In the early 1990s, with the success of the NES and Super Nintendo consoles, Nintendo dominated the world video game market, despite the fierce competition from Sega.
The emergence of the CD-ROM led Nintendo to partner with Sony to develop a CD player for the Super Nintendo, the SNES-CD, better known as the Nintendo PlayStation, to compete with NEC's PC-Engine and Sega's Mega-CD.
But a dispute led Nintendo and Sony to abandon their joint project, which Sony then recycled to develop its own console, the PlayStation. Nintendo then turned to the Dutch firm Philips to pursue its project.
The announcement of the PlayStation in 1991, added to the failures of Sega's Mega-CD and Philips' CD-i, persuaded Nintendo to bury the CD-ROM extension of the Super Nintendo for good and to turn to the development of an entirely new console.