The Ultimate History of Video Games: From Pong to Pokémon and Beyond—The Story Behind the Craze That Touched Our Lives and Changed the World (81 page)

Next came Sony’s turn to drop a bomb. Olafsson was supposed to discuss “what it’s going to take to be successful storytellers in coming years.” The topic obviously gave him room to discuss the technological strengths of PlayStation, and he was expected to announce the system’s price and launch date. At the time, it was generally assumed that PlayStation would likely be as expensive, or possibly more expensive, than Saturn. Olafsson started his speech as expected, then interrupted himself.

Sony clearly won the first battle of E3. By sending Saturns to four retailers only, Sega offended several of its best outlets. Kay*bee Toys responded by dropping Sega from its lineup. More important, releasing in spring or summer, typically slow seasons for video game hardware sales, did not give Sega any advantage. Having a surprise launch meant that Sega had forfeited any chance of having a big send-off for Saturn and gave the appearance of being afraid of head-to-head competition with PlayStation.

Sony’s surprise was more effective. Even though Saturn came bundled with a highly desirable game,
Virtua Fighter
, it was too expensive for the consumer electronics category. The $399 price point was known to be more of a high-end electronics ticket, something that people might pay for a stereo component but not for a video game console. Sega was making the same mistake Trip Hawkins had made with 3DO.

While Nintendo, Sega, and Sony threw million-dollar parties at E3, Trip Hawkins held a quiet and elegant dinner at a fine restaurant. In his typical socially graceful fashion, he left one seat open at every table and shuttled from one table to the next through the meal so that he could speak with all of his guests. During the meal, a reporter asked him what he thought of Sony. Sighing and looking a bit tired, Hawkins replied, “For a company that is so new to the industry, I would have hoped that Sony would have made more mistakes by now.”

Nintendo executives focused on Super NES, Game Boy, and Virtual Boy rather than Ultra 64. There were no Ultra 64 prototypes for guests at the Nintendo booth, and by this time everybody knew that Nintendo had no plan to release the console in 1995. Lincoln did announce, however, that Virtual Boy would come out in August for a suggested retail price of $179. Nintendo’s other big announcements were three Super NES game—
Donkey Kong Country 2, Killer Instinct
, and
Yoshi’s Island.
*

One problem with launching Virtual Boy, along with the general lack of interest most consumers had in the product, was that the only way to see its 3D images was to place your face against it. This meant that shoppers would not see the 3D images as they walked past them in stores. Also, the system could not be effectively demonstrated on television.

Virtual Boy was released on August 14 to generally lackluster reviews. Although reviewers at
Entertainment Weekly
and
Popular Science
gave it glowing reviews,
game magazines panned it. When the editors at
Next Generation
opened the box in which their Virtual Boy was packed, they began playing volleyball with the inflated bags Nintendo had used as packing material. “It was the most fun we were ever going to have with anything in that box,” editor in chief Neil West explained when asked about it.

By mid-August, the industry had already lost interest in Virtual Boy, as Microsoft became the focus of worldwide attention. On August 24, 1995, Microsoft launched
Windows 95 (Win95)
, a major upgrade from previous
Windows
operating systems that included technology for running games smoothly. Though Microsoft published a few games to accompany the launch of
Win 95
, it would take months before people realized the deep impact the new operating system would eventually have on gaming. By the end of the year, people would even be able to play first-person shooters without leaving the
Windows
environment, making computer game installation suddenly easier.

Though it did not make computers as simple to use as consoles,
Win 95
went a long way toward closing the gap. Computer games did not catch up to console games in overall sales, and the top console games still sold at two to three times the rate of the top PC titles, but video game publishers began eyeing PCs as a viable new platform.

The next big event was the September release of PlayStation. One person who was not going to see this release, however, was Steve Race. On August 7, Race resigned as president of Sony Computer Entertainment of America and resurfaced quickly at Spectrum HoloByte. Few people were surprised by Race’s departure; his ongoing battles with his employers in Japan were well-known.

Sony shipped 100,000 PlayStation consoles for release on September 9, almost all of which had been prereserved. The entire shipment sold out. Two days after the release, Sony had already sold more PlayStations than Sega had
sold Saturns in the five months since the surprise announcement at E3. By the end of the year, Sony boasted of having shipped 800,000 PlayStations into North America while Sega claimed to have sold 400,000 Saturns.

In the meantime, things unraveled for 3DO and Atari. As far as the public was concerned, Nintendo had blown a hole in 3DO’s claims of technological superiority with
Donkey Kong Country.
In 1995, Crystal Dynamics released a game about a wise-cracking Hawaiian lizard called
Gex
that brought the same highly polished graphical look to 3DO and supplemented it with the voice files that would never have fit in a Super NES cartridge. Standup comedian Dana Gould performed the voice-over for Gex, the main character, giving the game a certain charismatic wit. Realizing that
Gex
was the most surefire game in the 3DO lineup, Panasonic bundled it with their company’s version of the console.
*

Gex
and other highly improved games were not enough; 3DO had lost its position as the most desirable game console the moment Tom Kalinske announced that Saturn had already shipped. By the time Sony launched in September, the only tricks 3DO manufacturers Panasonic and GoldStar had left were to offer rebates and to bundle more software. As one GoldStar print ad stated, “The GoldStar 3DO system is jammed full of space-age technology and comes with lots of FREE stuff.”

3DO’s window of dominance had been shut, and, in his own evangelical way, Hawkins helped close it. Seeing that there was no way to compete with
Sega and Sony, he began talking about the disappointment of the 32-bit generation and the real strengths that 64-bit processing had to offer. Hawkins changed his focus to M2, a 64-bit console that he promised would shame PlayStation and Saturn. M2 never materialized. 3DO sold the technology to Matsushita for $100 million, and though many game companies did receive M2 development kits, no M2 systems were ever released.

Things were even worse at Atari. Atari president Sam Tramiel struggled to find ways to bolster sales and cut costs. In 1995, he stopped manufacturing Jaguars and concentrated entirely on selling off the existing inventory. He slashed the price of the console to $149, released an attachable CD-ROM peripheral, and openly courted new game developers. He ran infomercials to try and sell additional consoles, but the infomercials did not reach the right audience. Toward the end of 1995, Atari finally convinced Wal-Mart to carry Jaguar in its superstores, but by that time people knew about Saturn and PlayStation and weren’t interested. Nothing seemed to work. The company was hemorrhaging money. The end came when Sam Tramiel suffered a mild heart attack and his father, Jack, came in to run the show in his absence.

Many theories arose about why Jack Tramiel purchased Atari. Some people said that he bought the company as a means for exacting revenge on Commodore, the company that he founded, then left under unpleasant circumstances. Another theory was that he purchased Atari to make one last fortune, enough money to ensure the future of his three sons, Sam, Leonard, and Gary. A third theory suggested that he bought Atari as a way of bringing his sons together. If any of these were his reasons, he succeeded. Atari outlasted Commodore, had a few enormously profitable years, and united his sons in a common goal.

On July 30, 1996, Atari Corp. merged with JTS Corporation, a company that manufactured 3.5-inch disk drives, in an $80 million stock swap. Jack Tramiel was active on the JTS board after the merger. Two years later, Hasbro Interactive purchased the Atari library from JTS.

Time Warner put Atari Coin-Op on the sales block in 1996 as well. In an interesting twist, one of the first people to bid on it was Nolan Bushnell, the man who originally had founded the company. Time Warner turned down his offer, however, and sold Atari to a familiar competitor—Williams Manufacturing.

In late November 1995, Nintendo finally unveiled its 64-bit, cartridge-based game console at its Shoshinkai trade show, held that year in a cavernous, warehouse-like convention center called the Makuhari Messe. As a proprietary show featuring only games for Nintendo systems, Shoshinkai was considerably smaller than E3 or the Tokyo Game Show. The entire show fit into one section of the Makuhari Messe and filled less than two-thirds of the floor.

Nintendo’s next-generation console underwent three name changes by the time it was unveiled. First known as Project Reality, then Ultra 64, the final name of the console was “Nintendo 64 (N64).” Although Nintendo had released many details about the new console during the months leading up to the unveiling, no information was ever leaked about the system’s controller. Created by Genyo Takeda and Nintendo Research and Development Team 3, N64 had a new and revolutionary three-handled controller that featured both
a traditional digital directional pad and a new analog directional lever. The T-pad, which was especially good for fighting games, worked a lot like a light switch. It did not read how hard you pushed, it simply noted when you pushed down on it and from what direction you pushed, then moved you in that direction at a constant speed. The analog lever, on the other hand, responded to pressure. Push slightly to the right, and the character you were controlling would inch in that direction. Push the lever all the way over, and your character would run at full tilt.

Hiroshi Yamauchi was clearly proud of the new controller. In a lengthy speech given the first day of the show, he said, “If you think this is just another game pad, then you know nothing about video games.”