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Everything quickly fell apart when the then-president of Nintendo realized the contract's wording let Sony have full ownership and profits over the console's games. The company terminated the contract and forged a partnership with Philips -- while Sony rebuilt the project from scratch, dropping the cartridge slot and creating the CD-ROM-only [[Play Station]] (now one word).
Nintendo later terminated its contract with Philips, and the latter company created the CDi -- which featured [[The
During this situation, Squaresoft -- known these days as [[Square Enix]] -- was becoming increasingly frustrated with Nintendo's draconian censorship policies, publishing restrictions, and refusal to move away from cartridge media (which, at the time, had far less storage space than CD-ROMs). Squaresoft -- then Nintendo's most popular third-party development studio -- eventually signed a contract with Sony, which eventually published the PlayStation's [[Killer App]]: ''[[Final Fantasy VII]]''.
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