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JRPGfan said:
Hynad said:

I’m sorry?

Hironobu Sakaguchi

Producer and executive vice president, Square Japan; Chairman and chief executive officer, Square USA

Of course, back then I wasn’t the president of Square. There was a management level above me, and I talked with them to make the decision. But PlayStation games being on CDs was the biggest factor. If you wanted to make a 3D action game on a Nintendo 64 cartridge with that limited space, you could do it. But I wanted to create a 3D role-playing game. It was very clear in my head what I wanted to make, but that would have been difficult on Nintendo’s hardware. …The biggest problem was, of course, memory. Based on our calculations there was no way it could all fit on a ROM cartridge. So our main reason for choosing the PlayStation was really just because it was the only console which would allow us to use CD-ROM media.

Shinichiro Kajitani

Vice president, Square USA

At that time, Square was really close to Nintendo — we were basically like a second party for them. So when their new system was in development, we gave them lots of advice, like, “You’re going to need a CD-ROM drive for it,” “You don’t have enough bandwidth to do what we’re trying to do,” and, “With what you have now, we’re not going to be able to make an RPG.” We gave them lots of advice. But [Nintendo president] Yamauchi-san at Nintendo basically refused to listen to any of it. And that’s when Sakaguchi-san and the management team at Square decided, “OK, we’re going to go with Sony now.”

https://gonintendo.com/stories/289651-square-enix-opens-up-about-trying-to-make-final-fantasy-vii-for-n

^ whats crazy is that Nintendo hasnt changed.

They still design hardware, around their own wants and needs, and basically ignore 3rd party input (on hardware).

Nintendo is not crazy for trying to innovate when it comes to hardware. Otherwise all would be low end PC boxes, the industry would stagnate. Sony and MS took lessons from Nintendo and still continue to do so. Third party support doesn't always depend on hardware either, many examples of that. Big installbases are a big reason for more support too.