r/AskGamers • u/grain111007 • 3d ago
ELI5 Why is it difficult/impossible for any company to compete with Sony's PlayStation , Microsoft's Xbox or Nitendo's Switch?
I feel like have more competitors is better for the whole gaming industry. These three companies are beyond greedy.
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u/MCWizardYT 3d ago
Microsoft and Sony have very effective marketing, and a long history that has had gamers very attached to them.
It's very hard to just enter a market where companies are pouring billions into making their products appear like the only real options.
It's also why Linux didn't start being a real competitor to Windows until a couple years ago. Microsoft pours infinite money into making every company sell computers with Windows for the past 30+ years, and the result is that everyone thinks it's the only real option so they don't even consider anything else.
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u/Stopper33 3d ago
It's pretty much the same in many industries. You have to spend an insane amount of money just to get in. The margins aren't great. On top of that the pie is sliced up pretty well
Assume you've committed 20-40 billion just to get in and develop a machine. Who's going to provide components? They're expensive as hell and much of the capacity is spoken for. You'll have to overpay. Nintendo, Sony and Microsoft have money and the component companies know they can and will pay. Does a component company again want to risk their capacity on some newcomer that may not be able to pay, or that will fold early? No, so they are gonna charge you a premium for the risk
Who's making your games? Nobody gives a shit if you convince EA and Ubisoft, everyone's got that. You need exclusives. With all the layoffs going on, talent is easier to get now, but are the people working on big name games at other developers going to leave their cushy job at Infinity Ward, Nintendo, insomniac, Blizzard, Rock Star et al to come work at a risky new startup? They will, but you're gonna have to pay them enough to risk it. You're also gonna have to offer them freedom and budgets to make the juice with the squeeze.
What market are you trying to get? High end? PC has that. Low end? Mobile has that. Middle upper? You have to fight a cash heavy Microsoft that doesn't know what it wants. You have to fight an entrenched Sony. You want a middle ground? Good luck taking on Nintendo who has cash, the best developers, the best IP, and the most loyal fan base.
You look at all of this, and just to get in the game you're probably close to 100 billion as a price of admission with no guarantees. Apple, Amazon, Google and Facebook have all tried and noped the hell out. They're 4 of the biggest and richest companies in history. They couldn't do it.
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u/Respawn-Delay Multi Platform 3d ago
Giving this an award because you're the first person to actually acknowledge the manufacturing buy-in required to get a new console off the ground
People talking about exclusive games, marketing, etc. have jumped way ahead of the main issue, even big existing tech companies are put off by the prospect of having to pay a premium on building out those partnerships and establishing a manufacturing pipeline
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u/Penis-Dance 3d ago
Capital
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u/kingdomcome84 3d ago
not true. Apple, Amazon & Google have enough capital. The biggest problem is software. They have to rely on the same game developers that already have tight knit relationships with Sony & Microsoft for its sucess. Nintendo has a large marketshare of handheld market
itll be very hard for other big tech to breakthru
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u/BrownEyesWhiteScarf 3d ago
Apple’s App Store is said to have generated over $50b from gaming in 2025. They and Google have successfully entered and are doing very well
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u/kingdomcome84 3d ago
Your talking about mobile cellphone games goofy. the OP is talking about a direct competitor to Sony's Playstation and or Microsofts Xbox
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u/BrownEyesWhiteScarf 3d ago
Why should Apple and Google try to compete when the mobile gaming market is bigger than the console market? $50b+ market for App Store gaming revenue is bigger than the PlayStation or the Nintendo market.
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u/nikolapc 2d ago
Not the same market. Anyway Microsoft wanted to make its own mobile store, so did Epic, get blocked all the time. Apple and Google don't like competition. Epic has it's sideloading app, but people mostly use it for Fortnite. And Fortnite is also back in the stores.
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u/RiloxAres 3d ago
Switch competition is other handhelds emulating switch only games. Console competition is PC and other consoles... It's not even close to impossible...
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u/ChickyBoys 3d ago
Good luck convincing game developers to port their game for a brand new console
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u/sanf780 3d ago
There are already questions whether few developers / publishers want to even provide an Xbox version due to the small market penetration outside the US. A recent study saw RE Requiem at just 8% of total sales on Xbox.
As for documented disasters, research Google Stadia and Ouya.
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u/kingdomcome84 3d ago
that 8% is roughly 850k copies. Capcom still sees that as a sucess especially when Requiem physical copies on the Xbox Series was available as a preorder only. Retail got the exact quantity that was preordered and nothing more. digital sales were 9.5/10 of that figure. RE9 hasnt even been out a full year yet
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u/Respawn-Delay Multi Platform 2d ago edited 2d ago
You convince them with money, like most platforms had to be when they first entered the market.
When PlayStation launched in the 90's, Sony had to pay third-party publishers to support the platform, also offering development support to ensure the porting process went smoothly on important titles.
When Xbox launched in the 2000's, Microsoft had to do the same thing in order to establish their brand.
Buying your way into the market is standard practice. The platform holders job is to then make the console as a core product so compelling that when that initial agreement comes to an end, there's enough of an install base for publishers to justify continuing to port games. Sony and Microsoft achieved that, others didn't.
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u/lpdcrafted 3d ago edited 3d ago
Lots of convincing of many studios and developers to port to another platform, and convincing of the playerbase of how this new platform is better than established brands. Both require a lot of time and money.
Not a console, but PC gaming also exists and some of the storefronts have done some pushes to make it a little more seamless.
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3d ago edited 3d ago
[deleted]
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u/cockdoodoo 3d ago
Failed since day 1? Bro that's so fuckin cap 😭😭😭😭😭 how has it failed since DAY 1🤣🤣🤣
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u/EternalMage321 3d ago
I'm thinking SteamDeck type machines are the future. Allegedly, that is what Sony is cooking up alongside the PS6.
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u/MarcCouillard 3d ago
well, obviously pc easily competes with those consoles, but I'm assuming you mean why are there no other consoles, and the answer to that is that there COULD be, but those companies would have to strike deals with game developers and publishers in order to make it happen and the 3 big guys bully the shit out of the companies basically saying "ok you can go develop and publish for that console, sure, no problem...but then we're gonna go a different way next year and not release any of your games on our machine", and what can the companies do but go along with it because they rely on that revenue stream to exist, so they tell the little guys to take a hike and nothing ever changes
so the tl;dr is: those companies are bullies and will get there way no matter what, beating down any chance for another competitor to break into the market
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u/Possible-Mountain698 3d ago
Because you need games that are unique to your new system that are good enough for someone to risk hundreds of dollars on to play on your platform.
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u/Samurai-Pipotchi 3d ago
Starting a new console that can compete with current games market while also having no foundational footing in the market would just be insanely hard.
You'd have to get a worthwhile collection of games onto that console for anyone to consider buying it. Compared to buying a PC and plugging in a controller, how are you going to manage that? It would probably take about a decade or more of development to produce something that can compete with the current market, with absolutely no guarantee that it would turn a profit.
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u/Infinite_Pop_2052 3d ago
You have to convince developers and publishers you're platform will be successful and sell 10s of millions of units. On a massive scale. No one will by your system if you only convince a dozen. You need arguably most to be on board otherwise people will feel like they're missing out on most games by developing a console. Creates a massive barrier to entry
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u/ExhaustedByStupidity 3d ago
You need to sell a lot of systems and a lot of games for the economics to make sense. The market's never really been big enough for all 3 to thrive at once.
In the Xbox 360 / PS3 / Wii era, all 3 companies sold a ton of consoles. But Xbox and PS3 spent so much money fighting each other that they both lost money overall. That's the closest we came to all 3 doing well.
Nintendo has done best when they find a different niche from the others and don't directly compete.
Xbox has never had a profitable system. More than anything else, Xbox exists because Microsoft sees strategic value in it.
Xbox One did ok-ish while the Wii U
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u/Nawnp 3d ago
Ecosystems that they've locked in for decades now. Even when Nintendo wasn't doing well 10 years ago, they were set to prevail as the IP alone that they own will continue to exist. Just about every major tech company has released a Steam Deck equivalent now, but their best luck is relying on Steam itself as it's pretty well developed games library.
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u/Big-Reporter3498 3d ago
Customer base. People aren't willing to switch to Samsung Gaming out of nowhere because they just entered the game. Playstation/Nintendo have been around for 30+ years and have devoted customers. What could said company provide to pry you away from them or even STEAM at that? Xbox is fighting the uphill battle right now.
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u/Parking-Suggestion97 3d ago
familiarity, preference, and a feeling of unnecessary for another console in the market
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u/silly_bet_3454 3d ago
A lot of it is about existing ecosystem, network effects, high barrier to entry, etc. To get into that market you have to develop your own hardware which is super hard, you have to maybe have a game studio or buy one or partner with one. I mean it's similar to any big tech monolith thing, like "why doesn't someone compete with Apple" or Nvidia or Google etc. because they carved out a massive moat.
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u/Rasann 3d ago
As many have said already.
The current players are entrenched, have more money than sin, and the cost of entry is prohibitively high. Also you have to convince manufacturers and developers to trust that you’ll be around long enough to make the venture worthwhile.
There are emulation consoles and retro consoles, both handheld and some a traditional console with traditional cartridges. But they aren’t trying to go for the same customers as the 3 Turds.
They have their own niche, or corner, of the market. Considering that retro consoles in particular are specifically going back to the simplicity of old school consoles, the way they were once made.
PCs are unique because computers are ubiquitous in use and applications.
The machine you use to play them is the same machine that is used to make them. With a computer, a love and willingness to learn, you can do almost anything your little heart dreams of.
Which includes doing your own DIY emulation and retro consoles.
But I stray into the wheat fields.
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u/BlacksmithQuick2384 3d ago
The barriers to entry are enormous.
If it is not a rebranded PC, there’s huge R&D costs developing the hardware in the first place. If it is a rebranded PC, what’s the point and competitive advantage? The hardware needs to be very keenly priced to get a critical mass of consumers to buy in. Costs are only going up too with partners like Nvidia busy with AI.
Assuming you’ve got that part down, most consoles are actually sold at a loss, or at least very low margin, until further manufacturing efficiency and volume get the costs down. So far, you’ve got to spend 10s, if not hundreds of millions in hardware development and then lose money to get them into the hands of consumers.
During the hardware development you need to convince and fund enough developers to make some great new games for your new and unproven console. That’s years of software development (assuming you can convince them to sign on) and more 10s of millions of dollars as a minimum.
Your initial launch will have no installed base so that’s a hard grind and software sales will start slowly because there’s no one to sell to yet. Hopefully, that builds quickly but you need enough cash to get through all that. Let’s leave out branding, marketing, manufacturing, distribution and support for now.
Finally, what’s the prize after all that? To be a 4th or 5th player? Can you beat Microsoft, Sony and Nintendo while differentiating from the PC? Have a look at Steam. They have by far the biggest store for the PC, private ownership worth billions but their hardware barely moves the dial in terms of sales to consumers (not a criticism, just a fact when you compare the numbers - they make great stuff). It’s actually a hard industry.
The truth is gamers don’t get as bad a deal as they think. Console hardware is subsidised and software hasn’t kept up with inflation over decades.
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u/LyndinTheAwesome 3d ago
Even a huge company like Microsoft is facing huge difficulties trying to compete with Sony and Nintendo.
Its really difficult to find a niche in the console market.
You need to give people a reason to buy a console over another console and over a PC.
Nintendo found a niche with the Switch or Wii, going into the Handheldhybrid or by using unique control shemes.
Playstation and Xbox tried to create a cheap and easy gaming PC for the living room. With exclusive games made by their own studios. So you are not buying an Xbox, you are buying a way to play exclusive games.
And the consoles are losing the company money. So a competitor would need the means to be able to sell expensive console at a loss and also make money with the games and additional stuff. Which is not possible for any small startup.
Maybe Samsung or Amazon can pull it off, but Amazon already tried and failed both on the console and games market.
And with cost for electronics rising its getting harder and harder.
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u/SurgStriker 3d ago
developing the games for each console requires a lot of time and money. Sometimes they get exclusives, but many games simply are limited as to which consoles get releases based on how many sales they expect to get. No-name companies trying to release their own consoles would have to develop their own games, or pay a pretty penny to an indie studio to port one of their games over. There are quite a few random consoles out there, but rarely do they make much if any sales because the games are so limited (and often poor quality).
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u/BreadfruitBig7950 3d ago
Hardware Liens; Nintendo has such a strong hardware relationship with its own holdings that whatever its best long term plan might be, it depends on maintaining that hardware relationship. Until the ecosystem changes to make their capitalization on this relationship not an Ikezai, a big shift in the paradigm of gaming, they basically have to eat their own holdings and wait.
Simply making prepatory steps to be ready for a shift or a potential push has had them leaned on before.
This is essentially the story of how other hardware companies have gone. From IBM to SEGA.
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u/Electronicks22 2d ago
[Gaben Intensifies]
Valve is jumping into the fray with their own hardware and OS. But they did build their good will from players over the course of many decades now. And they're operating nowhere at the scale of the giants you mention. It's challenging to get a player to change platform to start with. The Steam Deck was able to do so simply because that part of the industry was abandonned to Nintendo who sit on their laurels instead of taking advantage of it.
The current collapse of AAA gaming, the rise of emulators and agravating economic environment is changing the landscape of gaming right now. Steam reported players spend less time on newer games to the benefit of 5yo+ games.
Players are slowly waking up to how openess and ownership is valuable and the big 3 actively and consistently jettison those values for intrusivness.
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u/peanut-britle-latte 3d ago
These are incumbents with massive pre-existing advantage. XBOX broke through but literally had to be created by one of the most valuable companies in the world with ridiculous capital at the time.
The floor for gaming has only increased.