Great read.
Ultimately, Nintendo's own arrogance and strong arming led to the creation of their strongest competitor who has dominated them and the industry for 3 generations.
Not only that but it more importantly marked the end of Nintendo being the home to Japanese third parties, replaced with Sony and third parties for the large part have not looked back ever since. I can only imagine how dominant Nintendo would be if Sony never stepped in and if SE and others continued to focus on Nintendo only.
Don't know much about Japanese corporate culture and so can't say how outstanding these reactions from Nintendo and Square were or still are but whats clear is that for Square it was a massively risky move.
A massively risky move, that paid of above anyone's expectations. FF7 became the best selling Square game in history, the second best selling PS1 game, sold almost triple the amount of FF6, and revolutionized the JRPG genre on a global scale, a genre Square excelled at. Sqaure just put out hit after hit on PS1 and with PS1's global success was able to get a global audience that they would have never gotten with Nintendo. PS2 was a continuation of those efforts allowing SE to launch their new blockbuster IP Kingdom Hearts.
Square fully backing Playstation is what allowed Playstation to be the behemoth it is now and in turn in built Square to a level of success unseen by Japanese third parties.
This is still to this day, imo, the biggest betrayal in the gaming industry considering how it forever changed the landscape going forward.
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