Sony announced the PS3 from the top of the world. They closed out the PS2's run as the most dominant console in history, knowing its life would continue for a good portion of the next generation. Riding high on a wave of overconfidence, Sony decided they owned the market and people would simply buy whatever they produced. The PS3 launched a year behind its competition, sported hefty price tags thanks to blu-ray and stumped developers with the cell processor's complex architecture. Sony also made the decision to ignore the lead Microsoft built in online functionality, letting PSN languish as the skeletal structure of an online service for years. The progression of the PS3 as a console felt like a boulder rolling uphill.
Many of Sony's design missteps could have been overlooked, if they hadn't hit the stage at back to back E3 press conferences acting like they owned the world - and like they didn't care if everyone knew they were using the PS3 to foist the blu-ray format onto their customers. A less confusing marketing campaign also would have helped, with weird abstract commercials and jumbled messaging about the PS3's features causing heads to spin. It's hard to imagine an alternate reality in which the PS3 falls so staggeringly far behind a refurbished Xbox brand, launching defective hardware, without the added weight of Sony's hubris.
Logic dictates both Nintendo and Microsoft, who benefited greatly from the PS3's early stumbling, would learn a lesson from Sony's mistakes. A generation later, however, Microsoft and Nintendo fell into the same holes as they launched their newest consoles. Neither is sunken yet, but both companies are clawing their way out of holes they have no reason to be in.
Microsoft's announcement of the Xbox One was as much of a disaster as Kaz Hari's tone deaf unveil of the PS3, and for many of the same reasons. The big-green-machine decided the current gaming market was a lock to buy their newest creation and turned their attention elsewhere. Microsoft spent 45 minutes of their short one hour unveil talking about basic system functionality, and ended the presentation with 15 minutes of games dominated by yearly sports titles everyone already expected to make an appearance. Closing with sports was fitting for Don Mattrick and company though, as they committed a cardinal sin of one of the United States' most popular games.
In the NFL, receivers who consistently take their eyes off the football before catching it tend to drop more passes - usually around twice as many as their peers. The phenomenon is called a concentration drop, and most often occurs when the player knows they have a chance to make a big play and get anxious. Microsoft thought they had a chance to take a lead, and they started up field into the realm of TV and motion controlled user interfaces before even trying to nab a segment of the people most likely to buy the console at launch. Sony used the opportunity to come over the top with a knockout hit at E3, but Microsoft only responded by blaming others and exhibiting concussion-like symptoms when everyone asked them what was going on.
Microsoft topped off the Xbox One's issues with the exact same pricing mistake as the PS3. In service of pushing a technology forward, Microsoft made it mandatory and rolled the cost on to consumers. It's possible Microsoft missed all of the problems Sony's blu-ray blitz caused the company - selling consoles at a loss, fighting the floundering TV market and constantly nursing PR wounds. Reasons aside, it makes no sense for Microsoft to force kinect down early adopters' throats. Coupled with the Xbox One's vaunted, and poorly explained, cloud-computing's struggle to keep the system competitive, and a vaguely developer hostile indie publishing model, Microsoft finds themselves in the same position as Sony was years ago.
If Microsoft's problem was assuming people would just buy their console, then Nintendo's was assuming people would buy a console just for their games. In fairness to Nintendo, that's largely been their strategy for every console. The Wii U's launch was a mess though, with Nintendo happily letting people think their new system was a peripheral for almost a year, and the company has yet to announce anything with console moving power. The Wii U's gimmick isn't enough to propel it to the same level as its predecessor either and, without the decent third party support Nintendo threw away after the GameCube, the system isn't doing well.
Surprisingly, Nintendo's position isn't too far off from the PS3's either. Both the PS3 and Wii U alienated devs with odd or confusing technology. In the case of the Wii U, it's no longer on par with its competition and with a small installed base of players many publishers and developers have decided it isn't in their best interest to spend money porting to the console. The Wii U tablet controller, like the kinect, has proven impenetrable design blockade for most developers as well. Like the early days of PSN, Nintendo's online infrastructure is an undeveloped and barely functional skeleton.
Both Microsoft and Nintendo made their biggest mistakes when they assumed their relative systems' successes would simply roll over into the next generation. Then they compounded problems caused by overconfidence by not paying attention to how Sony turned the PlayStation brand back around. They became comfortable, like Sony became comfortable, and forgot about building a foundation. Nintendo and Microsoft also missed the boat on something Sony learned the hard way: there are no second chances at first impressions. All Sony had to do was show the faintest hint of understanding, and the rest slid right into their hands as the untouchables lost their grip.