How Did Nintendo Lose In The Console Wars?

While the console wars will continue on, Nintendo was once king of the mighty mountain of anything considered video games (home or portable - even though Nintendo will finally be challenged on the latter with Sony's PSP in 2005). But, Nintendo has gone from #1 in market share, down to #3. Nintendo now lives by these words: be careful of whom you tick off, because one day they may be your competitor. You will understand why by the end of this article.

Back in the days of the NES, Sega's Master System could not even put up a fight against Nintendo's original 8-bit behemoth that sold over 60 million units. Then, the Super NES (SNES) was released, but was not dominant early on. Sega released the 16-bit Sega Genesis (1989) two years before the SNES and had a jumpstart in the entertaining 16-bit console war. Sega still lacked that one title that everyone had to own until Sonic The Hedgehog was born (1991).

Sega realized a flaw in the SNES processor - it was too slow. Sega exploited this flaw to the public by releasing their Sonic games that displayed a fast moving hedgehog on screen (the Genesis processing power was coined as "blast processing" by Sega). The SNES had plenty of games that displayed too many moving sprites onscreen and the game would actually slowdown because the processor could not keep up with the onscreen action.

However, in the end, Nintendo prevailed due to its many new franchises it created on the SNES (Super Mario Kart, Star Fox, F-Zero) and killer sequels (The Legend Of Zelda: A Link To The Past, Super Metroid, Super Mario World). Sega stopped supporting the Genesis with quality games in the late stages of its life cycle leading to the death of the console. Nintendo sold 49 million Super Nintendo consoles initially losing a big chunk of its market share when the Genesis was first introduced, but Nintendo still managed to retain a 60% market share after the 16-bit console war was over (and selling twice as many SNES consoles as the Genesis).

When the Genesis was popular, Sega saw the opportunity to incorporate CD gameplay by introducing the Sega CD peripheral attachment for the Genesis. But the lack of any quality games made most gamers stay way from the CD add-on. Nintendo, however, saw a threat when news broke of a Genesis CD peripheral, and since Nintendo had no experience with CD consoles, they enlisted the help of Sony (ah, the plot thickens).

Nintendo is king of cartridge-based consoles, but Sony had the resources to create the CD add-on for the SNES that was ironically named Playstation. After months of working, eventually the two companies split. Both were in disagreement about the final specs of the system and how profits would be divided.

Sony was already a major consumer electronics leader with their Walkmans, TVs, VCRs, stereos, etc. and now figured they could try their hand at the video game business. Since Sony invested so many hours of labor and money into this CD machine, they decided to make it a full-fledged stand alone console with their specs and would then be able to keep all of the profits. The Sony Playstation was born (and eventually becoming more popular than Sony's Walkman).

Sony jumped to CD gameplay and Sega followed suit with the Sega Saturn, but Nintendo opted to stay with the cartridge format for one more generation. By doing so, Nintendo alienated many game publishers - none more important than Square Enix (best known for their Final Fantasy RPG franchise). Square Enix (and many other publishers) decided that disk gameplay was the future and left Nintendo's cozy camp to partner with Sony (and enjoy Sony's lower licensing fees).

Square Enix's Final Fantasy VII (the first Final Fantasy game released on the Playstation - and Sony made everyone aware of it with ads that claimed if the game were created on a cartridge, it would have cost $1200) went on to sell an outstanding 7.8 million copies!

Nintendo released the Nintendo 64 (fortunately their last cartridge-based system) in 1996. The high production costs of games on cartridges and the lack of the many quality game titles seen on previous Nintendo consoles doomed this console for most of its life cycle (there was not even a Metroid game for the N64). Nintendo slipped out of the number one spot for console market share for good and has yet to ever return to that position.

The N64 sold 32 million units, which considering the lack of numerous quality titles like the SNES possessed, is a solid number sold, but pales in comparison to the Playstation One's sales figures. In May 2004, Sony had shipped its 100 millionth Playstation One console. Sony easily won the 32-bit/64-bit console war.

The Xbox, GameCube and PS2 console war has been fierce. Sega's 128-bit Dreamcast was pulled from the much crowded console war and stopped producing consoles altogether. Companies have offered different prices, different bundles, but in the end, the Playstation 2 is number one with a record-breaking 70 million units sold as of May 2004 (and will likely break the 100 million mark faster than the original Playstation One console). Xbox is number two and the Nintendo GameCube is close-behind at number three.

Nintendo has been able to bring back the much needed Final Fantasy franchise (in some limited capacity however). The GameCube finally switched to disc gameplay, but Sony had a one year head start with the PS2 and has never looked back. Nintendo claims their next console, code-named "Revolution," will be released along with its competitors.

Can Nintendo ever be number one again? Even with quality franchise titles such as Metroid Prime, The Legend Of Zelda: Wind Waker, Super Mario Sunshine, all of the mega-popular Pokémon games, Nintendo is still only in third place in console market share.

To think that if Nintendo had not ticked Sony off with the development of the SNES CD add-on, Nintendo and Sega may still be fighting the console war along with Microsoft. But if that happened, more than likely many more game publishers would have been backing Nintendo's console and all of those terrific Final Fantasy games would have been released on Nintendo's console instead of a competitor's game machine. Nintendo may never be number one again unless they acquire games like Castlevania, Grand Theft Auto, Metal Gear Solid and incorporate online gameplay in more games for their future game console.