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Old 05-19-2014, 07:51 AM   #1
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The Rise of Nintendo: A Story in 8 Bits

http://grantland.com/features/the-ri...games-history/

by Blake J. Harris on May 14, 2014


The following is an excerpt from Blake J. Harris’s new book, Console Wars. It has been slightly modified for this publication.

On September 23, 1889, just weeks before his thirtieth birthday, an entrepreneur named Fusajiro Yamauchi opened a small, rickety-looking shop in the heart of Kyoto. To attract the attention of passing rickshaws and wealthy denizens, he inscribed the name of his new enterprise on the storefront window: Nintendo, which had been selected by combining the kanji characters nin, ten, and do. Taken together, they meant roughly “leave luck to heaven” — though, like most successful entrepreneurs, Yamauchi found success by making his own luck. In an era where most businessmen were content to survive off the modest returns of regional mainstays such as sake, silk, and tea, he decided it was time to try something new. So instead of selling a conventional product, Fusajiro Yamauchi opted for a controversial one, a product that the Japanese government had legalized only five years earlier: playing cards.

In the heart of Kyoto, he and a small team of employees crafted paper from the bark of mulberry trees, mixed with soft clay, and then added the hanafuda card designs with inks made from berries and flower petals. Nintendo’s cards, particularly a series called Daitoryo (which featured an outline of Napoleon Bonaparte on the package), became the most successful in all of Kyoto.

After several decades of staggering success, Fusajiro Yamauchi retired in 1929 and was succeeded by his son-in-law Sekiryo Yamauchi, who ran Nintendo efficiently for nineteen years, but in 1948 he had a stroke and was forced to retire. With no male children, he offered Nintendo’s presidency to his grandson, Hiroshi, who was twenty-one and studying law at Waseda University. It didn’t take long for Hiroshi Yamauchi to make his presence known. He fired every manager that had been appointed by his grandfather and replaced them with young go-getters who he believed could usher Nintendo beyond its conservative past.

With innovation on his mind,Yamauchi branched out into a number of other, less lucrative endeavors, including an instant-rice company and a pay-by-the-hour “love hotel.” These disappointments led Yamauchi to the conclusion that Nintendo’s greatest asset was the meticulous distribution system that it had built over decades of selling playing cards. With such an intricate and expansive pipeline already in place, he narrowed his entrepreneurial scope to products that could be sold in toy and department stores and settled upon a new category called “videogames.”

Yamauchi wanted Nintendo to aggressively get into the videogame business, which was really two separate businesses: home consoles and coin-operated arcade games. He saw the potential in these industries and took the necessary steps for Nintendo to enter both.

Despite middling results from titles like Wild Gunman and Battle Shark, Yamauchi remained committed to his new vision and continued to allocate a vast amount of resources toward videogames. In 1977 Nintendo released a shoebox-sized orange console called the Color TV-Game 6, which played six slightly different versions of electronic tennis and was met with a mixed reception. Though the console managed to sell one million units, it ultimately lost money.

Nevertheless, Yamauchi remained undeterred. Nintendo continued to put out arcade games (striking out with duds like Monkey Magic and Block Fever) and also continued to release home consoles (like the Color TV-Game 15, which offered fifteen slightly different versions of electronic tennis).

By this point, Nintendo already had penetrated most of Japan, and so Yamauchi set his sights on the place where the videogame frenzy had started: America.



1. Arakawa



Yamauchi had dipped a toe into this red, white, and blue pool a few years earlier and was encouraged by the results. In the late 1970s Nintendo had begun working with a trading company that would export arcade cabinets to American distributors, who would in turn sell these games to vendors in the United States. Though the profits from this arrangement were minimal, Yamauchi believed that if he could cut out the trading companies and send over someone he trusted to grow Nintendo’s business organically, then there was a lot of money to be made.

The American market would be risky, tricky, and perpetually persnickety. There appeared to be only one man properly equipped for the challenge: Minoru Arakawa, a frustratingly shy but brilliant thirty-four-year-old MIT graduate. Not only did Arakawa possess the insight and intellect to open a U.S. division of Nintendo, but he was already living in North America and had an incalculable fondness for America (some of his most cherished memories had come from a post college cross-country trip he’d taken in a used Volkswagen bus).

In every way, Minoru Arakawa appeared to be the perfect candidate … except that he happened to be married to Yamauchi’s daughter, Yoko, who blamed Nintendo for turning her father callous. She simply refused to let her husband join Nintendo, as she did not want to watch history repeat itself.

Yamauchi initially proposed the idea to Arakawa in early 1980. Following a pleasant family dinner, Yamauchi spent two hours discussing his plans for the expansion of Nintendo and concluded by stating that the success of his plan hinged on Arakawa. Anticipating his daughter’s reluctance, Yamauchi explained that this American division would be a completely independent subsidiary. Arakawa wrestled with the decision as well as with the objections of his wife, who cautioned him that no matter what he accomplished, he would always be perceived as nothing more than the son-in-law. Arakawa decided that the opportunity was too good to pass up, and in May 1980 he and his wife left Vancouver to start Nintendo of America (NOA).

Arakawa and his wife spent their days at the office and their nights observing games and players at local arcades. They learned a lot this way, but no amount of knowledge could make up for the fact that for Nintendo to gain a foothold, they needed a strong sales network. So Arakawa set up a meeting with a couple of guys who he thought might be able to help: Al Stone and Ron Judy.


2. Stone and Judy


Al Stone and Ron Judy were old friends from the University of Washington, where they had lived in the same frat house and had been known to embark on promising get-rich-quick schemes together (like buying soon-to-be-discarded local wine cheaply and then reselling it to their college brethren with less sophisticated palates).

After graduating, they started a trucking business in Seattle called Chase Express. Chase struggled, and while they continued to invest in it and hope for a turnaround, they also began looking for alternative business opportunities.

They eventually found their answer, though it still involved big rigs. Through a friend in Hawaii, Ron Judy had been informed that a Japanese trading company was seeking a distributor to sell some arcade games made by Nintendo. Intrigued, he agreed to test the waters and received a crate containing a few arcade cabinets of Nintendo’s Space Fever.

Though the game was little more than a shameless rip-off of Taito’s Space Invaders, Judy got his brother-in-law to place the games in some of the taverns he owned in south Seattle. Much to his delight, the machines were quickly overrun with quarters, which convinced him and Stone that this was their future. They formed a distribution company called Far East Video and used their assets from the trucking industry to travel around the country and sell Nintendo games to bars, arcades, hotel lounges, and pizza parlors.




Space Fever
was followed by Space Launcher (underwhelming), which was followed by Space Firebird (disappointing), which was followed by a slew of unsuccessful non-space-themed games. After this string of mediocre misfires, Stone and Judy were ready to quit, and Arakawa couldn’t help but reconsider his new vocation. More than ever, Nintendo of America needed a megahit, like Pong or Pac-Man. And just when it appeared time was running out, Arakawa believed that he’d found what he needed: Radarscope.

At first glance, Radarscope may have appeared to be just another shoot-’em-up space game, but it distinguished itself with incredibly sharp graphics and an innovative 3-D perspective. After receiving positive feedback from test locations around the Seattle area, Arakawa invested much of NOA’s remaining resources in three thousand units.

But a few weeks later, before the rest of the arcade cabinets even arrived, Arakawa felt an ominous chill upon revisiting the test locations, where he noticed that nobody was playing his crucial new game. That foreboding was validated after the three thousand units finally arrived and Stone and Judy found that operators had little interest.

Radarscope was fun at first, the consensus appeared to be, but it lacked replay value.


3. Miyamoto


With so much invested in this game, the last remaining hope was for a designer in Japan to quickly create a game and send over processors with that new game to America, where NOA employees could swap out the motherboard and then repaint the arcade cabinets. This task was given to Shigeru Miyamoto, a floppy-haired first-time designer who believed that videogames should be treated with the same respect given to books, movies, and television shows. His efforts to elevate the art form were given a boost when he was informed that Nintendo was close to finalizing a licensing deal with King Features, enabling him to develop his game around the popular cartoon series Popeye the Sailor Man. Using those characters, he began crafting a game where Popeye must rescue his beloved Olive Oyl by hopping over obstacles tossed in his way by his obese archenemy, Bluto.

Shipments containing the code for Miyamoto’s new game began to arrive. Due to last-minute negotiation issues with King Features, Nintendo had lost the rights to Popeye, which forced Miyamoto to come up with something else. As a result, Arakawa, Stone, Judy, and a handful of warehouse employees didn’t know what to expect. They inserted the new processor into one of the thousands of unsold Radarscope machines and then watched the lights flicker as the words “Donkey Kong” came to life on the arcade screen. The initial impression was that this was a silly game with an even sillier name. Who would possibly want to play a game where a tiny red plumber must rescue his beloved princess by hopping over obstacles tossed in his way by an obese gorilla? Yet, with no remaining options, Stone and Judy set out across the country to sell it.

Never before had there been a quarter magnet quite like Donkey Kong. It was so successful, in fact, that it eventually attracted the attention of a major Hollywood studio, whose high-priced legal team believed that the game violated copyrights, and they threatened to crush Nintendo. To avoid this potentially crippling blow, Arakawa turned to the only lawyer he knew in Seattle: Howard Lincoln, an elegant, imposing former naval attorney whose only claim to fame was having modeled for Norman Rockwell’s painting The Scoutmaster when he was a child.


4. Lincoln


Lincoln had first crossed paths with Arakawa about one year earlier when Stone and Judy needed him to review their contract with Nintendo of America. After that, Lincoln slowly but surely took on the role of Arakawa’s consigliere, weighing in on any matter with legal ramifications. As Nintendo of America grew, Lincoln drew up new employment agreements, looked at various business deals, and handled some tough matters (like siccing the U.S. marshals on Donkey Kong counterfeiters). Through it all, Lincoln and Arakawa forged an unshakable friendship. Which is why Lincoln was the first person Arakawa contacted when, in April 1982, MCA Universal sent a telex to NCL explaining that Nintendo had forty-eight hours to hand over all profits from Donkey Kong due to the game’s copyright infringement on their 1933 classic King Kong.




It didn’t take long for them to realize that this was a high-stakes shakedown. Though never explicit, Universal’s ultimatum was simple: Settle or we’ll make life at Nintendo so difficult that the company will fold. The prudent thing to do was pay the ransom. But Lincoln had an ace tucked up his sleeve: in all of his research, there didn’t appear to be a single document indicating that Universal had trademarked King Kong, which would place the gorilla in the public domain. And in early 1983, Judge Robert W. Sweet sided with Nintendo. He concluded that they had not infringed and, as Lincoln had predicted earlier, he awarded Nintendo over $1 million in legal fees and damages.

The Donkey Kong fiasco-turned-feat caused many ripples, but three waves in particular were instrumental in creating the eventual tsunami that would be Nintendo. First, Lincoln became NOA’s senior vice president. Second the countersuit set the tone for the litigious stance that many would say later defined the company. And third — and most importantly — the verdict kept the Donkey cash flowing, providing Nintendo with a war chest at what would soon prove to be a crucial moment.


5. Borofsky and Associates


By the early 1980s, the videogame bonanza had become so lucrative that everyone wanted in. This included companies that had no business entering the market (like Purina), companies that didn’t understand the market (like Dunhill Electronics, whose Tax Avoiders allowed players to jockey past a maze of evil accountants and onerous IRS agents), and lowbrow outfits that polarized the market (like Mystique, whose flair for pornographic titles was highlighted by their 1982 anticlassic Custer’s Revenge, which follows a naked cowboy on his quest to rape Native American women). The marketplace was overrun by a glut of smut, muck, and mediocrity.

And just like that, the North American videogame industry ground to a halt. Hardware companies (like Atari) went bankrupt, software companies (like Sega) were sold for pennies on the dollar, and retailers (like Sears) vowed never to go into the business again. Meanwhile, Nintendo quietly glided through the bloody waters on a gorilla-shaped raft. The continuing cash flow from Donkey Kong enabled Arakawa, Stone, Judy, and Lincoln to dream of a new world order, one where NOA miraculously resurrected the industry and Nintendo reigned supreme. Not now, perhaps, but one day soon.

In Japan, however, that time had already come. Yamauchi’s large investment in R&D had paid off in the Family Computer. The Famicom, as it was commonly called, was an 8-bit console that stood head and shoulders above anything that had ever come before. It was released in July 1983 along with three games: Donkey Kong, Donkey Kong Jr., and Popeye, which Miyamoto ended up designing after licensing negotiations got back on track. The Famicom stumbled out of the gate but was soon rescued by heavy advertising and the release that September of Super Mario Bros. (another Miyamoto brainchild).




As sales soared to staggering heights, Yamauchi pressured his son-in-law to introduce the Famicom in America. Arakawa resisted, exercising patience. The U.S. market was still licking its wounds from the videogame crash, and releasing the right console at the wrong time would be a recipe for disaster. For this reason, he continued to rebuff the suggestion until 1984, when he was finally willing to consider the notion— but only if the console Nintendo of America sold looked nothing like a console at all.

This wolf-in-sheep’s-clothing logic led to the Advanced Video System (AVS). Though the guts of this machine were nearly identical to the Famicom’s, the AVS hardly resembled its foreign relative. It came with a computer keyboard, a musical keyboard, and a cassette recorder; and aesthetically, it was slim and sleek, with a subdued gray coloring that contrasted sharply with the Famicom’s peppy red and white palette. Nintendo’s AVS, the non-console console, was first introduced at the 1984 Winter Consumer Electronics Show. Arakawa simply wanted to gauge the market reaction, which was distressing: nothing but scoffs, sighs, and sob stories. Nobody there wanted anything to do with the AVS, except for a tanned man with piercing blue eyes who stared at the Advanced Video System as if it were the sword in the stone. He then introduced himself with an understated sureness that would have made even King Arthur jealous. His name was Sam Borofsky.

Borofsky ran Sam Borofsky Associates, a marketing and sales representative firm based in Manhattan. Back in the late seventies, they became one of the first firms to represent videogames, and at the height of the boom they had been responsible for over 30 percent of Atari’s sales. If Nintendo of America ever wanted retailers to reopen their doors, then these were the guys who ought to do the knocking.

From Borofsky’s end, the attraction was equally strong. Ever since Atari had imploded, he’d been scouring the country in search of the next big thing, and as he reviewed what Nintendo had to offer, he believed he had found it.

Arakawa, however, still needed convincing, which Borofsky was happy to provide. He spent months detailing the reasons for Atari’s downfall and outlining plans for a proposed launch. Meanwhile, Nintendo of America put another new costume on the Famicom, dressing it up as an all-in-one entertainment center for kids. The result of the rebranding effort was a clunky gray lunchbox-like contraption and, along with that, a new lexicon to differentiate it from its predecessors: cartridges were now dubbed Game Paks, the hardware was dubbed the Control Deck, and the entire videogame console was rechristened the Nintendo Entertainment System (NES). And to round out the renovation, the NES came with a pair of groundbreaking peripherals: a slick light-zapper gun and an amiable interactive robot named R.O.B.


6. The Launch



Focus groups suggested that the NES would be a colossal flop, R.O.B. kept malfunctioning during pitches, and the press showed no interest. Arakawa, however, remained undeterred. He temporarily relocated a handful of employees to the East Coast after leasing a warehouse in Hackensack, New Jersey, where Nintendo could house inventory, build in-store displays, and, most important, resemble a legitimate company to still-skeptical retailers. To keep tabs on the progress, Ron Judy made frequent visits to New York, often accompanied by Bruce Lowry, NOA’s bright and blustery VP of sales. Lowry was occasionally able to help Borofsky persuade the big toy chains. At the top of their wish list was Toys “R” Us, whose eventual decision to stock the NES provided Nintendo with much-needed momentum going into the launch.

On the morning of the big day, the Nintendo of America team gathered at FAO Schwarz, where Nintendo had paid for an elaborate window display and an attractive floor space that featured a small mountain of televisions with game footage playing. The moment of truth had finally arrived, and within moments of the store’s opening an excited customer eagerly approached the display, grabbing an NES and all fifteen of its games. The NOA team looked on, watching everything they had been working toward so suddenly come to fruition. It was a dream come true — until they were snapped back to reality upon learning that Customer #1 was actually just a competitor doing due diligence.

That Christmas, the NES was available in over five hundred stores. Though no staggering success, Nintendo managed to sell half of the 100,000 units they’d stocked, which effectively proved to the world that the videogame industry was not dead but had simply been hibernating.

Heading into 1987, what NOA really needed was someone to help roll out the NES nationwide and ensure that at the end of this roller-coaster ride, Nintendo would wind up on top. Someone to prove that the NES was more than just this year’s Christmas fad. Someone who could exploit the potential for expansion and transform Nintendo from a niche sensation into a global juggernaut.


7. Main


That someone turned out to be Peter Main, though at the time he was dealing with matters much more pressing than corporate expansion: beef dip sandwiches and garlic butter buns. As the president of White Spot, a Canadian fast-food chain, Main was used to eating, sleeping, and breathing burgers, but in the summer of 1985 his mind went into overdrive when an outbreak of botulism swept through Vancouver.

Health officials alleged that improper refrigeration of garlic oil concentrate was the likely cause and that Main’s restaurants were responsible for the epidemic. Following this horrifying news, he spent much of the next year doing damage control, ensuring that the issue had been resolved and defending the integrity of his beef dip sandwich. When the public outcry finally died down and White Spot’s reputation was restored, he stepped down from his post and took a long vacation to decide what he’d like to do next. That’s when Arakawa called and asked Main to join Nintendo of America.




Before Peter Main and Minoru Arakawa were ever colleagues they were friends, and ever since Arakawa had left Vancouver to start NOA, he had been trying to recruit Main. For years Main declined these job offers. Videogames were a far cry from hamburgers, but even though he turned down Arakawa, he often provided friendly advice on Nintendo of America’s strange yet profitable forays into the restaurant business (Arakawa had gone ahead and bought the British Columbia franchise rights to Chuck E. Cheese as well as a pair of seafood bistros in Vancouver). Main’s expertise as a restauranteur only fueled Arakawa’s desire to rope him in, but time after time Main declined the overtures — until that fateful call in late 1986. This time Main was open to a major life change, and it didn’t hurt that Ron Judy was planning to relocate to Europe, which would effectively make Main NOA’s number three.

Though Main lacked any videogame experience, his outsider mentality allowed him to look at the business as something novel and spectacular. To spread this new gospel, he choreographed what he would later describe as Nintendo’s “storming of Normandy,” a full-out advertising, promotion, and distribution blitz that accompanied the rollout of the NES into stores nationwide. Meanwhile, Main provided a trustworthy-looking corporate (and Caucasian) face to a company that many in the outside world still viewed as a foreign curiosity. Main was an expert charmer. And that charm, that talent for cultivating friendships, gained the company credibility with Wall Street, trust from retailers, and respect from parents wanting to know what they were buying.

Month after month, Nintendo of America grew stronger. They sold 2.3 million consoles in 1987 and 6.1 million in 1988. As staggering as these numbers were, sales of the hardware were nothing compared to the software: the company unloaded 10 million games in 1987, and 33 million more in 1988. With numbers like these, it didn’t take Main long to realize that, at the end of the day, the console was just the movie theater, but it was the movies that kept people coming back for more. This personal revelation led to a Hollywood-like title-driven business strategy, and his coining of the phrase “the name of the game is the game.”

Main’s approach to sales and marketing coincided with Arakawa’s overarching philosophy of “quality over quantity.” As Nintendo exploded, there were plenty of opportunities to make a quick buck (hardware upgrades, unnecessary peripherals), exploit the company’s beloved characters (movies, theme parks), or dilute the brand by trying to attract an audience older than Nintendo’s six-to-fourteen-year-olds. But these kinds of things didn’t interest Arakawa. What propelled him was a desire to continually provide Nintendo’s customers with a unique user experience. He set up a toll-free telephone line where Nintendo “Game Counselors” were available all day to help players get through difficult levels, and he initiated the Nintendo Fun Club, which sent a free newsletter to any customer who had sent in a warranty card. Both programs were very costly and could have been offset by charging small fees or obtaining sponsorship, but Arakawa believed that doing so would compromise Nintendo’s mission. And to further safeguard Nintendo from the dangers of impurity, he and his team put into place a series of controversial measures:


1. The Nintendo Seal of Quality: Ron Judy had the novel idea of mandating that all games pass a stringent series of tests to be deemed Nintendo-worthy, ensuring high-caliber product and making software developers beholden to Nintendo’s approval.

2. Third-party licensing program: Howard Lincoln’s strict licensing agreement enabled software designers to make games for the NES but restricted the quantity they could make (five titles per year), required full payment up front (months before revenue from a game would be seen), and charged a hefty royalty (around 10 percent). In addition to these stringent terms, all game makers needed to purchase their cartridges directly from Nintendo.

3. Inventory management: Heeding Sam Borofsky’s suggestion, Peter Main devised an incredibly rigid distribution strategy that purposefully provided licensees and retailers with only a fraction of the products they requested. The goal of this technique was twofold: to create a frenzy for whatever products were available, and to protect overeager industry players from themselves.

Though NOA’s methods drew ire from retailers, anger from software developers, and eventually allegations of antitrust violations from the U.S. government, there was no denying that whatever Nintendo was doing was working — so well, in fact, that Peter Main needed additional reinforcements as he inflicted Nintendo-mania on his adopted homeland.


8. Nintendo Power


Help came in the form of Bill White, a straitlaced marketing whiz whose smallish eyes and oversized, round-rimmed glasses emitted a boyish vibe. Though he was only thirty years old (and, after a haircut, could have passed for thirteen), he spoke about brand recognition, market analysis, and strategic alliances with the expertise of someone twice his age. Part of that precocious nature was due to an almost religious belief in the power of marketing, part was due to his father’s history as a Madison Avenue ad man, and part was due to a chronic insecurity that could only be quieted by winning at everything he did. Peter Main saw the potential in White and hired him in April 1988 to become Nintendo’s first director of advertising and public relations.

When White joined NOA, the marketing department consisted of just three people: himself, Main, and Gail Tilden, an exceptionally smart woman with an encyclopedic memory. The lack of manpower forced White to wear many hats, but his most important responsibility was to forge corporate partnerships. Though Nintendo continued the take the videogame world by storm, the rest of the world still didn’t know what a Nintendo was. To build the brand, White courted Fortune 500 companies, resulting in pivotal promotions, like Pepsi placing a Nintendo ad on over 2 billion cans of soda and Tide featuring Mario on the detergent maker’s giant in-store displays. His biggest coup came with the release of Super Mario 3, when he negotiated for McDonald’s to not only make a Mario-themed Happy Meal but also produce a series of commercials centered around the game.

By virtue of his efforts, White became Main’s right-hand man, something of a protégé. But as Main fed White’s ambitions and the young marketer swallowed up more and more responsibility, this left Tilden, the other member of the marketing team, with less and less to do. This displeased Arakawa, who set out to find a better way to utilize one of NOA’s most dynamic employees.

Tilden was at home, nursing her six-week-old son, when Arakawa called and asked her to come into the office the next day for an important meeting. So the following day, after dropping off her son with some trusted coworkers, she went into a meeting with Arakawa. The appetite for Nintendo tips, hints, and supplemental information was insatiable, so Arakawa decided that a full-length magazine would be a better way to deliver exactly what his players wanted.




Tilden was put in charge of bringing this idea to life. She didn’t know much about creating, launching, and distributing a magazine, but, as with everything that had come before, she would figure it out. What she was unlikely to figure out, however, was how to become an inside-and-out expert on Nintendo’s games. She played, yes, but she couldn’t close her eyes and tell you which bush to burn in The Legend of Zelda or King Hippo’s fatal flaw in Mike Tyson’s Punch-Out!!

For that kind of intel, there was no one better than Nintendo’s resident expert gamer, Howard Phillips, an always-smiling, freckle-faced videogame prodigy.

Technically, Phillips was NOA’s warehouse manager, but along the way he revealed a preternatural talent for playing, testing, and evaluating games. After earning Arakawa’s trust as a tastemaker, he would scour the arcade scene and write detailed assessments that would go to Japan. Sometimes his advice was implemented, sometimes it was ignored, but in the best-case scenarios he would find something hot, such as the 1982 hit Joust, alert Japan’s R&D to it, and watch it result in a similar Nintendo title — in this case a 1983 Joust-like game called Mario Bros.

As Nintendo grew, Phillips’s ill-defined role continued to expand, though he continued to remain the warehouse manager. That all changed, however, when he was selected to be the lieutenant for Tilden’s new endeavor.

In July 1988, Nintendo of America shipped out the first issue of Nintendo Power to the 3.4 million members of the Nintendo Fun Club. Over 30 percent of the recipients immediately bought an annual subscription, marking the fastest that a magazine had ever reached one million paid subscribers. And as the magazine’s audience grew, so did the influence of Howard Phillips.

If Nintendo Power gave kids a chance to step inside the candy factory, then he was their Willy Wonka, magically and eccentrically showing them how the sweets were made. Though Mario was Nintendo’s mascot, Phillips became the face of Nintendo. Peter Main took advantage of this, sending Phillips all over the country for press events and on-camera interviews. Main appointed Phillips Nintendo’s first Game Master. Shortly thereafter, Howard Phillips became a national celebrity, boasting a Q score higher than Madonna, Pee-wee Herman, and the Incredible Hulk.

The rise of the Game Master was just the latest sign of Nintendo’s unprecedented success. By 1990, Nintendo of America had sold nearly thirty million consoles, resulting in an NES in one out of every three homes. Videogames were now a $5 billion industry, and Nintendo owned at least 90 percent of that. The numbers were astounding, but Nintendo’s triumph went beyond that. Arakawa had proven that he was more than just the son-in-law, Lincoln had proven that he could take on anyone, and Main had proven that he could swim with the sharks.
Together, they had single-handedly resurrected an industry. And they did it all with only 8 bits. Imagine what they could do with 16 …
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Old 05-19-2014, 10:13 AM   #2
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Pretty cool but I have to admit I did not have the patience to read all of that.
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Old 05-19-2014, 04:21 PM   #3
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What I did read was awesome. I didn't know Nintendo were established so early (I know that may sound bad).
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Old 05-20-2014, 01:25 AM   #4
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1. The Nintendo Seal of Quality: Ron Judy had the novel idea of mandating that all games pass a stringent series of tests to be deemed Nintendo-worthy, ensuring high-caliber product and making software developers beholden to Nintendo’s approval.

2. Third-party licensing program: Howard Lincoln’s strict licensing agreement enabled software designers to make games for the NES but restricted the quantity they could make (five titles per year), required full payment up front (months before revenue from a game would be seen), and charged a hefty royalty (around 10 percent). In addition to these stringent terms, all game makers needed to purchase their cartridges directly from Nintendo.

3. Inventory management: Heeding Sam Borofsky’s suggestion, Peter Main devised an incredibly rigid distribution strategy that purposefully provided licensees and retailers with only a fraction of the products they requested. The goal of this technique was twofold: to create a frenzy for whatever products were available, and to protect overeager industry players from themselves.
How they got away with this all is astounding. Of everything about that era of gaming, in the entire history of gaming, this is perhaps the boldest move with the biggest risk.

I really loved reading this article, though it seems to touch more on the NOA side of things than what was going on at Yamauchi's side of the pond.
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