It seems like arbitrary mental gymnastics when -- in reality -- they are competing with one another directly. When one console "sidesteps" it often leads to it being crushed, but on rare occasions it can surge ahead of the competition and become very successful. It doesn't make it any more or less of a console.
People acted like the underpowered Wii was anything new. Heck, that move wasn't even new for Nintendo: both the NES and Game Boy were very underpowered compared to the competition. Were the TurboGrafix-16 and the Genesis the only two "directly competing" consoles in the late 80s 'cause the NES don't count 'cause Nintendo was still stuck in 8-bit? Was the Game Boy not "directly competing" with the Game Gear, Lynx, and Neo Geo Pocket (r.i.p.) because it had a monochrome screen instead of a color one?
This sounds like a hoity-toity justification for 2008-era "filthy Wii-playing casuals" nonsense.
The point is that Wii sales did not take away from Xbox or PlayStation sales. Either the Wii sale was to someone who would never buy an Xbox or PlayStation
(like grandma looking for some exercise), someone looking specifically to Play Nintendo games, or someone who bought the Wii as a second console. Nintendo's strategy was to go after a different market, so it is puzzling when I hear push back for pointing out the fact that they were successful at it.
PlayStation and Xbox have very similar games. In fact as far as third parties go they pretty much share the exact same games, and those third party games are their biggest sellers. If a mainstream person just wants to play Madden or Call of Duty, which is a whole lot of people, then they are choosing between a PlayStation and Xbox console. Meanwhile Nintendo consoles are primarily bought to play Nintendo exclusive games. Third party support is very lacking. Additionally third party games on the console are still typically exclusive to Nintendo, and are minor sellers compared to Nintendo's own games
(with some exceptions). There is simply very little overlap between the games offered between Nintendo and PlayStation/Microsoft consoles. That is the definition of a seperate market.
The exact same argument applies to web based games versus console games. Yes both web games and console games are video games, but they are targeted towards entirely different markets. Just like with Nintendo, web games are not competing with PlayStation and Xbox. All of this is important because anything beyond the most general analysis that tried to lump every possible video game together would be inherently flawed. A great example of this was all the doom predictions for the video game industry because the Wii U was tanking. The reality was that whether the Wii U succeeded or failed, it meant absolutely nothing for PlayStation and Xbox sales.