Worst prediction ever

[Sullla]

Clearly that was a disastrously incorrect prediction. There's no denying that.  But it's not quite as bad as it appears on first glance. Many of the assumptions that the poster was working off of changed prior to the release of the consoles in question. For example:

- The PS2 never retailed for $375; it may have had more difficulty selling at a higher price point. OK, maybe not, but it's possible too. A lot of people believed that the PS2 would sell for roughly $400, since it cost about that much to make at the time. Everyone knows how Sony solved that problem by now: they sold the system at a loss, intending to make up the initial cost through software sales. And it worked, although Sony never made all that much money from the PS2, even with ridiculous sales, due to their market share strategy. Increase the initial price point for the PS2, and the last generation may have looked different.

- The poster also was operating on the assumption that the Dreamcast would live out a full lifespan in the market, rather than the abortive system we actually got. And frankly, that wasn't a terribly unrealistic expectation; the Dreamcast sold well in the US at launch (although it did poorly in Japan); Sega's bankruptcy and horrible prior history really did kill off what might have been a successful console. Imagine a world where the Dreamcast HAD been supported, launching a year earlier than the PS2 and retailing for less than half the price. (Say, $150 vs. $300 in the holiday season for year 2000.) I don't think it's unreasonable to assume that things might have gone very differently in that scenario.

- Finally, the poster mentions the expected launch of the Dolphin (Gamecube) in December 2000, only a couple of months after the American launch of the PS2. Obviously that didn't happen either, and the PS2 had a whole year to gobble up sales without any real competition. By the time that the Gamecube (and Xbox, which hadn't even been annouced at the time of this writing) were on the market, PS2 was already firmly entrenched in a dominant position, AND cutting the price to boot. It was thus never a $300 PS2 versus a $200 Gamecube, but the two systems selling at the same (or very close) price point - and the PS2 was a dominant software library. What would have happened if the Gamecube and PS2 really HAD launched at about the same time? I still think the PS2 would have won overall (especially in Japan), but it would have been a closer race, more like the Playstation/N64 console war.

So what does this really prove? Console wars are unpredictable. We really don't know what will happen ahead of time. Change just a few of the initial market conditions, and the outcome can swing wildly from a tight three way race (a potentially major battle between a $150 Dreamcast, $200 Gamecube, and $300 PS2, the latter two launching at the same time) to a runaway romp by one system, which of course actually occurred. So yes, this was clearly a bad prediction, but it wasn't as insane as some of you seem to think. (Those launches were only seven years ago, and I remember them very well.) I also think that the PS2's runaway victory had more to do with its major competitors of the day (Nintendo/Sega) shooting themselves in the foot than with any brilliant strategy on the part of Sony, but that's much more debatable.