George Harrison of Nintendo has used a metaphor of cars to describe the 'threat' that the PS3 and Xbox 360 has on the Wii. He asks you to imagine two suburbanites who are looking to buy some new chrome rims for their BIG SUV's and then imagine a third person who is conducting comparisons in order to find the best hybrid. Harrison remarks that they are all technically involved in auto improvement, but the interests of the third guy are unlikely to overlap with the SUV drivers. He explained that this is how Nintendo views the gaming business now, MS and Sony are going in one direction and Nintendo are going in another.

Quote:
The Fool: The Microsoft Xbox 360 or the Sony PS3: Which is the bigger threat to the Wii?

Harrison: Neither. Consider three 30-something suburbanites. On a Saturday morning, two of them drive their big SUVs into a tire shop to buy big new chrome rims. The third is home online, doing product comparisons to figure out which hybrid he wants to buy.

You can say that all three are involved in the "auto improvement" business at that moment ... but it's unlikely the interests of the first two and the hybrid shopper are ever going to overlap. That's how we see the "video game business" right now. Two companies are going in one direction, and we're headed in another.