In 1991, Sony announced that they were working
on a brand new project with Nintendo; A Super NES compatible CD based system dubbed: The
Play Station. It was set be a hit that would propel Sony
into the video-game market right next to Nintendo; not as a competitor, but as an ally. So… what went wrong? If you open up a Super Nintendo, you’ll
find a sound fx chip called the SPC 700. The maker of this chip? Sony. It was developed by an engineer named Ken
Kutaragi. After watching his daughter have a blast playing
the NES, he decided that video games weren’t just a fad, or cheap entertainment. During his free time, he created the SPC 700
chip. When Sony found out about his secret project,
he had to convince his superiors that the booming video game industry was just getting
started. The success of the sound chip implemented
into the SNES gave Sony President Norio Ohga reason to believe that were they to make a
game console, it could be a magnificent success. He didn’t quite feel up to the task of entering
the industry from ground zero, however. Luckily, Nintendo approached him with a wild
idea; A CD based system that could supplement the SNES. In 1988 Sony began developing a CD based add-on
to the Super Nintendo. The two companies got along very well in the
early stages of the project. Hundreds of prototypes were made and tested,
and their future together seemed all but certain. There was just one problem. One really big problem. Sony wanted to control licensing for the CD
versions of games produced for the Super Nintendo’s Disk format. Nintendo tried to work around it, but Sony
refused to budge. The alternative was to have Nintendo control
the profits and licensing for the system, leaving Sony with little reason to continue
their work. In addition, Nintendo knew that developers
preferred the CD’s to cartridges. They would likely lose many of their licensing
agreements to Sony. These two entertainment giants had become
accustomed to getting their way, and continued trying to one-up each other throughout the
project. It is at this point that I introduce you to
Nintendo President Hiroshi Yamauchi. I’ll go into more detail about Yamauchi-san
in another video, but for now I will just say that this man meant business. He did not mess around and knew exactly how
to get what he wanted. If Nintendo had unfavorable terms, let’s
just say that contract wouldn’t be around for long. Yamauchi served Nintendo very well during
his time as CEO, but his policies on licensing, distribution and production slowly began to
wear down the 3rd party developers who relied on Nintendo’s consoles to stay in business. If he continued his strict domination of the
video game industry for much longer, they were going to break. His decision on what to do next may just have
been that breaking point. Yamauchi-san secretly sent a few higher-ups
to Europe to have a chat with Philips, Sony’s biggest competitor. Philips had been hard at work on their own
CD-i gaming system, so the offer of CD based games of Nintendo’s IP’s appearing on
their system seemed too good to pass up, even if Nintendo controlled the profits. [Yes, Nintendo actually allowed 3rd party
developers to make games based on Super Mario and The Legend of Zelda that appeared on a
non-Nintendo system. And yes, they’re absolutely awful.] Now if Nintendo could get better terms with
a different company, a change of plans isn’t so extraordinary; it’s business. However, Nintendo violated the unwritten rule
of Japan and favored a Foreign company over a Domestic one. This was a taboo rarely violated at the time. Many Japanese game companies were upset with
Nintendo for turning their backs on the mainland (so to speak), especially since Japan had
recently been hit with an economic recession. Aside from just the cultural norms of Japanese
business, Nintendo decided to break the news that Sony was no longer involved in the SNES-CD,
in the worst possible way. In 1991 Sony took the opportunity at the Consumer
Electronics Show to announce that they were developing a new add-on for the Super NES
called The Play Station (Two Words). It generated a lot of buzz and Sony held their
heads up high as they were about to make their first foray into a new industry. But their elation did not last long. The following day Nintendo had a press conference
of their own. At this very public conference, where the
press abounded and journalists were eager to hear more about this new Nintendo Play
Station, Nintendo made their big announcement. The Super Disk, as they called it, was being
developed by Philips not Sony. This is one of the darkest moments in video
game history, and its consequences still resonate today. Sony President Norio Ohga was incredibly mad,
as one would expect. But he didn’t prove to be one to explode
and declare war immediately. He showed great poise, and tried to patch
things up with Nintendo. After all, Sony was still interested in collaborating
with the lucrative game company, and in 1992 a new deal was formalized, though sadly nothing
ever came of it. Just like Nintendo had secretly sought out
Phillips to take over the work Sony had done for years, Sony began preparations of their
own. After trying to collaborate with Nintendo’s
rival SEGA on a new CD-ROM based console, which also didn’t work out, Ken Kutaragi
decided that there was only one way they were going to make it in the gaming industry. Come the next generation of consoles, they
would have a surprise up their sleeve that would change everything. Remember how I mentioned that Nintendo President
Hiroshi Yamauchi drove a hard bargain with the 3rd party developers? Well it comes into play in the following years. You see, despite Nintendo’s partnership
with Phillips, the only thing that came of it was a few CD-i games using Nintendo’s
properties. The games were terrible, the CD-i was overpriced
and, well, that was the end of it. A CD Peripheral for the Super Nintendo never
came out. Developers like Square, EA, Namco and Capcom
were really hoping that a deal could be struck between Nintendo and Sony or Philips so they
could produce more games, at a higher quality, using easy-to-develop-for CD’s rather than
Nintendo’s clunky cartridges. Some companies had already started making
games for the Super Disk that either never came out or had to be drastically altered
in order to fit on SNES cartridges. Sony knew this. If they could shake up the industry enough,
many of the biggest video game makers in the world would eagerly leave Nintendo and flock
to their system. The 32-bit Sony PlayStation (one word this
time) was announced early in 1994. It began generating buzz well before launch,
as its hardware was used to run games like Virtua Fighter for arcades in Japan. It took a massive share of the market, which
was compounded by the fact that Nintendo decided to continue with cartridges on the N64. This decision finalized the mass exodus of
3rd party developers from Nintendo and right into the arms of Sony. Their plan worked, and while they couldn’t
ultimately take Nintendo down, they won the next 2 generations of consoles, drastically
outselling Nintendo and forcing Sega out of the business. It’s easy to look at what happened here
and pick sides, blaming either or for causing such a drastic change in the video gaming
landscape. But think about it like this, that cartridge
based N64 gave us some of the greatest games of all time in Super Mario 64, Ocarina of
Time and countless others. Likewise for the Super NES, Chrono Trigger
would have never been released in its current form. Final Fantasy 7 would have been so different
that it’s tough to say whether it would have created such a revolution in the first
place. Many of these games changed my life in ways
I can’t even describe. I think these games are perfect just the way
they are. Plus, it’s not like Sony and Nintendo were
going to be best buds forever. All of my research tells me that Sony was
going to jump into the console market whether they got their start with the Super NES add-on
or not. The next generation would almost certainly
have seen Sony creating their own system and challenging Nintendo directly. So if you’re feeling down about the whole
situation and what “might have been”, just remember: things like this happen, and
it’s not always pretty, but in the end, I wouldn’t have it any other way.
I hated the PlayStation due to the loading screens. I still think the cartridges were better for consoles. I guess that's my unpopular opinion.
Wow I never knew any of this. Thanks, great post.
I wonder what Nintendo consoles would be like if this was completed?
The will be loads of comments of people claiming they have this, maybe not here but definitely on YouTube.
Moronic corporate decision making, that’s basically why. Like every corporation, management personnel are plagued with the mental affliction of acute paranoia. It’s only thanks to top tier psychiatrists, and various types of consultants, does it seem any corporation of a massive size seem to hold itself together.
Moreso in those days of relative Japanese corporate isolationism (not really, but sort-of when you compare it to the open and interconnected nature of business in a far more technologically globalized world).