IIRC. The deal actually fell through because of Sony being unreasonable in their demands. They said something along the lines of "We'll own all the publishing rights for your games if you develop for this system, in doing so it would mean that you wouldn't be allowed to make any games unless we say so." Which is basically like owning all the IP's Nintendo has to offer.
From what I gather, we're probably living in the worst timeline of events for gaming due to Nintendo and Sony not teaming up.
I mean let's think about the consequences here.
>Sony and Nintendo don't team up
>Sony make the PS1
>Decimate the competition
>Introduce the casuals the gaming (or takes the casuals from Sega, as they did try to market to them as well)
>Sega are tossed out of the industry
>Microsoft see the benefits of the industry, and join following Sony's example.
>Gamecube is a failure, despite having tons of interesting and new/old IP's being revisted. Nintendo get the idea that IP's like F-Zero aren't for the consumers. They then go on to create the Wii, finally grabbing the remaining casuals into gaming, netting them 100m+ sales.
>PS2 probably has the most successful gimmick ever shown in the industry so far (DVD player) resulting in 150m+ sales of their console. Making Sony believe that gimmicks are the future (as seen by the Blu-ray player in the PS3) and go with that for a while. Games do come out, but less and less as the Playstation's go up in number.
>Xbox, while a decent console itself laid out a pretty terrible future for gaming and Microsoft in general. Paying for multiplayer was eventually taken by Sony in which no one gave a shit after Microsoft shot themselves in the foot in the announcement for the Xbox One. As well as casualizing the industry futher and not actually doing anything else for gaming sans a few games they don't even want to make sequels for.
Now of course, that's what I see. This is our current industry. These are the three other timelines we could've seen.
>Sony and Nintendo team up
>CD drive isn't successful
>Whatever licensing issues they have need to be cleared up
>If Sony say that the contract said they basically own the rights for Nintendo's IP's or at least to publish them we could be dealing with a PS1 run by Sony, using Nintendo's IP's on it. Mostly likely very successful, leading to an industry run by Sony, Sega and Microsoft. With Sega eventually losing it around the 7th gen if they actually had a successful Dreamcast.
>If Sony don't own the rights for Nintendo's IP's, we could be seeing a PS1 coming out much much later than we saw, or a quick jump to the PS2 (being called the PS1).
>What this would've meant is that Sega wouldn't be threatened by the PS1, and would've made the Saturn with the original specs as intended. This would've meant the third party devs who has to deal with the Saturn's horrible architecture won't have this problem and will gladly make for the console. More game = More successful, and Sega probably would've won out this gen.
>Industry would probably turn out to be Nintendo, Sega and Sony with an newly released PS1 sometimes in 1996/1998, or would start with the PS2 in 2000. Whether it would be successful or not would depend on a lot of factors (1st and 3rd parties, the competition at the time, if they have a DVD player installed, the current state of the industry at the time etc.)
This industry would actually be pretty cool, while Sony are important for a lot of things (maturing of the industry, two stick controllers, many many IP's and 3rd parties we know and love today) this may actually be a good thing for the industry if we can at least say that many of the 3rd parties went to Sega and Nintendo during this period.
>Sony and Nintendo team up
>CD drive is successful
>Sony and Nintendo team up for their next console. (As Sony would most likely want more of the industry)
>Sega aren't threatened by the PS1 and the original Saturn specs remain the Original PS1 specs. (I'll get to this in a minute)
>What you've got here is either three kinds of consoles from Nintendo. An N64 with a disc drive, or a PS1 with Nintendo titles.
>Sega most likely keep truckin with what they've got, but still come second if SoJ and SoA still fight over petty things that hurt their console a lot more than it should. But would've probably sold a lot more games and titles than they did with the Saturn. Not going into the red if they keep playing their cards right.
>Nintensony's console would've definitely won out this gen, if the N64 with a disc drive is created. We could be seeing some pretty incredible games on this system. They probably would've looked a lot better than the N64's games, they also would've got FF7, 8 and 9 on their console. Also, if Sony did create some games for this console as well, we'd be getting some amazing games on this version of the N64. If the PS1 with Nintendo IP's goes through, it's pretty self explanatory what we'd be seeing.
>6th gen would most likely be Gamecube with help from Sony and Dreamcast. Microsoft may join the industry, but it's hard to say since they were influenced by Sony.
>If MS don't join the industry, they would probably focus a lot of their time on the PC gaming market, and that would've also been better off in general.
This timeline would've also been pretty cool. Nintendo and Sony teaming up would've been better for the industry in a lot of ways, but it's still very hard to say if we would've had games like MGS, Resident Evil, Crash Bandicoot etc.
>Nintendo and Sony don't team up
>Sony go to Sega and ask them the same offer (They did go to Sega after Nintendo said no. [Source]
>Sega agree, but instead of a joint console and the specs for the joint console are made
>Basically, PS1 specs for the Saturn
>SoJ don't get pissy at SoA for making this deal and we get a joint Sony-Sega console.
>A PS1 with Sega IP's and Sony IP's and third parties.
>Competition basically becomes the N64 vs Playsaturn
>We all know who is going to win here
>Even if Sony don't join up with Sega for the Dreamcast, it would've already been too late. Sega would have had a large market share and the Dreamcast would've been very successful, not rushed out to the market as quickly, and if Sega are goody goody with Sony, we could be seeing a DVD player inside it, along with a lot of IP's and 3rd parties.
The best timeline I could see for gaming would be this one.
This is ALL just speculation for the most part, and probably has a lot of holes in it. But this it what I see could've happened if the deal went through with Nintendo, went through and failed, and went through with Sega instead.
...I may have sidetracked a little...