The dynamics of the console wars
In the modern console wars, the Wii reigns king, with almost 100 million units having been sold globally. However, the operation, style, and content of the media released for the Wii is very different from that released for the PS3 and Xbox 360, so the latter two are most often compared.
From an unbiased standpoint, there are a number of reasons why the average consumer would buy the PS3 over the Xbox 360. The Xbox offers better performance in CPU-heavy games; having said that, most casual gamers will not be able to differentiate between the two systems while playing. On the other hand, the PS3 offers better tangential features, like rechargeable controllers and a blu ray player. Furthermore, Microsoft charges on a monthly basis to access their online gaming network, whereas Sony does not. Based on this evidence, there is reason to speculate that more people would buy the PS3 over the Xbox 360, since most consumers globally would want the extra features of the PS3 and not notice the improved performance of the Xbox. In actuality, the Xbox 360 has sold 3 million more units than the PS3.
There are a few cascade effects that could be in place, altering the results of the decision. An information cascade describes a situation where an ever increasing number of people make the same decision, assuming that the people before them made that decision with information they don’t have. This could be the case with the console sales; if that more people bought an Xbox, they might have known something about the products that later consumers did not know, and must not have heard negative information from their friends who have it already. Similarly, the later consumers experience a direct benefit; owners of one console can only play with others who have the same console, making the product your friends own much more enticing. Furthermore, if everyone owned the same console, that console would receive more attention from developers, and have more games available for it. In this particular instance, the fact that all of one’s friends own one console make it significantly more valuable, since playing with one’s friends is the primary reason many people buy these products.