Nintendo, Sony and Microsoft are three masters in the gaming console industry. It’s amazing to see how these three players have played out their strategies in the market. Here is the story with my personal touch

My Tryst With Games

Personally when I was probably 10 years old I saw a version of Sega computer games at a friend’s place. And that’s when I really pestered my parents to buy me a console. It’s was quite an investment for our family way back and it took a while and quite a bit of convincing. But it opened the world of Mario, Contra and so many other things to us. Most of the days after school was gaming sessions and we were close to being addicts. Unfortunately I didn’t move on to computer games like Unreal, Counterstrike had so much movements that I used to get nausea. Also I got to buy a computer much later when I was in second year in college and that also was a quite basic one running on AMD. Currently I own a Nintendo Wii and it is fun.

The Trio

Nintendo was the big daddy of gaming consoles and game development but they didn’t start like that. Nintendo was a playing card maker for a long time in Japan. Nintendo experimented quite a bit but none that became so profitable for them to change their path from primary business of manufacturing playing cards. In 1975, Mitshubishi Electric showed their video gaming console that they were developing for another client who went bust and they were finding another partner of the same. Nintendo latched onto the opportunity and brought microprocessor to the video game systems. They have been the market leader in this space for a long time and was a household name all over the world. Mario was popular with anyone who would have played video games ever was developed by Nintendo.

Sony was consumer company that used to develop and sell very innovative products. Their products were normally based on analog electronics and the company was not very happy with the digital world. There were people in Sony who though digital to be the future and were able to convince Sony’s top management to work with Nintendo to bring a gaming console called Playstation in the early 90’s.

Sony has sound chips that could generate much better sound effects than the computer generated sounds on Nintendo games. Nintendo wanted the sound chips for their console and Sony agreed to make one for them but they were charging a premium. Sony wanted to collaborate with Nintendo to design Playstation so that they can get access to Game Developers that Sony lacked themselves. After few years of collaboration Nintendo backed out of Playstation leaving Sony’s project in doldrums.

Sony had no option but to go alone on this. One thing Sony did which was different from Nintendo was their console was always supposed to have a CD drive which gives them huge memory advantage than the plastic consoles that Nintendo was bound to. Nintendo never believed that the games can be fast enough with a CD player as well as players waiting for minutes before they can start playing. The game developers were thinking of upgrading games to 3D graphics and movie like soundtracks and hence the move was inevitable. Sony courted the game developers for a long time but they were stuck in the chicken and egg problem number of Playstation sold in the market and availability of quality games.

Nintendo also believed games that are family friendly meaning less gore and blood whereas Sony was more open to all that. Nintendo targeted children where Sony with Playstation was targeting young adults who had more purchasing power.

The first Playstation was competing with Sega’s Saturn console and Nintendo 64 console. Sony was able to fight the price war battle because of their advantage of integrated processor design where Saturn was based on multiple chips which Sony knew. When volume picked up Sony was able to drive their costs down more effectively as against their competitor.

This was more or less with the scene of Games. Atari, the American gaming company, had a rise and fall during this time. Hence the market was quite open to be dominated by the Japanese console makers. Microsoft was seeing all this from the edge and Sony was capturing the living room of people all over the world.

Sony VS Nintendo Moves

• Sony designed console with CD whereas Nintendo design with plastic cartridges
• Sony targeted young adults with 3D graphics and movie like sounds whereas Nintendo targeted young kids with family games
• Sony’s gamble with CD played out well as game developers needed more memory to make games more movie like
• Today Sony still has PS4 ruling the market where Nintendo with it Wii console which has all these features of Sony PS has had relative success due to its motion controllers. Nintendo Switch Console is doing good in the market and caters to a different need from the traditional consoles.

I will take this story including the Microsoft “Multi-Billion” dollar entry into the console market and possible future of the consoles.

Inspired by Podcast Series called Business Wars