You know, that actually kinda works.
If you follow the history of the console wars and the emergence of Sony and Microsoft - you can see that Nintendo trying to make a CD upgrade for the SNES with Sony helped to develop and even funded much of the tech that eventually became the Sony Playstation. A similar story can be seen from Sega's dealings with Microsoft in developing the Dreamcast (which ran Windows CE).
That's what makes the Nintendo vs Sega wars so epic. They both in an attempt to create their own 'Super weapon' to defeat the other ended up creating monsters neither could control that ended up taking one out completely and heavily damaging the other.