The history of the Nintendo Entertainment System (NES) spans the 1982 development of the Family Computer, to the 1985 launch of the NES, to Nintendo's rise to global dominance based upon this platform throughout the late 1980s. The or was developed in 1982 and launched in 1983 in Japan. Following the North American video game crash of 1983, the Famicom was adapted into the NES which was launched in North America in 1985. Transitioning the company from its arcade game history into this combined global 8-bit home video game console platform, the Famicom and NES continued to aggressively compete with next-generation 16-bit consoles, including the Sega Genesis. The platform was succeeded by the Super Famicom in 1990 and the Super Nintendo Entertainment System in 1991, but its support and production continued until 1995. Interest in the NES has been renewed by collectors and emulators, including Nintendo's own Virtual Console platform.
1981–1984: Origins 1981–1983: Development The video game industry experienced a period of rapid growth and unprecedented popularity during the late 1970s to early 1980s, with the golden age of arcade video games and the second generation of video game consoles: Space Invaders (1978) and its shoot 'em up clones had become a phenomenal success across arcades worldwide, game consoles such as the Atari 2600 and the Intellivision became popular in North American homes, and the Epoch Cassette Vision became the best-selling console in Japan. Many companies, including Nintendo, arose in their wake to exploit the growing industry.
The inspiration for the Famicom hardware was arcade video game hardware. A major influence was Namco's Galaxian (1979), which had replaced the more intensive bitmap rendering system of Space Invaders with a hardware sprite rendering system that animated sprites over a scrolling background, allowing more detailed graphics, faster gameplay, and a scrolling animated starfield background. This provided the basis for Nintendo's Radar Scope (1980) arcade hardware, which they co-developed with Ikegami Tsushinki, improving on Galaxian with technology such as high-speed emitter-coupled logic (ECL) integrated circuit (IC) chips and memory on a 50 MHz printed circuit board. Following the commercial failure of Radar Scope, the game's arcade hardware was converted for use with Donkey Kong (1981), which became a major arcade hit. Home systems at the time were not powerful enough to handle an accurate port of Donkey Kong, so Nintendo wanted to create a system to allow a fully accurate conversion of Donkey Kong to be played in homes.
Led by Masayuki Uemura, Nintendo's R&D2 team began work on a home system in 1982, ambitiously targeted to be less expensive than its competitors, yet with performance that could not be surpassed by its competitors for at least one year. The console began development under the codename Project GAMECOM. Uemura analyzed the innards of rival consoles, including the Atari 2600 and Magnavox Odyssey, sidestepping their primitive technology. Their main competition was the Epoch Cassette Vision, the best-selling console in Japan at the time, with Nintendo president Hiroshi Yamauchi telling employees he wanted them to develop a console both more powerful and cheaper than the Cassette Vision. Nintendo R&D2 engineer Katsuya Nakakawa analyzed the IC chips of the more powerful Donkey Kong arcade hardware, concluding that it would be possible to use them as a basis for their console. Another Nintendo R&D2 engineer, Takao Sawano, proposed that the D-pad of Nintendo's Game & Watch handheld devices should be adapted for the console.
Meanwhile, in North America, the toy manufacturer Coleco was working on a new home console to compete with the Atari 2600 and which would be capable of handling fairly accurate ports of arcade games. Coleco demonstrated a prototype of the ColecoVision to Nintendo R&D2 engineers, who were impressed by the smoothly animated graphics. It left a strong impression on Sawano and Uemara, who had the ColecoVision in mind while working on Nintendo's new console in Japan. However, while the ColecoVision was a significant improvement over the Atari 2600, there was still no console comparable to the original Donkey Kong arcade hardware. Nevertheless, the bundled port of Donkey Kong helped the ColecoVision become a major success in North America.
Uemura sent the engineers Katsuya Nakakawa and Masahiro Ootake to meet with Ricoh, a semiconductor manufacturer that had previously worked with Nintendo on arcade games. One of Ricoh's supervisors was Hiromitsu Yagi, a former Mitsubishi Electronics engineer who had previously designed the large-scale integration (LSI) chips for the Nintendo Color TV-Game consoles in the 1970s. To determine the system specifications of the new console, Nakakawa and Masahiro brought along a Donkey Kong arcade machine for Ricoh to analyze, in order to help build a console more powerful than any consoles at the time and which would be comparable to the Donkey Kong arcade hardware.
Uemura initially thought of using a modern 16-bit central processing unit (CPU), but instead settled on an 8-bit CPU based on the inexpensive MOS Technology 6502, supplementing it with a custom graphics chip, the Picture Processing Unit, produced by Ricoh. To reduce costs, suggestions of including a keyboard, modem, and floppy disk drive were rejected, but expensive circuitry was added to provide a versatile 15-pin expansion port connection on the front of the console for future add-on functionality such as peripheral devices. Peripherals like the Famicom keyboard would later be released utilizing the Famicom expansion port. Other peripheral devices connecting via the expansion port would include the Famicom Light Gun, Family Trainer, and various specialized controllers. Many would be released in Japan only, such as the Famicom 3D System. Other add-ons like the Family Computer Disk System, and Family Computer Network System would connect via the cartridge port.
The wireless broadcast functionality of the TV Tennis Electrotennis (1975) got Nintendo designer Masayuki Uemura to consider adding that capability to the Famicom. He ultimately did not pursue it to keep system costs low.
1983–1984: Famicom release in Japan Nintendo held its own exhibition to unveil the Famicom, becoming a sensation among toy show exhibitors. Shortly after, the competing SG-1000 was unveiled at the Tokyo Toy Show.
Launching on July 15, 1983, the Family Computer (commonly known by the Japanese-English term Famicom) is an 8-bit console using interchangeable cartridges. The Famicom was released in Japan for (about $150 at the time, or equivalent to $ in ). Its launch game list is Donkey Kong, Donkey Kong Junior, and Popeye. The console was intentionally designed to look like a toy, with a bright red-and-white color scheme and two hardwired gamepads that are stored visibly at the sides of the unit.
It sold well in its early months, at 500,000 units in its first two months. However, many Famicom units reportedly had faulty graphics chips and froze during gameplay. After tracing the problem to a faulty circuit, Nintendo voluntarily recalled all Famicom systems just before the holiday shopping season, and temporarily suspended production of the system while the concerns were addressed, costing Nintendo millions of dollars. The Famicom was subsequently reissued with a new motherboard. The Famicom easily outsold its primary competitor, the SG-1000. By the end of 1984 Nintendo had sold more than 2.5 million Famicoms in the Japanese market. This made it the best-selling console in Japan, surpassing the Cassette Vision. Sales exceeded Nintendo's expectations, leading to the Famicom being sold out, so Nintendo raised projections and increased production for the following year.
Nintendo had planned to be the exclusive provider of Famicom games during its launch year. Major arcade developer Namco approached Nintendo about Famicom development, as they had no means of cartridge production. They contracted a 30% fee to Nintendo per game sold, consisting of 10% as a licensing fee for the console, and 20% as the production cost of new cartridges. By 1984, third party Famicom games were published. This 30% fee became a de facto standard in console and storefront licensing for video game publishing through the 2010s.
1984–1987: Going international 1983: Marketing negotiations with Atari
Bolstered by its success in Japan, Nintendo soon turned its attention to foreign markets. As a new console manufacturer, Nintendo had to convince a skeptical public to embrace its system. To this end, Nintendo entered into negotiations with Atari to release the Famicom outside Japan as the Nintendo Enhanced Video System, with plans to release the system by the end of 1983. Though the two companies reached a tentative agreement, with final contract papers to be signed at the 1983 Summer Consumer Electronics Show (CES), Atari refused to sign at the last minute, after seeing Coleco, one of its main competitors in the market at that time, demonstrating a prototype of Donkey Kong for its forthcoming Coleco Adam home computer system. Coleco had licensed Donkey Kong for the ColecoVision home console, but Atari had the exclusive computer license for the game. Although the game had been originally produced for the ColecoVision and could thus automatically be played on the backward compatible Adam computer, Atari took the demonstration as a sign that Nintendo was also dealing with Coleco. Though the issue was cleared up within a month, by then Atari's financial problems stemming from the North American video game crash of 1983 coupled with the departure of Atari CEO Ray Kassar left the company unable to follow through with the deal in time to make the target launch.
North America 1984–1986: Nintendo VS. System
Famicom hardware debuted in North America in the arcades, in the form of the Nintendo VS. System in 1984; the system's success in arcades paved the way for the official release of the NES console. After the video game crash of 1983, many American retailers considered video games a passing fad, and greatly reduced or discontinued the inventory of such products. Nintendo of America's market research was met with warnings to stay away from home consoles, with US retailers refusing to stock game consoles. Meanwhile, the arcade industry also had a slump as the golden age of arcade video games came to an end, but arcades were able to recover and stabilize with the help of software conversion kit systems. Hiroshi Yamauchi realized there was still a market for video games in North America, where gamers were gradually returning to arcades in significant numbers. Yamauchi still had faith there was a market for the Famicom, so he decided to introduce it to North America through the arcade industry.
Nintendo developed the VS. System with the same hardware as the Famicom, and introduced it as the successor to its Nintendo-Pak arcade system, which had been used for games such as Donkey Kong 3 and Mario Bros. (both 1983) Though technologically weaker than Nintendo's more powerful Punch-Out arcade hardware, the VS. System was relatively inexpensive, epitomizing Gunpei Yokoi's philosophy of "lateral thinking with withered technology." The VS. System was also able to offer a wider variety of games, due to being able to easily port over games from the Famicom. Upon release, the VS. System generated excitement in the arcade industry, receiving praise for its easy conversions, affordability, flexibility and multiplayer capabilities.