Nintendo doing their own thing and not trying to directly compete with more powerful rival hardware goes back years. Do you remember when Nintendo refused to put a CD drive in the N64, to compete with PlayStation, and stuck with cartridges? They said they could do anything with carts that CDs could do, but with instant loading. To prove this they released Star Fox, which had cut scenes and tons and tons of speech!
What you may not know, is that in 1984, when Nintendo had a big arcade presence with massive selling games such as Donkey Kong, LaserDisc games became the big new thing. Pretty much all of the arcade game manufacturers – Taito, Williams, Gottlieb, Atari, and Cinematronics – jumped on the Laser band wagon and produced amazing-looking LaserDisc games which were seen as the future of arcade gaming. Nintendo of course didnt play ball even then.
The LaserDisc players which were the heart of these new games were very unreliable and broke down all the time. Nintendo knew this and didnt want to make their own Laser disc game, instead they released Punch-Out!, which had massive cartoony sprites, to compete with the likes of the very popular LaserDisc cartoon games Dragons Lair and Space Ace. Incidentally, Punch-Out! had two monitors, one on top of the other, like the Nintendo DS! Apparently, this was because they had a ton of spare monitors they needed to use up!
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