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The Nintendo 64 was Nintendo's answer to the growing dominance of the PlayStation. It was a 64-bit console, the only one generally recognized in that class despite the 64 bit Atari Jaguar, which had actually been released earlier. Unlike the other companies' consoles of the generation, the N64 had continued to use ROM cartridges, which many saw as a hindrance to gameplay, as cartridges have much less memory space and are also more expensive than optical media; however, Nintendo's answer to this was that unlike CDs, cartridges cannot be damaged by a simple scratch to the surface, nor are load times much of an issue. Nevertheless, it is also possible that Nintendo did this for fear of then growing software piracy issues facing other consoles, such as the PlayStation.

Nintendo 64 was the culmination of work by Nintendo, Silicon Graphics, and MIPS Technologies. The SGI-based system design that ended up in the Nintendo 64 was originally offered to Tom Kalinske, then CEO of Sega of America by James H. Clark, founder of Silicon Graphics. SGI had recently bought out MIPS Technologies and the two companies had worked together to create a low-cost CPU/3D GPU combo that they thought would be ideal for the console market. A hardware team from Sega of Japan was sent to evaluate the chip's capabilities and they found some faults which MIPS subsequently solved. However, Sega of Japan ultimately decided against SGI's design, apparently in part due to internal problems between Sega of Japan and Sega of America.

In the early stages of development the Nintendo 64 was referred to by the code name "Project Reality". This moniker came from the speculation within Nintendo that the console could produce CGI on par with then-current supercomputers. In 1994 the console was given the name Nintendo Ultra 64 in the West. The console design was shown for the first time in late Spring 1994. The first picture of the console ever shown featured the Nintendo Ultra 64 logo and showed a game cartridge, but no controller. The final console was identical to this, but with a different logo. When the system together with the controller was fully unveiled in a playable form to the public on November 24, 1995, the console was introduced as the Nintendo 64 in Japan, contrary to speculation of it being called Ultra Famicom, at the 7th Annual Shoshinkai Software Exhibition in Japan. Photos of the event were disseminated on the web by Game Zero magazine two days later. Official coverage by Nintendo followed a few weeks later via the Nintendo Power website and print magazine. In February 1995 Nintendo of America announced a delay of Nintendo Ultra 64 until September 1996 in North America. Simultaneously it was announced that Nintendo had adopted a new global branding strategy, calling the console everywhere Nintendo 64. Subsequently the PAL introduction was further delayed, finally being released in Europe on March 1, 1997.

During this stage of development two companies, Rareware (UK) and Midway (USA), created the arcade games Killer Instinct and Cruis'n USA which claimed to use the Ultra 64 hardware. In fact, the hardware had very little in common with what was finally released; the arcade games used hard drives and TMS processors, although they were based on the MIPS R4600 CPU. Killer Instinct was the most advanced game of its time graphically, featuring pre-rendered movie backgrounds that were streamed off the hard drive and animated as the characters moved horizontally. Nintendo dropped "Ultra" from the name on May 1, 1996, just months before its Japanese debut, because the word "Ultra" was trademarked by another company, Konami, for its Ultra Games division. The console was finally released on June 23, 1996.

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