Back in the 1990s, Nintendo was trying to develop a CD add on for their Super Nintendo system to compete with the Sega CD. Since they didn't want to allocate the resources themselves to do it, so they commissioned Sony to do it.
Sony went on to create pretty much an entire console for Nintendo (they had already created the sound chip for their Super Nintendo, so the relationship was already established). Nintendo said "Lol, nah. We changed our minds." And awarded the contract to Phillips.
Part of Phillip's contract with Nintendo, was that they could use their IP in some games. Thus the absolute worst Zelda games were born:
Link: The Faces of Evil
Zelda: The Wand of Gamelon
These games were ABYSMAL. Horrible. So bad, that Nintendo doesn't even officially recognize them, even though they're technically licensed.
My avatar is the Link from those terrible horrible games. Why? Because I don't know. I guess it's so bad, they're good. And I'm a massive Zelda and Nintendo fan. You can view the cutscenes from the game:
But what became of Sony, caught with their pants down? After having developed the hardware for Nintendo, they said "What do we do with the thing we made?" and then some Japanese guy said "Lets call it the playstation and release it."
And they did. And Nintendo inadvertently created their own worst nightmare of competition.