Back in the day, Nintendo was at its peak, holding two trump cards: Dragon Quest and Super Mario Bros. 3. And yet, what happened?
Sega, through the Mega Drive's relentless software release schedule—like a machine gun—and solid game quality, managed to withstand the onslaught of those two titles.
This time, Jupiter's offensive was several times more ferocious than the Mega Drive's had been.
"The most infuriating thing—" Ryoji Nakabachi glared at the screen, where a Pikachu was demonstrating a paper-folding puzzle, his voice tinged with bitterness, "is that this thing is genuinely fun. In terms of graphical presentation and creativity, it surpasses all the cards we hold."
This was what frustrated Ken Kutaragi, a man of technical background, the most.
Admitting the opponent's superiority was more painful than admitting one's own inadequacy.
He had sent someone to queue for the first few Jupiter titles on release day.
Over the past few nights, he had dissected the technical logic of Sonic 3D countless times in his mind, finally having to concede that Sega's American employee, Mark Cerny, was a genius.
Even Sony's arcade game Dance Dance Revolution (DDR), which still maintained decent cash flow, had its underlying code written by Sega for its first generation.
So, Sony wanted to port this cash cow to the PlayStation as well.
"Should we be grateful that Sega cares about us so much?" Ken Kutaragi asked with a self-mocking smile, pulling at the corner of his mouth. "To block us, they're even resorting to scheduling tactics that would kill a thousand enemies while sacrificing eight hundred of their own."
"There's no point dwelling on that now," Nobuyuki Idei said, rapping his knuckles on the table to break the wave of defeatism that had settled over the room. "If we can't win the launch race, we'll win the long game. Sega's initial burst will eventually wane—that's our chance."
He turned to the manager in charge of third-party relations, his eyes sharpening. "Go back to Namco. Tell Masaya Nakamura that Sony will support their new game development with every resource we have. And our own Development Department—tighten your belts. I want to see something that can rival Paper Pokémon Adventure or Sonic 3D, even if it's just a demo."
Ken Kutaragi picked up the black controller again, staring at the "Game Over" screen. His brow furrowed once more.
Before the battle had even begun, Sony had already been pushed to the brink of a cliff.
But the more dire the situation, the more it ignited the fierce resolve burning in his gut.
Kyoto, Nintendo Headquarters.
A faxed document landed on the mahogany conference table with a soft rustle.
The contents were Sega's "Top Secret Internal Data" comparing the costs of optical discs and cartridges.
"Those Sega bastards are now trying to teach us how to run a business," Yamauchi Hiroshi said from his seat at the head of the table, idly rolling two well-worn steel balls in his hand, his gaze fixed elsewhere.
His voice was quiet, but the executives in the room instinctively softened their breathing by half a beat.
"President, while this data might be a deliberate smokescreen from Sega,..." Masayuki Uemura, the head of the Development Department responsible for hardware, adjusted his glasses, his tone hesitant. "...the situation it implies is indeed worth serious consideration. The cost advantage of optical discs is simply too overwhelming. The recent wavering among Third-Party Manufacturers is largely due to this."
The current situation was delicate.
Sega was spending lavishly up front, while Sony was sharpening its knives in the background. Caught between them, Nintendo, despite winning a brilliant legal battle against Sony in Chicago, seemed uncertain about its strategy for the next round of hardware competition.
This was especially true for the "SFC-CD" project.
Ever since breaking ties with Sony and turning to Philips, the add-on had become like an unwanted illegitimate child. Although development was nominally continuing, everyone could see that Headquarters' enthusiasm for the project had cooled to absolute zero. More than a year after the announcement, the SFC-CD had yet to materialize, while development on a new console had already begun.
"Cost?" Yamauchi Hiroshi snorted, setting down the iron ball he was holding. "You get what you pay for. I learned that decades ago."
He turned his gaze to Shigeru Miyamoto.
"Miyamoto, have you played Sega's new machine yet?"
Shigeru Miyamoto stared blankly at the teacup in front of him. When his name was called, he looked up, a wry smile playing on his perpetually boyish face.
"I've played it, President."
"What do you think?"
"The graphics are truly stunning. That sense of depth is something the Super Famicom could never achieve." Miyamoto spoke honestly, but then shifted his tone. "However, that 'Loading' thing... it ruins the rhythm."
He made a gesture with his hand. "Mario just went down a pipe, about to jump to the next level, the excitement is peaking—and suddenly the screen goes black with 'Please wait, loading data.' It's like watching the most thrilling part of a movie, and the projectionist suddenly runs out to change the film reel. For an action game, that's fatal."
Yamauchi Hiroshi nodded in satisfaction.
"Did you hear that? That's why I don't like optical discs."
The old man rose, hands clasped behind his back, and walked to the window.
Outside lay Kyoto's ancient streets. There were no neon lights of Akihabara here, only the arrogance and stubbornness of a thousand years.
"What's the point of a CD-ROM with its massive storage? It's just packed with cutscenes and pointless music—stuff for spectators, not for gamers."
"But Mr. President," Masayuki Uemura persisted, "the future trend—"
"Trends are defined by the victors!" Yamauchi Hiroshi spun around abruptly, his white eyebrows bristling. "Nintendo sells toys, not appliances! Toys should be playable right out of the box and durable enough to withstand being dropped. Optical discs? They're delicate glass products—a single scratch renders them useless, and players have to stare blankly at the screen while the disc loads. This experience runs counter to Nintendo's core philosophy."
He returned to his desk and rapped his fingers sharply on the surface twice.
"And have you considered this? CDs are too easily copied. With a computer and a burner, anyone can duplicate them at home. If we adopt this technology, how much effort will we have to expend outsmarting pirates? Cartridges are expensive, yes, but they're our own lock—and we hold the key."
The conference room fell into deathly silence.
Gunpei Yokoi remained silent. Having experienced both success and failure, he knew that offering advice to the President at this moment would be like walking straight into a gunfight.
He understood clearly that the President's words were driven half by his unwavering commitment to the gaming experience and half by sheer disgust with Sony.
Back then, when they collaborated with Sony on the SFC-CD, Ken Kutaragi had buried a landmine in the contract, nearly stealing the SFC market share for Sony.
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