"It's true the system is powerful," Ken Kutaragi said, shaking his head, "but it's simply too expensive. Those SNK guys are too ambitious—they want to bring the arcade right into people's homes. Selling a single machine for six or seven hundred thousand yen, and cartridges for three hundred thousand? They're treating game consoles like luxury goods. And they're so eager for success, they're impossible to control. We need mass adoption, not something to be flaunted by nouveau riche in their living rooms. Prioritize them last."
Another strike.
"That leaves Capcom and Namco."
"Capcom's very pragmatic," Kutaragi's tone softened. "I heard they're planning to release a new CPS2 motherboard this year. Solid technology, and they have no ambition to make their own console—they just want to focus on selling games. A good backup plan. But if we're betting on 3D—"
His finger slammed down on the word "Namco."
"Namco is our top choice."
Kutaragi's eyes sparkled with the excitement of a tech fanatic spotting a kindred spirit. "These guys worked with Atari to develop 3D technology. Their 3D expertise rivals Sega's. Have you seen their System 21 motherboard? That's the fruit of their collaboration with Atari. Their Winning Run is neck-and-neck with Sega's Virtua Racing. More importantly, Namco and Nintendo have a score to settle."
The executives in the room shared a knowing smile. It was no secret that Namco, as one of the earliest supporters of the Famicom, had been squeezed the hardest by Nintendo's oppressive business practices.
"I also lean towards Namco," the Technical Director, who had remained silent until now, added. "They previously collaborated with NEC on the PC Engine. While ambitious, their ambition was grounded in technical confidence, far more manageable than SNK's blind arrogance. Moreover, if we could jointly develop a framework that allows their arcade games to be ported to the PlayStation at low cost and without quality loss—"
"They'd likely agree to collaborate with us," Ken Kutaragi interjected. "We could propose a joint development program with Namco. Based on the PlayStation's architecture, we'd create a universal arcade motherboard. This way, they could develop a game once, earn revenue from arcades, and seamlessly port it to our console for software sales. Namco dominates the arcade market, while Sony dominates the home console market. A partnership like this, I believe, would merit serious consideration from Masaya Nakamura."
Oga Norio understood immediately. This was a clever move: using Namco's technological expertise to refine Sony's hardware while leveraging Sony's research capabilities to reduce the marginal costs of Namco's arcade machines.
"Excellent." Oga Norio slammed his hand on the table, making a decision. "Let's tentatively go with Namco. Kutaragi-kun, you handle the negotiations personally."
"Yes, sir." Ken Kutaragi closed his file folder, his blood boiling with excitement.
One week later, at Sega Headquarters...
Takuya Nakayama tossed a freshly printed copy of Nikkei Industrial News onto his desk. In a small corner of the front page, an unassuming headline read: "Nintendo's SFC-CD Add-on Development Plan Suspected to Be On Hold."
"I knew it," Takuya said, crossing his legs and spinning a ballpoint pen in his hand. "That old coot Yamauchi Hiroshi is like a pixiu—money in, none out. He'd never hand half of the SFC's market share to Sony. Not unless Mario switches careers to become a sewer worker."
Across from him, Yu Suzuki stared blankly at the news. "But Takuya, didn't we hear they just signed an agreement? Minoru Arakawa was even popping champagne in Chicago."
"The agreement is to keep Sony on a leash, not invite it to the dinner table," Takuya Nakayama scoffed, leaning forward. "Mr. Suzuki, think about it—how does Nintendo make its money?"
"Game software?"
"Wrong. It's these plastic shells." Takuya picked up a Mega Drive cartridge and weighed it in his hand. "More precisely, it's the control over these plastic shells. Royalties, cartridge production fees, approval costs—through this whole process, Nintendo can skim off thirty percent of the profit while sitting on their hands. If it were CD-ROMs instead, with discs costing just a few hundred yen each and anyone able to press them, how could Nintendo maintain their chokehold? How could they continue collecting their 'toll fees'?"
Yu Suzuki pondered this. "So they never intended to push for a CD peripheral at all?"
"They'll have to eventually, to compete with our Mega-CD," Takuya shrugged. "But definitely not now, and certainly not in the way Sony wants. Nintendo's strategy is clear: keep Sony pacified and drag it out. They want to squeeze every last drop of profit from Super Famicom cartridges for another two or three years. As for that so-called 'Super Famicom-CD,' it's just a carrot dangled in front of a donkey."
The door swung open, and Manager Tanaka from the Marketing Department strode in with a triumphant gleam in his eye.
"Takuya, we've got confirmation," Tanaka said, plopping onto the sofa and unbuttoning his suit jacket. "Our insider in Kyoto says Nintendo's Hardware Department has downgraded the SFC-CD project to the lowest priority. Word is, Yamauchi Hiroshi lost his temper at an internal meeting, calling the CD's snail-like loading speed 'unacceptable for modern games'."
"Hah, what a noble-sounding excuse," Takuya Nakayama chuckled.
Nintendo's move was indeed ruthless.
On the surface, it was framed as a technical issue—the slow read speeds and long loading times were indeed common problems with early CD drives, completely at odds with the seamless, plug-and-play experience of cartridge-based games.
But at its core, this was a deliberate strategy to maintain the Super Famicom cartridge's absolute dominance.
Nintendo held exclusive patents on several data compression technologies and specialized chips (such as the DSP chips commonly used in Super Famicom cartridges). These innovations allowed them to pack astonishing graphical effects into the limited storage capacity of cartridges.
As long as the storage medium remains unchanged, this technological barrier will remain unbroken, forcing third-party developers to obediently pay Nintendo's exorbitant prices for their cartridges.
"What's Sony's reaction?" Takuya Nakayama asked.
"Utterly silent," Tanaka said, frowning. "Too silent. Given how they've been played, Norio Oga's fiery temper should have erupted by now. But Sony hasn't made a peep. They even canceled the joint press conference we'd planned, issuing a perfunctory delay notice instead."
"Silent dogs bite," Takuya said, his smile fading, his gaze turning cold. "Tanaka, this is the most dangerous kind. Nintendo thinks it's outwitted a monkey, but it's actually unleashed a true monster."
He stood up and walked to the window, gazing out over the Tokyo cityscape.
History's wheels had taken a sharp turn here, only to roll back into their original ruts.
Nintendo's arrogance and greed had driven Sony into a corner, but also forced it to find a way out.
If they hadn't pushed Sony to such extremes, Ken Kutaragi would never have had the chance to create the PlayStation, the console that would shake the industry to its core.
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