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A Tale of the Mirror World, Part 7: Winners and Losers

Hillary Clinton plays with her Game Boy on Air Force One in 1993. While history hasn’t recorded with certainty what game she was playing, I’d bet dollars to doughnuts it was Tetris.

Atari had high hopes for the superlative implementation of Tetris they released for the Nintendo Entertainment System on May 17, 1989, and its initial performance fulfilled all of them, more than justifying their ambitious opening production run of 300,000 cartridges. Indeed, in the first month alone, fueled by positive press and even more positive word of mouth, the Tengen Tetris burned through half of that stock, with sales increasing week over week. Atari clearly had the beginnings of a massive hit on their hands — but not if Nintendo could prevent it.

Nintendo requested that Judge Fern Smith, whose San Francisco courtroom would be the home of most of the legal proceedings in the war between them and Atari, issue a preliminary injunction barring Atari from continuing to sell Tetris until the questions surrounding the rights to it had been fully resolved. Judge Smith agreed to allow the two sides to argue their cases for or against such an injunction beginning on June 15. In the scant few weeks allowed to them, the two companies’ legal teams scrambled to collect documents and depositions in the United States, Britain, and the Soviet Union. Nikoli Belikov, Alexey Pajitnov, and the other Russians associated with ELORG thus got to enjoy the novel experience of being interviewed by opposing teams of American lawyers.

The current proceedings were not a full trial on the issue of the rights to the NES Tetris; that wasn’t expected to begin for months, and could then take more months to bring to a final verdict. This preliminary hearing dealt only with the question of whether Atari should be allowed to continue to sell their Tetris over the course of all those months. If Judge Smith thought it likely that Atari would prevail at the full trial, she could give them permission to do so. If she thought the opposite, she could order the Tengen Tetris pulled from the market for the interim.

When in-court arguments began, Atari pressed two separate lines of defense against Nintendo’s charge that the Tetris rights they claimed to own were ill-gotten. They hoped at least one of them would stick.

One line of defense accepted for the sake of argument the definition of “computer systems” as “PC computers which consist of a processor, monitor, disk drive(s), keyboard, and operation system” which was found in the revised contract Robert Stein had signed with ELORG the previous February. The NES did in fact — or at any rate potentially could — meet this definition, Atari argued. For proof, they looked to the console’s Japanese incarnation. There it was known, conveniently for Atari’s purposes, as the Nintendo Famicom, short for “Family Computer.” As that name would imply, Nintendo’s long-term goal had always been to turn the platform into more than just a game console. As far back as 1984, they had started selling an add-on kit called Family BASIC, an implementation of the BASIC programming language which came complete with a keyboard for typing in code. From 1986 on, it had been possible to purchase a disk system for the Famicom, which could be used for saving one’s BASIC programs as well as running commercial software sold on this alternative media. Thus a Famicom could be configured in such a way as to tick most of the boxes in the revised contract’s definition of a computer system. Should Judge Smith need more evidence, Atari pointed out that just the previous year Nintendo of Japan had introduced the Family Computer Communications Network System, a modem allowing Nintendo owners to take their machines online — albeit, in keeping with Nintendo’s walled-garden philosophy, only to access Nintendo’s own network. Once online, a Famicom could be used to play games with others, but could also be used to access a whole range of other information and services, from an encyclopedia to stock reports, from a travel agency to mail-order retail kiosks.

Sure, these things had only happened in Japan to date, but the North American NES was at bottom the same machine as the Japanese Famicom. All signs pointed to the NES as well being given capabilities that moved it from the category of game console to that of full-fledged home computer. For evidence of that, one needed look no further than Nintendo’s most recent annual report, where plans for a North American version of a Nintendo-branded online service featured prominently: “By employing the Nintendo Entertainment System as a domestic communications terminal, utilizing regular telephone lines, and the establishing of a large-scale network which to this point has been inconceivable, we plan to provide a vital supply of information for the domestic lifestyle in the fields of entertainment, finance, securities, and health management, to mention but a few.” “In court,” said an Atari spokesman, “Nintendo went to great lengths to say that the NES was a toy and its cartridges were the equivalent of Barbie’s arms and legs, but at the same time they were signing up AT&T to use the machine for stock reports. There is a Nintendo computer network in Japan and one planned for the United States. Sounds like a computer to me.”

If Judge Smith was in doubt how seriously Nintendo’s more grandiose schemes should be taken, she needed only ask the Software Publishers Association. The American software industry lived in terror of this potential Nintendo network, as it did of all of Nintendo’s much-rumored plans to use their game console as a Trojan Horse for bringing the walled-garden model of a software marketplace to applications other than games. If and when brought to fruition, such plans might force the entire industry to kowtow to the whims of this one foreign company. Thus the SPA’s support of Atari’s efforts to break into Nintendo’s extant walled garden of videogames by force, before it was too late.

In response to Atari’s claim that the NES effectively was a computer system, Nintendo noted that the contract which they claimed gave them rather than Atari the rights to make Tetris for the NES had been signed between ELORG and Nintendo of America, not Nintendo of Japan; the version of Tetris available for the Famicom in Japan was made by Henk Rogers’s Bullet-Proof Software, and its legitimacy wasn’t an issue to be decided in Judge Smith’s courtroom. Whatever its technical similarities to the Famicom, the North American NES was a separate product, and none of the Japanese accessories which could be construed as turning the Famicom into a “real” computer were available for the NES. If such accessories should become available in the future, the argument might be revisited, but right now the court should deal only in actualities, not hypotheticals.

For their other line of defense, Atari fielded the assertion that the revisions made to the original contract with Robert Stein had been made in bad faith, and that Stein had in fact been tricked into signing the contract. The Russians had originally intended, Atari argued, to license all of the rights to Stein and be done with it before they realized what a big seller the game had the potential to become. When they saw the opportunity to make more money through a deal with Nintendo, they had tried to pull a fast one to duck out of the first agreement. Stein himself testified to all of this in his deposition. Atari’s Dan Van Elderen, who had recently replaced Randy Broweleit at the head of the Tengen subsidiary, claimed the Russians “knew they had sold all those rights until they figured out, counseled by Henk Rogers and Nintendo, that there was a loophole. They realized they could have gotten a lot more money, so they double-dealt us all.” “Something went on between the Russian author and Nintendo,” said Atari’s president Hideyuki Nakajima in a deposition that might have come across better had he shown Alexey Pajitnov the respect of learning his name. “Nintendo knew we had the license, and it urged us to go forward with the game. Nintendo only cared once we filed the antitrust suit against them. They went after us. Howard Lincoln and Arakawa wanted to stop us. It was revenge.”

Nintendo yielded no ground to this argument either. They trotted out depositions from Alexey Pajitnov, Alexander Alexinko, Nikoli Belikov, and others at ELORG, all testifying that they had always understood the contract with Stein as covering only full-fledged personal computers, and had created the revised version merely to clarify what had always been the case. Furthermore, Stein had been given ample time to review this clarified version of the contract, and had signed it of his own free will.

As anyone who has followed the long and winding story of the Tetris negotiations to this point must acknowledge, neither side was presenting anything close to the unvarnished truth. Nevertheless, Judge Smith, who wasn’t privy to the inside details of the case in the way that we are today, had a hard time getting past the presence of a signed contract clearly stating that the rights Stein had licensed applied only to personal computers — which she judged that the NES, whatever it might become in the future, wasn’t as of June of 1989. On June 21, she handed the devastating news to Atari: they must immediately cease manufacturing and selling the Tengen Tetris, unless and until their right to do so was affirmed by the trial which was to follow later in the year. In the meantime, all unsold copies were to be recalled from the retail pipeline and locked away in a warehouse under the supervision of the court.

In a telling sign of which way the winds were blowing, Judge Smith issued no injunction against Nintendo releasing their own NES version of Tetris while both sides prepared for the full trial. But, perhaps wary of attracting her ire when she seemed to be favoring their side, Nintendo opted to hold their version in abeyance as well. Whose Tetris would make it permanently onto store shelves would be decided by a trial which was scheduled to begin in November. Until then, Tetris on the NES would remain in a tense state of stasis.

As the trial date drew near, Nintendo flew Nikoli Belikov to California to become their most important witness. The excitement of a free trip to the Soviet Union’s vision of a Mirror World was rather dampened by the rest of his circumstances. The pressure from Robert Maxwell’s allies inside the Kremlin hadn’t eased. Belikov faced the prospect of losing his career or possibly even his freedom if things went badly in that San Francisco courtroom. “Before my departure, I was invited into the State Committee for Computer Technology,” he remembers, “and they said, if you lose this lawsuit a special commission will be created who will look into how many millions of dollars the Soviet state has lost due to your reckless actions.” Belikov had known his fair share of bureaucratic scuffles during his day, but he had never felt so exposed as he did now. He joked darkly with his new Nintendo friends that if things went south he might just have to defect.

He needn’t have worried; Nintendo’s confidence that Judge Smith was leaning in their direction proved well-founded. The first day of the trial — November 13, 1989 — was a dream for Nintendo and a nightmare for Atari. Judge Smith came into the courtroom that morning only briefly, to announce that, having reviewed the evidence that had already been submitted, she saw no need to hear from witnesses or otherwise go through the motions of a full trial. She announced a summary judgment declaring Nintendo to be entirely in the right, Atari entirely in the wrong. The former was free to release their NES version of Tetris at their convenience, while the latter was to destroy their warehoused copies of the game forthwith. After months of preparation and buildup, the “trial” was over well before lunchtime. Atari announced that they would appeal the summary judgment, as you do in such circumstances, but soon decided that doing so would just mean more lawyers’ fees down the drain.

So, the judgment was allowed to stand, and the remaining copies of the Tengen Tetris were destroyed. Thanks to their relative scarcity as well as their sheer quality as the best implementation of Tetris ever to grace the NES, those copies which were sold during the one month the game spent on the market have become collectors’ items today, fetching prices of $100 or more.

For the Nintendo/ELORG camp, it was all over but the celebrations. “It made both Mr. Arakawa and I feel wonderful, just great” says Howard Lincoln. “There was jubilation,” says Henk Rogers. Rogers took Belikov out on the town. “I remember he turned up the stereo. We were breaking all the laws,” says Belikov. “He was speeding around San Francisco on the hilly streets. I was, honestly speaking, still in shock. Everything was happening in slow motion. The joy came a lot later. The fear started to go. I could go… I could go back!”

When Belikov did go back to Moscow, the money that came flowing the Russians’ way thanks to the deals he had made was finally enough to quiet the storm that had been battering at ELORG’s doors for so long. Robert Maxwell came to ascribe his friend Mikhail Gorbachev’s failure to deliver on his promise to oust “the Japanese company” to his need to placate certain factions within the Kremlin in order to maintain his grip on the General Secretary post: “He said other people in the government felt strongly that it should go the other way, so we stopped.” After threatening to create an international political scandal out of the issue, Maxwell allowed cooler heads to prevail in the end, washing his hands of the whole matter in that way that only the very rich are generally empowered to do. “You take your lumps along the way,” he said with a shrug. As big a deal as Tetris was in the realm of videogames, it was small potatoes in the context of his overall business empire.

And so, not without a whiff of anticlimax, the final questions about who was the rightful owner of Tetris in each of its incarnations were definitively resolved. ELORG, Bullet-Proof, and Nintendo were the winners, the new order they had sculpted in February and March of 1989 having been given the stamp of approval of an American court. Atari, Stein’s Andromeda Software, and Mirrorsoft were the losers. Somewhere in between was Spectrum Holobyte, who had managed — as much due to circumstance as conscious choice — to sit out the conflict as something of a neutral party, and was rewarded by being allowed to continue enjoying the strong sales of the North American personal-computer version of Tetris. Those sales, which would ultimately total several hundred thousand, might not have been a patch on the numbers the NES version would soon be racking up, but they suited a small computer-game publisher like Spectrum Holobyte just fine.

Nintendo’s NES Tetris was inferior to Tengen’s, but was good enough to get the job done.

As for the right and wrong of it all… well, the ethical waters surrounding Tetris had been muddy virtually from the moment Robert Stein had seen Vadim Gerasimov’s implementation of the game running on a computer in Budapest and tried to buy it from his Hungarian programmers without acknowledging where it had actually come from. Still, whomever we decide to label as the heroes and villains of this twisted tale, and in whatever ethical light we choose to see the other aspects of Atari’s war against Nintendo, it’s hard not to feel that Atari got a raw deal when it came to Tetris. They licensed the rights in good faith and created a superlative version of the game, only to be forced to pay for the sins of others. But all’s fair in love and (business) war. “It was revenge,” says Howard Lincoln of spoiling Atari’s plans and spiriting away what would go on to become the most popular videogame in history. “And you know how sweet revenge can be.” I’m not sure I do, actually — but I have a feeling that Howard Lincoln does.

Nintendo’s NES Tetris hit the market within days of the summary judgment, hoping to capitalize on whatever was left of the Christmas rush. The game would spend a year on the NES top-ten chart and sell at least 6 million copies over the course of its unusually long commercial lifetime. Yet, just as Lincoln, Arakawa, and Rogers had all suspected, and despite all the drama that had surrounded its release, this version of Tetris didn’t turn out to be the one that mattered most.

The Nintendo Game Boy had arrived in North American stores near the end of the summer of 1989, just in time to create a major headache for the teachers of all those members of Generation Nintendo who headed back to school with the gadgets in their backpacks. Game Boy would go on to become Nintendo’s second massive success story. In fact, it would become even more massive a success story than the first, selling almost 120 million units — roughly twice the total worldwide sales of the NES and Famicom lines — over the course of more than a decade in production.

For the first handful of those years, every single one of the millions upon millions of Game Boys that were sold in North America and Europe included a copy of Tetris. It was thus the Game Boy that spread Tetris absolutely everywhere, making it popular on a scale that no videogame had ever managed before nor has ever quite managed since. The irony in this is rich. While everyone’s attention had been focused on the grand legal showdown between Nintendo and Atari, the handheld Tetris, the rights to which had never been seriously disputed by anyone since Henk Rogers had picked them up on his first visit to Moscow, was the Tetris which ultimately proved to be the most important by far.

The Nintendo Game Boy Tetris, by far the most successful and historically important version of all.

In discussing such a divine synergy as that enjoyed by the Game Boy and Tetris, it’s impossible to state precisely which half of the equation got more out of the deal. Still, the preponderance of the evidence would seem to indicate that Tetris gave at least as much as it got. In the process, it did nothing less than identify a whole new potential market for videogames.

Nintendo of America’s success to date had been predicated on knowing exactly who constituted the natural market for their games, and targeting that market with pinpoint precision. Nintendo Power, the lifeline that linked the Nintendo executive suites to the youthful Generation Nintendo, looked not at all different from other magazines aimed at teens and preteens, full of exclamation points and eye-popping splashes of color plastered across every page. A closer look at the contents only cemented the impression: alongside articles about the games themselves were profiles of teen pop stars like Debbie Gibson and earnest admonitions not to let playing Nintendo supersede doing homework. While a story might occasionally surface, in Nintendo Power or for that matter in a newspaper, about a sheepish parent who had somehow picked up a Super Mario Bros. obsession, such anecdotes were amusing for the very reason that they were such an exception to the demographic rule.

But as the Game Boy’s sales only continued to increase following a launch that had been explosive beyond even Nintendo’s dearest hopes, the company’s customer surveys began to reveal a curious piece of information: many, many adults were playing with the Game Boys they had bought for their children as much or more than said children were. The adults in question were largely well-educated professionals who would never have dreamed of darkening the doors of an arcade or picking up an NES controller. Yet here they were, playing Game Boy. And, it didn’t take much further probing to reveal, the game they were almost universally playing was Tetris.

Surprised by this development but far from averse to it, Nintendo began aiming some of their marketing fusillade at adults. Game Boy advertisements were soon appearing in in-flight magazines, targeted explicitly at the business travelers leafing through their pages:

If you’re reading this ad, you’re very bored. You’ve mastered the safety instructions in every language, and the flight attendant won’t give you any more almonds. Now what? Game Boy won’t ask you for your dessert, and fits just as neatly into the mouth of that screaming child beside you as it does into your briefcase.

The cleverest of all the new advertisements neatly reversed the typical family’s videogame supply chain to suit the changing times: “This Father’s Day, treat Dad like a kid!”

Many of the Game Boys sold via such advertisements were literally never used to play any other game than Tetris. Reports had it that some players, concerned over a tendency the cartridge had to fall out of its slot as it aged, actually glued it into place — thus cementing permanently, as it were, the link between Game Boy and Tetris. This state of affairs wasn’t entirely ideal in Nintendo’s view — they sold the Game Boy cheap in the expectation of making a lot more money off the game cartridges they would later sell for it, a plan which a Game Boy that was used for nothing other than playing Tetris rather nullified — but Game Boy sales on the whole were so absurdly strong that there was little room to really complain.

Careful readers will note that I described the combination of the Game Boy and Tetris as “identifying a whole new potential market for videogames” rather than creating one in any sustained sense. For years after millions of adults went Tetris crazy, game makers — including the usually astute Nintendo — were remarkably slow to follow up this success. Many students of gaming history date the true beginning of the modern market for casual games to the release of Bejeweled in 2001. Yet if you ask these same students about the first casual game, full stop, the majority will point back to Tetris. Not coincidentally, Bejeweled and its many descendants all inhabit a subgenre broadly known as the “matching game,” which has Tetris as its forefather. When writing A Casual Revolution, his book on the phenomenon of casual games, Jesper Juul interviewed dozens of casual players. One of the constants of these interviews emerges when the players are asked about their experience of playing games before discovering modern casual-game portals like Big Fish Games. As often as not, Tetris is the first thing to spring into their minds. This indicates not simply that many of these casual gamers once played Tetris, but that they also identify it as something broadly like the games they enjoy today. Tetris gave them a glimpse of something circa 1990 that the games industry never fully managed to deliver to them again until the following decade.

Eager like all Tetris publishers to use the game’s origins in the Mirror World for marketing purposes, Nintendo did a fair amount of outreach in the Soviet Union. Here Howard Lincoln visits a Russian summer camp, where he passes out free Game Boys.

Juul published his book in 2010, when countless millions were still playing Tetris on the so-called “feature phones” of the time. For all the anecdotes from Tetris‘s heyday about playing it on work PCs in office cubicles, it was always the collision between the game and a mobile device — whether Game Boy, feature phone, or smartphone — that really brought the magic. It may have taken Tetris five years to make the journey from Alexey Pajitnov’s clunky Elektronika 60 terminal to the svelte little Game Boy, but once it arrived on mobile it was clear that this was where the game would truly thrive. A great casual game can be played obsessively or sporadically with equal success, and thus really comes into its own when combined with a portable gadget of some stripe and a player with a little — or perhaps sometimes a lot — of time to kill. Game designer Frank Lantz:

Tetris might be the ur-casual game. If you think of casual games as the PopCap-style match-3 puzzle games, Tetris is the blueprint for that, and yet it is possible to play Tetris in drunken binges. You are addicted to this activity, this repetitious thing you can’t walk away from for hours. When you finally put it down, you are groggy and have a headache. Or it is possible to play Tetris when you are standing in the line at the DMV and you think, “Okay, I am bored, I’ve got five minutes to fill and I will play some Tetris.” It is still Tetris in either sense.

Tetris, in other words, molds itself to your life rather than the other way around. Rather than gaming as lifestyle, it’s gaming as lifestyle accessory. It turns out that, contrary to almost every one of the games industry’s pre-millennial instincts, there’s even more money to be made in the latter than the former. Tetris, the urtext of the casual game, had sold an estimated 170 million physical copies and 425 million digital copies by 2016, earning nearly $1 billion in the process. By most meaningful measures, it is indeed the most popular videogame in history. A game that somehow managed to become iconic without containing any actual icons — no characters, no story, no essential style or look — it must also be, in light of the market it did so much to identify, at the very least in the conversation for the title of most important videogame of all time.

In 1993, Tetris became the first videogame to be played in space when cosmonaut Aleksandr Serebrov took his Game Boy with him into orbit. This well-publicized event was as close as the Russians ever came to achieving their hopes for a grand promotional partnership between Nintendo and the Soviet space program.

(Sources: the books Game Over: How Nintendo Conquered the World by David Sheff, The Tetris Effect: The Game That Hypnotized the World by Dan Ackerman, and A Casual Revolution: Reinventing Video Games and Their Players by Jesper Juul; the BBC television documentary From Russia with Love; Nintendo Power of July/August 1989, September/October 1989, and November/December 1989; The New York Times of June 22 1989 and December 21 1989.)

 

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A Tale of the Mirror World, Part 6: Total War

Howard Lincoln and Minoru Arakawa

Henk Rogers returned to Moscow on March 15, 1989, under very different circumstances from those of his first visit of a month before. Then he had officially been a tourist, a complete unknown to ELORG with no right to do business in the Soviet Union; now he had a meeting with Nikoli Belikov and his fellow bureaucrats scheduled prior to his arrival. Then he had traveled alone; now he brought with him an American named John Huhs, a lawyer and fluent Russian speaker with no experience in videogames but heaps of experience brokering complex international deals with insular non-democratic countries like the Soviet Union. Then he had been working, ostensibly at least, as a free agent, trying to secure the handheld rights to Tetris for his own Bullet-Proof Software so he could license them on to Nintendo; now he was working as a more direct proxy for the Japanese videogame giant, hoping to broker an agreement in principle to license the North American console rights to Tetris directly from ELORG to Nintendo. If he could achieve that goal, Minoru Arakawa and Howard Lincoln of Nintendo of America, two of the three most powerful people in videogames (the third being, of course, Nintendo’s overall president Hiroshi Yamauchi), were willing to drop everything and join him in Moscow for the final signing.

When Rogers walked into his meeting with Belikov, he threw Nintendo’s eye-popping offer for the console rights down onto the table without preamble. In addition to a generous royalty, Nintendo would guarantee that ELORG would make at least $5 million from the deal when all was said and done. If, in other words, royalty payments didn’t reach $5 million within a certain time frame, Nintendo would make up the difference out of their own pocket. This was big money by almost anyone’s standards, but in the context of the Soviet Union of 1989 it was an astronomical sum. The offer was intended to turn Belikov’s head, and in this it succeeded magnificently. Previous negotiations had dwelt on relative nickels and dimes: $50,000 here, $100,000 there. Nintendo’s offer elevated the discussion to another financial plane entirely. It was so much more generous than Belikov could have imagined in his wildest dreams that he was highly motivated to get an agreement finalized before cooler heads in the West prevailed. And this, needless to say, was just what Arakawa and Lincoln had intended.

As their initial offer testifies, Arakawa and Lincoln wanted those Tetris rights very, very badly. While their actions were partially motivated by their firm belief that Tetris was one hell of a game that deserved as wide an audience as possible, this was hardly the sum total of what was driving them. Nor did even the profits they expected the game to rake in fully explain their generosity. Unbeknownst to Nikoli Belikov, Alexey Pajitnov, or anyone else in the Soviet Union, the Tetris rights were about to be tossed like the mother of all live grenades into the greatest war the American videogame industry had ever known. The combatants were nothing less than the two most legendary trademarks in videogames. It was the architect of the first great videogame craze versus the architect of the second: Atari versus Nintendo.

The roots of the conflict ran deep. Forbidden from entering the console market by the agreement which had split the old Atari into two companies in the wake of the Great Videogame Crash, Atari Games had tried to content themselves with building standup arcade machines while Nintendo breathed life back into the supposedly dead North American console market. At last, unable to resist that exploding market’s allure any longer, they had formed their Tengen subsidiary to make console games of their own in 1987.

Whatever their personal feelings toward the company, Tengen had known that Nintendo was the only game — or, rather, the only game console — in town. They had thus signed a contract to become an authorized maker of games for the Nintendo Entertainment System in January of 1988. Tengen was limited, like most such licensees, to five games per year, which were to be manufactured by Nintendo at the times and in the quantities Nintendo chose. Therein lay the first concrete bone of contention between the two companies.

When Tengen delivered their first finished games to Nintendo in June of 1988, Nintendo ordered far fewer to be manufactured than Tengen had requested. They pinned the need for the reduction partially on overoptimism on Tengen’s part and partially on a worldwide microchip shortage they claimed was forcing them to scale back all cartridge production. To say the least, their licensee wasn’t convinced. A livid Atari claimed they could have sold ten times as many game cartridges as Nintendo deigned to provide them with, and openly suspected malice aforethought in Nintendo’s whole production-allotment process. Atari decided that in order to thrive again in the console market they must break Nintendo’s stranglehold on the manufacture of cartridges.

The key to breaking through on that front, they realized, was to break the lockout system employed by the NES. Nintendo’s ability to control their captive market without running afoul of antitrust laws hinged on this patented and copyrighted combination of code and circuitry, which prevented unauthorized cartridges from working on the console. If Atari could develop a lockout-defeating technology from scratch, making no use of any of Nintendo’s schematics or documentation, their lawyers believed that they would be legally in the clear to produce their own Nintendo games in whatever quantity they desired, and without paying Nintendo the customary licensing fee.

Unfortunately, reverse-engineering the lockout system was a tall order; it was by far the most advanced piece of a game console that was otherwise years out of date in purely technical terms. At last, they decided to cheat.

The code that operated the lockout system had been registered by Nintendo with the United States Copyright Office, an act which had required Nintendo to send to the Copyright Office a copy of the code. There it was kept under lock and key, inaccessible to third parties — except under one condition: if the code should become the subject of litigation, both sides were entitled to a copy. In other words, had Nintendo accused Atari of violating their copyright on the code, Atari’s lawyers would have been able to request a copy in order to defend their client.

Nintendo had not done any such thing. Nevertheless, Atari filed an affidavit with the Copyright Office in connection with legal proceedings allegedly about to get under way, for which a copy of the code was needed. The affidavit indicated that the code was “to be used only in connection with the specified litigation.” Failing to do their due diligence in verifying Atari’s claim, the Copyright Office complied, providing a copy of the code to be used in a legal case which didn’t exist. Not coincidentally, Atari’s ongoing efforts to reverse-engineer Nintendo’s lockout system finally bore fruit shortly thereafter.

On December 12, 1988, Atari Games filed suit against Nintendo, charging them with monopolistic business practices. “Through the use of a technologically sophisticated ‘lockout system,'” the complaint claimed, “Nintendo has, for the past several years, prevented all would-be competitors, including Atari, from competing with it in the manufacture of videogame cartridges compatible with the Nintendo home-videogame machine. The sole purpose of the lockout system is to lock out competition.” The complaint went on to make note of Nintendo’s stranglehold on the supply of third-party game cartridges: “The impact of Nintendo’s conduct has been to block any competition in the manufacturing market for videogame cartridges compatible with the Nintendo machine.” Atari asked for a staggering $100 million in damages.

On the same day they filed their lawsuit, Atari announced that they would start manufacturing and selling their own Nintendo games, without involving Nintendo at all or paying them anything at all. Tengen shipped new, unauthorized versions of their three extant Nintendo games — Pac-Man, Gauntlet, and R.B.I. Baseball — using their lockout-defeat technology. And they soon announced another four unauthorized games — Super Sprint, Rolling Thunder, Vindicators, and Tetris — which were to be released in May of 1989. Even more so in its way than the lawsuit, Atari’s decision to start making unauthorized games for the NES was the shot heard round the industry.

The conflict between Nintendo and Atari was a deeply personal one. Whatever Nintendo’s real or alleged legal sins, Atari, barely half a decade removed from their glory days, resented them most of all as the usurpers of what they regarded as their rightful crown. For their part, Arakawa and Lincoln had known Hideyuki Nakajima, Atari’s president, for years, had imagined there was a bond of mutual respect that would prevent him from ever taking a step like this. When Atari had signed on as a Nintendo licensee, they believed they had shown Nakajima exceptional deference, freely divulging, as Lincoln would later put it, “the crown jewels of our business.” In their eyes, then, Nakajima’s declaration of war was a personal betrayal.

It was also nothing less than an existential threat to Nintendo’s entire business model. If Atari got away with this, other publishers would inevitably find their own ways to defeat the lockout system — who knew, maybe Atari would even sell their stolen secrets to them — and the walls around Nintendo’s carefully curated and absurdly profitable videogame garden would be demolished. That scenario must be prevented at all costs. Largely thanks to Howard Lincoln, Nintendo of America already enjoyed a reputation for ruthlessness when their interests were challenged. Now, Arakawa told Lincoln to stop at nothing to quell Atari’s uprising. Atari had opted to go to total war with, in Lincoln’s colorful diction, “a tiger who will skin you piece by piece.”

Nintendo’s legal response to Atari was swift, multi-pronged, and comprehensive. On January 5, 1989, they filed a counter-suit alleging breach of contract (for reneging on Tengen’s existing agreement to sell authorized Nintendo cartridges) and trademark infringement (for printing the Nintendo logo on Tengen’s unauthorized packaging). More audaciously, the suit alleged that Atari had violated the Racketeer Influenced and Corrupt Organizations Act, better known in law-enforcement circles as RICO and normally applied to gangland money-laundering operations, in setting up Tengen as essentially a shell corporation with the intention of defrauding Nintendo. Another suit, filed on February 2, accused Atari of patent infringement of the NES lockout system.

But the courts were hardly the only weapon which Nintendo, the company which for all intents and purposes was the American game-console industry, had at their disposal. They took to calling the major retailers, telling them that selling products “which infringe Nintendo’s patent or other intellectual-property rights” would have dire consequences for their supply of official Nintendo hardware and games. “Companies would not carry our games because there was pressure from Nintendo which could jeopardize their business,” says Nakajima. “Even the big companies like Toys ‘R’ Us couldn’t stand up to them.” Atari executive Dan Van Elederen imagines the way a conversation between a major retailer and Nintendo might have gone: “You know, we really like to support those who support Nintendo, and we’re not real happy that you’re carrying a Tengen product. By the way, why don’t we sit down and talk about product allocations for next quarter. How many Super Marios did you say you wanted?” “If a retailer carried Tengen games, their Nintendo allocations would suddenly disappear,” remembers one retail buyer who was caught in the crossfire. “Since it was illegal, there were always excuses: the truck got lost, or the ship from Japan never arrived.” Tengen was slowly but methodically squeezed out of retail.

A third theater of battle was the press, which the combatants used to lob statements back and forth, jockeying for advantage with the public and especially with the American political establishment, many of whose members had long expressed concern at their country’s longstanding trade deficit with Japan. Atari tried to frame a folksy narrative of a domestic upstart just looking for a fair shake against the calculated malfeasance of a shifty-eyed foe from the Orient: “Let’s say you buy a Ford, and the company says, ‘If you buy a Ford automobile from us, you have to buy Ford gas.’ That’s not the way business is done.” Nintendo replied by claiming — being partly if not entirely truthful about their motivations — that they had put their controls in place to keep the junk games that had done so much to precipitate the Great Videogame Crash of 1983 off the market this time around: “It was the only way we could ensure that there would be consistent, quality software.” Hoping doubtless to curry favor, some American publishers who were closely identified with Nintendo parroted this company line, among them Acclaim Entertainment: “Nintendo is trying to make this into a category, not a fad, where videogaming becomes another part of our entertainment life.”

But the majority of the American software industry stood — tacitly at least — with Atari. Indeed, Atari’s cause was increasingly becoming that of the American software industry as a whole — by which I mean many companies that had never heretofore made console games at all, that had concentrated on the less volatile home-computer market. Yet in recent months, in the face of a Nintendo market that had gone from nothing to three times the size of the total American market for computer games with incomprehensible speed, it had been hard for the computer-game publishers to resist the lure of the other side. Most of those who jumped into publishing agreements with Nintendo were frustrated by the same restrictions and policies that so infuriated Atari. The whole enterprise seemed consciously engineered to let them make some money but never too much — and certainly to keep them from ever making a truly iconic Nintendo game to rival the likes of Super Mario Bros.

The Software Publishers Association, the traditional American software industry’s biggest lobbyist and trade group, left no doubt where it stood on the question: “The SPA believes that Nintendo has, through its complete control and single-sourcing of cartridge manufacturing, engineered a shortage of Nintendo-compatible cartridges. Retailers, consumers, and independent software vendors have become frustrated by the unavailability of many titles during the [1988] holiday season, and believe that these shortages could be prevented by permitting software vendors to produce their own cartridges.” The SPA warned ominously and to some extent presciently of what the walled-garden philosophy of software marketing could come to mean if it spread further: “We don’t want any computer company to get the idea that what Nintendo is doing would be acceptable in the computer business. Software is an intellectual property that thrives in an unrestricted environment.”

That said, few companies were willing to attract the attention of the Nintendo tiger by stating their views too stridently or too publicly, much less by taking the sort of aggressive action Atari Games had opted for. There was, however, one notable exception.

On January 31, 1989, the other Atari — the home-computer company run by Jack Tramiel and his sons — filed their own suit against Nintendo, asking that the latter be forced to pay the towering sum of $250 million in damages. At issue this time was Nintendo’s policy of requiring that many licensees not port their games to other systems for two years from the date of their first appearance on the NES. This policy, Tramiel’s Atari claimed, was an abuse of Nintendo’s near-monopoly of the videogame market and thus a violation of antitrust laws. Atari Corporation’s claim to being an aggrieved party in the issue was perhaps debatable; Tramiel’s company produced mostly hardware, not software, and its main strategic focus was its ST line of computers, whose most successful games tended to be dramatically different in character from those which sold best on the NES. It was, in other words, hard to imagine that the lack of hot Nintendo-style games on the Atari ST was a primary reason behind its lackluster North American sales. But Jack Tramiel had a long history of using the courts as business competition by other means, and, gauging the political mood in the country with respect to Japanese imports, he thought he smelled blood in the water here.

So, it was now the two Ataris against Nintendo — the past of videogames against their future, one might say. Thematics aside, the two Ataris made for some very unexpected bedfellows. Each part of the old, monolithic Atari felt that they were the only part truly worthy of carrying the name’s legacy onward. To put it bluntly, the two companies “don’t like each other,” admitted Atari Games’s Dan Van Elderen. But, as they say, the enemy of my enemy…

Isolated in Moscow, Nikoli Belikov was unaware of this dramatic backdrop to Nintendo’s generous offer for the Tetris console rights. From his perspective, the only thing preventing the negotiation from moving forward immediately was the promise which he had made to Kevin Maxwell to give Mirrorsoft an opportunity to bid on the rights. Thankfully, the Russians hadn’t heard anything at all from Mirrorsoft since Maxwell had departed Moscow over two weeks ago.

On the same day that Henk Rogers first presented Nintendo’s offer, Belikov fired off a telex to London, saying that ELORG was about to sign a deal for the console rights to Tetris and that, in accordance with the arrangement he and Maxwell had arrived at, Mirrorsoft urgently needed to send their own best offer — if they wished to make an offer at all, that was. He gave them exactly 24 hours to do so, an intentionally impossible time frame. When the deadline expired, Belikov considered himself to have done his legal duty. Now nothing lay between him and a deal worth at least $5 million.

When word came to Arakawa and Lincoln from Rogers that an agreement for the console rights looked very possible, they scrambled to secure the visas and airplane tickets they needed to come personally to Moscow. This latest round of Tetris negotiations offered not just the opportunity to secure an all-but-guaranteed massive hit for Nintendo, but also that of taking away an all-but-guaranteed massive hit from Atari. Neither Arakawa nor Lincoln was an especially forgiving man, and they relished this opportunity with their every last fiber of vindictiveness. Their preparations for their journey smacked more of a spy thriller than a typical business trip. The comings and goings of two men such as them within what was once again a multi-billion-dollar American videogame industry hardly went unobserved even when the industry wasn’t racked by total war. On the contrary: their every statement, action, and, yes, movement was closely scrutinized for clues to what Nintendo might do next. Arakawa and Lincoln thus felt compelled to slip away in the dead of night, telling only two of their closest confidants where they were going and why.

They arrived in Moscow on Sunday, March 19. As befit the sense of occasion that surrounded their visit, Henk Rogers forewent the taxis that were his usual mode of transportation around Moscow in favor of picking them up at the airport in a big black Mercedes he had managed to rent at an exorbitant price. The two huddled in the back seat, jet-lagged and bleary-eyed, and marveled at the Mirror World outside the windows, which Lincoln said reminded him of the mean streets of old black-and-white gangster films. Their self-appointed chauffeur, feeling himself by comparison an old hand with Moscow life, merely smiled and nodded. At the hotel, Arakawa and Lincoln were given a room with a single bed, a disconnected stove, and a refrigerator without a door. Don’t complain, Rogers told them; it can only get worse.

Whatever their other prowesses as negotiators, Arakawa and Lincoln weren’t gifted with Henk Rogers’s all-but-irresistible charm. Arakawa was reserved, stoic, even shy among new people, while Lincoln, who looked every inch the corporate lawyer he was, made the most of his native suspicious nature as Nintendo’s attack dog, willing to challenge every point and question every assertion in trying to secure for his company every possible advantage. Alexey Pajitnov, for one, sensed the change in the atmosphere around the table as soon as they all entered the conference room the next day.

Still, it was fascinating in a way to watch Belikov and Lincoln, two sly old foxes with far more in common than the gulf of culture, language, and politics that lay between them might suggest, sniff one another out. Lincoln questioned Belikov long and hard about the previous deal with Stein and the potential trouble it might present. Belikov, meanwhile, notwithstanding the incredible offer that lay on the table, pressed relentlessly for further advantage, persisted in testing every boundary. Apparently not understanding how unique Tetris was, he seemed to see game design as a commodity amenable to the typical Soviet model of mass production, proposing that Nintendo and ELORG set up a joint subsidiary to crank out many more games. Apparently not understanding that the key to Nintendo’s control of their walled garden was their ownership of the means of production of game cartridges — the very thing they were fighting so savagely to maintain far away in the United States — he proposed that the Tetris cartridges be manufactured by ELORG in the Soviet Union, a recipe for quality-control disaster if ever there was one. Then he proposed that ELORG make actual Nintendos in the Soviet Union for sale behind the Iron Curtain. The most surreal moment of the talks came when a cosmonaut trooped in to pitch an idea for plastering the Nintendo logo all over Soviet rockets; when the Soviet Union embraced capitalism, it seemed, it really embraced capitalism.

Another bizarre incident hearkened ironically back to that earlier pivotal instant when Henk Rogers had produced Bullet-Proof Software’s “pirated” Nintendo Famicom version of Tetris to gasps all around the conference table. Wanting to demonstrate how adept his people were at this consumer-electronics thing, one of the Russian bureaucrats reached under the table and came up with a Soviet knockoff of a Donkey Kong standalone handheld game which Nintendo had released back in 1982. In its Soviet form, it was bereft of any acknowledgment of its origins — and bereft of any agreement to pay Nintendo royalties for it. Under normal circumstances, such a thing would have set Howard Lincoln into a paroxysm of enraged threats. But today, managing to see the bigger picture, he swallowed hard and held his tongue with difficulty.

To be fair to Belikov, many of the kookier ideas that he was forced to pitch likely didn’t originate with him. In this era of perestroika, Mikhail Gorbachev had tasked the masterminds of his nation’s economy, so long accustomed to looking inward to quotas and five-year plans, with looking out, with finding areas where the Soviet Union could compete with the other members of the community of free nations Gorbachev was intent on joining. Computer software had always seemed like an area with real potential in this regard, responsive as it seemingly was to the country’s long tradition of mathematical excellence. And now here was the Tetris deal. As a game rather than a more “serious” piece of software, it perhaps wasn’t the completely ideal vehicle for Soviet software’s coming-out party, but it would do. As soon as that $5 million figure started to spread through the Soviet bureaucracy, Belikov’s negotiations over what had heretofore been regarded as a silly little game — a minor transaction at best — took on a dramatically higher profile. Lots and lots of people with lots of different agendas were now trying to muscle their way into the room with these foreigners who so evidently had more money than sense. Lincoln batted away each crazy proposal as politely as he could, and kept trying to steer the discussion back to the deal that was already on the table.

Alexey Pajitnov in his Moscow apartment.

The atmosphere was warmer that evening when Rogers, still playing the role of chaperone and tour guide, located the only sushi restaurant in Moscow and took Arakawa, Lincoln, Pajitnov, and Nintendo’s legal consultant John Huhs out for dinner there. Pajitnov was skeptical of the notion of eating raw fish, but soon got with the program — at least until he popped an entire ball of wasabi into his mouth just ahead of his companions’ urgent warning cries, nearly causing his head to explode. Back at the Pajitnov family apartment, Arakawa gave the children a prototype Game Boy with a prototype of Tetris in the cartridge slot, telling them that they were now quite possibly the first people in the entire Soviet Union to own a Nintendo product. Pajitnov still stood to gain absolutely nothing from this game that so many others were now confidently expecting to earn them millions, but he did appreciate the attention and respect he was shown by the Nintendo delegation, so different from Robert Stein and the ELORG bureaucrats who did little more than tolerate his presence at the negotiating table. And he took Henk Rogers at his word that someday soon he would find a way to get him his financial due — if not with Tetris, than with the next game he designed.

A contract giving Nintendo exclusive worldwide-except-for-Japan console rights to Tetris was signed on March 22, 1989, alongside another giving the Japanese rights to Rogers, thus fully legitimizing in the eyes of ELORG the Bullet-Proof version of Tetris that had started this whole ruckus. Two heavyweight bureaucrats, the head of the State Committee for Computer Systems and Informatics and the head of computer research at the Soviet Academy of Sciences, came out to witness the signings, which were conducted with some pomp and circumstance. To commemorate the occasion, Rogers, who in his standard inimitable fashion was now wheeling and dealing on the Moscow black market like a native, presented Arakawa and Lincoln with tickets for that evening to the Bolshoi Ballet. Much to their amazement, Mikhail Gorbachev himself showed up for the performance — and took a seat that was worse than theirs. That was Henk Rogers for you.

From being the property of Robert Stein in their totality barely a month earlier, the rights to Tetris had now been sliced and diced into a whole pile of discrete parts. The computer-game rights lay with Mirrorsoft in Europe and, through Mirrorsoft, Spectrum Holobyte in North America and Bullet-Proof Software in Japan. The arcade rights lay with Atari Games in North America and Europe and, through Atari, Sega in Japan. The worldwide handheld rights lay with Bullet-Proof, who planned to use them to let Nintendo bundle a copy of Tetris with every Game Boy sold when the new gadget came to North America in four months or so. And now, as a product of this latest round of negotiations, the non-Japanese console rights belonged directly to Nintendo, the Japanese console rights to Bullet-Proof.

This, anyway, was the new world order according to ELORG and Nintendo. But there was soon trouble from the parties whose earlier deals had been retroactively voided, just as Rogers had warned Belikov there would be the previous month.

On the morning of March 22, even as the contract-signing ceremony was about to get under way, a belated response had finally arrived to the telex which Belikov had sent to Mirrorsoft six days before. In the message, Jim Mackonochie of Mirrorsoft, adopting a posture of bemused confusion, said that Mirrorsoft didn’t need to bid for the console rights because they already possessed them. His obvious intention was to pretend that the disastrous meeting between Belikov and Kevin Maxwell had never happened, and to hope that thereby the old status quo would be allowed to reassert itself. But he learned that that most definitely wasn’t a possibility later the same day, when Belikov sent a reply stating that the console rights had never been Stein’s to license to Mirrorsoft, and that those selfsame rights had in fact just been licensed to Nintendo. To rub salt into the wound, Belikov also dropped the bombshell that the handheld rights already belonged to Henk Rogers.

The Mirrorsoft camp’s response was predictably swift and aggressive. Evidently not recollecting how well his last decision to shove Mackonochie aside had gone, Kevin Maxwell jumped personally back into the fray the very next day with a telex telling Belikov he was “in grave breach twice over of our agreements with you.” Having apparently remedied the ignorance that had led him to call the Bullet-Proof Tetris a pirated version on his last trip to Moscow, he wrote that “we already hold the worldwide rights to Tetris on the Nintendo family computer. Indeed, we have been marketing it accordingly, [through] Bullet-Proof Software in Japan since January 1989.” But he was willing, he graciously conceded, to come to Moscow to meet once again with Belikov and learn from him “how you intend to remedy your double breach of our agreement.” Should Belikov refuse to invite him to such a meeting, he warned of legal and political — yes, political — consequences.

Mikhail Gorbachev and Robert Maxwell. The latter was so chummy with the Kremlin that questions would later surface over whether he had acted at times as a Soviet spy.

He wasn’t just blowing smoke. His father, Robert Maxwell, was an absurdly well-connected man, the ruler of a communication and publication empire that spanned the globe and that had placed him on a first-name basis with countless current and former heads of state. When told by his secretary that “the prime minister” was on the phone for him, legend has it that Maxwell would ask, “Which one?” His Rolodex contained the home address and phone number of one Mikhail Gorbachev, just as it had Gorbachev’s predecessors Yuri Andropov, Leonid Brezhnev, and Nikita Khrushchev.

After the Nintendo delegation returned home from Moscow and it became clear to Kevin Maxwell that Belikov had no intention of granting him his mea-culpa meeting, he went to his father to explain what the Russians had done to him, eliciting a desk-pounding fit of rage: “They won’t get away with it! Rest assured of that!” Robert Maxwell wrote directly to the highest levels of the Kremlin, issuing a thinly veiled threat to the many investments he was making into Gorbachev’s new Soviet Union: “We attach high importance to our excellent commercial relations with the Soviet government and many leading agencies in the fields of information, communications, publishing, and, indeed, pulp and paper production. We face the prospect of all this being jeopardized by the unilateral action of one particular agency.” Nice economy you’re building there, Gorbachev, ran the subtext. It’d be a shame if anything happened to it — and all because of one silly videogame.

Maxwell contacted the secretary of state for trade and industry within Britain’s own government, pushing him to place the Tetris issue on the agenda for an upcoming summit between Margaret Thatcher and Gorbachev. Alexey Pajitnov’s little game of falling shapes was now threatening to impinge on agendas at the highest levels of international statecraft. In late April, Maxwell flew to Moscow to meet personally with Gorbachev, ostensibly to discuss his growing number of publication ventures within and on behalf of the Soviet Union. But he brought up the issue of Tetris there as well, and claimed that before he left Gorbachev assured him that he would personally take care of the issue of “the Japanese company” for him.

In actuality, though, Gorbachev did little or nothing, presumably judging that Maxwell wouldn’t really blow up deals potentially worth billions in the long run over a videogame-licensing spat. Still, plenty of others within the Soviet government — among them many representatives of the hard-line communist order that was at odds with Gorbachev — wanted an embattled Belikov to back down and give Maxwell what he wanted.

When Howard Lincoln returned to Moscow about a month after his first visit for a follow-up meeting, a tension that verged on paranoia was palpable around the conference table. Belikov spoke of “calls from the Kremlin, calls from people who never before knew we existed. Many of them have shown up to examine our records and to question us on this deal. We have told them we have done the right thing. We have stood up to them, but we do not know what will happen.”  There were even rumors that the KGB had been put on the case to dig up dirt on Belikov and his colleagues at ELORG, rumors of bugs in telephones and men in descriptly nondescript trench coats trailing people through the streets. Belikov had hired a pair of personal bodyguards for protection.

He clung to a simple but potent line of argument against his persecutors: Gorbachev had said that producers in the Soviet Union needed to have a degree of economic freedom, needed to make decisions in response to the market rather than a hidebound bureaucratic class. That was what perestroika, the buzzword of the age, was all about. He, then, was just doing perestroika. Nintendo had offered ELORG a better deal, and he was bound — duty-bound by perestroika, one might say — to take it.

Howard Lincoln’s son Brad plays Tetris with Alexey Pajitnov.

Helping Belikov stay strong was the fact that he and Howard Lincoln had gone from cagey adversaries to something approaching friends. In the months after signing their deal, Belikov arranged for Lincoln and his son to take a private tour of Star City, the heart of the Soviet space program. He took Lincoln on a traditional Russian fishing trip — “traditional” in this case indicating much more vodka-drinking than fish-catching. He felt a bond with Howard Lincoln and also Henk Rogers, two men who had talked straight to him and treated him as an equal, that he most definitely didn’t feel with Robert Stein or the Maxwell clan. He felt that Lincoln and Rogers had been in his corner, so he would stay in theirs. Crusty old bureaucratic knife fighter though he was, his sense of loyalty ran surprisingly deep.

While Belikov was weathering the storm unleashed by Robert Maxwell upon Moscow, Arakawa and Lincoln were left to deal with the issue of Atari, Mirrorsoft sub-licensee of the Tetris rights, in the United States. It seems safe to say that they relished their situation far more than their Soviet partner did his, not least because it afforded them the luxury of going on the offensive in yet one more way against their bitterest enemy. With delicious satisfaction, Lincoln drafted a cease-and-desist letter that was sent to Atari on March 31, saying that the console rights to Tetris belonged to Nintendo rather than to Tengen, and that the latter thus needed to give up their own plans for Tetris if they didn’t wish to spark another legal battle in the ongoing war. He knew, as he would later put it, that Atari “would go nuts” when they received the letter. On April 6, Nintendo announced via an official press release their plans to release their version of Tetris for the NES that summer. Atari took the bait, suing Nintendo for infringing on their licensing deal with Mirrorsoft on April 18. They honestly believed that the rights they had licensed from Mirrorsoft were perfectly legitimate — “There was no inkling that we were in the wrong,” Tengen head Randy Broweleit would later say — and they had no intention of lying down for Nintendo. Quite the contrary. Having engulfed so much of the American videogame industry already, it hardly surprised anyone that the war between Atari and Nintendo had now sucked Tetris as well into its maw.

The Tengen Tetris, running in this version’s unique cooperative mode.

Ironically, the version of Tetris which Tengen was finalizing against the will of the game’s designer was by far the best version of the game that had yet been created. Indeed, plenty among the Tetris cognoscenti will tell you that the Tengen Tetris still stands among the best versions ever created, far superior to the versions Nintendo was preparing in-house at the time of its release. Tengen had assigned Ed Logg, creator of iconic arcade games like Asteroids, Centipede, and Gauntlet, to head up a team that wound up spending three person-years on the project, a rather extraordinary amount of time in light of what a simple game Tetris really was. Under Logg’s stewardship, Alexey Pajitnov’s core design took on a much more polished look than it had enjoyed to date. The pieces were no longer solid blocks of color, but were given texture and a pseudo-3D appearance that made them look more like falling blocks than falling abstractions, harking back to the physicality of the pentomino puzzles that had inspired the game. Logg also added a head-to-head competitive mode to the game, and an innovative cooperative mode in which two players could work together to clear away lines. And he made the speed of the falling shapes increase slowly and subtly the longer you played, instead of taking a more noticeable, granular leap only when you went up a level. Whatever you could say about the circumstances of its creation, taken purely on its own terms it was truly a Tetris to be proud of.

It needed to be great. Tengen was counting on this game becoming an unstoppable force that would bust right through the blockade Nintendo was erecting around their lifeline to retail. The launch was as lavish as they could make it, beginning with the game’s unveiling at Manhattan’s Russian Tea Room restaurant. As that location would imply, the line of marketing attack developed by Mirrorsoft and Spectrum Holobyte was employed once again by Tengen. In their hands, though, it came to read a little tone deaf, being amped up with far more testosterone than the game destined to go down in history as the very personification of a non-violent, casual puzzler really had need of. “It’s like Siberia, only harder,” ran one tagline. “It’s the nerve-wrackingest mind game since Russian roulette,” ran another. A third said it should only be played by “macho men with the first-strike capability to beat the Russian programmers who invented it. If you can’t make the pieces fit together, an avalanche of blocks thunders down and buries you weaklings!”

But, overheated rhetoric aside, Tengen clearly saw the potential of Tetris to expand the Nintendo demographic beyond boys and teenagers, buying full-page spreads in such mainstream non-adolescent publications as USA Today. And, now that they controlled the means of Nintendo cartridge production, they weren’t going to be caught out by any shortage on that front. They ordered an initial production run of fully 300,000 Tetris cartridges, at an expense of $3 million.

The Tengen Tetris was released on May 17, 1989. It took Nintendo exactly eight days to sue in response; in combination with Atari’s earlier suit against Nintendo, this latest legal salvo meant that each company was now accusing the other of making or planning to make what amounted to a pirated version of Tetris. While American courts tried to sort through the dueling lawsuits, American gamers faced the prospect of deciding between dueling versions of Tetris on the NES, each claiming to be the one and only legitimate version.

Alexey Pajitnov’s little game of falling shapes, having already sparked a bewildering amount of international intrigue, had found yet another role to play as a coveted prize in the greatest war the American videogame industry had ever known. Nintendo and Atari were both willing to use every resource at their disposal to ensure that Tetris belonged to them and them alone. All of the conspiratorial maneuvering that had taken place in Moscow the previous February and March was about to be put to the test. Did all of the rights to Tetris belong to Robert Stein to sub-license as he would, as Atari claimed, or did Stein possess only the computer-game and arcade rights, as Nintendo claimed? It must now be up to a court of law in the United States to decide.

(Sources: the books Game Over: How Nintendo Conquered the World by David Sheff and The Tetris Effect: The Game That Hypnotized the World by Dan Ackerman; the BBC television documentary From Russia with Love; Hardcore Gamer Vol.5 No.1; Nintendo Power of September/October 1989; The New York Times of February 3 1989 and March 9 1989.)

 

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A Tale of the Mirror World, Part 5: The Inflection Point

Just a few weeks after the Mirrorsoft and Spectrum Holobyte versions of Tetris went on sale, Robert Stein received a telex to which was attached a Russian name he had never seen before in all his negotiating efforts. One Alexander Alexinko from a previously unheard-of state agency called Electronorgtechnica — more colloquially referred to as simply ELORG — was taking over the negotiations, which were now expected to proceed on a more formal basis. Any hopes Stein might have harbored that the Russians would just go away quietly, allowing him to reap all of the profits from Tetris coming back to Andromeda Software, were thus dashed. On the other hand, though, the very fact that the Russians were reaching out to him — just about the first proactive step he had ever witnessed from them in the previous eighteen months or so of dialog — could be a positive sign that some sort of legitimate, mutually lucrative deal was possible after all. Anything was better than the fractured, pointless discussions they had had to date.

As happened more often in the Soviet Union than its rulers might have cared to admit, the sequence of events which had brought Alexinko into the picture had had more to do with happenstance that any orchestrated shift in strategy. ELORG lived under the Soviet Ministry of Foreign Trade, where it was charged, like several competing organizations within the labyrinthine and turf-war-plagued Soviet bureaucracy, with overseeing the import and export of technology. In the past, the agency had carved out a niche for itself under this absurdly broad umbrella as the calculator kingpin of the Eastern Bloc, exporting knockoffs of American and Japanese models that were much sought-after by scientists and engineers — even if, as was all too typical of Mirror World technology, they didn’t always work quite right. But now, Perestroika was in the air, and organizations like ELORG were expected to take an entrepreneurial role in forging a new Soviet Union that was happy to trade with its former arch-enemies in the West. It was thus in search of potential products that might be viable in the West that Alexinko had come to the Moscow Computer Center one day. He was there to beat the bushes and see if any golden nuggets fell out. Games were about the farthest thing from his mind; he was interested in serious software, as befit the very serious government institution he worked for.

Then one day a personable member of the research staff named Alexey Pajitnov mentioned in casual conversation that he and, more recently and thus more pertinently, much of the management of the Computer Center had been negotiating directly with someone in Britain named Robert Stein over a game Pajitnov had created. Alexinko was shocked. A new era may have been dawning in the Soviet Union, but the old way of doing things died hard with a hardened bureaucratic veteran like him. To his mind, this unauthorized negotiation bordered on the scandalous or even treasonous. And when the researchers produced the paper trail of their confused communications with Stein, full of broad statements ripe for misconstrual, his shock turned into horror. Just as Pajitnov had been shoved out of the dialog and out of pocketing any potential profits from Tetris by his managers at the Computer Center some months before, now those selfsame managers were taken off the case by Alexinko. He would manage the discussions from here, he told them. His first step took the form of that initial telex to Stein.

It’s not clear whether Alexinko, isolated as he still was in so many ways in the Soviet Union even in the time of glasnost and perestroika, was ever aware that Stein had jumped the gun and allowed Mirrorsoft and Spectrum Holobyte to release Tetris without a clear agreement with the Russians. It is clear, however, that Stein at the very least made it plain to Alexinko that the game was well on its way to being released. In doing so, he turned what could have been a disadvantage into its opposite. This was exactly the sort of deal that the new Soviet Union was supposed to be making, exactly the sort that Alexinko was supposed to be brokering. Did he want to enjoy the credit for it, or did he want to put the brakes on it, prompting anger in at least two other countries that could very easily get back to his bosses? Stein could be very savvy at times, and this is a fine example of one of them.

Dealing at last with a motivated individual with the wherewithal to make things happen, Stein hammered out a deal with his opposite number with head-snapping speed, in marked contrast to all those previous months of fruitless back-and-forth. He visited Moscow again to put the finishing touches on the contract in February; he and Alexinko shook hands over a final draft on February 24, 1988. Alexinko explained that he just needed to get the contract approved by his superiors, then he would send it on to Stein for his signature. The Soviet bureaucracy still being the Soviet bureaucracy, it took a little longer than he had implied it would, but the deal was finally signed on May 10, 1988. Stein breathed a sign of relief, thinking he had gotten away with one. He had his contract in hand, everything was now legal and above-board, and Mirrorsoft and Spectrum Holobyte needed never know that their permission to release Tetris post-dated their actual release of Tetris by some months. Alas, though, whatever good feelings were in the air weren’t destined to stay around for long.

The first inkling of trouble came when the Mirrorsoft and Spectrum Holobyte versions of Tetris, filled with Westerners’ ideas of iconic Soviet imagery, finally made their way to Moscow. Alexinko was not at all amused by the tribute to Mathias Rust landing his private plane on Red Square, which appeared on the title screen before the game proper had even begun. What the Western media had reported as little more than an amusing human-interest story, the Soviet Union regarded as a national embarrassment. Rust had, after all, penetrated through the entire Soviet air-defense system to the very nerve center of the country flying nothing more advanced than a rickety old Cessna; Rust himself was still imprisoned in the Soviet Union, charged with terrorism. Pajitnov, for his part, took the Rust tribute in good humor, but was unhappy about portrayals of the Red Army in battle. He told Stein that he wanted Tetris to be “a peaceful game heralding a new era in the relationship between superpowers and their attitude toward world peace.” Stein dutifully took up the delicate task of requesting these omissions of Mirrorsoft and Spectrum Holobyte, who duly ponied up for some new graphics to replace the objectionable ones.

But tensions between Stein and the Russians were continuing to grow. Alexinko was coming more and more to distrust his opposite number. Royalties for Tetris were supposed to be flowing to the Russians through Stein, their only direct contact in the West. Yet by the end of September they still hadn’t seen any money at all, even as Tetris topped many computer-game bestseller charts in the United States. Stein tried to soothe an impatient and suspicious Alexinko by explaining that these things took time, that the money would be coming eventually. Alexinko didn’t believe his excuses, started mumbling about modifying the contract to include a firm time frame on royalty payments, with penalties for late payments. It’s not clear today whether Stein really was still playing fast and loose with the Russians, or whether he was, as he himself claimed, at the mercy of Mirrorsoft and Spectrum Holobyte, waiting for his own royalties to filter through those companies’ accounting departments so he could send the Russians’ cut onward. What is clear, however, is that this pugnacious little Hungarian was once again rubbing everyone in Moscow the wrong way, raising hackles and raising suspicions.

And he was still overreaching himself in trying to keep the various Western interests placated. He licensed the arcade rights to Tetris to Atari Games in May, despite never having obtained those rights from the Russians. Putting the cart before the horse yet again, only after making that deal with Atari did he broach the subject of the arcade rights with Alexinko in Moscow, hoping to quickly get a deal that would once again keep his Western partners from realizing what a dangerous game he was playing. But Alexinko obstinately refused to even talk about the issue until he started seeing royalties from the computer-game versions — not even when Stein offered a $30,000 advance for the arcade rights in July. Soon Tetris arcade machines, made by Atari Games in the United States and sub-licensed by them to Sega in Japan, were pouring out of factories, without any form of agreement with the Russians, while Stein sweated it out and hoped the Russians’ isolation would keep them from noticing.

By the time it went into production, the arcade version of Tetris had already played a critical role whose importance wouldn’t become clear for many months. Atari took a prototype of it with them to an American arcade-industry trade show in June of 1988. There it was spotted by the two most important architects of Nintendo’s stunning American success: Minoru Arakawa, the president of Nintendo of America, and his right-hand man Howard Lincoln, who bore the official titles of Senior Vice President and General Counsel but in reality was all that plus much, much more. Neither had seen or heard about Tetris before encountering it that day in Atari’s trade-show booth. Both were immediately smitten by the Tetris Effect. Randy Broweleit of Atari’s Tengen subsidiary, who had a license to release five games per year on the Nintendo Entertainment System, was in the booth as well, and proved very forthcoming. He told Arakawa and Lincoln of the game’s unlikely origins in the Mirror World, and told how Atari had been able to acquire both console rights and arcade rights to the game from Mirrorsoft in Britain. Tengen’s Nintendo version for the North American market, he explained, would likely be coming out in May of 1989. In the meanwhile, a fellow called Henk Rogers had sub-licensed the Japanese Nintendo rights from Atari and would probably be releasing his version much sooner. Arakawa and Lincoln went away satisfied that Tetris, which they both recognized to be a natural fit on the Nintendo, would eventually be appearing for the console in both Japan and North America. Fair enough, then; on to other business. But then, several months later, the conversation with Broweleit and the demonstration of Tetris flashed back into the forefront of their minds in response to a new communication from Japan.

Deep in the bowels of Nintendo’s worldwide headquarters back in Kyoto, a team of 46 designers, programmers, and engineers were hard at work putting the finishing touches on a top-secret project with revolutionary potential: a handheld game console to be called the Game Boy. It would be a sharply limited device even in comparison to the less-than-technically-earth-shattering NES, with a tiny black-and-white 2.5-inch display that smacked more of a calculator than a conventional videogame. Clearly it wasn’t going to be possible to port Super Mario Bros. to the new gadget and call it a day. Therefore the call had gone out through Nintendo’s management ranks to keep eyes open for concepts which would work well on the Game Boy. This inevitably meant simple games, far simpler even than was the norm on the NES.

Tetris was perfect for the platform. It was as if Tetris had been made with the Game Boy in mind from the start — or as if the Game Boy had been made just to play Tetris. In this light, what Randy Broweleit hadn’t said to Arakawa and Lincoln on that day at the trade show was as important as anything he had said: he’d made no mention of handheld rights. Why should he? There wasn’t any market to speak of for handheld videogames at the time. If Nintendo had their way, however, that was all about to change.

Having heard from Broweleit that Henk Rogers in Japan had sub-licensed from Atari the rights to a Famicom version of Tetris, Arakawa and Lincoln decided he was the place to start in trying to secure the handheld rights. While Rogers’s Bullet-Proof Software was undoubtedly a tiny player even by the standards of the domestic Japanese market, much less the world videogame stage, he had bonded with Nintendo’s president Hiroshi Yamauchi — by no means an easy thing to do — over their mutual love of Go, and had acquired a reputation within Nintendo as an up-and-comer with potential. Rogers, who was close enough to Nintendo’s inner circle to be in on the Game Boy secret, was told that if he could get the handheld rights for himself then Nintendo would happily sub-license them from him. It didn’t take a savvy videogame veteran like Rogers long to recognize the synergy between the Game Boy and Tetris, and to recognize that millions and millions of dollars were potentially in such a deal for him. “If you’ve met Rogers, you know that he is capable of finding his way in the middle of any storm,” says Lincoln. “Telling him that we were ready to license from him was like showing red meat to a hungry lion.” Rogers reached out to Robert Stein on November 15, 1988, saying he’d like to discuss buying the worldwide handheld rights to Tetris. As a starting point for negotiations, he offered an advance of $25,000.

Nikoli Belikov circa 2004

Life by that point hadn’t gotten any easier for an increasingly addled Stein. In October, he had gotten word from Moscow that Alexander Alexinko had been taken off his case, to be replaced by one Nikoli Belikov. The change would not be to his benefit. If Alexinko had been a fairly typical example of the competent Soviet bureaucrat, Belikov was something else entirely, a man who had built a reputation for himself well before the era of perestroika as the consummate bureaucratic in-fighter, a master of the art of the well-timed back stab whom you trifled with at your peril. He was the sort of man who was put on the job to do an agency’s dirty work.

The conversation was soon verging on the openly hostile, as Stein and Belikov nurtured what had been from the first a pronounced dislike of one another. The fundamental impasse remained the same: Stein still hadn’t paid the Russians for the computer-game versions of Tetris that had been sold to date. “When I read [the contract with Stein], I felt very unhappy,” says Belikov. “It said the first payment should be made within three months. It was already October. I began to think what to do: how to force Andromeda Software to pay.” Yet even as he failed to pay the Russians Stein continued to pressure them to sign over arcade rights — and now, in the wake of Henk Rogers’s recent request, handheld rights. Understandably, Belikov wanted to see money from the deal that had already been signed before he signed another. “Andromeda Software sent me telexes asking to start negotiations for new licensing agreements,” says Belikov, “but my only reaction to these was ‘first honor the original agreement, then we can negotiate further.'”

Again, the reasons for Stein’s recalcitrance on this most critical of issues remain unclear. Had he really not yet been paid by Mirrorsoft and Spectrum Holobyte? Had he used the money for something else, perhaps to shore up his declining business, and thus no longer had it to give to the Russians? Or was he for some other reason simply refusing to part with it? He had happily accepted Henk Rogers’s $25,000, but continued to dither on producing the rights Rogers was after. The latter first grew impatient, then deeply suspicious. Something was wrong here. “He said he was going to go to Russia,” says Rogers. “He kept on saying that, but he wasn’t going.” With the Game Boy scheduled to ship in Japan in April of 1989, in North America in July, time was running dangerously short. At last, Rogers decided that if Stein wouldn’t go to Moscow for him, he would go himself. He would try to talk to these mysterious partners of Stein’s and see if he could negotiate a handheld deal for himself. In February of 1989, despite having no advance invitation or for that matter any official status whatsoever with ELORG, he bought a ticket for Moscow.

Rogers and Belikov weren’t the only ones sensing that Robert Stein wasn’t playing it straight. Mirrorsoft too had been inquiring about the handheld rights, perhaps envisioning a standalone handheld Tetris game, and had run into a similar pattern of delay and obfuscation, raising with them as well the question of what sort of relationship Stein really had with the Russians. The situation led Jim Mackonochie of Mirrorsoft to reach the same decision as Rogers: he would go to Moscow himself to see what was what. When he explained his plan at the next Mirrorsoft board meeting, however, he was overruled. Board member Kevin Maxwell, son of primary Mirrorsoft shareholder Robert Maxwell and thus not a man to be disputed, said he was going to Moscow for business anyway that February. He would meet with the ELORG people while he was there, he said in his confident way, and get everything sorted out.

In the United States, Phil Adam of Spectrum Holobyte had also decided to travel to Moscow himself, but was similarly shut down when he told the people back in London about his plans. Kevin Maxwell would take care of everything, he was assured.

The Chinese wall Stein had built between his partners in the West and his charges in Moscow was about to crumble. Yet Stein himself had hardly dropped out of the picture. While Rogers and Maxwell were making their plans, he finally arranged for his own trip to Moscow to try one more time to make his own deal for the arcade and handheld Tetris rights. All three parties would arrive within days of one another, none having any idea that the others were coming.

Henk Rogers in his Moscow hotel room, 1989

The first to arrive was Henk Rogers, primed to deploy the charm that had served him so well through his career to date. Rogers:

I did know I was going behind the Iron Curtain for the first time and I had no idea what I was getting into. I kind of knew how to deal with people who were not from my original culture. So, I was expecting to get off that plane and make friends. That’s not what happened. Everybody that I met was unfriendly and unhappy and grumpy. There was an information desk in the hotel. I asked them about ELORG. “Nope, I can’t find it.” No attempt at going any further.

The prevailing impression he had of Moscow can be summed up in the word “gray”: gray skies, gray streets, gray and unsmiling people. The television in his hotel room showed only gray snow, the radio played only gray static. Born marketer that he was, he was disturbed perhaps most of all by the complete lack of advertisements in the city: “Nobody was trying to sell you anything!” At last, he found a tour guide and translator who took him to the ELORG offices. In very un-Soviet fashion, he simply marched up unannounced and knocked on the front door.

Rogers in his Western naivete didn’t realize it, but he was actually putting his would-be negotiating partners in a very delicate position by doing so. Glasnost or no, the law still required that any meetings of Soviet citizens with foreigners be approved in advance by the state. Rogers himself was in the Soviet Union on a tourist visa, meaning that even discussing business on the trip was technically illegal.

As we’ve noted, though, Nikoli Belikov wasn’t your typical hidebound Soviet bureaucrat. He had meetings already scheduled in about a week with Robert Stein and this new, unknown quantity named Kevin Maxwell. He realized, as any savvy negotiator would, that a third party to play against the other two could be a very good thing to have. He talked briefly with Rogers that day, just long enough to tell him to come back the next day, by which time he could pull some strings to get an official meeting on the books. As a matter of courtesy, he also invited the original instigator all this chaos, Alexey Pajitnov, to attend what would turn into a solid week of negotiations.

When the next day came, Rogers found himself seated before a massive table much like the one that had greeted Robert Stein the first time he came to Moscow, inside a similarly forbidding room. Not allowing his stark surroundings to intimidate him, he launched into the sales pitch of his life. With most potential licensers, his cause would have been helped enormously by his being able to say that he enjoyed a close connection to Nintendo, by far the richest and most powerful entity in videogames, with 70 percent of the worldwide market at their command. He now realized to his shock, though, that Belikov and the rest of the Russians knew nothing about Nintendo or their enormous market clout. So, he took on the persona of a sort of consultant. He avoided the hard sell, treating the Russians more like confidants than potential marks, walking them patiently through the details of the Western videogame business in the way that Stein had never bothered to do, telling them in the process about this top-secret upcoming gadget called the Game Boy. Tetris, he said, would be the perfect game to sell millions of Game Boys — and Game Boy would be the perfect platform to sell millions of copies of Tetris. While it would perhaps be an exaggeration to say that Belikov took a liking to Rogers — he really wasn’t the sort of person to like anybody sitting on the other side of the table from him — he was favorably impressed by the contrast with Stein. When the day was over, Belikov told Rogers to come back again the next day, this time with a formal offer for the handheld rights to Tetris.

Henk Rogers and Alexey Pajitnov

Over the course of the meeting, Rogers had forged another relationship that would prove even more key to his future than the bridge he was building to the taciturn Belikov. Even before they were introduced, he had picked out Alexey Pajitnov; he was just so intrinsically different from the other unsmiling, gray-suited (of course!) bureaucrats sitting around the table. Rogers chatted with Pajitnov, something Stein had bothered to do in only the most patronizing of terms. “Finally out of all this dressed-in-suit business world, I saw a guy who really liked and understood the game,” says Pajitnov. “And somehow we liked each other, almost immediately.” Rogers calls Pajitnov “the friend I was looking for in Russia. We got together that night, started talking about game design, immediately jumped into [ideas for] Tetris II. We had stuff to talk about.” Bonding over vodka inside the Pajitnov family’s humble apartment, finding ways to communicate despite Pajitnov’s broken English and Rogers’s nonexistent Russian, the two formed a bond of friendship and trust that has endured to the present day. For Pajitnov, the key aspect of the evening was that Rogers “offered me nothing and asked for nothing” in relation to his game. Again, the contrast with Stein couldn’t have been more pronounced.

When a woozy Rogers stumbled home to his cold hotel room that night, he knew he had seen a side of Russian culture almost impenetrable to most Westerners — the warmer side that existed behind the closed doors of family life, the one that had nothing to do with politics and ideology. And he knew that, whatever else the next day might bring, he at least had Pajitnov in his corner. The problem, of course, was that Pajitnov had long since been forced to relinquish virtually all say in the fate of his own game.

Still, Rogers’s charm and his straightforward, very un-Stein-like manner were beginning to have their effect even on Belikov. Without much preamble on the next morning, Rogers and ELORG agreed to work on a deal giving Bullet-Proof Software exclusive worldwide handheld rights to Tetris. Steins’s Chinese wall had just crumbled to dust. After a few days of detail-ironing, on February 21, 1989, they signed the final contract. For Henk Rogers, it was the deal of a lifetime, one that was all but guaranteed to make him a very, very rich man. But his euphoria was short-lived.

A boxed copy of the Bullet-Proof version of Tetris, like the one that Henk Rogers showed Nikoli Belikov at a pivotal moment.

Wishing to show his new Russians friends and business partners an actual, tangible product his company had already created using the Tetris intellectual property, Rogers reached into his bag and pulled out Bullet-Proof Software’s Nintendo Famicom version of the game, which had been released in Japan the previous month and had already sold 130,000 copies. “We’re the biggest publisher of Tetris in the world right now,” he said proudly. But Rogers needed only take one look at Belikov’s face to realize he had made a serious error. He had simply assumed that, whatever else was going on with Robert Stein, his own Famicom version of Tetris, for which he had acquired the rights from Atari rather than directly from Stein, was entirely legal and above-board. But the Russians, it gradually became clear, had no idea that any commercial versions of Tetris beyond the Mirrorsoft and Spectrum Holobyte computer games existed. Belikov, from being on the verge of smiling five minutes before — a smile represented a veritable outburst of joy from him — was now loudly accusing Rogers of software piracy. “You are illegally selling something that doesn’t belong to you,” he almost shouted, pounding the table to emphasize his point. The conversation began to take on the tone of an interrogation.

The prospect of Mirrorsoft sub-licensing part of their rights had apparently never occurred to the Russians, and had conveniently gone unmentioned by Stein. A flustered Rogers struggled to explain; flustering Henk Rogers wasn’t an easy thing to do, but Belikov had managed it. He took the Russians through the fine print on the back of the box, through Andromeda and Mirrorsoft and Atari and finally to Bullet-Proof. It was all nonsense, Belikov insisted. As far as he had understood it, the rights shouldn’t go further than Mirrorsoft and Spectrum Holobyte. Rogers asked about the videotape of the Famicom Tetris which he had been required to submit for approval, the one that Stein had told him had indeed been approved by the Russians. No one at the table had ever seen any such thing. Rogers mentioned that Stein had also licensed Tetris arcade games that were now in service all over the world. Once again, the Russians knew nothing about that.

This marked a pivotal moment — perhaps the pivotal moment in the entire negotiation. For the Russians, it provided the first incontrovertible evidence of what they had suspected all along: that Stein wasn’t an honest broker. For Rogers, it threw all of his assumptions into doubt — and suddenly threw everything, namely all of the various rights to Tetris, into play. It seemed that much of what Stein had told his Western and Eastern partners alike was, as Rogers would later put it, a “sham.” As the conversation/interrogation continued, it became clear that the Russians believed they had licensed only the computer-game rights, not console rights, to Stein. Belikov produced the contract they had signed. Whether by intention or accident, its wording on the subject was vague: it granted Stein the rights for “the IBM PC and other computer systems.” It was unclear whether “computer systems” should include game consoles. On its face, the lack of clarification was far from inexplicable: the Russians at the time had had very little idea if any what game consoles were, and even Stein had spent his career immersed in the European market, where home computers dominated in digital entertainment and consoles were almost unheard of. It struck Rogers as clear that the intent of the Russians — and most likely of Stein as well at the time of the signing — had been to limit the license to personal computers. Still, when he had seen the opportunity to make more money licensing Tetris for consoles, Stein had opted for a broad interpretation of the clause. It was difficult to say which way it would go in a court of law. And as went living-room game consoles, so potentially went handheld devices. Was a Game Boy really any less or more a “computer system” than a Famicom? Or, to really a stretch a point, could even a standup arcade game be construed as a “computer system?” It was all so damnably unclear.

Looking for a way to demonstrate his good faith, Rogers did some hasty calculations, reached again into his bag to pull out a checkbook, and wrote ELORG a check for the $40,000 he estimated he owed to Atari for the copies of Tetris he’d already sold under the terms of the contract he’d signed with them. He could sort that out with them later. Right now, he knew, much more than $40,000 was at stake. Voluntarily handing over a check was just about the last thing anyone sitting around the table could ever imagine Robert Stein doing. It made a huge impression on the Russians, not least Belikov. “Forgive me,” Belikov remembers Rogers saying. “I didn’t know. I want to work with you.”

Rogers understood that the great danger presented by the contract’s vagueness brought with it great opportunity. Everything truly was now in play. And Belikov had something of the same feeling. The next morning, he asked Rogers whether he and/or his friends at Nintendo would be interested in submitting a bid for the worldwide console rights to Tetris. Absolutely, Rogers replied, but warned that “there will be trouble.” The contract between Stein and ELORG was vague enough that Stein could make a plausible case for his interpretation, and the likes of Mirrorsoft and Atari who stood behind Stein had plenty of legal resources at their disposal. But Belikov was already hatching a scheme to clarify the situation. Implying as much to Rogers, he told him to go home, talk to Nintendo if he needed to, and prepare a proposal within three weeks.

Rogers had now been in Moscow for about a week. Stein was to come in for his scheduled meeting that very afternoon, and Belikov wanted to make sure that he didn’t get a whiff of Rogers’s presence. Really, he told Rogers in no uncertain terms, I need you to leave now. “I didn’t [yet] understand who was working for whom,” says Belikov. “But I did understand that they must not meet.”

Robert Stein in Moscow, 1989

Stein had already arrived at ELORG as Belikov hustled Rogers out the door; he had been taken to wait in a side room to ensure that Rogers wouldn’t meet him on his way out. Belikov, that master of the bureaucratic double-cross, was about to paint his masterpiece.

Assuming his most peremptory posture, he dropped a document on the table in front of Stein, demanding that he sign it before anything else was discussed. When Stein asked what it was, Belikov explained that it was an amended version of the contract that had been signed between Andromeda and ELORG back in May of 1988. The amendments were to be, by the mutual agreement of the signing parties, treated as having gone into effect with the original contract, treated for legal purposes as if they had always been there. Belikov strongly implied that the amendments applied entirely to what had been the primary source of rancor between Stein and the Russians for months now, the issue of timely payment — or, rather, the lack thereof on Stein’s part. The Russians’ determination to resolve this issue struck Stein as, if hardly welcome, not unexpected in light of everything that had transpired. Indeed, Alexander Alexinko had been threatening to add language to the contract on exactly this subject for months before Belikov had arrived on the scene. Belikov was counting on this sense of plausibility. “I artificially increased the penalties for delayed payment,” he says. “I knew that they were unrealistic, but I had to concentrate his attention on these figures, which I was naturally ready to reduce.”

Stein took the amended contract back to his hotel room that night to read it over. As expected, he returned to ELORG the next morning in a huff, insisting that the proposed payment schedules and penalties were impossibly stringent. Belikov grumbled and duly agreed to a compromise figure, whereupon Stein signed his name to the new document.

The squabbles about payments had all been an elaborate smokescreen. The real point of the amended contract was a clause which Stein had, as Belikov had intended, entirely overlooked. It clarified “computer systems” as meaning “PC computers which consist of a processor, monitor, disk drive(s), keyboard, and operation system.” In signing the contract, Stein had just retroactively voided the deal which had given the console rights to Tetris to Atari (and, yes, passed those same rights further to Henk Rogers in Japan). And in the process, he’d cut himself out of the staggering amounts of money Tetris would soon be generating on consoles and handheld devices. An embittered Stein would later call Belikov “a son of a bitch”: “They made it so matter-of-fact — we would like you [to sign this] for the sake of bureaucracy — and I agreed because I was so focused on getting what I wanted I forget about watching what they wanted.”

The things that Stein wanted were the handheld rights, which unbeknownst to him Belikov had already signed away to Henk Rogers, and the arcade rights. Belikov rebuffed him in his usual non-committal fashion when it came to the former, telling him they’d talk about them later, but showed him a little mercy when it came to the latter. The arcade rights wouldn’t, however, come cheap: Belikov demanded a $150,000 advance, plus payment of all of Stein’s outstanding obligations for the computer-game versions of Tetris, with the late-payment penalties described in the amended contract, and all within six weeks. Still having no idea what he had done in signing the amended contract, Stein agreed to all this as well on the morning of February 24. He was then hastily bundled out of ELORG’s offices, thinking the Russians had driven hard bargains but that his trip had been at least a partial success in spite of it all.

Belikov needed to get rid of him, given that Kevin Maxwell was scheduled to arrive that very afternoon. He still had one more double-cross to pull.

Robert and Kevin Maxwell

Manifesting all of his father’s arrogance and authoritarianism without the same native business acumen, Kevin Maxwell was regarded as a troublesome dilettante within the Maxwell empire, with a tendency to meddle in affairs about which he had an imperfect understanding at best. It was all too typical of him to parachute down on a problem that was on the verge of being solved and take charge at the last minute, thereby to walk away with the credit from his father, whom he worshiped with a perhaps unhealthy ardor. Thus this meeting with ELORG. Maxwell seemed to expect that his name alone — his father was personally acquainted with Mikhail Gorbachev, and had been among the first Western financiers to invest in Gorbachev’s rapidly changing Soviet Union — would bring these Russian rubes into line. He walked into ELORG’s offices that afternoon oozing self-importance and condescension, but with very little idea of the particulars that he was supposed to be negotiating. The wizened old fox Belikov practically licked his lips at the sight of him.

Belikov threw the Bullet-Proof version of Tetris which Henk Rogers had left behind onto the table. “What’s this?” he asked. Maxwell said he had no idea, said it must be an unauthorized pirate version of the game. When Belikov showed him the fine print on the box, tracing the rights through Mirrorsoft to Atari and so on to Bullet-Proof, Maxwell stuck to his guns. Mirrorsoft hadn’t authorized any such release, he insisted more stridently than ever, having never bothered to research all of the side deals that had been made involving Tetris by that point. Ironically, this “pirated” version of Tetris was the only one for which the Russians had actually been paid what they were owed, thanks to the check Rogers had written a couple of days earlier. That irony wasn’t lost on Belikov. If the rights wound up disputed in court, he now had Maxwell on record admitting that a console version of Tetris which Mirrorsoft had in fact authorized — by extension anyway, through the deal with Atari — was illegitimate. It would add weight to the Russians’ claim that the console rights had never been Stein’s to license to Mirrorsoft in the first place.

But Belikov didn’t let on at this meeting that any disputes surrounded the deal the Russians had signed with Stein; better to let Maxwell find out about that later. On the subject of the handheld rights that were Maxwell’s primary goal, he proposed a quid pro quo: he would promise Mirrorsoft the opportunity to bid on the handheld rights as soon as they became available in exchange for the right to reprint a number of Maxwell Communications reference publications, such as Collier’s Encyclopedia, royalty-free in the Soviet Union. He made it sound like “waiting for the handheld rights to become available” referred to some irksome bureaucratic process that had to be finalized. In reality, of course, Mirrorsoft would be waiting a very long time, approximately forever in fact: those rights had already been purchased by Henk Rogers, and would never, ever be relinquished by him.

Belikov also promised Maxwell the right to bid for the console rights, offering to sign an agreement to that effect. Maxwell, either out of confusion or out of total ignorance of what rights Mirrorsoft already claimed to own, readily agreed. Since signing an agreement to negotiate on a set of rights carried the natural implication that one didn’t already possess said rights, Belikov now had Maxwell further on record as tacitly acknowledging that the console rights did not and had never belonged to Mirrorsoft.

A self-satisfied Kevin Maxwell walked out of ELORG on the same day he had first arrived like Neville Chamberlain leaving Munich, having signed away a whole pile of publication rights and tacitly admitted that Mirrorsoft’s contract to publish Tetris applied only to computer games — and all in return for a promise from the Russians to listen to future proposals.

Belikov, on the other hand, had more than earned the right to smile, having in the course of one rather extraordinary fortnight completely reshaped the state of Tetris as a commercial entity. He finally had Stein firmly on the hook to pay ELORG the royalties he owed, with penalties. He had licensed the arcade rights to Stein for a lucrative advance. He had tricked both Stein and Maxwell into acknowledging that their rights didn’t cover console versions, and he was awaiting new bids for those rights from Rogers and Maxwell that should be on his desk within a few weeks. He had licensed the handheld rights to Rogers on very good terms — a deal that, if Rogers’s optimism had any grounding at all in reality, could be by far the most profitable of all. He had even gotten paid by Rogers for the sales to date of the Japanese Famicom version Stein had apparently tried to slip past him, and had a promise from Rogers to continue to pay him for it while everything else got sorted out. No, it wasn’t a bad fortnight’s work at all.

Still, it wouldn’t be all smooth sailing from here. Powerful organizations had a vested interest in the previous status quo, and were hardly likely to take this sweeping realignment with equanimity. Alexey Pajitnov’s simple little game of falling shapes would cause much more international drama before all was said and done.

(Sources: the books Game Over: How Nintendo Conquered the World by David Sheff and The Tetris Effect: The Game That Hypnotized the World by Dan Ackerman; the BBC television documentary From Russia with Love. Most of the images in this article are borrowed from From Russia with Love.)

 

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A Tale of the Mirror World, Part 4: A Different Mirror

Another day at the office for Henk Rogers: haunting the trade-show circuit, looking for games to license for the Japanese market.

Encompassing three different continents, the story of Henk Rogers’s formative years reads like a preview of the world’s multicultural future. Born in Amsterdam in 1953, Rogers immigrated to New York City when he was 11 years old, courtesy of his mother’s second marriage to an American. He spoke no English at all at the time his family made the move; he could only communicate with his stepfather using their mutual broken German. But Rogers, as he would prove repeatedly throughout his life, was a quick assimilator. Within a year, he was out of his school’s English-as-a-second-language curriculum and into the regular pool of students. And not long after that, he won admission to New York’s Stuyvesant High School for gifted kids.

When he was 19, his family was uprooted again, when his stepfather shifted the center of his business as an importer and exporter of gemstones from New York City to Yokohama, Japan. Not excited about the prospect of another new culture and new language, Rogers wound up in Hawaii as a compromise destination; it would be, relatively speaking, easier for his parents to keep an eye on him there than if he remained on the mainland. In Hawaii, he attended university on and off between working odd jobs. But his real passions were surfing and playing a strange new game called Dungeons & Dragons that was being passed among residents of this far-flung outpost of its home country in the form of dog-eared photocopies. “Some weekends we’d start playing on a Friday evening and wouldn’t stop until Monday morning,” he remembers. “It was a huge part of my life.”

In the meantime, Japan had begun to look more and more attractive after all, thanks to that most eternal of motivations: he had fallen for a Japanese girl studying English in Hawaii. In 1976, he abandoned his own desultory studies to follow her back to her homeland; the couple married the following year. Cut off from his old Dungeons & Dragons buddies, Rogers found both a new hobby and a mode of integrating himself with his new surroundings in the traditional Japanese board game Go. Following the example of his stepfather, whose own passion for Go was so pronounced that Rogers suspected it to be a partial motivation for relocating the family business to Japan in the first place, he would eventually advance to become a six-dan player — just shy of tournament-worthy.

As we’ll soon see, his knowledge of Go would prove unexpectedly valuable later in his life. Right now, though, it certainly wasn’t going to pay the bills. Rogers had always had a somewhat strained relationship with his stepfather, but, cast adrift in Japan with no knowledge of Japanese and no university degree, he had few prospects other than the family business. So, he spent the next six years traveling the world as a gem trader, spending almost as much time in Thailand, a major source of gemstones, as he did in his new home of Japan. In fact, he was there in 1982 when his wife gave birth to the couple’s third child. Dissatisfied alike with travel, gems, and working with his stepfather, he decided after that experience to quit his burgeoning career in gemstones at the age of 29. He was determined to find a more forward-thinking line of work, and one where he could be his own man. In the future, if he missed something as earth-shaking as the birth of a child, it would be by his own election, not his stepfather’s.

From the first time he had encountered a vintage IBM mainframe back in high school, Rogers had had a strong if usually latent interest in computers. Now, using his native charm and family connections, he managed to finagle himself a contract job as a microcomputer programmer at Hitachi. His brief tenure there would set another pattern for his future — that of an aggressive defender of intellectual-property rights. For his first assignment, his superiors, displaying the blissful disregard of copyright law that was so endemic inside even big companies like Hitachi during the early days of the microcomputer industry, asked him to break the protection on a copy of VisiCalc so that it could be shared throughout the company. When Rogers flatly refused to do so on ethical grounds, he was instead asked to create a simple home-accounting program to be sold for Hitachi’s computers. In addition to writing the program, he engineered his own ingenious copy-protection method, using a pair of strong magnets to corrupt certain sectors of the disk. Determined to secure his royalty stream from the ravages of software piracy, he told Hitachi that he would only give them permission to release the program if his copy protection remained on the disk. Hitachi demurred, and that was that for the accounting program and for Henk Rogers’s career as a contract programmer. Luckily, he already saw a brighter prospect on the horizon.

Thanks to his contacts in the United States, Rogers was aware of the phenomenon that was Wizardry, the computerized implementation of the Dungeons & Dragons experience that had taken the Apple II by storm in 1981 and was still selling like crazy a couple of years later. Despite a vibrantly creative culture of arcade games, console games, and (to a somewhat lesser extent) computer games, Japan had nothing remotely like Wizardry. As a Westerner based in Japan and a programmer with a background in Dungeons & Dragons, Rogers realized he was wonderfully positioned to remedy that failing. “I had never built a product,” he says. “I had no idea what I was getting into. But I did have a bold vision for the game: a full Dungeons & Dragons game featuring fighters, warriors, wizards, clerics. All of that stuff.” Over the course of nine months, he programmed a dungeon crawl, heavily derivative of Wizardry but simplified in many ways, on the NEC PC-8801 home computer. The finished product, if it perhaps didn’t quite live up to that first “bold vision” of being everything Dungeons & Dragons was, would prove good enough for his purposes. He called it The Black Onyx, a nod to his old career in the gemstone trade. Unhappy with the deals offered by the established publishers, he formed his own little company, which he named Bullet-Proof Software, to publish the game himself.

The Black Onyx

Lacking though it was in many ways compared even to the original Wizardry, much less the many CRPGs that had followed the latter game onto the North American market, The Black Onyx was nevertheless the first really playable CRPG to hit Japan, manifesting just enough of the qualities that can make the genre so compelling. Rogers’s biggest problem was figuring out how to market it in a country that had little awareness of Dungeons & Dragons, or for that matter of the Western tradition of epic fantasy in general. He claims that, upon publishing the game via magazine advertisements in December of 1983, he sold just one copy in the first month, four in the second. Desperate for a breakthrough, he hired a translator to alleviate his still-dodgy Japanese and conducted a personal publicity blitz, visiting each of the major Japanese computing and gaming magazines and teaching the staff there how to play a CRPG.

It worked. Each magazine’s April issue ran a long and very positive review, and sales exploded. Soon The Black Onyx was selling 10,000 copies per month and being ported to every viable home computer in Japan. It ended 1984 as the best-selling Japanese computer game of the year, and actually wound up fueling sales of its own inspiration, Wizardry, when the older game was ported to Japanese computers; being more advanced than Rogers’s game, Wizardry was ironically taken to by Japanese players as the logical next step in dungeon crawls. In the longer view, The Black Onyx set the stage for franchises like Dragon Quest and Final Fantasy that are still going strong today. The Japanese would never lose their passion for the genre, although they would soon take it in their own distinct direction. If anything, the CRPG is even more popular today in Japan than in the land of its birth.

The voice of Henk Rogers, however, wouldn’t be a notable one for very long in the craze he had done so much to foment. He hammered out a Black Onyx II to more modest success, but by the time he was starting on a third game it was becoming clear that the series’s reign was destined to be a short one in the face of the competition now entering the market. “I was flattered on one hand,” he says. “But I also realized that I didn’t quite understand the Japanese aesthetic and way. These games were quite different to mine, and just struck a more effective cultural chord.” He never even finished the third game.

While it’s certainly true that Japanese CRPGs would take on their own personality in time, it’s perhaps debatable, given the more sustained success enjoyed by the Wizardry series in Japan, whether The Black Onyx‘s short day in the sun had more to do with cultural factors or fundamental issues of design and implementation. In the final analysis, the game’s success had been at least as much a tribute to Rogers’s skill at personal salesmanship and his talent for straddling cultural divides as a reflection of the rather workmanlike implementation of a dungeon crawl at the root of it all. Tacitly acknowledging this, he now largely abandoned game design in favor of playing to these, his real strengths.

Rogers continued to see opportunity in the cultural divide between the West and Japan, which was in its own way as pronounced as that between the West and the Eastern Bloc. When Western eyes peered toward Japan, they saw a pictographic alphabet even more cryptic than the Cyrillic glyphs found in the Soviet Union, supporting a language lacking any of the Latin antecedents shared by its Western peers. And they saw a culture that could seem almost as impenetrable as the language. What to make of a country where comics full of the most transgressive (to Western sensibilities) forms of sexual violence were everyday fare in family bookshops, yet the incidence of actual sexual violence was one of the lowest in the world? What to make of a country with one of the healthiest diets in the world — resulting in one of the longest average lifespans in the world — that nevertheless took Colonel Sanders of Kentucky Fried Chicken fame to heart as some combination of Santa Claus and minor deity? What to make of a country whose rules of social etiquette were so infamously complex and nuanced that it was doubtful whether any Westerner had ever fully understood them, where an extra inch or lack thereof in a bow could spell the difference between decorum and boorishness? Plenty of Westerners over the years would find this alternate Mirror World as fascinating as the one behind the Iron Curtain, would fall into rabbit holes of Japanophilia from which they would never emerge. Most Western game publishers of the 1980s, however, had enough problems selling games to their own citizens. They had no time to try to figure out what might appeal to those strange people on the other side of the Mirror.

In this ongoing cultural disconnect, Henk Rogers saw opportunity. Just as he had sensed the appeal of a game like Wizardry in Japan, he was convinced that there were plenty of other great game ideas waiting to be imported from the West, and that he was just the person to do the importing. His new life as a game importer took on certain ironic similarities to his old one as an international gemstone trader. He roamed the world, haunting trade shows to check out the latest and greatest games.  He looked for games that had commercial potential in Japan, which weren’t always easy to find; in general, games in Japan had a different, simpler aesthetic than the complex simulations and adventure games that dominated much of computer gaming in North America in particular. When he found a game he judged to have potential, he deployed his sheer personableness — by far his greatest asset in business — to more often than not work out a deal with the publisher. He then carried the game with him back to Japan, where he put his handful of programmers to work porting and translating. Bullet-Proof Software wasn’t the only importer and porter of Western games in Japan — a company called StarCraft had been at it since before The Black Onyx had been a gleam in Rogers’s eye — but they were quite successful at it. Among the games they introduced to Japanese audiences were such classics as Archon and M.U.L.E.

But for all the success Rogers was enjoying, the full-fledged computers to which he ported his games made up a very small part of the overall market for digital games in Japan. By the mid-1980s, the heart of the market lay with the Nintendo Famicom console, which would sell a stunning 10 million units in Japan — approximately one for every twelve people living in the country — in its first three and a half years on the market there. By disposition a mainstream rather than a niche sort of guy, Rogers desperately wanted a piece of that action. Unfortunately, Nintendo ruled every aspect of the Famicom, computing’s first great walled garden, with an iron fist. Very few third parties were allowed to make games for the platform, and then only under the strictest of terms. After rejecting the bids of some of the biggest names in consumer electronics, it was difficult to imagine them giving Rogers’s tiny Bullet-Proof Software more than the slightest glance.

Yet Henk Rogers had never been one to take no for an answer. When he learned that Nintendo’s famously imperious president Hiroshi Yamauchi was, like himself, an avid Go player, he saw his opening. He wrote directly to Yamauchi, saying he owned the best computerized Go game in the world — he owned no such thing, but needs must — and was interested in porting it to the Nintendo Famicom. Much to Rogers’s own surprise, Yamauchi invited him to a visit at Nintendo’s headquarters in Kyoto to discuss the proposal. Over a Go board and glasses of Yamauchi’s good Scotch, the two struck a deal that many companies many times the size of Bullet-Proof would have killed to have. Rogers hastily sourced an extant Go computer game from a tiny publisher called Edge Computers in Britain — perhaps not actually the world’s best computerized Go program, but it would do — and had his team port it to the Famicom. It sold 150,000 copies, hardly a spectacular figure by Nintendo standards, but pretty darn great by Bullet-Proof’s. Most importantly, Bullet-Proof was now established as one of the elite circle of developers able to make games for the Famicom. Rogers, still embracing the role of Western gaming’s ambassador to Japan, went off again in search of more games that would work within the technical and cultural constraints of the Japanese Nintendo market.

The two annual Consumer Electronics Shows, the high points of the American games industry’s calendar, were musts for a person in Henk Rogers’s position. Thus it was that he found himself wandering through Spectrum Holobyte’s display at the Winter CES in Las Vegas in January of 1988. Running there was this odd game of falling shapes called Tetris, which was about to be released for computers in Europe and North America. Like Robert Stein before him within the much more austere environs of the Institute of Computer Science in Budapest, Rogers’s initial instinct was to dismiss the game as too simple even for the Nintendo. And yet somehow he kept drifting back over to it. When he finally stepped up to play, he didn’t want to stop. He found that Tetris reminded him of Go in the way it built a well-nigh compulsive experience out of the most basic of raw materials: black and white stones and a grid of tiles in the case of the latter, seven distinct shapes falling endlessly down the screen in that of the former. “Tetris was probably the quietest game at the show,” he remembers. “Even then, products were graphically exciting, but this game was a totally different thing. I wanted to play it because it struck some basic chord. I couldn’t stop playing.”

Tetris was the ultimate find for a games importer like himself: utterly abstract, it carried along with it no cultural baggage whatsoever, wouldn’t really even require any language translation. And thanks to its simplicity it would be dead easy to port like crazy. Rogers decided he had to have Tetris for Japan, and he had to publish it on everything there: Nintendo, home computers, even in the form of standup arcade games if possible. Determined to deliver his patented sales pitch to maximum effect, he invited Phil Adam and Gilman Louie, the partners in charge of Spectrum Holobyte, to visit Japan at his expense to see his operation in action and hopefully make a deal. In May of 1988, a euphoric Rogers secured from them an agreement in principle to license Tetris for the Nintendo Famicom and for Japanese home computers.

But competing interests and miscommunication would combine to make his euphoria short-lived. Robert Stein, you’ll remember, had licensed the rights to Tetris to Mirrorsoft in Britain, who had then brokered a second deal with their semi-sister company Spectrum Holobyte in the United States to sell the game in that market. One problem with all this was that, unbeknownst to his Western partners, Stein had never actually signed a contract with or otherwise gotten clear permission from Alexey Pajitnov and/or the Soviet state to do anything at all with Tetris before Mirrorsoft and Spectrum Holobyte released it; we’ll return to that ticking time bomb in the next article. But a second, subtler potential bombshell also lurked beneath the surface of the deal: it wasn’t at all clear where the rights of Spectrum Holobyte, Mirrorsoft, and Stein’s Andromeda Software began and ended when it came to making further licensing deals involving the game. Before Henk Rogers arrived on the scene, Mirrorsoft, believing themselves to be the senior partner, at least in comparison to Spectrum Holobyte, and thus empowered to make sweeping deals involving the property that affected the American publisher as well, had already sub-licensed it to no less storied a name in videogames than Atari — or, rather, to a subsidiary of Atari called Tengen.

Regular readers of this blog may recall that Atari in the aftermath of the Great Videogame Crash had been split into two entities that were sold off separately by Warner Communications, the company’s brief-lived corporate parent. And just to make things extra confusing, both entities retained the Atari name. Atari Corporation went to Jack Tramiel, the recently deposed head of Commodore. It had jurisdiction over home computers and game consoles. Atari Games went to the Japanese company Namco, a big player in standup arcade games (among other claims to fame, Namco had created Pac-Man). It had jurisdiction over the old Atari’s substantial arcade-game business. Each new Atari was strictly forbidden under the terms of the sales to enter the other’s area of specialization.

At first, Atari Games had reason to believe they had gotten the better end of the bargain. The arcade market had never cratered quite as badly as the console market, and, although it would never enjoy a return of the glory days of the early 1980s, did make a modest recovery from its worst depths in relatively short order. Hideyuki Nakajima, the executive whom Namco had placed in charge of Atari Games, was so bullish about the arcade market that in early 1987 he engineered a stock purchase giving him and a handful of his top employees complete control of the company. Atari Games was now an independent maker of arcade games once again, just as the original company had been back in the days of Pong.

By 1987, however, the Nintendo Famicom had finally come to North America under the name of the Nintendo Entertainment System, and console gaming, just a few years on from being pronounced a dead fad, was exploding once again. A new generation of kids were replacing Pac-Man with Super Mario on their tee shirts and lunch boxes. Jack Tramiel’s Atari Corporation, the only version of Atari with permission to enter the console market, seemed nonplussed by it all, focusing instead on the exercise in diminishing returns that was their ST line of home computers. Atari Games, on the other hand, was positively aching to find a way back into the console market, which soon dwarfed that of the arcades.

Peering closely at the legalese which bound their operations, Atari Games realized that it prohibited them only from entering the console market under the name of Atari. So, they created a subsidiary, peopled with veteran Atari staffers, to make console games under a different name. They called the new subsidiary Tengen Corporation. Ironically in light of the role Tengen would later play as an arch-nemesis of the Go lovers Henk Rogers and Hiroshi Yamauchi, the name was a reference to the classic Japanese board game. Go players call the board the universe, and the central spot on it is known as the “tengen.” Thus the name was a reference to the spot the “new” company hoped to occupy: one at the center of the videogame universe. Placed in charge of achieving that goal for Tengen was Randy Broweleit, late of the computer-game publisher SSI.

The initial strategic plan at Tengen would have them leverage the strengths of the parent company by making home versions of Atari’s latest arcade hits. Such a plan would require them to release their games on the Nintendo, the only truly viable platform in the console market of the time. In January of 1988, days after Henk Rogers first encountered Tetris in Las Vegas, they thus signed a contract with Nintendo. Despite an already palpable tension between the two management teams — the Atari veterans saw Nintendo as usurpers of their rightful crown, and didn’t do a terribly good job of hiding it — Atari’s suite of major arcade properties that were natural candidates for porting to the home made their offer a difficult one for Nintendo to refuse. Still, Nintendo wasn’t interested in making things too easy for them. Under the contract’s terms, Tengen was allowed to make exactly five games per year for the console, a restriction that, although standard boilerplate for Nintendo’s third-party licensees, nevertheless chafed from the get-go.

Yet the restriction didn’t keep them from exploring the possibility of releasing games that had never appeared in an arcade. Shortly after signing the deal with Nintendo, Tengen fell under the thrall of the Tetris Effect when an employee brought a boxed copy of the Spectrum Holobyte release of the game into the office with him. Broweleit couldn’t help but note that the game had far more in common with the simple aesthetic of Nintendo than it did with its more complex peers on computers. He thought it might make a good fit on the console, and passed this recommendation on to Hideyuki Nakajima, the head of Atari Games and thus the man who really called the shots at Tengen.

Following the legal fine print on the back of the box through Spectrum Holobyte, Mirrorsoft, and Andromeda, Nakajima decided to contact the middle of these entities, with whom he already had a relationship thanks to past deals. In lieu of cash, he worked out a straightforward rights swap with a Mirrorsoft executive named Jim Mackonochie: Tengen would get worldwide console rights to Tetris, while Mirrorsoft would get worldwide computer-game rights to Blasteroids, one of Atari’s big arcade releases of the previous year. Seen retrospectively, it wasn’t a very good deal at all from Mirrorsoft’s perspective, given that Tetris would go on to conquer the world while Blasteroids would go down in arcade history as an over-complicated, not-very-fun dog of a game. At the time, though, Mackonochie, one of that minority of players who were immune to the Tetris Effect and who thus saw it as little more than an interesting curiosity, believed he had done very well indeed.

Simultaneously, Atari went directly to Robert Stein to acquire the heretofore unsold arcade rights. Molding Tetris to their normal business model, they planned to release the arcade game first, letting it build name recognition and momentum, then bring it to the Nintendo in 1989.

Atari’s arcade version of Tetris, which proved very successful after it started shipping in the summer of 1988. In some ways the forgotten version of Tetris, this is the form in which many players who would later become full-blown addicts on the NES and/or Game Boy first encountered the game. Note that the Russian and Soviet imagery from the Mirrorsoft and Spectrum Holobyte releases is maintained.

Even as Atari was making these deals, Phil Adam and Gilman Louie of Spectrum Holobyte were shaking hands with Henk Rogers over some of the same Tetris rights. When Louie called Mackonochie to tell him about the deal he’d negotiated, and the magnitude of the screw-up became clear, the conversation turned into a shouting match. Something obviously had to give — and Mirrorsoft, who had made the first deal with Robert Stein to license the game and lay much closer to the heart of Robert Maxwell’s publishing empire, was in the stronger position. As a sop, Spectrum Holobyte was allowed to sell the Japanese home-computer rights to Tetris to Rogers. But the Nintendo rights — the ones Rogers really coveted — would go to Tengen. The final contract specifying as much was signed between Mirrorsoft and Tengen on May 30, 1988.

But, as we’ve already had ample occasion to observe, Henk Rogers wasn’t easily denied. If Tengen now owned the console rights to Tetris, he would simply have to get his piece of the action from them instead of from Spectrum Holobyte. He immediately started pleading his case to Hideyuki Nakajima and Randy Broweleit. Being afflicted with the same trepidation about doing business in the Japanese Mirror World that afflicted most American companies, Atari had already flipped the Japanese arcade rights to Sega. Thus that part of Rogers’s Japanese plans for Tetris was a non-starter. But Tengen decided at some point during Rogers’s charm onslaught that there was really no reason not to let this upstart have the Japanese Nintendo rights. Once that deal was made, the rights had reached four degrees of separation from Alexey Pajitnov back in Moscow: they passed through Robert Stein’s Andromeda Software to MirrorSoft, from Mirrorsoft to Tengen/Atari, and finally on to Henk Rogers’s Bullet-Proof Software. The contract which Rogers signed with Tengen reflected this convoluted chain of ownership. It specified that he would have to give a videotape of his Nintendo Tetris to Tengen once it was finished. If it met their standards, they would pass the videotape on to Mirrorsoft, and so on, until it arrived in Moscow for final approval. Happy to jump through whatever hoops were necessary to get his hands on Tetris, Rogers readily agreed, and set his small team of programmers to work. When they were finished, he duly passed the end result up the chain, receiving within a few weeks word from Stein that his Russian charges had given the final stamp of approval.

Bullet-Proof’s version of Tetris for the domestic Japanese Nintendo Famicom market. Note that they followed the lead of Vadim Gerasimov in implementing the game in English, and that of Mirrorsoft, Spectrum Holobyte, and Atari in yet again filling it with Russian and Soviet imagery.

Bullet-Proof Software’s home-computer version of Tetris hit the Japanese market in November of 1988, and was a solid success. The Nintendo Famicom version followed in January, and blew up huge, exceeding by an order of magnitude any of Rogers’s previous successes. Indeed, it was in the poetically appropriate alternate Mirror World of Japan that Tetris first became a truly mass-market phenomenon, selling 130,000 copies in its first month on the market — as many as the Mirrorsoft and Spectrum Holobyte releases combined had sold in their first year. It would go on to sell another 2 million copies. Tetris had now circumnavigated the globe from east to west, finding its greatest success to date very nearly back at its original starting point, in a country from which a westward-facing observer could see the Soviet Union on a clear day. Henk Rogers enjoyed vindication for his faith in the game. And he enjoyed the tangible rewards of that vindication: he was suddenly a rich man.

Anyone taking stock of the situation now couldn’t help but acknowledge that Tetris was far more than a niche curiosity. With computer versions having proved successful in North America, Europe, and Japan, with the Nintendo Famicom version having proved very successful in Japan, and with Tetris arcade games eating quarters (or their monetary equivalents) in prodigious fashion all over the world, a North American Nintendo version had to stand front and center in Tengen’s plans for 1989. There seemed little reason to doubt, given the relative size of the markets, that this version would become the most successful yet. Things were beginning to move quickly — perhaps a little too quickly for one Robert Stein, still clinging to his role as the rest of the world’s sole conduit back to the game’s country of origin, still trying to mask how sketchy his relationship with the Russians actually was. Everything that had happened to Tetris since it had escaped through the Iron Curtain had been built on the foundation laid down by Stein. Now everyone was about to discover how shaky that foundation really was.

(Sources: the books Game Over: How Nintendo Conquered the World by David Sheff and The Tetris Effect: The Game That Hypnotized the World by Dan Ackerman; the BBC television documentary From Russia with Love; Computer Gaming World of April 1987; Electronic Games of July 1993; GamePro of December 1990; Game Developer of August 2012; the article “Off the Grid” from the Hawaii Business website.)

 

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Generation Nintendo

Nintendo

In the final months of World War II, when the United States was trying to burn out the will of a starving Japan via the most sustained campaign of aerial incendiary bombardment in history, a handful of obvious targets remained strangely untouched. Among those targets was Kyoto: population 1 million plus, founded in the year 793, capital of the nation and home of the Emperor for most of the intervening centuries, home to more national shrines and other historic sites than any other city in Japan, world famous for its silk and cloisonné. If a single city can be said to embody the very soul of the Japanese people, it must be this one.

If the citizens of Kyoto believed that their city was being left untouched by the bombs raining down on the rest of the country out of respect for the special place it occupied in the Japanese psyche, they were partially correct. Yet the motivation behind their seeming good fortune was cold-blooded rather than humanitarian. American Air Force planners were indeed aware of Kyoto’s symbolic importance, but they hardly saw that importance as grounds for sparing the city. Far from it. Kyoto was being reserved as a target for a special new weapon, one which was referred to only obliquely in Air Force internal memoranda as “the gadget.” Today we know the gadget as the atomic bomb. Entirely destroying Kyoto with one bomb would deliver a shock to the rest of Japan unequaled by the destruction of any other possible target: “From the psychological point of view there is the advantage that Kyoto is an intellectual center for Japan and the people there are more apt to appreciate the significance of such a weapon as the gadget.” Kyoto must be left untouched while the gadget was made ready for service so that mission planners and scientists could properly evaluate the bomb’s effect on an undamaged clean slate of a target.

Hundreds of thousands of Kyoto residents would wind up owing their lives to Henry L. Stimson, a humane man tortured daily by the orders he had to issue as the American Secretary of War; never was there a Secretary of War who hated war more. In response to Stimson’s demand after the successful first test of the gadget in New Mexico, General Leslie Groves, head of the Manhattan Project, reluctantly presented the Air Force’s list of planned targets to him, with Kyoto at the top. Stimson was horrified. Citing the proposed destruction of Kyoto as an unforgivable act from which Japan would never recover, Stimson, 77 years old and in poor health, faced down virtually the entire entrenched bureaucracy of the American military to demand that the first atomic bomb to be used in anger be dropped somewhere, anywhere else: “This is one time I’m going to be the final deciding authority. Nobody’s going to tell me what to do on this.” His stubborn stance resulted at last in Kyoto being stricken from the list by grumbling generals who would have been perfectly happy if its destruction really had been a death blow to the culture it symbolized, thank you very much. Of course, in saving hundreds of thousands of Kyoto residents Stimson was also consigning to death hundreds of thousands of others in Hiroshima. Such are the wages of war.

The decision to spare Kyoto had another unintended consequence, one which may seem trivial — even disrespectful — to mention in parallel with such immense tolls in human lives saved and lost, but one which in its own way illustrates the interconnectness of all things. Hidden away within Kyoto’s blissfully undamaged warren of ancient streets was a little family-owned company called Nintendo, maker of ornate playing cards and other games and collectibles. Absolutely dedicated to the war effort, as all good Japanese were expected to be at the time, they had lately taken to giving their products jingoist themes, such as a backgammon board illustrated by cartoon animals dressed up as soldiers, with Japanese flags flying proudly above them and British and American flags lying crumpled in the dust at their feet.

More than four decades later, Stimson’s determination to spare Kyoto and with it Nintendo boomeranged back on his country in a way that no one could have seen coming. Many contemporary commentators, conditioned by the Reagan Revolution to cast all things in terms of nationalism and patriotism, saw in the arrival of Nintendo on American shores the opening of the latest front in a new war, economic rather than military this time, between the United States and Japan. And this time it seemed that Japan was winning the war handily. They had come for our steel, and we had done nothing. They had come for our auto industry, and we had done nothing. They had come for our televisions and stereos, and we had done nothing. Now they were coming for our videogame consoles. How long would it be until the PC industry, arguably the biggest economic success story of the 1980s, was threatened as well?

Given the subject of this article, I should take a moment to clarify right now that this blog has not been and will never become a history of console-based videogames. This blog is rather a history of computer games, a culture possessed of plenty of interconnections and collisions with the larger, more mainstream culture of the consoles, but one which has nevertheless remained largely its own thing ever since the first popular videogame console and the first three pre-assembled PCs were all launched during the single fecund year of 1977. In addition to reasons of pure personal preference, I justify this focus by noting that a fair number of people are doing great, rigorous history in the realm of videogames, while the realm of computer games has been comparatively neglected.

Still, we can’t really understand the history of computer games without reckoning with those aforementioned interconnections and collisions with the world of the consoles. And one of the biggest and most obvious collisions of all was that crazy time at the tail end of the 1980s when Nintendo arrived to sweep the rug out from under a computer-game industry which had spent the last few years convinced that it was destined to become the next great movement in mainstream American entertainment — i.e., destined to hold exactly the position that this Japanese upstart had just swept in and taken over with breathtaking speed. Small wonder that coded allusions to the dark days of World War II, accompanied by thinly veiled (or blatantly unveiled) racism, became the order of the day in many sectors of American culture, industry, and government alike. Meanwhile the bewildered computer-game executives were trying to figure out what the hell had just hit them and what they should do about it. Let’s join them now in asking the first of those questions.

Hiroshi Yamauchi

Hiroshi Yamauchi

The history of the company known as Nintendo — the name can be very roughly translated as an admonition to work hard but also to accept that one’s ultimate success is in the hands of greater powers — dates all the way back to 1889, when it was founded by Fusajiro Yamauchi as a maker of intricately painted playing cards, known as “hanafuda” in Japanese. Nintendo managed to survive and grow modestly amid many changes in Japanese life over the course of the next half-century and beyond. The company’s modern history, however, begins in 1949, when Hiroshi Yamauchi, latest scion of the family-owned business, took over as president. Far more ambitious than his forebears, this latest Yamauchi was inspired by the entrepreneurial ferment of the rebuilding postwar Japan to expand Nintendo beyond playing cards and collectibles. The results of his efforts were decidedly mixed in the early years. Among his less successful initiatives were a line of instant-rice meals — a sort of ricey Ramen Noodles before Ramen Noodles were cool — and a chain of “love motels” offering busy executives the convenience of paying for their trysts by the hour. (Ironic as they might seem in light of Nintendo’s later rigorously enforced family-friendly image, at the time the love motels seemed to everyone around him a natural innovation for Yamauchi to have dreamed up; he was a notorious philanderer.) More successful, for a while, was a Nintendo taxi service. Yet even it was hardly a world-beater. Throughout the first two decades of Yamauchi’s lengthy reign he continued to cast restlessly about for the Big One, the idea that would finally take Nintendo to the next level.

In 1969, he made a big step in the direction of finding his company’s life’s purpose when he founded a new division called simply “Toys.” Employing a number of young gadget freaks as inventors, Toys began to churn out a series of strange contraptions straight out of Rube Goldberg, such as the Ultra Hand, a scissor-like reach extender that was more whimsical than practical; the Ultra Machine, an indoor mechanical baseball pitcher; and the Ultra Scope, a periscope for peeking around corners and over fences. (Parents were not terribly fond of this last one in particular.) All were quite successful, opening at last the sustainable new business front for Nintendo that Yamauchi had been dreaming of for so long.

With electronic components getting smaller and cheaper by the year, Nintendo’s innovative toys inevitably began to take on more and more of an electronic character as time wore on. The first big success in the realm of electronic gadgets was something called the Nintendo Beam Gun, which combined a light gun with a set of targets equipped with the appropriate photoelectric sensors; more than 1 million of them were sold. Nintendo built on the Beam Gun’s success with a chain of Laser Clay Ranges — think “clay pigeons” — that spread across Japan during the mid-1970s, re-purposed bowling alleys where patrons could engage in gunfights with cowboys and “homicidal maniacs” projected onto the far wall.

With Atari now going strong in the United States, videogames were a natural next step for Nintendo. They first made a series of Color TV Games, each a home videogame capable of playing a few variants of a single simple game when hooked up to the family television set; they sold at least 2.5 million of them in the late 1970s. The Nintendo Game & Watch, a whole line of handheld gadgets capable of playing a single game each, did even better; Nintendo is estimated to have sold over 40 million of them during the 1980s. Meanwhile they were also moving into the standup arcade; Donkey Kong, released in 1981, became a worldwide smash, introducing the Nintendo name to many in the United States for the first time. The designer of that cute, colorful, relatively non-violent game, a virtual blueprint for the eventual Nintendo aesthetic as a whole, was one Shigeru Miyamoto. He would become not only Nintendo’s own most famous designer and public figure, but the most famous Japanese videogame designer of all time, full stop. The protagonist of Miyamoto’s Donkey Kong, a little leaping Italian plumber named Mario, was also destined for greatness as one of if not the most famous videogame characters of all time (his only serious rival is likely Pac-Man, another contemporaneous Japanese creation).

All of this success, however, was only laying the groundwork for Nintendo’s masterstroke. Moving on from the single-game units that had so far been Nintendo’s sole output, Yamauchi tasked his engineers with creating a proper videogame console capable of playing many games that could be sold separately in the form of cartridges, just like the Atari VCS. The device they came up with was hardly state of the art even at the time of its debut. It was built around a clone of the venerable old 8-bit MOS 6502, the same chip found in the Atari VCS as well as American home computers like the Apple II and Commodore 64, with those circuits that were protected by patents excised. It offered graphics a little better than the likes of the 64, sound a little worse. The new machine was being readied at seemingly the worst possible time: just as the Great Videogame Crash was underway in the United States, and just as the worldwide conventional wisdom was saying that home computers were the future, videogame consoles a brief-lived fad of the past. Yet Nintendo freely, even gleefully defied the conventional wisdom. The Nintendo Family Computer (“Famicom”) was deliberately designed to be as non-computer-like as possible. Instead it was patterned after Nintendo’s successful toys and gadgets — all bright, garish plastic, with as few switches and plugs as possible, certainly with nothing as complicated as a keyboard or disk drive. It looked like a toy because Nintendo designed it to look like a toy.

The Nintendo Famicom

The Nintendo Famicom

Yamauchi realized that a successful videogame console was at least as much a question of perception — i.e., of marketing — as it was of technology. In the imploding Atari, he had the one great counterexample he needed, a perfect model of what not to do. Atari’s biggest sin in Yamauchi’s eyes had been to fail to properly lock down the VCS. It had never occurred to them that third parties could start making games for “their” machine, until Activision started doing just that in 1980, to be followed by hundreds more. Not only had all of those third-party cartridges cost Atari hundreds of millions in the games of their own that they didn’t sell and the potential licensing fees that they didn’t collect, they had also gravely damaged the image of their platform: many or most Atari VCS games were just plain bad, and some were in devastatingly terrible taste to boot. The public at large, Yamauchi realized, didn’t parse fine distinctions between a game console and the games it played. He was determined not to lose control of his brand as Atari had done theirs.

For better and for worse, that determination led to Nintendo becoming the first of the great walled gardens in consumer software. The “better” from the standpoint of consumers was a measure of quality control, an assurance that any game they bought for their console would be a pretty good, polished, playable game. And from the standpoint of Yamauchi the “better” was of course that Nintendo got a cut of every single one of those games’ earnings, enough to let him think of the console itself as little more than a loss leader for the real business of making and licensing cartridges: “Forgo the big profits on the hardware because it is really just a tool to sell software. That is where we shall make our money.” The “worse” was far less diversity in theme, content, and mechanics, and a complete void of games willing to actually say almost anything at all about the world, lest they say something that some potential customer somewhere might possibly construe as offensive. The result would be an infantilization of the nascent medium in the eyes of mainstream consumers, an infantilization from which it has arguably never entirely escaped.

Whatever the reservations of curmudgeons like me, however, the walled-garden model of software distribution proved successful even beyond Yamauchi’s wildest dreams. After releasing their new console to Japanese consumers on July 15, 1983, Nintendo sold more than 2.5 million of them in the first eighteen months alone. Sales only increased as the years went by, even as the hardware continued to grow more and more technically obsolete. Consumers didn’t care about that. They cared about all those cute, colorful, addictive games, some produced by an ever-widening circle of outside licensees, others — including many or most of the best and best-remembered — by Nintendo’s own crack in-house development team, with that indefatigable fount of creativity named Shigeru Miyamoto leading the way. Just as Yamauchi had predicted, the real money in the Famicom was in the software that was sold for it.

Minoru Arakawa

Minoru Arakawa

With the Famicom a huge success in Japan, there now beckoned that ultimate market for any ambitious up-and-comer: the United States. Yamauchi had already set up a subsidiary there called Nintendo of America back in 1980, under the stewardship of his son-in-law Minoru Arakawa. Concerns about nepotism aside — no matter how big it got, Nintendo would always remain the Yamauchi family business — Arakawa was ideal for the job: an MIT-educated fluent English-speaker who had traveled extensively around the country and grown to understand and love its people and their way of life. Under his stewardship, Nintendo of America did very well in the early years on the back of Donkey Kong and other standup-arcade games.

Yet Nintendo as a whole hesitated for quite some time at the prospect of introducing the Famicom to North America. When Arakawa canvased toy stores, the hostility he encountered to the very idea of another videogame console was palpable. Atari had damaged or destroyed many a business and many a life on the way down, and few drew much of a distinction between Atari and the videogame market as a whole. According to one executive, “it would be easier to sell Popsicles in the Arctic” than to convince the toy stores to take a flyer on another console.

But Arakawa, working in tandem with two American executive recruits who would become known as “the two Howards” — Howard Lincoln and Howard Philips — wouldn’t let go of the idea. Responding to focus-group surveys that said the Japanese Famicom was too toy-like and too, well, foreign-looking to succeed in the United States, he got Nintendo’s engineers to redesign the externals to be less bulbous, less garish, and less shiny. He also gave the Famicom a new, less cutsy name: the Nintendo Entertainment System, or NES. The only significant technical update Nintendo made for North America was a new state-of-the-art handshaking system for making sure that every cartridge was a legitimate, licensed Nintendo game; black-market cartridges duplicated by tiny companies who hoped to fly under the radar of Nintendo’s stringent licensing regime had become a real problem on the Famicom. Tellingly, the lockout system was by far the most technically advanced aspect of the NES.

The Nintendo Entertainment System

The Nintendo Entertainment System

The new NES made its public debut at last at the Summer Consumer Electronics Show in June of 1985. Few in the home-computer trade press — the videogame trade press didn’t really exist anymore — paid it any real attention. The big news of the show was rather the new Jack Tramiel-led Atari’s 16-bit ST computer. Computer Gaming World was typical, mentioning the NES only as a passing bit of trivia at the end of a long CES feature article: “Nintendo even offered an entirely new game system.” Clearly Arakawa and company had an uphill climb before them.

They deliberately started small. They would sell the NES first in New York City only — chosen because Arakawa considered it the most cynical and challenging place to market a new gadget in the country, and, as the old song says, “if you can make it there you can make it anywhere.” Starting with a warehouse full of the first 100,000 NESs to arrive from Japan and a $50 million war chest, Arakawa and the two Howards personally visited virtually every toy and electronics store in the five boroughs to press flesh and demonstrate the NES to skeptical managers and proprietors — and (hopefully) to take orders when they were finished. Meanwhile Nintendo blitzed the airwaves with advertising. They managed to sell 50,000 NESs in New York alone that Christmas season — not bad for an unknown gadget in a field that everyone, from the most rarefied pundit to the most ordinary Joe or Jane on the street, considered to be yesterday’s fad.

From that promising start they steadily expanded: first to that other taste-maker capital Los Angeles, then to Chicago, to San Francisco, to Dallas and Houston, and finally nationwide. Sales hit the magic 1 million mark well before the end of 1986. Cheap and cheerful and effortless in its lack of fiddly disk drives and keyboards, the NES was selling by that point as well as the Commodore 64, and far better than any other home computer. In the NES’s second year on the market it eclipsed them all to such an extent as to make continued comparison almost pointless: 3 million NESs were sold during those twelve months alone. And, astonishingly, it was still just getting started. During 1988, 7 million NESs were sold, to go with 33 million cartridges, each of which represented yet more profit for Nintendo. Lifetime NES sales topped 30 million in 1990, by which time one out of every three American homes could boast one of these unassuming gray boxes perched underneath the television. Total NES and Famicom lifetime sales reached a staggering 75 million in 1992; as many Nintendos were by then in the world as all PCs, whether found in homes or businesses or schools, combined. Even the Atari VCS in the heyday of the first videogame fad had never been able to boast of numbers like this.

Because Nintendo had come into the console market when it was universally considered dead, they had been able to reinvent it entirely in their own image. Just as “Atari” had once been a synonym for videogames in general, now “Nintendo” threatened to become the same for a new generation of players. Savvy about branding and marketing in a way that Atari had never quite managed to be, Nintendo felt compelled to actively push against this trend by aggressively protecting and limiting the use of their trademarks; they didn’t want people buying a new “Nintendo” that happened to have the name of Sega, Sony, or 3DO stamped on its case.

Nintendo’s penetration of the North American market could (and doubtless has) serve as the basis of an MBA course in marketing and brand-building. Starting from the less than nothing of a dead industry replete with consumer ill-will, coming from a foreign nation that was viewed with fear and mistrust by many Americans, Nintendo of America built one of the largest and most insanely loyal customer bases the American economy has ever known. They did it by tying their own brand to brands their target demographic was known to already love, like Pepsi and McDonald’s. They did it by building Nintendo stores within stores in major chains from Macy’s to Toys “R” Us, where kids could browse and play under the benevolent gaze of Mario while their parents shopped. (By 1991, Nintendo alone represented 20 percent of Toys “R” Us’s total revenues, and seven of their ten best-selling single products.) They did it by building a massive mailing list from the warranty cards that their young customers sent in, then using contests and giveaways to make every single one of them feel like a valued member of the new Generation Nintendo. They did it by publishing a glossy magazine, Nintendo Power, full of hints and tips on the latest games and all the latest news on what was coming next from Nintendo (and nothing on what was coming from their competitors). They did it by setting up a hotline of “Nintendo Game Counselors,” hundreds of them working at any one time to answer youngsters’ questions about how to get through this tricky level or kill that monster. They did it by relentlessly data-mining to find out what their customers liked about their games and what they didn’t, and crafting new releases to hit as many players as possible precisely in their sweet spots. They did it by spending up to $5 million on a single 30-second television commercial, four or five times the typical going rate, making the new commercials for a new Nintendo game an event in themselves. They did it by making sure that Mario and Zelda and their other iconic characters were everywhere, from televisions shows to records, from lunch boxes to bed sheets. And they did it by never worrying their customers with the sorts of metrics that the home-computer makers loved: kilobytes and megabytes and colors and resolutions and clock speeds and bit counts. The NES was so thoroughly locked down that it was years before there was any published information available at all on what was really contained within those ubiquitous gray plastic shells.

If it can all sound a little soulless when laid out like that, well, few in business would argue with the end results. Nintendo seemed to be becoming more American than most Americana. “A boy between 8 and 15 without a Nintendo is like a boy without a baseball glove,” wrote Hobby World magazine in 1988. In 1990 a survey found Mario to be more recognizable to American children than that most American of all cartoon icons — Mickey Mouse.

And where did all of this leave the established American computer-game industry? That was a question that plenty in said industry itself were asking with ever-increasing frustration and even desperation. Total sales of computer games published on all platforms in 1989 totaled about $300 million; total sales for Nintendo cartridges, $1 billion. It wasn’t supposed to have gone like this. No one in computer games had seen anything like Nintendo coming. They, the computer-game industry, were supposed to have been the next big wave in American home entertainment — a chicken in every pot and a home computer in every living room. Instead this Japanese upstart had stolen their thunder to such an extent as to render their entire industry an afterthought, a veritable non-entity in the eyes of most financial analysts and venture capitalists. Just to add insult to the injury, they were being smothered by thoroughly obsolete 8-bit technology when they could offer consumers audiovisual feasts played on Amigas and Atari STs and IBM PS/2s with VGA graphics. A computer-game designer with Electronic Arts saw unnerving parallels between his own industry and another American industry that had been devastated by Japan in the previous decade:

The best companies and the best programmers were making computer games. But the Nintendo player didn’t care about the sophisticated leaps we were making on computers — the frame rate of the images or incredible sound. They just wanted fun. It was like we were making gas guzzlers and the Japanese were making subcompacts.

At street level the situation didn’t look much better. Fred D’Ignazio, a columnist for Compute!’s Gazette, shares a typical story:

My kids and I used to play games on our home computer — games like Epyx’s The Legend of Blacksilver, SSI’s Questron II, EA’s Jordan vs. Bird: One-on-One, Gamestar’s Take Down, Arcadia’s Aaargh!, and, of course gobs and gobs of good educational games.

Then the Nintendo landed, and things haven’t been the same since. The Nintendo runs day and night. (We’re not even allowed to shut off the machine when we go to bed because there’s always a game in progress — and there’s no disk drive to back it up.) Meanwhile, I don’t think our little home computer has been fired up in weeks.

The computer that was most damaged by Nintendo’s invasion of North America was undoubtedly the Commodore 64. It was very cheap in computer terms, but once you added in the cost of the essential disk drive it was nowhere near as cheap as the NES. And it was still a computer, even if a computer that had long been used primarily for playing games. You had to type in arcane commands to get a game started, had to wait for the game to load, often had to shuffle disks in and out of the drive and do a lot more waiting as you actually played. A Compute!’s Gazette reader shares the story of her attempt to introduce her Nintendo-loving eight-year-old nephew to the joys of Commodore 64 gaming:

As he looked through my 64 software to pick out a game, I started to give directions on how to handle the software and disk drive. Before I could finish he said, “I just want to use a cartridge and start playing.” After about fifteen minutes into a game he said, “This is great, but how come it takes so long to start the game again and why do I have to keep turning the disk over and over all the time?” Shortly after, he started complaining that his hand was too small for the joystick. He tried three other joysticks, but he either had the same problem or the joystick didn’t have the dexterity needed to play the game. He then said, “I wish I could use my Nintendo controls on your Commodore.” Soon after, he quit and went right to his Nintendo.

The Commodore 64 was in a very difficult position, squeezed from below by Nintendo and squeezed from above by the Amiga and Atari ST and, most of all, by ever more consumer-friendly MS-DOS-based machines from companies like Tandy, which were beginning to sport hard disks, crisp VGA graphics, sound cards, and mice. There wasn’t much that Commodore’s aged little breadbox could offer in response to a feature set like that. In the battle versus Nintendo for the low end, meanwhile, all of the immense force of playground public opinion was arrayed against the Commodore 64. The 64 was clunky and slow and ugly. It was the machine your big brother used to play games on, the one your parents kept pushing you toward to learn programming or to play educational (blech!) games. The Nintendo was the machine that all your friends played on — the same friends who would look on you as a freak if you tried to get them to play a computer game with you.

If you think that hardcore Commodore 64 users accepted this changing world order peacefully, you don’t have much experience with the fanatic platform loyalties of the 1980s. Their heated opinions on the 64’s Nintendo crisis spilled much ink on the pages of the remaining 64-centric magazines, moving through spasms of denial (“If Nintendo has the ability to keep its users captured, why do my two nephews keep pestering me to let them play the games that I have for my 64?”), advice (“Commodore could bring out some new peripherals like a light gun to play shooting games or a keyboard to make use of the superior sound of the 64”), and justification (“This letter was typed on a 64. Let’s see any Nintendo do that!”). When all else failed, there was always good-old-fashioned name-calling: “The word-processing capability of the 64 is a pointless feature to most Ninnies, since the majority of them don’t seem to be able to read and write anyway. Most of the Ninny chic was built on the fact that a baboon could operate it.”

None of this raging against the dying of the light could make any difference. The Commodore 64 went into an undeniable decline in 1988. That decline became a free fall in 1989, and in 1990 the 64 was effectively declared dead by the American software industry, with virtually every publisher terminating support. The other great 8-bit survivor, the Apple II, hung on a little longer thanks to an entrenched user base in schools and small businesses, but when Apple finally discontinued all production of the line in 1993 the news was greeted by most publishers with a shrug: “I didn’t know those old things were still being made!”

The computer-game publishers’ reactions to Nintendo were complicated, ofttimes uncertain, occasionally downright contradictory. With Nintendo rapidly taking over what used to be the low end of the computer-game market, many publishers felt emboldened to refocus their energies on the still slowly growing higher end, particularly on all those new consumer-oriented clones from Tandy and others. Plenty of publishers, it must be said, weren’t really all that sad to see the 64 go. The platform had always been tricky to develop for, and its parent company was still widely loathed for heaps of very good reasons; everyone in the industry seemed to have at least one Commodore horror story to tell. Many had come to see the 64 during its years of dominance as an albatross holding back ambitions that would have been realizable on the bigger, more powerful platforms. Now they were at last free to pursue those grander schemes.

At the same time, though, the Commodore 64 had been their cash cow for years, and there remained the question of whether and how soon all those bigger machines would make up for its loss. Certainly they failed resoundingly to take up the slack in 1989, a bad year for the computer-game industry and a great one for Nintendo. Electronic Arts, the closest thing the industry as a whole had to a bellwether, had their worst year ever that year, leaving some investors openly calling for the resignation of founder Trip Hawkins.

As unhappy as the majority of industry old-timers remained with the Nintendo-dominated state of affairs in digital games in general, that $1 billion in annual cartridge revenue and massive mainstream penetration was awfully tempting. As early as 1988, it seemed that just about everyone was discussing adapting their computer games to the NES, and a fair number were swallowing their pride to approach Nintendo with hat in hand, asking for a coveted license to make NES games. In addition to the sheer size of the Nintendo market, it also had the advantage that piracy, which many in the computer-game industry continued to believe was costing them at least half of the revenues they would otherwise be enjoying, was nonexistent there thanks to those uncopyable cartridges and the NES’s elaborate lockout system.

Activision,1 who had enjoyed their greatest success by far in the old glory days of the Atari VCS, jumped onto the Nintendo bandwagon with perhaps the most enthusiasm of all. Activision’s head, the supremely unsentimental Bruce Davis, often sounded as if he would be perfectly happy to abandon computers altogether, to make Activision exclusively a publisher of videogame cartridges again: “If hardware companies are designing a machine for one purpose, they will do a better job than on a multi-function machine.”

But it’s the more unlikely NES converts that provide the best evidence of just how far Nintendo had come and just how much pressure the traditional computer-game industry was feeling. The NES began to get quite a number of ports of computer-game fare that no one would ever have imagined trying to put on a machine like this just a year or two earlier. Origin, for instance, put out NES versions of Ultima III and Ultima IV, and Lucasfilm Games ported Maniac Mansion. (See Douglas Crockford’s “The Expurgation of Maniac Mansion for a description of the hoops publishers like Lucasfilm had to jump through to meet Nintendo’s stringent content restrictions.) Even SSI, whose traditional stock-in-trade of turn-based, cerebral, complicated strategy games was about as far from the whimsy of Mario and Zelda as you could get, moved Pool of Radiance over to the NES. Computer Gaming World, the journal of choice for those same cerebral strategy gamers, tried to rope in Mario fans with a new magazine-within-a-magazine they dubbed “Video Gaming World.”

Few of these initiatives bore all that much fruit. The publishers may have found a way to get their games onto the NES, but said games remained far from the sort of fare most Nintendo players were interested in; suffice to say that Nintendo never had to worry about any of these titles eclipsing Mario. Still, the fact that so many computer-game publishers were making such an effort shows how scary and uncertain Nintendo was making their world. Perhaps the most telling moment of all came in August of 1990, when an embattled Trip Hawkins announced that Electronic Arts would be jumping into the console space as well. This was the same Trip Hawkins who had written a commitment to “stay with floppy-disk-based computers only” into Electronic Arts’s first business plan, who had preached the gospel of home computers as successors to videogame consoles as loudly and proudly as anyone in his industry. Now he and his company were singing a very different tune. Bing Gordon, Hawkin’s right-hand man at Electronic Arts, compared home computers to, of all unflattering things, steam engines. James Watt, the inventor of the steam engine, had imagined one in every home, with a bunch of assorted pulleys and gears to make it do different things. Instead modern homes had a bunch of more specialized machines: washing machines, food processors… and now Nintendos. Soon Hawkins would leave Electronic Arts to found 3DO, a company to make… you guessed it, a new videogame console.

Some, however, chose a more belligerent path than these can’t-beat’em joiners. Nintendo’s rigorous control of the NES’s walled garden rankled everyone in the older software industry; this just wasn’t how their business was done. They believed that Nintendo was guilty of restraint of trade, antitrust violations, you name it. Particularly enraging was Nintendo’s complete control of the manufacturing pipeline for NES cartridges. Leveraging those data-mining systems of theirs, more sophisticated than anyone had heretofore ever dreamed of, Nintendo made sure that the supply of new games was always slightly less than the demand for them, thereby creating a hype for each new title as a hot, desirable status symbol among the Nintendo Generation and, most of all, avoiding the glut of games piled up in warehouses — and, eventually, landfills — that had marked the Great Videogame Crash of 1983. But when American publishers saw their games produced in insufficient quantities to become the hits they believed they might otherwise have been, they cried foul. The Software Publishers Association served as the disgruntled voice of the American software industry as a whole in what became a full-scale public-relations war against Nintendo.

The SPA believes that Nintendo has, through its complete control and single-sourcing of cartridge manufacturing, engineered a shortage of Nintendo-compatible cartridges. Retailers, consumers, and independent software vendors have become frustrated by the unavailability of many titles during the holiday season, and believe that these shortages could be prevented by permitting software vendors to produce their own cartridges.

American publishers felt certain that Nintendo was playing favorites, favoring their own games and those of their favorite third-party publishers — generally the ones from Japan — by manipulating production numbers and manipulating the sentiments of Generation Nintendo through the coverage they gave (or didn’t give) each game in Nintendo Power. “If I pissed Nintendo off,” runs a typical complaint, “I would get less product. My games would get hit in Nintendo Power and they’d get low ratings.” And the most surefire way to piss Nintendo off, at least according to this complainer, was to release a game for the NES’s first serious competitor, the Sega Genesis console that entered the United States in 1989.

There was plenty of tinder already lying about the public sphere, just waiting to be ignited by such rhetoric. All of the concerns about videogames that had been voiced by parents, educators, and politicians during the heyday of Generation Atari were now being dusted off and applied to Generation Nintendo. Now, however, they were given additional force by Nintendo’s very foreignness. Plenty of Americans, many of whom had still not completely forgiven Japan for Pearl Harbor, saw a nefarious agenda behind it all, a fifth column of Mario-obsessed youngsters who might come to undermine the very nation. “Notice the way Super Mario is drawn,” wrote one in a letter to a magazine. “He has the eyes of someone who has been brainwashed.” Lurking just below the surface of such complaints, unstated but by no means unconveyed, were old attitudes toward the Japanese as shifty characters who could never be trusted to follow the rules, whether in war or business. It all came down to “cultural” differences, they muttered disingenuously: “There’s more of a sharing of the pie by American companies. In Japan, it’s different: winners win big and losers lose.”

Hoping to capitalize on the burgeoning anti-Nintendo sentiment, in December of 1988 Tengen Games, a spinoff of Atari Games (which was itself the successor to the standup-arcade portion of the original Atari’s business), sued Nintendo in federal court for antitrust violations and monopolistic practices: “The sole purpose of the lockout system is to lock out competition.” Having found a way to defeat the much-vaunted lockout system through a combination of industrial espionage, reverse engineering, and good old social engineering — this is one of the few occasions in Nintendo’s history where one might accuse them of having been naive — Tengen simultaneously launched a few of their own unauthorized games for the NES.

Nintendo’s counterattack against Tengen was massive and comprehensive. Not only did they launch the expected blizzard of legal actions, but they made it clear to all of the stores that handled their products that there would be grave consequences if they chose to sell the Tengen games as well. Such threats ironically represented a far more clear-cut antitrust violation than anything found in Tengen’s original suit. When Tengen got the court to order Nintendo to cease and desist from such behavior, Nintendo allegedly only became more subtle. “You know, we really like to support those who support Nintendo, and we’re not real happy that you’re carrying a Tengen product,” a rep might say. “By the way, why don’t we sit down and talk about product allocations for next quarter? How many Super Marios did you say you wanted?” “Since it was illegal, there were always excuses,” remembers one retailer. “The truck got lost, or the ship from Japan never arrived.”

Tengen was determined to try their case against Nintendo first and foremost in the court of American public opinion. “Who gave Nintendo the power to decide what software the American public can buy?” they asked. The New York Times, for one, agreed with them: “A verdict in favor of Nintendo would probably have a spillover effect into the personal-computer industry, where it could have a chilling effect on the free flow of ideas and innovations that have characterized that market since its inception.” An opportunistic Congressman named Dennis Eckart launched a high-profile crusade against Nintendo that led to lots of heated rhetoric amid Congressional hearings and the involvement of several state Attorneys General and the Federal Trade Commission. Jack Tramiel of the other Atari (the one currently making the Atari ST computer), who had always viewed lawsuits as healthy business competition by other means, piled on with a suit of his own, claiming that by monopolizing the market Nintendo was keeping his own company from getting good software for its machines. “Nintendo has demonstrated its disregard for free and fair competition in America,” said Jack’s son and anointed successor Sam Tramiel.

Yet the anti-Nintendo sentiment in the country didn’t ultimately do much to help either of the two Ataris’ legal cases; the courts proved willing to buck that rising tide. In a landmark ruling against Tengen in March of 1991, Judge Fern Smith stated that Nintendo had the right to “exclude others” from the NES if they so chose, thus providing the legal soil on which many more walled gardens would be tilled in the years to come. Similarly, the Tramiels’ suit against Nintendo was definitively rejected in 1992, after having cost their company a great deal of time, energy, and most of all money it could ill afford. The other various and multifarious investigations into Nintendo’s business, of which there were far too many to summarize here, resulted in a mixed bag of vindications and modest slaps on the wrist that did nothing to alter Nintendo’s overall trajectory. Perhaps the best argument against Nintendo as a monopoly was the arrival of the company’s first competitors in the console space, beginning with Sega, who proved that it actually was still possible to carve out a non-Nintendo place of one’s own in the game-console industry that Nintendo had so recently resurrected.

Nintendo, then, was here to stay, as were Sega and other competitors still to come. The computer-game industry would just have to accept that and reckon with it as best they could. In the end, the threat from Japan proved not quite as apocalyptic as it had seemed during the darkest days of 1989. In 1990 computers could start to boast of a modest new buzz of their own, thanks to the new so-called “multimedia PCs” and a bunch of new games that took advantage of their capabilities. Having ceded the low ground to the consoles, computers had retained the high ground, a loyal constituency of slightly older, more affluent gamers who still had plenty of room in their hearts for the sort of big, high-concept strategy, adventure, and CRPG games that weren’t all that realizable on the more limited consoles. The computer-game industry grew again already in 1990, and by a double-digit percentage at that. The vibrant jungle of PC gaming would continue to bloom in a thousand ways at once, some of them productive, some of them dead ends, some of them inspiring, some of them kind of repugnant. And through it all, the jungle of PC gaming would remain interesting in ways that, at least for this humble writer, the fussily manicured walled garden of Nintendo has never quite managed to be. But whichever mode of distribution you personally favored, one thing became clear as the 1980s gave way to the 1990s: neither Generation Nintendo nor the emerging Generation Wintel would be going anywhere anytime soon.

(Sources: The Making of the Atomic Bomb by Richard Rhodes; Game Over by David Sheff; Compute!’s Gazette of May 1988, March 1989, August 1989, September 1989, October 1989; Computer Gaming World of September/October 1985 and June 1988; Amazing Computing of January 1989; materials in the SSI and Brøderbund collections at the Strong Museum of Play.)


  1. Activision changed their name to Mediagenic midstream in these events. Because I haven’t told the story behind that change yet, and in order to just generally avoid confusion, I simply refer to the company as “Activision” in this article. 

 

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