Nintendo and Sony weren't always rivals. In 1991 they collaborated on a CD add-on for the Super Nintendo to be released as early as Christmas that year. Their motivation was the same that drove Sega and NEC to pursue their pricey CD attachments. The CD media offered a format that was cheaper and higher capacity than the cartridge. Rich soundtracks and video playback were now possible, something only available to PC games at the time. It seemed like the logical progression for home game systems. Nintendo certainly didn't want to be left behind when the predicted multimedia revolution began.
Of course Nintendo ultimately didn't end-up abandoning the cartridge-based console system until 2001. The hype over multimedia gaming also waned as system after system flopped.
During the 1991 Consumer Electronics Show (CES) the partnership between Nintendo and Sony rapidly disintegrated. For those with short memories, or born after 1985, the CES used to be the major annual event where new video games were announced (just think of E3). As legend has it the contract between the two was highly favorable to Sony, something to the effect of Sony collecting all royalties from sales of CD game licenses. Licensing games had been Nintendo's bread-and-butter business since hardware sales weren't particularly profitable at the time. When Nintendo president Hiroshi Yamauchi read the contract he blew a fuse and nixed the arrangement. A new contract was hastily arranged with Philips to provide a similar attachment. Nintendo announced this new alliance at the CES the day after Sony publicized their deal with Nintendo.
This hasty arrangement with Philips ultimately led to the infamous Zelda CDI games.
Nintendo and Sony patched things up in 1992 and went back at work on a new CD system. This time it was a 32-bit CD-based system that also played Super Nintendo games. A late 1993 release was targeted but in 1994 it was quietly canceled. The word on the street is this system collapsed when Nintendo decided the CD format was too slow and Sony saw the Super Nintendo's shelf life ending soon. Of course this rumored system would never have existed had that initial 1991 alliance held-up. Nope, instead we would have seen a lower-tech attachment along the lines of the Sega CD or Turbo-Grafx 16 CD hitting the streets in the early 90s as originally planned. The gaming world as we know it certainly would have evolved differently had this Super Nintendo CD seen the light of day. One can only wonder how events might have unfolded...
Before diving in too deeply it's important to briefly recall the state of gaming in 1991.
Sega finally managed to chip away at Nintendo's market dominance with the Genesis and major releases like Sonic the Hedgehog.
In August, Nintendo brought the Super Nintendo to the states with new Mario and Zelda games to kick things off.
Sega looked to regain momentum by releasing the Sega CD to the Japanese market in December, the US version was looming around the corner.
The Turbo-Grafx 16, and its CD add-on, were hopelessly stuck in third place.
So what if Hiroshi Yamauchi reviewed that contract on a good day and chose to renegotiate with Sony? OK, maybe the famously ill-tempered chairman never had a good day in his entire life but a truce still isn't a wildly absurd proposition. They let cooler heads prevail the following year, it's definitely feasible they could have sorted things out in 1991 too. It's one small change to the initial equation that was the 1991 gaming industry which could have radically changed the future.
Scenario 1: Two Console War Continues
Prior to the early 90s there was only room for one game console in the market. The Atari 2600 reigned supreme with the Intellivision and Colecovision lingering in the background. Later the NES came around and captured over 90% of the total game market with the Sega Master System and Atari 7800 gasping for breath. The NES was so wildly successful it brought video games into nearly every home in the country. Sounds like that would be great for Nintendo but there was an unintended consequence. Video games were now so mainstream that multiple consoles could survive, Nintendo would never again achieve the market share they enjoyed in the 80s. The 16-bit war proved this, the Sega Genesis and Super Nintendo each managed a healthy run with other competitors playing second fiddle. By the 2000's there would be room for three consoles.
Suppose the Nintendo CD was released in late 1991 with a new Mario game as the pack-in, maybe even just Super Mario World with a CD soundtrack and bonus levels. The system is an instant hit and stores struggle to keep it in stock. Sega responds by pushing more franchise titles to their CD system. The once rumored Phantasy Star CD game is actually published and sells furiously. Squaresoft sees the Nintendo CD as the logical platform for their next Final Fantasy game, the music among the greatest ever produced.
The Atari Jaguar is still released in 1993, but their CD add-on is rushed to market. The outcome isn't much better for Atari though. The fate of the 3DO doesn't change either. Although more advanced than the Nintendo and Sega CDs, the high price and lack of major titles dooms the system. Another victim of this scenario is the 32X which is never developed. The original motivation for that add-on was to buy time against the impending 32-bit Sony Playstation. It was marketed as a cheap way for consumers to own a 32-bit system even if it wasn't really that significant of an upgrade.
Without the pressure from Sony, Sega and Nintendo continue the one-on-one battle at their own pace. Sega targets a holiday 1995 release for the Saturn instead of prematurely releasing it before software was available. Nintendo and Sony continue their profitable partnership by jointly developing the Nintendo 64, which is now CD based. They look to spring 1996 for the system launch. Although more advanced than the Saturn the competition is close. Sega focuses on their line of sports games which is what kept them afloat in the Genesis vs. Super Nintendo war.
The Saturn vs. Nintendo 64 battle continues until the next millennium. Without Sony's overpowering of the game market there would be less incentive for Nintendo and Sega to accelerate new systems. The early 2000s see the Sega Dreamcast and Nintendo Gamecube hit store shelves. OK, the system names would be different and stuff but the technologies are roughly the same. Again, the Gamecube is jointly developed by Nintendo and Sony but likely uses DVD discs.
Today we'd essentially be seeing the end of the Gamecube vs. Dreamcast feud. Late 2006 could have seen launches of new Sega and Nintendo/Sony offerings. The rise of high-definition televisions forcing each company to consider HD capable consoles.
Would Microsoft still have entered the gaming market in this scenario? Sony was the first company to prove that an "outsider" could conquer the game hardware market. NEC, Panasonic, and Philips all failed. Still, I suspect the temptation would be too great for Microsoft to resist. Somewhere in the early zeros they'd make a run at it and probably see roughly the same level of success that they did in the real world.
Scenario 2: The Second Crash
The video game crash of 1983 was precipitated by a flood of low quality games causing consumers to completely lose interest in gaming. Could the same have happened nearly a decade later?
16-bit CD add-on systems weren't exactly known for their high-quality games. For every Ys, Snatcher, Dungeon Explorer II, or Lunar there was Marky Mark Make My Video, Prize Fighter, and Masked Rider: Kamen Rider Zo. Actually, there were at least two horrible full-motion video (FMV) games for every decent CD game produced. Is there any reason to suspect that the Nintendo CD wouldn't be deluged with crappy FMV game after crappy FMV game? Sure, there'd probably be a killer Zelda title but there'd also be "Tom Zito Presents Mario's FMV Adventures in FMV Land Starring Corey Haim" and "Samus Aran Takes You on a Tour of the the Louvre".
Sony wouldn't be producing the finest quality CD games either. Look no further than the Sega CD games developed under the Sony Imagesoft label. Their handiwork included games like Hook, Last Action Hero, Cliffhanger and an assortment of drab "ESPN" branded sports games.
So by 1992 we have two pricey CD add-ons cranking out games nobody wants with a third spiraling into the clearance bin. Instead of changing course, suppose Sega and Nintendo try to outdo each other in the "multimedia" department. Game play goes to hell while publishers load hours of grainy video into each disc. Consumers turn sour.
By 1993 console sales take a dive, the focus on CD gaming having severely cut into new cartridge production. Atari releases the Jaguar which drives a final nail into the gaming coffin. Any hope for brighter days are dashed by another lousy system entering the market.
1994 sees games stores closing and clearance bins full. Nintendo and Sega try a few "last ditch" games starring franchise characters but it's too late. Their systems are dead and debts too high to invest in a new generation of consoles.
Windows 95 is released the subsequent year. The new OS makes PC gaming much simpler than the DOS/Windows 3.11 days. There's a spike in PC sales followed by a revival of the gaming business. Someone would capitalize on this opportunity. Maybe the Panasonic M2 would actually be finished, maybe some other electronics conglomerate would step in, maybe a game company would try their hand at hardware. In 1985 Nintendo, up until then a major game publisher, led the restoration of the console gaming system. Is it far-fetched to believe someone like Capcom might have filled this theoretical void? Their situation in the mid-90s was comparable to Nintendo's in the mid-80s. They had a strong library of franchise games and pockets filled with quarters from Street Fighter II machines. It's even plausible that SNK would see the opportunity to step in with a downgraded, and cheaper, Neo Geo variant.
Scenario 3: Groundhog Day
What if the Nintendo CD was produced yet nothing changed? Suppose the joint Nintendo/Sony add-on hit the stores in 1991 followed shortly by the Sega CD. As the prior theory explored there would certainly be a barrage of horrible CD games that followed. Instead of continuing down the spiral suppose Nintendo scrapped their CD attachment entirely.
The Nintendo of Hiroshi Yamauchi knew when to cut bait. Rob the Robot, Zapper, Power Pad, Super Scope, and later the Virtual Boy were all scrapped when things looked bad. Suppose in 1992 they simply dropped their CD at the first sign of lameness. Sony would blame Nintendo for abandoning the system too soon while Nintendo would blame Sony for the quality of the hardware. Lawsuits would be exchanged. By the time the smoke cleared, Nintendo and Sony harbored a deep resentment for each other.
By 1993 Sony is furiously working on a 32-bit system to put Nintendo out of business, something called the "Playstation". By 1995 the system was ready for a September launch.
Fast-forward to 2007 and the "Playstation 3" is battling a lower cost Nintendo "Wii". Of course this "Wii" system can natively play the old Nintendo CD games, or consumers can drop $8 to download them on something called the "Virtual Console". The Nintendo CD add-on goes for $50 on something called "eBay" with games averaging $2-$10.