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With systems like the N64 and Playstation (and to a lesser extent the PS2 and Gamecube) proprietary formats could be justified being that you really didn’t know whether the other formats that were available would survive. Today, I think the main reason they’re used is because memory cards (in particular proprietary memory cards) are a very high margin accessory. With that said, if I was Sony I would have used a better excuse and I would have probably claimed that it was for piracy prevention (or something).