According to Wikipedia, Hudson originally approached Sharp before pitching the idea to NEC. While Sharp was enthusiastic and agreed that it had great commercial potential, the deal ultimately fell through.

The deal-breaker was Sharp’s deep relationship with Nintendo at the time. Apparently, developing a console with Hudson’s CPU was seen as something that would have jeopardized their partnership with Nintendo.

What Sharp was working on back then was the "C1 NES TV"—basically a NES-integrated television. You could think of it as the NES era's version of the iMac. It has a bit of a comical look that always makes me smile.

https://ja.wikipedia.org/wiki/%E3%83%95%E3%82%A1%E3%83%9F%E3...