State of the Industry by Sandra Prior

We've been gaming on home consoles since the Atari launched worldwide in 1977 just before the video game crash in the early 80s. Sure there were other consoles before it that housed one game on it to play, but the console following really started at that specific launch.

From there onwards Nintendo, SEGA, Sony and now Microsoft have been leading the industry (with others like the NeoGeo, Phillips CDi and Panasonic 3DO making up the other bits and bops that are excluded). Why did the manufacturers stumble? And who or what can we point the finger to? I present to you, 'The 3rd Generation Curse'.

Below is a breakdown of the more prominent consoles launched since 1977, depicting only the first three consoles for each individual manufacturer.

Atari

Atari 2600

Atari 7800

Atari Jaguar

Nintendo

Nintendo Entertainment System (NES)

Super Nintendo Entertainment System (SNES)

Nintendo 64 (N64)

SEGA

SEGA Master System (SMS)

SEGAMega Drive (SMD)

SEGASaturn (Saturn)

Sony

Sony PlayStation 1 (PS1)

Sony PlayStation 2 (PS2)

Sony PlayStation 3 (PS3)

Microsoft

Xbox

Xbox 360

Atari's 2600 started the concept of gaming on your TV at home, so the success of the console is a no-brainer. When launching the Atari 7800 things did not all go according to plan as the new contender, Nintendo, had other plans by introducing the world to Mario and his plumber brother. By the time the Jaguar launched, Atari was not the household name they were accustomed to before, and plummeted straight into retails store bargain bins. Short, but not sweet – 3rd Generation Curse No.1.

Nintendo was on top of the world back in the early 80s with the launch of the NES. Their follow-up console, the SNES, was just as good and held its own with feisty rivals SEGA aiming at destroying their throne. Then the N64 arrived on the scene, and Nintendo's persona changed. Arrogance, ignorance and greed were their downfall in a market that was fed up with the monopoly they maintained for over 10 years.

Sony approached the market with their new CD-based 3D angle, complete with aggressive marketing, and Nintendo found them in a market that had moved on. The children they once catered for had grown up and were after a more mature experience. Even though the Wii has brought the brand back to a desirable status, it took two generations of re-strategizing and humbling before the general community would accept them back again. 3rd Generation Curse No.2.

SEGA had a lacklustre start to the industry with the SMS. Nintendo really destroyed anything and everything in its path at the time. Therefore all efforts were focused on the up-and-coming SMD where SEGA virtually made a name for the brand outside the arcade environment, with all the arcade ports being made available at home. Things were looking up for the company... then they made the most bizarre decision.

Attachments for the SMD were next in line to counter-attack the onslaught from Sony's super-computer. The SEGA Mega CD and SEGA 32X were two add-ons for the SMD that just never took off. Both platforms were dropped very early on and left consumers with a terrible taste in their mouth.

Coming from a wealth of mistakes in the 16bit era, they rushed their next generation console, the SEGA Saturn, to store shelves. To say that the reception was decent would be an overstatement. The damage was done and the Sega Saturn just never had a glimmer of hope. (Sadly their 4th generation console would be their last swansong, but the damage happened in the 3rd generation.) 3rd Generation Curse No. 3.

Sony, who was ironically dropped by Nintendo in favor of Phillips to produce a CD add-on for the SNES went forth to create one of the most influential products in the industry, from the very blue-prints they worked on alongside Nintendo. The PS1 was a massive success and shortly after launch people were already hyping the PS2 so much that anything else was irrelevant.

The SEGA Dreamcast perished, with the Nintendo GameCube and Microsoft Xbox fighting for any leftovers. Sony was on top of their game, and they knew it. This lead to some arrogance, reminiscent to that of Nintendo in the N64 era. Is the 3rd Generation Curse taking its toll again?

Microsoft is only in their second generation (even though the SEGA Dreamcast functioned off a Microsoft Windows CE infrastructure) and it is only at the end of a 3rd generation that you can observe the outcome. The original Xbox followed a very similar path to that of SEGA, with it being annihilated by the PS2, like the SMS experienced with the NES. The 360, like the SMD, is the console that is fighting head to head against the PS3 in a very close-fought battle (like the SNES and SMD was). The outcome will be very interesting.

Presently if one looks at sales numbers it is very apparent that Nintendo has risen from the dead and reinvented the brand. Microsoft has improved in leaps and bounds but it is Sony that has lost the most market share. What exactly Sony's future plans are no one knows.

After 2008's E3 showing, they approached the audience with a very humble approach. Jack Tretton really chose his words wisely and on some level drew memories in my old database of how Sony approached the market in the early 90s.

Outrageous remarks such as, ‘You will need a second job to afford the PS3’ (which surprisingly still holds some truth in it) is nowhere to be seen. Sony owns one slogan that does summarize the brand and I believe that one should never forget it - Never Underestimate the Power of the PlayStation.

As for the 3" Generation Curse, it has proven to be as true as the curse in Survivor where the winner of the car never wins the million dollars. It's one of those weird phenomenon’s in the world that is unexplainable. If there is one fact that can be learned from past failures, then it would be for manufacturers to stay humble in an industry where your consumer can dump you in an instant for the next best thing.