As an outsider looking in to the gaming industry, I cannot help but note that the Nintendo Wii has placed itself in its own category, a category significantly different than the the group the PS3 and Xbox 360 find themselves in.
I don't know a single person who owns a Nintendo Wii and is satisfied with the console on its own. Every person that I know who has one, doesn't use the console as their primary gaming machine. They either have an Xbox 360 (usually) or a PS3 and then a Nintendo Wii as sort of "toy" to play with on occasion.
It's as if though these gamers use their extra cash to buy the Wii for the novelty of it, but their main resources and cash are contributed to either Sony or Microsoft.
I'm not saying that it's bad for the Wii, that's actually a great move by Nintendo. To become so different that no matter what other console a gamer has, a Nintendo Wii sits right along side it.
The true console war belongs to the Xbox 360 and Sony PS3. It's then that price matters, that game selection matters. It's then that graphics, power, features, wireless, all of that matters. None of that matters for Nintendo because many people are going to buy a Wii whether or not they own another console.
The theory can be compared to PC gaming. No one competes with PC gaming because it's an established category all on its own. Perhaps we'll see Apple and Microsoft competing in the PC gaming category eventually, but as for right now the PC has no competition in the gaming arena.
Nintendo has done something revolutionary with the Wii by carving out a second category in the console wars, and, by being the only contributor to the category, it becomes a winner no matter how well the PS3 and Xbox 360 do.