On December 4th, posters announcing the release of the PC Engine CD-ROM expansion kit appeared across Tokyo's Akihabara electronics district.
A number of hardcore gamers lined up eagerly, ready to welcome the dawn of a new gaming era.
However, that enthusiasm began to fade within just a few hours.
The first players to get their hands on the new hardware and games rushed home, connected their systems, and inserted the shiny silver game disc. The first title was Noriko Ogawa NO-RI-KO.
When the system booted up, a clear live-action video appeared on the TV screen—idol Noriko Ogawa smiled brightly at the camera and sang a cheerful song.
For the first few minutes, players were indeed amazed by the visual and audio quality the CD-ROM brought.
But once the novelty wore off, they quickly realized something was wrong.
This thing seemed to do nothing more than play video and music. Occasionally, a few options would pop up, letting the player choose what to watch next.
"Seriously? I spent all that money just for an interactive movie player?" one player stared at the screen, feeling insulted.
"There's no gameplay at all!"
"Why didn't I just buy her VHS tape instead?"
If Noriko Ogawa NO-RI-KO merely confused and disappointed players, Capcom's Street Fighter completely enraged them.
As regulars of the arcade scene, players had sky-high expectations for this port.
However, once they started playing, their excitement was instantly crushed. Compared to the cartridge version, the graphics showed almost no improvement—let alone matching the arcade version.
Even worse, during gameplay, there was noticeable input delay.
"There's lag! The response speed isn't even as good as the Famicom version!"
"How are we supposed to play like this?"
Every time the disc drive made a loud noise while reading, the players' frustration grew even more.
What was supposed to be a showcase of the CD-ROM's advantages became a complete disaster instead. Angry players called it the perfect example of "negative optimization."
The poor experience quickly spread throughout the gaming community and soon reached Akihabara again.
Sales were disappointing, game performance was criticized, and some players even demanded refunds—giving Hudson and NEC's executives massive headaches.
They couldn't understand how a product meant to represent the future—this CD-ROM expansion—could flop so badly right out of the gate.
Meanwhile, other third-party developers were secretly delighted. In private circles, NEC's failure became the butt of many jokes.
At Sony headquarters, Ken Kutaragi sat in his office reading two reports—one detailing the PC Engine CD-ROM's technical specifications, and the other filled with market feedback and player comments, some dripping with sarcasm.
He flipped through the papers carefully, tapping his finger lightly on two phrases: "input delay" and "lack of gameplay."
To him, NEC and Hudson's failure was a textbook example of what not to do.
No matter how powerful the hardware is, without software capable of harnessing it, it's nothing but expensive scrap metal.
And leaving the fate of software entirely in the hands of third parties was pure foolishness.
Ken Kutaragi picked up his pen and added a few more lines to his report.
Sony must not repeat this mistake.
Future consoles must have a lineup of first-party games that share the same DNA—hardware and software developed together from the start, complementing each other perfectly.
Only then could they truly show players what next-generation gaming was capable of.
At Sega's arcade development division, Yu Suzuki frowned deeply.
He watched the screen as Ryu threw a sluggish punch, shaking his head.
The character's attack commands seemed to travel through air for half a second before being executed in-game.
"We can't release something like this," Suzuki said, his tone filled with disgust. "This kind of delay would drive anyone crazy, and the noise from the disc drive completely destroys the game's rhythm. This isn't a port—it's a disgrace."
The programmer beside him looked troubled. "Suzuki-san, it's a limitation of CD-ROM technology. The seek speed is too slow—unlike cartridges, it can't load data instantly. And since games require frequent jumps between different parts of the disc, each seek means another long wait."
The issue was soon placed on Takuya's desk.
He read through the report summarizing the technical challenges, showing no surprise on his face.
"The seek problem—contact Sony," Takuya instructed his assistant. "They're the experts in optical drive technology. The PC Engine CD-ROM expansion kit was licensed from them, even though NEC handled later development."
"This incident, even if it doesn't humiliate them, will definitely push them to research improvements. It's the perfect chance for them to prove themselves."
"We'll collaborate with them to create a high-speed data access system that integrates hardware and software—a new industry standard. Once it's done, every third-party developer working with us will appreciate it."
The assistant took careful notes.
"As for loading speed…" Takuya paused, thinking aloud. "Toshiba's 1M DRAM—it's been on the market for almost three years now. The price should've dropped by now."
"Let Suzuki test it. If it works well, talk to Directors Terauchi and Hatano. Have them negotiate with Toshiba for a good price."
As the assistant scribbled quickly in his notebook, Takuya tapped his fingers on the desk, waiting for him to finish.
Fixing the disc-reading bottleneck would only prevent Sega's CD-ROM add-on from becoming another anxiety-inducing mess like the PCE-CD. But that wasn't enough.
"Speed alone isn't enough," Takuya continued. "Street Fighter's visuals and sound make it clear that if an expensive product can't deliver a revolutionary experience, even hardcore players with money to spend won't buy it."
Leaning back in his chair, he stared at the ceiling, as if recalling something. "Tell Suzuki to bring out that shelved project—the co-processor we designed for the Mega Drive cartridges."
The assistant paused, remembering what he meant.
Back when the team tried to achieve more powerful graphics on the Mega Drive, they had designed a high-performance co-processor that could be embedded in cartridges. But in the end, the upper management scrapped it due to cost—each chip would add over thirty dollars, which was unacceptable for cartridges that sold for only fifty or sixty.
"It was too expensive before because the base cost of a cartridge was too low," Takuya explained clearly. "But now it's different. The CD-ROM add-on itself is a high-priced product—players already expect to pay a lot. Adding one more chip won't feel significant, but the improvement in experience will be enormous. That's a worthwhile trade."
He raised two fingers. "Graphics and sound—both must advance. For audio, add a dedicated sound chip. Don't make developers rely solely on the Mega Drive's built-in audio hardware. The CD-ROM gives us huge storage capacity—if we don't use it for higher-quality music and effects, we're wasting the players' investment."
Halfway through writing, the assistant suddenly asked, "Sir, what about CD music playback? NEC promoted that as one of their major selling points."
Takuya's mouth twitched, almost amused.
"Completely unnecessary," he said bluntly. "Who would spend three hundred dollars on a bulky game console add-on just to listen to music?"
"If someone wants to listen to CDs, they can just buy Sony's D-2 Discman. It costs under two hundred dollars and fits in your pocket."
"Do you understand who our users are? They're gamers—people sitting in front of their TVs, wanting to play the best games in the world—not casual audiophiles who just want another gadget."
He paused, his tone firm. "And adding that feature means another decoding chip—raising the cost again. Even worse, third-party developers would have to rebuild their entire audio pipelines to match the higher standard. That's just making things harder for them."
The assistant stopped writing, reviewed the notes, and read back the key points for Takuya's confirmation.
After Takuya nodded, he turned and headed toward the arcade development department.
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