Console wars

Console wars, also known as system wars, is a term used to refer to periods of intense competition for market share between video game console manufacturers. The winners of these "wars" may be debated based on different standards: market penetration and financial success, or the fierce loyalty and numbers of the fans of the system's games. The term itself does not strictly denote a clear winner in each case, though. The outcome of a console war may however determine whether or not a manufacturer remains a part of the video games industry.

Due to different manufacturers releasing consoles at different times, the wars described below are not exact definitions and do not necessarily have firm beginning and ending dates. Also, these wars had different years and combatants on different continents, since traditionally the four main markets—Europe, Japan, Australia and North America—have been treated as separate entities, with machines and games released at different times or even completely different games being released. This situation is not as apparent as it was in the past, but remains in some respects, particularly with regards to Japan when compared to the other three markets.

In the mid-1980s, home computers from various manufacturers were used primarily for gaming purposes by consumers worldwide (in the absence of comparable consoles following the video game crash) and are included here as well.

Early American console wars
In North America in the late 1970s to early 1980s (peaking between 1980 and 1984), an early sales battle between several companies which bears quite a resemblance to later console wars developed. The pyrrhic outcome and virtual bankruptcy of all the major combatants set the stage for Japanese dominance of video game console manufacturing by eliminating competition and discouraging American and European investment. When Nintendo brought console gaming back to North America in 1985, the discredited market segment held no American-based competition.

Fairchild vs. Atari vs. Bally
The first console war took place during the second generation of video game consoles, which began with the release of the Fairchild Channel F in 1976. The initial conflict itself began the following year, with the release of the Atari VCS, later known as the Atari 2600. The Atari Video Computer System (VCS) was introduced in 1977 at a price point of US$199, after two years of research and $100 million in investment. That same year, the Bally Astrocade also released, with arcade hit Gun Fight as a built-in game.

While none of the consoles were yet a major seller, the VCS maintained a strong lead, but the war came to an abrupt hiatus as a result of the video game crash of 1977, when Fairchild and Bally were soon forced to exit the home console market within the next one or two years. Atari was the only major survivor from this first battle, but also struggled as VCS sales slowed down.

Atari vs. Magnavox vs. Intellivision vs. ColecoVision
As soon as the Golden age of arcade video games began in 1978, with the mainstream success of Taito's arcade game Space Invaders, Atari soon released a home console port for the VCS. As a result, they successfully revived, and expanded, the home console market, and the console war resumed and escalated into a full-scale war as new competitors began entering the market. By 1980, sales were doubling annually and three million homes had Atari consoles. Its name was eventually changed to the Atari 2600 in 1982 when Atari introduced the "next generation" Atari 5200.

From 1978 onwards, several new competing consoles appeared: the Magnavox Odyssey², Intellivision, and ColecoVision, each managing to gain a market share, though the Atari 2600 would remain the most dominant console of that era.

Seeing the success of Atari, toy company Mattel began work in 1978 on its own console, the Intellivision, which debuted in 1980 with a price tag of $299 and a pack-in game, Las Vegas Poker & Blackjack. The system was an immediate success. Though not the first system to challenge Atari (systems from Fairchild Semiconductor, Bally, and Magnavox were already on the market), it was the first to pose a serious threat to Atari's dominance. A series of Intellivision TV ads featuring women in bikinis mercilessly attacked the Atari VCS's lesser capabilities with side-by-side game comparisons. Nevertheless, Atari held exclusive rights to most of the popular arcade game conversions of the day, and used this key segment to support its older hardware in the market.

This game advantage and the difference in price between the machines meant that each year Atari sold more units than Intellivision, lengthening its lead despite inferior graphics. This need for price parity has influenced every console war in the quarter century since Atari and Intellivision faced off.

The ColecoVision was introduced by Coleco in 1982 and sold 500,000 units its first year, further dividing the marketplace. It was priced similarly to the Intellivision and had a decisive technological edge over its rivals, being the first true 8-bit console ever, meaning it could duplicate coin-operated arcade games almost to a "T"; Coleco licensed several major arcade games for its system - including Donkey Kong, which was the pack-in game for the console - to rival Atari's technically inferior 'ports'. In response, the Atari 5200 was released later that year to compete against it, though it never became as successful as the ColecoVision or its Atari 2600 predecessor.

This "first console war" ended with the North American video game industry crash of 1983, when huge over-supplies of poor-quality video games and competition from personal computers caused game prices to drop precipitously. This led to Atari suffering major losses and nearly all of its competitors abandoning the market. As a result, the first console war came to an abrupt end. In contrast to the first console war, which was led by American manufacturers, most of the subsequent console wars would be led almost entirely by Japanese manufacturers, up until the 21st century, when American manufacturer Microsoft slowly began gaining a share of the console market.

Home computer wars
Although these wars are grouped under one category here, there were many different minor wars between home computer brands that ran from the mid 80s until the mid 90s. All of the computers involved had many upgraded versions released over their lifetimes, which usually included increased RAM and improved CPUs, but rarely a reduction in size due to their integrated keyboards. These wars mainly took place in the United Kingdom and Japan, which during the late 80s were the centres of the world computer game industry, having been unaffected by the crash that took place in the US. This period is also renowned for being the time of the 'bedroom programmer', and many companies formed by such people have lasted until the current day.

8-bit war: ZX Spectrum vs. Commodore 64 vs. MSX
In the United Kingdom, the Atari vs. Intellivision war never reached the major scope and impact that it did in North America. Instead, the Spectrum vs. Commodore wars of the mid 1980s were the true originator of the console wars. This was due to the start of single-format computer and video game magazines and the far greater entry into mainstream youth culture of these computers than the previous consoles. The Commodore 64 was generally far more technically advanced than the ZX Spectrum, but it usually sold for triple the price.

Another competitor was the MSX computer platform from Japan. The MSX sold over 200,000 units in the United Kingdom by the end of 1987, but it was unable to match the success of the ZX Spectrum or Commodore 64 computer platforms in the United Kingdom.

Games vs. Education: Spectrum & C64 vs. Acorn (BBC)
A parallel micro war raged in the UK, between the perceived games oriented Spectrum & Commodore 64 micros with the educationally marketed and more expensive Acorn (BBC Microcomputer) offering. On unit sales, the more competitively-priced Spectrum and Commodore won, and Acorn lost - though Acorn's tie-in with the BBC's "The Computer Programme" and the associated "Government Computer Literacy" and "Computer for schools" programs ensured steady sales post the bursting of the home micro bubble. A fair proportion of the 1.5m 8-bit BBC micros were still in regular use in UK schools well into the 90's.

This fight for market dominance was portrayed in the BBC 4 drama Micro Men.

16-bit war: Amiga vs. Atari ST
The Amiga vs. Atari ST wars took place in the late 1980s. In Britain and France where the Atari ST was relatively stronger compared to other areas the war lasted well into the early 1990s. Eventually Amiga clearly outsold the Stari ST in Britain. The Amiga had the better graphics and sound, and a built-in double-sided floppy disk drive. The ST was cheaper and had built-in MIDI ports. Many early games were developed for the ST and simply ported to the Amiga, using the same code and graphics but remaking the music and sound.

8-bit war: NEC PC-88 vs. Sharp X1 vs. FM-7 vs. MSX
The Japanese computer wars, which saw several Japanese computer manufacturers competing for dominance in the Japanese home computer market, began in the early 1980s and lasted up until the mid-1990s. Throughout that period, the market leader was NEC, while its main competitors were Sharp and Fujitsu, followed by the MSX platform.

The first major computer war in Japan took place in the 1980s between several 8-bit computer platforms, with the market leader being the NEC PC-88, while its main competitors were the Sharp X1, Fujitsu's FM-7, and the MSX platform. These Japanese home computers were generally more advanced than their Western counterparts, offering higher-resolution (640x400) graphics and higher-quality (Yamaha FM synthesis) audio. Each of these platforms sold millions of units in Japan. The MSX platform sold over 2 million units in Japan by the end of 1987, while the FM-7 and X1 each sold more than that, with the PC-88 having sold the most in Japan. The only Japanese computer platform with a presence in the Western world, however, was the MSX, which also sold over 200,000 units in the UK by 1987 and had a presence in other European markets.

It was from this early Japanese computer scene that some of the country's most famous game developers originated from, such as ASCII, Koei, Nihon Falcom, Enix, and Square, for example. Famous Japanese game developers such as Yuji Horii (Dragon Quest), Hironobu Sakaguchi (Final Fantasy) and Hideo Kojima (Metal Gear) also began their careers in the Japanese computer game scene.

16/32-bit war: PC-98 vs. X68000 vs. FM Towns
In the late 1980s, a second computer war began in Japan, between the 16/32-bit successors of NEC, Sharp, and Fujitsu. The most dominant home computer in the Japanese market would be the NEC PC-98, which sold more than 20 million units in Japan by the mid-1990s. While the PC-98 initially released back in 1982, the 16-bit computer war didn't begin until the late 1980s, when their competitors, Sharp and Fujitsu, released the Sharp X68000 and FM Towns to compete with NEC's more dominant platform.

In order to compete against NEC's dominance, the X68000 and FM Towns began offering the latest cutting-edge home computer technology in the late 1980s, including advances that wouldn't be seen in home computers elsewhere in the world for years.

The X68000, released in 1987, featured a 16/32-bit hybrid 68000 CPU processor, arcade-quality graphics, up to 16-bit (65,536) simultaneous colors, and resolutions up to 1024x1024 pixels. The FM Towns, released in 1989, featured a 32-bit Intel CPU processor, arcade-quality graphics, up to 15-bit (32,768) simultaneous colors out of a 24-bit (16.78 million) color palette, resolutions up to 1024 × 1024 pixels, CD-ROM storage, and streaming CD audio. In response to these systems, the PC-98 increased its capabilities, offering up to 8-bit (256) simultaneous colors out of a 16-bit (65,536) color palette by 1987, a 32-bit Intel CPU by 1988, and CD-ROM support by 1989.

The Japanese computer wars eventually came to an end around the late 1990s, when Microsoft entered the market with Windows 95, and the IBM PC slowly came to dominate over most other computer platforms across the world.

8-bit era
In contrast to previous system wars which were limited to specific regions, what is now known as the "8-bit era" was the first time a console war extended across the world, with Nintendo and SEGA battling for dominance in different territories.

NTSC regions: Nintendo vs. SEGA vs. Atari
The "8-bit era" began on July 15, 1983, with the Japanese release of two consoles: the Family Computer and the SG-1000. Due to the Family Computer being the more advanced console, the Family Computer significantly outperformed the SG-1000. Nintendo soon released the Family Computer in North America as the Nintendo Entertainment System, also known as the NES, in 1985. It revived the console gaming industry in North America (after the North American video game industry crash of 1983), and, as a result, Japan came to dominate the worldwide game console market for many generations.

By the time the more advanced Master System was released in 1985 in Japan and 1986 in North America, it was too late, as the Nintendo Entertainment System (NES) had already come out on top in the NTSC regions of North America and Japan (where it was known as the Nintendo Famicom), partially due to its earlier release, but mostly because Nintendo banned developers from releasing their games on other systems if their games were released on the NES. Nintendo's third-party licensing restrictions put a damper on third-party support for the Master System and the rest of Nintendo's competition in North America and Japan.

The Atari 7800 also had some limited success in the United States, though its appeal was largely limited to a niche audience, battling with SEGA for second place in the American market, with both trailing far behind Nintendo. Beyond the American market, however, Atari was nowhere near as successful as either SEGA or Nintendo in any other markets.

Nintendo of Japan continued to repair Family Computer systems until October 31, 2007, attributing the decision to discontinue support to an increasing shortage of the necessary parts. Overall, due to the larger sizes of the NTSC markets, the NES sold significantly more than the Master System on a worldwide scale.

PAL regions: SEGA vs Nintendo
The PAL regions of Europe and South America, however, were a different story. In contrast to Nintendo's dominance in the NTSC regions of North America and Japan, it was the Master System that dominated the PAL territories of Europe and South America, specifically Brazil.

Australia had similar success with the Master System in its early days, though when the NES was released there by Mattel, Master System sales started to slow down, with neither console gaining the overall lead in Australia.

SEGA would remain the market leader in Europe up until the mid-1990s. The Master System continued to sell in Europe up until the late 1990s, and is still being sold in Brazil through to the present day.

Worldwide sales figures

 * 1) Nintendo Entertainment System – 61.91 million (Japan: 19.35 million, Americas: 34 million, Other: 8.56 million)
 * 2) Master System – 13 million (Japan: 8 million, United States: 2 million, Western Europe: 1 million, Brazil: 1 million, South Korea: 1 million )
 * 3) Atari 7800 – 3.77 million
 * 4) SG-1000 – 2 million

Home consoles
The "16-bit era" is mostly known in Western markets for the rivalry between the Mega Drive (known as the Genesis in North America due to trademark reasons) and the Super Nintendo Entertainment System (often abbreviated to SNES or Super NES; known as the Super Famicom in Japan). The Mega Drive/Genesis came out about two and a half years earlier than the SNES; however, it did not perform well at retail until the release of Sonic the Hedgehog, which drove sales. In Eastern markets, however, the era was better known as a three-way rivalry between the NEC PC Engine, Mega Drive, and Super Famicom (SNES).

Overall, the Super Famicom/SNES emerged as the leader in the Western markets, closely followed by the Genesis as runner-up, and then the TurboGrafx-16/PC-Engine in a distant third place. In the Eastern markets,, the SNES emerged the leader, followed by the PC Engine as runner-up, and then the Mega Drive in third place. On a worldwide scale, this put the SNES and the Mega Drive / Genesis almost on par, though the SNES managed to edge out a slight overall lead long after the 16-bit era had ended (largely due to continued success in the Japanese market), with the PC-Engine/TurboGrafx-16 in a distant third place.

Eastern front: NEC vs. SEGA vs. Nintendo
NEC (then the Japanese PC market leader) and Hudson Software entered the console market with their PC-Engine (released as the TurboGrafx-16 in North America), the first 16-bit system, since the PC-Engine actually predated the Mega Drive in Japan. However, the Genesis came just before the TurboGrafx-16 in North America. Hudson, attempting to reach the same level of popularity as the Super Famicom/SNES and Mega Drive/Genesis, designed their own mascot to stand beside Mario and Sonic, named Bonk the Caveman. While NEC did not have as big an impact in the market as Nintendo or SEGA, they still sold more copies than expected for an all-new hardware system. The PC-Engine further weakened SEGA's position in Japan, with the Mega Drive remaining in third place in Japan behind the Super Famicom and PC-Engine throughout the 16-bit era.

Western front: SEGA vs. Nintendo
A Sony focus group found that teenage boys would not admit to owning a SNES rather than a Genesis, supporting the idea that the Genesis was more popular among older gamers. The late November 1994 release of Donkey Kong Country changed the pace for Nintendo. After three holiday seasons of coming in second to SEGA in the American 16-bit console market, Nintendo had the biggest game of the year. SEGA still outperformed Nintendo in overall holiday sales, but 500,000 copies of Donkey Kong Country that Nintendo sent out in its initial shipment were mostly sold in pre order, and the rest sold out in less than one week. Donkey Kong Country paved the way for Nintendo to win the waning years of the 16-bit generation,  and for a time, hold its own against the PlayStation and Saturn. In 1998, SEGA licensed the Genesis to Majesco in North America so that it could re-release the console. Majesco began re-selling millions of formerly unsold cartridges at a budget price together with 150,000 units of the second model of the Genesis, until it later released the Genesis Model 3. Majesco released the Genesis Model 3 at $50, Nintendo matched its price with their new model of the SNES. Majesco then dropped the price of the Genesis Model 3 to US $40 and again to US $30, with Nintendo matching them dollar-for-dollar every step of the way. Software prices for both systems remained stagnant, ranging anywhere from US $10 to US $25 per title. By this time 16-bit sales only accounted for 10% of the total U.S. console market, but it was a brisk and fiercely fought share. Majesco would wind up selling between 1 and 2 million Genesis Model 3 consoles, along with 10 million or so Genesis cartridges for fiscal year 1998. In comparison, Nintendo would only sell 1 million SNES consoles and 6 million SNES carts. According to a 2014 Wedbush Securities report based on NPD sales data, the SNES ultimately outsold the Genesis in the U.S. market.[41]

In early 1991, SEGA revealed the Mega-CD add-on, and announced its release in Japan in late 1991 and in North America (as the SEGA CD) in 1992. While this add-on did contain a faster CPU, more memory and some enhanced graphics capabilities over the Mega Drive/Genesis itself, the main focus of the device was to expand the size of video games; cartridges of the day typically contained 8-16 megabits of data, while a CD-ROM would hold 640 megabytes (5120 megabits). While it became known for several games, including Sonic CD and Night Trap, the expansion only sold 6 million units worldwide.

At June 1994's Consumer Electronics Show, SEGA showed off the 32X as the "poor man's entry into 'next generation' games." The 32X was originally conceived as an entirely new console by SEGA of Japan. SEGA of America R&D head Joe Miller convinced SEGA of Japan to strengthen the console and convert it into an add-on to the existing Genesis, but they would not make it a competitor to the forthcoming Saturn. Although this add-on contained two 32-bit CPU chips and a 3D graphics processor, it failed to attract either developers or consumers as the superior Saturn had already been announced for release the next year. Originally released at US$159, SEGA dropped the price to $99 in only a few months and ultimately cleared the remaining inventory at $19.95; at least 600,000 units were sold.

In Europe, the Mega Drive maintained support until 1998, where it sold more than 8 million units, outselling all other consoles up until that time. The Mega Drive also saw success in Brazil, where it held 75% of the market share. The Genesis was SEGA's most successful console; though SEGA has never released a total sales figure quote.

SNK would later release their Neo Geo CD in 1994. Like the TurboGrafx-16/PC-Engine, it was not able to compete with SEGA and Nintendo despite having superior graphics.

Panasonic's 3DO Interactive Multiplayer, released in 1993 would also fail to compete with SEGA and Nintendo despite its advanced 3D graphics. The extremely high price of $699.99 would also lead to its failure.

Worldwide sales figures
Super Nintendo Entertainment System - 49 Million

Mega Drive/Genesis - 40 Million
 * 1) TurboGrafx-16 – 10 million (US: 2.5 million, Asia: 7.5 million)

First handheld war
In the handheld wars, Nintendo's Game Boy came out well on top and far outlived the Game Gear and Atari Lynx, becoming one of the most successful handheld consoles of all time. The Game Boy's victory is generally attributed to its greater battery life, cheaper price tag, smaller size, and wider third party support over the SEGA Game Gear and Atari Lynx, despite the Game Gear and Lynx's having color screens. However, Nintendo continued to research into improving the screen and first released the Game Boy Pocket, with a true black-and-white screen. Later, Nintendo created the Game Boy Color, with near-total backward compatibility.

The Game Boy had many ports of games from popular Nintendo franchises. It was also launched with the extraordinarily popular puzzle game Tetris as a pack-in.

Many other companies attempted to get in on the handheld market and they could also be added into this category. These included the Neo Geo Pocket and the WonderSwan (though the latter was in Japan only).

Worldwide sales figures

 * 1) Game Boy and Game Boy Color combined – 118.69 million (Japan: 32.47 million, the Americas: 44.06 million, other: 42.16 million)
 * 2) Game Gear – 11 million

32-bit war: SEGA Saturn vs. Sony PlayStation
In the "32-bit era", the Saturn was released first and despite success in Japanese markets, it ultimately lacked sufficient third-party support outside of Japan for it to viably survive.

SEGA's decision to use dual processors was roundly criticized, and some believe the second CPU was added as a knee-jerk reaction to the PlayStation's specifications. It has been said that only SEGA's first-party developers were ever able to utilize the second CPU effectively. The SEGA Saturn was the more difficult console to program for with some titles being dropped during the development process (STI's Sonic X-treme for example), and therefore the 3D graphics on its third party games often lacked the luster of the PlayStation or Nintendo 64 (N64), a severe disadvantage at the dawn of 3-D games on home consoles.

SEGA was also hurt by the plan to have a surprise four month early US launch of their console. This head start failed for several reasons. One of the major reasons being there were few software titles ready. The SEGA Saturn was also US$100 more expensive than the PlayStation at its launch, and only available at four retailers.

Sony took an early advantage by initiating an expensive ad campaign and appealing to an older demographic who had grown up playing video games. The PlayStation was positioned as a necessity alongside the TV and VCR. The securing of this demographic is widely credited as the key to the system's success. SEGA and particularly Nintendo's offerings were characterized as appealing more to children (both companies, for instance, featured mascots that appeared in Saturday morning cartoons). With Sony's greater hardware sales came greater third party support; ultimately the PlayStation won the era virtually unopposed. Sony carried this momentum over into the release of the PlayStation 2. The Saturn was discontinued in 1998, as SEGA again tried to gain a head start over Sony with the Dreamcast.

However, the Saturn was a success in Japan, where it outsold the Nintendo 64 and is considered the most successful SEGA console in the country. As a result, the Saturn continued selling in Japan for several years longer than in other regions.

32-bit vs. 64-bit: PlayStation vs. Nintendo 64
Although this era is known as the "32-bit era", the 64-bit Nintendo 64 was released later than the other two consoles with which it was originally meant to compete directly. By the time of its release, Sony had already established their dominance and the Saturn was struggling to keep momentum. Its use of cartridge media rather than compact discs alienated developers and publishers due to the space limits and the relatively high cost involved (compare US$3.50 for an Nintendo 64 cartridge to 35¢ for a PlayStation disc), though the Nintendo 64 had much faster load times because of its cartridge media. Despite this, Nintendo managed to carve out a profitable niche in this era, selling over 30 million consoles.

Worldwide sales figures

 * 1) PlayStation – 102.49 million shipped (Japan: 21.59, US: 40.78, Europe: 40.12)
 * including PSone – 28.15 million shipped
 * 1) Nintendo 64 – 32.93 million (Japan: 5.54 million, the Americas: 20.63 million, Other: 6.75 million)
 * 2) Saturn – 9.26 million (North America: 2 million, Europe: 1.26 million+, Asia: 6 million+)
 * 3) 3DO Interactive Multiplayer - 2 million

Sixth generation
SEGA's Dreamcast, the first sixth-generation console, debuted in Japan on November 27, 1998.

128-bit war: Dreamcast vs. PlayStation 2
As the first console to feature a built-in modem, the Dreamcast offered players a new console gaming experience; users were able to play games with one another via the Internet. The Dreamcast was the sole sixth-generation console for over a year, until Sony released the PlayStation 2. Despite being a commercial failure in Japan, the Dreamcast would become successful in North America. However, due to the PlayStation 2's built-in DVD player and heavy advertising, the Dreamcast would be largely overshadowed by the PlayStation 2's hype. Despite this, the Dreamcast in fact managed to outsell the PlayStation 2 in the North American market in 2000. However, this was not enough to make up for the losses in both hardware (selling at a loss) and software sales (much of which was being pirated).

In early 2001, SEGA announced its discontinuation of the Dreamcast; it adjusted its company strategy to abandon the console industry and focus on third-party development. Therefore, the Dreamcast left the market as the sixth-generation competition began to increase. Nevertheless, SEGA have continued to manufacture arcade machines through to the present day.

On March 4, 2000, Sony released the PlayStation 2 in Japan. The console featured a 294.912 MHz processor — an improvement over the Dreamcast's 200 MHz processor—and promoted backward compatibility with PlayStation games. Unlike previous consoles, the PlayStation 2 could play DVDs, creating additional value for consumers interested in purchasing both a DVD player and gaming console. Within two days of the PlayStation 2's release, Sony set a new record by selling 1 million consoles. The initial supply did not meet the demand; there was a shortage even among those who pre-ordered, which led to inflated reselling and reported thefts. Although the PlayStation 2 did not originally focus on Internet connectivity, Sony developed an external adapter that enabled online gaming for select titles after the Xbox's release.

PlayStation 2 vs. GameCube vs Xbox
Nintendo released the GameCube in Japan on September 14, 2001. Unlike previous Nintendo consoles, which used game cartridges, the GameCube used optical discs similar to MiniDVDs. The size of the discs, however, restricted users from playing regular DVDs and CDs on the console. With an introductory price of $199, the GameCube cost approximately $100 less than the PlayStation 2 and Xbox — a selling point for price-conscious consumers. The console offered signature family-friendly games, such as Luigi's Mansion, in addition to third-party titles, including the more mature video games Eternal Darkness: Sanity's Requiem and Resident Evil 4.

On November 15, 2001, Microsoft entered the console market by releasing the Xbox in North America. The Xbox featured an 8 GB of internal storage capacity, allowing users to save games and download content directly to the console. Like the PlayStation 2, the Xbox also played DVDs; however, it required an external add-on to do so. The release of Xbox Live, a subscription-based online gaming service, allowed users to play compatible titles online. Within two months of Xbox Live's debut, 250,000 users had subscribed, exceeding the company's projections.

Overall, the sixth generation expanded gaming consoles into a broader entertainment experience, whether through online gaming or the ability to play DVDs. As seventh-generation consoles overtook the market, Nintendo and Microsoft discontinued the GameCube and Xbox. Sony, on the other hand, continued to produce the PlayStation 2 after the PlayStation 3's release in 2006. In 2009, Sony announced that PlayStation 2 production would continue until demand decreases. Therefore, sustained PlayStation 2 purchases continue to increase the console's lead in sales.

Worldwide sales figures

 * 1) PlayStation 2 – 150 million
 * 2) Xbox – 24 million
 * 3) GameCube – 21.74 million
 * 4) Dreamcast - 10.6 million

Game Boy Advance vs. competitors
During the sixth generation era, the handheld game console market expanded with the introduction of new devices from many different manufacturers. Nintendo maintained its dominant share of the handheld market with the release in 2001 of the Game Boy Advance, which featured many upgrades and new features over the Game Boy. Two redesigns of this system followed, the Game Boy Advance SP in 2003 and the Game Boy Micro in 2005. Also introduced were the Neo Geo Pocket Color in 1998 and Bandai's WonderSwan Color, launched in Japan in 1999. South Korean company Game Park introduced its GP32 handheld in 2001, and with it came the dawn of open source handheld consoles. The Game Boy Advance line of handhelds has sold 81.51 million units worldwide as of September 30, 2010.

Mobile gaming
By the early 2000s, mobile games gained popularity in Japan's mobile phone culture, years before the United States or Europe. By 2003, a wide variety of mobile games were available on Japanese phones, ranging from puzzle games and virtual pet titles that utilized camera phone and fingerprint scanner technologies to 3D games with exceptionally high quality graphics. Older arcade-style games became particularly popular on mobile phones, which were an ideal platform for arcade-style games designed for shorter play sessions. Namco began to introduce mobile gaming culture to Europe in 2003.

Nokia tried to create its own mobile gaming platform with the N-Gage (and later N-Gage QD) in 2003 but this effort failed mainly because, at the time, the convergence of a cell phone and a handheld gaming platform did not mix. Many users complained of having to talk on the phone 'taco-style' by tilting it sideways in order to speak and hear. There were hardware issues as well, and though some quality games came out, support for the platform was anemic.

Home systems
All three consoles have had major shortages both at their launches and directly afterwards, with the Xbox 360's continuing for months after release and Wii's continuing after two holiday seasons; the PlayStation 3 saw high demand for its first week of release, but it did not continue, being in stock at most major retailers shortly after release.

Home Entertainment
The seventh generation is best known for major consoles branching out into other types of media rather than solely focusing on video games. All three consoles offer basic abilities such as photo-viewing, listening to music and browsing the internet, as well as the ability to connect to external memory devices such as USB flash drives and SD cards. The Xbox 360 originally boasted a higher-quality DVD player and music player, and over the years has released other features such as an external HD-DVD drive (now a dead standard, surpassed by Blu-ray), Zune downloadable content, Netflix streaming and Last.fm internet radio. PlayStation 3, on the other hand, has Blu-ray, Netflix streaming, and Qriocity music.

This new generation for the first time has all of the major consoles focusing on online integration. All three have their own connection services: Wii's Nintendo Wi-Fi Connection, Xbox Live, and PlayStation Network. Competition has branched now from simply offering the best games to the best online content; smaller games can now be purchased and downloaded from online stores within the consoles, and extra applications such as Netflix streaming and Facebook connectivity are heavily supported. Almost all games sold in retail have online support, including online multiplayer and downloadable content for bug patches and new features, potentially increasing replay value in certain games for even years.

Another notable feature in current-gen gaming is the use of avatar characters. Nintendo first introduced Miis with the Wii console, caricatures of players that could be created and used in flagship titles such as Wii Sports; however they lack the ability to customize that Xbox's avatars have, as clothes and accessories can be purchased online or unlocked in games played. PlayStation 3, instead of an in-game character, offers PlayStation Home, a social simulator where avatars can talk and explore, and customize their homes based on games played.

Backwards compatibility
Initially only the Wii was completely backward compatible (with the exception of the Game Boy Player) with its predecessor, the GameCube, while the Xbox 360 and PlayStation 3 only offered partial support. The Wii also offered the Virtual Console service, which provides the ability to emulate various older gaming platforms (NES, SNES, N64, Arcade, Commodore 64, Neo Geo, Mega Drive/Genesis, Master System and PC-Engine/TurboGrafx-16); each game can be purchased on the Wii Shop Channel and saved to the console's internal memory or an SD card. A revised version of the Wii known as the Wii Family Edition was released in North America in October 2011 and in Europe in November 2011, which, unlike previous versions, lacks GameCube backwards compatibility, controller ports and memory card slots. The Wii Family Edition has not been released in Japan (as of August 2012).

Original models of the PlayStation 3 contained some hardware from the PlayStation 2 (the Emotion Engine CPU and Graphics Synthesizer GPU) in order to facilitate backwards compatibility, while original PlayStation video games were emulated via software. However, complete backwards compatibility was not achieved until the release of the firmware update that first came with Ratchet & Clank Future: Tools of Destruction. When the PlayStation 3 was released in PAL regions however, the Emotion Engine chip was removed to reduce costs and instead partial software emulation was used. This lowered the level of backwards compatibility with PlayStation 2 software, although PS1 software was unaffected. This restriction also applies to early 80 GB NTSC models (released before August 2008). With the release of the 40 GB PS3 model in late 2007, the Graphics Synthesizer was also removed from the system, thus also removing compatibility with PlayStation 2 software. No new model since has contained this hardware and thus PlayStation 2 software remains incompatible on all but the earliest consoles. However, in October 2011, Sony began releasing PlayStation 2 software via their PlayStation Store. These titles will function on any PlayStation 3 console as they have been ported to the platform, rather than simply being digitally-distributed copies of the original software.

The Xbox 360 uses software emulation for backwards compatibility via game-specific patches automatically downloaded from Xbox Live or downloaded and burned to a CD or DVD from the Xbox website. Various games have not received such a patch and thus remain incompatible to this day. Some original Xbox titles are available for download via Xbox live, obviating the need for an original Xbox.

Worldwide sales figures
Overall, the Wii would outsell its competitors worldwide. However, Wii sales considerably fell in 2012. To this day, the PS3 and Xbox 360 have been catching up. Nevertheless, the Wii has still outsold its rivals by about 30 million units.


 * 1) Wii – 97.18 million
 * 2) PlayStation 3 –
 * 3) Xbox 360 – 70.0 million

Japan sales figures

 * 1) Wii – 11,534,590
 * 2) PlayStation 3 – 6,341,950
 * 3) Xbox 360 – 1,448,665

Europe sales figures

 * 1) Wii – 24.9 million
 * 2) PlayStation 3 – 19.7 million
 * 3) Xbox 360 – 13.7 million

United States sales figures

 * 1) Wii – 30 million
 * 2) Xbox 360 – 18.7 million
 * 3) PlayStation 3 - nearly 12 million

Third handheld war
Although Nintendo and Sony originally denied competing with each other with their handheld products, it was widely believed that a new handheld war had begun with the releases of the Nintendo DS and PlayStation Portable (PSP) in late 2004 and early 2005, respectively (the Nintendo DS Lite, a smaller and sleeker version of the Nintendo DS, was released in late 2006). As of the 2006 E3 press conference, however, Nintendo attacked Sony's handheld console, announcing that the Nintendo DS had been outselling the PlayStation Portable. This could be taken as recognition of a new handheld war.

The Nintendo DS's power is comparable to that of Nintendo 64. It is notable in its use of two screens, one of them being a touch screen. It also sports a microphone input. It showed considerable early success, particularly in branching out from the usual core demographic of video game players due to the intuitiveness of the touch screen control system. The Nintendo DS is the less expensive of the two systems, and has longer battery life. The Nintendo DS is backwards compatible with Game Boy Advance (GBA) games, but not with games for prior Game Boy systems. The Game Boy Advance slot is also used for accessories, such the add-on included with Guitar Hero: On Tour.

Sony's PlayStation Portable was more powerful than the Nintendo DS, with graphical power roughly in between the original PlayStation and the PlayStation 2. It was advertised as a portable multimedia system, as well as a handheld console (much in the same way as the PS2). Numerous movies have been released on the PlayStation Portable's UMD format, and the system can play video and audio from the Memory Stick Pro Duo port. The PlayStation Portable also supports a large relatively high-resolution display, an analog nub, and standard controller buttons. Other features include the ability to make internet phone calls using Skype, and a Global Positioning System (via an add-on).

Both the Nintendo DS and PlayStation Portable support Wi-Fi networking, and have free online systems. The PlayStation Portable has had online games since its launch in December 2004 in Japan, and the DS has had online games since mid-November 2005. Nintendo has also worked with McDonald's and Hilton Hotels to set up Wi-Fi access points across the US, Europe and Australia.

Worldwide sales figures

 * 1) Nintendo DS – 152.50 million,  (Japan: 32.99 million, the Americas: 58.54 million, other: 60.97 million)
 * 2) *including Nintendo DS Lite – 93.85 million, (Japan: 18.20 million, the Americas: 36.44 million, other: 39.21 million)
 * 3) *including Nintendo DSi – 27.39 million, (Japan: 5.90 million, the Americas: 11.37 million, other: 10.12 million)
 * 4) *including Nintendo DSi XL – 12.47 million, (Japan: 2.35 million, the Americas: 5.43 million, other: 4.70 million)
 * 5) PlayStation Portable – 82 million,
 * 6) Game Boy Advance – 81.51 million,  (Japan: 16.96 million, the Americas: 41.64 million, other: 22.91 million)
 * 7) *including Game Boy Advance SP – 43.57 million, (Japan: 6.51 million, the Americas: 24.00 million, other: 13.05 million)
 * 8) *and Game Boy Micro – 2.42 million, (Japan: 0.61 million, the Americas: 0.95 million, other: 0.87 million)

Japan sales figures
Based on figures from Famitsu/Enterbrain,
 * 1) Nintendo DS – 32,598,870
 * 2) PlayStation Portable – 16,867,853

United Kingdom sales figures
Based on figures from GfK Chart-Track
 * 1) Nintendo DS – 10 million
 * 2) PlayStation Portable – 4.9 million

Home consoles
On November 18, 2012, Nintendo released the Wii U, the first home console of the eighth generation. Sony then released the PlayStation 4 in 2014, alongside Microsoft's release of the Xbox One, in 2014. Sony would, in 2016, release an upgraded version of the PlayStation 4, the PlayStation 4 Pro, with a specific focus on HDR and 4k video support. Microsoft followed suit in 2017 with the release of the Xbox One X, which added UHD Blu-ray support. Nintendo would later release the first hybrid console, the Nintendo Switch, in late 2017.

Nintendo 3DS vs. PlayStation Vita
On February 26, 2011, Nintendo released the Nintendo 3DS, the successor of the Nintendo DS and immediately took over the handheld market in Japan and worldwide. On December 17, 2011, Sony released the PlayStation Vita to compete in the handheld market but it failed to grab significant market share from the Nintendo 3DS and its own predecessor, the PlayStation Portable. Sony later on released a cheaper version of the PlayStation Vita, the PlayStation Vita Slim; while this included 1 GB of on-board storage, it replaced the OLED display of the original model with an inferior LCD display, which deterred many potential buyers.

Nintendo would later release the Nintendo 2DS for those that did not wish to use the 3D functionality supplied with the original Nintendo 3DS, while an upgraded version would later on be shipped, the New Nintendo 3DS.

Smartphones vs. handheld consoles
In 2011, video game console sales began declining due to facing strong competition from the growing smartphone gaming market. As a result, the smartphone market is seen as a threat to the handheld console market. Despite the Nintendo 3DS's success, handheld console sales have seen a decline in Western markets. The PlayStation Vita, the current rival of the 3DS, has had under-performing sales in 2012.

Some possible reasons for the rise of smartphone gaming is the convenience and low price of smartphone games, in addition to the convenience of carrying around a single multi-purpose device over a dedicated gaming handheld. Also, many kids are starting to see smartphones as the "new and cool" thing due to successful mainstream marketing.

Mobile gaming war
As the worldwide mobile gaming market reached an all time high, and is predicted to continue its rise, what is said to be the first global mobile gaming war began around 2011-2012.

In Japan, which had a mobile gaming culture much earlier than the West (due to faster mobile internet speeds appearing in Japan at a much earlier date), the two market leaders are GREE and DeNA, which each have their own mobile gaming platforms: OpenFeint and Mobage, respectively. Both companies were largely unknown in the West, but have been popular in East Asia. Due to their experience in generating revenues from the freemium (free-to-play) model, they are the world's most profitable mobile gaming companies.

In the West, the market leader is Zynga, based in the United States. It has the mobile gaming platform with the largest user base, yet despite this, it has not been as profitable as its Japanese counterparts, which may be due to GREE and DeNA having been around longer and having more experience on how to convert their users into paying customers.

The global mobile gaming war began around 2011-2012 as the GREE and Mobage mobile gaming platforms were introduced to Western markets, where they have had growing success, thus challenging the Western market leader Zynga. As a result, this has led to the beginning of what is possible the first global mobile gaming war.

In addition to the three market leaders, GREE, DeNA, and Zynga, other mobile gaming platforms have also been introduced by other companies, such as Apple, Google, Microsoft, Facebook, Sony, Gameloft, and EA.