The Ultimate History of Video Games: From Pong to Pokémon and Beyond—The Story Behind the Craze That Touched Our Lives and Changed the World (48 page)

The Master System was the most expensive of the trio, selling for about $10 more than a similarly equipped NES. The NES Control Deck, which included the console, two controllers, and a
Super Mario Bros.
cartridge, sold for $129.95; the basic Master System package sold for $139. The Nintendo Action Set, which included everything in the Control Deck packaging plus the “Zapper” light gun and the game
Duck Hunt
, sold for $149, as did the Master System and gun set, which included the “Light Phaser” and the game
Safari Hunt.

Nintendo had several advantages right from the start. The marketing clout Nintendo received from its association with Worlds of Wonder opened doors to retailers, which remained closed to Sega. Anyone who wanted to sell Teddy Ruxpin and Laser Tag, including Sears and Toys “R” Us, was going to hear about the Nintendo Entertainment System.

Nintendo also had a stronger identity. In 1981, the biggest year of arcades,
Donkey Kong
was second only to
Pac-Man
in popularity. A
Donkey Kong
cartoon show had aired on television, and Nintendo made succeeding games that featured Donkey
Kong and Mario as heroes. Also, Nintendo arcade games all looked very similar. They had similar cabinet designs, the same style of art, and often the same themes. When Nintendo broke from its traditional Mario-style game with
Punch Out
in 1983,
Donkey Kong
could still be seen sitting in the audience. By doing this, Nintendo established an identity and created mascots that would remain valuable through the next decade. Though Sega broke into the U.S. arcade market before Nintendo did and had more games in its library, no theme ran throughout these games. They included everything from race cars to jet fighters.

Nintendo’s biggest advantage was its library of games, and the advantage was apparent right from the start.
Super Mario Bros.
was more popular in arcades than
Hang On
, and Nintendo did a much better job of capturing its game in the home version. People went to stores asking for the “new video game system that plays that Mario game.” Very few people ever seemed aware of the
Hang On
cartridge.

Nintendo’s software advantage ran deeper than just the packed-in game. With
Donkey Kong, Donkey Kong Junior, Golf
, and
Popeye
, Nintendo had a substantial list of its own arcade games. Internally developed products, later referred to as “first-party” games, would eventually become a defining component in the operation of a video game company.

Hiroshi Yamauchi recognized the importance of setting up strong relationships with successful game publishers and arranged exclusive partnerships with Bandai, Capcom, Hudson, Konami, Namco, and Taito. (Although Bandai [a leading Japanese toy manufacturer], Taito [publisher of
Space Invaders
], and Namco [publisher of
Pac-Man
] were the most respected names at the start, Capcom and Konami eventually emerged as Nintendo’s most influential partners during the 1980s.)

Shortly after the NES’s national launch, Capcom released home versions of such arcade games as
Trojan, Ghosts ’N Goblins
, and
1942.
The text in many of these games was hastily translated and often contained grammatical errors.

Although several top Japanese game companies signed licensing agreements with Nintendo, the American companies showed little interest. Game publishers such as Sierra On-Line, Broderbund, and Electronic Arts were more interested in making games for computers than for consoles, and toy companies like Milton Bradley and Mattel had left the industry entirely.

One interesting twist from the early days of Nintendo occurred when Lincoln and Arakawa visited Activision. They demonstrated the NES and discussed their business model and how they planned to avoid the traps that destroyed Atari. One of the executives at the meeting was Greg Fischbach, vice president of Activision’s international group. Fischbach approached Arakawa after the meeting, and the two men discussed Nintendo’s licensing deal. Not long after the meeting, Arakawa received a call letting him know that Activision was not interested in making games for the NES.

One reason companies would not sign licensing agreements with Nintendo was that the terms of the agreement seemed entirely one-sided. Yamauchi had analyzed Atari’s downfall and decided that Atari had allowed it to happen by letting the market flood with mediocre games. To prevent this from happening to Nintendo, Yamauchi implemented strict controls. Atari was caught off guard when companies like Activision and Imagic began making games for the 2600. To prevent this from happening to his system, Yamauchi protected it with a security chip that locked out unauthorized cartridges. This meant that the only way to make games for the NES was to allow Nintendo to manufacture them, and Nintendo maintained final authority in deciding which games would be manufactured and in what quantities.

At the same time that he courted established companies, Arakawa was not entirely cooperative with the lesser-known companies that approached him. When approached by small design houses, he sometimes authorized companies to make games for the NES without giving them the design specifications they needed to understand the system.

The first American company to sign a licensing agreement with Nintendo was Acclaim Entertainment. The agreement was signed in 1988. Amazingly, Acclaim got the agreement before it ever published a game.

Three ex-Activision executives—Jim Scoroposki, Rob Holmes, and Greg Fischbach—founded Acclaim. Fischbach, the vice president who wrote the memo cautioning against involvement with Nintendo, left the company in 1986 and moved to New York to take a job with RCA Records as president of RCA International. When the company was bought out seven months later, Fischbach lost his job.

During his tenure with RCA, Fischbach kept in touch with Holmes and Scoroposki and met with Scoroposki socially. One day over lunch, Scoroposki mentioned Nintendo. He had visited the Nintendo booth while attending the Winter CES in Las Vegas, and had come to the conclusion that the company really might restart the video game business. He believed that Nintendo might sell two or three million NES decks and that retailers would be clamoring for software. They could meet that need by starting a company that would import popular titles from Japan.

Arakawa had not taken Fischbach’s telephone calls because he was attending the annual Toy Fair trade show in New York. Lincoln arranged a meeting with Fischbach in Arakawa’s hotel room. After a long discussion, Arakawa agreed to extend a license to Fischbach’s still-unnamed company, and Lincoln faxed the agreement the following day. Once he obtained the license, Fischbach flew to Japan to find some games.

As president of Activision’s international group, Fischbach had visited Japan several times and had several contacts in Tokyo. He began his search in Akihabara, Tokyo’s electronics district.

Fischbach went to Japan in March 1987 and returned with three games. In June, even before the games were ready for market, Fischbach, Scoroposki, and Holmes decided to make a big splash as they announced their new company at the Summer CES. They rented a huge booth at the show that they decorated with an enormous sign bearing their company’s new name—acclaim. They wanted to convince passing retailers that Acclaim would be a major force in the video game industry. The image Fischbach tried to create proved prophetic.

Scoroposki’s belief that licensing with Nintendo would be a lucrative move also proved true. Acclaim Entertainment released its first game in August 1987—a space combat game called
Star Voyager
that Fischbach jokingly referred to as “the game that never ends.” Nintendo required licensees to make a minimum order of 1,000 cartridges; Acclaim ended up selling more than 100,000 copies of
Star Voyager.
Acclaim exceeded 200,000 in sales of its next game,
3D World Runner
, and more than one million copies of
Tiger Heli
—a game that Taito released in Japan but decided against releasing in the United States.

Over the years, Acclaim became one of Nintendo’s most influential partners, and Fischbach never told Arakawa or Lincoln about the memo he had written after their visit to Activision. In 1989, however, the memo surfaced during a court battle between Atari Games (the coin-operated games division that Warner Communications did not sell to the Tramiels) and Nintendo.

Despite their hesitation to represent Nintendo, Worlds of Wonder salespeople soon discovered that the NES was their hottest product. The demand for Teddy Ruxpin in 1986 was at an all-time high; but by 1987, neither Teddy Ruxpin nor Laser Tag did very well. Nintendo, on the other hand, continued gaining momentum. Americans purchased 3 million NES consoles in 1986. Sales more than doubled the following year. This translated into huge commissions for toy representatives from Worlds of Wonder, but it also caused Nintendo to reconsider the relationship.