Why do people say that a console fails if its in third place?

[Erik Aston]

John lucas... Long and insightful post... There is one ma-hey-jor factual error in there though. At least if all you're looking at is PS2 and GC, Sony was more successful profits-wise than Nintendo last-gen.

Nintendo made more money during the era, but its safe to assume most of that came as a result of GBA. GBA sold 4 times as much, it sold a good deal more software, and it thrived on remakes of NES and SNES games (8 million sellers, 3 of them 5-million sellers) which probably had extremely high profit margins.

There were even some pretty rumors of internal pressure at Nintendo to begin focusing entirely on handhelds.

And I think Sony was pretty pissed that after 10 years of dominating what they thought was the main ball game, that Nintendo was still more profitable than them. That has to hurt. Enter PSP.

 

Delusional: You wrote: that's why it's the 'strategy' that failed if it doesn't meet their objective.  but it can't be said that a console failed,

This is true... But the console is the result of the business strategy. Despite a lot of individual brains and talent, Sony collectively failed to understand the very market they were dominating. They set the wrong tone in developing PS3... When people say "the business plan rests on the console (hardware)" (which is what the "wiimote gimmick will fade" and "HD will matter in two years" theories are actually saying), they've got it completely backwards. And its because the strategy succeeds or fails before the console even goes on sale that people could so confidently pick Wii to dominate this generation back in September. Of 2005.

And in the end, the strategy they lay out years before launching a console CAN dictate whether or not a company succeeds or fails in all of the areas John laid out.

And when a company has had just a brilliant stroke of genius in their business plan, due to a great visionary like Bushnell or Yamauchi or Kutaragi, it has led to a period where the company leads in nearly every single area. And every time, that visionary has failed in glorious fashion when given too much leeway in dictating the strategy behind future consoles, specifically the third console. (Well, Bushnell WOULD have uttery failed going against NES, had he not sold the company... He still talks about how he would have acclerated the arrival of the internet by ten years.)

 

To answer the original question... Using the parameters John laid out... It is extremely difficult for a console to come in third or even second place in terms of marketshare and not lose out big-time in other areas... Nintendo is the only company which has ever even survived after coming in third place in marketshare, and MS is so far the only company which has ever survived coming in second place, though obviously they've got some massive issues.