Monday, April 07, 2008

Leave Luck to Heaven

On September 23, 1889 a young Japanese man by the name of Fusajiro Yamauchi started a small company called "Nintendo Company, Ltd". The original intent of this company was to manufacture handmade hanafuda playing cards. Nintendo was successful in this venture and through the years became one of the dominant players in Japan for playing cards, even being the first Japanese company to make cards out of plastic.

However, in 1956, current company president Hiroshi Yamauchi paid a visit to the United States to meet with the US Playing Card Company, then the world leader in their industry. Yamauchi was stunned to find a small and sparse office as the headquarters of an industry leader. Yamauchi decided at that time that Nintendo needed to move in other directions if they truly wanted to grow as a company.

The playing card market hit a saturation point in 1964 around the time of the Tokyo Olympics and soon the company's stock plummeted from 900 yen a share to 60. Nintendo soon began to branch out into other ventures, trying to find the market that was right for them. Over the years they dabbled in taxis, love hotels, a TV channel, instant rice and many other products. It was the release of a toy called "The Ultra Hand" in 1970 that pushed Nintendo headlong into the electronic entertainment industry.

Seeing that there was money to be made in electronics, Nintendo secured the Japanese distribution rights for the Magnavox Odyssey. At the time the Odyssey was the only game console on the home market, predating even the Pong units.

Based on the success of the Odyssey and the desire to more fully enter the market, Nintendo developed a series of dedicated home consoles known as the "Color TV Game" series. Many consoles were released in this series, beginning with the "Color TV Game 6" which offered 6 variations of a game called Light Tennis which was heavily based on Pong.

This continued with "Color TV Game 15" which contained two controllers and 15 variations of Light Tennis. The series continued with "Color TV Racing 112", a racing game that came complete with a steering wheel and gear shifter. Next up was "Game Block Kuzushi" which was a console based on Breakout. The final unit in this series was called "Computer TV Game" and was a port of Nintendo's first arcade game.

In conjunction with the Color TV Game series, Nintendo began manufacturing arcade games, beginning with Computer Othello. They also tried their hand at the hand held console market with a series of games known as "Game and Watch".

Realizing the potential of the home market, Nintendo set to work on creating a home console that would be both affordable and powerful. Their original designs called for a 16-bit processor and a floppy disk drive to be priced at $75-100 USD, but these designs proved too costly to implement and Nintendo soon found themselves rethinking their ideas from the ground up.

On July 15, 1983, Nintendo released their system in Japan. This toy like apparatus was designed to be a fun diversion for the family to enjoy together, hence the name FamiCom (Family Computer).

The FamiCom came complete with two hardwired controllers (the second of which had a microphone built in) and an expansion port that would later be used for various add-ons such as the Zapper, Power Pad, a keyboard for creating BASIC programs and a cassette drive, amongst other things. Most of these additions were never released outside of Japan.

The initial runs of the FamiCom contained a number of problems involving systems freezing and locking up. In order to generate good faith with consumers Nintendo announced a total recall of every unit and re-designed the motherboard. Once these issues were worked out the FamiCom began to shine.

The FamiCom was an unmitigated success and by the end of 1984 Nintendo had sold 2.5 million units in Japan alone. Bolstered by the influx of cash and the prospects of an even better venture overseas, Nintendo began to investigate releasing their console in the American market.

Hoping to find a partner for this venture, Nintendo first approached Atari to see if they would be interested in the distribution rights for their console, then known as the Nintendo Enhanced Video System. Atari was initially interested in this prospect until the unveiling of Donkey Kong for the Coleco Adam at the 1983 Consumer Electronics Show. Atari wrongly believed that this adaptation was an indication of Nintendo being duplicitous and asserting themselves to multiple companies. (However, Nintendo had no role in the creation of this iteration of Donkey Kong.) This mistrust caused Atari to pass on the deal. Subsequently, Atari was nearly destroyed by the "Great Video Game Crash" shortly thereafter.

Nintendo worked on a mockup of what would be their American console, this time branded the Nintendo Advanced Video System. However, analysts disliked the machine and speculation was rampant that it would fail.

Nintendo went back to the drawing board and ultimately created the Nintendo Entertainment System (NES) which ended up being the released console. Two major points were settled on prior to releasing the unit stateside.

First, Nintendo did studies and market analysis on the USA and determined that playing with their family was not what most gamers envisioned. Therefore, they removed the reference from the console's name.

Secondly, because of the recent market crash and the fear that video games were a fad that had already passed, Nintendo did not want to brand their console as a video games system. So the initial sets came bundled with a robot called Robotic Operating Buddy (R.O.B.) as well as a light gun called the Zapper.

The initial release of the NES came on October 18, 1985 when 100,000 units were set loose on New York City. Nintendo, aware of retailers' concerns with carrying yet another game system, offered to purchase back any unsold units, therefore putting all of the financial risk on themselves. The system flew off the shelves and by the time of the nationwide release in February of 1986, 90,000 of those initial units had been sold.

Before long the system was a worldwide success and Nintendo found themselves at the forefront of the gaming industry. Whereas a few years prior Atari had been synonymous with gaming, Nintendo now held that mantle. Kids did not play video games, they played Nintendo.

One of the pack-in games for the initial release was Super Mario Bros., the game that more or less created the platform genre and served as the introduction to gaming for an entire generation of American youth.

Apart from the overwhelming success of Super Mario, many other game series which continue to exist today began their life on the Nintendo, including The Legend of Zelda, Final Fantasy, Metroid, Kirby and many others.

In order to maintain strict control over the games market, Nintendo placed inside the NES a chip known as the 10NES, which acted as copy protection for the console. In order to legally manufacture a game for the NES a company had to submit their game to Nintendo who was the sole manufacturer of cartridges for their system.

Some crafty third party vendors devised methods for bypassing the protection scheme and released unlicensed cartridges for the system. However, Nintendo was not shy about taking companies to court for unapproved usage of their system and companies such as Tengen and Galoob found themselves facing the infamous Nintendo legal staff.

As the NES aged, Nintendo felt that they needed to expand their influence. Remembering the success of their earlier Game and Watch systems, Nintendo set out to create a hand held gaming system.

The result of this was the Game Boy, a pocket sized gaming console that had graphics comparable to the NES, though on a 2 color screen that lacked backlighting. The vast library of games as well as the inclusion of some of Nintendo's flagship titles helped the Game Boy dominate the hand held market even after competitors released machines that were more impressive from a technical standpoint.

Nintendo's control of the home market was so strong that even after more advanced systems had been created, (namely the TurboGrafx-16 and Genesis, known overseas as the PC-Engine and Megadrive) many retailers held off on stocking them.

However, Nintendo was not content to rest on their laurels and in 1990 they released the Super Nintendo Entertainment System (Super FamiCom in Japan). The SNES was more powerful than the NES and ushered in the 16-bit era.

Though Nintendo maintained their lead, they began to feel the bite as Sega began to draw players away from Nintendo. This was never more so the case than the release of Mortal Kombat for their respective systems.

Mortal Kombat was a sleeper hit at the arcades, a graphically violent fighting game that involved the killing of your opponent in gruesome and detailed methods. When the time came to release the game to the home market, Nintendo refused to budge on their "no blood" censorship policy.

As a result the Sega version of the game outsold the SNES version by 3 to 1, even though Nintendo's console offered better graphics and sound. It was becoming apparent that Nintendo was not moving forward and progressing with the wants and needs of their audience.

On December 9, 1993, congressmen Herb Kohl and Joe Lieberman held Congressional hearings on video game violence. As a result of this hearing, the Entertainment Software Rating Board (ESRB) was created.

Because a ratings system was now in place for games, Nintendo allowed the adaptation of Mortal Kombat II to reach the SNES unmolested from its arcade form. This version outsold the Sega release by a substantial margin.

As time wore on, the move towards 32-bit gaming and 3-D hardware became inevitable. Not wanting to be left behind by the next generation of games, Nintendo sought to both extend the life of the SNES and work on a new console that would fill the needs of modern gamers.

Nintendo had received assistance from Ken Kutaragi at Sony when choosing the sound processor for the SNES. In the end they had settled for the Sony SPC-700. Because of the connections they had formed when making this decision, Nintendo approached Sony to see about creating a CD-ROM add-on for the SNES.

This addition was to come in two stages, the first being an add-on for the SNES, the second was to be a brand new console that utilized both Nintendo and Sony's hardware and upped the ante for what a home system could do.

Nintendo found themselves unhappy with the terms of the contract they had signed with Sony, feeling that Sony retained too much control over the titles made in the SNES-CD format. Because of this they began working in the background with Philips to the same ends.

At the 1991 CES, Sony was shocked to find that Nintendo did not announce their partnership, but instead announced their partnering with Philips. This was an unforeseen and stinging blow to Sony.

This move turned out to be an enormous mistake for Nintendo, as the wrath of Sony played out in the next generation of consoles and Nintendo found their control of the market slipping away. Nintendo's joint venture with Philips, the CD-i was a complete failure. Nintendo entered into lawsuits to prevent Sony from continuing on with their project, but ultimately it came to fruition.

The codename of their original joint venture? The Playstation.


EuroYank - Virginia Hoge said...

Now how did Nike get started and why are they so cheap to produce, about $1.99 a pair and sell for about $100 a pair? Where is the profit going to certainly not to the workers or the unions or to taxes or factories hmmmm?

E said...

I don't know a whole lot about Nike, but then again I more or less loathe professional sports and the whole cult of celebrity that goes with it.

As for the $1.99 to $100 ratio...Some would point to that as a prime example of the free market system. Others would call it disgusting.

I think I can determine from your tone which side you fall on. ;)

EuroYank - Virginia Hoge said...

I was coughing when I said it!

E said...

Turning left and coughing, perchance? Seems that's how the big companies have us nowadays. :(