The PC Engine was a collaborative effort between the relatively young Hudson Soft (founded in 1973) and NEC. NEC's interest in entering the lucrative video game market coincided with Hudson's failed attempt to sell designs for then-advanced graphics chips to Nintendo in an earlier, lower-profile scenario similar to Nintendo's rejection of Sony's designs for a Super Famicom CD attachment which evolved into the PlayStation.

The PC Engine is a very small video game console, due primarily to a very efficient three-chip architecture and its use of "HuCards" (Hudson Card; also referred to as "TurboChip" in North America and based on the BeeCard technology Hudson piloted on the MSX). The cards were about the size of a credit card (though slightly thicker), similar to the card format used by the Sega Master System for budget games. However, unlike the Sega Master System (which also supported cartridges), the TurboGrafx-16 used HuCards exclusively. TG-16 featured an enhanced MOS Technology 65SC02 processor (dubbed the HuC6280 by Hudson) and a custom 16-bit graphics processor, as well as a custom video color encoder chip, all designed by Hudson. The 'HE System' logo found on the manual of every Japanese game stood for "Hudson Entertainment System"

(From Wikipedia)