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Talk about straw man arguments, I don't think anyone here has said Nintendo is perfect, I like their strategy but feel they are dropping the ball in other areas as well. Obviously you haven't read many of my posts because I am not afraid to stand up against a Nintendo choice if I truly feel it is detrimental. I also am sorry you feel you are so much better than other people here because it is "Nintendo fansite" who do rely on it for open discussion. This site has been one of the most informative and INTELLIGENT sites I've been too when it comes to gaming discussions. I've been to a ton of different sites, and none even touch this one when it comes to balance. So I'd appreciate you not harpooning those of us who enjoy it here and do use it for open discussions. Personally I could care less if you respect or don't respect my opinion but there are others here that deserve a tad bit more credit then you are giving them. I usually respect your opinions but I think you are crossing the line a bit.
I probably wasn't referring to you then.

One doesn't have to proclaim Nintendo's literal perfection to see how silly it is for some folks to defend any possible counter-point one can bring up. When they can do no wrong in most discussions you partake, and I've sadly been in plenty here, it's actually a bit humorous and I wouldn't qualify them as open discussions. It's gotten better since some fresh blood has come in. That is somewhat refreshing.
Is it snobby to think propaganda repetition is not intelligent discussion? Hmm, probably so. So perhaps you are correct and I should re-evaluate that. However, as I said, I certainly don't blanket the entire forum or all its users. But I have certainly seen plenty of it before. Maybe I look at too many bait threads and not enough at other stuff.

Ok, wanna talk graphics?
The Wii didn't need HD, but I do think graphics were definitely low-balled for $250. I also believe that a fairly priced HD system is possible without being entirely cost-prohibitive (for us or Nintendo).
(Before I say anything else, this entire issue is all a what-if scenarios anyway. We're all talking fantasy here. So nobody needs to be defensive.)
A blue laser diode (either format) is definitely out of the question because of its cost prohibitive... ness? Is that a word? Cost prohibitivization? Did I make a new word? Anyway, it's anti-affordable, much less available, and won't be for a while longer evidently. So they'd have to stick with regular DVD media, which isn't a big deal (IMO).
They don't need to match 360 bit-for-bit to achieve close to visual parity. If anything we know Nintendo appreciates design elegance. Most developers have more of less said that the Xbox is a gnat's penis more powerful than GameCube. If that is true and it was achievable at that big price gap, then we know the appreciable benefit for design optimization. 360 is definitely designed better than the BX1 (you can't do much worse than a system slapped together with virtually OTC parts in 18 months) but it's still a bit inefficient.
I do believe that they could put together a reasonable 720p HD system at $299 and be at or close to break-even. Any offset could still be made up fairly quickly. Go nuts and launch with a party game that needs a lot of controllers. Wii XXXTreme Sports! There. You're caught up.

Aside from hardware, Nintendo has software revenue streams that Sony and MS don't even come within the same hemisphere of touching. Nintendo also doesn't have extraneous business interests that suck additional tens of millions from their bottom line. They could be more aggressive on hardware, price fairly, and still be healthy if they chose. $600 million healthy? I don't know, but I wouldn't lose any sleep over it even if I were a shareholder.
I know a higher price flies in the face of "Blue Ocean". But like I said we're talking what-if scenarios. This would be the dawn of the "Yellow Snow" strategy. There's plenty of precedent in consoles proving that people will pay more for what they want. In this strategy, Nintendo would "piss" off their fanboys by pricing it higher and offering more of what people other than their shrinking base wants in a console. It's brilliance! Everybody loves a rebel... err, a Revolution?
Being the value provider, the GameCube's "Purple Rain" strategy, only got them so far. About 15% to be specific. So value only accounts for so much. People 'wanted' PS2 and they paid for it.
But seriously, yes, I do think $299 is doable for "virtual" parity with 360.
Or they could have at least delivered a premium SD unit at a break-even $250. Some more pipelines wouldn't kill anyone. The Wii as it is is not Nintendo's best foot forward for gamers. It's almost "politically" designed for profit/cost, being a pimped GCN, and the GCN itself profited very handsomely at $100 for a long time. Last I heard it had an under $60 BOM per unit towards its end?