Software
Software for the PC-98 generally ran from program and data disks (Disk 0 & 1) or (A & B), and NEC did not have a strong GUI to go up against Microsoft's Windows 95 when it took Japan's PC market by storm. NEC's decision to work with Microsoft to offer a PC-98 compatible version of Windows 95 could be seen as the first step towards the PC-98's downfall, as consumers were no longer required to have an NEC-built system to run software designed for Windows.
The PC9801 had thousands of game titles designed for it, many of which made creative use of the system's limitations (it was originally designed as a business machine) to great commercial success. Despite having hardware specifications far inferior to the Fujitsu FM Towns and Sharp X68000 personal computers, the massive install base and steady flow of game titles (in particular "dōjin" style dating sims and RPGs, as well as early games of the Touhou Project franchise) kept it as the favored platform for PC game developers in Japan until the rise of the DOS/V clones.
NEC kept much of its hardware and platform proprietary or under license, so while it had a virtual monopoly in the Japanese market, later IBM PC clones with DOS/V and Windows from companies such as Hitachi and Panasonic that did not require such license fees (like Epson's 98 clones) flooded the market and displaced NEC. The proprietary technology that was NEC's strength turned into its weakness as its competitors could use off-the-shelf technology to build cheaper IBM PC clones at a time when NEC was charging much steeper prices for its PC-98s.
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