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@Jumpin

Not sure if Ninty ever fell back to Sega. They lost some marketshare to Sega, especially in Europe, but I won't call it "fell back".

AFAIK Sega was the first company that successfully used coolhunting agressive marketing aimed directly at Ninty. Kids who were picked up by Ninty in the mid-late 80s had grown up to teens and that pave the way for newcomers to market games differently. There're other attemps such this epic commercial of 3DO: http://www.youtube.com/watch?v=digN1yZBJBc - but only Sega was able to make it right.

Funny enough but this kind of marketing still works for modern teens. Dichotomy of "toys vs real gaming machine" and attempts to define own product like an elite choice are definitely help to sell consoles to young people, who sensitive enough to care about own social status (of course if the price is reasonable, teens usually don't have that much money to pay $600 for gaming machine).