For those who don't know, Ed Fries was a programmer for the Apple II, and the Atari 800. Later, he moved to Microsoft, and became a member of Microsoft Games Studios.
"Nintendo's saying that they're going to have a revolution the next time around. Nobody knows—and I've talked to everybody in the game business—whether they really do have a revolution or not. In a way, I think that's smarter thinking than chasing what the competitors are doing. If could really introduce something that is very different and original, then at least you have a chance. If you just chase, you're always number two by definition."
"Nintendo … I think everybody is kind of confused by right now. Publishers don't know what to think about Nintendo—whether this Revolution thing is even going to happen, whether it's going to be cool or not, or whether Nintendo's just going to stop making consoles in the living room and just become a software publisher. Right now there doesn't seem to be a lot of information from Nintendo telling people what to do, so everybody's very, very wait-and-see on the Nintendo platform—including me."
"In the case of Nintendo, I think they really get that. Their titles define their hardware. The Nintendo DS is outselling the PSP—which is a vastly superior piece of hardware—because of a first-party software title called Nintendogs, which is very original and creative. You see stuff like that [and] it'll drive everything that the business is about. I don't think Nintendo's advice needs to be in that area.
I think Nintendo really needs to be clear with both consumers and publishers about what the Revolution is—whether it's real or not—and they need to get that information out. Otherwise, there's just not going to be an opportunity for them. The stuff about, "We don't want to introduce these ideas because we're afraid people might steal them;" the PS3 and Xbox 360 are set—they can't go back and redesign that hardware. I don't even believe that argument. So either they don't have any revolutionary ideas, or for some reason they're just being really coy about it. I think they're doing a lot of damage to themselves right now by being coy about it.
I think Nintendo's always underestimated the importance of having full support from all the third parties. They were keeping the third parties down [and] Sony freed them. And yeah, they [the third parties] put out a lot of crappy stuff. That's why Nintendo was keeping them down. They were afraid that they were going to put out a lot of crappy stuff—which is what they did—but it didn't destroy the business. If anything, it made the business stronger because they put out a lot of good stuff, too."
Full interview can be found here