PORTLAND, Ore. (TheStreet) -- Enjoy setting up your pre-purchased Playstation 4 and Xbox One consoles this week and lording it over your friends, gamers. It may be the last time you're that excited about a home video game console, if not the last time you see one.
Sony's (SNE) integration of the PlayStation 4 with other forms of entertainment, cloud-based gaming, the PlayStation Vita handheld gaming system and even a gamer's existing mobile devices -- as well as Microsoft's (MSFT) use of similar connections for its Xbox One -- continues a drift away from dedicated gaming devices that continues to alter the video game industry. While some new hardware should boost an industry that saw sales of consoles, games and accessories slide 22% last year and 9% the year before -- with console sales through October already down nearly 19%, according to VGChartz -- there are far greater threats ahead.
Video game streaming through services including Valve's Steam and OnLive are pressing console makers into increasing online offerings from the already substantial content available on their online services. Meanwhile, the introduction of third-party streaming hardware including Mad Catz's Google (GOOG) Android-powered M.O.J.O., Nvidia's (NVDA) Shield and Valve's own experimental Steam Machine are threatening Sony, Microsoft and Nintendo with both content and pricing.
Handheld consoles aren't going to save console makers, either. Nintendo has found tremendous success with its 3DS handheld console, but its nearly 37 million sales since 2011 are troubling when compared with the nearly 30 million iPhones Apple moves in a quarter. Flurry Analytics estimates that Nintendo's share of the handheld gaming market has decreased from 70% in 2009 to just 36% in 2011 as smartphones ballooned from 19% to 58% of the mobile gaming market during the same period. Mario still has some clout in the market, but the $1 to $4 app is crushing him like a toadstool.The gaming world has changed drastically since the Nintendo Entertainment System breathed new life into a video game industry that crashed in the early 1980s under a glut of bad product. The NES' more than 61 million console sales were like nothing the industry had ever seen -- its ensuing Nintendo 64 and Game Cube combined never hit that mark, nor did the Sega Genesis or original Xbox -- but it was only the beginning. As a bit of nostalgia and perhaps a primer for things to come, we're taking a look back at the five best-selling consoles of all time. The original NES didn't make the cut, but those that did tweaked the industry and changed the way the world looked at gaming forever.