This is a different approach in comparison Nintendo, with Sony focusing on improving the overall amounts of realism on the PS3. As a result, the Playstation Eye is a possible substitute that could have an impact on the Wii. However, since it does not have similar motion features means that this is more of a distant threat that is being faced. (Eaton, 2009) When you analyze the overall threat of substitutes that could be affecting the Nintendo Wii, it is clear that Microsoft's Natal is biggest. This is because the technology that it uses and the way it can interact with other features are superior to those on the Wii. Where, Natal can perform various functions that are not possible, causing some consumers to see this product as a better value. Once this occurs, it means that a shift could take place in the market. As a result, Nintendo needs to remain focused on this threat. (Eaton, 2009)

The Sony Playstation Eye is not as big of threat as Natal. This is because it can provide better graphics and experience than Wii. However, it does not have the same kind of motion sensors. This is problematic...

Until these different issues have been rectified, it is unlikely that the Playstation Eye is a major threat. (Eaton, 2009)
When you put these different elements together, they are showing how Nintendo needs to be prepared for possible substitutes that could be quickly entering the market. As Microsoft is the greatest threat with Natal, thanks in part to: the different features it offers (which are not available on the Wii). Therefore, Nintendo needs to be watchful against these kinds of: threats and offer similar applications that can address the various shortcomings of the Wii.

Bibliography

Porter Five Forces Analysis. (n.d.). Wikepedia. Retrieved from: http://en.wikipedia.org/wiki/Porter_five_forces_analysis

Eaton, K. (2009). Sony, Microsoft Motion Controls. Fast Company. Retrieved from: http://www.fastcompany.com/blog/kit-eaton/technomix/sony-microsoft-motion-controls-will-beat-wii-its-own-game