The Rise of Nintendo

Last time I talked about the video game crash of 1983 and what it did to the video game market in North America. While the crash did destroy gaming in America, the rest of the world continued to create video games and Japan became a big market for them. In this entry I will explain how Nintendo brought video games back to North America. 

 A Growing Company

Following the North American video game crash of 1983 the market was absolutely dead in North America. No one wanted to back video games with time, effort or money and video game consoles were quickly discarded as a waste of time at electronics shows in the mid-1980s.

While the crash affected North America quite a bit, the rest of the world was unaffected by the crash and video games continued to be successful elsewhere. One market that was growing rapidly was the Japanese gaming market and a company that was at the forefront of that was Nintendo. Nintendo had become a big hit in the video game industry following the success of the Game and Watch handheld games in 1980 and the arcade hit Donkey Kong in 1981.

Miyamoto's first big hit

Nintendo had been around since the late 19^th century but only stepped into the electronic entertainment front in the 1970s, attempting to bring the Magnavox Odyssey to Japan.  Nintendo branched out into creating its own hardware and eventually created the Family Computer (or the Famicom) in 1983.

So while the video game crash affected North America, Nintendo was growing in size and influence in Japan. Nintendo decided that the company should expand to the American market, so Nintendo representatives brought the Famicom to trade expos in North America in the mid-1980s. Because of the video game crash, distributors had no interest in the system and disregarded it entirely. Nintendo needed a new strategy.

A New Strategy

Instead of marketing the device as a video game console, Nintendo decided to try and market the device as a children’s toy. This included adding in a light gun, a toy robot that played the games with players (R.O.B) and a name change to the Nintendo Entertainment System. With the new marketing strategy in tow Nintendo returned to North America and had some limited success in selling the NES.

But getting into some toy stores wasn’t enough for Nintendo to make the impact that the company wanted; truly entering the North American market meant getting the NES in just about every toy store across the country. To do this Nintendo began to petition stores in person and offered to buy back any unsold systems.

This had some success but Nintendo had yet to make its power play to take over the market. For the 1986 holiday season Nintendo struck a deal with Worlds of Wonder (the people behind the two most popular toys from 1985: Teddy Ruxpin and Lazer Tag) that if a store wanted to buy those popular toys, the store also needed to buy a certain number of Nintendo systems. In exchange for this, Nintendo gave a cut of the profit to Worlds of Wonder.

Really? This was the best-selling toy of 1985? 

This made the NES very accessible in North America and it quickly began to take a complete hold over the market. The system got the exposure that it needed and became a phenomenon, taking over the top-selling games chart and solidifying Nintendo as a huge power in North America.

Emerging Competition

Not only had Nintendo made a huge name for itself as an international company, but the success of the NES had dragged North America out of the video game crash of 1983 and the industry began to boom. Video games had returned in full force and many companies began vying for the top spot that Nintendo had a stranglehold on.

Sega was one company that was poised to take advantage of the booming games industry in North America. The Sega Master System was released in 1986 and, though technically superior to the NES, it didn’t sell as well in North America and Japan because of Nintendo’s aggressive marketing and control over those markets. The system did see success in other markets like Europe and Australia due to Nintendo’s lack of a strong presence in those areas.

In 1989, Sega released the Sega Genesis/Mega Drive to the North American market to try and combat the wild popularity of the NES. This launched an enormous rivalry that raged for several years throughout the mid-1990s and really tested Nintendo’s dominance in the market. But that story I will save for next week.

Lasting Effects

The rise of Nintendo in North America led to many different affects but the two that were most important were the shift in power from North America to Japan in video games and the establishment of video games as a toy and not an entertainment medium.

Nintendo kicked off a slew of foreign-based companies heading into North America and attempting to take hold where American-based companies (mostly in California) had once had complete dominance over video games. As I mentioned earlier, Sega entered the market with Nintendo and later on Sony entered the video game race with the Playstation. 

The other effect on video games that Nintendo’s rise to power had was a branding of games as a “children’s toy” and not an entertainment medium. While there are many other factors at play, video games have always come under harsh criticism when violence, sex and other risqué themes are played out. This mentality of it being a game and not an entertainment medium (like movies, for instance) didn’t help the cause. It has taken video games a long time to “grow up” as a medium and this label of “toy” was a big reason why that is.

I don't care how much the medium "grows up" this still won't be ok

So, Nintendo brought video games back to North America and they were a huge success. Bringing the games back as toys caused the label to stick, Japan took control of the video game market and Nintendo began to draw stiff competition from Sega. Check back next Friday to see how the rivalry between Sega and Nintendo played out.

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