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I think it is time for a history lesson. Companies do not fade or rebound without a reason. Sega fell out of the game console market, because their platforms were unstable. Sega phased out hardware at a ridiculous pace often leaving developers holding the bag. Third parties basically lost all confidence in the brand. They were reluctant to develop games for a platform that may be gone in two years. It had more to do with what Sega was doing wrong then what the competition was doing right.

Nintendo lost two generations in a row, because the company was a proprietary whore. First with carts, and then with their smaller disc format. Sony didn't get the better library, because the brand was hip or cool. They got the better library, because developers were cost conscientious consumers. Every game made for a PS platform ran a developer five dollars per copy, and that is manufacturing and licensing. Where as in the 64 generation developers were spending between fifteen and twenty dollars per copy of a game. To make matters worse Sony was willing to buy back unsold games. Something that Nintendo would not do. Financially speaking Sony was a better partner that left more for third parties, and was less of a risk.

Nintendo was able to rebound, because they had two things going for them. They had a huge share of the market in handheld devices which maintained developer relations. Plus their new console was targeted at a market that had been untapped. It is after all easy to dominate when there isn't any competition to oppose you. Nintendo was never out as far as gaming is concerned. They were just focused in a different segment.

I suppose if you want to boil it all down to a root cause for both Sega and Nintendo. The root cause would have to be that they were too self involved. Sega in thinking its only job was to make hardware. Nintendo in it willing to run a detrimental platform. Sony did well by servicing the field first rather then focusing only on themselves. That is where Sony went wrong this generation they got so caught up in their wants that it never occurred to them that what they were doing might hurt their stable of developers. Which the developers did point out again and again. Only the fact that Sony was willing to relent saved the platform.

Sony didn't want to slash the price of their platform the way that they did. They were forced to do so to get many developers to come back. For all the talk of Microsoft buying exclusives early in the generation. The reality is that Sony just made exclusives on their platform cost prohibitive. That isn't even a exaggeration a lot of developers did in fact get killed off by the costs incurred by developing for the platform. I would say in the final analysis that they did make a big mistake, but were smart enough to own up to that mistake.

Who is to say if Sega or Nintendo hadn't done something similar in previous generations that they wouldn't have been able to stick their rough spots out, and come out strong. While it is good that Sony was flexible enough to cave in to the demands of developers. What isn't good is that they jeopardized their relationship in the first place which saw rivals make serious in roads. Sony took developers for granted, and so developers stopped taking Sony for granted. Which is a lost advantage.

I know this is wandering off the subject, but it needed to be pointed out. That Sega got knocked out for a reason, and Nintendo got back in for a reason. You cannot argue that Sony will dominate. Which by the way is a word that is being misused in this thread. It means more then doing better it means doing a hell of a lot more better. After all a boxer winning off the score cards isn't the same as a knockout in third round. You need to have a argument beyond it can happen. You need to explain where Sony will get those advantages that will translate to a knock out blow.

Seeing as both Microsoft and Nintendo have stable platforms, format production parity, and strong relationships with developers. In some cases developers do better with one or the other then they do with Sony. It is terribly hard to see what Sony has over them. Especially since other shortcomings are being addressed. After all Nintendo and Microsoft are doing what it takes to increase their own software output. While on the whole Sony's stable of studios haven't done too well with consumers.

If your going to argue Sony can reclaim some domination in gaming. You really need to put forth some kind of logical explanation. That doesn't just impact a segment, or is a minor advantage which more often then not covers a minor disadvantage elsewhere. You need to show someplace where Sony can get a real preferential response from either third parties or consumers. Anything can happen, and that is true. However that doesn't mean you should just throw it out there.