Business Wars

Once a symbol of 80s teenage nerdom, video games are now as common as television sets in American households. Can you imagine a world where the Sony PlayStation didn’t come out? That’s what almost happened. Originally conceived as a joint venture between Nintendo and Sony, the SNES-CD was supposed to be the bridge between Japan’s two largest tech companies. Instead, it drove the companies to war, an intense competition for entertainment domination that still goes on today.

It's 1949. 22-year old Hiroshi Yamauchi is the heir apparent for his family's playing card company, Nintendo. From humble beginnings as a scrappy street stall founded in Kyoto's back alleys to the largest card company in Japan by the time Yamauchi takes over, this isn't a company that backs down easily when a little competition comes in. But it was a company that changed it's entire business over a couple of... cartoon characters.

From the moment it began, the PlayStation project was in danger. The problem was none other than PlayStations knight and chief advocate: Kutaragi. He thought the now-iconic handlebar controller design was “too different” from the flat rectangles people were used to. To make matters worse, PlayStation was getting closer and closer to launching without any games… a console with no games? Good luck with the PlayStation now, Sony. They were in trouble. And Nintendo knew it.

This is a story about Sony and Nintendo, but it also involves a little company called Sega. Ever play Sonic the Hedgehog? That’s Sega. And during Nintendo’s domination of the US market, they were the only company able to fight back. That is, until they tried to outplay Sony.

Nintendo decided early on that the Nintendo 64 would be a cartridge console, instead of a CD console. But CDs are much cheaper to make and have much better graphics. Game companies are upset, and defect to Sony. In a few months time, Sony has two of the most popular game series in Japan to itself. Nintendo will now have to make its own games that are strong enough to outsell PlayStation. It’s Nintendo vs the world. They’re taking a huge gamble, and this is not a game.

After years of sitting on the sidelines of the next-generation console war, Nintendo is finally ready to make its move. But, the years it’s spent building it’s reassuring family-friendly reputation is now a weakness. Nintendo children of the 80s are all grown up, and want adult games. Sony is able to release edgier fare like Grand Theft Auto and Tomb Raider. The half-decade cold war between Sony and Nintendo is about to turn hot. Their next head-to-head battle is a multi-billion dollar clash that will define the future of video games. And in the real world, just one of them can prevail.

We're wrapping our coverage of the console wars between Nintendo and Sony. David is joined by Vance Wallace, who knows video games from both sides of the controller. In the '90s, Vance was one of the best players in the world for Quake. He's also a game designer who worked on the first Lara Croft Tomb Raider games for Nintendo Wii.