They’ve essentially conceded the high-end console market to Sony and Microsoft.

I would like to point out that the iPod shuffle has more memory than the Revolution.

1) The Revolution is obviously designed with market research on both gamers and the people who buy the systems in mind. Consider for a moment that much you have to pay extortionate prices for on the XBox 360 (such as Wi-Fi and a proprietary hard drive), and then consider the Revolution…which has free Wi-Fi and saves downloads on CF cards. Also consider the sizes of the system; the Xbox 360 and PS3 are beasts, practically computers from 1995 in size (and it must be said, the PS3 design is really, really ugly. I bet if you scrape away the silver paint there’s biege plastic under there.) The Revolution is tiny (i.e. easy to hide) and has a nice, sleek design.

Or there’s the online component. I remain skeptical that Nintendo will keep first-party Internet play free, despite their commitment to hotspots and wireless play on the DS. But I would lay down money that it’s going to cost far less than XBox Live or Sony’s online network and that likely in most games it’s going to be far better integrated.

Then, of course, there’s system cost. The Xbox 360 is a de-facto $400, and the PS3 is apparently going to be between $450 and $500 for a decent package. The Revolution is apparently at a price point of $200. And, unlike Sony or Microsoft, Nintendo actually makes a profit on the systems it sells. So if they get a sales edge, they can cut the Revolution’s price and watch the competitors squirm.

2) The Xbox 360 and the PS3 are not about games and never were (as, frankly, is amply demonstrated by the failure of both to start strong in-house franchises.) Both Sony and Microsoft see this system as a backdoor to introducing the appliance computer and getting a grip on the market (and to be fair to Microsoft, I’ll give them some praise for thinking this far ahead.) The PS3 is particularly crucial because if it doesn’t sell well, that’s going to have nasty ramifications all up and down the Sony product line. Nintendo, on the other hand, is a toy company with no investment in pushing a product line beyond systems and games.

3) Nintendo has the games. Metroid, Mario, and Zelda alone are enough to secure a solid fanbase, but I’ve got my fingers crossed that lesser franchises like Killer Instinct and Eternal Darkness will return. Sony has, what, GTA (which isn’t even an exclusive) and XBox has Halo. Not exactly a killer lineup. Combine that with the fact that Nintendo seems to have done a complete 180 on independent development and that they’re putting a big chunk of their older games out there for download (I fully expect my first $50 spent on games won’t be games designed for the Revolution), and that’s a hard row for the other competitors to hoe.

Of course, in the world of video games, hype counts for everything, so we’ll see how it goes.