But in my eyes, Sony and Microsoft are competing directly against one another
(let's face it, their consoles are very similar)
While Nintendo is competeing in the gaming market, they have alwasy been profitable and have always had somewhat of a niche place. Granted the Wii could(and is) changing a lot of that, but I don't think Ninty winning in profits and market share(instead of jsut profits) would have too much of an affect on what developers do between say PS3 and Wii or even 360 and Wii. A decision like that is probably made before market share is even considered.
sony and microsoft are competing directly but i think Nintendo simply can't be left out of the equation especially in japan because japan is the market where Sony has a huge mind share lead over microsoft: ifsony get's into more problems because of a strong Nintendo, like because of some important japanese developers bringing their future series to the wii instead of ps3, or to the DS like it happened with dragon quest 9 (dragon quest was the best selling ps2 and ps1 game over there) they get get into mroe problems international not only because of those games lost but also in terms of sales towards microsoft which is really strong in US/UK
if now microsoft/nintendo came to the glorious/obvious idea to create their own versions of singstar/buzz or other versions of music/quiz games etc. then suddenly the european casual market might be not so sure for the PS too especially at the higher price point
it's the usual: 1 bite here 1 bite there and suddenly a company can be in problems
and we all know that financially Sony can't beat Microsoft
MS could very likely burn their money for producing electricity for free for their xbox customers and still wouldn't have money problems