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Shadow1980 said:

If I had to guess regional market share under this alternate timeline, then assuming the most optimal circumstances for Nintendo I would assume the N64/PS1 split would have been 60/40 in the U.S. and 75/25 in Japan, with Europe being a toss-up. Globally, that could have put the N64 at around 70-75M and the PS1 at around 45-50M. Despite coming in second place, Sony would still have a brand with significant potential. Nintendo would still likely have continued making very conventional consoles after seeing a CD-based, still very conventional N64 winning the day, meaning we would never had have a GameCube, much less a Wii, Wii U, or Switch. This leaves Xbox in a nebulous place. Would MS have been as emboldened to enter the console market had Sony not dominated like they did, or would they still see potential? If so, then what? Could they have succeeded? Would the OXbox's market share have been better or worse? And if there was no Xbox, then the face of online gaming on consoles would likely have turned out very differently (and may have never caught on, at least not until much later), not to mention there never would have been franchises like Halo and Gears of War.

This is an interesting question.

Microsoft entered the console race in the first place because they were afraid Sony would become big enough that people might abandon PCs running Windows in favor of TV devices that were outside of the Microsoft ecosystem. I can't see them having the same anxiety over a Nintendo dominant in the console space. In fact, I think they would probably have tried to buy out Nintendo, but if they couldn't manage to do it when Nintendo was weak, as happened when they made offers in the mid 2000s, they certainly wouldn't have managed it with a strong Nintendo.  Maybe Microsoft would still have used Sega as a backdoor into the market.

If they had gone in, it would also be an interesting question. With the market more evenly split between Nintendo and Sony rather than being dominated by Sony, I could see the Xbox having a real shot. On the other hand, Microsoft is still just as clueless in Asia as they were 20 years ago, so that wouldn't have changed. Maybe Western games wouldn't have gained as much of a foothold in 6th gen as they did in 5th gen with Nintendo dominating.