Original story from Kent as told in First Quarter:
Verbatim including italics, barring typos.
There is an interesting story behind Yoshi's Island. When Shigeru Miyamoto first demonstrated the game to Nintendo's marketing department, it was rejected because it had Mario-style graphics rather than the waxy, pre-rendered graphics of Donkey Kong Country. Rather than change to an artistic look he did not like, Miyamoto made the game even more cartoon-like, giving it a hand-drawn look. The second version was accepted.
Miyamoto, who is rightfully proud of his work, was offended that the first version was rejected. The same month I interviewed Miyamoto and Tim Stamper, creator of Donkey Kong Country, together and noticed that Miyamoto was a bit hard on Stamper, making such statements as "Donkey Kong Country proves that players will put up with mediocre gameplay as long as the art is good."
In a later interview, Miyamoto admitted that Yoshi's Island had been a touchy subject at the time.
I think that it happened after Donkey Kong Country was introduced. In comparison with the graphics of the Super Donkey Kong, there was not enough punch to Yoshi's Island. That was what I was told by the marketing people.
I intensified my hand-drawn touch on Yoshi's Island from the initial part of the program. Everybody else was saying that they wanted better hardware and more beautiful graphics instead of this art.
Even while I was working on the Super Mario World, I was thinking that the next hero should be Yoshi. Other people have created the games based upon Yoshi... Yoshi's World Hunters, Yoshi's Egg, Yoshi's Cookie and so forth--games that I don't really like. So I decided to make an authentic Yoshi game.
Verbatim including italics, barring typos.