Nintendo were kind of jerks in the 80s/90s, and sure they did bully retailers and developers, and why not ... they were used to getting their way on most everything. Yamauchi did have kind of an Emperor Palpatine meets Mr. Burns vibe going on, lol.
It wasn't until the decision to axe CD-ROM from the Super NES successor though that they really hit a brick wall.
After that nothing was ever the same, and it hasn't really ever been again, that was kind of the moment where the third party community was forced to divorce themselves from Nintendo, the thing was, third parties realized very quickly there was life without Nintendo and they never looked back.
I remember actually reading in an EGM circa 1995 or so that Project: Reality (the N64) wasn't going to use CDs in any way and being really stunned as it seemed obvious the entire industry was moving that way.
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