Originally Posted by DotComCTO
Microsoft has the cash to throw around. They are trying to buy mind share. They understand that it is unbelievably hard to compete with the iPod - just as they realized that XBox had a tough road up against the PS2. However, in a few short years, the line of people waiting to get an XBox 360 was unreal...and Nintendo isn't the #2 player in the home console market anymore (in the US). People would clearly say that the leaders now are Sony and Microsoft (although look for a strong comeback from Nintendo with the Wii).
'People' wouldn't clearly say that Sony and Microsoft are the leaders now, only 'Americans' would. Simply because, the US is the only market where the Xbox did well.
In Europe, the Xbox did far weaker business than it did in the States, and in Japan, well, there were weeks where the Playstation ONE outsold it... Xbox was (and still is) a joke over there. In contrast, the Gamecube did 'okay' in all three major worldwide markets.
Far as who's #2 now, its closer than you'd think. Last I checked, MS sold 24 million Xboxs compared to 21 million Gamecubes sold. Of course, both are pretty insignifcant accomplishments compared to Sony's 106 million PS2s sold. For all the Xbox hype (in the US), Sony still owns the market, MS and Nintendo are light-years behind. To put it in further perspective, even in the US, the Xbox's stronghold, PS2 still outsold it 2.5 to 1 (Europe was 6 to 1, and Japan, 11 to 1. Ouch).
Now we have the 360, and people did indeed line up to buy 'em when they launched. So what? That's a couple hundred thousand consoles, not tens of millions. People will line up to buy the Wii and the PS3 also. Launch day lines don't mean that much, because demand will always outstrip supply at launch, unless your product is simply AWFUL beyond words.
Bottom line: Xbox was a US-only success, and did not come even close to disloding the market leader, even in the US. And that was with MS willing to lose billions on it. 360 may fare better, but not much. MS's ability to dominate markets where it can't leverage Windows or Office is much more limited than is widely believed.