Nintendo

The Rise and Fall of a Corporate Giant

It's always tempting for know-it-all twits with little more credibility to their name than running an obscure personal website to try and play the role of the boy who noticed that the emperor has no clothes. But realistically speaking, pulling that rubbish on Nintendo is completely irresponsible, although it has become sort of trendy lately for American developers to slag off Shigeru Miyamoto. Not only has Nintendo arguably done more to create a thriving video game market outside any company (besides Sony and Atari), they've also created a huge number of genuinely great games which have provided hundreds of billions of hours of fun over the past 20 years. Emperor Nintendo simply isn't walking around naked.

But sometimes, he shows a little bit too much...

The Nintendo story - especially in recent years - has been a prime example of how merciless opportunism can occasionally triumph over idiotic business decisions. And, over the past decade, it's also been a tale of a corporate giant's fall from power. Considering Nintendo spent the majority of its life manufacturing playing cards, its current state of existence is pretty impressive. Then again, Nintendo is a struggling third place contender in a market that they owned body and soul as recently as 1987-1995, so it's fairly evident that something has gone stomach-wrenchingly wrong.

Nintendo's first decade as a gaming company was fairly low-key, and hardly anything to be ashamed of. While they spent a few years getting off the ground, along the way they created quite a few hardware innovations - the light gun, Game + Watch, the D-Pad - and suffered very few genuine embarrassments. Unless you count Donkey Kong 3. It wasn't until the unveiling of the NES that Nintendo revealed its true form - a mighty, draconian entity bent on ruling the world through fear and an expensive cartridge licensing model. And honestly, Nintendo is a gaming company whose success was built by an angry, elderly man, who has quite probably never played a video game in his life (Hiroshi Yamauchi- above). Bad things were inevitable.

1890-something
Nintendo is born as a hanafuda card company. By strange coincidence, future rival Coleco was also created as a leather and textile company around this time.

1943
Hiroshi Yamauchi takes over Nintendo, firing many in the process, including his own grandfather! Soon afterward, "Yamauchi" forges a pact with the American Walt Disney Corporation allowing Nintendo to borrow Disney's characters for cards.

1970-1982
Nintendo takes its halting baby steps into the world of electronic gaming. First there's a light gun game which is both technologically innovative and moderately successful in Japan. Then there was some other stuff which ultimately led to a heroic gardener named Shigeru Miyamoto creating Donkey Kong, an up-the-girders escapade versus an angry ape and, later, versus Universal's angry lawyers. To this day I still have no idea how Nintendo won that case... but that's another story. DK and its sequel DK Jr. - and their stellar performances in the arcade and home markets - cement Nintendo as a formidable creative force in the gaming world. Just in time for...

1983-1984
The American video game market collapses. Nintendo creates a home console in Japan called "Family Computer", or Famicom for short. It's launched, whereupon it wraps its steely tentacles around the hearts of Japanese gamers. Despite crippling hardware flaws in the first batch which require a full-scale recall. Meanwhile, Nintendo stupidly offers the Famicom hardware to Atari for release in the US, only narrowly avoiding having the American giant permanently quash their dreams of a worldwide gaming monopoly thanks to the fact that Atari was desperately thrashing in the turbulent waters of a market crash at the time and couldn't be bothered with purchasing a possible rival's product with the intent to kill.

1985
Nintendo test-drives the shiny new Nintendo Entertainment System in the New York City market - a repackaged version of the Famicom. The NES is an exercise in pure, unmitigated deception (and capitalizes on the fact that marketing people and corporate buyers, in general, lack the intelligence necessary to use a toothpick without grievous bodily injury). Since no buyer is willing to invest in video games, Nintendo simply calls their video games consoles "entertainment systems" and their cartridges "paks." This does not fool a single child in the country, but seeing as the market collapsed not because of disinterest in games but rather because of a disinterest in crappy, overpriced games, that doesn't matter a whit. To help divert the corporate buyers' from the true nature of the NES, Nintendo packs a useless moving "robot" along with the system, as well as a light gun. The robot accessory is not supported at all in the coming years (and is dropped from the package as soon as the system reaches a decent saturation point), but it does its job by tricking retailers into thinking that they're investing in something totally not even slightly related to those darned video games that had scuttled profits in recent years.

At the same time, Nintendo has a small brainstorm and realizes the biggest problem with the Atari 2600 was the utter lack of quality control. Therefore, they arrange a copyright-protected lockout scheme and a strict licensing system to keep rigid control over what is made available for the NES. This has the net effect of reducing the awful games released for the system (though certainly not eliminating them altogether - I should point out that Friday the 13th and Jaws featured the Nintendo Seal of Quality as well) while making Nintendo very, very rich on licensing fees. It also has the effect of completely screwing third parties and retailers alike on a regular basis, which will ultimately come back around to bite Nintendo in the buttocks.

Super Mario Brothers, quickly becomes the most successful game on the system and eventually the most successful game ever made, with over 40 million copies sold.

1986
The NES goes nationwide, marking the beginning of gaming as mass-market entertainment. Also, Super Mario becomes more popular among Yankee young 'uns than Mickey Mouse.

1987
The NES becomes the most popular thing ever created in the history of anything. Millions of children demand their parents buy them one or so help them they'll set fire to the house, and they are so not kidding. At least 35 are reported dead in bloody yuletide combat amongst parents seeking the tremendously hard-to-find NES in the aisles of America's retail outlets. Eager to capitalize on this new cash cow, American developers shed their fear of console games and line up to publish on NES. Nintendo cackles and takes their money in advance, promising that they might possibly receive their cartridges in time. And if they're lucky, in the quantities they specified.

The Legend of Zelda gets a Stateside release and almost beats the launch sales of Super Mario Brothers 2, also released this year.

1988
Yamauchi's eldritch powers come into play and allow Nintendo to steal away the rights to Tetris from the midst of one of the ugliest, most convoluted ownership battles in history. And at the same time, they crush the skulls of Tengen and others who would dare defy the terms of the NES publishing license. The company goes on a buying spree and ends up owning approximately 13% of the United States by year's end, as well as claiming a lien on the souls of at least 350,000 newborn children. Stores which cross Nintendo are forced to file for Chapter 11 when the company angrily cuts off game shipments. The FTC is alerted, but Nintendo uses their death laser satellite (innocuously disguised as an orbital training potty in the shape of Mario's smiling face) to wipe Washington, D.C. off the map before action can be taken. I think...

American shipments of highly-anticipated title Zelda II are delayed due to a "chip shortage." Strangely, Canada receives a full batch of shipments on time, which may be the only instance in history of Canada receiving something before the States.

Nintendo glosses over their brazen and blatantly illegal tactics by publishing an inexpensive in-house magazine called Nintendo Power, created with the intent of indoctrinating America's youth with pure, unadulterated propaganda. "After all," they reasoned, "it worked pretty well for Hitler."

1989
Nintendo laughs as NEC tries to sell the TurboGraFX-16 to America with dismal results. Meanwhile, the company launches the GameBoy, a portable gaming system with roots in the old Game & Watch titles but with much more exciting blurry, green-and-grey graphics. Most of Sony's product development staff commit suicide for having failed to come up with the idea first. Nintendo suddenly owns two American gaming markets - console and portable. Super Mario Brothers 3 also receives a small preview in gaming movie, The Wizard, which despite being a load of old tosh, sells pretty well.

1990
Just as everything seemed to fall into place for Nintendo and they reached their peak, little did they know this year was the beginning of the end. Super Mario Brothers 3 had the most successful launch period of any game ever and sold over 7 million copies in its first year. Meanwhile...

Nintendo laughs as Sega tries to sell the Genesis to America, then chokes on their laughter as Genesis starts to catch on. Said choking becomes a full-scale coughing fit as disgruntled third-party developers begin throwing in their hat with Sega. The Sega Master System was suppressed by Nintendo's fascism, but Big N realized too late that they had failed to take Sega's second wind into account.

1991
The Super NES is launched in the US and Japan. It is amazing. It has unparalleled hardware features, and despite its slow processor speed and sketchy sprite-handling capabilities, it completely annihilates the Genesis in terms of power. However, the Genesis' one-year advantage and the durability of the NES market - those who wanted advanced power had already upgraded to Genesis, and those who didn't care already had a 700-game-strong NES library from which to choose - means that the Super NES is completely annihilated in terms of sales. Oh yes, and Sega's Sonic the Hedgehog character has a foreseeable chance of overtaking Mario in popularity.

1992
Sega continues to kick dirt on Nintendo's grave. For fun, it also urinates on the headstone. Then it cockily introduces the Sega CD, which signals the first sign that Sega may have won this round, but it has already lost the war.

Sony, having decided (after losing most of its top designers to suicide in the wake of the GameBoy debacle) that it can't compete with Nintendo through innovation, decides to compete with a Trojan Horse instead. Thus they sign on to help promote Nintendo's plan to meet Sega head-on in the optical drive race. The plan: a Sony-built console called the PlayStation X, which will incorporate both a Super NES and a matching optical drive, giving Sony a huge amount of control over the entire SNES hardware empire.

And oh yes, the third Zelda game's sales don't reach expectations, and the game is beaten narrowly by Sonic the Hedgehog 2.

1993
Nintendo's execs start to get cold feet as they consider the ramifications of their deal with Sony. Emboldened by the fact that Sega's CD add-on approximately tanked upon arrival, Nintendo leaves Sony standing at the altar and on the eve of unveiling the PlayStation X announces they've decided to tell their contract with Sony to go do anatomically improbable things to itself. Instead, they partner with Phillips to create a completely different CD add-on. This later becomes the hideously misbegotten CD-i, a system that sold awful, but wasn't actually that bad.

1994
Nintendo realizes that not only is business integrity terribly overrated, so is creative integrity. They lend the rights to their oldest and most noble gaming property, the conspicuous-through-his-long-absence Donkey Kong, to the techno-wizards at Rare. The result: Donkey Kong Country, a brilliant-in-every-way Rare platform game featuring extremely impressive pre-rendered 3D graphics. DKC's graphics allow Nintendo to pretend the Super NES is almost as good as one of the upcoming next-gen machines, finally allowing the system to pull ahead of the Genesis. By this point, of course, the Genesis had already thoroughly screwed itself over through Sega's sheer incompetence, so this victory is hollow at best.

1995
The Super NES, revitalized in sales by Donkey Kong Country, realizes its swan song year, offering a huge variety of top-tier games like Chrono Trigger, Earthbound and Yoshi's Island. No one cares, as Sony launches the PlayStation and new mascot Polygon Man wins the hearts of millions. Well not really, but Wipeout, Resident Evil, and Tomb Raider all won gamers' affection.

Nintendo tries to enter the 32-bit race prematurely with a "portable" console called Virtual Boy. It is the worst-selling system ever created by human beings. The worst thing about the sales? The Virtual Boy was a fantastic system.

Meanwhile, the GameBoy continues to sell steadily, making it the only reason Nintendo doesn't sink under the waves of obsolescence and die. Oh, and the continuing sales of DKC and its fantastic sequel.

Sega launches its Saturn console and it sells almost as bad as the VB.

1996
The Super NES market reaches single-digit sales for most titles. Old 16-bit wonders such as Capcom and Acclaim experience profuse financial pain thanks to the good old Nintendo licensing model. Nintendo, on the other hand, is still in pretty good shape despite their shrinking market share, thanks to the good old Nintendo licensing model.

RPG powerhouse Square defects to Sony. Other RPG powerhouse Enix defects to Sony as well, even though no one in America cares. Every other company on earth quickly defects to Sony also, except Rare and Acclaim. Nintendo weeps.

Nintendo promises that their new Nintendo 64 system will offer Jurassic Park quality computer graphics. Once people get past the jaw-dropping revolution that is Super Mario 64, they realize that Jurassic Park was never quite that blurry and blocky.

NOA President Howard Lincoln seems unfazed by the opinion of every sentient being on the planet that three games just isn't enough to make a system stand a figment of a chance. "You can paint the worst possible scenario for me," he tells NEXT Generation magazine, "and I'll simply smile and say three words: Super Mario 64."

1997
Gamers and media alike begin painting the worst possible scenario. Howard Lincoln smiles and says three words: "Super Mario 64." Millions of gamers angrily exclaim, "We've already beaten the game and earned 120 Stars. Twice. We're off to play Tomb Raider and Final Fantasy VII." Lincoln smiles and says two more words: "Zelda 64." Gamers pause and decide to give him one last chance.

1998
The GameBoy gets a colour update, and Zelda turns out to be practically the only worthwhile N64 game for the entire year. And it's damnably hard to find thanks to the fact that Nintendo has mastered the practice of artificial shortages and media manipulation; by lamenting the inevitability of undersupplied quantities, Nintendo goads gamers into hunting down a game they might otherwise wait for. And just as supplies run dry, Nintendo magically announces that, hey, we've just found some games we didn't know we had! How about that. Gamers and the Media start painting the worst possible scenario yet again. Howard Lincoln smiles and says a word: "Pokemon." That's the one word that gamers should have ignored, but didn't, and quickly becomes the most widely popular Nintendo franchise of all time. In fact, half the fans probably didn't even know there was a game! Well, the ones under 9 years old. Yes, after netting the rights to make "a few Pokemon things," Hasbro turned it into the most childish franchise since The Teletubies.

1999
Pretty much everyone realizes that Nintendo is just coasting by on the strength of the Pokemon phenomenon at this point, but since there are millions of kids who aren't discriminating enough to care about quality out there buying Pokemon stuff, the company is perfectly secure.

In other news, Hiroshi Yamauchi publicly decries the practice of creating sequels and spin-offs, causing complete panic within the ranks of the company as dozens of designers desperately ask themselves if Yamauchi is going to pull the plug on their current projects (Super Mario 128, Zelda VIII, Pokemon Snap, Pokemon Gold & Silver, Metroid IV, Wario Land IV, et cetera...).

Sega launches its Dreamcast system and it sells almost as bad as the Saturn.

2000
Sony launches the PlayStation 2, demonstrating an amazing mastery of Nintendo's "super-hyped shortage" techniques. By gradually announcing news of an ever-diminishing supply of PS2s, Sony manages to whip American buyers into an ungodly frenzy of supply-and-demand, driving eBay prices for the console into the stratosphere (the highest price I heard myself was on the radio- it went for $10,000 to some fat guy). Nintendo sighs sadly and, realizing their secret's out, gives up the practice. This is the only thing of note Nintendo does all year, other than announcing 10 new Pokemon movies, 200 new Pokemon episodes, 20 new Pokemon games, and an uncountable number of Pokemon playing cards.

2001
The N64's swan song, Paper Mario, turns out to be the best game on the system since Shadow Man. No one cares, as they're still hunting down PlayStation 2s and pretending Ever Grace is way better than Paper Mario. It's next gen, for cripes sake!

Five years after its original revelation to the public, the company finally launches "Project Atlantis," a 32-bit handheld console called GameBoy Advance, only 3 years since its previous update. It has amazing power for a handheld, but unfortunately no one can see the screen, and most Americans have huge, fat hands incapable of holding the system comfortably. It beats the almighty crap out of Virtual Boy in sales though.

The GameCube is launched in Japan 3 days after the 9/11 terrorist attacks spoon up a heavy dose of paperwork to a frisky world economy. GCN seems to be an attempt by Nintendo to shrug off the ill-fitting yoke of Serious Gaming they adopted for the N64. Artistically speaking, this is a great thing - the company seems to be making games for games' sake again, rather than games for the sake of impressing the rubes and competing with Resident Evil, which strangely enough is also part of its new strategy, or at least was. In terms of the bottom line, though, Nintendo's top-tier titles - traditionally million-plus sellers - immediately begin muddling about at the middle of the sales charts.

2002
Nintendo rolls out more phenomenal, A-list titles in six months than appeared for the entirety of the Nintendo 64's lifespan: Pikmin, Eternal Darkness, Animal Crossing, Metroid Fusion, and Metroid Prime. All manage to rack up excellent scores in gaming publications and are accompanied by dauntingly huge media campaigns. These games manage to sell a combined total number of units equal to a single N64 blockbuster.

Pokemon disappears off the face of the Earth... for now.

Meanwhile, thousands upon thousands of gamers who have never played a single Zelda game outside Ocarina of Time and Majora's Mask protest the new look for the upcoming GameCube chapter, The Wind Waker, complaining that the cheerful cartoony appearance doesn't seem at all appropriate for a Zelda game.

Nintendo mainstay Rare defects to Microsoft, which is strangely enough generally regarded as a victory for X-Box. Not that Rare are bad, but their average development period is now 2 1/2 years for an average-good game. Rare go out not with a bang, but with a whimper, as their final Nintendo game, Star Fox Adventures, sucks.

2003
Lacklustre holiday sales and the clinging stench of being arbitrarily labelled a "kiddie" system cause the GameCube to become persona non grata in numerous chains, some of which go so far as to drop GCN altogether from their inventories. They quickly bury their heads in shame though, as this was shortly before the release of Wind Waker, which managed to set all sorts of presale records. Several American gaming publishers also drop support of the Cube, despite roughly equal sales of GCN and X-Box goods. The thinking most likely is that someone has to go, and Microsoft is in a better position to crush retailers/publishers like a bug if they give up support of the X-Box.

The verdict:
Nintendo's history is riddled with poor decisions, flawed hardware, lacklustre peripheral support and blind greed and opportunism. Like Apple, the computer company they so resemble, Nintendo's gone from being the industry leader to a niche player - the owners of an ever-shrinking portion of an ever-growing industry. Their ability to create quality software and own the whole widget will sustain them for a while... but, as Captain Kirk once asked, for how long?

The Future:
Nintendo's future is uncertain right now, but they have promised their next system for late 2005-early 2006. I predict that they will die before 2010. I don't like it any more than the die-hard fans do, but with a history like that, Nintendo will be dead in no time...