The videogame market is absolutely astonishing right now. When I was a kid there was lots of discussion if there was even room for two major consoles on the market. The combined systems moved for the SNES, Genesis/Megadrive, and the TurboGrafx-16 is less than Wii moved by itself (90m combined vs 101m for the Wii).

Here's the rundown today:

1. Nintendo:

A playing card company that became a toy company that now makes video games. Has both the currently most popular handheld (the 3DS) on the market, but also the most popular console/handheld on the market (Switch). Of the top-10 highest selling consoles of all time, Nintendo alone has half of them (if you count the Gameboy and GBC as a single console). They've managed to have a top-selling system in every decade since the 1980s and have overcome misses like the WiiU and the GameCube without missing a beat.

Their current console (Switch) is fantastically underpowered for the generation, basically a cheap Android tablet. Though not yet the all-time most sold console, it's expected to overtake the PS2 before retiring as sales are still ridiculously strong despite competing against systems many times as powerful.

Between the 3DS, Switch, Games, and licensing, Nintendo's revenue for 2022 was ~$14 billion dollars, net at ~$4b

Nintendo has an e-store, but zero cloud gaming strategy.

2. Sony:

A classic Japanese electronics giant that makes every kind of consumer electronics imaginable. Entered the console market after being insulted by Nintendo during the 90s, now arguably the second closest hegemon of the industry after Nintendo. Capable of producing incredibly exotic, but powerful, hardware -- every home console Sony has put out since the original Playstation and the current PS5 is in the current top-10 most sold. The PS2 is the all time winner.

Sony's handhelds haven't faired as well, while the Playstation Portable was a relative hit (and still popular among home brew enthusiasts today), the follow-up Vita was a relative failure, prompting Sony to pull from the portable market. Sony is the only major console maker to get into VR.

Sony proper revenued ~$81b, but Sony Interactive (the division that does games) made $20.75b, but net at $2.6b in 2021.

Sony has an e-store, and you can play a decent library of recent games over the cloud.

3. Microsoft:

Another absolute monster of a company. The history of the Xbox is fascinating (there's an interesting quasi-advertisement documentary on youtube about it), but it's basically a rouge operation that's allowed to survive because it makes money. Totally against prevailing corporate DNA, the systems have performed very well, but not industry leading, since launch. The Xbox 360 is the only system to crack the top-10, but the other systems have performed respectably.

Microsoft has focused on M&A to build up a gaming lineup, but their systems have been treated like an infectious disease in some markets (notably Japan) limiting overall performance. Severe missteps in launch and marketing of the Xbox One probably sapped a not insignificant percentage of their possible growth. It's safe to say that the Microsoft Xbox division focuses heavily on the North American market first, while the Japanese systems see that market as second.

Microsoft revenued $198.3b in 2022, Xbox made $15.56b of that. Microsoft does not seem to share net for the Xbox division.

Microsoft is all in on the cloud. all in.

4. Valve:

The massive dark horse that appears in the room when the power cuts out, covered in black smoke. A "pseudo" console platform company with Steam as their console. They focus mostly on being a channel/publisher for other games -- with various hardware and gaming software side businesses. They target existing PCs as the runtime engine, but try to enable users to access their games in various ways. Steam has a catalog of around 50,000 games.

Here's the real astonishing numbers, if the PS2 is #1 selling console of all time with 155 million units sold, and the Switch has moved 122 million units so far...Steam sees around 200 million monthly active users as of 2023. The PS5 has sold around 32 million units, Steam sees around 75-80 million daily active users per day.

Valve has recently entered the portable console space with their Steam Deck, which runs a custom Linux variant and a compatibility layer, capable of running AAA PC titles. It's estimated to have moved around a million units so far. Valve is also a major driver in the higher-end consumer VR market - one of the only true competitors to Meta.

Valve does this with less than 1200 employees, yearly revenue is estimate to be around $13-15b. It's unknown what their net is, but it's expected that they are very profitable.

Despite being fundamentally a cloud-based console, Valve does not have a cloud gaming offering where you can just sign in to some remote server with your account and start playing. Instead they've relied on external parties to provide those services like GeForce Now or Shadow.

5. Mobile:

I won't spend time here other than to say that most people who are interested in console games consider this a different segment in the way that people interested in Movies think of TV and Radio as different segments. Mobile gaming is huge, can make massive money, but is very hit driven and home to a huge predatory "free to play" industry.

6. Meta

I'll spend even less time here. But basically Zuckerberg traded a dominant, highly profitable, but fading, $116b company for a company that focused on moving fewer platform units than the PlayStation Vita. Great consumer tech, some great games and experiences, but kind of a user mess.

Here's some things that are clear at this point in the generation:

- Nintendo could probably release a Switch II with considerably better specs at any time, but has no reason to as the Switch is selling like hotcakes, and making unreal profits for the company.

- Nintendo appears to make around 30% profit, the highest of the 3 major hardware makers (Sony about 10-13%, Microsoft is unknown, but their M&A rate is crazy). It's guessed that Valve makes more than any of the above.

- The supply chain is choking the high end systems from Sony and Microsoft, and this was before the pandemic. The PS5 was released in 2020 and is still hard to find on store shelves. If you can't move systems, you can't move games.

- Valve has had an incredible year. The Steam Deck is a hit in early gaming circles, largely delivers on promises, is a relatively open platform, and open to customization. Steam dominates its perceived market (game launchers), but also may secretly be one of the largest gaming platforms on the planet. Cheap (<$300) PCs are appearing that can run an almost impossibly large library of games and Valve has been an incredible steward of individual gamers' purchased libraries.

- Nintendo has bizarrely embraced the Indy scene, something only Valve has really done. It's a perfect fit for the lower powered Switch.

- Mobile gaming didn't eat console games -- in fact some pundits are saying the mobile gaming industry has "collapsed". And gaming is now a much larger industry than movies and TV combined.

- Meta isn't even in the top-20 of platform units sold.

Bottom line, Nintendo is one of the smaller players in the industry, but makes lots of money, the giants are struggling to fill channel demand with their platform, and Valve may eventually just overtake them all in the end. Basically Nintendo employees deserve some extra spending money because they're among the best on the planet.