Nintendo vs. Sony vs. Microsoft

Updated: Jun 23

The PlayStation was not originally intended to be a standalone game console.

In the late 1980s, Sony and Nintendo collaborated on a peripheral for the Super Nintendo Entertainment System (SNES), the king of console gaming at the time. Ken Kutaragi, PlayStation's "father," was a video game enthusiast who had a vision that would later save Sony from bankruptcy.

In 1988, Sony and Nintendo agreed to bring the CD-ROM to the SNES, giving the machine 700MB of storage space. However, relations between the two Japanese gaming behemoths were strained.

Nintendo surprised the whole audience of the Consumer Electronics Show '91, including Sony, by announcing its new partnership with Philips just one day after Sony debuted its SNES-compatible hardware "PlayStation." The divorce was finalized after the backstab, which both parties blamed on each other.

With its decision, Nintendo, the once-unbeatable ruler of the console world, established its ultimate opponent. Kutaragi's efforts to persuade Sony's upper management to pursue vengeance against Nintendo were successful. Sony abandoned all plans to create the then-additional PlayStation and began testing the waters for a full-fledged standalone console. The father of the PlayStation single-handedly transformed the game forever.

We might well find ourselves in a world where platform owners are more interested in the complementing components of their ecosystems than the competitive aspects in the not-too-distant future. Stranger things have happened; consider how Microsoft and Apple's current degree of cooperation would have sounded to us in the mid-90s. Even after Microsoft's dramatic 1997 "rescue" of Apple, the level to which macOS and iOS are now treated as top-tier platforms would have been unthinkable. Is it so difficult to imagine a comparable agreement between some or all of Sony, Nintendo, and Microsoft?

In the data I've collected over the years, the Xbox 360's tie ratio has now reached 9.4, a new high for the system. This puts the overall number of Xbox 360 software units sold between 321 and 325 million. In comparison, the Wii tie ratio increased to 8.0, resulting in total software sales of 315 to 320 million units for that platform. The PS3 presently has an 8.5 tie ratio, with software sales ranging from 180 to 183 million units. We're approaching the conclusion of the Wii's life cycle, so it's feasible that its tie ratio will continue to rise as hardware sales decline and extra software sales accrue.

I should also mention that they do not include any manufacturer-bundled software, such as Uncharted for the PS3, Wii Sports for the Wii, or Call of Duty: Modern Warfare 2 for the Xbox 360. These figures do not include any software purchased digitally through services like as Xbox Live or the PlayStation Store. To return to what Pachter mentioned, I believe this is an important topic to consider, particularly as the Wii U launches and Microsoft and Sony develop their future consoles. Given the revenue that can be made by only the hard core video game customer - which is likely what today's retail revenue represents 

Sony, Nintendo, and Microsoft were now in a battle. With Sony's unexpectedly high success with the PlayStation 2, Nintendo realized it had been demoted (or, as time showed, upgraded) to the role of a niche console company catering to devoted Nintendo aficionados rather than the general public.

In the console world, time has produced an equilibrium between Sony, Microsoft, and Nintendo. Sony has always charged a premium for its games, and it has become the unofficial king of dedicated gamers. Microsoft is attempting to move away from a physical console-based ecosystem in favor of cloud and low-cost gaming. While providing a safe haven for independent enthusiasts and continuing to consolidate its "Nintendo Magic" devotees, Nintendo winks at hardcore gamers – who would benefit from some mobility – with heavy titles like Doom and Witcher.

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