It's my belief that the deciding battleground for last generation was back in 2000, with the clash between PS2 and Dreamcast. Momentum is a powerful thing, as we all know, and it's very, very hard for a company to change sales momentum once it's resolved (as Nintendo can attest after watching their $100 machine continue to languish at 3rd place). The timing of the PS2 against the Xbox and GameCube was absolutely critical to their performance, more than any other factor.

I mean, sure, people talk about the PS2's tremendous 3rd party support, they talk about the PlayStation brand's tremendous influence, but these are often an end in themselves, rather than a means (as Wii can attest). I think that Sony's ability to grab the initiative from Sega, a year before Xbox or GameCube came on the scene, was what ultimately gave them the great things that later secured the PS2's greater strengths.

Basically, Sony's ability to out-hype the Dreamcast in that critical early juncture is what won them that generation. Everything else fell into place because of that. Now, superior 3rd party support was part of what gave PS2 that edge in hype over the Dreamcast, but that was as much through Sony's ability to convince 3rd parties that the PS2 was the horse to bet on, not Dreamcast, as it happened to turn out.

I'm not insulting any console, btw. I'm just asserting that how PS2 out-hyped the Dreamcast is what set the console up for greatness, and the year's worth of momentum they were able to build, and the fact that Microsoft and Nintendo were not offering anything fundamentally different meant that there was no chance of them winning, even if MS and Nintendo had corrected others of their flaws (like if Xbox had gotten better Japanese 3rd party support, or Nintendo had embraced DVDs and online), they couldn't have done anything to take that momentum away.

Yes, I would agree with that. Console cycles in general are all about momentum, and lacking any upsets (since all the consoles were not so dissimilar), Sony got their momentum going well ahead of the competition, hence ensuring very strong software support as well as a market for those third party games.

It was a big part of it, yes.

Sega burnt through their store of good-will before the Dreamcast was released, much like Sony did to get the PS3 underway along with the container loads of cash, but Sega was worse to the point where the fuel light was on. It was always going to be a losing battle because Sega was finished before they even got to start. Its not that the PS2 was so strong at that point, it was more that Sega was so weak. Its good will which gives a company like Nintendo or Microsoft (now) or Sony a place at the table, you need the confidence of the third party developers and the confidence of consumers and getting it is a massive chicken/egg problem where you have to get both the chicken and the egg at the same time. Nintendo could have launched the Dreamcast against the PS2 (goodwill), Microsoft could have done the same (money) but Sega themselves didn't have enough of either.

dont forget the dvd player in the ps2 that helped a lot. it was my first dvd player

I agree that it was as much Sega's failure as it was Sony's success, but the point stands either way. The theory isn't so much about the Dreamcast's failure as it was about how, by defeating the Dreamcast, Sony cemented a victory that Microsoft or Nintendo could not budge (in the what-if world, though, i'm saying that Microsoft and Nintendo couldn't have won if they modified the strategy they took with the actual hardware they had, factoring out the what-if of Nintendo releasing the Wii back then, which would significantly complicate things)

You are putting too much weight to the hype, i think that the psx made the ps2 as a obvious selecion for many people, the price was still accesible and it had great games coming, the dreamcast didnt had much to offer from the beginning and the GC only had Nintendo for most of it

Compared to this generation, the PS3 was way too expensive for the ps2 users to make the change, im not sure about the xbox though i dont i find it to be that good aside from the online service, the ps3 has bluray and incredible graphics, the wii has the controller and a huge nintendo on its back

well the major thing in japan was the ps2 being the cheapest dvd player available, which was a format which was increasingly catching on at the time. Same with america as well. Brand name and marketing just outshadowed a damaged sega. And when I mean damaged, I mean 2 failed add-ons, 2 failed handhelds, and their fledging saturn which further lost them influence.