How Nintendo Created Its Greatest Enemy: A Gaming What If?

A seemingly small decision a week ago could have dramatically altered the landscape of the console wars, echoing the challenges Sony faced with the PlayStation 3’s launch. But history often hinges on individual choices, leading to alternate realities. This time, we’re looking back to the 16-bit era and a pivotal moment that reshaped the industry.

Nintendo’s firm grip on the third generation with the NES was undeniable. Sega achieved moderate success with the more powerful Master System, but couldn’t unseat the industry leader. Despite multiple attempts to establish a mascot, they consistently fell short of matching the popularity of Mario. This period laid the groundwork for a fierce rivalry that would define the next decade of gaming.

Sega’s response was surprisingly proactive, anticipating the next generation much like Microsoft did with the Xbox 360. The leap from 8-bit to the 16-bit Mega Drive was a defining experience for many gamers. Standing in a toy store, looking at titles like Phantasy Star or James Pond, it felt like the pinnacle of visual fidelity. And, in some ways, particularly in pixel art, it arguably was, as the 16-bit era continues to hold a special place in gaming history.

The Mega Drive launched in Japan and the United States over two years before the Super Nintendo (and a year and a half earlier in Europe). For a significant period, the generational gap was only five years – nearly half a generation. This difference was immediately apparent. The Super Nintendo was undeniably more powerful. However, the Mega Drive had advantages that allowed it to remain competitive, and its faster CPU often resulted in smoother performance for multi-platform releases. Sonic the Hedgehog also quickly emerged as a rival to Nintendo’s mascot. Furthermore, Sega’s more lenient approach to censorship gave the Mega Drive a slightly more mature and edgy appeal.

Despite its initial lead, the Super Nintendo steadily gained ground on Sega. This pressure forced Sega to explore alternatives – or, more accurately, to experiment. About a year after the Super Nintendo’s release, Sega launched the Mega-CD, a CD-ROM add-on for the Mega Drive. This expansion unlocked entirely new possibilities, offering improved processing power (with the Mega Drive CPU as a backup), enhanced graphics, and the virtually unlimited storage capacity of the CD format. This move demonstrated Sega’s willingness to push boundaries and embrace new technologies.

While not a blockbuster success, the Mega-CD sold nearly 2.5 million units and featured several notable games. It solidified Sega’s reputation for high performance, forward-thinking design, and a cooler aesthetic. Today, such add-ons are largely considered relics of the past. Following the Nintendo 64’s memory pak, it wasn’t until the PlayStation 4 Pro and Xbox One X that we saw a resurgence of mid-generation hardware upgrades, followed by fully backward-compatible consoles with no exclusive titles.

Nintendo also had a penchant for accessories that could connect to their consoles and modify the hardware in various ways, though these were less prominent in the West. For example, the Famicom (Japanese NES) had a disk drive, modem, Famicom 3D System, and Famicom Network System. And because the battle with Sega was so intense – arguably the dirtiest console war ever, with Sega taking risks – they couldn’t afford to appear technologically behind. This competitive pressure shaped the industry’s trajectory.

Nintendo announced it would release a CD add-on for the Super Nintendo. This project, developed in collaboration with Sony under the leadership of Ken Kutaragi, would have allowed Super Nintendo games to be played on CD. The resulting device, known as the Nintendo PlayStation, reached a functional prototype stage (at least two known versions existed) and even had games in development, including a title that would later become Legend of Mana. The potential for a combined cartridge and CD-ROM system was groundbreaking.

However, the agreement favored Sony to a degree that Nintendo found uncomfortable. Reportedly, Sony wanted to be able to publish games for free on the console and receive licensing fees from players who purchased games for the Nintendo PlayStation. Nintendo, being Nintendo, was accustomed to controlling things its own way and abruptly announced in 1991 that there would be no Nintendo PlayStation, opting instead for a more compliant partnership with Philips.

Ken Kutaragi was reportedly deeply offended, and a humiliated Sony (a smaller Japanese company at the time, nearly 35 years ago) decided to develop the device on its own – a decision that would rewrite history. Today, Sony is a gaming giant, having defeated Nintendo in three of the last five console generations and holding the record for the best-selling console of all time. Much like Microsoft’s missteps after Mattrick, focusing on a limited number of franchises and Kinect, it was their own shortsightedness that allowed a competitor to rise.

Imagine Nintendo taking a different approach, not disappointing Sony, and releasing the Nintendo PlayStation. It would have been a CD add-on. The Mega-CD sold just over two million units. How much would that have impacted things? Perhaps three or four million units. Of course, it would have meant Nintendo losing some control, but it also would have meant Sony wouldn’t have launched the PlayStation in the next generation, or at least not as early. We don’t know what the contract would have looked like, but there were clauses that prevented Sony from competing with Nintendo.

It’s certainly possible Sony would have launched its own console eventually, but it would have been years later and it’s uncertain whether they would have been able to use the PlayStation name. This means that titles like Final Fantasy VII might have remained Nintendo exclusives, and whether Square would have left Nintendo is still very unclear. With the Super Nintendo having an extended lifespan, Sega might have been left with their Saturn console for a year or two, and it might have become more popular (perhaps Square would have partnered with them?).

Of course, we can only speculate about where series like Resident Evil and Tekken would have ended up, but if the Nintendo PlayStation had come to fruition, we would have either seen another collaboration or Nintendo and Sony consoles launching around the same time when the partnership broke down – meaning Sony wouldn’t have had the one-year lead they gained with the PlayStation (Nintendo tried to compensate with the Virtual Boy). Furthermore, Nintendo might have become accustomed to CDs, and perhaps even overlooked cartridges.

A completely different world. A stronger Sega, a Nintendo that didn’t inadvertently create its greatest enemy, and a Sony that likely wouldn’t be as dominant as it is today. There were many companies trying to launch their own consoles during that era – Amiga CD32, Pippin, Jaguar, Neo Geo CD, CDI, 3DO – but none succeeded except Sony, with the right product at the right time. How things would have played out if they had launched different products at different times? I’m not saying it would have been as disastrous as Apple (Pippin), Panasonic (3DO), Philips (CDI), or Microsoft (Xbox) – but I certainly don’t think it would have been as successful.

In conclusion, much like Microsoft’s misstep with the Xbox 360, it was Nintendo itself that paved the way for its most formidable competitor. The decisions they made in 1991 shaped the entire gaming landscape, and if they had followed through with their original plan, the market we know today might look drastically different. Perhaps Sony would have remained a player, or perhaps another tech giant would have stepped up. Perhaps it would still be the era of Sega and Nintendo, and if Microsoft hadn’t been frightened by Sony’s success with the PlayStation, I doubt they would have bothered making the Xbox. A different world. A parallel reality.