"The choice here is really between investing for the Xbox 360 and PS3 -- since their capabilities are fairly similar -- or the Wii. I would caution investors and developers that the larger installed base of the Wii is really a bit of a red herring. In the U.S., there is a 19-million unit installed base for the Wii verses 22-million units combined for the 360 and PS3. Assuming some overlap in the 360/PS3 installed bases, they're roughly equivalent. In addition, Nintendo is the dominant publisher on the Wii with over one-third of software market share on its platform. Guitar Hero and Rock Band account for one-sixth of sales. So the addressable market for third-party Wii titles is only about half of what the installed base would imply. The situation on the 360/PS3 is less daunting, with less than a quarter of software dollar share going to first-party publishers and Guitar Hero/Rock Band. ...I think the Wii installed base represents, to a certain extent, fool's gold for someone looking to invest in video game development." - Cowen & Company's Doug Creutz

That's just a small portion of what Mr. Creutz had to say. I think the big problem is that developers aren't willing to work in order to find out what works on Wii and what doesn't. They see shovelware party games and just go with the flow.

Check out Mr. Creutz's full comments, along with other analysts here