Like Sony did right?
I would be interested in seeing if Apple could compete with the "big boys" and not sell their system at a loss like the "big boys" do (well with the exception of the Wii).
Yes, Nintendo needs some competition. However, if Apple decides to compete, they will go for the "casual" route. Competing directly with the Playstation/Xbox brand would cost them a lot more money than they might be
willing to loose. They would have to come up with something "innovative" [Which Apple shows no sign of in the Gaming World] to offer a reason to switch, or they would get swept under the rug. Its a tough market.