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 The Master Plan Because of the infamous downscaling of the popularity of home consoles, which occurred around 1984, it was make-it or break-it time for the video game industry in America. Consumers were choosing computers over the more expensive and singularly focused consoles, and major video game companies - including Atari and Mattel - were beginning to quit the business. Something big had to happen - something very, very big.
While the video game decline in America rapidly grew worse, the Japanese were having the time of their lives. The rather large Game & Watch (and card) company, which later became a game/console developer, released its first home console: the Nintendo Famicom (short for family computer). The success that the system saw was remarkable, and the situation did not look likely to change. Who was the competition for this thriving company known as Nintendo? Sega, with its Mark III console. Unfortunately, in the face of the opposition, the Mark III had no chance. That, however, didn't stop Sega from following Nintendo around the world. When the Famicom, which Nintendo dubbed the NES (Nintendo Entertainment System) in the US, was released in the States in early 1986, Sega chose to take its machine there as well, albeit three months after the release of its rival's system. The NES was released at a paltry $159, while the Master System cost a bit more at $200. Unfortunately, the Master System fared poorly yet again, despite its technical proficiency. While both were labeled as 8-bit machines, the Master System had four times as much RAM (8KB), eight times as much video RAM (16KB), an impressive audio system, and a processor twice as fast (3.5MHz) as the Famicom's - with some impressive software and a slick system design. Furthermore, the Master System was notable for its ability to play two software formats: cartridges, which were similar to the ones Nintendo used; and the tiny "card" format, which was no bigger than your hand and inexpensive to produce. The latter media failed to catch on, and cartridges were soon dominant. The main reason Sega was unable to gain customers was to the shrewd, wise, and powerful business decisions of one man: Hiroshi Yamauchi, CEO of Nintendo. Because of the success of the NES in Japan, third-party developers had nowhere else to turn if they were to stay in the business. Yamauchi knew this and took advantage when possible. For third parties to produce games for the Famicom, they had to sign a contract with Nintendo. This document required developers to develop only for the NES. Almost all companies had signed this agreement, which left Sega with only itself and two others developing for the system. Because of this, it's little wonder why Nintendo had a 90 percent market share during the NES period.
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