Failure is a complicated term.
The REAL and MOST IMPORTANT factor in success or failure of a system is its ability to make money. Profit.
All businesses go into business to make money. And not just a little or enough to get by. They make products to make as much as they can from that product in order to build as a company and create more and different products.
Another factor of success and failure is how many and the percentage of units are accepted and used by the buyers in comparison to the competition. Sales. Marketshare. This is what MOST gamers get caught up on when calling something success or failure. And on the surface having the most sales seems successful. But this is only TRULY successful if that first factor I mentioned goes along with it. If you spend $200 to make then sell $100 worth of product then while you may sell out and the buyers have and use your product you've actually failed.
A lemonade stand example. The total cost of the ingredients (lemons, sugar, water also styrofoam cups, serving pitcher, mixing spoon and little table to sell them on, maybe magic marker and cardboard sign to advertise "shop") that go into your selection of lemonade drinks comes up to let's say $10.00 and you can produce 50 drinks with that $10. You sell each of your drinks for a dime, 10 cents. All 50 drinks sell out and you made $5! YAY! (50 X .10 = 5.00) Oops! You had to spend 10 of your original dollars just to be able to make the 50 drinks and only got $5 back in return. You actually lost $5 selling your goods! Sure you sell out everytime with those cheap prices but it actually costs you to stay in business. What's the point of this unless you like being charitable? If so, then just GIVE the drinks away. That's TRUE charity, right? No need for money exchange then.
So as you can see having the most sales doesn't necessarily reflect success and true victory. It WILL endear you in the hearts of your loyal buyers but financially you'll be hurting if all this effort doesn't produce reasonable profits. And say if the kid sold the lemonade for 20 cents...he'd STILL be just breaking even. No progress. He paid back all of his R & D, his costs of production, his overhead. That's better than losing money but you're exactly where you started before you made the drinks. You might as well have just given it away and be done with it. Woulda been a lot simpler and quicker.
If the kid sold his 50 drinks for a quarter each and sold 'em all he would have made $12.50...that's $2.50 profit! Eventually the kid could save and build on that and maybe set himself up a chain of lemonade drinkstands in the future or go into ice cream and cookie sales to diversify! Maybe set up a little candy business on the side for extra profit pull in.
Another measure of success is respect and reputation. This tends to go along with the last measure because of humanity's love of a winner. How you are perceived by your public. This is how you keep buyerbases continuing to want to buy from you. It means nothing immediate for the pocketbook but it's important to be respected by your customers and have a good reputation. Doing this will keep customers by your side in a slump. Think of sports teams who historically lose year after year yet still have loyal fanbases waiting for them to win. Decades and centuries even. They pass on their loyalty to their descendants. Now THAT'S dedication! And then when they finally win the loyals rejoice like no tomorrow. If your customers see something good in you that customer is more apt to stick by you when times are tough.
One more is leadership. Ability to dictate or change the pace of the field you're in. This one can bring in respect & reputation as well though not necessarily profits or sales bases. Those visionaries who see a missing element in their field of business and work to rectify it for their own good. Often it ends up rectifying it for the field-at-large as a good idea is usually incorporated by the competition so they won't look old hat or get usurped. This CAN bring in profits and salesbases but that depends on how hard it was for the competition to copycat or modify the idea.
You can also say employee satisfaction. If you do well in this aspect you will have a workforce willing to put their best effort on the line to make your company grow & evolve. A workforce that isn't happy will most likely not be as willing or wanting to make the company powerful. They'll use the job for their own personal gain knowing the company is using them for theirs. The problems comes from the topdown. Waterfalls drop from the cliffs.
There are many ways to count success but the only ones on the charts tend to be Profit & Marketshare since they are probably the easiest to measure.
3rd place in a contest of 10 isn't that bad. Olympics say 3rd best gets a bronze and gets to stand up on the 3-level stage to revel in his/her glory. 3rd place in a contest of 3 can be bad because 3rd also means last. 3rd in 1,000? Exceptionally good! 3rd in 3? You got work to do, my friend.
In win or lose scenarios there can be only one. In contests of the mosaic it matters less but you can't ALMOST get away from the police or ALMOST win Bingo or ALMOST jump over that bottomless gorge. Some contests make it binary and it's either gain or fail.
Luckily in gaming like some parts of life it's not so binary. There CAN be a big winner and a little winner. Or a big winner, a medium winner, and a little winner.
The reason in gaming 3rd place can be seen as bad often times is because of the current state of the industry. It's STILL quite small in comparison to other industries. The talent is limited and the competition is few. The audience's resources are finite and the buyers are fickle. The industry as it currently stands usually cannot decently support more than 2 competitors at a time. At most people are willing to buy only 2 different systems. There are those who buy 'em all but they are either an intense devotee (collector), have their priorites skewed only to gaming at the expense of other things, or just have money and room to spare. In the pyramid of life most people are at the base and the base says most people are poor, working class, middle class with priorities not totally focused on gaming tending not to be an extreme devotee.
Gamesystems are investments that accumulatively take up a lot of money over time and a lot of space with the libraries built and accessories gathered. Also a lot of time to delve into each title and there are only 24 hours in a day and 7 days in a week. Most people don't have much of none of the three. Not enough money. Not enough space. Not enough time. One or more or all will be the case for the "pyramid's base".
So they become selective and pick the best choice for their needs. We all have different tastes and pick a variety of choices based on our unique tastes. But as varied as our tastes are there are not enough companies able to cater to each one. There would be Madden system for those who only like playing Madden & a Final Fantasy system for those who like playing Final Fantasy and other RPGs. There are only so many developers to go around and only so much funding to support development. So we have companies who select a broad swath of outlooks to entice the relatively small base to come over to their system. So it comes from both ends. Lack of resources and manpower on producer-end and user-end. This is why the industry has limits and why it can only reasonably support 2 companies at best as it currently stands.
Since this thing is limited developers/publishers/sellers try to make as much as they can looking for the greatest populational audiences they can find. OR influencing that audience to try out a new idea so to BECOME that developer's audience. Once one platform that holds the developer's offerings gathers enough audience it entices developers to want to perform there. A bond is created between developer and user and user follows developer whereever it goes. The user tries to influence other users to join the bond since humans are a social species that have to interact and share connection with one another. The more the bond complexifies and strengthens the better base the platform has entrenched and if the platform provides enough different developers to provide for each of the user's needs, whims, & moods the user has little inclination to go elsewhere. They have found their personal gaming nirvana and the platform & developers gets all the tribute paid by their locked-in base of users.
The opposing platforms have to fill a need that the other platform does not and similarly make it attractive for developers to bring their user bonds and create new user bonds on their platform. If the original platform fills most of these needs the other platform will be the alternative and loved by that few but little else. Tributes will similarly be proportionally small due to less base gathered. If both platforms fill a relatively equal set of needs then both platforms will be market winners with only negligible #1 & #2 status applied.
Since users are few and platforms can provide wide sets of needs it makes it hard for a 3rd platform to find its draw. It either is too similar to another which won't sway the already locked-in or not fulfilling a need for a decent amount of users.
Its tributes will be smaller than the last one.
There will be a clear hierarchy in marketshare. That's purely based on user-to-developer/platform bond. It's the people marker.
If the platform maker spent a certain amount and the user tribute exceeded it then that maker is also successful profitwise. If not then while the maker has the people it won't have the funding
Without funding it will be harder to keep up the platform and you risk losing your audience. When it turns to Walter Reed Hospital and mildew is on the ceiling the bond will slowly be broken. When the Colliseum goes into disrepair the crowd won't wanna watch lion matches against the gladiators anymore. Financial momentum is most important to keep up. It takes marketshare momentum to empower financial momentum due to amount of user tribute.
Rep & Respect momentum holds user bonds even when Walter Reed effect is going on.
Leadership momentum gives you the ability to jumpstart new momentum in marketshare, rep/respect, financial.
Employee satisfaction momentum gives you the manpower to energize your leadership momentum since company will work as one to achieve set goals.
In the 6th generation this is how it went down in the console-only success charts (3 competitors out of 3).
Financials: 1st- Nintendo, 2nd- Sony, 3rd- Microsoft
Marketshare: 1st- Sony, 2nd- Microsoft, 3rd Nintendo
Rep & Respect: 1st- Sony, 2nd- Microsoft, 3rd- Nintendo
Leadership: 1st- Microsoft, 2nd- Nintendo, 3rd- Sony
Employee Satisfaction (speculative): 1st- Nintendo, 2nd- Microsoft, 3rd- Sony (the first 2 exceeded content Sony because the employees had drive to overcome the marketshare/respect leader and worked together to make it happen)
In the limited field of gaming being 3rd out of 3 can be fatal since 3 consoles are in danger of becoming like 5th wheels. Look at my stats:
•Microsoft was financially terrible. Only because they were the monopoly of Operating Systems were they able to recover from that. 4 Billion Dollars LOST? On gaming? Unheard of!
•Nintendo was losing marketshare with each generation which would eventually erode their financial success if they didn't do anything to stop it.
•Nintendo was ALSO the least respected of the 3 not long ago. People talking about them going 3rd party and leaving the console business. Talk about next-gen without even mentioning Nintendo's name in the conversation. Kiddie, old hat, anti-Mario, anti-Nintendo in general. Nintendo had to do something to change this because only Nintendo loyals stuck to them in this time and more and more began to slip as time went on. This means eventually less marketshare and less financials obviously.
•Sony never really led the way with much during their 12-year Playstation success. They coasted by on their market leadership not ushering in much new wanted change. Their decisions didn't affect the business policies of the competition like the competition did to theirs. In other words in terms of leadership the competition's bold directions and implementations had a greater effect on Sony than Sony's directions and implementations had on them. (it definitely showed in the PS3 that's for sure)
•Sony's employees were probably for the most part satisfied being on the top of the heap in market and rep. But it was complacency compared to the energized satisfaction of the competition who brainstormed and configured ways of coming up with new ideas to upset the others. Obviously Nintendo's employees were most energized and the results showed in the Wii and DS.
In Japan XBox 360 is a failure Financially, Marketsharewise, Respectfully, Leadershipwise, and in Employee Satisfaction. It is an outright failure in all of those respects in Japan. They are trying but they are failing. They may not fail forever if their employee power rises and it builds a little leadership maybe a little respect but you can pretty much say the 360 is toast in Nihonville.
I think this essay has spelled it out. This is a mosaic contest where #1 & #2 don't necessarily have to mean winner and loser but there ARE hierarchies and if you use my 5 points of comparison you can call out the stats to see how much a system failed and succeeded. The only ones market charts read is finance and mostly sales figures but this only tells part of the story.
John Lucas