The markets for both types of devices were driven by changing rivalries over the decades, which furthered competition and the innovation of new products. While the early 1990s were marked by the rivalry between Sega and Nintendo, the entry of Sony in the mid-1990s and Microsoft in the early 2000s established today's competition on the global home console market. Since then, Sony's PlayStation and Microsoft's Xbox have become well-known gaming brands. On the handheld market, Sony challenged Nintendo's dominating position in the mid-2000s, setting its PlayStation Portable against the Nintendo DS. While Microsoft and Sony pursue similar strategies of hardware competition, Nintendo tries to set itself apart by offering new gameplay possibilities and acquiring new target groups. This approach is also exemplified by the Nintendo Switch, which can be regarded as a hybrid between home and handheld console.
Today, the Japanese home console market is split between Sony's PlayStation 4 (2014), Microsoft's Xbox One (2014) and Nintendo's Switch (2017), while the handheld market is split between the Nintendo 3DS (2011), the Nintendo 2DS (2016) and the PlayStation Vita (2011). For all consoles, hardware spin-offs that offer new features exist. While the competition between the three manufacturers is more evenly distributed in other national home console markets, Nintendo and Sony clearly dominate their home market.
Despite their historical significance for the video game industry, classical video game consoles were in a long-term decline until 2017, when the successful launch of the Nintendo Switch contributed to the first growth of sales revenue in many years. One reason for the decline is thought to be the rise of the smartphone, which is the most popular gaming device in Japan today. Tellingly, while one major trend for the video game industry as a whole in recent years was the growing influence of online distribution, the online game market of packaged PC and home console games as well as related game services consistently decreased for many years.