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Ever since computer chips became small and cheap enough to stick in a plastic box with a controller, the battle to corner the market with the ultimate home gaming system has raged on.
Industry giants like Nintendo, Sega, Sony, and Microsoft have fought for decades in a minefield of changing technology, cruel market forces, and tenacious brand loyalty. The ultimate prize? The devotion of the hardcore gamer legions (and their money).
We call it the Console Wars, but it’s more than a brutal corporate showdown—a lot can be learned from a deep dive into this fascinating conflict. Are killer games better than slick graphics? Why did Dreamcast crash and burn? Was the MiiVerse a parallel reality? It’s time for some answers, so plug in your A/V cables, blow on your cartridges, and get ready for some nostalgia—here come the Console Wars!
In the beginning, there were many contenders: Atari enjoyed an early lead with their 2600 console, but Mattel, Coleco, Magnavox, and others jumped on the bandwagon as home consoles grew in popularity and affordability. However, the market saturation effect of this mini-gold rush led to the “video game crash” of 1983, an industry recession that thinned the playing field by forcing several companies out of the market.
But that same year, two products launched that changed the game (pun intended) forever—Nintendo’s Famicom and Sega’s SG-1000. Nintendo dominated the market at first, gaining a foothold in America when they re-released the Famicom as the Nintendo Entertainment System (heard of it?). Sega moved quickly though, countering the NES with their Master System and kicking the Console Wars into full swing.
Though their first two consoles barely put a dent in Nintendo’s success, Sega finally grabbed a sizeable chunk of the market when they rolled out the Genesis, taking advantage of the new potential of 16-bit processing. They also scored a massive hit with Sonic the Hedgehog and kicked off an aggressive, “edgy” marketing campaign to differentiate themselves from Nintendo’s family-friendly image.
Feeling the heat from Sega and needing a new console to compete, Nintendo finally entered the 16-bit era with the Super Nintendo Entertainment System (SNES) in 1990. Ingeniously, Nintendo designed the SNES to allow enhancement chips on game cartridges to add to its processing power. This effectively upgraded its capabilities whenever a new game could take advantage of better technology, extending its useful life in the fast-moving world of technology.
After that golden age, nothing would be the same—especially for Sega. Determined to beat Nintendo, they rolled out the CD-Rom-powered Sega Saturn in 1994. But gamers were distracted by hype for a newcomer to the arena, and just a month later a challenger appeared. Sony launched the PlayStation to critical acclaim and won over many gamers by working with more 3rd party developers instead of relying on in-house IP like Sonic.
Almost two years later, the Nintendo 64 came to market to finally challenge Sony’s growing market share. Still relying on cartridges, the N64 could have bombed. But its futuristic design, four-controller multiplayer support, and exclusive titles like Super Mario 64 and GoldenEye 007 cemented its success. Meanwhile, internal conflict at Sega, combined with the cancellation of a highly-anticipated 3D Sonic title, started a downward spiral the company would never truly recover from.
Desperate for a win, Sega made a bold move with the futuristic Dreamcast in 1999. Its innovative peripherals and built-in internet modem looked promising, but the system proved to be ahead of its time and once again, and many gamers were holding out for Sony’s next console instead. Poor sales and continued strife continued, and Sega ended up casting their dreams of console market success into the fire. Somewhere, a voice yelled “finish him!”
Stepping over the bloody remains of Sega, Sony set the bar high for the new millennium with the PlayStation 2. Despite still only supporting two controllers, the PS2’s advanced graphics, online capability, and some legendary titles (Metal Gear Solid 2 or Grand Theft Auto 2, anyone?) established it as the best-selling console of all time (to this day). Contrasting with Sony’s sleek black machine, Nintendo followed up with the boxy, toy-like GameCube.
While GameCube represented a family-friendly alternative to digital violence, Microsoft came in guns blazing with the Xbox in 2001. Fans spilled buckets of alien blood in its launch title, Halo: Combat Evolved, which revolutionized first-person shooters. Microsoft also kicked off an era of bros trash-talking each other online from the safety of their homes with their Xbox Live service.
After the dust settled, the “big three” contenders raced to create the seventh generation of consoles. Microsoft and Sony simply upgraded their hardware and refined the user experience with the Xbox 360 and PlayStation 3, while Nintendo brought a physical dimension to play with the revolutionary (and strangely named) Wii. The war rages online as well: Sony introduced their PlayStation Network (PSN) and Nintendo launched the MiiVerse, a “social gaming network” populated by creepy cartoon avatars.
The eighth generation was strongly shaped by outside forces: smartphones, streaming media, and social networks all threatened to steal valuable screen time from video games—an existential threat in this industry. To stay competitive, consoles needed to become one-stop-shops for all types of entertainment, and the Xbox One, PlayStation 4, and Wii U raced to integrate popular services and technologies like Netflix, Twitch, voice control, and screen casting.
Today, the front lines are shifting and the mighty console may finally be fading away—or morphing into something new. Nintendo’s modular Switch system provides unlimited possibilities, the supercharged Xbox One X allows smooth streaming of 4K video, and even PCs have begun to bleed into the Console Wars with Valve’s Steam Controller and Steam Machines attracting console gamers to their platform.
Perhaps the biggest shake-up is the explosion of the Virtual Reality industry. Companies like Oculus and HTC are coming out with highly advanced and relatively affordable headsets, and even Sony has embraced the shift with PlayStation VR. Has the console war come to an end, or is it simply shifting to a new front? Only time will tell, but one thing’s for certain—gamers are the true winners here.