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 (88 page)

To help emphasize that new console’s image as more than a game machine, Sony concept designer Teiyu Goto created a special case for the new console that suggested consumer electronics instead of simply video games. Goto, who also designed the look for the VAIO line of laptop computers, created a cabinet that looked like a stereo component. Instead of the sleek shape and smooth lines and top-loading design of a game console, the “next generation” PlayStation had a rectangular cabinet and a front-loading tray.

With Sega launching a new system, and Sony well on its way, it was obvious that Nintendo would shortly join in the race. Nintendo made its announcement the day before the Electronic Entertainment Expo.

In typical Nintendo fashion, the announcement provided very little information, just enough specifics for reporters to create a rough idea of what the system might be able to do. To create the new system, which was code-named Dolphin, Nintendo had forged two new partnerships. The design of the processing chip would be handled by IBM. Dubbed “Gekko,” the new chip would be based on IBM’s PowerPC architecture and would feature 0.18 micron copper technology.

According to Nintendo chairman Howard Lincoln, the new console would have a DVD drive. However, like Kutaragi, he refused to specify whether it
would play movies. He also refused to specify polygon-rendering rates. The most he would say was that Dolphin’s graphics performance would meet or exceed anything on the market or going into production.

What he did say, however, was that Matsushita, known in the United States as Panasonic, had entered into a manufacturing agreement with Nintendo. Dolphin, Lincoln told the audience, would be released in 2000, just like the “next-generation” PlayStation.

On November 27, 1998, Sega launched Dreamcast in Japan. Although the system sold out, the response was quieter than expected. Sega shipped 150,000 consoles, which sold for 29,800 yen (approximately $260). Of the four games available at launch, only
Virtua Fighter 3tb
sold well. Based on the most successful arcade game Sega ever released in Japan,
Virtua Fighter 3tb
sold at a nearly one-to-one ratio with the console.
*
The other three games available at launch were
Godzilla Generations
, a ponderous game in which players controlled Godzilla as he pounded Japanese cities into rubble;
Pen Pen Tricelon
, a cute racing game for children, featuring a penguin and other cuddly animals; and
July
, a text-and-pictures adventure. In the weeks that followed, Sega shipped 300,000 more consoles, along with two new games—
Sonic Adventure
and
Sega Rally 2.

Although the Dreamcast launch looked successful on the surface, it had in fact gone dreadfully wrong. With Sony’s next-generation machine looming on the horizon, Sega wanted to shore up its installed-base as quickly as possible. Sega needed to ship more consoles and more games so that it could exploit the launch-day excitement. That, however, was prevented when NEC encountered manufacturing problems.

Irimajiri had hoped to sell well over 1 million Dreamcasts in Japan by February 1999. Instead, he sold under 900,000. And the sales continued to be slow. Looking at the Japanese market from a historical perspective, Irimajiri calculated that he would need to sell more than 2 million consoles by the time Sony launched its new console. In the fiscal year that started on March 1, 1999, and ended on February 29, 2000, Sega sold less than 900,000 consoles. Sega’s only hope was to beat Sony on the basis of price and games.

Back in the United States, Bernie Stolar and other Sega of America officials scrambled to avoid the mistakes Sega Enterprises had made with the launch of Dreamcast. Stolar vehemently maintained that he did not want the four games available at Japanese launch to be used as launch titles in the United States. Working closely with Midway Games, Sega hoped to have a much better lineup, with fifteen games ready when Dreamcast went to market.

The American launch of Dreamcast was set for September 9, 1999.
*
As the launch approached, however, Bernie Stolar was ousted from Sega much as he had been from Sony. With Stolar out, the responsibility of directing the launch
fell on the shoulders of Peter Moore, a former Reebok executive who had recently joined the company as senior vice president of marketing.

Sega of America had advantages never available to Sega of Japan. The success of Genesis gave Sega more clout in the United States than Sega Enterprises had in Japan. Sega had a sizable audience of loyal fans who liked the kinds of games Sega published. Also, in the ten months between the Japanese and American launches, several companies had managed to finish off truly polished games. Midway Games, for instance, had four games ready for the U.S. launch.

Several of the games selected for the launch stood out as “breakthrough” products. Sega had a brilliant football simulation called
Sega Sports NFL2K
with fast gameplay, a wide array of play options, and excellent graphics. Midway created a comical boxing game called
Ready 2 Rumble
that had a nearly perfect mixture of humor, graphic panache, and fast action. Perhaps the best game at the Dreamcast launch was Namco’s
Soul Calibur
, a superb home version of an arcade hit that actually looked better on Dreamcast than it did in the arcades.
*

The U.S. launch of Dreamcast was hailed as a big event, with retailers selling out of the nearly 1 million units Sega shipped. But just as unforeseen circumstances slowed the Japanese launch, an unexpected hiccup earned Sega of America bad press. A slight manufacturing glitch in many of the Midway games caused the music to skip. The problem was easily corrected, but Sega’s perfectly choreographed launch was marred.

Appearing to have some momentum, Sega enjoyed great hardware sales, with over 1.2 million consoles sold by the end of the holidays. During January, Sega experienced an expected dip in sales. Unfortunately, that dip continued through spring, even as Sega and its third-party partners expanded the Dreamcast library with a wide variety of games.

On February 27, 1996, Nintendo Co., Ltd., released a new cartridge for Game Boy called
Pokemon
(short for pocket monsters) into the Japanese market. What no one could possibly have suspected at Nintendo was that the company had done more than publish a game—it had started a small industry.

An outside company called Game Freak created the concept for
Pokemon
and proposed it to Nintendo at a time when Shigeru Miyamoto, the man who created
Mario
, just happened to be looking for a game that would allow Game Boy players to exchange items using Gamelink cables. Miyamoto oversaw the project from Nintendo’s side as it evolved into a full-fledged RPG for children, a universe in which children captured and trained friendly monsters, then entered them to fight in competitions. To create a need for players to exchange monsters, Nintendo created two different versions of the cartridge, red and green, each of which had a few unique creatures. The only way to collect all 151 creatures would be to trade.

Believing that the game would have limited appeal, Nintendo shipped only 200,000 copies of
Pokemon
on its first release. But
Pokemon
’s popularity grew steadily, and several stores ordered more copies of the game. Seizing an opportunity, one of the teams behind
Pokemon
set up a partnership with an animation studio to create an
anime
cartoon for television. When the cartoon became the highest-rated kids’ show in Japan, Nintendo started licensing
Pokemon
to toy, trading card, clothing, and food manufacturers.
Pokemon
soon became a billion-dollar industry.

In 1998, Nintendo finally exported the
Pokemon
phenomenon to the United States as part of a massive movement designed to bring new life to the aging Game Boy. The U.S. release of
Pokemon
bore little resemblance to the Japanese one, as the cards, games, and television show all hit within a few weeks of each other; the success was immediate. The syndicated
Pokemon
cartoon show became the hottest kids’ show on television, and
Pokemon Red
and
Pokemon Blue
became the bestselling games on the market.
Pokemon
trading cards became such a hot item that some elementary schools banned children from bringing them to class. Parents even initiated lawsuits, claiming that the way Nintendo and its partners marketed
Pokemon
trading cards was a form of gambling.

On November 23, 1998, Nintendo released Game Boy Color, a long-anticipated version of Game Boy with a color screen. In the spirit of Game Boy efficiency, Game Boy Color’s 32,000-color screen did not use backlit technology. Like other Game Boys, it had to be played in a brightly lit area or players would not be able to see the images on the screen. On the other hand, it could run for 10 to 12 hours on two AA batteries.
*
With the launch of
Pokemon
and Game Boy Color, Game Boy sales shot into record territory.

The boost could not have come at a better time. In 1999, nearly every video game company in Japan saw a significant drop in sales. Because of the relatively low cost of developing and manufacturing Game Boy cartridges and the brisk sales brought on by
Pokemon
and Game Boy Color, Nintendo had a profitable year.

In the United States,
Pokemon
sales gave the entire industry a boost. Video game sales generally drop in transition years in which new hardware systems are released, but U.S. game sales rose by $1 billion in 1999. The rise could be summed up in two words: Game Boy.

In 1997, the last year before the U.S. release of
Pokemon
, handheld game sales amounted to approximately $294 million. Nintendo released
Pokemon
in September 1998, and handheld sales surged to $466 million. From the moment they were released,
Pokemon Blue
and
Pokemon Red
became the hottest games on the market. In 1999, however, handheld game sales rose to $1.26 billion, representing 18 percent of the market. In short, the market had not grown; Game Boy did.

In February, Sony staged a trade show called PlayStation Festival 2000 to demonstrate the games that were under development for its new console, which was to be officially named PlayStation 2. By this time, the entire gaming world seemed consumed with excitement over the new console. But there were only nineteen games on display at the show, and PlayStation Festival 2000 left many attendees unimpressed.

Then rumors began circulating that for all of its power, PlayStation 2 was distinctly hard to program. Shinji Mikami, the Capcom designer credited with creating the popular
Resident Evil
and
Dino Crisis
games, complained that Sony had created insufficient tools to support PlayStation 2. Having created bestselling games for Dreamcast, Saturn, Nintendo 64, and PlayStation, Mikami said PlayStation 2 was the most difficult system he had ever worked with.