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If that were to happen this is how i'd see it play out:
- Playstation would've still dominate and would still continue the path it always did
- Nintendo would've still reject Microsoft's offer to take over and would still continue the path it always did

Main difference:
- Microsoft may have actually ended up buying Sega since it didn't bomb (and of course after being rejected by Nintendo), Halo would still exist but possibly games like Yakuza, Bayonetta could have been non-existent, and Sega/Microsoft probably wouldn't have ended up buying Atlus.