Nintendo publicly humiliated Sony, so Sony responded by making the PS1

20 May 2026 · 1 min

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In this short narrated video, Dan Novaes recounts how Nintendo, seeking to transition from cartridge-based games to CD technology in the late 1980s, partnered with Sony to develop a CD add‑on for the Super Nintendo, initially called the PlayStation. Nintendo balked at Sony’s demand to control CD licensing and profit from each game, leading to a dramatic corporate betrayal: at CES 1991 Sony announced the partnership, only for Nintendo to reveal the next day that it had switched to Philips. Sony, rather than abandoning the market, used the setback to develop its own standalone console, the PlayStation, which grew into one of the most successful gaming platforms. Novaes frames the episode as an entrepreneurial lesson: a major setback can become a massive opportunity, and a rival can inspire the creation of a future industry leader. The video ends with a call to follow the UBK channel for more entrepreneurial stories.

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Nintendo accidentally created its biggest rival, and it cost them billions. In the late 1980s, Nintendo wanted to move beyond cartridges. CDs were cheaper, held more data, and represented the future. So they partnered with Sony to develop a CD-based add-on for the Super Nintendo. It was called the PlayStation. But there was one problem: Sony would control the CD licensing. That meant Sony would profit from every game sold. Nintendo hated that idea. Then came the betrayal. At CES 1991, Sony publicly announced the partnership. The very next day, Nintendo revealed it was partnering with Philips instead. Sony learned about it alongside everyone else. An all-time corporate blindside. Most companies would have walked away, but Sony did the opposite. They built their own console, and PlayStation became one of the most successful gaming platforms ever created. The lesson: sometimes, your biggest setback becomes your biggest opportunity, and your worst enemy is the company that inspired you to compete. For more entrepreneurial stories and information like this, follow UBK.