It's a bit more complicated than it's being made out to be. It's definitely not as simple as "Nintendo rejected Sony" or "Sony wanted total control". It goes a bit deeper than that. There's no real bad guy, it was a disagreement that killed that iteration of the project.

It happened how it happened, and it couldn't have happened any other way. What if Sony didn't make the playstation after the cancelled deal? Would N64 seriously be competing against the saturn? LOL.

The way it happened taught Nintendo some pretty important lessons (like why not to have a monopoly, why not to use carts) that I think helped them in the long run.

On a sidenote, Philips had allready made the CDI long before Nintendo became involved.

In typical Philipsness*, the product was a good idea but too early and too expensive. The hardware of the day was just not up to the tasks they had set it.

*) See Video 2000 et al :P

From what i read the contract between them was signed before it was fully read by the Nintendo execs.
Whoever was supposed to sign it was away on business and when he returned he read the contract and refused to honor it.
In typical sony style they wanted full owndership of the games made for the CD unit, inclucing the ones nintendo made. Any fool can see that just isnt going to happen.

Nintendo then sneaked off to Philips and signed a deal to put Mario and Zelda on the CD-i, for a Japanese company to betray another japanese company is one thing, but to goto an English company is another. What made things worse was the heads at Sony were stoked about the deal and announced it to the press.

I wouldnt say this was totally nintnedos fault, the contract should never have been signed and Sony were being very greedy, but at the same time it was wrong of Nintendo not to honour a contract.

Sony came out ok in the end anyway and i think the whole failure of the Cube and N64 is the reason we have the Wii today.

There is actually a lot more to this story.

Long before Nintendo and Phillips and Sony ever went through this, Sony and Phillips went to war over a little device called CDs.

The legend goes somewhat like this. In trying to create a new audio format, Sony was looking into laserdisc type technology that was completely digital and could be read with a laser producing a fantastic and superior audio experience. The problem is, Sony kept screwing it up.

In a somewhat strange turn, Phillips wanted to show Sony their new fomat for audio in a closed door meeting in order to get the tech off the ground. The English directors sat with Sony's big wigs and pulled out of their pocket a "CD" (What we current;ly know as a CD today. On the other end of the table, Sony pulls out a 13" version of a CD that looks like the size of a record. (Or small Laserdisc) There was much cursing on Son'y end.

I believe Phillips owns the patent for CDs and they have that as one of their benchmarks. "Creators of CD technology". A race Sony did not win.

On the Nintendo / Playstation deal, Nintendo was obviously at fault for BAAAAD business ethics. They signed some pre-lim deals and betrayed Sony by going to a company that beat them to the punch.

In the end it was the best thing that could have happened for Sony.
Over 10 years of great videogames.

It took Nintendo THAT long to come back in the home console market.
I and many others believe Nintendo's almost downfall was sealed when they betrayed Sony. They made it out alive though, so let's see how this plays out!
Gotta love these stories.

DDR? Do you mean Konami's Dance Dance Revolution, or another thing that DDR stands for?

Yeah Konami mighta made DDR still, but on the N64? The N64 carts didn't have space to hold MP3s or anything, they mostly used MIDI soundtracks... Needless to say, many games would have not come out, were it not for the CD tech in the playstation.

In Japan, there was a DDR game on the N64. There were FIVE on the Game Boy Color.

Could u imagine how amazing it would be if they join forces. We would all be playing the Ninenstation or maybe the Playdo right now.....with amazing graphics and zelda and mario and metal gear....and of course what every crazy idea nintendo had for a controller.

Excuse me?! Philips is a Dutch company, not English. It was founded in 1891 in my hometown Eindhoven.

 On-topic: if everything went as planned, Nintendo would've ended up being bought by Sony, with Sony having complete domination over the industry until the end of days.

In our universe, Nintendo took a pretty bad beating but survived it, took over again and is now making more profit then ever.

What scenario do you like better?