Thats a great example. I love Nintendo. Mario and Zelda is always great, but historically Nintendo has not been a good platform for 3rd party developers (I read somewhere that 30% of wii owners didn't know you could take out wii sports and replace it with another game...). The bets that Nintendo has made that hasn't been smash hits, have been terrible failures, because no one else is there to pick up the slack.

If you buy an X-Box, and the next Halo turns out to suck, you are still going to get your moneys worth of 3rd party titles.

There's a big difference between the two in business model: Sony and MS had to care about attach rates and third party software sales, because they (at least initially) took a loss with each console sold: The only way they could make money was if people bought a bunch of software so they'd get licensing revenues.

The Wii was designed with different assumptions in mind, which led to a lean machine they could sell at a profit. Someone buying and Xbox and Gears of War was a huge problem for Microsoft, if someone bought a Wii and Mario Kart, it was just fine for Nintendo as long as the customer was happy: Every sale was profit, plain and simple.

I don't know about the Wii not being good for 3rd parties either, it's more that the Wii didn't do what the 3rd parties wanted to do (high tech edgelord games). So we got completely moronic things like a Castlevania fighting game, a Soul Calibur that wasn't a fighting game. How about Dead Space, a slow, ponderous horror title? Yeah, the devs turned it into a rail shooter, just about the most anti-horror genre choice imaginable.

In simple terms, they thought the Wii userbase were morons who would lap up anything - after all, they'd bought a motion control toaster to play technically really simplistic titles, and in the devs' world, technically simplistic = bad. So they gave people disrespectful shovelware, which, surprise surprise, bombed.

They had the opportunity to make solid titles - the Wii may have been a toaster, but it was still beefier than the PS2 or Gamecube which had a lot of really good titles and anyone who's played Metroid Prime knows those controls are crack.

I think the big miss with the Wii wasn't how good/bad it was, but communication. What was the philosophy behind the machine, Nintendo communicating that, the devs really trying to understand that.

The Nintendo comparison is missing some nuance as well. Nintendo was a gaming company that got caught in a war between the two giants Sony and MS for total control of the living room. For Sony and MS, gaming was just a single division that they were willing to take losses on or invest heavily then wait years for payback due to the consoles filling multiple strategic objectives. MS and Sony dumped tons of cash into developing their 3rd party game libraries where Nintendo relied on their in-house development to seed their consoles with games and make most of their money.