They didn't because video game manufacture always increase the power over previous generations.  No manufacture would every downgrade power for the next generation.  It is the amount of power/cost that is in question.  Making a very powerful system usually means that inflates the price due to having to include newer technology.  What Sony should have done was design a system that was on par with 360 or slightly above it with parts (GPU, Memory, etc) that would have kept it in the 350-400 price range for launch.  They didn't and included the IBM cell microprocessor which you could probably find similar results with a cheaper option.  Including the Blu-Ray drive back then didn't help either (since they were pretty damn expensive when it first launched).  There were cheaper options available which they would have sacrificed some power.  However, they could have released a more consumer friendly price tag which would have probably guaranteed their spot on top again.  Nope they had to go the route of almost "PC mentality".  Thinking if they just put the most expensive/most recent technology in a system and slap the PS name on it that it would sell no matter the cost.  There are reasonable technological advances video game manufacturers should strive for their next generation machine that don't put the price out of consumers pockets.  They have to balance performance with price.  If you can't balance those then you are destined to enter a console race with one hand tied behind your back.   Also, they need one more thing to sell: Games.

Wii - didn't have too much performance upgrade but offered something new at a low launch price

360 - offered a good performance upgrade and had a semi decent launch price

PS3 - offered an even better performance upgrade than 360 with included features such as Blu-ray but a very bad launch price

The 16-bit era was the SNES, the Sega Megadrive (or Genesis), and the PC-Engine (or Turbografx-16), The Neo-Geo doesn't count as it was not intended to be a direct competition on the other 3, it was not available everywhere, it was a 1:1 arcade port, and the price was put for selling at a profit in a low volume, it was an elite system for a few people...

The PC-Engine was powerful compared to the NES, but compared to the other two it lacked a lot, it had a 8-bit CPU with a good clock speed, and it was really crippled on inputs and outputs. The Genesis had the clock speed, faster than the SNES one, but the SNES won with the CPU-architecture, sound capabilities, the amazing Mode-7 and the inclusion of the enhancement chips, the two most famous were the Super FX and the CX4...

So bottom line, the 16-bit era was the only one where the selling ranking was on par with the console power... Super Nes 1st overall, Genesis 2nd overall and Turbografx 3rd overall...

1. Agreed.

2. No. Just no. That is a load of shit and you know it. Provide some links. Maybe I might believe you.

The reason the most powerful system rarely leads the market is because, in order for a system to be the most powerful system, these systems tend to come with several significant disadvantages. The two most obvious disadvantages are price (often these systems launch at $100 or more above than the market leader) and being released later (often a year or more after the market leader).

1.  Saying the most powerful system always wins is false.

2.  The PS1 certainly had some advantages over the N64 (storage space, crisper sound).  And while I have heard that the PS1 could calculate more polys as you mentioned, I believe it was for basic, flat-shaded only.  Once texture mapping, effects, etc were added for an actual game environment, the N64 pushed more, and it was certainly more powerful overall (faster cpu speed, better texture mapping, more color, anti aliasing, Z buffering).

3.  Uh, I hope you don't really believe that.

Just on the N64 vs. Playstation ...

Check out the games for both systems ( N64: http://ign64.ign.com/  Playstation: http://psx.ign.com/ ) and it should be very clear that, in real world performance, the N64 was significantly more powerful than the Playstation.

Edit: On top of this, the argument about the Playstation being able to calculate more polygons is entirely false; the Playstation did not have dedicated 3D hardware and was at a significant disadvantage.

There was an old argument that the PS2 was better able to calculate raw polygons than the Gamecube but that was based (almost entirely) on the technical specifications released by the companies. Nintendo claimed that the Gamecube could produce 12 to 15 million polygons per second in game (which it eventually did), and Sony claimed that the PS2 could produce 66 million polygons per second even though the best PS2 games only achieved 10% of that.

Still, not the most powerful, that is the point of the thread.

I wish Wii have at least the half of the support that PS2 has...

It seems silly to lump the 360 and the PS3 together to say graphics matter. The two weakest systems combined (360 and Wii) trounce the more powerful PS3, which proves power alone doesn't win a console war.

It's just because most of the winners in a console generation were released before the losers when talking about the major competitors, moores law dictates that later consoles would typically on average be more powerful. The fact that the most powerful consoles haven't won is more a result of other factors.

if the wii was as powerful, nevermind more, it would have twice as many sales as it currentlys has, and there wouldn't be a single 3rd party that wouldn't be supporting it the shit out it. It'd have BETTER support than the ps2 and ps3 would have been in real deep shit