by Steven Kent
—Jim Whims
Despite their hesitation to represent Nintendo, Worlds of Wonder salespeople soon discovered that the NES was their hottest product. The demand for Teddy Ruxpin in 1986 was at an all-time high; but by 1987, neither Teddy Ruxpin nor Laser Tag did very well. Nintendo, on the other hand, continued gaining momentum. Americans purchased 3 million NES consoles in 1986. Sales more than doubled the following year. This translated into huge commissions for toy representatives from Worlds of Wonder, but it also caused Nintendo to reconsider the relationship.
Several reps wound up making over a million dollars a year in commissions. They [Nintendo] finally capped people like Mike Needleman and, … oh, who was the guy in Boston? Richard Tuckley. They capped them to a million dollars apiece.
It was an easy deal. You just said, “Here’s your lucky day. I’ve got an extra 50,000 pieces of NES.” Easy sell.
—Steve Race
Disaster struck Worlds of Wonder as the 1987 Christmas season approached. Mistakenly confident in the continued popularity of Teddy Ruxpin, Worlds of Wonder management grossly overestimated its inventory needs. The company ended up with so many extra copies of the expensive robotic bear that it faced bankruptcy.
In October, Minoru Arakawa contacted Worlds of Wonder to break off the partnership. Nintendo now had so much clout that it no longer needed a distribution partner. By coincidence, Arakawa contacted Don Kingsborough about discontinuing the Worlds of Wonder relationship around the time that Kingsborough was preparing to lay off his sales force. Arakawa decided to hire them instead. Ironically, Worlds of Wonder connected Nintendo with the exact sales force it had once tried to enlist through Atari.
* For a more complete account of the New York launch, see Game Over.
* Super Mario Bros. was not the first side-scrolling game. Scramble, Defender, Super Cobra, and several others predated it by several years.
* At one point in the game, players could even walk through a brick wall to enter a seemingly endless underwater world.
Pac-Man, the most successful arcade character of all time, at E3.
Donkey Kong—the 300-pound gorilla that put Nintendo on the map.
After selling Atari to Warner Communications, Nolan Bushnell bought back the rights to Chuck E. Cheese Pizza Time Theaters. Atari made Bushnell famous, but it was “the rat” that made him rich.
David Rosen, the man who brought photomats, bowling alleys, and arcade machines to Japan, then led Sega to the United States.
Bushnell hired his neighbor, Joseph P. Keenan, to work for Atari. Keenan went on to become the president of Kee Games, and later, Data East USA.
Roger Hector and Nolan Bushnell at the launch of Sente.
Workers assemble Centipede machines.
Atari’s Don Osborne demonstrates the Star Wars coin-op “cockpit” to George Lucas.
Possibly the greatest coin-op designer of all time, Dave Theurer created Missile Command, Tempest, and I*Robot.
Former Disney animator Don Bluth provided the artwork for Dragon’s Lair, the first laser disc–based arcade game. Some pundits thought Dragon’s Lair would be the game to restore the arcade business, but with an average price tag of $4,300 and requiring special maintenance, laser disc games were a short-lived fad in arcades.
Nicknamed “Golden Boy” by his coworkers, Atari’s coin-op engineer Ed Logg has a history of hits that includes Asteroids, Centipede, Gauntlet, and the Tengen version of Tetris for the NES.
Pete Kauffman, chairman of Exidy, was the bad boy of arcades. His pedestrian demolition game, Death Race, inspired a feature on the television news magazine 60 Minutes, and he later created a game called Chiller that was so amazingly morbid that most American arcades refused to carry it.
Ed Rotberg, creator of Battlezone, left Atari shortly after working on the military version of the game.
Parent-activist Ronnie Lamm appeared on the television talk show Donahue to warn about the evils of video games.
In 1981, Tournament Games held the world video-game championships in Chicago. The attendance was low, and the checks given to the winners bounced.
In 1981, video arcades were as common as convenience stores, and arcade games could be found just about anywhere.
In 1981, the arcade business started its long collapse and sights like this, the recently closed arcade at Honolulu International Airport, became all too common.
Toru Iwatani (pictured here between Yasuhiko Asada, Namco president, and Kazuo Ito, Namco general manager) only made one famous game before being bumped up to management. However, that sole game was Pac-Man, the most popular arcade game in the world.
Though it did not do particularly well in the international market, Ms. Pac-Man was the most successful game ever released in American arcades.
The arcade business’s brightest star, Namco’s Pac-Man appeared on Saturday morning cartoons, breakfast cereal boxes, and the cover of Time.
Minoru Arakawa, president of Nintendo of America, had to battle to break into the U.S. market, then struggled again to revive the home game market.
Seattle attorney Howard Lincoln convinced Arakawa not to surrender when sued by Universal Studios over Donkey Kong. Arakawa was so impressed that he made Lincoln vice president of Nintendo of America.
This doodle, created by attorney John Strauch, played a large role in a court decision that cost Nintendo $250 million in the Alpex case. The decision was later overturned. (See pages 394–395.)
Having created Donkey Kong, Mario, Zelda, Yoshi, and Star Fox, Shigeru Miyamoto (pictured here with awards from the Academy of Interactive Arts and Sciences) is generally regarded as the most successful game designer in history.
Donkey Kong was the game that enabled Nintendo to break into the U.S. arcade business.
Russian mathematician Alexey Pajitnov (seen here visiting his old apartment in Moscow) created Tetris, the best-selling video game of all time.
The Nintendo Entertainment System (NES) and the Super NES, the systems that solidified Nintendo’s place in video game history.
Game Boy…. Atari engineers laughed when they saw its crude, monochrome screen. Twelve years, 115 million units, and more than 450 million cartridges later, Game Boy reigns unrivalled as the most popular game system of all time.
The late Gumpei Yokoi, dean of Nintendo’s engineers, devised the toys that helped Nintendo expand from manufacturing playing cards, created the hardware for Nintendo’s first arcade games, and led the team that made Game Boy.
By the time former Mattel president Tom Kalinske was appointed president and CEO of Sega of America, Nintendo already controlled more than 90 percent of the video game industry. Kalinske chose to take Nintendo head-on.
Brilliant, temperamental, and an extreme perfectionist, Sega’s Yuji Naka created Sonic The Hedgehog, NiGHTS, Burning Rangers, and Samba de Amigo.
The creation of Sonic The Hedgehog signaled a new direction and attitude for Sega. It also meant the end of Nintendo’s unchallenged dominance of the home game industry.
Sega’s top arcade hit-maker, Yu Suzuki, is known for his sophisticated taste in wine, cars, and technology.
Capcom’s Shinji Mikami, creator of the exceptionally gory Resident Evil games.
Crazy Taxi creator, Hisao Oguchi.
Hironobu Sakaguchi of Square Soft thought Final Fantasy would be his swan song as a game designer.
Created by Andrew Gavin and Jason Rubin of Naughty Dog, produced by Universal Interactive, and published by Sony Computer Entertainment, Crash Bandicoot games became Sony’s unofficial answer to Mario and Sonic. (Pictured here is concept art from the latest Crash Bandicoot game, which is being developed and published by Universal.)
In 1994, Nintendo allowed Tim Stamper and a team at Rare, Ltd. to use their new rendering technology to revive Donkey Kong. The result was Donkey Kong Country.
Moviephile and Metal Gear creator, Hideo Kojima.
Sort of a cross between Clint Eastwood and Toshiro Mafune, Solid Snake is the me
rcenary hero of Konami’s Metal Gear Solid.
John Romero, cocreator of Doom and Quake.
During the 1993 joint hearings, Senator Joseph Lieberman displays a light pistol used in video games.
Nintendo’s Donkey Kong enters the ring in a PR event for Super Smash Bros.
Because of the lasting popularity of the Pokemon craze in Japan, Nintendo opened a “Pokemon Center” store a few blocks from the main subway station in Tokyo.
In 2001, Microsoft plans to enter the video game industry with its new Xbox game console.
Seamus Blackley, whose past resume includes such impressive feats as working on the super collider and such low points as Tresspasser—terrible Jurassic Park–based first-person shooter on PC—is the main designer of Xbox.
Having helped his company launch a very successful line of PC peripherals, Microsoft “chief Xbox officer” Robert Bach is now assigned to break into the video game hardware market.
Nintendo teamed up with IBM to design a custom-built 64-bit chip for GameCube. Because Nintendo was so quiet about the system, many skeptics doubted its ability to compete with Sony’s PlayStation 2 and Microsoft’s Xbox. Big mistake. GameCube may look like a toy, but going into the 2001 Christmas season, it could compete with anything on the market.
With the launch of PlayStation 2, Sony officially launched the most recent generation of video game hardware.
Twenty years and 100 million Game Boys later, Nintendo of America president Minoru Arakawa and Mario still have reason to smile.
First appearing in the 1981 game Donkey Kong as a carpenter named “Jumpman,” Nintendo’s Mario is the elder statesman of the gaming industry.
The Birth of Sega
When I was a youngster, I went to Coney Island. Like everybody else in New York City, I played the games in the penny arcades. That was really my total knowledge of the business.
—David Rosen, cofounder, Sega Enterprises
David Rosen and Michael Kogan … just a couple of guys living it up in Tokyo.
—Bernard Stolar, chief operating officer, Sega of America
The Meaning of Sega
Sega is not a Japanese word; it is an abbreviated form of Service Games. Though the company is headquartered in Japan and has a Japanese corporate culture, it was founded by Americans.
The history of Sega can be divided into two distinct stories. One is the story of Sega; the second is the story of David Rosen.
The Beginnings of Sega
My Dad was in Hawaii when the Japanese bombed Pearl Harbor. He ran the slot machines on the bases. When they bombed Pearl Harbor, there was a note on one of the slot machines that said, “In case of another attack, jump under this machine. It’s never been hit yet.”
—Lauran Bromley, president, Bromley Incorporated (daughter of Marty Bromley)
Service Games began in May 1952, shortly after laws were passed restricting the use of slot machines in the United States. Prior to those laws, a man named Marty Bromley managed game rooms with slot machines, pinball tables, and other coin-operated amusement devices on several military bases in the U.S. Territory of Hawaii. In 1951, after the laws changed and the government confiscated the slot machines, Bromley and his father purchased them from the government, then shipped them to Japan, where they set up game rooms for servicemen stationed there.
By most accounts, Japan of the early 1950s was practically a Third World nation. The country’s industries were greatly depleted during the war years, many of its factories had been destroyed, and a large portion of the workforce had died. Though the United States was a generous victor, Japan’s recovery was slow.
Bromley set up a lucrative trade. He branched out into jukeboxes and opened a manufacturing plant called Nippon Kikai Seizo. By 1960, Service Games, also known as Nippon Koraku Bussan, was one of the three largest coin-operated entertainment companies in Japan, along with Taito and Rosen Enterprises Ltd. By this time, Bromley had two partners, Dick Stewart and Ray LaMaire, who stayed in Japan and managed the business.
In 1964, they took on a new partner, a man named David Rosen.
There are two people who played a very important role in the opening and establishing of the coin machine industry in Japan. Dick Stewart and Ray Lemaire had come to Japan in 1952 and, sharing an office as a bedroom, had from scratch built a major operation on the U.S. military bases. They called their company Service Games. From this start they expanded into the Japanese marketplace, establishing a Jukebox operation that reached a total of over 5,000 locations. To service this route they had established branch offices in every major city in Japan. By this time they had two companies, Nippon Goraku Bussan and Nippon Kikai Seizo, which they merged into one. The company had an extraordinarily well-developed corporate infrastructure and, like my company, had taken the best from both business cultures: Japan and the United States. It was with this company, named Sega, that I merged Rosen Enterprises Ltd., and Sega Enterprises Ltd. came into being.
—David Rosen
Twelve years after Service Games was formed, Mr. Rosen came in. He was already established, and he already had his own company.
—Lauran Bromley
A Tough Guy from New York
You know, game machines, like a theater seat or a plane seat, depend on occupancy and depend on the time that they are used. If you charge $1 per play, but it’s only used ten times a day, you only make $10. Really, all you’re selling is time. Our machines were constantly going. I mean, [they were] going from morning to night.
—David Rosen
David Rosen was tall and thickly built, with dark hair and a strange calm intensity that suggested the ability to carefully consider issues under any circumstances. He could be friendly and quietly intimidating at the same time. He had served in the U.S. Air Force during the Korean War. In 1951, as Marty Bromley started his slot machine business, Rosen was stationed in the Far East. He traveled to locations such as Shanghai and Okinawa but spent most of his time in Japan.
While serving in Japan, Rosen came to believe that the Japanese people were too industrious to remain in their present circumstances. Seeing an opportunity, he started up a business even before he was discharged. After finishing his commitment with the Air Force, he returned to the United States, hoping to further his college education and establish his business.
My first business was actually involved in art, strangely enough, which is about as far from the current business as you could be. In those years Japan was still in an economic postwar strata and, consequently, there was still a lot of unemployment at the time. A lot of the artists were doing portrait painting based on photos. I established a company in the United States that sent photos back to Japan to be made into portraits.
—David Rosen, founder, Rosen Enterprises, Ltd.
When his portrait business failed, Rosen decided to return to Japan and start a new business that he would run while living in Japan. He studied the people and their needs and found an intriguing possibility.
At that point in time, the people in Japan had a great need for ID photos. You virtually needed an ID photo for school applications, for rice ration cards, for railway cards, and for employment, obviously.
We’re talking about 1953, 1954, and the photo studios generally charged what was then 250 yen, and it took two or three days to have the photos done. My thought was that we had, in the United States, photo mat studios that charged 25 cents, and you could get four photos. They were called Photomats—little booths that were completely automated.
—David Rosen
American Photomat booths were not an ideal solution, however. Upon returning home, Rosen discovered that Photomat pictures faded after one or two years. If he wanted to bring Photomats to Japan, where the pictures would be used on official IDs, he needed to find a way to produce pictures that could last for four or five years.
After some research, Rosen discovered that the problem was easily solved. Photomat pictures were made without negatives—an automated camera snap
ped the shot, then flashed the image on positive paper. If this process were carried out adhering to certain temperature specifications, the pictures would not fade for several years. The booths, however, lacked temperature controls. The people who ran the companies that made the booths believed that their customers viewed the pictures as having only novelty value.
