by Steven Kent
An exacting and relentless micromanager, Naka was well known for expecting nothing short of perfection from those who worked on his team. Like the programmers who created the games for the Atari 2600, Naka generally preferred to do everything from game layout to the music and even writing the code himself.
Not just programming, everything … the graphics, the pictures. I’m really careful about everything. It’s not exactly the building of the program itself that concerns me, it’s the overall flow of the program. In my mind, working as a producer or director means handling all aspects of a game, including the music, graphics, pictures, and everything.
—Yuji Naka, creator of Sonic The Hedgehog
Naka’s demanding managerial style sometimes gave way to outbursts. Unlike other creative teams, Naka’s team suffered from heavy turnover as burned-out programmers, designers, and artists looked for less demanding work elsewhere. Mild-mannered in public, Naka was said to be given to emotional flare-ups when under stress. He had already established himself as one of Sega’s most respected console game creators in 1989, when the company-wide call went out to create a new mascot that could compete with Nintendo’s Mario.
Mr. Nakayama expressed the idea to the company that it would be a good thing for Sega to develop a mascot character—one that could be sort of, that could do for Sega what Mickey Mouse does for Disney. As a result of that, numerous artists and designers from the company submitted design ideas and suggestions and sketches for what this character would be. A lot of ideas were considered, like kangaroos and rabbits, and we were kind of thinking along the lines of a jumping, hopping kind of character.
Mr. Oshima [Masato Oshima] was the artist whose character design sketch was accepted. He’s the one who essentially drew the hedgehog. It’s a very stylized hedgehog.
—Roger Hector, former head, Sega Technical Institute
Naka wanted to make a game that was similar to the Super Mario Bros. games, only simpler. Mario games used two buttons, so Sonic should use one. Mario collected coins, so Sonic collected rings. The way Naka’s people differentiated Sonic from Mario was by making the hedgehog faster and giving him “attitude.” Mario games were slow and friendly, Sonic games would be fast and the eponymous groundhog would glare at the camera and tap his foot impatiently if the player did not move quickly enough.*
The Japanese, unbeknownst to us, created a character with Sonic The Hedgehog. We, in America, thought Sonic was ridiculous because the hedgehog was a little known animal and it was in blue. We thought it was silly, but to the credit of the game, which was so good, the character became established.
I think it was because the game was a good game on its own anyhow. The character could have been anything, but it was a hedgehog that would have died a dismal death had it not been for a very good game.
—Michael Katz
Moreover, Sonic traveled through a surreal world designed to show speed. His two-dimensional side-scrolling environment included loops, steep cliffs, and pinball-esqe bumpers from which he could launch at high speeds. Compared to Sonic The Hedgehog, even the fastest racing games of the time seemed slow. Players had to make decisions in advance and react quickly to survive each level of the game. When Sega at last unveiled Sonic The Hedgehog, the response was one of astonishment. Magazines praised it as one of the greatest games ever made and proof that Genesis could do more than the Golden Axe and Moonwalker side-scrollers for which it had become known.
People at Nintendo, however, remained unimpressed.
It was pretty much a typical Nintendo reaction at first. [People said] “Look, they’re trying to copy us with Super Mario Bros. and it’s the same kind of a game. They can’t really do anything as good as we do it.” Over time, there was this kind of dawning realization that this was … not such a bad product. It was the same thing with Genesis, in general.
—Richard Brudvik-Lindner, former group supervisor and head of Nintendo of America Account Team, Hill and Knowlton
Sonic The Hedgehog was released in the United States in 1991. As part of Kalinske’s proposed plan, it replaced Altered Beast as the game that came bundled with the system. People who had purchased the old package with Altered Beast within a few-months grace period were allowed to mail in for a free copy of Sonic, in effect giving them an extra game at no charge. The Sonic cartridge was also sold separately for those who already owned Genesis.
Sonic was an immediate hit, and many consumers who had been loyally waiting for Super NES to arrive now decided to purchase Genesis. After struggling for more than a year, Sega was suddenly seeing success. The fiercest competition in the history of video games was about to begin.
The Super Family Computer
Japan remained loyal to Nintendo, ignoring both Sega’s Mega-Drive and NEC’s PC Engine (the Japanese name for TurboGrafx). When Nintendo Co. Ltd. announced that its 16-bit Super Family Computer (Super Famicom) would go on sale in Japan in November 1990, nearly 1.5 million people pre-ordered the console.
The November 21, 1990, Japanese launch of Nintendo’s 16-bit Super Famicom was an international media event. Tens of thousands of people lined up in front of department and electronics stores the night before, hoping to pick up the coveted new console. According to some reports, many parents called in sick to work so that they could join the lines of waiting shoppers. All of Tokyo was slowed down by the crowds, and a frenzy began when news spread that Nintendo had shipped only 300,000 consoles. The pushing and shoving were so chaotic that the Japanese government later asked Nintendo and other video game companies to restrict future hardware releases to weekends.
In terms of technology, the Super Famicom, which would be released in the United States as the Super NES, was an improvement over both Genesis and TurboGrafx. Like Genesis, Super NES had a true 16-bit processor rather than the 8-bit/16-bit hybrid in TurboGrafx. Nintendo’s Research and Development Team 2, led by Masayuki Uemura, designed the console around visual and audio performance rather than processing speed. It displayed more colors. Genesis had a 512-color palette; Super NES could display 32,000 colors. Along with its central processor, the Motorola 65816 chip, it included a Sony stereo chip and two customized graphics chips that were nicknamed PPU-1 (Picture Processing Unit) and PPU-2. Powered by PPU-1 and PPU-2, Super NES’s architecture included seven special modes for handling graphics, the best-known being “Mode 7 Graphics,” which enabled designers to set parameters for effects such as scaling and rotating backgrounds. What the Super NES lacked, and what would ultimately become its technological Achilles’ heel, was the sheer processing power of Genesis.
Nintendo’s strongest selling point, however, was the game that came packed in with the Super NES console—Super Mario World. Shigeru Miyamoto, who by now was seen as video gaming’s greatest star, created an enormous and sprawling game that expanded the Mario universe. By this time, Miyamoto had started working with teams of designers. He may have created the original Donkey Kong with only two people to write code, one person for hardware, and another for music, but the 16-bit Super Mario World, also known as Super Mario Bros. 4, was a much bigger effort created by what Miyamoto would later remember as a fifteen-person team.
Super Mario World built on earlier Super Mario Bros. games. It marked the return of the bright colors that had been a trademark of the original Super Mario Bros. (although they were replaced with washed-out colors in the series’ second and third installments). This was also the game in which Nintendo introduced Yoshi, a friendly dinosaur who carried Mario on his back. “Too much of a good thing,” complained one video game magazine. Others extolled it as the greatest game ever made.
Nintendo set aside $25 million for marketing and prepared to release Super NES in the United States at a retail price of $199 on September 1, 1991.* With Sega having recently dropped the price of Genesis, the $200 cost of Super NES seemed high. As one magazine put it, “Hold on to your wallets, Nintendo fans. Super Mario Bros. 4 is on the way. But it could be a mixed blessing for all those addicted t
o the Mario Bros. series of home video games—and a cash-register bonanza for the Japanese company that sells them.”5
As the time grew closer, however, it became clear that the market was shifting. The launch of Sonic had revitalized Genesis sales. The ABC sitcom Roseanne, starring comedienne Roseanne Barr, ran an episode in which Barr and her working-class husband splurged to purchase a Super NES for their son while telling him that they would not be able to afford to buy him such an expensive gift. When he heard this, the boy was nonplussed and exclaimed that he would simply visit a friend who owned a Genesis. There was a real market analogy to the one in the sitcom. Tired of waiting for Super NES to arrive and unhappy about the $200 price tag, many consumers decided to take a chance on Genesis. Unlike the Japanese launch in which Super Famicom had outsold both competitors combined in presales alone, Super NES would debut against an established product.
By the time Nintendo produced Super NES this fall, Sega already had 150 different 16-bit cartridge games on the market vs. 12 for Nintendo, and its player was retailing for $150, or 25 percent less than Nintendo’s. While no one knows who will ultimately win this spirited battle for Christmas sales, the feisty underhog has sold a million Genesis systems this year, vs. 700,000 for Super NES.6
In the meantime, NEC, already shut out by Sega, now faced desperate times as it tried to market TurboGrafx against a second competitor. Having already failed at increasing its sales by introducing new technologies—the TurboGrafx-CD and a handheld console called TurboExpress that played games designed for the TurboGrafx game console, as opposed to the scaled-down games played on Game Boy and Lynx, NEC lowered the price of its base system to $99.
The basic issue was that Genesis had much better-known games. They got Electronic Arts’ support and they had Madden Football and all that stuff. And they had a lot more marketing dollars. And, you know, marketing dollars count.
—Ken Wirt, former vice president and general manager, NEC Technologies
In a move designed to increase market share, NEC Technologies has lowered the suggested retail price of its TurboGrafx-16 system to $99.99. In addition, the company will offer the new TurboGrafx-16 system SKU, called the “Bonk SuperSet,” at a suggested retail price of $149.99 and will lower the suggested retail price of its TurboGrafx-CD player from $399 to $299. NEC’s 16-bit TurboExpress portable remains priced at $299.7
The Battle Begins
A conventional wisdom in the video game industry is that consumers purchase new hardware when the economy is strong and stick to software when the economy is tight. In 1991, the United States economy was in recession. It didn’t matter. Nintendo easily sold its entire first shipment of 1 million Super NES consoles when they went on sale on September 9. Estimates of the exact number of Super NES units sold in the United States over the next three months range from Sega estimates of just over 1 million to an internal Nintendo figure of 2.2 million.8 According to the NPD Group, a company that tracks sales figures, Sega outsold Nintendo in 1991. According to NPD figures, Sega finished the year with 55 percent of the market, while Nintendo’s share was 45 percent. (This figure did not include TurboGrafx, NES, or Master System sales.) And the competition was just heating up.
The All-American Game
Mr. Yamauchi was subjected to a great deal of scrutiny…. a great deal of discrimination. He was really dragged through the mud. And it took him six months to put that deal together.
—Howard Lincoln
Toward the end of 1991, U.S. Senator Slade Gorton (Republican, Washington) requested a meeting with Minoru Arakawa and Howard Lincoln. The three met at Nintendo of America headquarters in Redmond, Washington. During the meeting, Gorton asked Lincoln and Arakawa if they were baseball fans. Neither one was. Next he asked them if they knew that the Seattle Mariners, the local pro baseball team, was up for sale.
I think we’d [only] been to one Mariner game, but that was it. Trip Hawkins (founder of Electronic Arts) had come up and taken us, and we actually had gone to the owner’s suite where we met Jeff Smulyan (owner of the Mariners).
We didn’t have any interest in baseball. We probably had some kind of a vague idea that the Mariners had been put in play, that Jeff Smulyan had put the team up for sale, and that if they could find a local buyer, they could keep it. But there were no local buyers coming.
—Howard Lincoln
Gorton finally came to the point, asking them if Nintendo could help keep the Mariners in Seattle by buying the team. If Nintendo did not purchase the franchise, the Mariners would very likely move to Florida, where a group of investors was prepared to buy it. Lincoln’s response was less than favorable.
And I think I said it immediately, “Bull.” I mean, would Major League baseball go along with a Japanese investor, a Japanese element?
His comment was, “That’s going to be a problem, but that can be overcome by having minority local ownership.”
—Howard Lincoln
Lincoln and Arakawa were noncommittal. Lincoln worried about the backlash among major-league owners. He also worried about how Nintendo Co. Ltd. chairman Hiroshi Yamauchi would react to the bad publicity and protests that might erupt from the news that a Japanese company was purchasing an American baseball team. Arakawa, on the other hand, had lived in Seattle for the last fourteen years and wanted to give back to the city.
About two weeks later he [Arakawa] came in my office and said, “Oh, remember that meeting we had with Senator Gorton about baseball?” I said, “Yes.” And he said, “Well, Mr. Yamauchi has decided to buy the team.”
—Howard Lincoln
Lincoln and Arakawa decided to work through Senator Gorton, who was visiting Russia when Yamauchi decided to purchase the baseball team. By the time he returned, Lincoln and Arakawa were on the Big Island of Hawaii, staying at a large vacation property that Nintendo had purchased. On Christmas day, they called Gorton at home and told him the news. In an effort to stave off trouble, Yamauchi did not purchase the Mariners alone. He formed a consortium called the “Baseball Club of Seattle” with John Ellis, chairman of Puget Sound Power & Light; John McCaw of McCaw Cellular Communications; Frank Shrontz, CEO of Boeing; and Chris Larson of Microsoft. The consortium met Smulyan’s asking price of $100 million for the Mariners, with Yamauchi personally contributing 60 percent and taking the controlling voice.9 As Lincoln predicted, baseball fans and club owners did not welcome Yamauchi’s decision.
In Super Mario Land, one of Nintendo’s most popular games, Mario the plumber must travel through four kingdoms, dodging arrow-dropping bees (Bunbuns), defeating bomb-carrying turtles (Nokobons) and jumping over man-eating plants (Pakkuns) so he can rescue Princess Daisy from the evil Tatanga.
In Nintendo’s newest game, Hiroshi the billionaire must negotiate his way through a hostile country, avoiding the venomous Jingos and skiing past the antagonistic Moguls so that he can rescue Ken Griffey, Jr., from the clutches of the Tampa Bay Baseball Task Force and save the day for the beleaguered Rain People.10
Nintendo’s purchase of the Mariners was ill timed. The nation was in the midst of an economic recession that many economists and politicians blamed on Japan. Those opposed to the sale pointed out that Japan did not allow foreign investment in its baseball league, as proof that Yamauchi should not be allowed to buy his way into the major leagues. Baseball commissioner Fay Vincent stated that he doubted the sale would go through, and a national poll showed that 61 percent of Americans preferred to keep Japanese investment out of major league baseball.11
Lincoln had anticipated the American backlash to the offer. What he did not expect was a Japanese backlash as well. In Japan, where the economy was strong and the people enjoyed a favorable trade imbalance with the United States, Hiroshi Yamauchi was accused of arrogance and criticized for bringing negative attention to the current prosperity.
He made the decision, he did it, and then all sorts of flack broke out. There was a backlash in both the United States and Japan…. a negative reaction. We had, I think
, anticipated the negative reaction in the United States. I was a little bit surprised that there was a negative reaction to some extent in Japan. That really was because there was a negative reaction in the United States.
—Howard Lincoln
The final sale was approved when three-fourths of team owners in the American League and a simple majority of owners from the National League voted to support it. Since the purchase, Yamauchi has proved to be one of the least vigorous and involved team owners in baseball. In 1999, he would appoint Howard Lincoln chairman of the team, but other than that, he has always left Mariner affairs in the hands of Lincoln and the team’s front office.
He [Yamauchi] has never seen a single Mariner game. He’s never met John Ellis, our CEO. He’s never met any of the other Mariner owners. He’s never attended a game. He was going to come if we made it to the World Series, but he’s never had to. He’s never met a Mariner player. He’s never met Ken Griffey, Jr.
—Howard Lincoln
In 1994, Yamauchi did become involved with the Mariners for one brief moment. Early that year, Hiroshi Yamauchi called Arakawa and Lincoln to tell them about a great opportunity for the team—a Japanese pitcher whom he thought might do well in the major leagues.