An alliance between Sony and Microsoft would make about as much sense as Beowulf having sex with Robert Fulton at the second battle of Antietem.

Arrgh! Stay out of my dreams!

Depends who has the most input.
I'm not into being nickle and dimed by my console experience.

You know what I meant. Of course there has been other game companies. But during the 8 and 16 bit years none of them reached the market share that Nintendo and Sega had. As far as Nintendo and Sega were conserned Atari, NEC, SNK, 3DO etc didn't matter, and they didn't.

Actually, NEC's PC Engine (TG16) outsold Sega's Mega Drive (Genesis) in Japan - so yeah, they kinda did matter to Sega in their homeland regarding the fourth generation...

Yeah, the PC-Engine outsold even Nintendo... in Japan. The TG16 and Turbo Duo, both of which I own, sold terribly in the US and didn't matter to Nintendo or Sega. The largest market is what matters to the big companies. Japan is a small little island.  NEC may have been king of a mole hill, but Nintendo and Sega were titans fighting in mountains.

The little guys that get stepped on are not driving competition. NEC's PC-Engine was super cheap and easy to dev for. Beyond that it was so underpowered that I doubt Sega or Nintendo ever bothered to print an ad even mentioning their superiourity. But they sure did try to one up each other. Nobody tried to one up the Turbo Grafx-16 and nobody even noticed it's CD addon like they did the Sega CD.

All this is moot anyhow. Regardless of the little companies that came and went without notice, Sega dn Nintendo owned half the market each during the 16bit generation. Their competition was plenty to drive games forward. The same would be true if it was just Nintendo and MSony even if the Ouya  even gets released. Nobody will notice the Ouya or care about it's tech. Everyone will be talking about the big two and their tech. The big two will be enough to drive gaming forward just like back in the 16bit days.

Lol, oh the terror that people would be screaming. xD

VGC needs this!!!

I wouldn't call the Japanese game market a "molehill" back in the fourth generation, simply because it was such an important player back then.  And remember that Japanese companies are very proud when it comes to their home turf.  

Of course Nintendo and Sega were undoubtedly the top dogs in the fourth generation and their rivalry was the most legendary before Sony and Microsoft entered the market, but by your rationale - that only the top dogs have merit in the marketplace - would render Nintendo and Sega insignificant for two generations since Sony demolished them.  Were they a threat to Sony in the 5th and 6th gens?  Nope.  Were there console/fanboy rivalries regarding said companies during those eras?  Absolutely.

Which brings me back to my initial response to your post in the first place, which was to point out (mostly to some of the younger members here who may have read it) that Nintendo and Sega weren't the only companies around back then, nor was their rivalry the first.  After all, console rivalries have been around since the '70s with Magnavox vs Atari, and later, 2600 vs Intellivision, etc.

I like the idea of having one console to rule them all.
And also the fanboy wars would be much simpler, for instance:
Fanboy wars now:
PS3 vs 360
PS3 vs PC
360 vs PC
PC vs Wii
360 vs Wii
PS3 vs Wii

Fanboy wars in the MicroSony console era:
Playbox/XStation vs PC
Playbox/XStation vs WiiU
WiiU vs PC

Hey what do you guys like better?
Playbox or XStation?
I like both

What would be the point?

MS + Sony have 95% of the same exact games, they aim and market at the same exact demographic, lol.

What's Uncharted going to do for MS that Halo or Gears of War doesn't already do better?

There wouldn't be a "merger". What this would be would be Microsoft taking the Playstation brand and killing it off so that everything could be centralized under their own Microsoft XBox brand (lol at anyone who thinks they'd 'share' power with a dirt broke Sony).

They'd strip the Playstation down, keep the Uncharted, God of War, and Gran Turismo franchises (until they become unprofitable) and everything else would be gutted. Look at what they did to Rare.

Sony + Nintendo would be far more compelling as they actually have games that contrast each other well (Mario + Uncharted + Zelda + God Of War + Pokemon + Gran Turismo along with Monster Hunter + Dragon Quest + Final Fantasy unified under one banner too). They're both Japanese companies. And neither is big enough to destroy/rip apart the other, they'd have to work as partners. And a Sony-Nintendo cell phone handheld would be pretty kick ass.

Unfortunately, Nintendo's probably too stubborn to consider a partnership, the 3DS market in the West needs to collapse for them to start thinking about it.