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foxtail said:

Nintendo had to fight to get shelf space with retailers after the crash in the 80s with a lot retailers not wanting to bother with videogames at all.   Trying to get better shelf space was a old practice and something all products and companies wanted way before videogames. Nintendo convinced retailers to give them a chance and with the NES they found success with a wanted product.  Sony and Microsoft are also benefactors of the inroads Nintendo made back in the day for videogame shelf space.

As for keeping  their competitors products off the shelves, was there actually any lawsuits or was this just hearsay because unless I'm mistaken the lawsuit you're talking about is actually Atari vs. Sega in 1994 over shelf space for the Atari Jaguar? - source  

Yup. it happened. this is the most recent article i could fimd of the incident. 

That article actually talks a lot of nintys history but here is a snippet on this very issue.

The courts found Nintendo guilty and required amends to redistribute a large amount back to the consumers and break exclusive deals with third parties and retailers, but Nintendo ended up turning the loss into another victory. They distributed the price-fixing settlement in the form of thousands of $5 rebate checks, so to exercise the settlement consumers had to buy more Nintendo products.