Sony was also planning at that stage to develop another Sony-branded console that was Nintendo compatible, but this one would be more like a home entertainment system that would be able play both Super Nintendo cartridges and the new Sony designed CD format.
This was the plan, however, when Hiroshi Yamauchi decided to read the first 1988 contract between Nintendo and Sony, he realised that this agreement would hand all the power and control over to Sony and they would then own all the SNES CD-ROM format titles. Yamauchi did not like this at all and decided to secretly cancel the plans. On the day that he was supposed to announce their partnership with Sony, he instead said that Nintendo had now partnered with Philips and would no longer work with Sony.
Minoru Arakawa and Lincoln had secretly flown to the Philips European headquarters to form an alliance with Philips that would now give Nintendo the chance to have total control over the licenses on Philips machines.
Sony was first thinking of stopping their research and quitting their plan but then had a brainwave and decided to rather develop their own complete stand-alone console. Nintendo was not happy with this and sued them for breach of contract as they said that Nintendo owned the rights to the PlayStation name. Their case was denied, however, and Sony was given the go-ahead to launch the first ever Sony PlayStation machines.
