Nintendo Entertainment System

• 1. The Console That Saved an Industry

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  The Nintendo Entertainment System launched in New York City on the 18th of October 1985, into a market that trade press had declared dead. Electronic Games magazine reported in March 1985 that the video game market in America had "virtually disappeared", and warned that Nintendo's push into North America "could be a miscalculation." Two years earlier, the crash of 1983 had devastated the industry, leaving retailers so burned by unsold inventory that many refused to stock game consoles at all. Nintendo would go on to sell 61.91 million NES units worldwide, shift 30 percent of American households onto the console by 1990, and pioneer a third-party licensing model that still shapes the games business today.

  The machine began not as the NES but as the Family Computer, known in Japan as the Famicom. Its designer, engineer Masayuki Uemura, was charged by Nintendo president Hiroshi Yamauchi with building something radical: a home system priced below the competition that could run arcade games. Yamauchi's target price was 9,800 yen, less than 75 US dollars, against rival machines that sold for the equivalent of 200 to 350 dollars. What followed was a decade-long story of product recalls, antitrust settlements, format wars, a thriving black market of clones, and a catalog of games that launched some of the most enduring franchises in entertainment history.

• 2. Yamauchi's Trojan Horse

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  In 1978, Hiroshi Yamauchi split Nintendo into separate research and development divisions and appointed Masayuki Uemura to lead Nintendo Research and Development 2. Yamauchi's vision was unusual for the era: he wanted a home computer disguised as a toy, something children would adopt so enthusiastically that Nintendo could become the sole provider of software for it.

  The hardware team settled on 2,000 bytes of RAM and modeled the graphics processor after chips found in Namco's Galaxian (1979) and Nintendo's own Donkey Kong (1981). A test model was completed in October 1982. Because 65xx CPUs were not manufactured in Japan at that time, no development software existed and had to be built from scratch. Early Famicom games were coded on a PC-8001 computer, and programmers used LEDs on a grid with a digitizer to design graphics, since no dedicated software tools existed.

  During development, Yamauchi stripped out peripherals, keyboard, data ports, modem, and expanded memory to keep costs down. Yet he insisted on retaining a low-cost circuit allowing the CPU to send or receive unmodified signals, leaving a door open for future expansions. Some Nintendo engineers privately called the console "Yamauchi's Trojan Horse": it entered homes as a simple gaming device and yet contained capabilities far beyond its apparent function. A 1989 corporate report later acknowledged, "In the initial stages of the system's development, we foresaw these possibilities... we built a data communications function into the system." Lead engineer Masayuki Uemura credited luck for this foresight; colleague Genyo Takeda remarked that Uemura's lack of experience allowed him to attempt what others might have deemed unfeasible.

  The name Famicom came from Uemura's wife, who argued that the system was neither a personal computer nor a home computer but something different, something that could be called a family computer. The red and white color scheme came from Yamauchi spotting a billboard for DX Antenna, a Japanese antenna manufacturer, and simply liking those colors.

• 3. Recall, Boom, and Nintendomania

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  On the 15th of July 1983, the Famicom launched in Japan at a price that was still higher than originally planned but less than half that of rival consoles. It shipped with three games, all ports of popular Nintendo arcade titles: Donkey Kong (1981), Donkey Kong Jr. (1982), and Popeye (1982). Within two months, 500,000 units had sold.

  Then reports emerged of consoles crashing during gameplay. Uemura and engineer Gunpei Yokoi traced the fault to a defective integrated circuit that could lock under specific data conditions. Staff proposed replacing only the affected units. Yamauchi considered the idea and rejected it with a single directive: "Recall them all." The full recall and revised motherboard cost Nintendo short-term pain but preserved consumer trust ahead of the critical New Year selling season.

  After the revised model shipped, the Famicom's rise was swift. By the end of 1984 it had become the best-selling game console in Japan, spawning what was called the "Famicom Boom." Retailers were overwhelmed with demand, queues formed for new game releases, and games sold out instantly. Fourteen rival console manufacturers exited the Japanese market. Sega's SG-1000, which had launched in Japan on the same day as the Famicom, failed to gain traction. The phenomenon became known as "Nintendomania."

  Nintendo had launched the Famicom with first-party games only. In 1984, after being approached by Namco and Hudson Soft, the company agreed to allow third-party titles. Developers paid a 30 percent fee to cover console licensing and production costs, establishing a revenue model that would shape the industry for decades.

• 4. Redesigning for the West

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  Nintendo initially planned to bring the Famicom to North America through a distribution deal with Atari. The agreement was expected to close at the Summer Consumer Electronics Show in June 1983. During the show, Atari discovered that Coleco was demonstrating an unlicensed port of Donkey Kong on its Adam computer. Atari, believing this violated its exclusive license for the game, delayed the deal. Shortly afterward, Atari CEO Ray Kassar was fired, the deal collapsed, and Nintendo decided to go it alone.

  Nintendo first rebranded the console as the Advanced Video System, or AVS, positioning it as a home computer with a built-in keyboard, cassette-based data drive, and infrared wireless controllers to distance it from the failed image of game consoles. The AVS was shown at the Winter CES in January 1985 to a lukewarm response.

  Nintendo of America designers Lance Barr and Don James received the prototype from Japan and nicknamed it "the lunchbox." Their redesign added a two-tone gray color scheme, a front-loading zero-insertion-force slot modeled after a videocassette recorder, and detachable wired controllers using proprietary seven-pin connectors. Marketing manager Gail Tilden coined alternative terms for the hardware to avoid the language of prior consoles: cartridges became "Game Paks" and the unit itself became the "Control Deck." Nintendo also heavily promoted accessories, particularly the Zapper light gun and the Robotic Operating Buddy, known as R.O.B., to position the system as cutting-edge rather than as a toy.

  To secure shelf space after the 1983 crash had made retailers wary, Nintendo contracted with toy company Worlds of Wonder. WoW salesman Jim Whims recalled delivering a pointed ultimatum to retailers: "if you want to sell Teddy Ruxpin and you want to sell Lazer Tag, you're gonna sell Nintendo as well." After a successful first year, Nintendo of America ended the deal and hired WoW's sales team directly.

  The launch line-up for the October 1985 New York test market included 17 games, among them Super Mario Bros., Duck Hunt, and Excitebike. A nationwide North American release followed on the 27th of September 1986.

• 5. Licensing Rules and Antitrust

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  By 1988, the NES's market position was so dominant that industry observers noted the market for Nintendo cartridges was larger than all home computer software combined. Compute! reported in 1989 that Nintendo had sold seven million NES systems in 1988 alone, nearly as many as the total number of Commodore 64s sold in that system's first five years.

  Nintendo enforced this position through strict third-party licensing terms. Publishers had to sign contracts obligating them to develop exclusively for the NES, order a minimum of 10,000 cartridges, and release no more than five games per year. Nintendo was the sole manufacturer of all cartridges, and publishers had to pay in full before cartridges were produced. Cartridges could not be returned, meaning publishers bore all inventory risk. Some lost more money in distress sales of remaining inventory at the end of the NES era than they ever earned in profits.

  The global 1988 shortage of DRAM and ROM chips reportedly led Nintendo to fulfill only about 25 percent of publishers' cartridge requests on average. Some developers created additional company labels to circumvent the five-game-per-year limit; Konami, for instance, operated the Ultra Games label for this purpose.

  The United States Department of Justice, several states, Congress, and ultimately the Federal Trade Commission opened investigations into these practices. The FTC's probe included interviewing hundreds of retailers. Nintendo and the FTC settled in April 1991. Nintendo was required to send vouchers offering a five-dollar discount on a new game to every person who had purchased an NES game between June 1988 and December 1990. The 10NES lockout chip at the center of this system had a secondary consequence: it produced the notorious blinking red power light, in which the console appeared to turn itself on and off repeatedly when the chip failed to detect a valid counterpart inside the cartridge.

• 6. Europe, Clones, and the Edges of the Map

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  Outside Japan and North America, the NES had a more complicated story. Nintendo had anticipated a 25 percent market share in Europe. The console arrived in Scandinavia on the 1st of September 1986, distributed by Bergsala, but most European countries did not receive it until 1987. In France it launched in October 1987; in the Netherlands in the last quarter of 1987; in Spain likely in 1988. In the United Kingdom, the ZX Spectrum had already established a strong home computing and gaming culture, and the Spectrum's affordability and local software support severely limited NES penetration. The Master System outsold the NES across most of Europe through the late 1980s.

  In Poland, the NES did not officially arrive until the 6th of October 1994, the same day as the SNES and Game Boy. In Brazil, the official launch came as late as 1993 through Playtronic, after the market had already been saturated by unlicensed clones. The most successful Brazilian clone was the Phantom System by Gradiente. In India, the console was sold as the Samurai Electronic TV Game System by Samurai Electronics, which initially moved 3,000 units per month before bootleg competition cut that figure to 300 units per month in the early 1990s. In Russia, the unlicensed Dendy clone, produced in Taiwan by Steepler, became the most popular console of its time, selling six million units.

  In China, a reported 30 million units of Famicom clones were sold until late 1995. In Poland, the Pegasus clone distributed by Bobmark International sold more than a million units. Nintendo eventually struck a formal arrangement with Steepler in November 1994, permitting continued Dendy sales in Russia in exchange for also distributing the SNES. The NES Classic Edition, a miniature emulation-based replica announced on the 14th of July 2016, with 30 pre-installed games, briefly revived the hardware in 2016-17 before being discontinued and then briefly revived again on the 29th of June 2018, before a permanent discontinuation by December of that year.

• 7. Franchises, Famicom Disk System, and Legacy

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  Several franchises that defined the medium had their origins on the Famicom and NES. Super Mario Bros. (1985), The Legend of Zelda (1986), Dragon Quest (1986), and Final Fantasy (1987) all debuted on the platform. Capcom's Mega Man, Konami's Castlevania, Square's Final Fantasy, and Enix's Dragon Quest all launched on the system. The Legend of Zelda and Zelda II: The Adventure of Link were distinguished even at retail by their gold-colored cartridges, while all other licensed US cartridges came in gray plastic.

  In Japan, Nintendo also launched the Famicom Disk System on the 21st of February 1986, at a retail price of 15,000 yen, to address the cost and capacity limitations of ROM cartridges. The Disk System offered more than triple the data storage of the then-largest cartridge, introduced game save capability, and enabled lower retail prices. Disk Writer kiosks let consumers rewrite games onto their old disks at retail stores. Disk Fax kiosks let players submit high scores for contests, predating online leaderboards by years. Despite selling close to two million Disk System units in 1986, Nintendo only reached 4.4 million total units by 1990, falling short of internal projections. Capcom's cartridge release of Makaimura just four months after the Disk System launched already surpassed the disk format's capacity, and the format was gradually abandoned.

  Nintendo discontinued the NES in North America and Europe on the 14th of August 1995, and discontinued Famicom production in Japan on the 25th of September 2003, the date of the last Famicom unit ever manufactured, serial number HN11033309. That unit was loaned to the organizers of Level X, a video game exhibition held from the 4th of December 2003, to the 8th of February 2004, at the Tokyo Metropolitan Museum of Photography. At the Tokyo Game Show in 2023, the Famicom received "The Minister of Economy, Trade and Industry Award" in recognition of the console's lasting influence on the industry.