Nintendo already had previous experience with add-ons as they had already ventured down this well worn path with the Famicom Disk System for the Famicom (NES.) This add-on was never released outside of Japan because it wasn’t a resounding success amongst other factors, such as piracy and unreliability to name a few. But Nintendo wanted to compete and take advantage of this new storage medium that offered so much more potential to gaming, and so they approached Sony to produce what would be dubbed the SNES-CD.
Sony, having experience with this new CD-ROM technology, and Nintendo having used the Sony SPC-700 processor for the SNES sound output, it seemed like a natural fit for both companies. But it was mostly thanks to the relationship built between Nintendo and Sony through engineer Ken Kutaragi that such a processor was created and used in the SNES, and that there was even an open channel for dialog between the two companies at all, as Sony management didn’t like being bedfellows much with other companies at the time. So it come to pass that with a prior business deal, and a mutual business relationship (of sorts) well established, the two companies agreed on a deal.
Where things fell apart, essentially dooming this add-on never to see the light of day on a production line, is essentially when the powers that be at Nintendo HQ realised that the contract they had signed off on with Sony for the SNES-CD, also handed complete control of all software produced on it to them, freezing Nintendo out of retaining control of the software. With the Nintendo top brass less than happy with this seemingly one sided venture, they secretly formed a deal with Philips and put a stop to any further work on the SNES-CD with Sony. At the 1991 CES (Consumer Electronics Show) Sony announced that it was working with Nintendo on the SNES-CD add-on. But the following day Nintendo announced that they wasn’t working with Sony on the CD add-on for their 16-bit console, but instead had formed a deal with Philips. Sony was left red faced with embarrassment at their announcement the day before as Nintendo had neglected to tell Sony that the SNES-CD deal was dead in the water.
Sony could have killed all further work right there and left the video games industry to itself, but with a few different prototypes of the CD add-on produced, they decided to further research and develop the project and release a standalone CD-based console themselves. They eventually ended their on-going tumultuous relationship with Nintendo and went onto release the PlayStation, and the rest they say is history.
Although it can be said that if Nintendo had read the contract they had signed with Sony properly, then it might not have been signed in the first place. Or perhaps it would have been amended to allow Nintendo to retain control and rights over all the software for the add-on, there for it would have been signed, and the SNES-CD would possibly have been produced. Both these could have kept Sony out of the console hardware business that it ended up being the dominant leader in, but the truth is, it was Nintendo backing out and backtracking on their original agreement that caused Sony to further its development into a standalone console that would become the PlayStation. If they had honoured their contractual agreement with Sony for the SNES-CD, their decision to pull out and embarrass Sony (whether intentional or not) wouldn’t have come back to bite them, as they would slip into second place in the console market with the N64, and then third place with the Game Cube, all as Sony remained at the top spot with its PlayStation consoles.
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