How Did Nintendo Lose its Position of Supremacy?

[DemonDragonJ]

Back in the 1980's and 1990's, Nintendo was one of the most popular and influential video game companies in the world, having released three consecutive consoles (the NES, the SNES, and N64) that were among the best of their respective generations, selling numerous units and having some of the industry's best and most-beloved games (as well as some of its worst and most-reviled).

However, after that, they began to fall behind in the early 2000's, most notably as Sony and Microsoft entered the video game industry and Sega, the other major video game company of the 80's and 90's, ceased production of consoles. While Nintendo certainly is still a very prominent and influential presence in the world of video games, they no longer enjoy the position of supremacy that they once had.

Why is that? I am not a business or economics major, nor have I been following video game news zealously in recent years, so what can anyone else say about this? Why has Nintendo fallen behind other companies, and can they ever regain their former glory?

[Konrad]

"... [Nintendo] began to fall behind in the early 2000s, most notably as Sony and Microsoft entered the video game industry ..."

Not quite accurate. Wikipedia (https://en.wikipedia.org/wiki/Video_game_console).

Note the revenues generated by each system over the years. And consider some things that the wiki article doesn't mention much: quarter-sucking video arcades began to diminish while consoles began to flourish, while PC hardware eventually became capable of playing games almost as good then just as good then better than console counterparts.

By the 2000s, Nintendo was relegated to "kids games" while Sony dominated the market (with PlayStation 2) and Microsoft was trying to bludgeon in with XBox. Mario has always been a busy little plumber who brings home the money, yes. But it turns out that Grand Theft Auto brings home a whole lot more money.