Home / Gaming / How Nintendo Transformed Christmas Into a Gaming Holiday – Geek

How Nintendo Transformed Christmas Into a Gaming Holiday – Geek

Year after year, video games are some of the top sellers every holiday season. But it wasn’t always thus – in the 1980s, after the massive crash of Atari’s 2600 console left millions of unsold cartridges gathering dust on shelves across the country, retailers were terrified to devote any shelf space to electronic gaming before Christmas. But a little Japanese company decided to change all that, and the winter of 1985 saw a little gray box that would change everything released.

Jump into the Wayback Machine with us and let’s discover how Nintendo made Christmas the season of gaming.

Atari landfill

The Dark Times

To really set the stage for Nintendo’s Christmas triumph, we need to first revisit the tragedy of the great crash of 1983, when the American video game market was ruined so thoroughly that nobody thought it would ever recover.

The Atari 2600 was launched for the 1977 Christmas season and for the first three years of its life enjoyed modest sales. Then, in 1980, the company brought out a home version of Space Invaders, Taito’s arcade hit, and suddenly the 2600 was a must-have entertainment device for every household. That game alone sold over two million units, quadrupling Atari’s hardware sales, and all of a sudden electronic gaming was hot. Many other companies jumped into the market, including Coleco, Magnavox and more. Money flowed like wine and everything was good.

Until it wasn’t. Just three years later, Atari was on the ropes. The company had paid big bucks for another arcade license – Namco’s iconic Pac-Man – but the aging hardware couldn’t do the game justice and they shipped a blocky, flickery mess. The same year, their tie-in game for Steven Spielberg’s massive hit E.T, programmed in a little over a month by Howard Scott Warshaw, also flopped. The company buried fourteen truckloads of unsold games in the New Mexico desert, and retailers turned away from the medium, devoting shelf space to less expensive, more dependable sellers.


The Beast From The East

Nintendo was a strange company. Founded in 1889, it originally produced colorful hanafuda cards before branching out into toys and gadgets in the 1960s, starting with Gunpei Yokoi’s “Ultra Hand.” In the mid-70s, they entered into the market that would make them famous with the Color TV-Game 6 home Pong knock-off, and by 1981 they’d release the game that changed everything: Donkey Kong.

Nintendo began development of a cartridge-based video game system in 1980. The hardware was designed to provide solid performance, especially in terms of graphics, at a low price. In 1983, they launched the Famicom (short for Family Computer) in Japan, and immediately ran into trouble. A hardware defect in the initial production run would cause games to freeze at random, and Nintendo recalled every single system sold and stopped production until they could resolve it. That move would prove incredibly costly, but also established their reputation as a customer-first business that would do what it takes to deliver the best product.

That same year, they started making eyes at the world beyond Japan and actually entered negotiations with Atari to release the Famicom abroad as the “Nintendo Enhanced Video System.” That deal collapsed in the summer of ’83, and Atari soon followed, leaving Nintendo without a partner in the States.

That didn’t deter them, and in 1985 they debuted the latest incarnation of the Famicom at the CES conference. Dubbed the “Advanced Video System,” it was more computer than console, coming with a keyboard, a cassette data recorder and a BASIC programming cartridge. The market, still shaky from Atari’s implosion, didn’t bite. Nintendo didn’t get a single retail order for the AVS, and they went back to Japan to try again.

Nintendo AVS

Toys, Not Games

Realizing that the video game market in the States was radioactive, Nintendo took another pass at the Famicom to try and scrub away as much of the stink as they could. They started by renaming all of the parts to remove negative connotations – instead of “cartridges,” they became “game paks.” And the device itself wasn’t a “computer” – it was an “entertainment system.” The company also pushed accessories like R.O.B, a robot that the system could control and interact with for a pair of games. They returned to the States to debut the new design at CES… and it still didn’t work.

Retailers were still too tender to take the chance on a new console. So Nintendo decided to bet the farm on a gutsy strategy: they’d offer the machines to stores in New York, on a pure consignment basis. That meant that the retailers wouldn’t risk anything but shelf space to sell the new Nintendo Entertainment System. Legendary toy store F.A.O. Schwarz in Manhattan agreed along with a few hundred others, and for the next few months Nintendo dispatched local employees to stock shelves and even demo product.

It’d be nice to end this article by saying that the NES finally set the world on fire and became the must-have toy of 1985, but that’s not true. That said, it wasn’t the titanic failure that the company’s detractors predicted either. In the two test markets, the console moved a respectable 90,000 units out of the initial shipment of 100,000, and many retailers were convinced enough to place additional orders. Two years after the crash, video games were back.

Nintendo Ad

Frank Cifaldi / Video Game History Foundation

A New Age

Over the next year, Nintendo would push the NES into one market at a time; starting with Los Angeles, then Chicago, San Francisco, and finally going nationwide in September of 1986. By then, the system had its killer app – Super Mario Bros. – and was moving like hotcakes. 1986 was the year the system landed in Sears’ ultra-popular holiday catalog for the first time, and the company took home $310 million in sales. For comparison, the entire video game industry made about $100 million the year before, so this was an obvious sea change.

The next year, the NES was the best-selling toy of the holiday season. Same for 1988. Each year would also bring new must-have games that were advertised like crazy through the holiday season – titles like The Legend of Zelda, Wizards & Warriors and Blaster Master. Having a Nintendo was now an essential part of childhood.

Competitors soon entered the fray. Sega brought their Master System to the States in September of 1986, hoping to move as many as 750,000 of them by the end of the holiday season. It didn’t happen – despite the console’s advanced graphics, Nintendo had already established their chokehold on the market and the company barely sold 125,000.

Even Atari tried to use the NES’s success to get back in the game with the Atari 7800. However, the already underpowered console found itself struggling for third place, hamstrung by Nintendo’s rules on arcade ports – if a company made a game for the NES, they couldn’t release it on another system for two years afterwards. This resulted in fewer than 100 games being developed for the 7800 before it was discontinued.

By 1988, Nintendo had 83% of North America’s video game marketshare, leaving everybody else in the dust. The game was theirs to lose.

Super Nintendo

Bucking The Trend

Interestingly enough, Nintendo would move away from holiday releasing with its next console. The Super Nintendo would hit stores in August of 1991, narrowly missing the season. They were working from an interesting position though – competitors NEC and Sega had both already launched their next generation, the Turbo-GrafX 16 and the Genesis. Those consoles made the aging NES look like a relic, but Nintendo waited an entire year to riposte with the SNES. They knew exactly what they were doing, though – launching both with a new Mario game and titles that demonstrated the exciting new pseudo-3D Mode 7 technology, the SNES immediately set sales records. Over the next few years, the console would move software at a breakneck pace, selling six million copies of Donkey Kong Country and eight million of Super Mario Kart.

Over the next generations, all of the major players in the console market would stick with the pre-Christmas season to put their new machines on the American market. But with the Switch, Nintendo’s oddball part-portable that has once again proven they’re a force to be reckoned with, they launched in March, away from the holiday scrum entirely. It’s too early to assume that they know something we don’t, but a company built on taking big risks on innovation can’t ever get too comfortable.

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