Console Wars of the Second Generation
Created | Updated Jan 20, 2014
In the beginning, there was the word, and the word was 'arcade'. There had been a couple of video games around before, such as Pong, Space Invaders and SpaceWar, but it was not until arcades were invented that video gaming became a commercial enterprise. If you were to travel back in time to the 1970s, you would find several modern-day developers making good money in the arcades. However, there were also companies who had the profitable vision to take video gaming directly to the home.
Home video gaming really began with dedicated gaming machines such as Pong, but it blossomed thanks to the existence of home computers including (but not limited to) the Commodore64 and the Sinclair ZX Spectrum. These each supported quite an impressive number of games that could be loaded into the computer, and, thanks to the BASIC computer language they used1, it was possible for players to create their own games (though inevitably not to the same standard as commercially-produced titles). It should be noted, however, that the C64 and Spectrum were computers and not dedicated gaming consoles. But the seeds had been sown and soon other companies began to move in with brand new, purpose-built game consoles.
The first home video game system however was the Magnavox Odyssey. This was followed by the Atari 26002 and the Mattel Intellivision. Eventually, the increasingly lucrative home console market became big enough to tempt two more arcade manufacturers who were to go quite a way forward in shaping the games market that we know today: a former collectable-card manufacturer called Nintendo Koppai3 who first entered the video game market when they helped to market the Odyssey, and a long-time arcade manufacturer called Service Games - whose name was abbreviated to 'Sega'.
After marketing a console called the Mitsubishi colour TV Game 6, Nintendo released its own, cheaper, more powerful, 8-bit cartridge-based console called the NES - N(intendo) E(ntertainment) S(ystem)4 in 1983. Sega presently released its own 8-bit console, the Master System. However, due to the NES's head start, Sega had to adopt an 'Anything you can do, I can do better' attitude. The great war between Nintendo and Sega had begun.
Atari, meanwhile, found itself playing catch-up in an industry they'd helped to create. In response, they released a new console, the 5200.
The 'Golden Age'
Sega's attempts at overtaking Nintendo were not a success. Despite the release of a brand new console - the Mega Drive5, in 1990 - one of Sega's main problems remained their lack of a mascot; while Nintendo had Mario, the Italian plumber, Sega had nothing. For this reason, in 1991 the company unveiled a brand new character - Sonic the Hedgehog, a blue, spiked character who wore trainers and ran/rolled very fast. The Mega Drive was a smash hit in America6, giving Nintendo the push to release its own new console, the S(uper) NES7. The war between Nintendo and Sega had now become a war between Mario and Sonic. While the Nintendo stayed on top in Japan, Sega ruled the roost in America, with the two consoles roughly equal in Europe. Atari also released a new console at this time, the Jaguar in 1993, but it was a commercial flop. Arcade giants SNK also released a home console in 1990, the Neo Geo, but it never attained the success that Nintendo or Sega enjoyed.
The increased power of the SNES and Mega Drive allowed developers to create bigger and better games than were even conceivable two years previously. Unfortunately for Sega, though, this was to lead to its downfall. The Mega Drive controller was very simplistic, sporting just three buttons. While this didn't matter much at first, by the time more sophisticated games arrived that required a six-button pad, Sega began to look behind the times. Sega did eventually release a gamepad with increased functionality and extra buttons but, by that time, many gamers had switched to the more forward-thinking SNES. In a desperate bid to retain earnings, Sega released various add-ons such as the Mega Drive 32X, though this allowed for little other than additional, grainy FMV8. Still, the Mega Drive made some money, which fuelled the competitive spirit between Sega and Nintendo, constantly forcing them and their developers to create more and more ambitious games. The graphics and sound on the two systems, however, were a far cry from what is taken for granted today, and so developers had to rely on challenge, innovation and gameplay to keep the players interested. Looking back, many hardcore gamers consider this period to be the 'Golden Age' of video gaming, a time when gameplay was the most important aspect and before developers started to sell games predominantly on the quality of graphical whizz-bangs. However, a new force was about to change the face of video gaming forever - and it had a Sony logo.
A New Era
In the mid-1990s, electronics giant Sony approached Nintendo with their proposal for a CD-drive add-on for the SNES. However, Nintendo felt the market wasn't ready for CD technology (or rather, they were unwilling to depart from their traditional cartridge-based software), and the project wasn't taken up. Sony, however, decided to release it themselves through their 'Sony Computer Entertainment' division. In what, at the time, seemed a brave move, they entered the console market with a project called PSX, but which, when unveiled to the public in late 1995, went under the name of PlayStation. Sony had had some previous experience with video games, having worked as a third-party publisher for companies such as Namco, but had never made its own console or game. However, it did have one thing that neither Nintendo nor Sega could compete with - knowledge of marketing. Despite Nintendo and Sega actually having bigger advertising budgets, Sony managed its one better by selling a brand9 rather than relying solely on the merits of individual games to promote the console. They also targeted an older age bracket - 18-25 year-olds - than their rivals, for two reasons.
As consumers, the people in this group tend to have more disposable income; they don't usually have large families to support, nor is their leisure budget funded by pocket-money or part-time jobs like a paper-round.
The younger age bracket, the traditional gaming market, would look up to the older group to find out what was 'cool'. In other words, the product becomes something for younger kids to 'aspire' to, but it doesn't get labelled 'just for kids'.
Also, despite later completion from more powerful consoles - the Sega Saturn and Nintendo64 - PlayStation continued to succeed, ironically under a campaign that urged consumers not to 'underestimate the power' of the console. The Sega Saturn sank fairly quickly, despite an impressive advertising spend. The Nintendo64 (released 1997) would probably have beaten the PlayStation had it come earlier and cost less; Nintendo, it seemed, had a false sense of security, believing their heritage would compel people to buy their console no matter what.
Though the Saturn and N64 did have a few flaws such as taking a bit longer to develop and sticking with expensive, 'uncool' cartridges (N64), what really defeated them was the advertising and brand marketing. This also gave rise to two new breeds of gamer:
One who is more impressed by fancy graphics and FMV, sex appeal (Lara Croft), and maturity (read blood, guts, and gore) than enjoyable, innovative gameplay - the kind of person who buys the most popular games rather than the best ones.
One who is more of a casual gamer. They only buy selected titles, which means they tend to be better informed about the features and content of each game they decide to buy. This type of person is quite possibly entering into gaming for the first time, and so has no previous brand allegiance. As such, winning their allegiance - and that of their friends - becomes the primary goal of the games industry.
This is not to say that PlayStation was bad, just that it was technologically inferior to many of the competitors it outlived. It is also not to say that this was all Sony's doing; given the technological advances being made by Nintendo and Sega at this time, casual gamers would likely have emerged anyway. PlayStation did have one technological advantage though - fashionable third-party developers such as Squaresoft, Capcom, and Namco abandoned Nintendo and Sega for Sony, giving its developer profile a strong leg-up. Since Sony offered much more developer support than either Nintendo or Sega, developers welcomed a relationship that encouraged them to ally themselves with Sony. PlayStation also changed the nature of the market. The gaming market was now a cut-throat world of advertising and aggression, and video games were now a highly fashionable accessory, rather than, as it had previously been represented, a slightly nerdish or childish pastime.
The Next Generation
Nintendo and Sega decided at similar times to fight back by releasing next-generation consoles. There were a lot of rumours about Sega's up-and-coming Dreamcast, but the only consistent one was that it would use a Microsoft operating system10. However, it did include the promised modem. Even so, the public response was lukewarm. The initial ads for the Dreamcast promised a global gaming community of up to 6 billion players, but due to the scarcity (though not total absence) of such games, or of accessible, cheap and compatible telephone systems across Europe, they were eventually forced to remove these ads from the airwaves.
Sega then seemed to distance itself from this new product, referring to it not as Sega Dreamcast but simply as Dreamcast (just as, within Sony Computer Entertainment at least, PlayStation had never been officially prefixed by 'Sony'). However, even then Sega wasn't satisfied, and ceased to even say 'Dreamcast'; the 'name' of the product appeared to be a red swirl on a white background (or, in Europe, a Blue swirl), which was represented in its brand advertising by weird menageries of hurricanes, a guy with swirly eyes, etc. As a result, only the most diehard Sega fans bought the Dreamcast, as only they knew what it actually was. Even if the marketing campaigns weren't responsible for the slow uptake of Dreamcast, there were those who had been burned by the death of the Saturn and were reluctant to buy another failure. There were also those who owned PlayStations who, frankly, thought that Sony could do no wrong and were determined to wait for PlayStation 2 (PS2). Such was the expectation for PlayStation 2 that despite Sony only spending a little bit more on their advertising compared to the original PlayStation, the hype that surrounded it from the press and magazines reached saturation point. Technical specifications were exaggerated and potential future applications were speculated upon. Basically, as some would have had it, Sony was building the Death Star timed to be available just in time for Christmas.
Sega, meanwhile, eventually ceased production of the Dreamcast and returned to developing software for other plaforms - including, ironically, PlayStation 2. Game over.
Things were looking better on the Nintendo front. Despite the failure of the N64, it had made a lot of money from its handheld game console, the Game Boy, and its range of games based around Pokémon in particular, making it rather easy to fund its next console, the GameCube. Microsoft, too, finally entered the console wars at this time with a new console, the XBox11. Through impressive claims and Microsoft's acquisition of Rare, an important Nintendo second-party developer, Microsoft is now seeking to monopolise the video game market as it has previously attempted to do with computer software. Though the Xbox claims repeatedly to be the most powerful console around, the GameCube is just as powerful if architecture is taken into account and stats placed in context12. At the time of writing, the Xbox has just lost its brief lead to Nintendo. In Japan, GameCube sales recently sky-rocketed and it is now selling on a par with PS2, while both are outselling XBox by a ratio of 14:1. Though Microsoft believes it can survive on the American and European markets alone, as Sega demonstrated, this is a load of dingo's kidneys.
While all this was going on, the various companies were also making portable, handheld consoles. The first major success was Nintendo's 'Game + Watch' series, the first of which was released in 1980. After this came the Game Boy (1989) which, though it was the size of a brick and needed four AA batteries to run, succeeded because it was the first handheld to have interchangeable games. Other companies tried to mimic this, resulting in the Atari Lynx (which very few actually liked and fewer bought into), the Sega Game Gear (considered better by many, but ate batteries much faster), and Sony's PocketStation (which came later, was only widely available in Japan and was really more an add-on for the PlayStation console than an actual console in its own right). However, the Game Boy remains the market leader. It's gone from strength to strength, evolving along the way into the Game Boy Pocket (smaller, lighter, sharper screen, fewer batteries required), the Game Boy Colour, and, more recently, the Game Boy Advance (which is actually as powerful as a SNES!). Having focused more on playable games than indulging in graphical one-upmanship like the others, Game Boy is currently the biggest selling console of all time, and it will be a long time before anything overtakes it.
Mobile phones have exploded in popularity in recent years, and some of them are even able to play simple games. Though mobile phones probably outsell Game Boys at the moment, they don't qualify as handheld consoles since the games are merely an extra feature rather than the main function. Though the latest generation are actually being marketed as portable consoles, they are unlikely to break Nintendo's stranglehold on the market. It will be interesting to see if a game console is ever released with telephonic functionality as an extra...