Transcript: Rise of Nintendo

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Episode “The Rise of Nintendo”

Jeff: The year is 1985 and video games kind of look like they were a fad. It looks like it was just a thing it came and went and now we are all ready to move onto our lives. Kind of like disco, it was there it was big, now it’s gone.
Josh: Recently Atari basically single handedly created the home video market and destroyed it. There really was no appetite on both the part of people actually buying video games or retail stores to even carry video games.
Shandi: Because Atari you know, they made tons and tons of money and then they were just gone.
TJ: Its all about the home computer now, people are looking to the commodore, the Amiga, IBM, Apple, they are looking to buy these computers that offer more than just gaming.
Libe: The funny part if you think about that it’s just really only in America. And so while American companies didn’t want, you know to touch video games with a ten foot pole. Video games were still going strong in Japan and Europe.
Dan: So from the land of the rising sun Nintendo looks over and sees 250 million Americans with nothing to waste their homework time on. And they say we can conquer America and bring video games back.
Jeff: So over in Japan, Nintendo has this thing called the Famicom, the family computer. And its got very advanced graphics, and even more than that it’s got a controller that is a little more complex than what we are used to. Nintendo looks at America and they are trying to figure a way in. and they think lets partner with Atari.
TJ: Now Atari, yes Atari is dead in terms of consoles, but it has a name. Atari is a household name in America at this point, Nintendo isn’t.
Libe: Atari asked Nintendo; well you know what do you got for us. And they say well we have Donkey Kong, you can have Donkey Kong. Which is a huge arcade hit; it would definitely be a win for Atari. And so there like, ok cool.
TJ: We could have very easily been playing the Atari entertainment system instead of the Nintendo entertainment system, if it wasn’t for one mistake.
Josh: What had happened is Coleco, who had this home computer called the Adam, published their own version of Donkey Kong, even without Nintendo’s knowledge of that. Atari found out about this in the middle of their distribution talks and just got so pissed off.
Libe: Nintendo was like, no, no, no not us, its Coleco’s fault, they don’t have rights to that game they just made the game! You know innocently or not. Eventually it all got kind of ironed out, that there was so much bad blood that it never happened.
Jeff: So Nintendo they don’t have any options there just like, alright lets just get this thing out there, it’s put it in front of people and get them excited about it. They take it to the consumer electronics show, the biggest electronics trade show in the country.
Dan: Which is a big trade show for TVs electronics all sorts of entertainment things. And they setup a booth and everybody comes by and says a video game console? Nobody does those anymore you guys are crazy get the hell out of here.
Shandi: They are just like, video games, nobody plays video games anymore. What do you think you are doing, that’s not going to work? You are not going to make any money off of that.
You can’t even use the word video games without people getting skeptical. So Nintendo calls it the advanced video system. And even still with their little shenanigans, they didn’t attract any attention. They didn’t sell a single unit.
Josh: Undaunted Nintendo returned to the second CES later that year. They actually realized if we can’t live in the video game market, everyone’s telling us it’s dead. Let’s just reposition it as a toy. So they rebranded this advanced video system, the Nintendo Entertainment System.
Dan: It is an entertainment system because we are going to add this little robot he is called Rob he is your robotic operating buddy, you can shoot stuff. So it’s like a toy really, it’s not a video game system, it’s a toy.
Jeff: Keep in mind at this point it’s hard to imagine a time when Nintendo didn’t come with Mario, but this point its duck hunt, and Robby the Robot with Gyromite that’s what it comes with. There is still a piece of the puzzle missing.
Dan: And this time there perception is a little bit better. They are going oh ok, I can kind of see where you’re going, I still don’t want to buy any. But your not totally crazy and maybe eventually have something here and we can talk about it later.
Jeff: The challenge for Nintendo at this point isn’t selling kids on it. It was obvious that it was the greatest thing of all time. It still is the problem was getting stores to sell it.
TJ: So what end up happening is Nintendo, the head honchos of Nintendo say here is what you are going to do, you are going to New York City in Christmas of 85 and you’re going to sell door to door.
Jeff: They go to toy stores, they go to Macys, and where that might sell a Nintendo, and just put some good old fashioned shoe leather into it and try to sell people it face to face.
Shandi: They went to the stores and setup everything, like they brought the merchandise and they brought the displays. That’s some dedication there, that’s like you really believe in your product that you’re selling.
TJ: Nintendo said, put this on your shelves and you’re not going to be stuck with it like all your other Atari stuff. If you put our stuff out and it’s not going to sell, we are going to buy it back. That’s impossible, nobody does that, and Nintendo did.
Dan: So this strategy starts working. Nintendo sells a few consoles they are starting to feel a bit better. But they are saying we have to get into more stores, we got to move more units, what do we do?
TJ: In 1986 the two biggest toys were Teddy Ruxpin, and laser tag. Both made by Worlds of Wonder. So they contact worlds of wonder and they say, to Worlds of Wonder, if you can get us in all the department stores that your toys are in, we will give you a percentage of your sales, worlds of wonder does this.
Josh: By partnering with a sales force Nintendo was actually able to get into sales channels with leads of toy chains and department stores that they wouldn’t have had access to other wise.
TJ: How did they do this? Well when a department store like Sears or JC penny, Calls up Worlds of Wonder to place a order. Worlds of wonder says, hmm, ok yes we will give you 1000 Teddy Ruxpin's, which happens to be the hottest toy in America right now, but in order to do that you have to take five hundred Nintendo’s.
Dan: And everybody gores aww, c’mon. But they do it and it turns out to be a fantastic strategy. Because that gets Nintendo’s in front of the public and the public starts buying them up.
Jeff: So now it’s starting to build a little bit of momentum. But then Mario comes out. And now it’s got a lot of momentum. That’s probably one of the greatest games ever and it gave them the huge push.
Shandi: When I had the Nintendo I also had the Teddy Ruxpin bear. Of course I got the Teddy Ruxpin first, and I had it for a little while, but once I got the Nintendo, that thing was in the yard sale.
TJ: The next year rolls around, 87. Teddy Ruxpin’s over, laser tag is over. But guess what, Nintendo is just taking off.
Jeff: They didn’t need World of Wonder anymore, they severed the agreement, and here is where Nintendo really enters just a golden age. Stuff like Metroid, Zelda, Punch out, Excite bike, just all the Nintendo first generation classics start coming out. And at this point it’s built up so much steam that you can’t stop it. It is clear that it is more than a fad, it is a phenomenon.
Dan: Now the golden age of Atari only lasted a few years, Nintendo they had been around as not only the top dogs for more than twenty years and now with the Wii ,they are back on top again.
TJ: Could you imagine if there was no Teddy Ruxpin, we wouldn’t know Nintendo like we do right now.
Jeff: World of Wonder would later file for bankruptcy and Nintendo would keep making boat loads of money everyday.
Libe: You know the Japanese brought video gaming back to life so really that represented the shift of the American control of the video game market to Japanese control of the video game market and you know they have been on top ever since.
Jeff: In 1990 Nintendo was 1/10th of the trade deficit between America and Japan, just Nintendo products. That is how big they were.
Shandi: They knew that once kids played it and once they had it, it was going to catch on, and they were right, they were totally right. And then everyone made money and everyone was happy.