Come on guys, make up your mind.

Its okay to be in competition with Nintendo, don't feel bad. Just don't go changing 360 into Wii, because that's what you think we all want.

They won't, they'll keep that for their next-gen console, that will copy the Wii-method. It will be badly copied though since MS will probably copy it from a sense that they just need to water down the mind-set they're doing now instead of building a new mind-set from the ground.

It's just pure market forces, but they were actually right that in the beginning they were not competing with Nintendo. Sony and MS overshot the market and Nintendo made a console that went for the masses in the low-end market and made specific games for that market to cater too. it's only too bad that people think those games are low-quality and don't take much effort to make. But since Nintendo is gradually moving upmarket, Nintendo does come into a position where they compete with Sony and MS, but eventually it will be too late.

It's called a disruptive strategy, a economic theory from Harvard and MS isn't very good at coping with a company that does that, just look at google.