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Why are there only four console manufacturers left?


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#1
Skynet877

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Why is it that ever since the advent of modern gaming
(GameCube/PS2/Dreamcast/Xbox - Wii/PS3/360), there have been only four
console manufacturers?  It doesn't make much sense, in the previous
generation (N64/Saturn/PS1/3DO/etc.), there were tons of consoles and
console companies. Back in the day there were tons of other
mainstream console companies: The 3DO Company (3DO Interactive
Multiplayer), SNK (Neo Geo), Amiga (Amiga CD32), Royal Phillips
Electronics (CD-i), NEC Corporation (TurboGrafx-16), Atari (Atari
Jaguar), Casio Loopy, and a couple minor ones.  Granted, most of them
were commercial failures (save for Nintendo, Sega, Sony, and strangely
enough, The 3DO Company). But then everything changed when
gaming became modern, when the sixth generation (current generation)
started there were only four that even tried to compete.  It's like all
the other companies all just left the console gaming industry.  Now in
the seventh generation (next generation), we have seen the Dreamcast 2
get canceled, leaving but three active console manufacturers.
Now tell me this, why did every single one of the companies that were in
the console market (save for Nintendo, Sega, and Sony) not enter the
sixth generation?  They competed in the third, fourth, and fifth
generations, but then every single one of them stopped at the same time.
 Now I understand that most of the companies probably didn't have
enough funds to create a hi-tech modern console, but the thing is, they
didn't even try.  We didn't even see a 3DO Interactive Multiplayer 2,
when the first one sold more than 2 million units, making it the fourth
most successful console of the fifth generation. Does anyone
else find it odd that they all dropped out?  I mean, every few
generations we see one or two die off, but nothing like this, atleast
not since the video game crash of 1983.  Right now it's almost like a
monopoly, since there is such little variety.  I mean really, all you
have to choose from is Nintendo, Sony, Microsoft, and Sega.  That's not
too much variety. I do realize that there was supposed to be a
fifth company, Infinium Labs/Phantom Entertainment, perhaps you've heard
of the Phantom?  The Linux console that was announced a few years back
and became a bit of an urban legend?  Yes well, I applaud
Infinium/Phantom's enthusiasm, but they seriously frakked up.  They
canceled the console after getting everyone's hopes up and then
squandered away the investments that third-party companies invested into
the Phantom.  That's a pretty douche bag move, even in the video game
market, which is a market full of mergers, hostile takeovers, buy-outs,
studio closures, and subsidization. Well, I think I'll just
leave this here for you to discuss and ponder about.  Thank you all for
reading, I hope you found this both informative and entertaining.  I
encourage you to leave your own comments below.

#2
Canned Bullets

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Don't you mean 3 console manufacturers?

#3
Seagloom

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The answer to this would take awhile as we would need to cover each console manufacturer individually. Short version: each developer was forced to abandon the console market due to lack of profitability. Some of those manufacturers had to close up shop. Others were able to stay in business, but decided to focus purely on game development instead. The stories are fairly varied.

SNK is one of my favorite companies, and oddly, has one of my favorite stories in particular. They went bankrupt and got bought out by a pachinko manufacturer. Then SNK's old high-ups formed a new development house, which eventually bought SNK back, fusing their new company with the old and resulting in SNK/Playmore.

Another reason is lack of market share. Game industry history has shown it's usually two consoles that achieve widespread mainstream success; with a third lingering on a ways behind the others. A few, such as the Neo Geo, survived entirely by catering to a niche of very devoted fans. Most consoles do not have that luxury.

The Sega Genesis (Mega Drive), SNES, and TurboGrafx-16 competed against each other. Nintendo grabbed a slice, Sega was left with a smaller but sizable piece, NEC struggled to survive until they were forced to pack it in. Other consoles during this period were niche such as the Neo Geo, or lingered on for a brief period until they burned like so many moths to a flame.

Next console generation, it occurred again. The Playstation, Saturn, and N64... Playstation won the lion's share of sales, followed by the N64. Sega's Saturn was left to die as US executives' heads rolled. The 3DO and Atari Jaguar were released just before this time and were quickly forced out as they simply could not compete Sony, Sega, and Nintendo.

Sega's Dreamcast had saw a measure of success before the Playstation 2 was released and trounced it. Then there was only the PS2, Xbox, and Gamecube.

This pattern even held true for portables with the main exception being no one has ever managed to overcome Nintendo's dominance there. The current generation is actually unique in that it's only the second generation with three systems coexisting and no obvious loser. Although Nintendo is clearly the winner for now. While there is still a divide between the three in terms of which are most successful, neither Sony or Microsoft feels threatened enough to give up. There are a number of reasons I think that is, but that's another topic and pure conjecture besides. Of course the reasons why some of the above mentioned consoles failed are way more involved than simply "there can only be two!"

Bottom line: it comes down to money. It's scarce. Consoles and games are more expensive to produce and market than ever. Times have changed. An industry with multiple systems was hard to sustain before. It's virtually impossible now. Not that I mind. The only thing I miss about those days are going to arcades.

Modifié par Seagloom, 23 mars 2010 - 03:36 .


#4
AshedMan

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What console does SEGA make?

#5
Seagloom

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Now? Nothing. They gave up after the Dreamcast flopped. They decided consoles weren't worth the trouble anymore, which is why you can find Sonic games on other consoles now. Sony's savvy coupled with Sega's lousy decisions ultimately buried them.

Modifié par Seagloom, 23 mars 2010 - 03:08 .


#6
Thunderwolf

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It probably could be funds man. A lot of companies probably just thought it would be more lucrative to make games then compete in a full on console war with "Big 3". I have heard of the phantom; the idea amazed me but it just fell off the grid. Curious, but I don't know man. It is something to think about.

#7
Wicked 702

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To add to what Seagloom posted, which is a fantastic explanation by the way, designing and manufacturing consoles is an expensive business. Companies like Microsoft and Sony actually lose money on every Xbox or PS they sell, it's the licensing of games where they recoup the losses and turn a profit. Those companies that left the console market likely were unable to get enough game makers to produce for their console. That's a no-win business model in the gaming industry...

#8
Zaxares

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As others have said, it all comes down to 'money'. Because the current major players are so well established and command such huge shares, it would take a PHENOMENAL amount of capital and funding to try and break into the console gaming market. The Xbox apparently struggled in the red for years before it finally managed to start turning a profit. It only succeeded because Microsoft is such a behemoth in the technological world and could afford the losses and time it took for the Xbox to establish itself and start competing effectively. That kind of effort would bankrupt most other companies.



As Thunderwolf and Seagloom have said, it's simply much safer and more profitable to develop games for the established consoles than try to compete directly with them.

#9
Statulos

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Seagloom wrote...
SNK is one of my favorite companies, and oddly, has one of my favorite stories in particular. They went bankrupt and got bought out by a pachinko manufacturer. Then SNK's old high-ups formed a new development house, which eventually bought SNK back, fusing their new company with the old and resulting in SNK/Playmore.

Back in the day, getting a Neo Geo was sooooooo horribly expensive that most of us only dreamed with it.

#10
Seagloom

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Tell me about it. It remained that way into this decade. I bought a used Neo Geo and several games once and they cost me as much as brand new SNES games. There was one guy I was acquainted with as a teenager... an older gentleman that worked in a video store. He blew ridiculous amounts of cash on buying Neo Geo games new. I remember playing King of Fighters '94 when it first came out in arcades. A few short months later this man was playing it at his *house*. O.o The Neo Geo was good but not $300 per game good!

Modifié par Seagloom, 23 mars 2010 - 04:47 .


#11
Godak

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This topic only proves how awesome Seagloom is.



...Not that I needed proof, of course.

#12
Mordaedil

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It all technically started in the crash of 84, and how every video game console abandoned the market, with the exception of Nintendo and Sega. As time went on, Nintendo and Sony made a deal to work on a CD-player for the SNES, but they didn't work too well together, so Sony decided to take their invention and make it a console on it's own, which launched them all the way in to the 21'st century. At the turn of the century, Microsoft was dissatisfied with having to pay Sony licensing fees and started developing their own console, the X-box which cost Microsoft way more money than they could afford, but it was made up in software sales.



Every other develop prior to Microsoft and Sony's entry had to deal with minimal console sales due to lack of promoting their console and every frickin' kid on the planet wishing they owned either a Nintendo console or a Sega console, depending on if they were normal or social outcasts.

#13
ImperialOperative

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It's called equilibrium.



Too many competitors of a single product will saturate the market and eventually a few of the best will out-perform the others. Those who cannot compete will die or be absorbed by those who are succeeding.

#14
Onyx Jaguar

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The 32/64 bit era killed alot of companies, Sega never recovered and SNK died shortly there after (only to be reborn later).



Bandai tried for a second to introduce a handheld though. I think Nokia was the last one trying to get into it and failing (not counting the Phantom).



Anyone remember the Tiger system?

#15
Skynet877

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Seagloom wrote...

The answer to this would take awhile as we would need to cover each console manufacturer individually. Short version: each developer was forced to abandon the console market due to lack of profitability. Some of those manufacturers had to close up shop. Others were able to stay in business, but decided to focus purely on game development instead. The stories are fairly varied.

SNK is one of my favorite companies, and oddly, has one of my favorite stories in particular. They went bankrupt and got bought out by a pachinko manufacturer. Then SNK's old high-ups formed a new development house, which eventually bought SNK back, fusing their new company with the old and resulting in SNK/Playmore.

Another reason is lack of market share. Game industry history has shown it's usually two consoles that achieve widespread mainstream success; with a third lingering on a ways behind the others. A few, such as the Neo Geo, survived entirely by catering to a niche of very devoted fans. Most consoles do not have that luxury.

The Sega Genesis (Mega Drive), SNES, and TurboGrafx-16 competed against each other. Nintendo grabbed a slice, Sega was left with a smaller but sizable piece, NEC struggled to survive until they were forced to pack it in. Other consoles during this period were niche such as the Neo Geo, or lingered on for a brief period until they burned like so many moths to a flame.

Next console generation, it occurred again. The Playstation, Saturn, and N64... Playstation won the lion's share of sales, followed by the N64. Sega's Saturn was left to die as US executives' heads rolled. The 3DO and Atari Jaguar were released just before this time and were quickly forced out as they simply could not compete Sony, Sega, and Nintendo.

Sega's Dreamcast had saw a measure of success before the Playstation 2 was released and trounced it. Then there was only the PS2, Xbox, and Gamecube.

This pattern even held true for portables with the main exception being no one has ever managed to overcome Nintendo's dominance there. The current generation is actually unique in that it's only the second generation with three systems coexisting and no obvious loser. Although Nintendo is clearly the winner for now. While there is still a divide between the three in terms of which are most successful, neither Sony or Microsoft feels threatened enough to give up. There are a number of reasons I think that is, but that's another topic and pure conjecture besides. Of course the reasons why some of the above mentioned consoles failed are way more involved than simply "there can only be two!"

Bottom line: it comes down to money. It's scarce. Consoles and games are more expensive to produce and market than ever. Times have changed. An industry with multiple systems was hard to sustain before. It's virtually impossible now. Not that I mind. The only thing I miss about those days are going to arcades.

Why don't other large companies enter the market then? Microsoft and Sony did, so why not Apple or Magnavox or Phillips or Samsung, or any other large non-gaming corporation?

#16
Onyx Jaguar

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Apple and Philips did and they failed.

#17
Skynet877

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Thunderwolf wrote...

It probably could be funds man. A lot of companies probably just thought it would be more lucrative to make games then compete in a full on console war with "Big 3". I have heard of the phantom; the idea amazed me but it just fell off the grid. Curious, but I don't know man. It is something to think about.

They made the Dreamcast.  There was supposed to be a Dreamcast 2, but it was scrapped by Sega for the software market instead.

Modifié par Skynet877, 23 mars 2010 - 11:22 .


#18
Skynet877

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Onyx Jaguar wrote...

Apple and Philips did and they failed.

Apple did?

#19
jimmyjoefro

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Making consoles is expensive and most lose money on each system, which is why you pay $60 + tax for games.

#20
Skynet877

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jimmyjoefro wrote...

Making consoles is expensive and most lose money on each system, which is why you pay $60 + tax for games.

Companies don't get tax though, the government does.

#21
Onyx Jaguar

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http://en.wikipedia....ki/Apple_Pippin

#22
Guest_jynthor_*

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Wall of text...

#23
Loerwyn

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And the Dreamcast really only failed in the West; it's had new games in Japan in the last year or so I believe.

SEGA moved more into publishing and they're doing alright for themselves, but really there's no room for other manufacturers now. Nintendo have the casual/handheld market cornered with their Wii and DS systems, Sony and Microsoft have the rest of the market with the PS3 and the 360 respectively. Where would a new Sega system fit? The simple answer is that it wouldn't. Think back to the SNES, the only console manufacturers you heard of were SEGA and Nintendo, then along came Sony with their PlayStation. We then had Dreamcast/N64>Gamecube/PlayStation 2 and XBox.

The Gamecube didn't do as well as it should have, the Dreamcast just didn't succeed either, so we had basically PS2 vs XBox, and that's carried on to PS3 vs 360.

#24
jimmyjoefro

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Skynet877 wrote...

jimmyjoefro wrote...

Making consoles is expensive and most lose money on each system, which is why you pay $60 + tax for games.

Companies don't get tax though, the government does.


OK, I know that.  It was just a different way of saying $63.60 per game.

There's no room in the market for another system.  Nintendo has had to carve out their own little niche to stay alive as they realized they couldn't compete with Microsoft and Sony.  What company is more synonymous with games than Nintendo?  

The only new players in the market are going to be server based systems like OnLive.

Modifié par jimmyjoefro, 23 mars 2010 - 11:29 .


#25
Skynet877

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Onyx Jaguar wrote...

The 32/64 bit era killed alot of companies, Sega never recovered and SNK died shortly there after (only to be reborn later).

Bandai tried for a second to introduce a handheld though. I think Nokia was the last one trying to get into it and failing (not counting the Phantom).

Anyone remember the Tiger system?

I remember the Tiger system, Game.com, right?

There are a lot of games about golf and seducing women on that system, no?