There was something about Howard Lincoln, his stately but affable demeanor perhaps, that made almost anything he said sound like a State of the Union address. For this reason, he was the perfect guy to give a rundown of where the industry stood ten years after it had been resurrected by Nintendo.
He began by acknowledging the downturn of the industry. Since Christmas 1993, the industry had slowed, but it had been slowing faster for some than for others. “The sector is off by 26 percent through the first three months of the year,” he said, “but by far the biggest part of that hit is being taken by Nintendo.”
At this, the audience rippled with laughter—and, surprisingly, so did Kalinske. It was true, and of the hundreds of so-called insiders packing the room, he felt like he was the only one who actually knew why. And the fact that the biggest threat to Sega was actually Sega itself, and not just in some metaphorical sense but in the most pathetically literal way possible, was enough to make him laugh as well. Over the past year, Nintendo’s 16-bit sales were actually up 2 percent, while Sega’s had plummeted 43 percent, falling for nine straight months in a row.
“Yet despite that downturn, Donkey Kong Country remains one of the biggest-selling games of all time, with worldwide sales now in excess of 7.5 million cartridges. So in one sense, I suppose nothing really has changed at all. Great software still sells great.”
What was so amazing about Nintendo’s newest blockbuster title went beyond the game itself. Despite all the technobabble about next-generation hardware, polygons, and CPUs, Donkey Kong Country was a reminder that there were always breakthroughs to be made with what existed already. It was a concept that perfectly mirrored Nintendo’s recent renaissance: old dog, new tricks. Tony Harman was already scouring the globe for new old things, Gail Tilden was gradually bringing Nintendo Power into the Internet era, and Shigeru Miyamoto was patiently making new worlds in 64 bits. All of these benefits pointed to the primary advantage that Donkey Kong Country gave Nintendo: more time.
“And there’s one last headline that’s definitely making news,” Lincoln explained. “The revised release date of Nintendo Ultra 64. From the start, we targeted a fall 1995 launch, but the world’s only true 64-bit platform will now hit North American and European shelves in April 1996, for reasons that we’ll elaborate on in just a minute.”
Nintendo was never a company to take its foot off the pedal, but this runaway hit gave them the ability to continue moving at their own pace. With the Super NES making a comeback like no other and Sega seemingly more interested in the next than the now, Nintendo felt no need to rush the Ultra 64 system. “This concept,” Lincoln explained, “that the name of the game is the game, that it’s about hits and not bits, is certainly nothing new to these Nintendo meetings, but we don’t just say it. We base our whole business on it. And that is exactly why we’re delaying our launch of Ultra 64 in North America and Europe until next April.”
More time. Time was the most valuable commodity possible in the fast-moving videogame world. More time to have software available at launch, more time to implement marketing plans, and more time to let Sony come into the market and start feasting on Sega. In the long run, Sony’s entry wouldn’t be a good thing for Nintendo, but with similar demographic targets, Sony would inadvertently help Nintendo win the last years of the 16-bit battles.
After a video presentation that featured software publishers gushing about the power and possibilities of Ultra 64, Howard Lincoln prepared to hand the afternoon over to Peter Main. But before stepping aside, he left the audience with one final message, which in a way felt like it had been plucked from Kalinske’s ill-fated conversation with Nakayama. “First to market doesn’t mean much,” Lincoln started. “It’s what you do, not when you do it. And most of you know the long-term viability of Genesis in America was not related to the time when that platform was launched; it was related to far more important factors. . . .”
If Lincoln had known Kalinske was there, locking eyes with his competitor likely would have made for the perfect final punctuation mark to the history the two had been writing over these past several years. Unfortunately, the moment was not meant to be, and the two would need to find another way to attach an image to whatever this had been all about. And on a positive note of past, present, and future, Nintendo of America’s chairman left the stage to Peter Main.
“Howard, you’re absolutely right,” Main began, moving around the stage with an ease that contrasted with Lincoln’s placid stiffness. “I can tell you as I stand here that even without Ultra 64 in this year’s holiday picture, there are going to be a lot of happy gamers buying Nintendo products for the balance of this year—and I’m sure that’s going to make a lot of folks in this room extremely happy.”
Even when Main and Lincoln said the same thing, it always sounded different. They were members of the same family but had different ways of relating. One spoke like a lead-by-example father, the other like everyone’s favorite uncle. Main ran through the usual gamut of topics (sales, merchandising, promotions, etc.) but also had the honor of unveiling a game that seemed to complete Nintendo’s transformation. “Fasten your seat belts, folks, because our commitment to millions of Nintendo players is about to broadside the competition. Strap yourselves in for an assault that’s going to nail the 16-bit title for Nintendo this year. Are you ready? Let’s rumble.”
Sirens blared, obnoxiously loud, but that discomfort was soothed by what appeared on the screen next: images and gameplay from Rare’s new game Killer Instinct, the first fighting game that Nintendo had ever developed. It was like Mortal Kombat, but slightly less grisly, and it made good on Nintendo’s pledge from one year earlier to stop giving advantages to the competition. The days of being squeaky clean and keeping to themselves were over, but what had replaced them was not necessarily what anyone would have expected. Nintendo was still Nintendo; they hadn’t sold out or traded integrity for a quick buck. Rather, they had found a way to do what most iconic companies and characters do so poorly: evolve.
But out from the trenches Nintendo had come, stronger now than they had ever been, even when they’d had 90 percent of the market. Survivors, all of them, refocused and recommitted and reinvigorated. Arakawa’s long-term philosophy had been vindicated, Main’s alchemy of old and new had proved to be the magic elixir Nintendo needed, and Lincoln’s gamble twenty years ago to leave his career at a law firm for a roller-coaster ride unlike any other had paid off. These three, and all the others who were responsible for slowly but surely propelling Nintendo forward, had warped down a pipe together and come out the other end stronger than before. They were still the same ragtag squad that had beaten impossible odds with a launch in New York; they just happened to look a little different now. Armed with a killer instinct, they stood tall beside Mario and Luigi, ready to fight whoever and whatever might confront them next.
64.
GAME OVER
Ten months later, Kalinske sat at his desk and stared out the window. He had been doing a lot of this lately, not by choice, but it was a side effect of failure and, in truth, seemed about as productive as anything else going on at Sega.
As he had predicted, the Saturn was a flop. Since the surprise launch in May, Sega had sold eight hundred thousand units of hardware, less than half of what Sony’s PlayStation had sold (and the PlayStation had been available for only half as long as the Saturn). This dismal experience was accompanied by an untold number of frustrations, but none more grating than the fact that he had seen it coming. Kalinske had tried to work with Sony, and then Silicon Graphics, and even with Sega of Japan for what would have been Sega Saturn. He and his team had redefined the videogame industry with the Genesis, then been forced to sit back and watch as it was methodically destroyed by people who should have been on his side.
To put it like that made him sound naive, and maybe he had been at times, but if so, then shouldn’t he have regrets? Things he would have done differently. People and products he had trusted too much. Ma
ybe the problem had been that he had been fighting the wrong war, all that time believing it was Sega vs. Nintendo, when really the more treacherous battles were between Sega of America and Sega of Japan. But without the triumphs of Sega vs. Nintendo, there wouldn’t even have been an SOA vs. SOJ; Sega of America would still be the same fifty-person operation that Kalinske had taken over in 1990. He thought back over the years, rewriting history in his head and playing out scenarios, but even then he couldn’t find an alternative ending to this story. He knew all the whos and whats and whys, but never could figure out how things could have been different. And that haunting mystery was his ultimate frustration.
He could feel history rewriting itself, and it made him sick. Sega was no longer the alternative upstart, but just the new giant ready to fall, the way Nintendo and Atari had before them. Sega CD, 32X, and the Sega Channel would be viewed not as dynamic innovations but as flops that took Sega’s attention away from the oncoming freight train. Kalinske felt he would no longer be perceived as the mastermind of a company that had gone from a 5 percent market share to 55 percent in three years, but instead thought of as just some guy who’d happened to be lucky enough to ride the wave of Sonic and reap the benefits of hawking games full of blood, sex, and violence. He would be remembered as the guy in the right place at the right time who’d benefited from everything Michael Katz had done. Or maybe, and probably even more likely, he wouldn’t be remembered at all. History was indeed rewriting itself, and history was cruel.
Perhaps Kalinske would have seen some small silver lining if Sega’s defeat had meant big things for those he admired most at Sony. That, however, was hardly the case. Although Sony would go on to sell ten million PlayStation systems by the end of 1996 (with more than half of those sales occurring in the United States), most of SCEA’s key executives would be fired or let go within a year of the launch. The curious timing of this purge (which included Steve Race, Olaf Olafsson, and Michael Schulhof) would later be questioned in a September 23, 1996, Forbes article titled “Great Job: You’re Fired.” Why these men were let go will forever be something that only a select few truly know, but to this day Steve Race has no problem sharing his own theory, explaining that “the way to attain success at Sony was to either get into, or come out of, a Japanese vagina.” Despite the salty language, there would be no hint of bitterness (neither then nor today), and Steve Race would soon forget all about Sony and simply do what he did best: shrug it off, move on, and find a new company to turn around. And from his quiet office in Redwood Shores, Tom Kalinske couldn’t help but feel it was time for him to do the same.
“Are you busy?” Fornasier asked, interrupting his thoughts.
The sight of a friendly face made Kalinske perk up. “Never for you,” he said. “You’re one of the good guys. So take a seat, tell me what’s going on.”
“Thank you,” she said, her voice still chipper despite the faded light in her eyes. She’d had that hollow look ever since June 1995, when her son Troy, the only one of the triplets to survive the pregnancy, passed away ten days after his birth. The doctors had told her that these things sometimes happen with high-risk pregnancies; it was an absolute tragedy, but not one that could have been avoided. They said the words, and presented medical data, but she would always partially blame herself for working through the pregnancy. Unlike Kalinske, who could never figure out the how of his problem, Fornasier believed that she had figured it out for hers, even though she was repeatedly told there was no reason for her to feel guilty. Still, nothing could ever change the thoughts in that unseeably small part of her mind; she had made the ultimate sacrifice, and would forever have to live with that.
“What can I help you with?” Kalinske asked, suddenly hopeful that he might be able to do something productive with his day.
“Tom,” she said, shaking her head, “I’m just in a real bad spot here.”
“In what way?”
Logically, she knew it was time to leave Sega, but emotionally she just couldn’t let go. The choice had become easier to make after Paul Rioux left in June, Tom Abramson resigned in February, and Nakayama had fired Goodby, Silverstein & Partners just a few weeks ago. But even with all that, she still couldn’t bring herself to do it. She was one of the last remaining dinosaurs, but just couldn’t face extinction—that is, unless she was not alone. And she knew Kalinske’s contract would be up in June.
“I know that you’re legally not allowed to tell me,” Fornasier explained, “but if you could give me any sort of indication on whether you’re staying at Sega, that would really help a lot. Just to know that you’d be here, and that we could build another team . . .”
“I know what you’re asking, but it’s hard for me to answer.”
She was aware that he wasn’t allowed to talk about which way he was leaning, because Sega was a publicly traded company in Japan. Still, she had hoped that asking him in person might reveal some sort of answer. She felt kind of bad about putting him in this position, but she just didn’t know what else to do. Her job had become almost unbearable; she just couldn’t take any more, particularly any interactions with Paul Rioux’s replacement.
When Rioux had stepped down, his position was filled by someone from Sega of Japan named Makota Kaneshiro whose best talent, as far as she could tell, was not caring what anyone else had to say. This had really started to wear her down with the release of a game called NiGHTS into Dreams, which was the first non-Sonic game being made by the Sonic development team. The graphics of the game were beautiful, but conceptually it was a tough sell. Inspired by Jungian philosophy, it starred an androgynous fairy who guides a young boy and girl through a colorful but dreary dream world. She protested that the game would have trouble finding an audience in the United States, but he was adamant that Sega of America put all their eggs into this basket. It was by the prestigious Sonic Team, it had beautiful graphics, and people in Japan would understand it. She didn’t disagree with any of this, but she didn’t believe the audience here would connect. But he had little interest in her point of view. Although Fornasier had not been at SOA during the creation of Sonic, she couldn’t help but think about how perfectly this situation epitomized the change that had taken place.
For the most part, she had made peace with the dynamic, but something Makota had said to her last week wouldn’t stop rattling around her head. They had been discussing plans for the second annual E3 show and strategizing about the best ways to highlight various titles. Long discussions about what went where and which titles got how much attention had led to a meticulously crafted plan. But the following morning, when Makota distributed plans for the show, everything had been changed. The new strategy, unsurprisingly, featured all NiGHTS, all day long. She confronted him about this, hoping for at least an explanation, and he told her that she was mistaken.
“But everything is completely different,” she said.
“No, no, you approved this, Ms. Diane,” he said. “You have just forgotten.”
She shook her head and wanted to let the issue go, but her feet simply wouldn’t turn and walk away. She was sick of this happening, over and over, and she was sick of the new but unspoken corporate culture of giving in. What had happened to the Sega that had taught her to take? More important, what had happened to her that she was okay with no longer being that person? “Makota-san,” she said, now refusing to budge, “I apologize if I am speaking out of turn, and I have tremendous respect for all the good work you do, but I feel like I would be doing a disservice to my job if I did not stand here and fight for this.”
When she finished, Makota-san smiled widely and appeared to finally understand where she was coming from. Maybe this particular situation wouldn’t change, nor would the next, but there was now this understanding, and that had to be worth something. And then after a moment, nodding slightly, he replied, “Ms. Diane, you need to learn to be less passionate about your work.”
Suddenly her feet started working again, and as she walked through Sega
’s increasingly unfamiliar hallways, she decided that she very much needed to speak with Tom Kalinske.
“I’m sorry for asking,” Fornasier said to Kalinske. “I shouldn’t have put you in that position. It’s not right.”
“Don’t even think twice,” he told her. “I’d have done the same.”
“Thanks, Tom.”
“But even though I can’t discuss my contract with you, I can give you some advice if you would like.”
“Yeah, of course. Always.”
“Good,” he said. “I would just recommend that you don’t make your decision dependent on me. I don’t mean to imply anything by that, one way or another, but you need to do what’s best for you. You owe that to yourself.”
Somehow, with those words, it was as if a curse had been broken, and her logic and emotions were intertwined and functioning once again. “Thank you,” Fornasier said, with an assertiveness befitting someone who had accomplished all she had done. Shortly after this, she would go on to work for Paul Rioux, who had recently been named president of New Media at Universal Studios. There, as VP of marketing and business administration, Fornasier would seal a multiple-title contract with Sony to license Spyro and Crash Bandicoot. But before any of that, and coming to terms with life outside of Sega, she thanked Kalinske for everything he had done with a farewell hug.
“No, stop, don’t go,” Kalinske said. “I didn’t mean it—I need you to stay.”
“All right, all right, that’s all I needed to hear,” his wife replied, and then turned around and swam back in his direction.
Tom, Karen, and the kids had returned to a beach in Hawaii. Once again the sun was shining, and the children were collecting hermit crabs in a bright yellow bucket, but on this trip something there was noticeably different. Tom was different.
Not long after his conversation with Fornasier, Kalinske called Nakayama to resign. By this point, Kalinske had assumed that his leaving Sega was all but a formality, but Nakayama appeared to be genuinely surprised by this and asked if they could speak in person. The following week, Nakayama flew to Redwood Shores and met Kalinske to further discuss the matter. At first their time together felt just like the good old days, but eventually that feeling faded and Kalinske reiterated that it was time for him to look for a new challenge.
Console Wars Page 63