It is widely known throughout the entire US (ask anyone, they'll know) that the TurboGrafx-16 is larger to comply with FCC regulations of the time. It spread shit out and added a more shielding because our RF frequencies cannot be tampered with, goddammit! Heaven forbid that when you turn on your TG-16 your mom gets a little bit of static and/or snow on the TV in her room. Or maybe your sister can't hear Guns N' Roses quite as clearly on the radio (or whoever was popular in those days... WHAM maybe?).
In 1989? Maybe if you had a really uncool sister.
So anyway, yes, we've heard this story before, about RF interference, but is it actually true?
This could be the case for the Famicom vs the NES as well.
The design changes made to the NES, and the reasons behind them, are pretty well documented and I'm not aware of the FCC having anything to do with them.
The Mega Drive was already supa-huge so it didn't need modification. The Sega Mark III looked like a piece of rotted dog shit so they had to redesign the Sega Master System for the US to make it crazy awesome. The FCC really relaxed their policies on this not long after all of that. I don't recall any systems after the TG-16 that needed physical modification to come to the US.
I'm pretty sure the reason why game systems are no longer totally redesigned for export is the same reason they are no longer renamed for export. They are designed with world-wise markets in mind from the beginning since selling a machine only in Japan these days, and ever making your money back from the design, is totally impossible.
BTW, I love the MKIII!
I really don't think that the "bigger is better" attitude had anything to do with it. The US controllers are often larger, but that is only because Japanese have tiny midget micro hands.
Yeah, I'm not sure it did either, but I'm not convinced with the FCC thing yet either.