The Famicom Disk System (FDS) was released in 1985 by Nintendo as an add-on to it's overwhelmingly popular Famicom console. It was a unit that sat underneath the Famicom and used non-standard floppy disks for data storage. The primary reason behind the creation of the FDS was price : a disk could be produced for a fraction of the price of a cartridge. Games on disk retailed for around ¥3,000 vs. ¥5,000 or more for cartridges. And in 1985, the disks' 128k of storage space was quite appealing. The rewritable qualities of the disks also opened up interesting possibilities : games such as The Legend of Zelda (the first FDS game), Metroid, and Kid Icarus were first released to the FDS with a save feature. While the American NES saw these games with password features released only a year or two later, Japan's Famicom would have to wait half a decade for them in cartridge format. Also of note was Nintendo's 'Disk Writer' : a vending machine that charged 500 yen to write a new game on your disk. With blank disks costing only ¥2,000 apiece, this approach had obvious advantages over a ¥5,000-7,000 cartridge. To top it all off, the FDS was given an improved sound chip.
So what happened that caused this machine to fail so badly? Several things. To start off, Nintendo turned off developers early on by demanding partial copyright ownership over any games developed for the FDS. This caused many licensees to simply ignore the system outright. Then, four months after the release of the FDS, the first 128k cartridge-based game, Ghosts'n Goblins, was released. Transistor prices went down and battery backup technology improved a lot faster than Nintendo had anticipated, and all of a sudden, the FDS's storage capacity and saving abilities didn't look so special anymore. Publishers and retailers complained that the Disk Writer machines, while great for game buyers, were severely cutting into their sales. The final nail in the coffin was an unlicensed device that connected two FDS systems in order to copy games. After a brief surge of FDS sales following this device's release, Nintendo was finally forced to pull the plug.