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@Thechalkblock

The Playstation was actually the byproduct of a joint Nintendo Sony venture. Which Nintendo had decided to back out of. So Square might have had an expectation that the 64 would be a disc based system. However I think the true culprit wasn't the limitations of the technology more then it was the expense of the formats in question.

Sony held three critical advantages. Firstly their format was incredibly cheap to manufacture as in it costs less then two dollars to stamp, and case a disc. Secondly Sony had a buy back policy. A seller could return an unsold copy of a game, and get their money back. Thirdly Sony could lower prices until a product was sold.

Nintendo held three critical disadvantages. They used proprietary carts. So they got a good double gouge on developers. First the licensing fee, and then the manufacturing fee. Carts are actually quite expensive to manufacture, and I think but am not positive that the price was over ten dollars per cart. So Nintendo could not honor a buyback policy you cannot just meltdown carts, and shove them back in the press. Finally with the up front cost it was, and I am sure you can attest to this very slow to go down. Whereas a PS1 game could be as low as fifteen to twenty dollars a year after launch. The 64 game would languish at its original price point for two or more years. They rarely went below twenty, and that is when a seller just wanted to eat the loss, and get rid of the game.

So Square had a fairly easy decision to make. They could make more money with Sony. Take less risk with Sony. Then they also could have a strong secondary market with Sony. They could sell their game at different price points, and almost always show a profit. Sony gave developers a lot of opportunity.

This generation the situation is somewhat reversed. This generation its Sony putting road blocks in front of developers. Their format is the most expensive, and their technology is by far the most expensive to develop for. Finally their price point discouraged consumers, and even when they did buy they had less ready cash to purchase games for the console. Both of which limits sales of games.

You can find more in this article. http://en.wikipedia.org/wiki/PlayStation

P.S.

Sorry if I came off rough, but the Square being a mercenary comment has been the standard line for Sony fanatics who take it out on Square, because Sony is losing the console war. Square just didn't do anything to deserve it. They never have. They have just been the whipping boy of fans for as I am sure you can attest for the last dozen years.