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Sky Render said:

It's funny how people say that the market "only has room for 3" when the market has repeatedly shouldered the burden of far more than 3 consoles before, with each one doing relatively well. Let's not forget, before the NES came along, there were dozens of home PCs which were essentially intended for gaming, and they coexisted more or less without a market leader (IBM had a bit of a lead, but it wasn't very significant by 1985). And for all their failings, even the 3DO sold 2 million units in an unfriendly market, and the Sega CD sold 6 million.

For the most part, the market has never shouldered more than three consoles that have done exceptionally well (such as the GameCube and XBOX still managing over 20 million units each even though neither was dominant). But this has far more to do with the lower-selling consoles all ending up being either too similar to existing systems or ending up being total nightmares to use (and quite frequently, both). A well-designed, truly innovative system with clever marketing and an actually useful gimmick to draw in previously uninterested customers is all one needs to enter the market.

 

That was a different time. Games cost a LOT more to make now, the more you splinter the market the more multiplat becomes a neccesity.