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It was because Sony had a ton of mini discs laying around since the format didn't take off. The UMD cartridges are just mini discs internally.

what do you mean? there were no recordable UMDs. they all had to be stamped. so having mini discs laying around would serve no purpose

My mistake. I had heard the explanation I gave from a video, but now I've tried to find another source, and I cannot.