The PlayStation made its debut at the Consumer Electronics Show in June 1991 when Sony revealed its console, a Super Famicom/SNES with a built-in CD-ROM drive (that incorporated Green Book technology or CDi). However, a day after the announcement at CES, Nintendo announced that it would be breaking its partnership with Sony, opting to go with Philips instead but using the same technology.[14]
The deal was broken by Nintendo after they were unable to come to an agreement on how revenue would be split between the two companies.
http://en.wikipedia.org/wiki/PlayStation
During the SNES's life, Nintendo contracted with two different companies to develop a CD-ROM-based peripheral for the console to compete with Sega's CD-ROM based addon, Mega-CD. Ultimately, deals with both Sony and Philips fell through, (although a prototype console was produced by Sony) with Philips gaining the right to release a series of titles based on Nintendo franchises for its CD-i multimedia player and Sony going on to develop its own console based on its initial dealings with Nintendo (the PlayStation).
http://en.wikipedia.org/wiki/Super_Nintendo_Entertainment_System
Nintendo was searching for a format to expand its multimedia endeavors, however for some reason Nintendo did not read the contract closely or simply didn't heed enough caution. Hiroshi Yamauchi and Co. thought they were playing Sony, but in reality, Sony would come to play Nintendo like a fiddle.
Rumors surfaced indicating that Sony lawyers had skillfully crafted the agreement so that it allowed Sony to reap publishing profits from the SNES/Super Famicom CD-based games. These were the very profits Nintendo most sought to retain.
http://www.n-sider.com/contentview.php?contentid=231
I just provided three links that show you don't have your history completely right...
One, you said the deal between Philips and Nintendo produced the N64 when it was just a partnership that fell through for a SNES add-on
Two, you think it was a mistake for Nintendo to back out of the deal
Three, get your facts right
