I agree with MGibson; the N64 proved that must-have exclusives don’t guarantee success on a console. The N64 had several must-have titles (Mario 64, Ocarina of Time, Goldeneye, maybe Shadows of the Empire) but the high price of the games, plus the fact that there was barely any third-party support, helped kill it. The Dreamcast had several of the best games ever made as exclusive titles, but died a horrible and unfair death.
The PS2 has a few exclusives, most importantly the Grand Theft Auto series, but it doesn’t really need them. I believe it would have stayed on top regardless, because they got everything else right (DVD playing built in, backwards compatibility with the previous best-selling console, and of course all the hype of being the first next-gen console). Support from Square doesn’t hurt, and neither does the fact that just about every console game company other than Nintendo and Microsoft have a relationship with Sony to make PS2 games. It looks like a big library of titles is more important than just a few really, really exceptional titles when it comes to consoles.
Nintendo seems to have learned somewhat from the N64, and have been more aggressive in getting ports, but it seems to me that the only real drawing factor to the GameCube is still the Nintendo exclusives: Mario, Metroid, and Zelda. The only other big exclusive is the Resident Evil series, but remakes of old games aren’t going to draw in anybody new. And IMO, pissing off Rare was a very bad idea.
As for Microsoft, I’m still not sure where they’re targeting. To get their exclusives they’re buying development houses, like Bungie and Rare. And they still don’t have much to show for it: Halo is their only big exclusive that I can think of. They’ve released “improved” versions of some other titles, like Metal Gear 2, but that’s not going to draw anybody in. They keep going on about their focus towards “hardcore” gamers but no real breadth of quality titles for the thing; a big exclusive might make a buyer choose the Xbox over the PS2, but you need a wide range of titles to get the buyer to get a console in the first place. I think their biggest potential “exclusive” now is the Xbox Live service more than any one game.
Well, I just bought an Xbox last week, which means that the price is probably going to go down soon. (I caused the price of the Dreamcast, PS2, and N64 to drop at least $50 after I bought one.) I don’t know from business, but I’d be very surprised if price drops give a big boost to sales; if anything, it’ll only help keep levels steady. Because GC & Xbox are still distant seconds, they’re inherently niche market things – Xbox is targeting what it perceives as “hardcore” gamers, and GC is targeting Nintendo fans. PS2 is still the “everyman” console. I suspect that 90% of the people who would want an Xbox or GC are big enough fans that they’ve already bought one. So if the price drops, it’ll really only help Sony. For most people, a price drop will convince them “I can finally afford to get a console,” instead of “I can finally afford to get an Xbox/Gamecube”.
As for PS2 games’ being the “worst-looking” of the three; I think that that’s mostly online game site and game magazine hype. A lot of (very sad) people like to use all the technical specs of their consoles as bragging rights or marketing bullet points, but there’s really not all that much difference in the consoles, presentation-wise. The Xbox is inherently more powerful than the other two, but very very few titles on the Xbox take real advantage of it. Those that do just end up being pretty but bland games; there are dozens of Xbox games that use all the effects but are completely forgettable in the long run. And Final Fantasy X and ICO are, IMO, better-looking than anything I’ve seen on the Xbox. (Although Splinter Cell does have some very nice lighting effects).
The last I read was that only the PS2 is profitable, if that. All accounts say that Xbox is hemmoraging money, and I believe the Gamecube is losing money as well. But not as much as Xbox – the hard drive & video card in particular are very expensive; Microsoft’s “strategy” was to sell the consoles at a loss but make up the difference on software; I haven’t read anything that that’s even close to working yet. Of course, it doesn’t really matter for either company – Microsoft makes so much money on Windows and Office that every other division of the company operates at a loss. And Nintendo makes so much on the Gameboy and Pokemon that it can lose money on the Gamecube as long as it wants. I’d be highly skeptical that the GC is going anywhere anytime soon.
And for the multiple console “issue”; I work in games, and owning more than one console is pretty rare even for developers. Based on a random sampling, (about 30 or so of my friends & coworkers), only about 5 of us have more than one, and only one person I know owns all three. Now maybe that’s not accurate, since we can use consoles at work, but I would think that game developers would be more likely than anyone else to be “hardcore.” (Geez, I hate that word.)