How Nintendo Conquered Manhattan in 1985
A number of things crossed Bruce Lowry’s mind as he listened to Nintendo of Japan President Hiroshi Yamauchi speak. It was 1985, and the company—flush with capital thanks to the success of arcade sensation Donkey Kong—was poised to move into the American home console market. Yamauchi seemed completely undeterred by the fact that retailers were still stinging from the 1983 implosion of video games: oversaturation and poor quality control had led to systems from Atari and Coleco collecting dust in bargain bins. The former had even buried hundreds of thousands of unsold cartridges in the New Mexico desert, a metaphor for the collapsing industry as a whole.
But Lowry, who had been hired by Nintendo as Vice President of Sales after a stint at Pioneer, also knew things could be different under Yamauchi’s watch if they employed the right strategy. For one, Nintendo’s Famicom (“family computer”) system had sold 2.5 million units in Japan; for another, the games themselves looked far more sophisticated than previous offerings. Lowry’s own sons had played a prototype system and declared it “the real thing,” with the home versions virtual carbon copies of the arcade experience.
A slow rollout of the Nintendo Entertainment System (NES), Lowry figured, could work. If retailers and consumers were exposed to the game play and ad copy was worded to avoid direct comparison to the market losers, they might have a chance. Houston would be a good place to start. Or Nashville. Someplace, Lowry says, where “if we made a mistake, it wouldn’t have destroyed things. We could figure it out.”
Lowry’s internal strategy was broken by Yamauchi’s announcement: the North American debut of the NES would happen in New York City. It had the highest concentration of press, the biggest vendors, and the cache of being a cultural epicenter. It was also an area hit hard by Atari’s collapse, with those same retailers ready to suffocate any video game advocate within arm’s reach.
“We’re launching in New York,” Yamauchi said, his daughter translating, “because that’s where success happens.”
The room grew silent. Lowry sighed. “Leaving Pioneer,” he says, “suddenly seemed like the stupidest mistake of my life.”
The Game Plan
For Lowry and the dozens of Nintendo of America employees who migrated from company headquarters in Seattle to the East Coast in the fall of 1985, selling a gaming system presented a challenge. Though they knew the NES was a giant leap forward, the marketplace was prepared to treat any electronic entertainment like poison. In order to even be heard, they’d have to change the narrative.
The Famicom was originally put on display during the January 1985 Consumer Electronics Show, where Nintendo had dubbed it the Advanced Video System and paired it with strange accessories like a cassette recorder and keyboard; one game professed to tell fortunes. With no children around at an industry trade show, they weren’t sure how much interest they were going to get, but Lowry remembers seeing some buyers gambling on their Golf title. “They kept coming back,” he says. “I noticed that when they kept slapping money down on the monitor. It was a good sign.”
No one doubted the games were addictive, but the aesthetics of the clunky-looking system were lacking: Staffers sat down and began refining the control deck to appeal more to children. At the time, the toy industry was awash in robots like Transformers. Nintendo’s Japanese designers developed the R.O.B., or Robotic Operating Buddy, which sported a binocular-shaped head and could “assist” players with objectives in specific games. Nintendo also decided to include the Zapper, a light gun that could take aim at the targets in Duck Hunt.
The company figured the accessories would further distance themselves from past console failures. To help prove it, they conducted extensive market research in Paramus, New Jersey in the summer of 1985. Lowry remembers holding up the Zapper and telling a mother, “It comes with a gun!”
“Not in my house it doesn’t,” she said.
With electronics already being manufactured, there was no opportunity to return to the drawing board. The NES launch was set for late October, which concerned Lowry greatly. “For a Christmas item, you want to be in stores starting in August,” he says. “It was a hugely compressed window of time.”
But Yamauchi was unwavering. His son-in-law, Minoru Arakawa, was running Nintendo of America and had a gentle way of pushing the team forward, encouraging the belief the NES was different and that the industry could be resuscitated with the right strategy. The company leased a base of operations in Hackensack, New Jersey, a musty warehouse where inventory would be stored, seven-foot tall retail displays built, and sales calls made. Employees—arcade distributors and later company VPs Al Stone and Ron Judy, warehouse manager Howard Phillips, contracted sales guru Sam Borofsky, and development chair Don James among them—all worked in concert to set up what amounted to a satellite operation.
Prior to arriving, Lowry had made his first official vendor call to Woolworth’s. It was brief. “No way,” their buyer said. “Not touching it. See ya.”
Later, Lowry would pitch in to unload the first inventory shipment from Japan. The salesman remembers looking at the towering pile of NES systems, which took up an entire side of the warehouse, and wondered where they were all going to go.
While Lowry was knocking on doors that were subsequently slamming shut, Gail Tilden was busy trying to convince both the media and consumers that the NES was worth a shot. Hired as a Vice President of Brand Management in 1983 after a former colleague went on maternity leave, Tilden knew little about the implosion of console gaming. “I liked playing Frogger,” she says. “And Pac-Man. Nintendo, to me, was the Donkey Kong company.”
Tilden joined the team in New Jersey and set about trying to draw media interest for the system’s official launch party in October at a trendy spot called the Visage. Unfortunately, the event coincided with the death of actor Yul Brynner and the terrorist hijacking of a ship. “There was real news and soft news,” she says. “We were non-news.”
Attempts to entice a major ad agency to handle commercials proved equally frustrating. Lee Clow, who had just co-created the infamous Apple Orwellian 1984 commercial, didn’t even bother submitting a bid because Nintendo was so small. Others told them the name Nintendo was unpronounceable and would have to be changed. Eventually, Tilden found a smaller agency, Geers Gross, to tackle a series of commercials to air in the local market. “We shot two or three at one time,” she says. “The director ended up in the hospital with exhaustion.”
To combat what Lowry perceived as a poor impression of video games, an early spot depicted a mother watching her children slaughter the waterfowl of Duck Hunt in the safety of their living room. “At the time, drugs were in arcades and it was a bad element,” he says. “We came up with the concept of … Mom has her family home again. People didn’t want kids in arcades.”
Print ads avoided words like “video games” and “cartridges,” which carried negative connotations. Instead, they focused on R.O.B. or the “control deck” and “game paks” available. Tilden also learned a lesson from failed software, which packaged their primitive graphics in boxes with thrilling artwork. (Marketing expert Borofsky had worked for Atari and was quick to point out their mistakes.) “We didn’t want to over-promise,” she says. “We used pixels right on the box so people would know what they were getting.”
Nintendo also had sub-categories for games, which ranged from $20 to $35 each. “One of the categories was Education, which was Donkey Kong, Jr. Math,” Tilden says. “Then you had a programmable game with ExciteBike. That was part of the idea of separating ourselves, making sure people knew there were selections for everyone.”
The Hackensack team delivered their own inventory to stores, which revealed a culture clash: Nintendo’s Seattle exports didn’t think twice about leaving a cargo van unattended in the Bronx. “Everything was getting stolen out of the back,” Tilden says, laughing. “It was a different New York back then.”
Every weekend, Tilden and other employees would venture out to a mall in New York or New Jersey to set up a display intended to pull in foot traffic. Store owners shrugged, but Nintendo had wisely hired Mets players like Mookie Wilson and Ron Darling to draw attention. The pair would sign autographs and compete against shoppers in Baseball. Kids who tried the NES were enthralled, though Tilden had little patience for R.O.B., which had a glacial non-urgency in performing for a crowd. “It was hilarious to try and make him do anything,” she says. “The thing moved at the speed of grass growing.”
Titles like Duck Hunt were what Tilden calls “pick up and play games,” which required virtually no instruction—making them perfect for passersby. Nintendo had a total of 15 to 18 offerings that season, though no one can say for certain that their future signature hit, Super Mario Bros., was among them. Store ads featured the title—which was already available in Japan—though it could have been reprinted from a master list provided by the company before the game had actually shipped.
While the plumber may have helped move things along, no one game was likely to help retailer apprehension. Regional franchises like the now-defunct Wiz were slowly climbing on board—not because of familiarity with Nintendo, but because of the trust Lowry had built as a Pioneer representative. “It wasn’t anything formal, but I let these guys know we weren’t going to leave them hanging,” he says of Nintendo’s willingness to be flexible with accounts. “If they bought inventory and it didn’t sell, they knew we would help them out.” It wasn’t an explicit promise to return unsold stock, but it helped ease concerns about carrying the $139.99 product at a time Atari systems were rotting on shelves at $50.
”I had retailers saying they’d discount it to $100,” Lowry says. “I said, ‘No, you won’t.’” Nintendo had an absolute conviction in the quality of their product and weren’t willing to compromise, even when pitches didn’t go well: Once, after Lowry’s grandmother passed away, Arakawa was left to demonstrate Baseball for buyers at Sears. “Here’s this engineer from MIT who loved baseball,” Lowry says. “He wanted to play all nine innings and they’re just glazed over.”
Eventually, Sears, Macy’s, and other national chains signed on, motivated in part by the sheer hustle demonstrated by Nintendo’s team. But in an era where Walmart was not yet a power player, one account stood out above the rest: Toys “R” Us.
The Final Boss
As the nation’s then-largest purveyor of playthings, Toys “R” Us had profited handsomely from the Atari craze of the early 1980s. But that meant the company also took a bath when unsold stock began to pile up. By spring 1985, games were being sold for $5 with a $5 rebate from third-party producer Parker Brothers. “They had taken a tremendous hit from the Atari days,” Lowry says.
He sat with the franchise’s buyer—Lowry doesn’t recall his name—who wasn’t radiating enthusiasm. Nearby was Howard Moore, the chain’s Executive Vice President. According to Lowry, the buyer wasn’t swayed by his pitch, by R.O.B., or by the possibility of eating another Atari-sized loss.
“I don’t think we really want to get involved,” he said. Lowry was crushed. Toys “R” Us could set a precedent, but it went both ways. Other stores could be encouraged by their participation, or put off by a lack of it. But before Lowry could protest, Moore intervened. He knew and trusted Lowry.
“Well, that’s why I’m Executive Vice President, Bruce,” he said. “We’ll do it.”
The store went one step further, allowing Nintendo to set up an interactive display at a time when it was not company policy to do so. “That was our biggest move,” Lowry says, along with getting a foot in the door at FAO Schwartz, which featured a massive window set-up viewable from the street. (The store’s buyer happened to be a gamer.) The team was ecstatic—at least until the father of one of the television spot actors saw it and complained. His kid’s contract didn’t include the rights to show it in stores.
The Nintendo Entertainment System officially went on sale in late October across nearly 500 stores in New York, New Jersey, and parts of Connecticut. Retailers paid $98 wholesale; $139.99 bought consumers the console, two controllers, R.O.B., the Zapper, Duck Hunt, and Gyromite.
Stores featured giant R.O.B. displays showing off Nintendo’s graphics and features; one had an audience of the robots moving their heads in unison. Kids, Nintendo’s real clientele, passed word around: This was not another Atari. Like Lowry’s children, they recognized something new and different. (The television spots may not have done much to raise awareness; airing late at night, they were bartered, with Nintendo trading consoles for airtime and the barter agency selling the units right back to Toys “R” Us.)
By the time Christmas 1985 drew to a close, Nintendo’s exhausted sales force had managed to move between 50,000 and 90,000 consoles. (Lowry says they exceeded their goal of 50,000 units; Tilden believes a New York Times story citing 90,000 consoles may have been Nintendo’s attempt to exaggerate for media.) Either way, it was enough for the team to feel good about moving their efforts to Los Angeles and then nationally. By 1988, sales had grown to $1.7 billion; in 1989, 9 million systems were sold. When the NES was finally retired in the 1990s, more than 60 million had been installed. The media went from writing obituaries for the game industry to wondering who could challenge Nintendo, which was quickly becoming one of the all-time biggest success stories in the toy world.
Lowry left soon after the launch to head up Sega, which would later prove a worthy adversary; Tilden became editor-in-chief of Nintendo Power, an official magazine that was essentially a giant advertisement for games that quickly reached over a million subscribers. But the true monument to their achievement in Manhattan may have come in 2005, when the company opened a 10,000 square foot Nintendo World store at Rockefeller Center.
“Going into New York, there was really no other option than be successful,” Lowry says. “After Yamauchi was done, we walked out of the hotel room, had a cocktail and said, ‘This changes everything. But we can do it.’ And we did it.”