Dreamcast was discontinued before the Xbox One release, even then though, it was selling so bad if Sega didn't pull the plug then retailers surely would have, leaving just Sony in console gaming against Nintendo.
If it'd just been Sony leading the console market uncontested then we'd probably be a generation behind in terms of console power and features. A lot of what we got to enjoy last gen was the result of competition. MS doubled its planned RAM to accommodate for Epic's Gears of Was, Sony spent $950+ to produce each console that sold for $600, probably much of the cost being thought as necessary to compete with the Xbox 360 power and features. We probably wouldn't have saw such a thoughtless tactic be used.
If Sony had only the Wii to worry about, I'm sure they might have opted for not including the BR-drive, maybe even went for a completely different design in hardware that might have allowed for complete and full BC for PS1 and PS2 games because PS3 tech would have been drastically different and more in line with an evolution of PS2 tech. Maybe there wouldn't have existed a bridge between PC and console games and consoles would have had their own market in games. Maybe less powerful and less complex machines would have resulted in lower development costs for developers and publishers, lower gaming power might have resulted in lower standards for games allowing many smaller studios to stay relevant longer. Games could focus on artistic and creative aesthetics and gameplay rather than waste a generation on enhancing photorealism. Maybe the PS3 price would have been much smaller, not contributing a lot to Sony's finanial decline and thus helped them in their long term financial health in their other electronic markets.
What's interesting is what would the topic scenario done to built in HDD features, for instance if the PS3 had been built without one being mandatory then what great 7th gen features would we be missing? Demos, smaller digital games, DLC, patches/updates, app services like Netflix, Hulu, HBO Go, etc, perhaps. Now, if that weren't there, would that have an effect on the development of app services and set top box devices? After all I feel that it was mainly the gaming consoles that many I knew got their feet wet with app devices for their TVs to get services, because it was included in the consoles they'd have anyways for gaming, rather than ask people to go buy a device for app services alone.
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