http://www.1up.com/news/playstation-1-design
Note position of X and O.Teiyu Goto wrote:What was so hard about coming up with a controller? "The Super NES was a huge hit at the time, and naturally we wanted SNES gamers to upgrade to our system," Goto said. "That's why the management department didn't want the controller to be a radical departure -- they said it had to be a standard type of design, or gamers wouldn't accept it."
Ignoring management's request for a flat, Nintendo-like pad, Goto came up with a design that had grips on both ends and showed it to Norio Ohga, Sony's president at the time. "I still clearly remember him saying that 'the control stick is the most important part of any game,'" Goto recalled. "Ohga flies airplanes and helicopters, so he used the term 'control stick' to talk about the controller. He really liked the grips on the controller because it let him get a 3D-style grasp on the situation."
Management, however, was still pretty hostile. "They told me that the grip design was simply no good, that gamers wouldn't like it," Goto said. "We did wind up switching to a flatter controller design, and that survived all the way to the point where it was time to start making molds. Just around then, though, we had a 'creative report,' an internal presentation where assorted groups showed their current in-progress work to the top brass. During that report I showed off the flat controller design, explaining that this is how game consoles work right now, and Ohga was totally livid at me. 'This is no good! Change it! What was wrong with what you showed me earlier?' It was a huge boost for me, him saying that in front of everybody -- it made me feel like I had it right all along."
"Despite that," Goto continued, "management's opinions didn't change at all. They showed Ohga the flat controller again later and said that this is what they wanted, but Ohga was about to throw the model right back at them. I was there and I didn't want him to break the model, so I stopped him, but looking back, I think that was Ohga's way of saying 'Hang in there, Goto' to me. Management was still pretty peeved, but they felt like they had no choice but to follow him."
That explains how the controller got its look, but not how the buttons got their rather unique names. "That was also pretty tough," Goto revealed. "Other game companies at the time assigned alphabet letters or colors to the buttons. We wanted something simple to remember, which is why we went with icons or symbols, and I came up with the triangle-circle-X-square combination immediately afterward. I gave each symbol a meaning and a color. The triangle refers to viewpoint; I had it represent one's head or direction and made it green. Square refers to a piece of paper; I had it represent menus or documents and made it pink. The circle and X represent 'yes' or 'no' decision-making and I made them red and blue respectively. People thought those colors were mixed up, and I had to reinforce to management that that's what I wanted."
Still don't know why the location switch.