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===CD format=== The success of the PlayStation contributed to the demise of cartridge-based home consoles. While not the first system to use an optical disc format, it was the first highly successful one, and ended up going head-to-head with the proprietary cartridge-relying Nintendo 64,{{efn|The [[Nintendo 64]] was the last major home console to use [[ROM cartridge|cartridges]] as its primary storage format until the [[Nintendo Switch]] in 2017.<ref>{{cite web | last=Frank | first=Allegra | title=Nintendo Switch Will Use Cartridges | website=[[Polygon (website)|Polygon]] | publisher=[[Vox Media]] | location=[[Washington DC]] | date=20 October 2016 | access-date=25 October 2017 | url=http://www.polygon.com/2016/10/20/13344618/nintendo-switch-nx-games-cartridges | archive-date=20 October 2016 | archive-url=https://web.archive.org/web/20161020142412/http://www.polygon.com/2016/10/20/13344618/nintendo-switch-nx-games-cartridges | url-status=live }}</ref>}}<ref name="pcworld1" /> which the industry had expected to use CDs like PlayStation.{{r|maher20231208}} After the demise of the Sega Saturn, Nintendo was left as Sony's main competitor in Western markets. Nintendo chose not to use CDs for the Nintendo 64; they were likely concerned with the proprietary cartridge format's ability to help enforce [[Nintendo 64 Game Pak#Copy protection|copy protection]], given their substantial reliance on [[licensing]] and exclusive games for their revenue.<ref name="versus">{{cite web |title=The Game: PlayStation vs N64 |url=https://www.forbes.com/1997/09/19/feat.html |website=[[Forbes]]|date=19 September 1997 |access-date=18 August 2014 |archive-url=https://web.archive.org/web/20140819084533/http://www.forbes.com/1997/09/19/feat.html |archive-date=19 August 2014 |url-status=live}}</ref> Besides their larger capacity, CD-ROMs could be produced in bulk quantities at a much faster rate than ROM cartridges, a week compared to two to three months.<ref>{{cite journal | title = Hardware gimmick or cultural innovation? Technological, cultural, and social foundations of the Japanese video game industry | first1 = Yuko | last1 = Aoyama | first2= Hiro |last2= Izushi | journal = [[Research Policy]] | volume = 32 | issue =3 | date = 2003 | pages = 423–444 | doi = 10.1016/S0048-7333(02)00016-1 | issn = 0048-7333 }}</ref>{{sfn|Asakura|2000|p=103}} Further, the cost of production per unit was far cheaper, allowing Sony to offer games about 40% lower cost to the user compared to ROM cartridges while still making the same amount of net revenue. In Japan, Sony published fewer copies of a wide variety of games for the PlayStation as a risk-limiting step, a model that had been used by Sony Music for CD audio discs. The production flexibility of CD-ROMs meant that Sony could produce larger volumes of popular games to get onto the market quickly, something that could not be done with cartridges due to their manufacturing lead time.{{sfn|Asakura|2000|pp=103, 105}}<ref>{{cite conference | last1 = Tomaselli | first1 = Fernando Claro | first2= Luiz Carlos | last2= Di Serio | first3 = Luciel Henrique | last3= de Oliveira | title = Value chain management and competitive strategy in the home video game industry | conference= 19th Annual Conference POMS | date= 2008 }}</ref>{{r|maher20231208}} The lower production costs of CD-ROMs also allowed publishers an additional source of profit: budget-priced reissues of games which had already recouped their development costs.{{sfn|Lundrigan|1996|p=9}} Tokunaka remarked in 1996: {{blockquote|Choosing CD-ROM is one of the most important decisions that we made. As I'm sure you understand, PlayStation could just as easily have worked with masked ROM [cartridges]. The 3D engine and everything—the whole PlayStation format—is independent of the media. But for various reasons (including the economies for the consumer, the ease of the manufacturing, inventory control for the trade, and also the software publishers) we deduced that CD-ROM would be the best media for PlayStation.{{sfn|Lundrigan|1996|p=9}} }} The increasing complexity of developing games pushed cartridges to their storage limits and gradually discouraged some third-party developers. Part of the CD format's appeal to publishers was that they could be produced at a significantly lower cost and offered more production flexibility to meet demand.<ref name="pcworld1" /> As a result, some third-party developers switched to the PlayStation, including [[Square (video game company)|Square]] and [[Enix]], whose ''Final Fantasy VII'' and ''[[Dragon Quest VII]]'' respectively had been planned for the Nintendo 64 (both companies later merged to form [[Square Enix]]).<ref>{{cite web |title=Dragon Quest VII To Appear On PlayStation |url=https://www.ign.com/articles/1997/01/15/dragon-quest-vii-to-appear-on-playstation |website=[[IGN]] |publisher=[[Ziff Davis]] |access-date=7 March 2022|archiveurl=https://web.archive.org/web/20220307200025/https://www.ign.com/articles/1997/01/15/dragon-quest-vii-to-appear-on-playstation |archive-date=7 March 2022 |location=[[Chicago]] |language=en |date=15 January 1997 |url-status=live}}</ref><ref>{{cite web |last1=McFerran |first1=Damien |title=Nintendo Apparently Told Square "Never Come Back" After Losing Final Fantasy VII To Sony |url=https://www.nintendolife.com/news/2017/01/nintendo_apparently_told_square_never_come_back_after_losing_final_fantasy_vii_to_sony |website=[[Nintendo Life]] |publisher=[[Gamer Network]] |access-date=7 March 2022 |archive-url=https://web.archive.org/web/20220224162141/https://www.nintendolife.com/news/2017/01/nintendo_apparently_told_square_never_come_back_after_losing_final_fantasy_vii_to_sony |archive-date=24 February 2022 |location=[[Brighton]] |date=11 January 2017 |url-status=live}}</ref> Other developers released fewer games for the Nintendo 64 ([[Konami]], releasing only thirteen N64 games but over fifty on the PlayStation). Nintendo 64 game releases were less frequent than the PlayStation's, with many being developed by either Nintendo themselves or second-parties such as [[Rare (company)|Rare]].<ref name="versus" />
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