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Birth of a super hero
In 1980 Miyamoto was finally called into Hiroshi's office to be offered the chance to design a game. He gave his opinions of the shoot'em ups - crude and boring. Why didn't games employ more of the story line and techniques that made cartoons popular and absorbing. But his task was do make something out of Radarscope - one of the most banal of games. Planes came into view and players had to shoot them down. He asked questions of the technicians about how the characters could move and decided to abandon Radarscope and start again.
Nintendo was negotiating to use the Popeye characters and Miyamoto started work on a game based on them. The deal fell through and he had to start again. Beauty and the Beast was one of his favourite stories so he tried to create characters based on this. He imagined a bad guy, vaguely gorilla like but not too evil. The gorilla stole the girl friend of the hero and the object of the game was to get her back. The hero was a brightly overalled carpenter - at the time a very strange choice.
Even more strange was the name he chose for the game - Donkey Kong. The name would later make an American sales manager resign in despair - games had names like killer or annihilator or ... well anything thing but Donkey and Kong in combination.
What makes the story all the more amazing is that Hiroshi Yamauchi heard all of the negative comments and still backed it. In 1981 Nintendo released Donkey Kong and it became the first smash hit game.
Miyamoto was promoted to head of R&D 4 and asked to produce more games like Donkey Kong. He began sketching his previous hero and someone said that he looked more like a plumber - Mario was born and his brother Luigi soon followed. Luigi was tall and thin to make sure that he was instantly distinguishable.
The new game - Super Mario Bros - had all of the elements that Miyamoto enjoyed. He borrowed from Star Trek with warp zones, took magic mushrooms from Alice and included strange happenings to keep players interested. Miyamoto was fascinated by tunnels, manholes and the possibly of change.
Between 1985 and 1991 eight Mario games were produced and 60 to 70 million were sold.
While all of this creativity was going on Nintendo was playing a computer game of its own. Hiroshi had requested a security device be designed into the Famicom so that only Nintendo could create cartridges that worked with it. However it was quickly realised that selling licences for other companies to create games was yet another way of making money from the Famicom. Nintendo kept a tight control on the market. Its licence was such that Nintendo made money even if the licensee didn't.
In the main, though, a Nintendo licence was profitable and firms were happy that everyone made money. But Nintendo rationed the number of games that could be produced. They said it was to keep the quality high. The games market had been nearly ruined by a flood of low quality games and Nintendo really were worried that this might hurt their sales in the long term. The licensees on the other hand saw the restrictions as a cap on their potential profits. This caused much bitterness towards Nintendo. Rather than the goose that had laid a golden egg it was seen as the controller of the flow of wealth and far too strong for its own good.
The US Market
After Japan Nintendo needed to move into the USA market and then into the rest of the world. The USA wasn't an easy proposition because of the collapse of Atari. At first Nintendo attempted to use Atari as a way into the US. They licensed Donkey Kong on the Atari and almost let them put their badge on the Famicom - yes the Nintendo system could have been the winner Atari needed. But in reality Atari was being mismanaged into the ground. It had over produced, been slow to improve games and hardware and cut prices to the point that retailers were worried about taking any stock.
In 1984 the US computer games business was more or less dead. Atari made huge losses and was eventually sold to Jack Tramiel, the founder of Commodore. He turned it into a home computer company. The arcade part of the business was sold to Namco - a Nintendo rival. It wasn't just Atari that gave up the struggle - the toy manufacturer Mattel sold of its electronics division and Coleco folded. Every one was of the same opinion - there was no money in computer games!
This is the atmosphere that Nintendo had to contend with. Minoru Arakawa, Hiroshi's son in law, took on the task of building the company in the US and his first attempts centred on the arcades. From a base in New York he tried to sell thousands of Radarscope games - yes the very ones that Miyamoto was supposed to reprogram because they were so useless! Of course he failed but Donkey Kong was coming to the rescue.
The fledgling company moved to Seattle and waited for the new game chips. When it arrived they were in a state of shock - Donkey Kong did not sound like a winner and they assumed that they could add it to the unsellable stock pile of radarscope games! But they gave it a go. They first had to give the Japanese characters English names - the princess was called Pauline after the warehouse manager's wife but what to name the short and stout carpenter with the red cap? The answer came when they opened the door to their irate landlord wanting the rent paid. His name was Mario Segali and the character was at once dubbed Mario, Super Mario...
Donkey Kong many not have sounded like a hit but it was addictive and the number of games that Nintendo of America (NOA) sold increased each day. Next it was time to sell the games console but this wasn't easy. The Famicom had been remodelled - it was now a smart grey and was called the Advanced Video System (AVS). But the toy distribution chain in the US was still feeling the losses inflicted by Atari and the others. They refused to even stock the Nintendo machine.
Arakawa and his team worked hard to convince them. They laid on demonstrations, begged retailers to take some machine to see what would happen. They made it a risk free proposition and still most declined the offer! A company with less drive and commitment would have given up but Arakawa and his small team worked hard and got a foot in the door. The AVS wasn't an instant success but it did sell well enough to convince any retailer that had stocked it once to carry on stocking it. The sales grew slowly and steadily as the word spread that Nintendo was the machine to have because they have the great games.
NOA grew and grew. It used the same sort of licensing arrangement for third party games that Hiroshi had instigated in Japan. It also ran Nintendo Power - a magazine with a huge circulation - around 5 million! - that was sent to every console owner and is still being published.
The magazine was used to preview games and build up the market before they were released. This was fine as long as it was one of your games that was being hyped but what if it wasn't. The licensing system and the power that Nintendo had created a great deal of bad feeling even in those companies that made huge profits via NOA. The suspicion was always that the profits would have been even more if NOA had manufactured more cartridges or hyped the game more in Nintendo Power.
Eventually all of this came to a head in a number of law suites for anti-trust violations. NOA's competitors claimed that they controlled the market for their own benefit and this amounted to an unfair restraint of trade. Arakawa and his team had rebuilt the video games industry in the USA and were being made to pay the price of success.
For a while Nintendo started to lag in the market. It was slow to bring out a 16-bit console and this allowed Sega among others to catch up.Then the Sony Playstation and the Microsoft XBox seemed to be taking game playing into new territories as games consoles rival the power of desktop machines. Of course Nintendo had the last laugh in that its comparatively recent introduction of the WII has really taken computer games into completely new territories with the introduction of more sophisticated input devices. With the WII Nintendo is still innovating and still choosing strange names for its products!
If you want to know more about Nintendo's history - and there are lots of incidents I haven't told you about like MCA suing over copyright infringement of King Kong - read Game Over - Nintendo's Battle to Dominate An Industry by David Sheff
Details of Game Over can be found at the top of the sidebar.
The Nintendo Database includes a histoy of the company and its products from 1889 to 2006.