The revolution is here, and it is in people’s living rooms. Of course I’m not speaking of a Marxist holiday, I’m referring to the development codename for the hottest gift item over the last two years, that we know as the Wii.

Even now as the console approaches its second birthday, supplies for the units are scare and hard to come by. Nintendo of America CEO and President Reggie Fils-Aime has stated that during this holiday season, Wii consoles will likely still be somewhat rare. In other words, if you see one grab one, because you’ll be out of luck later. Though this leads to speculation that Nintendo is creating a demand for the system by creating an artificial scarcity – after all, how is it that two years after launch a multinational, profitable corporation cannot get their manufacturing lines up to speed – the fact remains that the company has struck digital gold with their latest device.

But technology continues to progress, our thoughts – and Nintendo’s R&D directives – will inevitably turn to what’s next. In an interview with the UK’s Channel 4, Shigeru Miyamoto – Senior Managing Director of Nintendo Co. Ltd., the Japanese parent company – made clear that Nintendo’s mission is to “improve and to take advantage of cheap technology to create reasonable and affordable entertainment.” Indeed, the Wii is a step in this direction, with Nintendo execs refusing to even attempt to compete with market contemporaries Sony and Microsoft on any level of technological supremacy. The Wii is a console that is made purposefully weaker, but on the other hand is comparatively inexpensive to manufacture. Indeed, Nintendo is the only company in the industry that actually makes money on their game systems, instead of treating them as a loss leader.

So what does this mean for the future of the Wii, and indeed, the game industry? As one of its biggest players attempts to create a new dialogue focusing on unique input methodology and design specifications, we face a potential deeper splitting of the market, deeper than we have seen in this generation as Nintendo expands on the concepts they’ve introduced.

For one thing, cheaper hardware can mean more frequent iterations. According to former 1UP.com editorial director John Davison, it’s possible we’ll see a new Wii by 2011. R&D spending at Nintendo has tripled since the Wii’s launch in 2006, and it is wholly plausible that the next-generation is already around the corner. It stands to reason that a number of the improvements that are appearing on the Wii will be present in the next version, namely its 1:1 motion tracking technology MotionPlus, and with any luck Nintendo will learn from its mistakes and provide improved storage and Internet solutions as well. Technology that is cheap now, will only be cheaper in the next go-round, and at that point we should also expect to see things like HD output and RF connectivity, instead of the Bluetooth that is in place now. Indeed, recent announcements from Nintendo have noted that their production costs have been cut by half since the Wii’s launch.

Past this point, as developers get used to the idea of developing with the unique input system that the Wii and its inevitable progeny will feature, different modes and methods of gameplay will certainly result.

What remains to be seen is whether the company will learn from its mistakes in this recent generation of hardware when it comes to its online presence, which is, in a word, terrible. Though it has been demonstrated that it is not the system with the best online capability is the one that achieves market dominance, it will certainly be a welcome addition to a machine that will surely be looked at closely, as the next round of technology dawns.