If they could do so within their areas of business and without being to the detriment of other areas of business, that is. Which is the point I'm trying to make here. It's ludicrous to view this as a same-term "console war". Microsoft is pushing to establish a conduit between its operating system and services and the entertainment center (which explains why the storage capabilities are severely gimped, while the streaming capabilities are so full featured), The Playstation 3 is an entertainment device that serves to complement and support Sony's CE business, and the Wii is, for all intents and purposes, a toy, one that serves well as a toy, but would be a miserable showcase system for high end CE devices.
I'm certain that all three would love for all of their standalone products to generate profit, but when you're looking at a conduit or a support system, profiting off of individual products is likely a good deal less crucial than if the product was, like Wii, a standalone product. Ideally, Microsoft would be in a position where it can pressure Sony into accepting MS OS and services, so we could get one high end CE platform to complement Nintendo's toy.
I agree:
Microsoft is trying to push their OS (and failing miserably, btw) into our homes through the guise of a media / entertainment center with the 360 and the Media Center editions of Vista.
Sony is using the PS3 as a trojan horse for the Blu-ray and entertainment device to promote their other business units, namely media.
Nintendo only makes games (hence the "toy" bit). They have no other agenda than to make games. And yes, the Wii is laugable as a high-end entertainment device in the vein of a 360 or PS3. It's good for games, and hardly any more (and some would argue that it hardly is even good for games!).
I'm not disagreeing with you, but at the end of the day, after everything's said and done, Media Create, Famitsu, NPD, NexGen Wars, VGChartz, SimExchange, the Pachters and market analysts and any others that I've left out will still say that the Wii is outselling both the PS3 and the 360 - they will never post only PS3 vs 360 sales; for them, all three consoles, nothing more, nothing less. The sales figures of all three consoles will be lumped together. There will not be any differentiation "because Sony has this agenda and Microsoft has that agenda while Nintendo doesn't have an agenda". All three are consoles, and in everyone's (except us who are hardcore gamers that frequent forums) eyes, the difference between one console and another, and one company's agenda and another's, is academic and moot. Nobody except us care - certainly the mass media, the main disseminator of information, doesn't care (or do their research thoroughly enough to dig up this information) - all they care is that "Wii Fit was on Oprah" and "Wii still unavailable in retail".
At the end of the day, in terms of "console war" sales, there is only one victor: Nintendo. In terms of the "conduit war", both Microsoft and Sony are losers, because Microsoft has failed thus far to introduce the media center into the living room in the way they initially envisioned it (independent of the 360). Sony, on the other hand, has won the HD format battle against HD-DVD but they are far, far from winning the next-generation format war against the DVD, a far inferior format. Both Sony and Microsoft have neither profited off individual products nor have they made any significant inroads off their conduits (again, Blu-ray and PS3 have not been the successes Sony would have hoped them to be, while Microsoft's RRoD has cost them USD1B, and Vista, despite selling 10% more than XP in its initial year, has done so when the market size has doubled in the same time).
In any case, for being a toy, the Wii sure has proven to be a most formidable opponent - and I bet none of us saw it coming!
