How Nintendo Became King Of The Video Game Universe
How did Nintendo, a Japanese gaming company, nearly 200 years old manage to break into and become the largest and subjectively most beloved company on the continent over their North American competitors?
A lot of us know Nintendo as the giver of incredible IPs like Super Mario, Legend of Zelda, Donkey Kong, etc., but did you know that they have been designing games for nearly 200 years? Although video games weren’t a thing for them until the late-1970’s Nintendo has had its foot in the games market for the entire length of it’s conception first beginning with playing cards. After branching off into a lot of different ventures they finally dipped into the video games market in 1974 and from there they looked at North America.
North America at the time experienced a decline in perceived viability in the video game industries because of the Atari shock. Nintendo’s president in 1986, Hiroshi Yamauchi said “Atari collapsed because they gave too much freedom to third-party developers and the market was swamped with rubbish games”. Nintendo then designed their own game console called the Famicon which enforced a strict licensing system, which was signified with their Nintendo Seal of Quality directly on the game box.
During the 1985 Summer CES Nintendo showcased a watered down version of the Famicon which we know as the NES. It was the Famicon redeveloped with the lesser functions for international release. They decided they didn’t want it to be associated with the term game console and instead marketed it as an entertainment system.
The roll out of the NES began in 1986 with the first 14 games being released: 10-Yard Fight, Baseball, Clu Clu Land, Duck Hunt, Excitebike, Golf, Gyromite, Hogan’s Alley, Ice Climber, Kung Fu, Pinball, Stack-Up, Tennis, Wild Gunman, and Wrecking Crew.
Prior to the launch, an intense marketing campaign was made through telemarketing and shopping mall demonstrations as well as risk-free propositions to retailers. That meant Nintendo would handle all store setup and marketing as well as guaranteeing a 90 day credit to all merchandise with unsold merchandise being being sent back to Nintendo for a full refund. This meant retailers invested nothing; appealing enough that they decided to accept.
This massive risk succeeded and eventually Nintendo earned a revenue of $310 million out of the video game industry total $430 million in 1986.
By the end of 1990 they had overtaken the video game industry outselling their major competitors: Atari 7800 and SEGA Master System. The release of Super Mario Bros. 3 showed that the North American market was becoming favorable to Nintendo because they sold over 7 million copies while in Japan they sold only 4 million. In addition to it being the fastest selling standalone game in video game history. Also, the Commodore 64 hit a sharp decline in sales with the founder of EA Trip Hawkins calling it the “last hurrah of the 8-bit world”.
By Christmas 1988 the Commodore 64 game market had been utterly destroyed and in 1994 Commodore International (creator of the Commodore computers) declared bankruptcy effectively fading to non-existence. Nintendo had won the title of having the largest user base in North America than any previous console developer and became Japan’s most successful corporation.
Nintendo’s massive push into the North American market and incredibly strict licensing agreement gave them the overwhelming advantage they needed.
From this point on Nintendo has only grown in popularity and still continues to get more and more popular as time goes on.
Personally I can’t see how Nintendo could ruin their reputation with the years of goodwill they accumulated since the NES.
But then again I could be wrong.
If you’re looking for more articles like this check out my publication: @Gaminglinkmedia or @ryanvelasco.
Subscribe to the mailing list so you won’t miss any future articles.
