This is a story that isn’t just about the design of an object made from silicon, plastic and metal. Nor is it just the story of the corporate politics that allowed the project to commence. It’s also the story of sales forces and distribution systems, of marketing strategies and product evangelists, of a confluence of social, economic and technological circumstances that allowed it to thrive. It’s about the vision behind the piece of hardware that pushed videogames into 3D and a veteran yet wide-eyed technology corporation into an industry that it would transform.
And it’s a vision that rose out from the rubble of a very public disaster. At the Consumer Electronics Show in June 1991, Sony revealed to the world a videogame console on which it had jointly worked with Nintendo. This SNES with a built-in CD-ROM drive was a project driven by Ken Kutaragi, a Sony executive who had come out of its hardware engineering division. It was to be Nintendo’s route into a brave new world of multimedia, and a way for Kutaragi to show his company how important the videogame industry could be. But the very day after Sony’s announcement, Nintendo declared that it would be breaking its deal with Sony by partnering with Philips instead.
This humiliating turnabout enraged Sony president Norio Ohga, but though it seemed sudden from the outside, problems had been boiling between the two companies for some time. The main issue was an agreement over how revenue would be collected – Sony had proposed to take care of money made from CD sales while Nintendo would collect from cartridge sales, and suggested that royalties would be figured out later. “Nintendo went bananas, frankly, and said that we were stepping on its toll booth and that it was totally unacceptable,” explains Chris Deering, who at the time worked at Sony-owned Columbia Pictures but would go on to head the PlayStation business in Europe. “They just couldn’t agree and it all fell apart.”
But Ohga was dead set on remaining in the game. At the end of a July meeting to plan litigation against Nintendo, he declared defiantly: “We will never withdraw from this business. Keep going.” And so Kutaragi went to work with strong support from the very top of Sony. “Ken brought together a handful of engineers that had come out of a broadcast and professional realtime 3D graphics engine called System-G,” explains Phil Harrison, who joined Sony in September 1992 to start its European game publishing business, and would eventually go on to become president of Sony Computer Entertainment Worldwide Studios. System-G was a special-effects computer that broadcasters could use to augment live broadcasts with 3D images in realtime. “Technologically, that’s not really a million miles away from videogames, but this was a super high-end workstation. And Ken’s big vision was to take that, apply it in high volume and bring it into the home,” recalls Harrison.
But the relationship with Nintendo wasn’t quite over. It had indistinctly proposed that Sony could remain involved in ‘nongame areas’ of the project, though the move was probably just to delay any attempt Sony may have been making to enter videogames off its own bat, as well as sidestep the legal challenges Sony had made over Nintendo’s breach of contract. Kutaragi was frustrated. Not only was he facing criticism and resentment from many at Sony who disagreed with the idea of Sony entering the game business, but the project’s focus was also dissipating within the company. ‘There is no consensus within Sony about why we are engaged in this business’, he wrote candidly in his January 1992 business report. ‘We are wasting time and missing opportunities while expecting too much from Nintendo and dealing with them in blind good faith’.