The PlayStation: how humiliation in Chicago gave Sony its most profitable product
At the Consumer Electronics Show in Chicago, in June 1991, Sony unveiled what it called the “Play Station” — a CD-ROM add-on for Nintendo’s Super Famicom, the result of two years of secret collaboration. The next morning, Nintendo held its own press conference and did not invite Sony. It announced a new partnership with Philips instead — what the New York Times called “a slap at Sony.”
Sony’s president, Norio Ohga, had personally telephoned Nintendo president Hiroshi Yamauchi in a last-ditch attempt to stop the announcement. It didn’t work. At the internal emergency meeting that followed, Ohga ended the discussion with a sentence: “We will never withdraw from this business. Keep going.”
The engineer who had set the whole chain in motion was Ken Kutaragi. Working in Sony’s semiconductor division in the late 1980s, Kutaragi had quietly negotiated a deal with Nintendo to supply the sound chip for the Super Famicom — without telling his supervisors, who would have blocked it. Good work leads to bigger work: the sound chip partnership eventually expanded into the CD-ROM collaboration, and from there into the “Play Station” project. When Nintendo walked away, Kutaragi proposed using everything Sony had already built and going it alone.
The proposal met fierce internal resistance. Sony’s senior executives regarded video games as toys; they did not want the company’s name on one. Kutaragi’s team was relocated out of Sony’s main headquarters to a satellite facility to keep the project at arm’s length. The hostility suited him. Working in effective isolation for three years, the team built a 32-bit console capable of real-time 3D polygon graphics at a time when every competitor was still designing hardware around flat, two-dimensional sprites.
The PlayStation launched in Japan on December 3, 1994, priced at 39,800 yen. A hundred thousand units sold on the first day; another 200,000 were gone by the end of December. In North America, Sony brought it out on September 9, 1995, at $299 — a price announced at E3 with such studied brevity that the crowd applauded before the sentence was finished, moments before Sega revealed its competing Saturn would cost $399.
The disc format changed the economics of game development. A CD pressed for a few cents could hold data that would have cost hundreds of dollars in ROM cartridge chips, and publishers could greenlight longer, stranger projects as a result. Final Fantasy VII, released in 1997, filled three discs and ran to forty hours; a cartridge version would have been financially impossible. The console’s 3D rendering capability rewrote what games could look like and, more slowly, what they could be about.
By December 2003, the PlayStation and its PS One redesign had together shipped 102 million units — the first console ever to cross 100 million. At its peak, Sony’s gaming division was generating 40 percent of the parent company’s total profit.
When the PlayStation 2 launched in 2000, Ken Kutaragi was chairman and CEO of Sony Computer Entertainment. The executives who had moved him to a satellite facility to contain the project had long since stopped complaining about toys.
Sources
- PlayStation — Wikipedia — launch dates, sales figures (102 million units shipped by 2003), Japanese launch price, development history.
- PlayStation at 30: The Betrayal and Revenge Story — Video Games Chronicle — CES 1991 details, Ohga’s “We will never withdraw” quote, day-one Japanese sales figures, NYT “slap at Sony” characterization.
- PlayStation — EBSCO Research Starters — Kutaragi’s team relocation, internal corporate opposition, 3D graphics context.