Some say the story begins with the CD-i. The real story however begins with the growing use of CD-ROM and the emergence of multimedia - devices that played games, movies, music, edutainment and more.
The CD-i multimedia player was a console jointly developed by Philips Electronics NV and Sony Corporation in the mid-80s. Eventually, Philips took the biggest part in the development process, responsible for at least 90 percent of CD-i's development. It was rumored that mounting conflicts between Sony and Philips resulted in a parting of ways early in the console's development.
The path of the raindrop has already been decided before it lands...
Although there were many detours along the way, Sony's path is said to have been one of both deception and learning. It was also wrapped within an undying desire to become involved in the video game industry no matter the obstacles.
Sony was extremely interested in video games and was prepared to step on whomever necessary to get its head in the door.
In 1988, Sony came to an agreement with Nintendo to contribute the main audio chip for Nintendo's next-generation home console, the Super Nintendo Entertainment System (Super Famicom).
One of Sony's young engineers, Ken Kutaragi, had bought his children a Famicom and came away unimpressed by the technology. He approached Nintendo with some chips that his company was working on. The Kutaragi-designed sound chip for the Super Famicom would be a key element to the system and was slyly designed in such a way as to make effective development possible only with Sony's expensive development tools.
As an extension of the agreement, Sony made its most ambitious attempt at squeezing into the video game market by signing a deal with Nintendo that would allow it to develop and use CD-ROM drive technology in home console entertainment applications. Furthermore, games for Nintendo's forthcoming Super NES would be fully compatible with Sony's CD-based console.
"...the convergence machines Nintendo today criticizes, were once the waters Nintendo intentionally sailed...."
Sony quickly began development on its home console in secret using the proposed "Super Disc technology". The technology was not scheduled to be released for another 18 months. Sony's console was initially called the "Super Disc", and was supposed to be able to play both SNES cartridges and CD-ROMs, of which Sony was to be the "sole worldwide licenser," as stated in the contract.
Nintendo president, Hiroshi Yamauchi
thought CD-ROM technology and multimedia would be a vital part of the future of video games. He increased Nintendo's research budget to facilitate the exploration of this new future.
Nintendo was searching for a format to expand its multimedia endeavors, however for some reason Nintendo did not read the contract closely or simply didn't heed enough caution. Hiroshi Yamauchi and Co. thought they were playing Sony, but in reality, Sony would come to play Nintendo like a fiddle.
Rumors surfaced indicating that Sony lawyers had skillfully crafted the agreement so that it allowed Sony to reap publishing profits from the SNES/Super Famicom CD-based games. These were the very profits Nintendo most sought to retain.
In its attempt to stay competitive with Sega, the convergence machines Nintendo today criticizes, were once the waters Nintendo intentionally sailed. (Although, with the drama that would soon follow, it's no surprise Nintendo developed a bias against them.)
October 1991 saw the commercial release of the Philips' CD-i multimedia machine.
"...it became clear that CD-ROMs weren't a fluke and could turn into a major business..."
All was looking just fine for Nintendo until it found that the deal they had struck with Sony way back in 1988 granted Sony the right to control and license all the CD-based games for the "Super Disc". Nintendo was now to be at the mercy of Sony and its "Super Disc", which could play SNES carts and Sony-manufactured CDs. Nintendo, understandably, began to get worried.
When it became clear that CD-ROMs weren't a fluke and could turn into a major business, Nintendo Co. Ltd. president Hiroshi Yamauchi realized that the proposed alliance with Sony meant giving up the very foundation of Nintendo's business - absolute control over license and manufacturing.
In May of 1991, Nintendo of America's Howard Lincoln
and Minoru Arakawa
flew to Eindhoven in the Netherlands and signed an agreement with Europe's biggest electronics manufacturer, Philips Electronics N.V. Under this new alliance, future Nintendo games would be playable on Philips' new CD-i system -- and Philips would in turn develop a CD-ROM add-on for the Super Famicom (SNES).
Under the contract, Nintendo would have complete control over licensing the games for the SNES add-on. As an extension of the agreement, Philips got the rights to use select Nintendo characters in some of their CD-i games. (One Mario game and three Zelda games were ultimately released.)
Meanwhile, Nintendo of America was busy preparing to introduce the Super Nintendo Entertainment System console to the North American market on September 9, 1991. The Super Nintendo was first scheduled to be on display at the June 1991 Consumer Electronics Show (CES).
In June of 1991, at the Chicago CES, Sony officially announced the Play Station (space intentional). As originally announced, the Play Station would have a port to play Super Nintendo cartridges, as well as a CD-ROM drive that would play 680 megabyte Sony Super Discs.
The machine would be able to play videogames as well as other forms of interactive entertainment, including movies, music and edutainment. Sony intended to draw on its family of companies, including Sony Music and Columbia Pictures, to develop software.
Olaf Olafsson, then chief of Sony Electronic Publishing, was seen on the set of Hook
, Steven Spielberg's new Peter Pan movie, presumably deciding how the movie could be worked into a game for the fledgling Play Station.
In Fortune magazine, Olafsson was quoted as saying, "The video-game business...will be much more interesting (than when it was cartridge based). By owning a studio, we can get involved right from the beginning, during the writing of the movie."
By this point, Nintendo had just about all it could take. On top of the deal signed in 1988, Sony had also retained all rights to the SNES sound chip, which further exacerbated Nintendo. Sony had Nintendo by the balls...
Whether by coincidence, or good timing, at 9:00 AM, the day after Sony announced its plans to begin work on the Play Station, Nintendo and Howard Lincoln made an announcement of their own. Instead of confirming the company's alliance with Sony at CES, as everyone expected, Nintendo announced it was instead working with Philips - Sony's longtime rival - on the SNES CD-ROM drive. Philips' technology was superior, said Nintendo.
Sony caught wind of Nintendo's intention the night before. It made every attempt at getting a hold of Nintendo, however all calls went ignored. After the news sank in, Sony was furious.
Because of their contract-breaking actions, Nintendo not only faced legal repercussions from Sony, but could also experience a serious backlash from the Japanese business community. Nintendo had broken the unwritten law among Japanese companies not to turn against each other if it benefited foreign competitors.
Sony tried to convince Nintendo to change its mind by threatening to sue but Nintendo insisted that their cooperation with Philips wouldn't interfere with Sony's Play Station project.
In the end, because of their mutual involvement, it was in the best interests of both companies to maintain friendly relations. After all, Nintendo was still using the Sony audio chip. Also, since the Play Station would have the ability to play SNES games, Sony realized it would benefit by bandaging their issues with Nintendo instead of burning the bridge further.
It turns out the partnership with Philips was simply a way for Nintendo to leverage itself so it could get better terms (like the control over CD games). Sony, however, didn't appear to budge since the original contract still existed.
Nintendo still managed to escape without a penalty. Because of the ambiguity and "vagueity" of the Japanese contracts, Nintendo (likely with the help of Howard Lincoln's finesse) managed to extricate itself from the bad parts of the contract with ease and therefore, Nintendo continued to work with Philips.
Things moved on, although subdued, and Nintendo of America released the Super Nintendo in September.
When it was clear to Sony that they wouldn't get any help from Nintendo with new CD games for the Play Station, Sony decided that it was time to show the world that they could manage on their own.
At the Tokyo International Electronics Show in October 1991, Sony put on a big show previewing the console, which they presented as a console both for both gaming and education. A variety of educational multimedia titles were announced.
No real games were presented however, Sony was in the process of signing deals with game publishers and developers. And still the Play Station would be able to run all old SNES games. Sony announced the launch - a tentative summer 1992 date - would be set six months before Philips and Nintendo's SNES add-on.
In January, before the May 1992 Summer Consumer Electronics Show, Nintendo made an official announcement that they were abandoning their partnership with Sony.
At the CES show, Philips announced it was still working together with Nintendo. They announced that the release date would be by Christmas that same year (Although, later this year, it would be delayed to 1993). At the show, Nintendo announced that it would use the same licensing system for the add-on as it had used with the NES and SNES.
Sony's response to this was to join forces with Nintendo's then competitor, Sega. Sony announced it would make games for the Mega CD, Sega's Multimedia Entertainment System.
At the show, Sega of America officially unveiled its CD-ROM drive, dubbed the Mega CD (later renamed Sega CD). The Mega CD had just been launched in Japan on December 1, 1991, with an initial retail price of 49,800 (US $380).
In October of 1992, publishers were growing tired of all the different CD formats on the market and in an attempt to create an industry wide standard, executives from the largest Nintendo licensees met with Hiroshi Yamauchi to persuade him to join forces with Sony again.
After discussions, an agreement was reached between Nintendo, Philips and Sony. The companies would create hardware that would use the same CD standard worldwide. Nintendo was awarded the rights to control and license all games for both Sony's Play Station and the Philips SNES CD-ROM drive while Sony was given control of all non-game software - edutainment, movies, etc. - for the Play Station.
A Super Famicom cartridge called the "System Cartridge" was placed into the normal cartridge slot (as pictured above). This cart contained a chip that handled the communication between the SNES and the Nintendo CD's RAM memory using a system called H.A.N.D.S. (Hyper Advanced Nintendo Data transfer System). The CD-ROM drive attached beneath the SNES via its expansion slot. A 32-bit Co-CPU would assist the SNES CPU, boosting the speed from 3.58 Mhz to an impressive 21.477 Mhz.
After the deal was made Sony said, "We concluded that we had to ally ourselves with Nintendo when we saw that it was going to be the 16-bit winner. We wanted access to all those Nintendo players."
After the reunion with Sony, a new system standard between Philips, Sony and Nintendo began development - the SNES Nintendo Disk a.k.a. Philips CD-ROM XA. It was also decided that the machine would be 32-bit instead of 16-bit (Sega's CD add-on was just 16-bit).
The games for the Nintendo Disk would be featured on a CD-cartridge hybrid. A 56Kbit RAM memory chip was to be used for saving game data. The CDs would be able to hold 540 megabytes of data.
This time Nintendo cooperated with both Sony AND Philips to make this new console. Some sources say that Nintendo only had a slight interest in developing this new CD system because they stood to profit more from a cart based model. Moveover, by this time, it was clear that other CD systems like the Sega CD and NEC's CD were faltering.
In August 1992 Nintendo announced the advent of its new Super FX chip. The Argonaut developed S-FX chip had the effect that Nintendo delayed its CD add-on even more. The CD-ROM had to now be upgraded to be better than the S-FX chip.
Around May of 1993, Nintendo released the last tech specs and information relating to the SNES add-on. A release date for fall of 1994 and a tentative price of $200 was set. In addition, it was announced that the CD format could hold 540 megabytes and that several games were already in development. It was rumored that Zelda and a Street Fighter 2 sequel were in development.
Nintendo promised to show the SNES add-on at the 1993 Summer Consumer Electronics Show held in Chicago. The promise was left unfulfilled, and Nintendo instead chose to announce new games for the SNES such as Super Mario All-Stars
and additional games that used the S-FX chip such as FX-Trax (a.k.a. Stunt Race FX
Before 1993 came to a close, Nintendo made it official that the SNES add-on plans were cancelled
"...Essentially, the need to continue developing an SNES add-on became obsolete..."
Along with the F-X chip, Nintendo was also working on its next-generation console, the Nintendo 64. On August 23, 1993, Nintendo officially announced its partnership with Silicon Graphics (SGI) to create a 3D, 64-bit Nintendo gaming console. Essentially, the need to continue developing an SNES add-on became obsolete.
Nintendo, Sony, and Philips scrapped the SNES Nintendo Disk, which reportedly never made it past prototype form. Sony abandoned its Play Station project which never made it out of the factory. Apparently, about 200 were produced. The software in development for it was cancelled just as swiftly.
Steve Race, Sony Computer Entertainment Of America's then CEO, stated, "Since the deal with Nintendo didn't come to fruition we decided to put games on a back burner and wait for the next category. Generally, the gaming industry has a seven-year product life-cycle, so we bided our time until we could get in on the next cycle."
The partnerships with both Sega, Philips and Nintendo were valuable learning experiences for Sony, and what they learned would be put to use just a few years later once Sony decided to strike out on its own with Ken Kuratagi's stand-alone PlayStation console.
Sony finished work on a number of SNES and Genesis games, scrapped the old "Play Station" developed for Nintendo, and set its engineers to work on developing a 32-bit CD-only game machine to unseat Nintendo in Japan and the United States.
The main effect of Nintendo's abandoning of their CD project with Sony and Philip was that the idea behind the machine that Sony and Nintendo were planning on first, the Play Station, was later released by Sony as the standalone console that now holds the reigns of this industry.
Its been said that none of the original chipset or technology from the "Play Station" was used in the PlayStation that we know today. The new 32-bit console was supposedly re-designed from scratch.
There are a lot of factors that ultimately contributed to Nintendo's backing-out of its deals for a CD-based system. One was obviously that Nintendo was comfortable with the profitable cartridge system it had running. Another was the clear failure of Sega's CD and NEC's CD consoles. The other arguments against the CD format, a little more arbitrary, are that of extended loading times, ease of pirating, and a read-only gameplay medium.
The Nintendo Power magazine said, "The next time when someone tells you that CD-ROM is the wave of the future, tell them that the future doesn't belong to the snails."
What would have happened had Nintendo partnered with Sony and released the Play Station? Perhaps Nintendo would have released the Nintendo 64 as a disc-based system. It's more likely, however, that nothing would be different today. Sony's goal was to gain knowledge that would allow it to eventually get into the industry. The "Play Station" was afterall Sony's machine.
All it might've done is prolonged Sony's inevitable entrance into the video game market.