I'd say the 360 era. If we're looking specifically at units sold, the PS3 barely beat out the 360 but if you look at sales performance from the previous generatiion to the next, Xbox wins in that case. Microsoft had a 265.22% perecent increase in units sales going from the original Xbox to 360 compared to the 43.61% drop Sony had going from PS2 to PS3. Not to mention their 2 highest sold exclusive titles (Halo 3, Gears of War 2) beat out the PS3's highest exclusive (MGS4) while it's 3rd highest was comparable to it. Halo 3 sold almost double than what MGS4 did.
I've been a Playstation person since the first console, so I've always favored it more but when the 360 came out ngl I was pretty tempted to go that route instead of a PS3 lol. Had they kept up the momentum they gained during that time and not fumbled out of the gate with the Xbox One, it's very possible they could have overtaken the PS4.
yeah, I think the argument can be made that the 360 was the market leader of the seventh generation because of so much ground that Sony lost in the beginning and middle of it, but I think there can be arguments to counter that too.
firstly, toward the end of the generation and even after the generation ended with Ps4/xbone launching while their predecessors were still being sold, the Ps3 did manage to outsell the 360. in the grand scheme of things this doesn't matter that much, and I would say that it doesn't matter at all if the Ps3 outsold the 360
after the production of the consoles had already ceased. but this was while they were still in production and for that reason I think it says something that at the end of their life cycles, the Ps3 sold more.
secondly, when analyzing the seventh generation as a whole, the Wii was the real market leader. it was the most successful hardware sold all throughout the generation. now, while it broke the boundaries of what is supposed to be a traditional video game console, the fact of the matter is, it kicked the Ps3's and 360's asses in sales. over 100 million consoles sold.
of course it wasn't without its industry tradeoffs; as a lasting effect of the image the Wii created for Nintendo's place among the big three, there has been a huge loss of third party support for the vast majority of multiplatform games and anytime there is a port created for the Nintendo consoles, it ends up being a big deal because of how behind it is in specs. personally, I believe that a lot, if not most people who owned a Wii back in the day,
also owned either a Ps3 or a 360 for this reason. it certainly would explain why the gaps in sales aren't as big as they are in other generations - Wii sold about 10-15 million more than its competitors, while in other generations the market leader sold at least 20 million more than whoever came in 2nd place.
thirdly, I don't know who profited the most in the seventh generation but if we go by profitability as the measure of market leader, there is also the RROD to consider on mS's side. at its peak, the 360 had a failure rate of over 50%. and if that ain't one of the worst failure rates hardware wise for any kind of machine/device, I don't know what it is! and on this subject, I heard that it cost mS over $1 billion in damages.
I'm making these points only to point out that yes, while one could argue that 360
was the market leader in the seventh generation, one could also definitely be making the argument on the contrary as well. which, to answer
@Mani-Man 's question originally, would subsequently mean that they never really were the market leader at all.
as a side note, MGS4 wasn't Ps3's highest selling exclusive. Gran Turismo 5 sold about 12 million copies.