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S.T.A.G.E. said:
shoichi said:

It didn't quite play out this way.

Condensed...

 

  • Sony's Kutaragi seen daughter play on the Famicom and got interested. 
  • Kutaragi developed in secrecy the audio system for the SNES that Sony execs didn't approve of when they found out, due to disinterest in the video game industry.
  • Kutaragi ended up convincing them to continue on the project
  • Nintendo and Sony later then created a partnership for a CD-based addon that would play both SNES and SNES-CD Roms, that would be sold by Sony.
  • The contract between the two was that Sony would be the licensee and have pretty much complete control over the SNES-CD format, which worried Nintendo.
  • Nintendo then cancels out of the agreement with Sony and then goes to Phillips for a CD-Rom addon that would have Nintendo in more control, which flopped hard.
  • Sony and Kutaragi continue working on the project which then becomes the Play Station.

They walked out of them before they revealed the product at ces. Where is this in your condensed version?

To be fair, while it is entirely Nintendo's fault for not noticing at the time, that tiny bit that stipulated Sony had control over all titles using their cd device was not something they openly discussed or agreed to... Sony pulled a fast one on them, Nintendo didn't parse through it looking for problems as is generally the sort of due diligence a company ought to do, and when they later discovered this they justifiably panicked. It's Nintendo's fault then, but it was also a shady move by Sony.