Interesting to find this thread over here at DU. I'm big into videogames. Been playing since Pac-Man Fever. It's a really great budget-based pastime.
Lots of interesting posts on the subject (liked the unnoticed outcome of the Betamax vs. VHS battle
http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=4730596&mesg_id=4731600">someone put up) but nobody really has pinpointed the reasons why the videogaming scene has turned out the way it has between companies Nintendo (Wii, DS), Microsoft (XBox 360), and Sony (PlayStation 3, PlayStation Portable).
The Videogame Market Crash of 1983/1984 and what happened in 1985 explain what's going on right now. A little backstory to paint the tale first.
Atari and Odyssey...and NintendoIn 1971, Nolan Bushnell, a tech student/all-around hustler, took computer gaming from the exclusive domain of the MIT crowd to the public arena when he began the videogaming business. What would in 1972 take the name of Atari was the beginning of digital electronic gaming as a business venture. He began the coin-op arcade videogames inspired by his many days working at an amusement park as a teen.
Without Atari, we wouldn't be typing these communications on our home computers right now because what Atari did in its pioneering of videogaming inspired the two Steves, Jobs and Wozniak, to create Apple which brought us the first personal computers.
But there was another founder of videogaming business and his name was Ralph Baer. Separate from what Bushnell was about to do, the inventive Baer began working on a console nicknamed the Brown Box in 1966. By 1972, this box was released to the public as the Magnavox Odyssey, the first videogaming console. While Bushnell was transforming bars across the country, Baer set the stage for introducing videogaming to people's living rooms. The focus was on a family-friendly experience since consoles were in people's living rooms.
Atari followed what Baer was doing in 1974 and introduced their own consoles initially built around superhit PONG. While Odyssey started videogame consoles, Atari enjoyed wider success and for all intents and purposes (and despite all copycats) WAS the videogaming industry in the 1970s.
Now here's where Nintendo comes in. Nintendo, a company originally began to make playing cards in Japan in 1889, had branched out to toys by the 1970s. And a videogame console was, of course, a toy as well even if a technological one. Nintendo caught on this rising comet by distributing the Odyssey in Japan in 1974. Learning from both the founders of videogaming, Nintendo decides to make their own consoles for hometown starting with the Color TV Game console series in 1977. With their own PONG clones for Japan they were now the first Japanese VG console makers. Atari's innovations had already lit a fire under Japan for years and now Nintendo went in headlong in this new enterprise.
Atari, Odyssey, and their copycats; Nintendo and the other Japanese arcade makers created two halves of a burgeoning videogame industry which you could call Western and Eastern. By 1980, you already saw the crossover of two very different creative sources. Space Invaders and Pac-Man which set game audiences on fire were out of the fertile imaginations of the Japanese. Breakout and Centipede came out of the vivid imaginations of folks right here in U.S.A.
But just as videogames were significantly influencing the national culture at the start of the Reagan 80's, Bushnell was pushed out of his own creation, Atari (which led to pursuing other hustles like Chuck E. Cheese). In need of financial backing, he made a deal with a devil called Warner Communications (now known to you as Time Warner) and they shook loose the reigns of his control forcing him to sell it to them in 1978. A bunch of bottom-line greedy money-hungry execs running the show vs. the guy who conceived the whole design of the company. Already the stage was set for the market to crash with idiots at the helm. But it would take a while to show.
Atari was the hotness and everybody got in on the videogaming act both in arcades and at home on the consoles. Even freakin' Quaker Oats started making videogames under the label US Games! The fierce competition of the early 1980's made the PONG copycat competition of the 1970's look like crayon scribbles. So many consoles on the market, such a recession in 1982, so much greed leading to poor quality/content control and then Michael Jackson happened in 1983. Whoa!
In the U.S. all of sudden just as it seemed this new era was cementing its ground, videogames were going out of style. It was considered a passed fad and not even a Toys 'R' Us would stock the things! People were talking about videogaming tournaments of the Twin Galaxies variety and then the bottom was falling out. In Japan, it was a whole different story with Nintendo riding the success of its liquid-crystal display handheld the Game & Watch of 1980 (inspired by the busy go-go lives of the Japanese) and interchangeable cartidge console — the Famicom, the Family Computer of 1983 (remember Baer's focus on the family?). In the arcades and at home Japan was videogaming but in the U.S. while it didn't show so much at first videogaming was headed toward extinction. Atari, the beginning of this videogaming business, was about to be the end of this business by 1984.
Here's where we get back to the point.Apple beginning the home computer eventually led the way for many competitors which asked the question
"What do we need videogaming consoles for if we can play them on out home computers which do that and so much more?" Baer's boxes were about to be obsolete and digital electronic gaming was about to be relegated to the general purpose computers like the Commodore instead of those specialized gaming computers that had been around for almost 15 years.
Nintendo already successful in Japan and with some fanfare in the West with hits like Donkey Kong, Mario Bros., and their various Game & Watches had decided to take the Family Computer out West. A fateful miscommunication between Coleco and Atari over rights to Donkey Kong allowed Nintendo to go it alone in bringing their version of gaming consoles to a soon-to-be barren market wasteland. Cultural differences necessitated a redesign and a Family Computer went from an Advanced Video Gaming System to an Entertainment System with a look enticing to both American audiences and wary retailers.
All alone in a atmosphere that said videogames as we knew them were dead, Nintendo single-handedly resuscitated the videogame industry in the U.S.A. with the Nintendo Entertainment System of 1985. The turn-knobs and wood grain of the Odyssey, the joystick and red action button of the Atari, were replaced by the Game & Watch-inspired plus-sign shaped Control Pad and lettered action buttons on a rectangular plank perfectly fitting in a player's palms. Nintendo's hardware and of course software design (Super Mario Bros., The Legend of Zelda, Metroid), not to mention their efficient (if sometimes ruthless) business models, forever relinquished the torch of the VG industry from the hands of Atari, its American originator, to its new Japanese saviour. Maybe it was destiny with that Japanese word 'atari' on the face of an American company.
Through Nintendo, Japan became the capital of the videogaming industry with Japanese game design predominant on the consoles and American/European game design predominant on the personal computers. Kids growing up with this unique cultural exchange began learning about Japan from manga, anime, and the customs and symbolism rich within them (who here knew what a Tanuki was before Super Mario Bros. 3?). With Nintendo fueling the innovations of videogaming, over time new competitors from Japan got in on the act including Sega and Sony. But no matter who competed and how well they did, in the end it always came back to Nintendo's endless ingenuity in the gaming experience and inexhaustible efficiency in running a business. They touched base with the founders of this industry long ago, learning from their mistakes to ensure their longevity. In doing so, they rewrote the bible on how to operate the business and have controlled it ever since despite what it may sometimes appear.
The PlayStation was originally a Nintendo idea. It was to be a collaboration between Sony & Nintendo that fell apart due to royalty issues. It was a mistake on Nintendo's part not to read the fine print of the contract and they reneged on the terms after the fact in order to preserve the company control which allowed them to be so innovative. Sony capitalized on Nintendo's mistake, improved upon the alternative marketing Sega used on Nintendo in the early 90's, and gained power in the videogaming market. But even with their record-selling success (over 100 million original PlayStations sold, over 140 million PlayStations 2 sold - standing world record), they never truly understood the creative process that goes into the videogaming business nor did they understand the waste-proof business model that allows tech to be mass market.
Back to the presentWith Nintendo's Wii and DS, Nintendo reclaimed the inevitable total control of the industry that would always come back to them. The Wii is the NES, the Family Computer reborn in full glory. Always following what Baer set out to do with consoles being a family-friendly experience, Nintendo focused on what REALLY drives the business better than ever before in creating that duo. It ain't tech. It's the experience. Mid-range to low-range tech used in a novel way allows for these complex items to sell for affordable prices especially when an economy goes south. It is why videogames seem to be recession-proof and Nintendo's the guardian of these types of principles.
Neither Microsoft nor Sony recognize this simple fact. Problem for Sony is they don't have the endless money to throw at the problem like Microsoft and their historic dependence on 3rd party developers (who must by design follow the most successful consolers) dooms them when they are not successful. The PlayStation 3 will not make it out of 2009 alive. Sony not truly understanding this business or its customers thought that previous success could command loyalty to a ridiculous price. They thought that high tech was the answer not realizing it was usually the least technologically advanced machine that did the best in the market since the very beginning. PCs are where you go if you're looking for high bleeding edge tech. But hell, with how the PC market is even PC developers cross over to the console world to make some money. Sony forgot that the company who makes its own hardware should also make its own software and have that as the focus (Nintendo's poor-performing Gamecube was kept alive for this very fact). 3rd party is to buttress your 1st party/2nd party success not be your primary success.
In 2009 Microsoft will soon find out what Sony knows now, Nintendo IS the videogame industry. They are the holders of the torch lit by Atari and the Odyssey.
John Lucas