Console wars are nothing new to the gaming industry. Here is a brief history of generations past.
It all started with the Atari 2600 as the most commercially successful console of its day. It really didn't have much competition other than ColecoVision, which sported more controller buttons, but they were awkwardly placed and required overlays for each game. This was before the big crash of the gaming industry in the '80s, due to the infamous movie tie-in game E.T. for Atari.
The gaming industry was revived when Nintendo released the Famicom in Japan, which had a US counterpart called the Nintendo Entertainment System, or NES. It came with the game Super Mario Bros., which at the time was extremely advanced and even had its own arcade cabinet. Its competition was the Sega Master System, which was lesser known, but it had its own selection of arcade-friendly titles people loved.
Then the console wars really fired up when the Super Famicom in Japan launched its US counterpart known as the SNES, or Super Nintendo Entertainment System, a console which many classic gamers consider the best console ever made. Sega had its own entry in the Megadrive, or Genesis in the US. Again, Sega focused more on the arcade games than anything else and won a strong following, despite everybody knowing that "blast processing" was basically a nothing term. Sitting on the sidelines with a cult following of its own was the Neo*Geo, which gave us the SNK arcade games such as Fatal Fury and Samurai Shodown, but it was too expensive for the average gamer and catered to the elite.
The next generation consisted of the PlayStation, the Nintendo 64, and Sega's Dreamcast. Sega had problems with consoles at that point, and after several failed attempts with the Sega CD and Dreamcast, they called it quits and just made games from then on, leading to Sonic finally starring alongside Mario in future titles. The Nintendo 64 was Nintendo's symbol of refusal to join its competition with disc-based games, and with its overwhelming number of bad games that tried too hard to push 3D, Nintendo found itself having a hard time competing with newcomer Sony's PlayStation. PlayStation almost won by default, in spite of problems with breaking down and needing to be replaced.
The console wars began again when Microsoft entered the fray with the Xbox, giving the new PlayStation 2 some competition. With its built-in hard drive that could play music in games that allowed it, the Xbox was a serious contender. Nintendo's GameCube was still a bit of an underdog due to its again-defiant physical game format of smaller discs.
The Xbox 360 found itself suffering from a problem similar to the original PlayStation, in that the first models usually ended up breaking down after a while due to an overheated power box. It was because of this that the PlayStation 3 almost won. However, the inclusion of the Blu-Ray player made the PlayStation 3 too expensive right out of the gate, giving the Xbox 360 the advantage in spite of its tendency to break down. Later models helped reduce the problem by allowing gamers to install the game to an expandable hard drive, giving Microsoft the edge. The Xbox 360 was most likely given its numerical name due to the popularity of the Tony Hawk's Pro Skater franchise and its tendency to emphasize numbers in how good the maneuvers were, based on rotations. Nintendo still enjoyed marginal success with the Wii, but with the release of the 3DS, portable gamers were beginning to migrate to Android and iPhone platforms.
Now we have the Xbox One and PlayStation 4 coming up, with the Wii U struggling to stay afloat.
The console wars have been brutal, but it was always up to the gamers to decide the winner.