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The History of Nintendo Co., Ltd.
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Nintendo stands alone as the single most influential company in the video game industry. They have sold well over a billion video games, created some of the world's most popular icons, such as Mario and Donkey Kong, launched franchises like Zelda and Pokémon, put at least one home console system in more than 40% of all American households and grown to be one of the largest companies our world has ever seen, topping Disney, IBM, and Apple. The construction of this mega-company did not begin with the Nintendo Entertainment System, however. Rather, it began in 1889 with playing cards.
The company was originally created by Fusajiro under the name Nintendo Koppai, selling playing cards called "Hanafunda." These cards were handmade from specific tree barks, and came in 48-card, 12-suit decks. Games were played resembling poker, and the Japanese Mafia, the Yakuza, eventually began using them in high-stakes games, and Nintendo Koppai’s popularity began to grow.
In 1929 Fusajiro retired as a wealthy man, and Sekiryo Kaneda, his son in law, became the new president. In 1933, Nintendo Koppai merged to create Yamauchi Nintendo & Co. In 1949, Hiroshi Yamauchi, Sekiryo’s grandson, took office as the new president of Nintendo, skipping a generation, as Hiroshi’s father had left his family when Hiroshi was only five years old. Hiroshi Yamauchi remains the current president of Nintendo today. Two years after taking office, the name was changed to Nintendo Playing Cards Co. Ltd., the following year the headquarters was moved, and the year after that the cards began to be coated in a durable plastic. The changes Nintendo was making led to the beginning of a deal with Disney in 1959, where they were asked to produce playing cards with Disney characters printed on each. Selling over half a million packs that year alone, it was the first success Nintendo experienced on that large of a scale.
In 1962, Nintendo stock was released, and the following year, the name changed to what it remains today, Nintendo Co. Ltd. At this time they also began manufacturing games and toys instead of cards, but it wasn’t until 1969 that the games department was founded, and electronic products were beginning to see a future. These electronic products included the Nintendo Beam Gun, which they hired Sharp to help design solar cells for sensors detecting light. So with this new light gun, they made games out of solar cells on targets. Laser clay pigeon shooting simulations became a major success, with its national premiere crowded by press and TV crews. But in this heavily publicized live event, it malfunctioned. Nintendo probably would have been done for if it wasn't for a new employee, Takeda, who hid behind the control box and triggered the pigeons and score manually before anyone caught on. Looking like a complete success in front of the camera crews, the Laser Clay Shooting System became one of the largest forms of entertainment in all of Japan. With this success, Nintendo began to release different variations of this system, including 1974’s Wild Gunman, where an alley gunman was projected with 16mm film and you had to use the light gun to get him before he got you.
The next year, using the technology that the U.S. had seen in Atari & Magnavox home video game console systems, Nintendo once again changed directions. They had seen phenomenal success in everything they had previously marketed, but were still searching for their niche. Nintendo was licensed to sell Magnavox’s home console system, the Odyssey, but didn’t yet have the technology to design their own. But hoping to design their own original home console system, they teamed up with Mitsubishi and developed the Color TV Game 6, which they released in 1977. During that same year, the infamous Shigeru Miyamoto began working for Nintendo, creating the artwork to design arcade games by. Over the next few years, they released the Color TV Games 15 system, among a couple other smaller systems.
After experiencing some success with these consoles, Nintendo re-teamed with Sharp and began to release the Game and Watch games in 1980, which would be the first product to truly go worldwide. But Yamauchi didn’t want to pass the opportunity to have his hand in the increasing market of arcade games, and so they began designing what was most popular at the time, simple shoot-em-up style games. Miyamoto was a designer of the games that were popularizing this craze, but only because he was forced to be. He hated the games he was making, and when asked to design yet another, he declined and created Donkey Kong instead, which was not well-taken at all. A heavy-set carpenter named “Jumpman” was trying to save his girlfriend from a big monkey. But Nintendo decided to release it anyway, and it became the highest selling Coin operated game of the year, selling more than 65,000 in the U.S. alone.
During this time, Nintendo was developing their plans to release the Nintendo Entertainment System, but Atari, Commodore, Bandai, Takara and Sharp were all entering into that market as well. With this knowledge, Nintendo knew they had to design superior system at the same cost to be successful. And in 1983, the Famicom was released in Japan, and sold over 500,000 systems in the first two months, as the stores were assured that, although they made virtually no profit on the systems, they would make a fortune on the games. Despite one initial multi-million dollar recall in Japan for a malfunctioning chip causing the games to freeze, the success was overwhelming, and convinced Yamauchi to begin planning for the American version of the console.
The other systems that were being released at this time, however, were failing because of the poor quality of third party company's games. So with this in mind, Nintendo included a software licensing program, the Nintendo Seal of Quality. With this, Nintendo would only license games that met their standard of quality, giving confidence to the consumer so they could be assured that whatever they bought was going to be good. No other system could promise that.
When it came time to launch the American Nintendo Entertainment System, Nintendo turned to Atari for help. At that time, Atari controlled a large portion of the gaming industry, and Nintendo was prepared to give all rights to the NES to Atari for distribution everywhere outside of Japan. But Atari backed out of the deal at the last minute when they discovered that Coleco, another industry entering into the deal, was developing an illegal version of Donkey Kong for their home computer. Upon learning this, Atari abandoned the deal and Nintendo threatened to sue Coleco. But while that deal was being negotiated, Atari was losing about 2 million dollars every day, staying alive only by the funding of the 20% ownership of Warner Communications (Time Warner), and Nintendo was still growing rapidly. They had already produced several home console systems, and their latest, the Famicom was proving to be their most successful, bumping the video game market to 3.2 billion dollars. In addition to this, that same year, they released the two player coin-operated version of Mario Bros, which gave a name to Miyamoto's "Jumpman", who would go on to be the single most well known cartoon figure in history.
In 1984, the world of video games saw it's first moments of hype, as fans were beginning to camp outside of stores the night before new games were to be released, and now the problem was no longer trying to stay ahead of the competition, but simply producing enough for the consumers. So Yamauchi designated three different research and design groups to divide his employees into. Gunpei Yokoi headed the first, Masayuki Uemura, the second, and Takeda Genyo took the third. In this, Nintendo would take the route of making just a few extremely high quality games instead of releasing countless moderate ones. With this they invested several million dollars into the research, design, and advertising of each individual game, to create what no other system could offer: epic games and the phrase "replay-value." The distinction of design, innovation and quality put games by Nintendo on an entirely different playing field. Later this year, they created the genre of arcade gaming that involved the two screen coin-operated "VS. System". But despite revolutionary releases like Donkey Kong 3, Mike Tyson's Punch Out, and Excitebike, the market was entering into the "video game crash", and sales had fallen by nearly 40%.
But at the Consumer Electronics Show in January of 1985, it was announced that the Famicom was to be released in the U.S. with 25 initial games.
At the Winter Consumer Electronics Show in July it became final that the name would be the Nintendo Entertainment System, and that there would only be 20 games available at the time of its release. So that year in December, the NES made its first appearance. The release was restricted to New York only, but still sold almost 100,000 units. At this same time in Japan however, Miyamoto's Super Mario Bros made it's debut and became an instant classic that would eventually go on to sell over 40 million copies worldwide. But this success could not yet change the momentum of the falling market, as it reached just 800 million dollars, a quarter of what it was two years earlier.
Hoping to change, Nintendo released the NES worldwide in 1986 with 15 compatible cartridges. The NES was by far the most successful system in the U.S. that year, selling more than ten times the amount of consoles as the runner-up. They had also began selling the Famicom Disk System in Japan, where the games were run on disks instead of cartridges to allow the re-use of the disks. But when piracy became an issue, the system was abandoned. During its last days of use however, one notable game was designed for it. Metroid was released only in this format, but never received any attention in Japan. After the abandonment of the disk drive, however, Nintendo decided to convert Metroid to cartridge format for the U.S. and Europe anyway. Instead of completely scrapping the project, it became one of the biggest blockbusters in gaming history. During that same year Nintendo's home console's saw the release of the Japanese version of Miyamoto's Super Mario Bros 2, as well as Mario Bros, his first game in the Zelda series and the first appearance of Donkey Kong on the NES with numbers 1, 3, and Donkey Kong Jr. Beyond Miyamoto's new additions to the gaming world, Dragon Quest became the first home console RPG, and classics such as Kid Icarus and Ghosts 'n Goblins were released. But despite all of this, the market continued to decline and reached a new low of 100 million dollars.
The popularity held strong through these times though, and by 1987 the NES was the number one selling toy in the U.S. and Zelda became the second video game in history, after Super Mario Bros, to sell over a million copies. During that year, Zelda II The Adventures of Link was released for the Famicom and Gunpei Yokoi unveiled a prototype of the Game Boy. In addition to that, Dragon Quest II, Castlevania, Megaman, Wizards and Warriors, Final Fantasy, RC Pro-Am, and a variety of other blockbusters were released, finally bringing sales back up to 430 million that year. And out of the 4.1 million home console systems sold that year, more than 3 million were Nintendos.
The popularity only increased in 1988 as the first Nintendo Power magazine was published in July, which at that time had about seventy Nintendo titles to review. The main one, making the front cover of the premiere issue was 1988's biggest release outside of Japan, the American/European version of Super Mario Bros 2. This was an entirely different game from the 1986 Famicom version of Super Mario Bros 2 however. Nintendo of America bought the innovative 1987 title, Dream Factory: Doki Doki Panic, converted all the characters to the Mario crew, detailed a few other minor graphical changes, and sold over ten million copies with a geographically limited distribution. Inside of Japan, the hype for games was still growing as well, proving by the epic release of Dragon Quest III. Released in Japan on February 10th, a weekday, the schools were empty as lines formed for more than three city blocks outside of every store that was predicted to carry it. When it sold out before the lines had emptied, violence and theft broke out in attempt to claim a copy that was otherwise unnattainable, and the Japanese government was forced to make revisions to its laws. It became that official that no Dragon Quest game could be released on except for on designated holidays and Sundays. This popularity pushed seven million sales of the NES that year, and one third of all homes in Japan and the U.S. owned at least one console, which was competing with the total number of VCR's owned (all brands combined). By the end of 1988, Nintendo controlled about 90% of the video gaming market, and with other releases like Blaster Master, Track 'n' Field, Bubble Bobble, Wizards and Warriors 2, and plenty more, Nintendo had brought the total video game sales back up to 1.1 billion dollars- and this was only the beginning, as Nintendo of America president Minoru Arakawa began the tetris project for the upcoming Game Boy system. But with such a level of success, every competitor tried their shot at stealing some of it.
Atari took Nintendo to court claiming they had developed an illegal monopoly on the entire video game industry, primarily from developing the technology of a computer chip lockout preventing unlicensed developers to sell NES games. This was Nintendo's initial strategy of keeping all games on a higher level of quality, which no other system was capable of doing- and the Federal Trade Commission cleared Nintendo from all charges. So unable to design games, third party developers begin to develop controllers, such as Camerica's Freedom Stick. As these broke patents, Nintendo legally forced all these to be halted as well. Nintendo had become the absolute pinacle of the market that no other company could compete with on any level regardless of the investment. It was then that Apple Computer president, Michael Spindel was asked what their largest threat was, and answered simply, "Nintendo."
1989 was a colasal year that witnessed even greater popularity as the Game Boy was released with Tetris, the Super Famicom was announced (which was originally intended to be backwards compatible with the NES), Super Mario Land 1 was released, eventually selling over 14 million copies, and Nintendo Power became the most subscribed magazine in it's age catagory. Not to mention that the Universal Studios blockbuster staring Fred Savage and Christian Slater, The Wizard, built up to one sceene, a Nintendo World Championship competition where Super Mario Bros 3 made an epic debut. This game would not be released until the following year however, and so the hype and popularity created a long buzz that carried on for months. And this mega-advertising was not only free for Nintendo, but they were nicely compensated for allowing Universal Studios to advertise Nintendo characters and games throughout the movie. This caused another 9.1 million NES systems to sell that year, which put at least one console in about half of all the homes in America and Japan, and again kept the market on its incline, reaching 2.3 billion dollars. It was then that U.S. studies were conducted showing that Miyamoto's Mario had become much more widely known than any other fictional character in history, including both Bugs Bunny and Mickey Mouse.
But competition was for the first time becoming an issue. NEC's 16-bit graphic PC-Engine (TurboGrafx-16), and Atari's color handheld system, the Lynx, were both released that same year, but the pricing design of the games didn't pull many people away from their loyalty to Nintendo. Later that year, Sega's efforts to take a larger portion of the market with their Genesis (Europe's version was known as the Mega Drive) and Atari's new ability to bypass the lockout chip, under the name Tengen, began to take a portion of both the system and game markets. Taking 40 million dollars per year from Nintendo's game market with titles like RBI Baseball, Klax, Pac Man and Mrs. Pac Man, Tengen was in violation of patents, and so Nintendo simply informed the retailers that were carrying Tengen games that if they were to continue carrying them, they were no longer going to carry Nintendo. And with the now classic releases that year, such as Dragon Warrior (American version of Dragon Quest), Tetris, Ghosts and Goblins, Megaman 2, Teenage Mutant Ninja Turtles, Lolo, and so on, plus the upcoming release of Super Mario Bros 3, Tengen's retail supply was over. It didn't end without a court battle, but Nintendo won the trial. Around that same time Tengen had attempted to release Tetris for the NES with their bypass chip even though they weren't legally licensed to do so. Nintendo had received their license from the original creator of the game, Alexei Pajitnov, while Atari received theirs from Mirrorsoft, who never had any legal right to issue a license, and so all Tengen versions of Tetris were recalled with damages directed to the European company, Mirrorsoft.
Although competition was more or less trying only to take away the success of Nintendo to make room for themselves, Nintendo was still the dominant name in every aspect of the market, selling over 50 million games that year and claiming 16% of all money spent on toys.
In 1990, the market continued to grow and Nintendo claimed even more of the growing sales. This year was marked by the hugely anticipated release of Super Mario Bros 3 to the world outside of Japan, and the Super Famicom to Japan. These two releases, coming in the same year, were of the most anticipated releases of any form of entertainment to date. Super Mario Bros 3, after a long wait, sold 18 million copies and rang in 500 million dollars in U.S. revenue alone after its release, which, until 1993, was beaten only by Spielburg's E.T. It still holds the record as the top selling video game in history (excluding games that accompany a system). Then on November 21st, the Super Famicom was finally released in Japan, at which point the stores ran lotteries to determine which people were allowed to purchase it, as the demand outdid the supply to such an extent that any other method of sales would have erupted into a series of problems.
This year also hosted the Nintendo World Championship, based off the previous year's blockbuster, The Wizard. Players in 30 major cities across the U.S. battled it out through Super Mario Bros 1, Rad Racer, and Tetris, seeing who could achieve the highest score. This further popularized Nintendo, and although more 3rd party developers, such as Color Dreams, began producing more unlicensed NES games for their share of the market, Nintendo still controlled 85% of the industry. Another attempt to take control of some of the incentives of the video game market came this year from Galoob, by the help of Camerica, with the ever-popular Game Genie. Although Nintendo was able to temporarily prevent the Game Genie from making a U.S. release, claiming that it lessened the life of a game, it was distributed heavily in Japan. But there was seemingly nothing anyone could do that would take any control away from Nintendo, and by the help of releases like Super Mario World in Japan, Dragon Quest IV, Megaman 3, Dr. Mario, Contra, Little Nemo the Dream Master, TMNT 2, and so on, this market was still increasing. By the end of the year Nintendo had sold 7.5 million NES systems, 3.2 million Game Boy systems, over 70 million games, and pushed the market back up to 3.4 billion dollars.
In 1991, both Nintendo and their competition continued to grow. In September the SNES hit the shelves with a 25 million dollar advertising campaign and the innovative new Super Mario World, which eventually sold over 17 million copies. The entire following month, SNES system sales totalled 1 every 5 seconds. With that in addition to the release of the Game Boy to the U.S., the popularity had never been higher, and they passed Toyota to become the single most profitable company in all of Japan, outselling the entire Sony corporation by about 35%. But this marked numerous efforts to claim these profits by more diligent efforts than had previously been attempted.
It began with the New York State Attorney General suing Nintendo on monopolistic claims over the video game market, forcing Nintendo to give every customer a 5 dollar certificate for any licensed NES game. Next, America Video Entertainment sued Nintendo for the continued use of the lockout chip, preventing many unlicensed developers from producing games for the system. Then Galoob was granted permission to release the Game Genie in Canada, then the U.S.
Despite all these conflicts, Nintendo tried to move on with their next project, the SNES CD. Ever heard of the Sony PlayStation? Guess who made it. Originally Nintendo joined with Phillips and developed a CD-Rom system, but as Phillips was Sony's worst competitor and the partnership had minor conflicts with a previous deal, Sony would not allow this to happen, and had the legal power to do so. So instead of trashing the idea, Nintendo did what Sony had wanted them to, and developed the CD-Rom system with them. It was supposed to be a partnership, but once it was produced, Sony made it known that a 1988 deal they had made with Nintendo granted Sony all rights to CD based games. So once Nintendo had designed and created the PlayStation, Sony legally took all credit and profit. But their new agreement stated that Nintendo still must advertise the PlayStation, although they would get nothing for it. But Nintendo refused to do so, and was able avoid a lawsuit.
Although this loss had dropped Nintendo's control over the market to 79%, they were still the richest industry in all of Japan and that year sold 2.7 million NESs, 4 million SNESs, 25 million Game Boys, and weren't too shy of selling 80 million games. This was attributed to the still increasing quality of games such as Sim City, Actraiser, Megaman 4, Battletoads, Super Ghouls and Ghosts, Super Castlevania, three Final Fantasy titles, and numerous Game Boy classics, including Metroid 2.
1992 brought some innovative releases to the Nintendo, as they attempted to reclaim their slight loss of market power. In June, the SNES was released in Europe, and some unique concepts, the Super Scope and SNES Mouse with Mario Paint were both released. There were also Portable Fun Centers developed to help the Starlight Foundation with hospitalized children. If nothing else, it boosted their spirits by giving them free access to their favorite games, as well as some of the giant releases of the year, like the epic Zelda 3: A Link to the Past, Super Mario Kart, which was the highest selling SNES game ever, and the introduction of Wario in Super Mario Land 2, all of which were Miyamoto titles.
But like always, where there's money people try to take their cut, and Galoob and Camerica took Nintendo to trial demanding a hefty sum of money for Nintendo's delay of their release of the unlicensed Game Genie in the U.S. Though Nintendo had grounds to do so, Galoob and Camerica won 15 million dollars of what they were asking for. This was a last shot at some money for Camerica however, as they went out of business shortly after, and Galoob began publishing advertisements in magazines, not to advertise for their Game Genie, but to advertise that they disliked Nintendo for asking that they not release their unlicensed product for their system, as it would only ruin the replay value of their games.
But Galoob's efforts didn't work as Nintendo had now grown even bigger than IBM, Apple, and Disney. They maintained their control over close to 80% of the market and brought in more revenue than every American movie industry combined. At this point they picked up the support of Electronic Arts, Lucas Arts, and Disney, who all began producing Nintendo games. During this time, Gunpei Yokoi, with his first research and development team began planning the production of a new style of home gaming console, the Virtual Boy.
But Sega released their CD system and Sony began to try to get back at Nintendo by designing games exclusively for Sega, as they had become Nintendo's primary competition. Instead of worrying about this, however, Nintendo simply announced the release of their Super FX Chip, raising the SNES's speed by nearly 300%. When nobody could compete, Sony realized that "we had to ally ourselves with Nintendo when we saw that it was going to be the 16-bit winner." So Sony made an agreement that put Nintendo in control of all games released for the soon-coming PlayStation.
When June came around, Nintendo President, Hiroshi Yamauchi bought the Seattle Mariners with the idea of eventually moving Nintendo's headquarters to Seattle. This was the first time in history that a Major League Baseball team was allowed ownership outside of North America. But in the mean time, Nintendo's success was apparent all over the world, as studies showed that the average child now spent more time playing Nintendo than watching Television, and it's no wonder with the releases of the year. Zelda 3, Mario Paint, Super Mario Kart, Super Mario Land 2, Street Fighter 2, Dragon Quest V, Star Wars, Maniac Mansion, TMNT 3, numerous Megaman and Final Fantasy titles, and countless other now-classic titles.
In 1993, Nintendo released the first game that took advantage of their new Super FX Chip. Miyamoto's Star Fox (European title: Star Wing). But even bigger than this, the total sales for Miamoto's Mario titles had broken 100 million, and to celebrate this, Mario Allstars, a collection of the 4 different Mario games was released (SMB1, both versions of SMB2, and SMB3), all with improved graphics and sound. If this wasn't enough, in August, Nintendo made the announcement that they would be teaming up with Silicon Graphics to develop a new revolutionary 64-bit system named Project Reality. Running at 100Mhz, it would be history's first home console with the ability to create smoothly rendered realistic three dimensional environments. But this wouldn't come until 1995, and so in attempt to tame the hype, Nintendo re-released the orignal NES in a smaller, top-loading, redesigned form in Japan and the U.S. It came bundled with both Final Fantasy 1 and 2 and kept the yearly sales of the system over a million for yet another year.
Miyamoto had two big releases on Game Boy this year as well, as the first Zelda title for the system, Zelda 4: Link's Awakening made its appearance, and Super Wario Land, staring Wario as the hero was released as well. Attempting to take a part of the Street Fighter 2 success, Mortal Kombat was able to achieve a significant deal of success- but as the game's only real notable quality was excessive blood and gore, Nintendo's less gory version was heavily outsold by Sega's blood-fest.
At the time, Nintendo was still planning to release the SNES CD with Phillips with a new Zelda title and a Street Fighter 2 sequel, but by the end of the year they announced that it wasn't coming. The delays that Nintendo had experienced allowed Panasonic's 3DO and Atari's Jaguar, designed by IBM, to be released first. So instead they released more games featuring the Super FX chip such as Stunt Race FX and the celebrated Super Mario Allstars. Other important releases of the year which kept Nintendo's share of the market close to 80% included Secret of Mana, Lufia, Street Fighter 2 Turbo, Mortal Kombat, Prince of Persia, SNES's version of Star Wars, Super Famicom remakes of the first two Dragon Quest titles, the Japanese version of Breath of Fire, multiple Megaman titles, and the obvious Miyamoto titles, Super Wario Land, Starfox, and Zelda 4.
1994 was a year of innovation, landmarks, and a couple changes. Howard Lincoln achieved a new spot as chairman of Nintendo of America and the Research and Development teams continued to produce original and innovative products. The release of the Super Game Boy gave players the ability to play their Game Boy games on their Super Nintendo in color, further popularizing Nintendo's handheld market. They then released the Gateway System, which was a mounted SNES system in airplanes that gave gaming access to travelers, and was used by more than 40 million different people. They also announced that the 64-bit system they were developing would use cartridges instead of CD's. For better or worse, this caught excessive attention in the media, and the system was renamed the Nintendo Ultra 64. Ever look at the white box holding the early cartridges? That's what the NU64 stood for. Later in the year they released the Exertainment System, which was an exercise bike with an integrated SNES.
In addition to this, Nintendo celebrated the sale of their billionth game and their release of the final NES cartridge, Wario's Woods. The technology of their SNES games was also climbing even higher. Donkey Kong Country was the epitome of this, using Advanced Computer Modeling to feature graphics rendered to an extent that they rivaled the upcoming 32-bit graphic system releases by Sega and Sony. The majority of the latest games featuring the Super FX chip now harnessed the technology that more than doubled the speed of what was previously attainable, labeled the Super FX 2 chip.
Outside of this, Gunpei Yokoi's new 32-bit Virtual Boy was beginning to receive press coverage. The immediate response of all media was disappointment. But as the year passed and more games were previewed at exhibits, the responses began to turn. Nintendo's overall popularity, however, was still on a steady incline as the year produced several now-mainstream releases, such as Super Metroid, Super Street Fighter 2, Breath of Fire 1 to the U.S., the sequel to Japan, and the top selling game of the year, Donkey Kong Country. All of this overshadowed Sega's joining into the 32-bit market with their 32X and kept the buzz at the 16-bit level.
1995 brought the rise of Nintendo's largest competitor to date, Sony PlayStation. But while this was happening, Nintendo and Silicon Graphics were finishing the new 64-bit system. When the Nintendo Ultra was completed in October, an April 1996 release date was announced. They began showing off the revolutionary new graphics and analog "3d-stick" in exhibits across Japan. Previews of Super Mario 64, Star Fox 64, Super Mario Kart 64, and, as it was known by at the time, Zelda 64. Not only did these games far exceed all viewers hopes of the new system's capabilities, but Yamauchi announced the N64 Disk Drive as the solution to the world's love for CDs.
The N64 Disk Drive would be the world's first writable bulk data storage device released for any console. With 64 megabytes, each disk contained more than five times the available information of a standard N64 cartridge, and in addition to that, it would run at a speed of more than three times that of the soon-to-come Sony PlayStation. The N64 Disk Drive also featured a 4 megabyte RDRAM upgrade, a real-time clock, a 56k modem, and the ability to be either self-bootable or run in conjunction with another cartridge. So in this, games could be designed either for this system alone, or used as an accessory to an already existing game, which was one of the primary intentions of the system. No longer would players have to buy the new sports titles every year, as a cheap and simple expansion disk could update all the years events, statistics, and information onto their old game. The real time clock would allow for extensive simulation games that could continue to play while the system is off. If this sounds a little like Animal Crossing, this was the idea. But in addition to that, the system could be used in conjunction with other titles as an upgrade, like in Ocarina of Time giving Link something new to explore or discover. Remember the Zelda Master Quest released with Wind Waker on Game Cube? It was the expanded version released on the N64 Disk Drive in Japan. Though this system featured vast new innovation and it's Japanese release set the foundation for today's technology, it never made it to the states.
Instead, Nintendo was more focussed on their new quarter ownership in Rare and their development of the Virtual Boy. With Rare, Nintendo continued on their streak of releasing games with Advanced Computer Modeling for the SNES, such as Killer Instinct and the sequel to Donkey Kong Country. Other games with ACM technology were previewed that year at electronics shows, including Star Fox 2, which was never actually released, but further fueled the buzz that the graphics were creating.
On the 21st of July, Nintendo released their Virtual Boy in Japan, but right away sales were slow and never picked up after the release of the Sony PlayStation on September 9th. One week before that Sega had released their Saturn system and Panasonic was preparing to invest 100 million dollars into the technology to develop the 3DO M2 64-bit system. At that same time, Samsung was spreading Nintendo games to pirate companies, slowing their sales for the year and helping Sony to become a large competitor.
But all in all Nintendo still managed to have a decent year. Despite their failed Virtual Boy system and struggles with Sony, Samsung, and competing companies, they released numerous games to keep them on top of the market. Chrono Trigger, Donkey Kong Country 2, Return of the Jedi, Megaman 7, Castlevania X, and Nintendo's final release in the regular series of both Dragon Quest and Final Fantasy, 6th installment of each, kept the spotlight on Nintendo for yet another year.
In 1996 Nintendo and Sony continued battling for market control, and regardless of the technologically superior projects that were being released by Nintendo, major video game producer, Square, left them for Sony, motivated by the ease of developing games on a CD-Rom. On February 1st, Nintendo announced that their already completed 64-bit project would be named the Nintendo 64 and set the U.S. release date for September 30th. Nine days after that announcement however, is when Square broke off their long-time solo commitment to Nintendo and cancelled their production of Final Fantasy VII for the N64.
Although this was devastating to Nintendo, when June 23rd brought the launch of the Nintendo 64 in Japan, it sold over 500,000 units before the day was over. The initial popularity was astonishing, as the system was breaking records with the availability of just two games. When October 1st finally came, the overly anticipated U.S. release made quite an impact, selling more systems the first week than Sony's PlayStation sold during its first thirteen. The entire shipment of 350,000 systems sold out in less than three days.
There were at that time, only two games that could be played on the system, both of which were designed by Miyamoto. Pilotwings 64, and Super Mario 64, the latter instantly becoming regarded as the "best video game ever" by most electronic and gaming magazines. Beyond the initial impact of the Nintendo 64, the SNES had two mega-hits during that same time, again, both Miyamoto titles, Super Mario RPG and Donkey Kong Country 3, keeping the 16-bit popularity alive. The handheld market was also maintained as the Game Boy Pocket was released in early August and the popular Tamagotchi game made its Game Boy debut, renewing the popularity of the system and motivating other companies to begin producing games for it again. But on the 15th of August, Gunpei Yokoi, who had headed Nintendo's number one research and development team, helped Miyamoto develop the original Donkey Kong, had a hand in the development of most systems Nintendo had made, and was the primary inventor behind the Game Boy, Game and Watch, and Virtual Boy, left Nintendo after nearly three decades of employment.
The following year, on October 4th, Gunpei Yokoi was pronounced dead after a car accident. While stepping out of his car to inspect damage following a minor wreck, he was struck and killed by another car. At 56 years old, he was regarded as one of the top three most influential people in the video game industry that had ever lived. But 1997 also saw new beginnings. The European release of the Nintendo 64 came on March 1st, and the Japanese debut of Pocket Monsters (Pokémon) for Game Boy posted new record sales, more than doubling PlayStation's Final Fantasy VII, which sold 2 million copies within the first 3 days of its January release. But PlayStation was still growing, having sold 3.2 million systems the previous year, and through 1997 was approaching 20 million total sales since its release. This would not hinder the popularity of the Nintendo 64, however, as the systems were unable to be produced fast enough to match the buyer's demand, selling out virtually everywhere.
By this time, no other system could compete with the sales of Sony and Nintendo. Sega and Atari were failing and the Panasonic 3DO M2 technology was no longer going to be harnessed for a video game console. But this high point marked Nintendo, once again, as the target of numerous other companies. Though Nintendo's share of the market was slipping to Sony, they still controlled the majority, and therefore remained the most profitable target. The most notable of these occurred when Games City became the next Nintendo pirating company, selling back-up systems and CD's containing pirated Nintendo games. Although court order forced Games City to stop selling all these products, Nintendo was awarded a small sum of $100,000, which didn't even account for their losses.
At this same time, the European Economic Commission, believing that Nintendo still possessed an illegal monopoly, passed new laws preventing Nintendo from selling European software companies the privilege to develop Nintendo-compatible games. In addition to that, developers of N64 games were given the freedom to break contracts and no longer create games exclusively for the N64. If that wasn't enough, Nintendo was also prohibited from being the sole manufacturer of the cartridges.
With more and more boundaries being set on Nintendo, they were forced to again delay the N64 Disk Drive, announcing that it was still coming, but could no longer arrive until June of 1998. Sony saw this as an excellent opportunity to gain the upper hand in the market and began funding massive promotions and cutting prices, beginning a giant price war between the two. But when Nintendo released StarFox 64 on June 30th, it sold more than 300,000 copies in the first five days, setting a new U.S. record, and keeping Nintendo in the lead. Following this, Nintendo released numerous other extremely popular titles, such as Super Mario Kart 64 and Golden Eye on the N64 and Harvest Moon on the SNES, keeping the 16-bit genre alive for a while longer. This helped further their lead in the industry and brought the video game market to a new record high.
By 1998, market power in the industry was being divided among many companies, and though Nintendo was still on top, it was not by a great distance. That year, Sega announced their new 128-bit system, which would use a Microsoft Windows CE operating system, allowing for easier game conversions to and from the PC. Known as the Katana in Japan, it was shown in May with outstanding graphics and a save game card known as the Visual Memory System with a graphic screen of its own. They eventually announced a Japanese release date of November and changed the name to the Dreamcast, aiming for the U.S. release to come in early 1999. But not long after that, Sega president Hayao Nakayama resigned from his position creating some problems, and Sony announced that they were beginning to work on their next system, the PlayStation 2, with the goal of being simply better than the Dreamcast. They were teaming up with Toshiba to create a DVD based system running at 250MHz.
With the buzz of this new competition, and the unavoidable delays in the N64 Disk Drive, Nintendo decided to release the N64 Expansion Pack in the Disk Drive's stead, plugging into the expansion port in the console, doubling the system's main memory. With this expansion came the heavily anticipated Zelda: Ocarina of Time. It made the Guinness Book of World Records when it sold more than 325,000 copies in pre-sales alone, and by the end of the year, those sales had surpassed 2.5 million, making it one of the most highly anticipated games in history. In cartridge sales alone it grossed over 150 million dollars, outdoing the year's highest grossing movie by 36 million.
Around that same time, Nintendo announced the coming of the mega-popular Pokémon (Pocket Monsters) to the U.S. In September, Pokémon was released in two different editions and became Nintendo's fastest selling games yet. In addition to the Game Boy versions, Nintendo put out a portable Pokémon system called the Pocket Pikachu, which doubled as a pedometer, allowing the player to simply take a walk to strengthen their Pikachu.
The Game Boy system itself also saw renewed popularity, not just from Pokémon but from new versions of the console. On April 14th, the Game Boy Light was released, featuring a backlight, then came the Game Boy's camera and printer, then finally the Game Boy Color. With mass market popularity, numerous other companies tried to join in with a handheld system of their own. Tiger's Game.com and Game.com Pocket Pro, Bandai's WonderSwan, and SNK's Neo Geo Pocket all came into the market, but none found the success they were hoping for.
As the competition could not disrupt the growth of Nintendo, emulations began to become available, allowing the ability to play the games on PCs, making distribution of them not only free, but convenient as well. But despite this and all other attempts to take a share of Nintendo's success, they continued to grow, pressing the market up another 30% from the previous year's record high.
February 14th of 1999 brought the announcement that Nintendo of America president, Howard Lincoln, was retiring. This, however, was overshadowed by the announcement that Nintendo had recently teamed up with IBM and was in the process of developing their new 400MHz system with optical disk technology, code-named Dolphin, and that they were also working on a new 32-bit Game Boy Advance system. Not long after this, Microsoft's turn for an announcement had come, claiming that they too were going to begin developing their own home console system, code named Xbox. Not wanting to be left out of the hype, Sony announced their new system, running at 250MHz was well on the way, despite an estimated price tag of $800.
All the while, Sega needed no announcements as they had just set records, grossing 98 million dollars in the first 24 hours of their system's release, but as time went on, they were beginning to be left out of the hype. With pure intentions, Sega announced that there would be no light gun available for the system due to the shootings at Columbine High in Colorado. Popular titles like House of the Dead, which were expecting a light gun, were instead forced to be played with a standard controller and on-screen crosshairs. When third-party developers promised the release of light guns in Sega's place, Sega simply prevented all imported guns from operating. Though all intentions were pure, the popularity began to fall for this new system. Sega had began to take the route of Nintendo's more family oriented gaming, and the mainstream gamers were adopting the more unethical games, incorporating a high degree of sex and violence- hence Sony's growth and the soon-coming market share of Microsoft.
But as Sony came into rise as a major contender for market leadership, Nintendo finally caught a break as someone targeted Sony instead of them.
Connectix Corporation began producing the $149 Virtual Game Station, which played emulated PlayStation games on the Macintosh. Sony attempted to stop this, but failed. When it became known that Sony could not put an end to this, Bleem introduced a PlayStation emulator for IBM computers for just $19.95. Again Sony attempted to halt shipments, and again they failed.
By this time, emulation projects were heavily cutting into the profits of both Nintendo and Sony, and though Sony's was eventually resolved, they both continued on investing into growth. And Nintendo had no problem doing so as the success of the Pokémon franchise continued to grow with the release of Pokémon Pinball, Pokémon Yellow, and Pokémon Snap for the N64. Through the course of the year, Nintendo also released four giant Miyamoto titles; Mario Golf, Super Smash Bros., Donkey Kong 64, and Mario Party, all of which kept Nintendo slightly ahead of Sony.
In 2000, new additions to the market of video game consoles were being promised by VM Labs and Indrema, but they're completely forgotten when Sony's PlayStation 2 made it's Japanese debut on March 4th, breaking 1 million sales in the first 2 days, setting the new record. During this release Bill Gates announced the specs on the coming XBox. A Nvidia NV2a 250MHz graphics processor and 64 megs of RAM, put it just a touch above the PlayStation 2. But that didn't seem to dissuade many Sony fans from the new PlayStation, though it did end up having 2 initial errors. First came the defective memory card which prevented the viewing of DVDs all together, then came a mechanical problem which wasn't so much of a problem at all. They discovered that region 1 DVDs, which weren't designed to play on it, did in fact play, expanding the variety of the machine's use and what it could be advertised for.
By the time the PlayStation was ready to make its American debut, there had been many changes to avoid additional unexpected surprises. At that same time, Sega was releasing many new products for the Dreamcast with hopes of reviving their now-falling revenue. A digital camera, MP3 player, mouse, SegaNet Internet service, and the Bleemcast, allowing PlayStation games to be played on the Dreamcast. In addition to those products, both Sega and Nintendo began to release games controlled through voice recognition, the first of which were Sega's Seaman and Nintendo's Hey You Pikachu. But Sega had further plans for this, including free SegaNet based phone calls and online games with voice recognition, AlienFront being the first of these.
But Sega was still struggling with financial losses and the media was more concerned with Nintendo's new developments in the handheld market. 2000 marked the sale of Nintendo's 100 millionth Game Boy system, ending the year with over 110 million sold. As the Game Boy was responsible for 47% of all U.S. hardware system sales, it seemed appropriate for the media to be caught by it. Fetching a good portion of this attention was Kirby's Tilt 'n' Tumble for the Game Boy Color. With a built in motion detector, Kirby's movement on the screen was controlled by the game sensing the angle the Game Boy was being held. But even before this technology became available, Nintendo began releasing details of the Game Boy Advance, which would not only be backwards compatible with all the other Game Boy cartridges, but offer wireless internet, and connect to their coming "Dolphin" system. Behind this new hype, however, came countless companies once again attempting to take a cut of this success by developing unlicensed products for the Gameboy such as the Songboy.com, converting the Game Boy into an MP3 player.
What attention wasn't on Nintendo was on Sony, as the hype for their PlayStation 2 continued and the original PlayStation was re-released in a compact form, known as the PSone, with an optional traveling screen. But this didn't fill the anticipation of Sony's fans who only wanted the new system. But this became a problem when the initial shipment was cut in half, so that only 500,000 total consoles would be available at its release. And when September came around, the demand escalated to an extent that the system was fetching as much as $1000 on eBay.
With all attention on Nintendo and Sony, their market dominance began to push many other developers out of business. The pattern of many companies closing operations, such as SNK's NeoGeo systems (in the U.S.), did however motivate others to take advantage of the opening opportunity. One such attempt was Bandai's attempt at competing with the Game Boy, releasing their WonderSwan Color and marketing alongside Sony, allowing the system to be able to connect to the PlayStation 2.
While Nintendo had been holding out on their new system, people were beginning to become not only ansi, but disappointed that Nintendo's apparently finished system was not appearing at any shows or conventions. So, being renamed GameCube, after previous names Dolphin and StarCube, it was finally shown to select people from the press during the first day of Space World, and instead of using the mainstream CDs or DVDs, Nintendo used a proprietary optical disc with Matsushita technology. The system was immediately well taken, as the technology on all levels of the system exceeded both the PS2 and the expectations of the XBox. And to hold off the anticipation of its release, games on their currently available systems held all the slots in the rankings of the highest selling games of the year. Pokémon Stadium took honors as the highest selling console game of the year, followed by The Legend of Zelda: Majora's Mask, both for N64. In the handheld market, Pokémon Gold and Silver debuted on Game Boy Color and became the fastest-selling games of all time, selling a combined 1.4 million copies the first week and more than 6 million through December.
The following year, 2001, was a very busy year full of changes, growth, problems, innovation and celebrations. It marked both the 10th anniversary of Sega's Sonic, and the 20th anniversary of both Mario and Donkey Kong. The year began with Nintendo's executive vice president of sales and marketing, Peter Main, announcing his retirement after 15 years. Following this, the marketing continued in its path of becoming more and more competitive, as the industry was being further divided. Microsoft began to advertise and rumors about Sega began to arise, going as far as articles in New York Times claiming that Nintendo was negotiating purchasing the company for 2 billion dollars. Both Nintendo and Sega denied this, however, and in the mean time Sega's new innovation continued to grow as they began the craze of cell phone games in Japan, the Dreamcast became the first to release broadband Internet support, and they began producing modem-based games. One of the notable titles was the first online-compatible RPG, Phantasy Star Online. But not long after this, Sega of Europe announced that they were beginning the production of games for competing systems. On March 31st, they ceased the production of Dreamcast systems and quit the business of being a console developer. On March 16th, Sega President, Isao Okawa passed away and the CEO, Hideki Sato took his place.
But all along Sega had been overshadowed in particular by the heavy promotion of Sony, and now Microsoft, as Bill Gates showed the XBox for the first time at the Consumer Electronics Show in January. He also confirmed the initial game list, consisting of mainly violent and mature-audience games, but among them was Halo and Metal Gear Solid X, which were the first titles that truly promoted the system, which at the time was having more problems than just a game list. They didn't necessarily have all the rights to the name "X-Box", as it was already taken by the Florida company, XBox Technologies. But with all the wealth of Microsoft, this problem was not able to even delay their release.
But during this time, Sony and Nintendo were still both growing. The PlayStation 2 passed 10 million total unit sales more than three times as fast as their previous system and Nintendo continued to press their Game Boy. In January, they released the Game Boy Mobile Adapter in Japan, allowing the Game Boy online access, and 2 months later proclaimed June 11th as the North American launch date for the Game Boy Advance. And when that day came, it sold 500,000 copies in the first week, and broke a million in under six. In addition to that, four of the seventeen available games made the list of the top ten best-selling games of the month.
Sony's advertising had reached a new level, appearing on the big screen in multi-million dollar productions. They took the gaming industry to the theaters, as movies were made based on Tomb Raider, Final Fantasy, and Resident Evil. Trying to keep the XBox up with this competition, Microsoft teamed up with fast-food chain Taco Bell to try to publicize its release. Though it wasn't quite as effective of an approach as the movies, it did produce enough hype to publicize its coming release date, and was in fact more effective than the efforts of Sony's ABC television show, You Don't Know Jack PlayStation and PC Games, which was cancelled after just six episodes.
Though the video game industry was reaching new record highs, seemingly unrelated events were still restricting its growth. The September 11th terrorist attacks on the World Trade Center and Pentagon caused countless game developers and publishers to make changes to their upcoming products, delaying the majority greatly. The Nintendo GameCube system experienced the greatest impact of this, as it was released in Japan just three days later. Not too distant from these problems came the Columbine tragedy. Although Sega had done everything in their power to better the situation, fundamentally ruining their entire fan base in doing so, and Nintendo had always held a very high standard of family oriented games, the Columbine families took both of them to trial alongside 23 other video game publishers in a five billion dollar lawsuit.
But the three now-dominant companies, Nintendo, Sony, and Microsoft, continued on their path of progress, and on November 15th, after a few delays, Microsoft officially released the Xbox in the U.S. This was followed by the American launch of the Nintendo GameCube just three days later, which despite having slightly superior performance, was priced 100 dollars less than either the XBox or the PS2. This helped account for Nintendo's breaking of all previous U.S. sales records, becoming the new fastest-selling next generation hardware system. They rung in more than 98 million dollars in revenue from the console and accessories during the first day alone, and sold more than 500,000 units during the first week.
Through this introduction of massive competition coming from the dual launches of the Xbox and GameCube, Sony reported that its PS2 sales didn't fall, and by the end of 2001, there were 6 million PS2s in North America. Trying to capture more of the attention, Microsoft put the XBox online earlier than they had been planning, but there was virtually no point, as there would be no online play available for another year. At this same time, Sony's emulation problems were ended, as Bleem went out of business from the legal costs of battling Sony.
While Nintendo was designing new innovative products, such as the Q, a GameCube-DVD player hybrid, Sony and Microsoft were looking for an advantage that could put them ahead of the competition, and Microsoft found one. They began purchasing the rights to Sega titles before being released on Dreamcast, and making them exclusive XBox titles. Nintendo has produced their own exclusive titles all along, Sony achieved the exclusive dedication of third party developers, and now XBox was purchasing the rights to exclusive titles of their own.
With everything now lining up nearly even between the three, the style of games became the primary difference. Nintendo created the market as it stands today, but typically remains dedicated to high-quality family-oriented games. This left the unethical gaming market open for the dominance of Sony and Microsoft. And as the popularity has switched from Nintendo's classic style gaming to that of the new generation, incorporating sex and violence, Nintendo has held strong to its roots, taking a pay cut in doing so. Through this, PlayStation and XBox became heavily dominant. By the end of 2002, after an 84% increase from 2001, the global shipments of video game consoles reached nearly 42 million units. With the handheld market excluded, Sony's PS2 has become the most desired system, accounting for 63% of the total console sales, where the GameCube fetched 21% and the XBox, 16%. Though Sony captured the throne as king of the console sales, from the perspective of an artistic appreciation, distinguishing the caliber of games by the quality, innovation, and design, Nintendo still held all honors. And from that perspective, their decision to remain loyal to that outweighed the economic motivation to turn to the mainstream.
During 2003, however, the mainstream found its way back to Nintendo a little more, particularly during the holiday season. After the drop to the $99 price tag during the third quarter of 2003, the GameCube's console sales fetched some drastic gains, topping the fourth quarter of the previous year by about 70%. Though this was not enough to catch up with Sony, it gave them an edge for when the holiday season shopping came around and the flagship game of the year, Mario Kart: Double Dash was simultaniously being released. Within the first month and a half, sales had passed a million, and the next highest selling game on any system was about $600,000 behind. And that next highest selling game was for Nintendo as well, as was the third highest selling game. The 2003 holiday season was dominated by Nintendo's sales to the extent that Nintendo was the only company of the three to see any market growth at all during the course of the year, and that came in the form of 63% software gains and console sales to match. This was coupled with a 25% overall drop in Sony's market, which brought Nintendo one step closer to reclaiming leadership in the industry.
Of course the majority of Nintendo's success continued to come from the handheld market. The Game Boy Advance lead the market on all levels, selling nearly 2.5 million units in the U.S. in December alone. The year's sales for the Game Boy Advance topped the PlayStation 2 by nearly 2 million units.
This helped hush the rumors of Nintendo's retirement from the home console industry. And if that wasn't enough to put an end to them, Nintendo then announced that E3 would see 2 next generation systems in the near future. The newest Game Boy system with 2 screens and 3D capabilities surpassing the Nintendo 64, and the debut of the next home console system.
Since the invention of electronic gaming, Nintendo has been the single most influential creator in every moment of its history. And the grand era of Nintendo dates back to the Nintendo Entertainment System, launched in Japan in 1983, and America in 1985. As the most notable release by Nintendo, this home console system is history's most successful. With a Ricoh RP2A03G CPU based on the 6502 NMOS 8-bit processors, running at 1.7mhz, it had 5 sound channels, 256x240 resolution at 8 bit, and could produce 512 possible color combinations. Though it's speed and 32k ROM are now considered obsolete, the games it produced were a marvel on grounds of innovation. Ranging from 16k to 512k per game, what was limited in technology was more than compensated for in design. The NES remains the most successful video game system on all levels, with sales alone showing this, as more than 62 million consoles have found a home, and no system to date has produced or sold anywhere near the number games.
Though the market has since grown to develop into one of the largest industries in the world, Nintendo started it all with this system, which not only survived the video game crash in the mid-80s, but revived the industry, and they have since been the most dominant and influential name upon every new innovation.
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