In 1983, the so-called “Great Video Game Crash” sent the console industry into a tailspin in the West. But in Japan that same year, their video game revolution had only begun thanks to a little company by the name of Nintendo.
Nintendo was no stranger to electronic gaming. They had pioneered light gun shooting galleries in Japan and in 1977, came out with the Color TV Game 6 which was a unit that played six versions of electronic tennis along with a sequel later on called the Color TV Game 15. Gumpei Yokoi, one of Nintendo’s engineers and who would be later known as the godfather of the Gameboy, had also come up with Nintendo’s first portable, calculator-sized gaming units called Game & Watch which were huge hits. By the time that Nintendo chief, Hiroshi Yamauchi, had seen the Atari VCS, he knew where he wanted to take the company’s fortunes.
But this wasn’t going to be some simple dip of its toes into the proverbial water. He wanted to obliterate the competition with a one-two punch in making something that was both cheaper and far more powerful. He’d also be setting into motion wheels that would eventually turn Nintendo’s profits to briefly top even the mighty Toyota as it took on the world beyond Japan and make Mario a household name right next to Mickey Mouse.
In a few ways, it would also be a system that would promote what Gumpei Yokoi’s own thoughts were when he designed the first Game & Watch. As quoted by David Sheff in his 1999 edition of Game Over: Press Start to Continue – “The Nintendo way of adapting technology is not to look for the state of the art but to utilize mature technology that can be mass-produced cheaply”. It’s a philosophy borne out of the late 70’s still echoed in systems like the Wii and the Wii U.
Masayaki Uemura, one of Nintendo’s engineers and one who was headhunted from Sharp (and who teamed up with Gumpei Yokoi on using Sharp’s new solar cells in Nintendo’s first light gun experiments and gaming centers several years earlier) was now working on the project that would change the world forever.
Uemura took a page out of the kind of playbook that Microsoft would revisit with its Xbox by talking to the actual people that made games for ideas on how to create the device Yamauchi wanted. In this case, it would be the engineers that worked on Nintendo’s arcade games. Unlike other machines that were often designed by technical engineers, Uemura felt that another approach was needed that would take his team closer to the ‘essence’ of what made a game a game.
It had to be fast which created the first hurdle — how to display the kind of action and color palette that would capture the imagination of players in the same way the arcades did? And how to do it cheaply? In the end, two chips were needed. One would be the brains controlling the interaction, the other would generate and control the actual visuals.
Nintendo’s engineers had the specifications, but now they needed help from a company whose business was to actually build the silicon. They weren’t easy to please — the specifications could change overnight and Nintendo’s requirements were extremely tough on the designers. But one company did step up to the plate. Ricoh was ready to do business but the low price Yamauchi demanded for each chip was absurd. They would only be able to make a profit from bulk sales. So, Yamauchi came back with a three million chip order over two years.
It was insane. No one video game system in Japan had ever sold as many. Even Nintendo’s Game 6 and Game 15 systems had only sold a million units each. But Ricoh took the deal and Nintendo had one of many contractors whose work would eventually end up in their new system. The list of companies that supplied Nintendo reads like a who’s who of electronics — Fuji, Mitsumi, and Sharp were among those that worked with the company to bring their system to life.
David Sheff also noted that the new system was also something of a “Trojan Horse”. In addition to the hardware needed to make the games go, it also had a few hidden talents of its own in the form of an expansion slot that could technically accommodate very PC-like features like a keyboard or even a modem. In a way, Yamauchi was sneaking a computer into people’s living rooms at an affordable price without actually coming out and calling it one.
The system was, at Yamauchi’s urging, stripped down only to the bare essentials. Extras could be added on later if needed via the expansion capability. It would also be cartridge driven. Yamauchi was convinced that the strength lay in the games that came out keeping the system “fresh” for years. It would also have “2,000 bytes of RAM” to work with with cartridges capable of holding “thirty-two times more computer code than an Atari cartridge.” It was incredibly ambitious stuff.
Even the design of the system was influenced by Yamauchi in, as David Sheff compares, as much as attention as Steve Jobs paid to the mouse for the Macintosh. Colors, whether it should have square or rounded edges, and even the controls were considered. The Wii’s control nunchuk has a speaker built-in; so did Nintendo’s original left controller.
The system launched at a price point of $100 instead of the $75 that Yamauchi wanted, but it was acceptable as it was still well below that of the competition. It also planted the seeds for the kind of approach that companies like Sega, NEC, SNK, and others entering with hardware would take — using the console as a “tool to sell software” where Yamauchi was convinced the profits were.
Japan’s “Family Computer” — the Famicom — had finally arrived. It exploded in sales clearing 500k units in the first two months after hitting stores in the summer of 1983.
Yet six months later a crucial issue was discovered when the system froze up with particular games. Instead of fixing them on a case-by-case basis, Yamauchi ordered a total recall that would cost the company millions and miss most of the crucial sales season during the Japanese New Year. And people still wanted it. New systems hit the shelves once the problem was identified, families rushed to stores to get it thanks to an affective marketing team up with stores and Nintendo, and Nintendo eventually couldn’t keep up with the demand. It was the success that Yamauchi had been looking for and far beyond the expectations of everyone else.
The Famicom had crushed the competition. Sheff notes in his book that “fourteen competing home video-game machine companies withdrew from the market” leaving Nintendo the virtually undisputed master of its own house. Sega had attempted to release its own system, the SG-1000, which didn’t do anywhere as well as Nintendo’s Famicom did.
It would be two more years until Nintendo’s system, with a new look and a bit of new tech (such as a recognizing a security chip in a cartridge to fight counterfeits), would finally arrive in 1985 on the shores of North America without Atari’s help. A deal was attempted in ’83 with the company that had ruled America’s home console scene before the Crash, but in the end, it turned out that Atari didn’t have the cash to buy the worldwide rights Nintendo hoped to open their way to the rest of the world. Its troubles had caught up to the company by the time contracts were drawn up towards the end of the year. By the time ’84 rolled around, Atari was desperately trying to stay afloat leaving Nintendo to pick its way through the rubble.
And they did. With a new look and a campaign to distinguish their console apart from the ones that had crashed and burned, Nintendo’s Advanced Video System (AVS) appeared at ’84’s Consumer Electronics Show (which are held in January) with a keyboard and other computer peripherals in an attempt to give it a new approach. Unfortunately, it didn’t generate much buzz. So Nintendo went back to the drawing board, came up with a new name (the Nintendo Entertainment System), and threw out the PC peripherals settling on a strange, mechanical piece of plastic called ROB the robot.
Nintendo literally hit the pavement in North America, starting in New York, drumming up interest store-by-store with booths and simply calling around for meetings with retailers throughout the city. Their advertisements were meticulously trimmed of anything that reminded people of Atari and the stigma it carried with “video games”. The new system was an “entertainment” system and it was argued to be so far away from what Atari did that the two didn’t even belong on the same continent. That was gist. And it was working.
Breaking into Wall Street with the help of a management and marketing veteran, Peter Main, Nintendo wooed analysts who followed the electronics and toy industries, creating a buzz that swept into the analysts working with retailers who then convinced their clients that Nintendo was something no one should miss out on. Orders started to pour in and in 1988 alone, the NES sold its way into history with 7 million systems.
Nintendo had finally broken out of Japan and into the West, re-igniting an industry and changing the world of gaming forever in ways no one could have expected. It might not have become the “computer” that Yamauchi intended to sneak into the homes of everyone, though I doubt he would have argued with what it created for Nintendo since then with the kind of recognition putting it…and its characters…on the same page as Walt Disney’s.