Why is the Playstation commonly referred to as the "PSX?"

Rumor: Everyone knows that Nintendo hooked up with Sony to create a CD add-on to the SNES, whuch was to be the big N's answer to the Sega CD. Nintendo ended up giving Sony the cold shoulder thus creating their own worst enemy and the rest is history.

The rumor is that the "X" is PSX stand for "extreme." The rumor states that since the Playstation was originally in development for Nintendo, that Nintendo held the copyright in the name "Playstation," so the official name for the Playstation was "Playstation Extreme," hence the term PSX.

I've heard this for years, but it sounds kind of strange.

Who knows the real answer?