I don't really see the Wii as a true competitor against PS3 and 360. It's a totally different market segment. Many casual gamers that just won't spend +$500 on a console will spend a few hundred for a simpler system for the family. Many hardcore gamers will buy both the Wii and another console. So they're not really competing against each other.
The Wii will do great because it emphasizes fun, playing together, and it's very accessible to people who know nothing about video games. I have friends who really struggle with FPS games like Rainbow Six on my 360 as they just can't get a hang of the whole complexity of controlling movement and aiming simultaneously with their thumbs. For me, it's easy because I'm used to it. But for them, a Wii is just so easy and accessible as they can just aim instinctively. Still, these friends would never buy a 360 or PS3 in the first place since most games are just too complicated for them.
 I suppose if the 360 or PS3 came out with a similar control device (I know SixAxis has motion sensing, but it's not the same) as the Wii with a similar range of games, they could then perhaps be considered competition. But atm they just aren't competing for the same consumers. I'll probably pick up a Wii later this year for my family and perhaps for times when friends are over, but I'll keep playing my 360 the majority of the time.
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