In 1994, with the looming release of the Sony Playstation and the SNES approaching the peak of its success with the launch of games like FFVI, Donkey Kong Country, the continued success of big games like Super Mario Kart, Super Mario All-Stars, Street Fighter II: World Warrior, The Legend of Zelda: A link to the Past, Megaman X and then the upcoming release of Donkey Kong Country 2, Yoshi's Island and Chrono Trigger, as well as big portable games like Link's awakening, Super Mario Land 3, Dr Mario, Super Mario Land 2, Tetris, and of course the upcoming Pokemon games, it was no doubt that Sony's main competitor for market share was either Sega or Nintendo, but most would agree that Nintendo was the winner of the Genesis/SNES era from a market share perspective and from a 3rd party partnership perspective, despite bitter feelings harboured towards Nintendo by many 3rd parties.
Capitalizing on the frustration of certain 3rd parties, and pushing the more "adult" (teen) market that Sega was targeting, Sony was able to gain huge territory in the console market, bringing to its side companies which were near 2nd party status with Nintendo, such as esp. Squaresoft (which did not release any games on a Sega system as of 1987), and to a lesser extent Capcom and Konami, and many others. In that generation, Nintendo was able to hold its ground in the US and Canada with the N64, and across the world with the Gameboy, but everywhere else in the world (also thanks to pirating and more European type games like car and sports sims) most reoriented their home console needs towards the Playstation, with Sega struggling with high prices and low dev support due to a difficult to develop for Saturn.
Only one gen later, with the Xbox coming, Nintendo tried one last push in competition with Sony in the more teen-driven arcade market and with Microsoft entering the race, it was quick that Nintendo decided to turn to other sources of market share and exit the head-to-head race with Sony in a market Nintendo was losing strength in. As of the middle of the gamecube gen, Nintendo was no longer seen as the main competitor in the home console space, with Microsoft going head-to-head with Sony, especially in the PS360 era when Microsoft wanted equal 3rd-party support for almost all non 1st & 2nd-party games. Sega had run the course with the Dreamcast, launching a number of great fighting and RPG games, but was not able to gain enough market share against the tough competition.
As Sony fought to keep its hold on the home console space during the time of the PS3, they decided to cease diluting their efforts between the home and portable consoles and dedicate all their efforts to the PS3, which happened shortly after the launch of the Vita. In the process, Sony eventually stopped their handheld line and in essence lost their market share in the portable console race to Nintendo, which had managed to maintain its dominance due to its sales powerhouses such as Pokemon and other 1st party games like New Super Mario Bros, and by securing certain crucial 3rd party games such as Monster Hunter and Dragon Quest which are big in Japan.
With the release of the PS4, Sony reestablished its dominance on the home console space regaining the ground it had lost to Microsoft during the time of the X360. With Microsoft now becoming more cross-platform, and its games being available elsewhere than on the Xbox, and with a limited amount of 1st party content, and now with the ensured success of the Nintendo Switch especially in Japan, the question becomes: who is Sony's main competition today? Most would argue that Microsoft is Sony's direct competition due to competing with similar content and hardware. Others would say that, in the history of things, it seems like Nintendo has been hiding behind that facade and slowly retaking ground in the portable console space and now in the home console space, esp. in Japan. While during the Wii era Nintendo was competing primarily on another plane and targeting a non-gamer audience, with the Switch Nintendo is gaining popularity with gamers. Perhaps Sony's main competition will be a new player such as Google with the new Titanium. Perhaps Sony's main threat is themselves, in how they manage their own console launches, libraries, console versions, streaming services, online platforms and OS, or their relationships with 3rd parties.
One thing is clear:
- Sony won the first war on the home console front against Nintendo and Sega.
- Sony lost on the portable front to Nintendo.
- Sony lost ground on the home console front to Microsoft and won it back, but could lose it again depending on how they and MS handle things.
- Sony's efforts are currently entirely focused on the home console space, but are also experimenting with games as a service (streaming) with Playstation Now.
- Sony has not thrown themselves on new technologies and often prefer to follow proven trails (e.g. the Playstation Move was a late answer to the Wii, disks are still the primary means of distribution, streaming services are not fully deployed as the single source of delivery)
- There seem to be relatively new players ready to join the battle (Google, Nvidia, Valve, EA, Apple).
I wrote this piece after reading this rumor thread on a new Google console. I hope you found it interesting, and the poll is there for you to share what you're leaning towards.