How Nintendo Conquered the Gaming World

In the 1960s, if you were a Japanese businessman who wanted to be unfaithful to your wife, it behooved you to get in touch with Nintendo. Specifically, Nintendo’s luxury love hotel, which rented rooms by the hour and catered to harried working professionals who wanted to carry on discreetly.

It’s said one of the love hotel’s best customers was Hiroshi Yamauchi, the president of Nintendo. But despite his patronage, the idea of turning a profit on your boss’s scandalous affairs wasn’t a very good one. The love hotel quickly failed. So did Nintendo’s other attempts to branch out from games, like manufacturing instant rice and selling vacuum cleaners. The company was known primarily for playing cards, not food or vibrating beds. For Nintendo to level up, Yamauchi would have to take the company back to its roots. To do that, they’d have to endure a pissed-off King Kong, a malfunctioning robot, and a nearly universal hatred of their newest venture—video games. They couldn’t use the term video game.

Nintendo would eventually become one of the biggest success stories in technology, in toys, and in entertainment. One Christmas, kids were playing with Teddy Ruxpin. The next, everyone was crowding around Nintendo displays at retailers that kept the cartridges away from thieving little hands—their hot breath fogging up the glass that separated them from The Legend of Zelda or Super Mario Bros.

While Nintendo seemed like an overnight success, it actually faced a lot of resistance in trying to resurrect the video game market here in the United States. And part of the blame for that moribund market rests squarely on Steven Spielberg.

Ready Player None

In the late ‘70s and early ‘80s, arcade games like Pac-Man and Space Invaders became cultural sensations, with storefronts devoted to row after row of the towering coin-operated machines. Space Invaders in particular was stuffed with so many quarters that by 1983 its revenue topped $3.8 billion. Adjusted for inflation, that’s over $10 billion in today’s dollars, making it one of the highest-earning entertainment productions ever made.

Naturally, companies were looking for ways to bring that arcade experience home. A number of systems were launched during this period, but the most significant was probably the Atari 2600, which brought games like Space Invaders to television screens. There weren’t many pixels to go around, but kids were drawn by the elaborate game box art that promised sweeping adventures. The home video game boom was on.

And then Steven Spielberg messed it all up.

Well, it wasn’t exactly Spielberg’s fault. Atari agreed to produce a game based on his seminal 1982 film E.T. The Extra-Terrestrial, but it had to be done in a matter of weeks to come out in time for Christmas. Programmer Howard Scott Warshaw banged out a primitive game that featured the lovable alien falling into pits and struggling to get out.

It was objectively terrible; players hated it. But Atari, eager to capitalize on the movie, made millions of copies. Most went unsold and then into a landfill. So did other Atari games that had been saturating the market. Naysayers who had predicted that video games were just a passing fad had seemingly been proven correct. Atari threw dirt over excess E.T. cartridges, literally, and retailers seethed over expensive inventory that sat on shelves. Games that were supposed to be selling for $40 were marked down to $4. And while it’s not fair to pin all the blame on E.T., the game became a symbol for an industry-wide collapse that saw Atari lose a reported $536 million in 1983.

This was bad news for Nintendo, which was counting on the video game business. The company had gotten its start in 1889, manufacturing playing cards and tabletop games before embarking on a series of misguided ventures like the love hotel. Inspired by the success of companies like Atari, Nintendo decided to get into the burgeoning and lucrative video game market in the 1970s. Their handheld Game and Watch system was a big hit, offering portable play that foreshadowed the Game Boy.

Next came the Family Computer, or Famicom, in 1983. The Famicom was Nintendo’s answer to home video gaming. The company had seen a lot of success with their own arcade titles like Donkey Kong, which had been a surprise hit in the States even though arcade owners hated the title—they kept calling it Konkey Dong or Honkey Dong. Nintendo saw a home system as a way to keep things fresh for players. Maybe they’d eventually get tired of Konkey Dong. If they did, there was always something else to play. Company president Hiroshi Yamauchi wanted them to have choices. He also wanted it relatively cheap—about $100 in 1983’s money.

Compared to Atari machines, the Famicom was a huge step forward. Famicom cartridges had the capacity for 32 times the computer code as Atari titles, meaning there was room for more information and better graphics and sound. It also had the processing power for peripherals like keyboards, though Yamauchi wanted to keep a no-frills approach and market it more like a toy, with a red and white plastic exterior.

The Famicom flew off shelves in Japan, selling 500,000 consoles in the first few months. After a million units, they began to think about the American video game market, even going so far as to partner with Atari to allow them to distribute the Famicom in the U.S. When that deal fell apart amidst Atari’s business troubles, Yamauchi and Nintendo had to decide—should they keep the Famicom in Japan or navigate the American market on their own? You know the answer, but the how might surprise you.

Blowing It

Let’s hit pause for a hot second to address one of the most enduring memories people have of their Nintendo—blowing in the game cartridges to remove dust. Did this actually help them boot up, or was it a kind of video game placebo?

The Famicom was a top-loading console; video games were inserted vertically. The American version was horizontal, with games loaded into a slot and then pressed down. Sometimes, the pins on the open end of the game could collect dust or develop corrosion, interfering with its connection to the console. The game would either fail to load or produce some kind of weird, haunted-looking Nintendo screen.

But it’s not likely that blowing into the pins did much good. Instead, it was probably the act of taking the game out and reinserting it to reseat the pins that would help it load. Nintendo even issued an official warning, advising players not to blow into the cartridges because the moisture could cause corrosion. Consider this old Nintendo tale debunked.

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Coming to America

Nintendo showed off the Famicom at the Consumer Electronics Show in January 1985, and people were … puzzled. The company had done a redesign and renamed their product the Advanced Video System. It was bundled with a cassette recorder and keyboard. In an electronics industry wounded by Atari, the company wanted to go out of its way to present it as anything but a video game system. The term video game would eventually be banned from Nintendo’s marketing efforts, in fact. Game cartridges were referred to as game paks. It was a control deck, not a gaming console. It soon got another name change, too, and became the Nintendo Entertainment System, or NES. At a price point of $140, after all, it needed to be taken seriously.

Still, this wasn’t going to be easy. When Nintendo gathered a focus group of kids in the U.S. to test the NES out, they—didn’t like it. One succinct kid said, quote, “This is sh*t!” 

But Yamauchi wasn’t going to let a bunch of foul-mouthed 8-year-olds dictate his company’s fate. Nintendo of Japan assembled a marketing team to tackle the biggest media market in America—New York City. Yamauchi believed that if Nintendo could get traction there, they could make it anywhere. The team, which included sales executive Bruce Lowry, future Nintendo Power magazine editor Gail Tilden, and warehouse manager and resident gaming expert Howard Phillips, set out to change the perception of video games as a creatively bankrupt medium.

Nintendo had another ace up its sleeve. Specifically, a robot. Dubbed R.O.B., or Robotic Operating Buddy, the primitive device was developed to make the NES feel more like an entertainment console than a video game system. When players popped in a game called Gyromite, R.O.B. could add to the fun by using its arms to pick up objects called gyros—very, very slowly. It also sounded like a weed whacker.

Nintendo also brought back Duck Hunt, a game they first released in 1976 that allowed players to target waterfowl with a light-sensing Zapper gun, which was originally gray but eventually tinted orange to comply with American consumer product standards. Did Atari come with a robot buddy and firearms? Nope!

In 1985, Nintendo demonstrated the NES across New York and New Jersey, using R.O.B. and the Zapper as a way of attracting attention. They even hired baseball players like Mookie Wilson, who played for the Mets, to draw in crowds. When kids got their hands around that rectangular controller, they ended up having a lot of fun. That’s because games like Duck Hunt didn’t really have a learning curve. No one needed to read an instruction manual. They were games you could just pick up and play.  

Slowly, stores like Sears signed on, impressed by the advanced game play of the NES and the hustle of the Nintendo marketing team, who would keep calling and calling until they wore buyers down. Nintendo also offered to let retailers return unsold inventory, which helped counter fears of being stuck with excess stock, as had happened with Atari games.

But one store loomed over all the others, with its buyer the final boss of Nintendo’s New York adventure. It was Toys “R” Us, the 800-pound gorilla—or giraffe—of the toy world. Their blessing or lack thereof could make or break a product.

Their buyer said no. But Toys “R” Us executive vice president Howard Moore vetoed him, agreeing to not only stock the NES but to set up in-store displays, which were highly coveted real estate. Between Toys “R” Us and the support of that other toy giant, FAO Schwarz, Nintendo had made it in New York. In 1986, they were beginning to distribute across the country and the response was positive. In June 1986, Chicago Tribune columnists Steven Kosek and Dennis Lynch wrote, “Of course, with any dedicated game machine, the play is the thing, and on the Nintendo the play is terrific. You often see the phrase ‘arcade-like action’ in game reviews, but the Nintendo really does offer arcade quality. The graphics, sound and playability are superb throughout the Nintendo line.”

By the end of their first full year in the United States, Nintendo had sold 1 million NES consoles. In year two, they sold 3 million. In 1988, Nintendo fever had officially gripped the country, with 7 million systems sold and 33 million game paks sold. According to author David Sheff, who wrote the comprehensive 1993 history of Nintendo, Game Over, by 1989, one in four American households had an NES.

But it turned out Nintendo didn’t need gimmicks. Their secret weapon wasn’t a noisy robot but a soft-spoken programmer named Shigeru Miyamoto.

Playing for Keeps

Miyamoto grew up in Sonobe, Japan, without most of the things kids today take for granted. There was no television and certainly no video games—just the occasional movie and his imagination. Miyamoto played in the countryside and explored nearby caves, avoiding barking dogs on chains on his frequent walks. After graduating college, he became a Nintendo staff artist, and it wound up being a perfect fit. Miyamoto loved arcade games. When he was tasked with coming up with a new one, he was told to think about Popeye, the spinach-engorged comic strip character Nintendo was about to get the rights to.

When that deal fell through, Miyamoto came up with characters of his own. One was a giant gorilla he named Donkey Kong. Kong obviously comes from King Kong. You might read online that Donkey was chosen to imply stubbornness, but the firsthand accounts from Miyamoto tell a different story. It seems that the word came from looking up something like stupid or foolish in a Japanese/English dictionary. That might sound a bit strange, since donkey doesn’t really have that meaning in English. It might very well have shown up in that dictionary because of a synonym for donkey that does mean stupid or foolish. (We should be glad the reference book was imperfect—it’s hard to imagine that Ass Kong would have taken off in the States.)

Miyamoto also created a carpenter that would later be named Mario, after American Nintendo warehouse landlord Mario Segale. (Fun fact: Mario’s trademark look was the result of having so few pixels to work with. Without a mustache and hat, you probably wouldn’t be able to make him out on the screen.)

Everyone loved the game—except Universal. The movie studio sued Nintendo, arguing that Donkey Kong was infringing on their trademark to King Kong. A judge disagreed, citing the fact that Universal had argued King Kong was in the public domain during a previous lawsuit. Nintendo was free to market Donkey Kong. 

The company also gave Miyamoto the freedom to develop games for the Famicom. Super Mario Bros. followed. So did The Legend of Zelda. These games—with their snapping enemies and intriguing caves, their abiding sense of exploration—seemed rooted in Miyamoto’s imaginative childhood.

Unlike Atari’s box illustrations, Nintendo liked to put their pixelated renderings front and center on packaging. They didn’t want to overpromise. And while the graphics were great for the era, what really drew players in were the games. They became increasingly elaborate, with hidden chambers, valuable treasures, and unfolding storylines that far surpassed the simplistic video game scenarios—like E.T. falling into a hole—that players had gotten used to.

Miyamoto became Nintendo’s own Steven Spielberg, able to create magic out of virtually everything he touched. Super Mario Bros. became a long-running series; so did Zelda.

The list of hits for the console was nearly endless. In Contra, you could be an elite soldier; in Metroid, an alien hunter who is—gasp!—secretly a woman, arguably the first Nintendo game with a twist ending; in Castlevania, a vampire hunter; in ExciteBike, an extreme athlete; and in Ninja Gaiden, well, a ninja. Obviously.

Not all of those games were made by Nintendo, but they’re all great games. Unlike Atari, Nintendo exercised serious quality control over third-party game manufacturers. A lock-out chip in the NES prevented any non-licensed games from booting up. Nintendo insisted on approving all games, box art, and content, and even limited producers to making no more than five games a year. Oh, and those producers also had to buy game cartridges directly from Nintendo, which meant the company could control how many copies were being distributed, guaranteeing they wouldn’t flood the market. Yamauchi was quoted as saying, “Atari collapsed because they gave too much freedom to third-party developers and the market was swamped with rubbish games.”

The quality and complexity of these new games spawned two important developments. Gail Tilden, who had been on the front lines of the company’s efforts in New York, was charged with creating Nintendo Power, a magazine devoted to game strategies and sneak previews of upcoming titles. It was a huge success, with a circulation of over 2 million. 

Another savvy move was the company’s call center. The Nintendo hotline was an 800-number in which players could call for advice in case they got stuck. Game counselors working at Nintendo’s headquarters in Seattle manned the phones next to thick stacks of game guides. This service started out free, but so many calls came in that Nintendo was forced to switch it to a paid line with a strict seven-minute cut-off time—otherwise, kids were apt to treat the representatives like counselors, telling them about school or wanting to talk about movies or music.

But it’s not like Nintendo needed the money. By the late 1980s, the company was everywhere. Mario was on boxes of cereal and kid’s cartoons. Super Mario Bros. 3 grossed over $500 million and got a McDonald’s Happy Meal tie-in. Hollywood even made a Super Mario Bros. movie starring Bob Hoskins and John Leguizamo.

Even though it was poorly-received and unintentionally gave Blue Velvet a run for its money in the annals of “creepy Dennis Hopper performances,” it didn’t dent Nintendo’s reputation one bit. Nintendo became a catch-all term for video games in general. But not everything Nintendo touched turned to gold.

NES-essities

Remember how Hiroshi Yamauchi wanted the Famicom to accept add-on devices? The NES could, too. And some of them were downright weird.

Long before the Wii appeared, the Power Pad was Nintendo’s answer to the criticism that they were marshaling an army of couch potatoes. The device was created by Bandai, but quickly licensed by Nintendo. It was a crinkly plastic mat that players could use to run in place for sprinting games. Titles like Athletic World and Dance Aerobics got players moving. Because this was tedious, the Power Pad usually ended up rolled up in the closet. It also smelled vaguely like an air mattress. One good thing to come out of it? A rare title named Stadium Events was released to just a handful of stores, eventually making it one of the most sought-after NES titles of all time. It’s believed only 200 copies exist. One factory-sealed copy sold for $66,000 in March 2020.

The Power Glove was even more infamous. This device tried to usher in a new era of virtual reality, but programming it to work with existing games was so complicated that most gamers gave up on it after a few minutes. Not even a plug in the 1989 Nintendo-themed movie The Wizard starring Fred Savage could turn its fortunes around.

For arcade-style action, you could also swap out your standard NES controller for the NES Advantage. The Advantage featured a joystick instead of a directional button and came with turbo buttons that could make rapid firing in games like Contra more convenient. It also had a slow-motion button that was the equivalent of just hitting the Start—or pause—button over and over.

One peripheral that never made it to shelves? An NES knitting machine. The company briefly toyed with the idea, thinking it could sell knitters on cool patterns and interactive knitting software. And yes, they were literally going to use the slogan “now you’re knitting with power.” If only.

Press Start

The NES remained a fixture in living rooms well into the 1990s, eventually selling 60 million consoles. 

In hindsight, its success somehow seems both inevitable and impossible. Atari had ruined the video game market in North America, making both retailers and consumers reluctant to buy in. But Nintendo knew the secret to video game success wasn’t in the hardware. It was in the gameplay, and in characters like Link, Mario, and Samus, who drew players in with a depth and dimension far beyond their simple pixelated forms.

Thanks to designers like Shigeru Miyamoto, the games had classic storytelling archetypes. Nintendo gave us the power to chart different courses for our favorite characters. And while today’s more sophisticated game systems like the Nintendo Switch can make the NES seem quaint, it’s telling that we’re using all this advanced technology to revisit the same plumber that first jumped onto our tube televisions all the way back in 1985.