Cast your mind back to the console war of the early '90s and one thing springs to mind - Sega vs Nintendo. The titanic struggle between these two Japanese giants dominated the video game industry for the best part of a decade, with the incumbent Nintendo - along with world-famous mascot Mario - being pushed all the way by the upstart Sega and its Sonic the Hedgehog character.

Of course, things are very different these days. Sega no longer makes its own domestic hardware and even works alongside Nintendo on collaborative projects. Shigeru Miyamoto and Sonic creator Yuji Naka may have been friendly rivals at one point, but they are now on much more comfortable terms, with Naka's studio Prope producing content for the 3DS, such as StreetPass games.

However, back in 2001, the pair were perhaps still seen as adversaries - which is why this recently translated interview between the pair is so interesting. It originally appeared in Famitsu magazine in December of that year - a period of great transition within Sega. The company was undergoing restructuring which would ultimately see it become a third-party publisher, but its Dreamcast console was still on store shelves.

In the interview, the famous game designers talk about their first encounter, which happened around the same time that the first Sonic game was revealed:

Miyamoto: We've talked several times before, but I think this is the first time we've had a proper face-to-face discussion like this. I've known all about Naka for a long time, though. (laughs) We first met about 10 years ago, I believe. I think it was right after the first Sonic was released, at a game show?

Naka: I remember it well. You could say it was the very first "near miss" encounter between myself and Miyamoto. I was standing there in the event hall, listening to that famous creator Lord British explaining his new game, Ultima Underworld. Then all of a sudden a voice came from behind me, "Do you find this interesting?" I turned around and it was none other than Miyamoto. That moment was our very first exchange, though I wouldn't exactly call it a conversation. (laughs)

Naka also discusses his immense respect for Miyamoto's talents, which Miyamoto repays in kind:

Naka: Since the beginning, Sega has been saying "we need to beat Nintendo!" But my intention wasn't really to "beat" Nintendo, but to make games that could stand shoulder to shoulder with theirs. If you try to make the exact same thing you'll never win; you've got pursue a different path. That was our thinking when we made Sonic… but of course, when Miyamoto showed me new games like Mario 64, I realized we were lagging behind again! Just when I thought we were on par, he goes and puts out an amazing game like that.

Miyamoto: Well, whether you're leading or trying to play catch up, I think that's ultimately something that the players decide. We're not exactly sitting cross-legged in some zen pose either; we're diligently trying to stay ahead! (laughs) You overtook us in a big way in America, after all.

Naka: But Mario has sold 100 million copies. We can't compete with that!

It's also interesting to note Miyamoto's reaction to seeing Sonic for the first time:

Miyamoto: After we made Mario, a lot of games came out with characters imitating that jump-action platformer system, right? Of all those I think Sonic had a certain uniqueness. "This game has real personality," I thought. "The creators are young and it's a little rough around the edges, but I can tell it was made by people who understand what the joy of games is all about." Although I was pretty young too, back then. (laughs)

Naka also explains that Sega's games - while still incredible products - lack the fine-tuning that makes so many of Nintendo's games so compelling:

Naka: Hmmm….. well, at Sega, as soon as we finished a game, it was kind of like "Alright, we're done! Now let's release it!" We would only spend a scant few weeks on balancing and fine-tuning. Later I looked back on it and really wished we had spent more time on that. Had we been more careful and thoughtful there, we might have made better games, I think. I get the feeling your approach to that, Miyamoto, was different.

Miyamoto: Our thinking about that is the same as Namco's. In their development process, they always spend a lot of time in the final tune-up phase. They're very smart about programming there. So, in our own way, we too take a lot of time with game balancing: it's like, "ok everyone, time for the tune-up!" That thinking derives from a saying we have at Nintendo: "it takes 5 years to build your brand, but only 2 to ruin it."

The pair chat about development and other topics, and end the interview with a touching exchange where Miyamoto compliments Naka's work - who then reveals that he'd love to see Sonic in the Super Smash Bros. series, something which would eventually happen in Brawl:

Miyamoto: If one of Naka's games is successful, he immediately wants to get started on the next project. That kind of work ethic is great. All I wish from our game developers is that they work hard and enjoy their work. That's all. The more good studios we have, the more the industry itself will be invigorated.

There's one other thing I want to say about Naka. If you think of games as fashion, then 10 years from now, what is popular today will be outdated. But if you think of the inherent value and quality of a game—that doesn't change much in 10 years. When a high-quality game is made, it sets a standard, and I think Naka is one of those rare people who can create the standards by which other games are judged.

That really means a lot to me, to hear you say that.

Of course, as a creator myself, I don't intend to stop competing with him! If people start thinking "Sega makes better games than Nintendo!" I'll have gotten us into quite a mess! (laughs)

I'd like to see Sonic in a Smash Bros. game someday. (laughs) Actually, I talked about it at Space World with the director of the last Smash Bros. He said "I wish you'd have said something sooner!" (laughs)

Well, if Sega is ok with it, we can add him anytime. I like that idea! (laughs)

Check out the full transcription here.