A history of videogame hardware: Nintendo Famicom

Year: July 1983 Manufacturer: Nintendo Original Cost: ¥14,800

Dinky, with red and white plastic casing and rounded edges, you’d be forgiven for thinking Nintendo’s defining video game system of the 1980s was a child’s toy. It’s no accident. Having achieved success with the Color TV Game 6 and 15 systems, Nintendo’s CEO Hiroshi Yamauchi wanted to design a more serious home computer disguised as a toy, one to appeal to the entire family: a family computer; or ‘Famicom’.

The heart of the machine, based on a Motorola 6502 chip derivative, was nothing unusual. But the system’s controllers derived their shape and input dynamics from Gunpei Yokoi’s Game and Watch LCD games, while the inclusion of a microphone on the second pad showed Nintendo’s broadminded industrial creativity. But Yamauchi’s inventiveness went further than mere product innovation. In May 1983 he addressed a wholesalers’ group, the Shoshin-kai, stating that sellers of the Famicom should not expect to see large profits from system sales. “Forgo profits on the hardware,” he said. “It is just a tool to sell software. This is where we shall make our money.”

The Famicom launched on July 15 1983 for just ¥14,800, around half the cost of rival systems. Within two months the system had sold over half a million units. Within six, disaster had struck. A bad chipset was causing a crash in certain games. Yamauchi, with typical flourish, recalled every system sold, skirting a crucial sales window in the Japanese New Year holiday, but protecting Nintendo’s name.

Nintendo soon learned that software sold hardware, not vice-versa, and Yamauchi appointed a young Shigeru Miyamoto, designer of Nintendo’s first global arcade hit, Donkey Kong, to head a new game design research group, R&D4. Yamauchi recognized that artists not technicians made the best games and filled R&D4 with similar creative minds. The internal software division established itself as the most successful in Nintendo, launching Mario Bros. and The Legend of Zelda, triumphs buoyed by Gunpei Yokoi’s R&D1 group, which counted Metroid, Kid Icarus and Excitebike among its accomplishments.

This feature is an extract from Simon Parkin’s book, An Illustrated History of 151 Videogames.

However, by 1984 Nintendo faced a crisis. The company could not meet the demand with new games. Yamauchi was loath to open the system up to third-party developers, fearing that doing so would dilute the brand with poor games – the Atari effect. In late 1984 he yielded, granting the first three licences to Japanese game makers. The licences were restrictive. Nintendo took an unprecedented ¥2,000 per cartridge, and imposed a minimum order of 10,000 units per game. While many companies were dismayed by the terms, any misgivings were silenced by the size of the potential market. Hudson, one of the first developers to obtain a licence, sold a million copies of its first Famicom title, Roadrunner.

While the Famicom’s rise to dominance in Japan had been smooth, the journey to the West was tortuous. Following a redesign to make the system look like a more serious computer, Nintendo renamed the machine the Advanced Video System and demonstrated it at the January 1985 CES show in Las Vegas. The reaction was disastrous: not a single order was placed.

Yamauchi ordered another redesign and renamed the machine the Nintendo Entertainment System, while Nintendo of America’s Minoru Arakawa offered retailers a bold promise: the company would deliver machines and set up window displays for free. After 90 days, the retailer would pay for what was sold and return anything else they didn’t want. The offer broke down barriers and rebuilt trust with the games industry.

Within three months the NES had sold 50,000 systems. Within a year, a million and within three years, three million. By 1990, Nintendo owned a 90 per cent market share of all video games in the West and, by 1991, the company was earning an average $1.5 million per employee, nudging past Toyota to become the most successful company in Japan. Almost single-handedly, Nintendo’s machine had resuscitated an industry.

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