PlayStation

The first conceptions of the PlayStation date back to 1986. Nintendo had been attempting to work with disk technology since the Famicom, but the medium had problems. Its rewritable magnetic nature could be easily erased (thus leading to a lack of durability), and the disks were a piracy danger. Consequently, when details of CDROM/XA (an extension of the CD-ROM format that combines compressed audio, visual and computer data, allowing all to be accessed simultaneously) came out, Nintendo was interested. CDROM/XA was being simultaneously developed by Sony and Philips. Nintendo approached Sony to develop a CD-ROM add-on, tentatively titled the "SNES-CD". A contract was struck, and work began. Nintendo's choice of Sony was due to a prior dealing: Ken Kutaragi, the person who would later be dubbed "The Father of PlayStation," was the individual who had sold Nintendo on using the Sony SPC-700 processor for use as the 8 channel ADPCM sound synthesis set in the Super Famicom/SNES console through an impressive demonstration of the processor's capabilities.

Sony also planned to develop another, Nintendo compatible, Sony-branded console, but one which would be more of a home entertainment system playing both Super Nintendo cartridges and a new CD format which Sony would design. This was also to be the format used in SNES-CD discs, giving a large degree of control to Sony despite Nintendo's leading position in the video gaming market.

In 1989, the SNES-CD was to be announced at the June CES . However, when Hiroshi Yamauchi read the original 1988 contract between Sony and Nintendo, he realized that the earlier agreement essentially handed Sony complete control over any and all titles written on the SNESCD-ROM format. Yamauchi was furious; deeming the contract totally unacceptable, he secretly cancelled all plans for the joint Nintendo-Sony SNES CD attachment. Indeed, instead of announcing their partnership, at 9 am the day of the CES, Nintendo chairman Howard Lincoln stepped onto the stage and revealed that they were now allied with Philips, and were planning on abandoning all the previous work Nintendo and Sony had accomplished. Lincoln and Minoru Arakawa had, unbeknownst to Sony, flown to Philips headquarters in Europe and formed an alliance of a decidedly different nature — one that would give Nintendo total control over its licenses on Philips machines.

The 9am CES announcement was a complete shock. Not only was it a complete surprise to the show goers (Sony had only just the previous night been optimistically showing off the joint project under the "Play Station" brand), but it was seen by many in the Japanese business community as a massive betrayal: a Japanese company snubbing another Japan-based company in favor of a European one was considered absolutely unthinkable in Japanese business.

After the collapse of the joint project, Sony considered halting their research, but ultimately the company decided to use what they had developed so far and make it into a complete, stand alone console. This led to Nintendo filing a lawsuit claiming breach of contract and attempted, in U.S. federal court, to obtain an injunction against the release of the Play Station, on the grounds that Nintendo owned the name[citation needed]. The federal judge presiding over the case denied the injunction. Thus, in October 1991, the first incarnation of the new Sony PlayStation was revealed; it is theorized that only 200 or so of these machines were ever produced.

By the end of 1992, Sony and Nintendo reached a deal whereby the "Sony Play Station" would still have a port for SNES games, but Nintendo would own the rights and receive the bulk of the profits from the games, and the SNES would continue to use the Sony-designed audio chip. However, at this point, Sony realized that the SNES technology was getting long in the tooth, and the next generation of console gaming was around the corner: work began in early 1993 on reworking the "Play Station" concept to target a new generation of hardware and software; as part of this process the SNES cartridge port was dropped, the space between the names was removed, and the PlayStation was born.

Xbox

Xbox is a sixth generation era video game console produced by Microsoft Corporation. It was first released on November 15, 2001 in North America, February 22, 2002 in Japan, and on March 14, 2002 in Europe. It is the predecessor to Microsoft's Xbox 360 console. The Xbox was Microsoft's first independent venture into the video game console arena, after having collaborated with Sega in porting Windows CE to the Sega Dreamcast console. Notable launch titles for the console included Halo: Combat Evolved, Amped: Freestyle Snowboarding, Dead or Alive 3, Project Gotham Racing, and Oddworld: Munch's Oddysee.

The Xbox was initially developed within Microsoft by a small team which included Seamus Blackley, a game developer and high energy physicist. The rumors of a video game console being developed by Microsoft first emerged at the end of 1999 following interviews of Bill Gates. Gates said that a gaming/multimedia device was essential for multimedia convergence in the new times of digital entertainment. On March 10, 2000 the "X-box Project" was officially confirmed by Microsoft with a press release.

According to the book Smartbomb, by Heather Chaplin and Aaron Ruby, the remarkable success of the upstart Sony PlayStation worried Microsoft in late 1990s. The growing video game market seemed to threaten the PC market which Microsoft had dominated and relied upon for most of its revenues. Additionally, a venture into the gaming console market would also diversify Microsoft's product line, which up to that time had been heavily concentrated into software.

According to Dean Takahashi's book, "Opening the Xbox", the Xbox was originally going to be called DirectXbox, to show the extensive use of DirectX within the console's technology[1]. "Xbox" was the final name decided by marketing, but the console still retains some hints towards DirectX, most notably the "X"-shaped logo, which DirectX is famous for, along with the "X" shape on the top of the system.

As time progressed Microsoft's J Allard took over the Xbox project and developed a marketing and advertising campaign to help reach youth audiences. Jeff Ballard was also primarily responsible for Microsoft's follow-up product, the Xbox 360.

Nintendo

Nintendo Company, Limited is a multinational corporation founded on September 23, 1889[1] in Kyoto, Japan by Fusajiro Yamauchi to produce handmade hanafuda cards. In the mid-twentieth century, the company tried several small niche businesses, such as a love hotel and a taxi company. Over the years, it became a video game company, growing into one of the most powerful in the industry. Aside from video games, Nintendo is also the majority owner of the Seattle Mariners, a Major League Baseball team in Seattle, Washington. They also are the partial owner of the Atlanta Hawks, an NBA team in Atlanta, Georgia.

Nintendo has the distinction of historically being both the oldest intact company in the video game console market and one of the largest and well-known console manufacturers, as well as being the most dominant entity in the handheld console market. As of December 1, 2006, Nintendo has sold over 387 million hardware units, and nearly 2.2 billion software units worldwide.

Early life
Nintendo started as a small Japanese business by Fusajiro Yamauchi near the end of 1889 as Nintendo Koppai. Based in Kyoto, Japan, the business produced and marketed a playing card game called Hanafuda. The handmade cards soon began to gain popularity, and Yamauchi had to hire assistants to mass produce cards to keep up with the demand.

Middle life
In 1956, Hiroshi Yamauchi paid a visit to the US, to engage in talks with the United States Playing Card Company, the dominant playing card manufacturer in the US. Yamauchi was shocked to find that the world's biggest company in his business was relegated to using a small office. This was a turning point where Yamauchi realized the limitations of the playing card business. He then gained access to Disney's characters and put them on the playing cards, in order to drive sales.

In 1963, Yamauchi renamed Nintendo Playing Card Company Limited to Nintendo Company, Limited. The company then began to experiment in other areas of business using the newly injected capital. During the period of time between 1963 and 1968, Nintendo set up a taxi company, a "love hotel" chain, a TV network, a food company (trying to sell instant rice, similar to instant noodles), and several other things (including a toy remote controlled vacuum cleaner called Chiritory [1]- which was later seen as a two-player game in WarioWare, Inc.: Mega Microgame$ in 2003). All these ventures failed, except toy making, where they had some earlier experience from selling playing cards. Then, after the Tokyo Olympics, playing card sales dropped, leaving Nintendo with a measly 60 yen in stocks.

Riddled with debt, Nintendo struggled to survive in the Japanese toy industry; it was still small at this point, and dominated by already well established companies such as Bandai and Tomy. Because of the generally short product life cycle of toys, the company always had to come up with new product. This was the beginning of a major new era for Nintendo.

In 1970, Hiroshi Yamauchi was observing a hanafuda factory. He noticed an extending arm, which was made by one of their maintenance engineers, Gunpei Yokoi, for his own amusement. Yamauchi ordered Yokoi to develop it as a proper product for the Christmas rush.

The 1970s also saw the hiring of Shigeru Miyamoto, the man who (along with Yokoi) would become a living legend in the world of gaming and the secret to Nintendo's longevity; his creative vision was instrumental in determining the path Nintendo's future (and indeed, the video game industry as a whole) would follow. Yokoi began to mentor Miyamoto during this period of time in R&D, teaching him all that he knew.