Console Manufacturer - Industry

Industry

The games console market is a volatile industry with changes of market leadership happening frequently as new consoles and games are released. For example, although the Nintendo NES largely dominated the gaming market in the 1980s, their market share was challenged after the 16-bit era, with Sega introducing their Mega Drive/Sega Genesis as a major competitor. Likewise, during the 32/64-bit era, Sega’s market share plummeted with the Sega Saturn, and Sony – a newcomer in the industry – became the market leader (Nintendo took second place with their Nintendo 64). As of 2005, the most significant console manufacturers in the industry during the 128-bit era were Sony (PlayStation 2), Nintendo (Nintendo GameCube), and Microsoft (Xbox). Of these three, Sony remained worldwide market leader with Nintendo and Microsoft roughly equal in second place, each dominating the competitor in its home territory. Two years into the seventh generation era, Microsoft has grabbed an early lead with the release of the Xbox 360 in North America on November 22, 2005, and the continuation of its revolutionary Xbox LIVE service. The release of the PlayStation 3 in Japan on November 11, 2006, and Wii in North America on November 19, 2006, saw gamers snub the pricey PS3 in favor of the more accessible Wii, despite its inferior graphical capabilities compared to the other two. The Wii remains in high demand (outstripping supply in some areas) and has surpassed the Xbox 360 while PS3 lags behind with less than half the worldwide sales of either competitor. Industry analysts caution that it is too early to call for final standings, with all three consoles anticipating new titles from major franchises for the holiday season of 2007 and Spring of 2008. In addition, the inclusion of a Blu-ray Disc player and the end of the hi-def format war has given the PS3 a recent boost, vaulting it past the Xbox 360 in the North American, European, and Japanese markets in monthly sales, although it has yet to catch the Wii's sales or either of the other two console's total sales numbers.

By contrast, in the related handheld console market, Nintendo has remained the market leader since the establishment of its wildly successful Game Boy line in 1989. In spite of its technological inferiority, the black-and-green Game Boy easily staved off competitors, including color-display systems made by Atari and Sega of the above-mentioned manufacturers. With backward compatibility and a continued emphasis on battery life and quality games, the Game Boy Color, though short lived, proved sufficient to maintain Nintendo’s lead and brand awareness until the release of the Game Boy Advance, which had all the same features and more, and again brooked no competition, including the Nokia’s phone/console hybid, the N-Gage. The first significant challenge to Nintendo’s handheld gaming dominance arrived in 2004, in the form of Sony’s PlayStation Portable (PSP). Despite superior graphics technology and a wide array of non-gaming capabilities, however, the PSP has failed to overcome Nintendo’s DS system, which, with its addition of a second, touch-sensitive screen, remains the fastest-selling console worldwide and in most territories.