Dutch conglomerate Philips, Sony's rival. This contract would give Nintendo total control over their licences on all Philips-produced machines. Kutaragi and Nobuyuki Idei, Sony's director of public relations at the time, learned of Nintendo's actions two days before the CES was due to begin. Kutaragi telephoned numerous contacts, including Philips, to no avail. On the first day of the CES, Sony announced their partnership with Nintendo and their new console, the Play Station. At 9 am on the next day, in what has been called "the greatest ever betrayal" in the industry, Howard Lincoln stepped onto the stage and revealed that Nintendo was now allied with Philips and would abandon their work with Sony. Inception Incensed by Nintendo's renouncement, Ohga and Kutaragi decided that Sony would develop their own console. Nintendo's contract-breaking was met with consternation in the Japanese business community, as they had broken an "unwritten law" of native companies not turning against each other in favour of foreign ones. Sony's American branch considered allying with Sega to produce a CD-ROM-based machine called the Sega Multimedia Entertainment System, but their board of directors in Tokyo vetoed the idea when American CEO Tom Kalinske presented them the proposal. Kalinske recalled them saying: "That's a stupid idea, Sony doesn't know how to make hardware. They don't know how to make software either. Why would we want to do this?" Sony halted their research, but decided to develop what it had developed with Nintendo and Sega into a console based on the SNES. Despite the tumultuous events at the 1991 CES, negotiations between Nintendo and Sony were still ongoing. A deal was proposed: the Play Station would still have a port for SNES games, on the condition that it would still use Kutaragi's audio chip and that Nintendo would own the rights and receive the bulk of the profits. Roughly two hundred prototype machines were created, and some software entered development. Many within Sony were still opposed to their involvement in the video game industry, with some resenting Kutaragi for jeopardising the company. Kutaragi remained adamant that Sony not retreat from the growing industry and that a deal with Nintendo would never work. Knowing that it had to take decisive action, Sony severed all ties with Nintendo on 4 May 1992. To determine the fate of the PlayStation project, Ohga chaired a meeting in June 1992, consisting of Kutaragi and several senior