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Forums - Sales Discussion - The evolution of the console market over time

I've had a big idea for the console market's history since about a year, but never got around to start it because of its scope. So instead I'll be making a more condensed version today, because having something is better than postponing it for all eternity.

The idea is to put console history into a new context which not only expands analyses, but also provides answers to bigger questions of the current time, such as why PlayStation console sales are in decline in Japan with no signs of a rebound despite continued success in other regions of the world. Or why Nintendo's home consoles have been on an up and down trajectory after the continuous decline of their first four.

Through each generation, the most important consoles will be placed in a table that contains five categories that describe the focus in their manufacturer's approach. These are:

1. Arcade Games: Consoles to play arcade games at home.
2. Arcade Evolution: Consoles to play games that have evolved from arcade gameplay.
3. Balance: Consoles that try to strike a balance between 2 and 5.
4. PC Priority: Consoles that prioritize playing PC games on console while 2 still has a notable presence.
5. PC Games: Consoles to play PC games.

It's rather rough, but should be good enough to work with.

Important notes left to preface the table: Since I am creating a new context, I might as well reinstate a generation that got lost along the way; this is why you'll see the count go up to 10. Another note is that the count prioritizes the North American market because the console market wasn't a global thing in the beginning; this is the reason why the dates for generation 3 and 4 look a bit strange, because when Japan entered the fray, there wasn't a global alignment yet.

Generation Arcade Games Arcade Evolution Balance PC Priority PC Games
1 Magnavox Odyssey
2 Atari 2600
Fairchild Channel F
Magnavox Odyssey 2
3 Atari 5200
Colecovision
Intellivision
4 NES/Famicom
Master System
5 Genesis/Mega Drive
PC Engine/TG-16
SNES/Super Famicom
6 Nintendo 64
Saturn
PlayStation
7 Dreamcast
GameCube
PlayStation2
Xbox
8 Wii PlayStation 3
Xbox 360
9 Wii U PlayStation 4
Xbox One
10 Switch PlayStation 5
Xbox Series X|S

Generation 1: The most basic of games built into the machines themselves. While the categorisation is straight-forward, there was an avalanche of devices to play Pong. As such, I call it a day by only listing the Magnavox Odyssey (1972).

Generation 2: The Atari 2600 (1977) is legendary with its estimated sales of 30 million units, that's why to this day there are companies who try to sell products based on this name. The other two most notable names of this generation are the Fairchild Channel F (1976) and Magnavox Odyssey 2 (1978).

Generation 3: This is the generation you typically see wiped from history and lumped together with generation 2 because it was a dark era for the console market. Make no mistake, the Atari 5200 (1982) was the successor to the Atari 2600, it's just that it failed with only ~1 million units sold. Both the Colecovision (1982) and Intellivision (1980) are estimated to have been more successful with 2 million and 3 million, respectively, but they are pitiful numbers nonetheless.

Generation 4: With the two Japanese companies Nintendo and Sega looking for global success, we see the first major changes in the console business. Not only did Japan take over, but the games themselves did change with password systems and even game saves becoming much more prevalent. The Famicom launched in 1983 and then as NES in 1985 in North America; total sales: 61.91m. Sega's Master System (~13 million) was released in 1985.

Generation 5: Nintendo remained the market leader with the SNES (1990, ~49m), but the competition was fiercer this time around. The Genesis (1988, estimates ranging from 30-35m) and Turbografx-16 (1987, ~10m) did well for themselves too.

Generation 6: This gen was the next one with major changes. There was a drastic shift to 3D graphics, but also a new market leader who made big efforts to wrestle third party games away from Nintendo and Sega, and at the same time proclaimed that their biggest competitor is neither of them, but rather Microsoft. In practical terms, this meant that Sony wasn't just after the games that were on other consoles, but also ones that were at home on the PC. The major consoles of this generation were released between 1994 and 1996. From this point onwards most people are familiar enough with the sales numbers that I skip the mention of them.

Generation 7: In this gen both Nintendo (2001) and Sega (1998) responded to the success of the PS1 which moves them further to the right on the table; it didn't help either one of them. Sony (2000) grew their dominance even in the face of the arrival of Microsoft (2001). The original Xbox was the first console to feature an HDD out of the box and it was becoming clear that more and more major PC games were going to be available on consoles going forward.

Generation 8: Nintendo (2006) regained the top spot with a big adjustment to their strategy where, in a nutshell, they oriented themselves at their own success stories (most notable the NES) instead of someone else's. Sony's Ken Kutaragi realized his original vision for PlayStation (2006) with a super computer entertainment system that was initially too pricey and in turn allowed Microsoft (2005) to change their trajectory of complete failure, because the Xbox 360's launch year and outlook was originally gloomy.

Generation 9: The Wii U (2012) is commonly mocked as a PS3/360 that came a few years too late and in terms of its approach it's certainly true that it was a console like the PS3 and Xbox 360. All of a sudden Nintendo placed emphasis on the AAA productions of American and European developers who had more or less migrated from PCs to consoles. During this generation, both Sony and Microsoft (2013) relegated Japan to a tier 2 market and their approach to make their consoles about playing PC games did hurt them further in Japan, because the PC market in said country went never beyond niche status. Playing PC games on console doesn't constitute a good sales pitch when there's not much demand for PC games to begin with.

Generation 10: Sony and Microsoft (2020) continue to make consoles that are essentially dumbed down PCs whereas Nintendo (2017) goes back to doing their own thing. What the table now shows is that Nintendo is in a very different spot than Sony and Microsoft, so we have parallels between hardware and software development over time.

It used to be that the video game industry cloned Nintendo games, but eventually it branched off into making games that Nintendo didn't make while Nintendo still makes the same games they always did and therefore nowadays holds major stakes in entire genres and subgenres, because they are seemingly the only ones to grant high production values to certain types of games. For consoles themselves it's similar: It used to be that Nintendo's competitors were majorly interested in gobbling up Nintendo's spot in the market, but by now it's clear that the focus lies elsewhere which essentially cedes a large chunk of the console market entirely to Nintendo and I don't mean only the handheld market or the Japanese market, but also the essence of classic consoles in the global picture which is why Switch does well everywhere.

...

So yeah, this is what a condensed version looks like. Maybe you agree with it, maybe you don't. Maybe you find this perspective interesting, but maybe not. Maybe your head spins because you were convinced that Switch is gen 8 and here it is gen 10.

While the general placement of the consoles in the table seems to be fine, there's of course room for discussion that one or the other console should be inbetween two categories because it isn't absolutely clearcut.



Legend11 correctly predicted that GTA IV (360+PS3) would outsell SSBB. I was wrong.

A Biased Review Reloaded / Open Your Eyes / Switch Shipments

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Ok  but what exactly make Switch games so different from, PS3 or PS4 games besides production value? Some of best selling Swtich are nothing but Wii U ports 

Or are you basing your list only on hardware aspects? 



IcaroRibeiro said:

Ok  but what exactly make Switch games so different from, PS3 or PS4 games besides production value? Some of best selling Swtich are nothing but Wii U ports 

Or are you basing your list only on hardware aspects? 

The list is based on what the manufacturers expect their consoles to do.



Legend11 correctly predicted that GTA IV (360+PS3) would outsell SSBB. I was wrong.

A Biased Review Reloaded / Open Your Eyes / Switch Shipments

EDIT:  I am modifying my original post here to provide a more logical version of the first post.

Generation Arcade Games Arcade Evolution Balance PC Evolution PC Games
1

Magnavox Odyssey

Atari Pong

2

Atari 2600 

Intellivision

3

Atari 5200 

Colecovision

C64
4

Atari 7800                 

Master System

NES/Famicom
5

Genesis/Mega Drive

Neo Geo           

TG16/PCE

SNES/Super Famicom 

Gameboy

6

Saturn N64 PS1
7

Dreamcast                       

GBA

Gamecube

PS2                

Xbox

8 Wii DS

PS3          

XBox360      

PSP

9

Wii U       

3DS

PS4          

XB1        

PSVita

10 Switch

PS5             

X|S

For reference, I'll use the following terms.
1. Arcade Games: Consoles to play arcade games at home.
2. Arcade Evolution: Consoles to play games that have evolved from arcade gameplay.
3. Balance: Consoles that try to strike a balance between 2 and 4.
4. PC Evolution: Consoles that prioritize playing games which evolved from PC gameplay.
5. PC Games: Consoles to play PC games.

Also I define "Arcade" and "PC" based on what they primarily meant in the 20th century.
Arcade: Short, intense, easy to die, mainly challenges the body (e.g. coordination), uses a variety of controls especially joystick (or d-pad by extension), local multiplayer
PC: Long, slower paced, content heavy, focus on cutting edge graphics (including 3D graphics), challenges the mind (i.e. strategy, puzzle solving, etc...), uses primarily keyboard and/or mouse controls (or touchscreen and analogue stick by extension), online multiplayer

Generation 1-3: The focus of these consoles is to port arcade games onto a home system.

Generation 4:  Nintendo actually changes the nature of a home console, because of the Famicom Disk System (FDS).  If you look at the Japanese release dates of every game that came before The Legend of Zelda, you will actually see a bunch of pure arcade games (essentially the black box games).  The FDS introduces the ability to save data while still using the elementary Famicom controller which introduces a new type of game which has arcade controls, but is made for the home like The Legend of Zelda and Metroid.  Sega and Atari are still making systems primarily for arcade games.

Generation 5: Nintendo doubles down on combining arcade controls with content heavy games (e.g. Super Mario World, A Link to the Past, etc...).  In spite of this there are popular games that are both purely arcade games (e.g. Street Fighter 2) as well as PC Evolution games (e.g. Final Fantasy 6).  The Gameboy largely plays games like the NES and SNES.  The Neo Geo is quite obviously an arcade machine.  Sega is also still focused mostly on making arcade style games.  Some of these are pure arcade ports (e.g. Altered Beast, Golden Axe, etc...) while other games could have easily been put straight into the arcade (e.g. Sonic, Streets of Rage).

Generation 6:  All of the console makers move toward the PC side by moving heavily toward 3D graphics.  The PC was making 3D games for several years before this generation came along (e.g. Myst, Doom, Wing Commander, etc...).  Therefore PC game developers have a head start on first party developers when it comes to making 3D games.  Going forward game design ends up borrowing more and more from PC games out of necessity.  Nintendo and Sega only move somewhat toward the PC side, but still try to provide experiences that are somewhat arcade-like and Nintendo even sticks with cartridges.  Sony goes very strongly toward the PC side by adopting both a CD ROM and heavily encouraging 3D graphics from third party developers.  A lot of notable Playstation titles are either PC ports (e.g. Tomb Raider) or heavily inspired by PC style gameplay (e.g. Final Fantasy 7/8/9).  

Generation 7:  More of the same from the previous generation.  PC developers still have the advantage, so now games like GTA (a PC series) fully come into their own.  Nintendo is the sole maker of any significant handheld in this generation mostly because of their approach to hardware.  They go for cheaper/weaker hardware that does not drain batteries.  This philosophy paves the way for the GBA SP, which has a rechargeable battery.

Generation 8: Nintendo regained the top spot in the home market by bringing in a bunch of new customers instead of competing for Sony's customer base.  They also return more to their arcade roots with the Wii.  However, they get even further away from their arcade roots on the handheld side by including a touchscreen which simulates mouse controls.  Their approach to the DS also brings in a bunch of new customers.  They key to Nintendo's success in this generation was neither becoming more arcade-like or less arcade-like, but in offering experiences that would bring in new customers.  

Generation 9:  The Wii U and 3DS were both more complex and more expensive systems compared to their predecessors.  Consequently they both alienate a good chunk of their former fanbase. The Vita fairs even worse, and ends up killing Sony's handheld line.  PS4 gains a price advantage over XB1 early on and then later has a notable advantage in exclusives which guarantees it's commanding lead for the whole generation.

Generation 10: Sony and Microsoft continue to make consoles that are following the same philosophy of their predecessors.  Nintendo merges it's home and handheld lines into the Switch.  Every notable first party game on the Switch has a corresponding title on either the Wii U or 3DS (except RFA).  This shows that the main draw of the Switch is in it's hardware value.  In combining their home and handheld systems they took two low systems that many customers considered low value and made one very high value system.  In buying a Switch, a person essentially gets 2 systems (a home and a handheld) for the price of one.

In summary, the history of the console market shows that customers tend to buy the system that offers new experiences.  With the Famicom, Nintendo actually moved away from pure arcade gaming with the Famicom Disk System, and this move changed console gaming forever.  When 3D came along, success went to Playstation because it was the most PC-like system, and the best new experiences for most console gamers came from the PC or PC-like games.  When Nintendo made the DS and Wii, they were offering new experiences that gamers had never encountered before, and they greatly expanded the market (temporarily).  

However, since the DS and Wii, there has not been a system which came along to offer radically new software experiences.  Sony and Microsoft are following the same path they always have.  Nintendo, likewise, is largely making the same type of software that they have been making for decades.  The new experience with the Switch is on the hardware side.  Home console gamers can play their big budget games on the go if they like (e.g. BotW, Mario Odyssey, etc...).  At the same time handheld gamers are able to play games that are actually a new experience to them, since the Switch can play games much more sophisticated than the 3DS was capable of.  And of course, gamers who were already playing both home and handheld systems, get a very good value by buying one system instead of two.

The Switch is a different type of console than what has come before, because the innovation is purely on the hardware side and not really on the software side at all.  The Famicom, PS1, DS and Wii all innovated on the hardware side to offer different types of games.  The Switch is not offering different types of games.  It is offering better iterations of previous entries, much like the SNES did.  The lack of compelling new kinds of software indicates it will not appeal to non-gamers.  The value is entirely in the hardware, and therefore it is going to appeal to established gamers who understand that it is a better way to play the games they already enjoy.

Last edited by The_Liquid_Laser - on 08 April 2021

I'm impressed by your motivation until now Rol, to try to figure out the answer to the universe, which is exactly what it takes to find out what makes a console successful. I respect your effort and am always happy to see other humans wondering the same trivial questions as me, while coming from a completely different culture, country, world.

My two cents, it's about trends. The reason why compagnies succeed and then drop in this market is because trends change, and while some companies follow the trends, others meet them in fragments of time

For example, when the NES came out, games like Mario and Zelda were revolutionary, cultural phenomena that arose at a point in time and made their mark. Then, the SNES followed up but while the games were an upgrade over the prior generation, they did not have the same impact. Now compare that to Pokemon, a game that came out on a much weaker system than the SNES and even the PlayStation, but was a massive phenomenon, even until today, and allowed Nintendo to weather the toughest entrepreneurial storms.

The Wii was Nintendo's chance to make its mark again but they didn't manage to catch lightning in a bottle and let the ball drop.... But finally the Switch came in with the right design, practicality, style, and library to back it up, and all the stars aligned while Nintendo probably didn't even expect it.


The PlayStation played all the cards right from the start to make noise. They had multimedia playback, targetted sports and simulation fans, this opened gaming for other people to turn their heads, and also allowed Sony to usher older Nintendo gamers towards the next experience. However trends make it that people are getting tired of the same old experiences, so they are turning to other forms of entertainment. Still, the PS and XB maintain a certain level of popularity even while things have calmed down. The future obviously belongs to the PC due to its versatility and the diminishing returns barrier. Nintendo is in the best position it has enjoyed since the NES and is here to stay as the new banner for games, and will likely be so for many generations to come. The reason is that Nintendo is on the trend and will ride, surf and even drive it for a few years, even generations. They're on top now.



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The_Liquid_Laser said:

This is an interesting categorization.  Probably the main thing that isn't quite so clear is what gets categorized as a "PC game" and what is "arcade evolution"?  I would probably call Animal Crossing a PC game, since it is a life sim.  However, it has never been available on PC.  On the other hand I'm not sure how I would categorize games like 3D Mario and 3D Zelda.  They don't feel like arcade evolved games or PC games to me.  I guess they are arcade evolved, but they are just a further iteration away from pure arcade games?


The other thing that isn't quite so clear is why Dreamcast and Gamecube are considered "Balance", while the N64 and Saturn are considered arcade evolution.  I do admit that I've never owned either a N64 or Saturn though.  From what I can tell N64 and Gamecube had very similar games, especially for the major releases.  Does this classification have more to do with third party games?  (But then again the Wii's third party library was not really strongly in the arcade evolution category.)  Dreamcast actually had a whole lot of arcade games: Marvel vs. Capcom, Powerstone, Guantlet: Dark Legacy, plenty of shmups, etc....

From Switch top 10 best sellers:

BOTW differs nothing from Sony/MS games,  I'd say it's closer to a PC game

Mario Kart is Arcade Evolved, no contest

Odyssey seems more like a balanced maybe? 

Smash is also more like an Arcade game

Sword and Shield is a classic console RPG but with very few focus in story and plotline, I don't know exactly how to classify it 

Let's Go is a mixed smartphone game and a classic Pokemon game 

Animal Crossing... I'm not sure. I don't get the same feelings playing AC as I do playing other simulators, I guess the fact the game meet major success playing in handhelds where people could play in small little sessions is their best selling point. I might consider it another thing altogether, maybe closer to mobile games than either PC or Console games 

Mario Party is... no idea. How do you see party games? 

Splatoon 2 is a PC game played on console. Anybody who disagrees with the single player campaign in mind don't really understand the popularity of the game lies on its multiplayer 

New Super Mario Bros U is also an arcade game

Bonus (future top 10): Monster Hunter Rise, also a balance between arcade games and PC games

Overall Switch strikes me more in the Balanced category than arcade evolved. Switch library being diverse is one of its selling point 



The_Liquid_Laser said:

This is an interesting categorization.  Probably the main thing that isn't quite so clear is what gets categorized as a "PC game" and what is "arcade evolution"?  I would probably call Animal Crossing a PC game, since it is a life sim.  However, it has never been available on PC.  On the other hand I'm not sure how I would categorize games like 3D Mario and 3D Zelda.  They don't feel like arcade evolved games or PC games to me.  I guess they are arcade evolved, but they are just a further iteration away from pure arcade games?


The other thing that isn't quite so clear is why Dreamcast and Gamecube are considered "Balance", while the N64 and Saturn are considered arcade evolution.  I do admit that I've never owned either a N64 or Saturn though.  From what I can tell N64 and Gamecube had very similar games, especially for the major releases.  Does this classification have more to do with third party games?  (But then again the Wii's third party library was not really strongly in the arcade evolution category.)  Dreamcast actually had a whole lot of arcade games: Marvel vs. Capcom, Powerstone, Guantlet: Dark Legacy, plenty of shmups, etc....

Arcade games and PC games used to have very strong differences, but much like the definitions and borders of video game genres, it begins to blend into each other over time. That's why younger people are probably unable to tell a difference for the most part.

An arcade game had to be instantly understood to get players hooked, because otherwise people would just walk over to the next cabinet. This created a very different setting for software competition than on the PC where games could afford to have steep learning curves. A logical result of this is that arcade games needed very few buttons for their controls whereas games on a PC worked with the keyboard and had virtually no limit on the keys being used in games.

The example of Animal Crossing has similarities to Fire Emblem where you may feel inclined to assign it to the PC side because you associate the genre itself with the PC, but in both cases the games have a distinct feel to them because their approach was not to get a PC game to work on a console, but rather to adapt a PC genre by working from the premise of console game design, which means that only a few buttons cover all important functions while at the same time there's a focus on only the key ingredients instead of offering dozens of options. Another example would be the JRPG genre which is an adaptation of PC RPGs; while in a PC RPG the player had a lot of options for the character build, the stat and talent growth with level ups was significantly streamlined for JRPGs like Final Fantasy and Dragon Quest. In all examples in this paragraph I am refering to the very first game in each series.

3D games on console like Mario and Zelda can be called a further step away from pure arcade games. There's certainly some bloatiness and timewasting involved that isn't present in their 2D counterparts, so they aren't quite the same. I'd say that comes with the added dimension for gameplay that necessitates a bit more complexity in both controls and level design.

The classification is based on what console manufacturers went for. The Saturn and N64 should probably be a half-step between Arcade Evolution and Balance for the above mentioned reason that 3D games don't have the same purity as older arcade games in quite a few genres. Both the Dreamcast and GameCube had their manufacturers adjust to be more like PlayStation, so it would be correct to say that both major first and third party software efforts determine where a console is placed. I say "major" because you can find something of almost everything on modern consoles, but the key is where the emphasis is.



Legend11 correctly predicted that GTA IV (360+PS3) would outsell SSBB. I was wrong.

A Biased Review Reloaded / Open Your Eyes / Switch Shipments

RolStoppable said:

Another example would be the JRPG genre which is an adaptation of PC RPGs; while in a PC RPG the player had a lot of options for the character build, the stat and talent growth with level ups was significantly streamlined for JRPGs like Final Fantasy and Dragon Quest. In all examples in this paragraph I am refering to the very first game in each series.

There is a nice video about it I watched while a go explaining this 

https://youtube.com/watch?v=fJiwn8iXqOI&feature=youtu.be

Basically Dragon Quest became popular because it brings a more accessible approach for the very complex PC RPGs (that were mostly based on the rules of board RPGs in mind)



im not sure why you put the switch as gen 10 since i called it in 2014 gen 8.5 because its exactly what the wii u should have been all along in my generation 8 prediction thread



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The_Liquid_Laser said:

This is an interesting categorization.  Probably the main thing that isn't quite so clear is what gets categorized as a "PC game" and what is "arcade evolution"?  I would probably call Animal Crossing a PC game, since it is a life sim.  However, it has never been available on PC.  On the other hand I'm not sure how I would categorize games like 3D Mario and 3D Zelda.  They don't feel like arcade evolved games or PC games to me.  I guess they are arcade evolved, but they are just a further iteration away from pure arcade games?


The other thing that isn't quite so clear is why Dreamcast and Gamecube are considered "Balance", while the N64 and Saturn are considered arcade evolution.  I do admit that I've never owned either a N64 or Saturn though.  From what I can tell N64 and Gamecube had very similar games, especially for the major releases.  Does this classification have more to do with third party games?  (But then again the Wii's third party library was not really strongly in the arcade evolution category.)  Dreamcast actually had a whole lot of arcade games: Marvel vs. Capcom, Powerstone, Guantlet: Dark Legacy, plenty of shmups, etc....

the arcade branch with Atari, Sega, Nintendo have one contender now: Nintendo. In Generation 3 and 4, Nintendo has a great conteder, pumped arcade game style, Sega. Now, Sega embraced the cinematograph games. Cinematograph games have pc roots.

The Pc branch with Sony, Microsoft, and Activision and EA pumped the games have a crowd competition. The Action Gun/Sword game with narrative direction it's a saturation point now. And the arcades base styles, have Nintendo with the leader of the segment. Race, Fighter, Platform, Zelda( besides Adveture or Rpg), Strategy, Sim, etc.

Animal Crosssing is arcade sim, because of short of times of play. the more simplification of rules.