Sin & Redemption
By: Karl Castaneda
While most people are aware that the NES/Famicom revolutionized gaming forever, they aren't aware that Nintendo was slow to gain momentum when the console was first released in its native Japan. The most famous of criticisms for the system was that it was unreliable; cart-reading errors and freezing were commonplace (Note: This is just another example of a Nintendo trait Sony would later copy). Of course, this was not up to the standard of the proud Hiroshi Yamauchi, so it wasn't too long before a product recall was ordered and the Famicom was re-shipped with a new motherboard. By the end of 1984, the Famicom was the best-selling console in Japan. And it made Hiroshi wonder...
Would this sell in other countries?
In a move that was equally ambitious and arrogant (Note: This ever-growing war of ambition and arrogance will be a recurring theme of Sin and Redemption), Nintendo showed a re-designed Famicom at the 1985 Computer Electronics Show. Now called the NES, Nintendo would go on to monopolize the industry that was still recovering from the video game crash of the early 80's.
This is the part where I'm supposed to talk about the Super Mario Bros. / Duck Hunt bundle or a tale from the childhood of Shigeru Miyamoto. But to truly understand why Nintendo had a monopoly, we'll have to explore an earlier period, a more Western locale...
Fall and Rise
The 80's saw rough times for Atari Inc. Since its console, arcade, and computer game divisions were all operating independent from each other and weren't prone to cooperating, the success of the 2600 (aka VCS) was never reinitiated. However, even with this seemingly crippling weakness, Atari still had an ace up its sleeve. With its fantastic image among home consumers, they seemed like the perfect candidate to be the U.S. distributor for the Famicom system. Nintendo was even gracious enough to give Atari the exclusive rights to the computer version of Donkey Kong. And it would have worked, too, were it not for an incompetent leather company from Connecticut.
You see, at the very same Consumer Electronics Show where Nintendo was to sign the deal with Atari, Coleco was showing off Donkey Kong on their new Adam Computer, despite the fact that Coleco only had the rights to port the game to their home consoles. Atari's CEO Ray Kassar was justifiably furious at Nintendo, who in turn was shocked to see how utterly and completely Coleco had violated the rules of their contract. And thus, the deal between Nintendo and Atari was terminated based on a misunderstanding, one that would haunt the latter far more than the former. The NES launched in the U.S. on October 18th, 1985 in limited locations and, in February of 1986, nationwide.
With the success of Miyamoto titles like Super Mario Bros., Legend of Zelda, and countless other first party offerings, you'd think Nintendo would already be set, but they didn't want their bliss to be as short-lived as Atari's, and so they cut the line on the former taboo of courting third party developers to make games on their console (Note: On PCs this wasn't as big a deal, but on home consoles, it was quite an idea).
However, it's important to note that this "courtship" wasn't as peaceful as you might think. Sure, Hiroshi was welcoming development houses all over the world to publish games on their famously successful platform, but it came at a heavy price. Strict exclusivity contracts and (sometimes ridiculous) royalties meant that if you wanted in on the party, you'd have to pay top dollar. While any support for third parties was a huge achievement at this stage, Nintendo's stubborn attitude towards control over what games were developed on the NES/Famicom and their bloated royalties would eventually be their undoing in the N64.
It's funny that, while Nintendo is famous for knowing their technology better than anyone else, it was a studio outside of NCL (even outside of Japan) who could manipulate the NES better than most first party developers. This was a studio called Argonaut, all the way over in England. And when Nintendo released a little trinket called the Game Boy, they were more excited than anyone...