1 00:00:34,800 --> 00:00:36,390 - So my partner Bill and I 2 00:00:36,430 --> 00:00:38,130 are going to play ping-pong for you. 3 00:00:39,260 --> 00:00:40,650 Here we go. 4 00:00:40,700 --> 00:00:43,180 The demo represents some of the recent developments 5 00:00:43,220 --> 00:00:47,220 in the new business of audience participation in TV. 6 00:00:47,270 --> 00:00:49,920 Watch me take him out in a minute. 7 00:00:49,970 --> 00:00:51,140 Ah, didn't do it. 8 00:00:52,970 --> 00:00:54,670 Ah, I did it this time. 9 00:00:56,540 --> 00:00:58,540 We would like to convince you 10 00:00:58,580 --> 00:01:00,500 that there is indeed a market 11 00:01:00,540 --> 00:01:03,070 in which money can be made in the near future. 12 00:01:12,380 --> 00:01:13,860 - It was like magic. 13 00:01:17,560 --> 00:01:20,260 You could make something happen on the screen. 14 00:01:22,650 --> 00:01:24,520 You know, having grown up with all 15 00:01:24,570 --> 00:01:27,700 of this preprogrammed stuff on the television screen, 16 00:01:27,740 --> 00:01:29,660 you'd never been able to change that. 17 00:01:29,700 --> 00:01:32,300 - America's most incredible video game. 18 00:01:32,300 --> 00:01:34,000 - Suddenly, with this little controller, 19 00:01:34,000 --> 00:01:35,750 you could actually control something on the screen. 20 00:01:35,750 --> 00:01:37,190 - You control the players 21 00:01:37,230 --> 00:01:39,100 as if you were coaching your own team. 22 00:01:39,150 --> 00:01:42,020 - It was just unbelievable, magical. 23 00:01:46,200 --> 00:01:48,550 - There is a new addiction in America: 24 00:01:48,590 --> 00:01:49,980 Nintendo video games. 25 00:01:50,030 --> 00:01:51,940 - How many of you own a Nintendo? 26 00:01:57,030 --> 00:01:58,950 - Joining us from the company's inner sanctum, 27 00:01:58,990 --> 00:02:02,080 Nintendo game master Howard Phillips. 28 00:02:02,130 --> 00:02:04,130 - This one's got about 12 times the memory. 29 00:02:04,170 --> 00:02:06,430 The graphics are-- graphics are much better. 30 00:02:06,480 --> 00:02:07,570 Oh. 31 00:02:07,610 --> 00:02:08,570 Got it. 32 00:02:10,350 --> 00:02:12,830 - People, animals, wizards, spells, 33 00:02:12,880 --> 00:02:15,490 you see this spread out over different worlds. 34 00:02:18,360 --> 00:02:20,060 - Nintendo Gameplay, David speaking. 35 00:02:20,100 --> 00:02:21,320 How may I help you? 36 00:02:21,360 --> 00:02:23,020 - It's not just stick figures anymore. 37 00:02:23,060 --> 00:02:25,100 There's much more involved in playing the game, 38 00:02:25,150 --> 00:02:27,450 a better use of colors, better use of music. 39 00:02:30,330 --> 00:02:33,810 - He is a computerized Italian swashbuckling adventurer, 40 00:02:33,850 --> 00:02:36,030 as Mario is clearly number one. 41 00:02:37,200 --> 00:02:39,380 - Not only for this coming Christmas 42 00:02:39,420 --> 00:02:41,770 but for an entire new generation. 43 00:02:47,820 --> 00:02:50,740 - The "Mario Bros." game cartridge is so hot, 44 00:02:50,780 --> 00:02:53,130 it is impossible to find in stores. 45 00:02:53,180 --> 00:02:55,830 - I've done seven stores a day for three weeks now. 46 00:02:55,870 --> 00:02:57,180 I cannot find it. 47 00:02:57,220 --> 00:02:58,830 - Can you do something? My kid wants it. 48 00:02:58,880 --> 00:03:00,660 His friend has it, and they're not friends anymore 49 00:03:00,710 --> 00:03:02,230 'cause he doesn't have it. 50 00:03:02,270 --> 00:03:04,710 - Nintendo's only been around for three years 51 00:03:04,750 --> 00:03:08,890 but will ring up mind-boggling sales of $1.7 billion 52 00:03:08,930 --> 00:03:10,020 by Christmas. 53 00:03:12,670 --> 00:03:14,630 - We were the video game industry. 54 00:03:14,680 --> 00:03:16,420 - We can't underestimate the value 55 00:03:16,460 --> 00:03:18,290 of 60 million players. 56 00:03:18,330 --> 00:03:19,590 - Tetris! 57 00:03:19,640 --> 00:03:21,510 - Nobody could conceive of how Nintendo, 58 00:03:21,550 --> 00:03:23,950 with so many great games, 59 00:03:23,990 --> 00:03:25,640 with 95% or more of the marketplace, 60 00:03:25,690 --> 00:03:27,120 could ever get toppled. 61 00:03:27,170 --> 00:03:28,470 - The last "Super Mario Bros. 2" 62 00:03:28,520 --> 00:03:29,820 was just sold. 63 00:03:29,870 --> 00:03:32,960 - My eight-year-old would kill for one. 64 00:03:33,000 --> 00:03:34,780 - Nintendo! 65 00:03:34,830 --> 00:03:36,220 - Yeah! 66 00:03:38,440 --> 00:03:40,350 - Nintendo! Nintendo! 67 00:03:40,400 --> 00:03:43,750 - Nintendo! 68 00:03:43,790 --> 00:03:48,010 - Today Nintendo controls the home video game market. 69 00:03:48,060 --> 00:03:49,840 - Let's play Nintendo! 70 00:03:49,890 --> 00:03:52,840 - Anybody would have found that to be a Herculean task, 71 00:03:52,890 --> 00:03:55,500 to try and unseat Nintendo. 72 00:03:55,540 --> 00:03:57,540 All the other companies were always trying, 73 00:03:57,590 --> 00:03:58,810 but, you know, they had maybe one game 74 00:03:58,850 --> 00:04:00,030 or one thing going on, 75 00:04:00,070 --> 00:04:02,460 whereas Nintendo just had everything. 76 00:04:02,510 --> 00:04:04,550 We're gonna be here forever. 77 00:04:04,600 --> 00:04:07,080 But then it changed. 78 00:04:26,620 --> 00:04:28,360 - # We're not scared to lose it all # 79 00:04:28,400 --> 00:04:30,800 # Security thrown through the wall # 80 00:04:30,840 --> 00:04:32,140 # Future dreams 81 00:04:32,190 --> 00:04:33,580 - When I first came to America 82 00:04:33,620 --> 00:04:36,410 was with the Mitsubishi Corporation. 83 00:04:36,450 --> 00:04:39,110 What I really felt here in the States 84 00:04:39,150 --> 00:04:41,850 was people really have the opportunity 85 00:04:41,890 --> 00:04:43,900 of making American dream happen. 86 00:04:43,940 --> 00:04:47,680 That spirit of sort of entrepreneurship, 87 00:04:47,730 --> 00:04:50,730 I really fell in love with that. 88 00:04:50,770 --> 00:04:53,510 After working for Mitsubishi for three years, 89 00:04:53,560 --> 00:04:56,600 Japan headquarters said, "You must come back," 90 00:04:56,650 --> 00:04:59,560 but I wanted to stay in America. 91 00:04:59,610 --> 00:05:05,570 So secretly, I sent my résumé to an American sort of 92 00:05:05,610 --> 00:05:07,310 recruiting firm, 93 00:05:07,350 --> 00:05:10,920 and I had a call at the company called Sega. 94 00:05:10,970 --> 00:05:12,400 I had no idea what it was, 95 00:05:12,450 --> 00:05:15,140 but they are looking for someone 96 00:05:15,190 --> 00:05:18,760 to launch their new video game business in the States. 97 00:05:20,410 --> 00:05:23,370 - And so it was, late in the 20th century, 98 00:05:23,410 --> 00:05:27,070 terminal boredom swept the countryside. 99 00:05:27,110 --> 00:05:30,460 The maker looked down and was not pleased by what he saw. 100 00:05:31,770 --> 00:05:33,600 And so it was he brought forth... 101 00:05:33,640 --> 00:05:37,730 Genesis. 102 00:05:48,220 --> 00:05:51,180 - The moment I started to work for Sega of America, 103 00:05:51,220 --> 00:05:55,230 I started to commute to Sega San Francisco headquarter 104 00:05:55,270 --> 00:05:57,800 because my family actually lived in Texas, 105 00:05:57,840 --> 00:06:01,710 and I stayed always in Comfort Suites. 106 00:06:03,190 --> 00:06:06,590 This small hotel room became my home away from home. 107 00:06:08,330 --> 00:06:13,940 I checked in there in, I think, October of '89, 108 00:06:13,990 --> 00:06:17,120 and by the way, I haven't checked out ever since. 109 00:06:17,160 --> 00:06:19,640 - 800-521-2-- 110 00:06:19,690 --> 00:06:21,730 - I don't think many people knew. 111 00:06:21,780 --> 00:06:24,560 I mean, I'm still shocked that he still stays there, 112 00:06:24,600 --> 00:06:29,220 personally, but I lived there for about a year and a half 113 00:06:29,260 --> 00:06:31,570 when I first started at Sega. 114 00:06:32,870 --> 00:06:34,830 - Hi, welcome to Sega. 115 00:06:34,880 --> 00:06:37,360 - It was hard to build an organization from scratch 116 00:06:37,400 --> 00:06:42,060 and launch a major video game system in the United States. 117 00:06:42,100 --> 00:06:44,230 There's so many hurdles to get into the business 118 00:06:44,280 --> 00:06:46,410 with all the retailers. 119 00:06:46,450 --> 00:06:47,850 You know, they just won't buy from anybody. 120 00:06:47,890 --> 00:06:50,240 You have to prove yourself. 121 00:06:50,280 --> 00:06:53,020 - The challenges we had in those days 122 00:06:53,070 --> 00:06:56,420 were the very strong presence of Nintendo. 123 00:06:56,460 --> 00:06:59,250 - Let's play Nintendo! 124 00:07:00,290 --> 00:07:01,690 - "Nintendo Power" magazine goes out 125 00:07:01,730 --> 00:07:04,300 bimonthly to players all around the country. 126 00:07:04,340 --> 00:07:06,600 Right now, it's about 1.7 million. 127 00:07:06,650 --> 00:07:08,520 On a weekly average, 128 00:07:08,560 --> 00:07:11,130 we get about 140,000 phone calls in here. 129 00:07:11,170 --> 00:07:12,650 - The key is in the hidden town. 130 00:07:12,700 --> 00:07:15,050 You have to cast a spell at the dead end. 131 00:07:15,090 --> 00:07:16,790 - Ah. 132 00:07:16,830 --> 00:07:18,270 - "Nintendo Power." 133 00:07:18,310 --> 00:07:20,440 - Another Nintendo game! 134 00:07:20,490 --> 00:07:23,660 - And parents are now faced with portable Nintendo. 135 00:07:23,710 --> 00:07:26,320 all: We are Nintendo. 136 00:07:26,360 --> 00:07:27,840 - Say what you want about Nintendo, 137 00:07:27,890 --> 00:07:30,800 but they were pretty cocky about their position 138 00:07:30,850 --> 00:07:35,150 and felt assured that we wouldn't have much success. 139 00:07:35,200 --> 00:07:38,640 - Nintendo's a very, very strong company, 140 00:07:38,680 --> 00:07:40,590 and so far, its competition hasn't been more 141 00:07:40,640 --> 00:07:41,730 than a blip on the screen. 142 00:07:41,770 --> 00:07:43,770 - This is the Sega Genesis. 143 00:07:43,810 --> 00:07:46,510 This is their next-generation video game machine. 144 00:07:46,560 --> 00:07:50,560 - The first year, the expectation was to sell 145 00:07:50,600 --> 00:07:54,000 1 million units of Sega Genesis, 146 00:07:54,040 --> 00:07:57,090 but sales was not that great. 147 00:07:57,130 --> 00:08:01,010 - We were struggling at the time, no doubt about it. 148 00:08:01,050 --> 00:08:04,880 - The president at that time held a weekly lineup meeting, 149 00:08:04,920 --> 00:08:08,530 and he always somehow seemed to forget 150 00:08:08,580 --> 00:08:11,150 about what we discussed previous week. 151 00:08:11,190 --> 00:08:13,580 So it repeated and repeated and repeated and so forth. 152 00:08:18,720 --> 00:08:21,680 - So we were stuck between a rock and a hard place. 153 00:08:22,980 --> 00:08:25,940 - We needed someone to turn the tide around. 154 00:08:25,990 --> 00:08:29,860 So Sega brought in Tom Kalinske, 155 00:08:29,900 --> 00:08:31,380 the prince of toy business. 156 00:08:35,820 --> 00:08:39,000 - When I was about to graduate, I got a job 157 00:08:39,040 --> 00:08:40,870 with J. Walter Thompson in New York City. 158 00:08:43,000 --> 00:08:44,270 We were given the assignment 159 00:08:44,310 --> 00:08:47,270 to develop a new children's vitamin, 160 00:08:47,310 --> 00:08:49,310 and we developed Flintstones Vitamins. 161 00:08:49,360 --> 00:08:51,660 - Yabba-dabba-doo! Yabba-dabba-doo! 162 00:08:51,710 --> 00:08:53,190 - Oh, great idea, Fred. 163 00:08:53,230 --> 00:08:55,760 - Within six months, it was the number one vitamin 164 00:08:55,800 --> 00:08:57,500 in the United States. 165 00:08:57,540 --> 00:08:59,500 - Yabba-dabba-doo! 166 00:08:59,540 --> 00:09:01,150 - But shortly thereafter, 167 00:09:01,200 --> 00:09:04,720 the Senate had a subcommittee on children's advertising. 168 00:09:04,760 --> 00:09:06,940 - Super Sugar Crisp is coated with super sugar 169 00:09:06,980 --> 00:09:08,770 to make it taste so sweet. 170 00:09:08,810 --> 00:09:11,160 - The feeling at the time was that 171 00:09:11,210 --> 00:09:13,300 children's sugared cereal advertising 172 00:09:13,340 --> 00:09:16,950 and somehow children's vitamins advertising was bad. 173 00:09:16,990 --> 00:09:18,740 - They're great! 174 00:09:18,780 --> 00:09:20,260 - And the next thing I know, 175 00:09:20,300 --> 00:09:22,700 Senator Margaret Chase Smith looks at me and says, 176 00:09:22,740 --> 00:09:24,260 "So, Mr. Kalinske, 177 00:09:24,310 --> 00:09:28,530 you think selling drugs to children is a good idea?" 178 00:09:28,570 --> 00:09:30,230 And so I read a letter that a mom had actually 179 00:09:30,270 --> 00:09:33,050 written to me that talked about how grateful she was 180 00:09:33,100 --> 00:09:35,400 because we're selling a vitamin that the children 181 00:09:35,450 --> 00:09:37,150 actually want to take, and I said, 182 00:09:37,190 --> 00:09:39,060 "By the way, I have 5,000 more letters like that. 183 00:09:39,100 --> 00:09:41,240 Would you like me to read some more of them to you?" 184 00:09:41,280 --> 00:09:43,720 And she said, "No, Mr. Kalinske, that's enough." 185 00:09:43,760 --> 00:09:45,410 Well, the Mattel guys were there, 186 00:09:45,460 --> 00:09:48,240 and the next thing I know, they flew me out, 187 00:09:48,290 --> 00:09:49,980 and I was offered a job. 188 00:09:50,030 --> 00:09:53,510 - You can tell it's Mattel. It's swell. 189 00:09:53,550 --> 00:09:56,600 - Ruth Handler founded Mattel. 190 00:09:56,640 --> 00:09:58,250 She came into my office, and she said, 191 00:09:58,300 --> 00:10:00,470 "Tom, the retailers say it's over for Barbie. 192 00:10:00,520 --> 00:10:01,820 "Forget about Barbie. 193 00:10:01,870 --> 00:10:03,260 "Let's get on to something else. 194 00:10:03,300 --> 00:10:04,740 What do you think about that?" 195 00:10:04,780 --> 00:10:07,040 And I said, "Ruth, that's the dumbest thing 196 00:10:07,090 --> 00:10:08,570 "I have ever heard. 197 00:10:08,610 --> 00:10:11,310 Barbie will be around long after you and I are gone." 198 00:10:11,350 --> 00:10:13,010 And she said, "That's what I wanted to hear! 199 00:10:13,050 --> 00:10:15,570 You're now in charge of the Barbie business." 200 00:10:15,620 --> 00:10:17,100 Barbie could be anything 201 00:10:17,140 --> 00:10:19,060 that a little girl wanted her to be. 202 00:10:19,100 --> 00:10:21,280 - Barbie's taking her driver's test. 203 00:10:21,320 --> 00:10:23,060 - I love her long hair. 204 00:10:23,100 --> 00:10:24,800 - Is there room in Barbie's dream pool for me? 205 00:10:24,840 --> 00:10:26,060 - Oh, Daddy. 206 00:10:28,330 --> 00:10:29,500 - And the business just took off. 207 00:10:31,900 --> 00:10:32,980 It grew like crazy. 208 00:10:35,120 --> 00:10:39,690 And then we created a series of different product lines 209 00:10:39,730 --> 00:10:41,820 that would appeal to young boys. 210 00:10:41,860 --> 00:10:46,520 And out of this research came this very muscular character. 211 00:10:46,560 --> 00:10:49,830 - I have the power! 212 00:10:49,870 --> 00:10:52,090 - And it became a pretty good hit. 213 00:10:55,090 --> 00:10:58,050 So I got promoted to CEO. 214 00:11:06,890 --> 00:11:11,070 In 1990, I took a vacation with Karen and the kids... 215 00:11:13,150 --> 00:11:15,850 And literally kind of lying on the beach... 216 00:11:19,070 --> 00:11:22,210 And all of a sudden, this guy appears. 217 00:11:22,250 --> 00:11:27,520 It was Hayao Nakayama, CEO of Sega Japan. 218 00:11:27,560 --> 00:11:28,650 And I said, "What are you doing here?" 219 00:11:28,690 --> 00:11:30,210 He said, "I'm looking for you." 220 00:11:30,260 --> 00:11:32,300 He said, "Well, I want you to come to Japan with me 221 00:11:32,350 --> 00:11:35,920 because we've got this great 16-bit technology." 222 00:11:35,960 --> 00:11:38,220 - Sega. - "We want you to run Sega 223 00:11:38,270 --> 00:11:40,010 and take on Nintendo." 224 00:11:40,050 --> 00:11:41,360 And I argued with him. 225 00:11:41,400 --> 00:11:42,920 I didn't really want to go, 226 00:11:42,970 --> 00:11:44,840 but my daughter Ashley said, 227 00:11:44,880 --> 00:11:47,490 "This man came all the way from Japan to find you. 228 00:11:47,540 --> 00:11:49,490 "You have to go back with him 229 00:11:49,540 --> 00:11:51,020 to see what he's talking about." 230 00:11:51,060 --> 00:11:52,630 - It's your destiny. 231 00:11:52,670 --> 00:11:55,280 - After a long discussion with family, 232 00:11:55,330 --> 00:11:57,240 I did go to Japan. 233 00:12:08,600 --> 00:12:10,170 And I must say, 234 00:12:10,210 --> 00:12:14,260 I was very, very impressed by what 16-bit technology was 235 00:12:14,300 --> 00:12:17,700 compared to what I had known as 8-bit Nintendo. 236 00:12:19,180 --> 00:12:21,660 And I thought, "This really is revolutionary," 237 00:12:21,700 --> 00:12:25,180 but at the same time, I was somewhat fearful of Nintendo. 238 00:12:27,270 --> 00:12:28,840 - The men sitting in this room 239 00:12:28,880 --> 00:12:31,410 control the American video game industry. 240 00:12:31,450 --> 00:12:34,970 - The NES continues to havea unit sales projection 241 00:12:35,020 --> 00:12:38,150 through Decemberof 2 million units. 242 00:12:38,200 --> 00:12:41,810 - Nintendo was extremely arrogant as a company. 243 00:12:41,850 --> 00:12:44,330 - To marketing vice president Peter Main, 244 00:12:44,380 --> 00:12:46,250 selling Nintendo is easy. 245 00:12:46,290 --> 00:12:49,120 - They come, they try, they like, and they buy, 246 00:12:49,160 --> 00:12:51,170 and it's a fun business. 247 00:12:52,510 --> 00:12:55,390 - Especially fun if there's no competition. 248 00:12:55,430 --> 00:12:59,000 - Nintendo threatened the leading software companies 249 00:12:59,040 --> 00:13:01,520 that if they developed for any other system, 250 00:13:01,570 --> 00:13:05,570 they would not give them approval of games on the NES. 251 00:13:05,610 --> 00:13:08,530 - They were able to, one by one, 252 00:13:08,570 --> 00:13:12,880 contact all major retailers and intimidate them 253 00:13:12,930 --> 00:13:15,970 or induce them not to handle Tengen product. 254 00:13:17,150 --> 00:13:18,500 - It was like blackmail. 255 00:13:18,540 --> 00:13:19,630 - No, I don't think so. 256 00:13:19,670 --> 00:13:21,330 No. Sorry. 257 00:13:22,810 --> 00:13:26,550 We were adamant that this was a legal tactic. 258 00:13:26,590 --> 00:13:28,330 - Retailers were the same way. 259 00:13:28,380 --> 00:13:32,470 Retailers were afraid to carry any other system. 260 00:13:32,510 --> 00:13:34,250 - The retailers didn't like us, okay? 261 00:13:34,300 --> 00:13:35,910 We were not liked. 262 00:13:35,950 --> 00:13:38,300 I don't think we were ever liked, 263 00:13:38,340 --> 00:13:39,560 but we were respected. 264 00:13:41,040 --> 00:13:43,260 - They were anxious to sue just about anybody 265 00:13:43,300 --> 00:13:45,830 that got in their way of doing business. 266 00:13:45,870 --> 00:13:47,050 - Please, just go away. 267 00:13:47,090 --> 00:13:49,700 We established the rule 268 00:13:49,750 --> 00:13:52,270 that Nintendo was not gonna get pushed around. 269 00:13:52,310 --> 00:13:55,840 - We were extremely on top of execution, 270 00:13:55,880 --> 00:13:57,970 willing to put resources 271 00:13:58,010 --> 00:14:00,320 where they needed to be at the right time. 272 00:14:02,110 --> 00:14:04,800 - What Nintendo was doing was monopolistic 273 00:14:04,850 --> 00:14:06,150 and was wrong. 274 00:14:06,200 --> 00:14:08,370 - Nintendo acts like an unchained 275 00:14:08,420 --> 00:14:10,850 800-pound gorilla swinging its way 276 00:14:10,900 --> 00:14:12,550 through America's toy stores. 277 00:14:14,680 --> 00:14:16,690 - Save you! - Help me! Ah! 278 00:14:16,730 --> 00:14:18,300 - Federal and state officials charge today 279 00:14:18,340 --> 00:14:20,040 that Nintendo threatened to cut off 280 00:14:20,080 --> 00:14:21,990 supplies of its video games 281 00:14:22,040 --> 00:14:25,300 if retailers charged less than Nintendo wanted. 282 00:14:25,350 --> 00:14:27,910 - As a law violator, a lawbreaker, 283 00:14:27,960 --> 00:14:31,400 you did wrong to your loyal customers. 284 00:14:31,440 --> 00:14:35,920 - Nintendo! Oh, man! 285 00:14:35,970 --> 00:14:37,970 - Our relationship with our customers 286 00:14:38,010 --> 00:14:40,670 is our number one priority, and that's the reason 287 00:14:40,710 --> 00:14:41,800 that we reached this 288 00:14:41,840 --> 00:14:43,890 comprehensive settlement today. 289 00:14:43,930 --> 00:14:46,500 I think we had to pay $5 million. 290 00:14:46,540 --> 00:14:50,850 All of the rest of the penalty was in the form of coupons 291 00:14:50,890 --> 00:14:52,330 that we would give out, 292 00:14:52,370 --> 00:14:56,070 allowing people to buy more Nintendo games, 293 00:14:56,120 --> 00:14:58,340 which was pretty slick, if you think about it. 294 00:14:58,380 --> 00:15:00,640 - Do you see that price coming down in the future? 295 00:15:00,690 --> 00:15:03,690 - I was asked on the witness stand, 296 00:15:03,730 --> 00:15:04,990 "Do you consider yourself 297 00:15:05,040 --> 00:15:07,390 to be an aggressive person, Mr. Main?" 298 00:15:07,430 --> 00:15:08,780 I said, "I'm in marketing. 299 00:15:08,820 --> 00:15:10,350 "It's about growing market share. 300 00:15:10,390 --> 00:15:11,870 "And whatever gets in your way, 301 00:15:11,910 --> 00:15:14,350 "you try and work around it or over it or past it. 302 00:15:14,400 --> 00:15:15,960 Is that what you mean?" 303 00:15:16,010 --> 00:15:18,790 He said, "That's what I mean." I said, "That's what we do." 304 00:15:21,270 --> 00:15:24,710 - I found something a lot more scary than cocaine. 305 00:15:24,750 --> 00:15:26,620 It's called Nintendo. 306 00:15:29,060 --> 00:15:30,980 - Nintendo was so powerful, 307 00:15:31,020 --> 00:15:34,980 they had a 95% share of the market. 308 00:15:35,020 --> 00:15:36,900 It was a dominant position 309 00:15:36,940 --> 00:15:40,250 not like which I've ever seen in my business career, 310 00:15:40,290 --> 00:15:43,600 so the idea of taking on this giant, Nintendo, 311 00:15:43,640 --> 00:15:48,340 that everybody said is too powerful, too big, 312 00:15:48,390 --> 00:15:51,650 it's an impossible task, that just appealed to me. 313 00:15:53,830 --> 00:15:57,180 I knew that Japanese companies tended to tightly control 314 00:15:57,220 --> 00:15:58,920 their operations outside of Japan, 315 00:15:58,960 --> 00:16:03,010 so before I accepted, I told Nakayama I needed 316 00:16:03,050 --> 00:16:07,270 to do things my way, the American way. 317 00:16:07,320 --> 00:16:10,970 He told me he agreed with me and he understood that. 318 00:16:11,020 --> 00:16:15,720 So I decided to take this role on. 319 00:16:18,280 --> 00:16:20,420 Sega of America was a small building, 320 00:16:20,460 --> 00:16:22,070 and there was no real lobby. 321 00:16:22,110 --> 00:16:26,290 People could wander in and out very easily, not well lit. 322 00:16:26,340 --> 00:16:28,120 It was so different 323 00:16:28,160 --> 00:16:31,040 than what I was used to at Mattel. 324 00:16:31,080 --> 00:16:34,610 It was initially a shock to the system. 325 00:16:34,650 --> 00:16:37,220 - The day Tom, you know, came to Sega 326 00:16:37,260 --> 00:16:39,650 was a very crucial time. 327 00:16:39,700 --> 00:16:43,310 Tom was someone who can really grow the company big. 328 00:16:43,350 --> 00:16:46,050 - Shinobu mentioned to me that Tom was coming, 329 00:16:46,100 --> 00:16:48,580 and I said, "Great," you know. 330 00:16:48,620 --> 00:16:50,450 "It's all uphill from here." 331 00:16:50,490 --> 00:16:54,410 - There were executives at other companies 332 00:16:54,450 --> 00:16:56,110 that were pretty dismissive 333 00:16:56,150 --> 00:16:58,890 of my coming into the video game industry 334 00:16:58,930 --> 00:17:00,540 and really having any impact. 335 00:17:00,590 --> 00:17:02,630 They thought I was just another toy guy. 336 00:17:02,680 --> 00:17:05,510 They thought all I knew how to do was market Barbie dolls 337 00:17:05,550 --> 00:17:07,120 and Hot Wheels cars. 338 00:17:07,160 --> 00:17:10,120 There were even analogies to, "Oh, here comes Ken 339 00:17:10,160 --> 00:17:12,690 "to save the Sega-- the video game company, 340 00:17:12,730 --> 00:17:14,300 and, boy, that's not gonna work." 341 00:17:14,340 --> 00:17:16,470 So personally, that was at stake for me, 342 00:17:16,520 --> 00:17:20,740 and none of us really knew if this thing with Sega 343 00:17:20,780 --> 00:17:22,740 was gonna be a success or not. 344 00:17:22,780 --> 00:17:26,140 I didn't even initially move my family up to San Francisco. 345 00:17:26,180 --> 00:17:28,010 I stayed in a Comfort Inn 346 00:17:28,050 --> 00:17:31,100 very close to the Sega offices. 347 00:17:31,140 --> 00:17:33,450 It happened to be a place that Shinobu Toyoda 348 00:17:33,490 --> 00:17:35,410 was also staying at. - Hi, Tom. 349 00:17:35,450 --> 00:17:37,490 - Tom started staying at the Comfort Inn, 350 00:17:37,540 --> 00:17:39,020 and then Tom and I decided 351 00:17:39,060 --> 00:17:41,500 that we would, you know, get, like, a two-bedroom suite 352 00:17:41,540 --> 00:17:43,330 someplace for about the same price. 353 00:17:43,370 --> 00:17:46,240 - Paul was a great roommate. We were both baseball fans. 354 00:17:46,290 --> 00:17:48,070 So we'd go back to the apartment. 355 00:17:48,110 --> 00:17:50,510 We'd have pizza and drink beer 356 00:17:50,550 --> 00:17:52,640 and got up early and went to Sega. 357 00:17:55,340 --> 00:17:57,430 I knew Paul Rioux for a long, long time. 358 00:17:57,470 --> 00:17:59,040 I knew him at Mattel. 359 00:17:59,080 --> 00:18:01,430 So we did discuss his experience in Vietnam. 360 00:18:01,480 --> 00:18:04,170 - I've had the mustache since I was, 361 00:18:04,220 --> 00:18:07,000 like--I got out of Vietnam. 362 00:18:07,050 --> 00:18:10,350 That's why I wanted to get out, so I could grow a mustache. 363 00:18:10,400 --> 00:18:12,440 - I knew he had gone through battle. 364 00:18:13,660 --> 00:18:16,140 He'd had explosions occur near his head, 365 00:18:16,190 --> 00:18:19,800 where he lost part of the hearing in one ear. 366 00:18:19,840 --> 00:18:23,540 To Paul, being in business was very similar to combat. 367 00:18:23,580 --> 00:18:25,590 He wanted to crush the enemy. 368 00:18:26,800 --> 00:18:29,550 - You gotta be ready to fight... 369 00:18:29,590 --> 00:18:30,900 similar in business. 370 00:18:30,940 --> 00:18:33,380 It's not as life-threatening 371 00:18:33,420 --> 00:18:35,770 in the business world, but sometimes it may be. 372 00:18:37,820 --> 00:18:41,300 - # She-Ra, Princess of Power # 373 00:18:41,340 --> 00:18:43,690 - I always felt that one of my strengths 374 00:18:43,730 --> 00:18:45,610 is coming up with unique strategies 375 00:18:45,650 --> 00:18:47,520 that either make companies successful 376 00:18:47,560 --> 00:18:49,740 and either work or don't. 377 00:18:49,780 --> 00:18:51,790 And it seemed to me that Nintendo 378 00:18:51,830 --> 00:18:53,440 was selling games designed 379 00:18:53,480 --> 00:18:55,490 for a very young audience. 380 00:18:55,530 --> 00:18:58,100 So I saw an opportunity to go after 381 00:18:58,140 --> 00:19:00,490 the teenage and college audience, 382 00:19:00,530 --> 00:19:03,580 and let's leave Nintendo with the kids. 383 00:19:06,930 --> 00:19:08,930 So I worked with Paul and Shinobu 384 00:19:08,980 --> 00:19:10,460 on putting together a plan 385 00:19:10,500 --> 00:19:13,290 on how we were gonna take on Nintendo. 386 00:19:26,950 --> 00:19:30,610 - Tom and I went to Sega Japan headquarter, 387 00:19:30,650 --> 00:19:33,920 where there is a big room called Decision Room, 388 00:19:33,960 --> 00:19:36,830 full of executives and managers... 389 00:19:36,870 --> 00:19:40,140 and Nakayama-san sitting in the center. 390 00:19:40,180 --> 00:19:42,970 - I'm not one to just go into a business 391 00:19:43,010 --> 00:19:45,230 where I think I'm gonna be second place. 392 00:19:46,280 --> 00:19:48,970 I had studied the market and had a strategy 393 00:19:49,020 --> 00:19:51,370 for what I thought we needed to do. 394 00:19:51,410 --> 00:19:55,760 First, I wanted to do more American licenses from TV shows 395 00:19:55,810 --> 00:19:57,720 and movies in the United States... 396 00:19:59,460 --> 00:20:02,640 - Because Japan didn't understand those licenses. 397 00:20:02,680 --> 00:20:04,770 - Montana, touchdown! 398 00:20:04,820 --> 00:20:06,510 - And I didn't think the development 399 00:20:06,560 --> 00:20:08,470 could occur in Japan. 400 00:20:08,510 --> 00:20:11,650 Then I said, "We've gotta lower the price of Genesis." 401 00:20:11,690 --> 00:20:15,610 - We wanted to make it very competitive against Nintendo. 402 00:20:15,650 --> 00:20:18,740 - And I wanted us to take on Mario, 403 00:20:18,790 --> 00:20:21,570 and so I wanted our best character 404 00:20:21,620 --> 00:20:24,310 to be included with the hardware. 405 00:20:24,360 --> 00:20:28,530 - Nakayama's face turned very white, and he said, 406 00:20:28,580 --> 00:20:32,020 "What, crazy? That's our lifeblood. 407 00:20:32,060 --> 00:20:33,280 Give it free?" 408 00:20:33,320 --> 00:20:35,930 And Tom told Nakayama-san, 409 00:20:35,980 --> 00:20:38,890 "By the way, in addition to this"... 410 00:20:38,940 --> 00:20:42,160 - I wanted to take Nintendo on directly in advertising 411 00:20:42,200 --> 00:20:44,290 and make fun of them. 412 00:20:44,330 --> 00:20:46,810 - Of course, there was a fear that Nintendo may sue us 413 00:20:46,860 --> 00:20:48,990 or somehow try to stop that. 414 00:20:52,300 --> 00:20:55,470 - After my presentation, they all talked in Japanese. 415 00:20:55,520 --> 00:20:58,040 Shinobu would try to translate in my ear, 416 00:20:58,090 --> 00:21:00,960 but I could tell this was not going over well. 417 00:21:01,000 --> 00:21:03,700 And I thought, "Well, that's the shortest career 418 00:21:03,740 --> 00:21:06,050 anybody ever had with a company." 419 00:21:06,090 --> 00:21:10,660 - Nakayama-san got so mad, his face turning very pale. 420 00:21:10,710 --> 00:21:12,140 - Nakayama said, 421 00:21:12,190 --> 00:21:15,890 "Well, nobody agrees with anything that you've said." 422 00:21:15,930 --> 00:21:19,720 - He literally stood up from chair and almost, 423 00:21:19,760 --> 00:21:21,020 like, kicking the chair. 424 00:21:21,070 --> 00:21:23,150 I really don't remember physically did he 425 00:21:23,200 --> 00:21:24,420 kick the chair or not, 426 00:21:24,460 --> 00:21:27,640 but he quickly walked to the door. 427 00:21:31,990 --> 00:21:33,900 - But he turned at the door, and he said, 428 00:21:33,950 --> 00:21:36,470 "When I brought you on board, I said you could make 429 00:21:36,520 --> 00:21:39,430 "the decisions for the company in the United States, 430 00:21:39,480 --> 00:21:43,170 and therefore go ahead and do what you just proposed." 431 00:21:52,100 --> 00:21:53,750 - For the third year in a row, 432 00:21:53,790 --> 00:21:56,140 it's on the top of everyone's Christmas list. 433 00:21:56,190 --> 00:21:57,890 - What do you want for Christmas? 434 00:21:57,930 --> 00:21:59,280 - Nintendo. 435 00:21:59,320 --> 00:22:01,410 - There were competitors, 436 00:22:01,450 --> 00:22:04,670 home video game companies that were in the business, 437 00:22:04,720 --> 00:22:06,500 and certainly one of the companies was Sega. 438 00:22:08,240 --> 00:22:09,810 One of the things that we always did 439 00:22:09,850 --> 00:22:13,160 was have our game people play their games. 440 00:22:14,600 --> 00:22:18,730 The feedback was uniformly, "Great graphics, 441 00:22:18,780 --> 00:22:20,730 but the games are lousy." 442 00:22:22,740 --> 00:22:25,480 As long as we were hearing that... 443 00:22:25,520 --> 00:22:26,650 we weren't too concerned. 444 00:22:30,130 --> 00:22:32,010 - Welcome to the Fight Palace. 445 00:22:38,100 --> 00:22:39,670 - The title that was packed 446 00:22:39,710 --> 00:22:42,060 into the Genesis was "Altered Beast." 447 00:22:43,500 --> 00:22:45,850 - Not a particularly good game in my opinion, 448 00:22:45,890 --> 00:22:48,500 but it also sounded like devil worship 449 00:22:48,540 --> 00:22:49,980 for half of the United States, 450 00:22:50,020 --> 00:22:51,940 where that would be just unacceptable. 451 00:22:51,980 --> 00:22:54,720 And we needed something to compete with Mario. 452 00:22:56,330 --> 00:23:00,030 - So there was company-wide efforts to come up 453 00:23:00,080 --> 00:23:01,470 with something new. 454 00:23:01,510 --> 00:23:04,600 Yuji Naka, our genius programmer, 455 00:23:04,650 --> 00:23:08,960 came up with algorithm to move object very fast, 456 00:23:09,000 --> 00:23:12,480 and he needed a character to move fast. 457 00:23:13,870 --> 00:23:16,880 - So he asked the art designer, 458 00:23:16,920 --> 00:23:18,880 Naoto Ohshima, to come up 459 00:23:18,920 --> 00:23:20,660 with some sort of characters. 460 00:23:27,710 --> 00:23:29,150 - It was Al Nilsen, 461 00:23:29,190 --> 00:23:30,720 our director of marketing, 462 00:23:30,760 --> 00:23:32,850 who had to pick the characters. 463 00:23:32,890 --> 00:23:34,110 - First game I have here 464 00:23:34,160 --> 00:23:35,500 is "Michael Jackson's Moonwalker," 465 00:23:35,550 --> 00:23:38,290 which was actually designed by Michael himself. 466 00:23:39,550 --> 00:23:42,600 - Al was one of the very first employees hired 467 00:23:42,640 --> 00:23:44,860 to launch Sega Genesis. 468 00:23:44,910 --> 00:23:49,740 He was the game guru, marketer, PR, everything. 469 00:23:49,780 --> 00:23:54,180 - Al's the best gamer I've ever seen. 470 00:23:54,220 --> 00:23:56,220 - He was like a big kid 471 00:23:56,260 --> 00:23:58,830 who played video games all the time. 472 00:23:58,880 --> 00:24:00,490 - Shinobu came into my office 473 00:24:00,530 --> 00:24:02,790 and explained about this contest 474 00:24:02,840 --> 00:24:06,710 that Sega Japan had had to develop our Mario. 475 00:24:06,750 --> 00:24:09,840 He says, "Nakayama has chosen you. 476 00:24:09,890 --> 00:24:11,980 "They're happy with two finalists, 477 00:24:12,020 --> 00:24:13,540 and they want you to choose." 478 00:24:13,590 --> 00:24:16,550 The first one was Eggs. 479 00:24:18,240 --> 00:24:19,900 "Okay, let's see what the other one is." 480 00:24:21,640 --> 00:24:23,680 "A hedgehog? 481 00:24:23,730 --> 00:24:26,600 What in the world is a hedgehog?" 482 00:24:26,640 --> 00:24:28,990 And there was this rock band. 483 00:24:29,040 --> 00:24:31,910 - He also had a girlfriend named Madonna, 484 00:24:31,950 --> 00:24:34,610 who was very voluptuous. 485 00:24:34,650 --> 00:24:39,350 - So I've got Eggs and a hedgehog... 486 00:24:39,390 --> 00:24:42,180 so I chose Sonic the Hedgehog. 487 00:24:43,440 --> 00:24:46,140 I said, "You gotta get rid of the rock band, 488 00:24:46,180 --> 00:24:48,010 and you gotta get rid of Madonna." 489 00:24:48,060 --> 00:24:49,400 - We said, of course, "No, no, no. 490 00:24:49,450 --> 00:24:51,060 we can't use the name Madonna for this." 491 00:24:51,100 --> 00:24:52,890 - But there were some other tweaks 492 00:24:52,930 --> 00:24:54,020 to the way he looked... 493 00:24:55,980 --> 00:24:58,670 Just to go and round off his edges. 494 00:24:58,720 --> 00:25:00,590 - The folks in Japan didn't like that 495 00:25:00,630 --> 00:25:02,240 because it was their creation 496 00:25:02,290 --> 00:25:05,770 and didn't want anyone to touch. 497 00:25:05,810 --> 00:25:07,290 - It went all the way up 498 00:25:07,340 --> 00:25:10,120 inside of the Japan culture to Nakayama, 499 00:25:10,160 --> 00:25:13,040 and he eventually said, "No, do what the U.S. wants done." 500 00:25:15,470 --> 00:25:17,610 - Six months later, I'm at Sega Japan. 501 00:25:17,650 --> 00:25:21,040 We walk over to a screen, and here's this guy Sonic. 502 00:25:22,440 --> 00:25:25,050 Never seen a video game move that fast... 503 00:25:25,090 --> 00:25:27,880 and look at these vibrant colors. 504 00:25:27,920 --> 00:25:30,790 After my visit, I went back, and I said, 505 00:25:30,840 --> 00:25:33,750 "Sega Japan created something that we can go 506 00:25:33,800 --> 00:25:35,620 "and put up against Mario. 507 00:25:35,670 --> 00:25:39,500 This can be our number one game." 508 00:25:49,200 --> 00:25:51,290 - "It's gonna be the best game Sega ever did." 509 00:25:51,340 --> 00:25:53,600 Coming from Al, that was, like, you know, 510 00:25:53,640 --> 00:25:55,470 "Hey, we got a runner." 511 00:25:56,690 --> 00:25:59,390 - That changed the mood and tide, 512 00:25:59,430 --> 00:26:02,780 so to speak, of the company immediately. 513 00:26:02,830 --> 00:26:05,090 And the rest is history, 514 00:26:05,130 --> 00:26:08,830 and, uh...yeah. 515 00:26:10,830 --> 00:26:13,180 - Let's play Nintendo! 516 00:26:17,580 --> 00:26:19,620 - It is the video game craze, 517 00:26:19,670 --> 00:26:22,450 the Nintendo craze, but this year, Nintendo 518 00:26:22,500 --> 00:26:25,500 may be up against some serious competition. 519 00:26:25,540 --> 00:26:28,160 - You get better graphics, more levels of play, 520 00:26:28,200 --> 00:26:31,990 better animation on the screen, longer games, 521 00:26:32,030 --> 00:26:33,510 just more fun to play. 522 00:26:33,550 --> 00:26:35,950 - Nintendo, however, does not plan 523 00:26:35,990 --> 00:26:37,820 to relinquish any ground. 524 00:26:37,860 --> 00:26:41,040 - Introducing the next generation from Nintendo. 525 00:26:41,080 --> 00:26:44,520 - Almost as soon as the NES was launched in the United States, 526 00:26:44,560 --> 00:26:47,220 Nintendo was working on the Super NES. 527 00:26:47,260 --> 00:26:49,310 - What do you do after you've made a fortune 528 00:26:49,350 --> 00:26:50,920 selling American kids on a product 529 00:26:50,960 --> 00:26:52,700 that drives their parents crazy? 530 00:26:52,740 --> 00:26:54,750 You declare it obsolete, of course, and introduce 531 00:26:54,790 --> 00:26:56,440 a new and improved version next month. 532 00:26:56,490 --> 00:27:00,060 - Nintendo wants a generation of video freaks 533 00:27:00,100 --> 00:27:02,360 to forsake the gear they've already spent 534 00:27:02,410 --> 00:27:04,230 several hundred dollars on 535 00:27:04,280 --> 00:27:06,890 for this, Super Nintendo. 536 00:27:09,760 --> 00:27:11,890 - So we arranged with Sega Japan 537 00:27:11,940 --> 00:27:15,290 to go and pick up one of the new systems for us. 538 00:27:15,330 --> 00:27:17,290 And we all got together in Tom's office, 539 00:27:17,330 --> 00:27:19,120 took it out of the box, 540 00:27:19,160 --> 00:27:22,120 hooked it up to the TV, hit the on switch, 541 00:27:22,170 --> 00:27:24,860 and we were ready to see what they had in store for us. 542 00:27:26,130 --> 00:27:28,350 - We had a Mario launch game. 543 00:27:29,560 --> 00:27:33,610 I knew instantly we had a winner. 544 00:27:33,660 --> 00:27:35,960 That game was that good. 545 00:27:36,010 --> 00:27:38,230 - "Are you sure?" 546 00:27:38,270 --> 00:27:42,010 This didn't look like 16-bit. 547 00:27:42,060 --> 00:27:45,010 It kind of looked 12-bit, if I want to coin a phrase. 548 00:27:47,710 --> 00:27:51,110 It just wasn't taking it to the next level. 549 00:27:51,150 --> 00:27:54,630 I was like, "Yeah, we're okay. 550 00:27:54,680 --> 00:27:57,680 "We've got this guy named Sonic in our back pocket. 551 00:27:57,720 --> 00:28:00,990 This could go and be very, very interesting." 552 00:28:01,030 --> 00:28:04,510 So I came up with an idea. 553 00:28:04,560 --> 00:28:06,560 - # Ah, push it 554 00:28:09,950 --> 00:28:13,430 - Ask not what machines can do for you. 555 00:28:13,480 --> 00:28:16,610 Ask what you can do for machines. 556 00:28:21,750 --> 00:28:25,450 - The Consumer Electronics Show is a twice-a-year extravaganza. 557 00:28:25,490 --> 00:28:30,360 More than 140,000 products are now on display. 558 00:28:30,410 --> 00:28:32,450 Hundreds of companies are taking part, 559 00:28:32,500 --> 00:28:35,060 and more than a third of the industry's annual business 560 00:28:35,110 --> 00:28:36,590 is done right there. 561 00:28:36,630 --> 00:28:38,150 - But this time, it's for the ducks. 562 00:28:38,200 --> 00:28:39,850 - Wait. - Uh-oh. 563 00:28:40,940 --> 00:28:42,850 - Whenever you're at war, 564 00:28:42,900 --> 00:28:44,810 you always hit the guy in the mouth 565 00:28:44,860 --> 00:28:46,160 as hard as you can. 566 00:28:46,210 --> 00:28:47,860 If you can't hit him hard, 567 00:28:47,900 --> 00:28:49,770 you might as well not even fight. 568 00:28:49,820 --> 00:28:52,390 That's the attitude in real war, 569 00:28:52,430 --> 00:28:54,170 and it's the attitude in business. 570 00:28:54,210 --> 00:28:56,130 You've gotta be prepared to take on 571 00:28:56,170 --> 00:28:57,960 the competition and win. 572 00:29:00,090 --> 00:29:03,220 - # Ow, dig it 573 00:29:03,270 --> 00:29:04,660 - Do you think the technology exists 574 00:29:04,700 --> 00:29:06,700 that these'll shrink even more? 575 00:29:06,750 --> 00:29:08,530 - I don't know how much smaller they can get. 576 00:29:08,580 --> 00:29:09,790 You know what the problem with them getting smaller 577 00:29:09,840 --> 00:29:11,490 is holding them steady, 578 00:29:11,540 --> 00:29:13,490 because if it's lightweight, it tends to move. 579 00:29:14,760 --> 00:29:15,890 - # Salt-N-Pepa, Salt-N-Pepa # 580 00:29:15,930 --> 00:29:17,370 - Nintendo had some new games 581 00:29:17,410 --> 00:29:19,060 and accessories on display 582 00:29:19,110 --> 00:29:21,460 inside the enormous Nintendo pavilion. 583 00:29:22,940 --> 00:29:24,810 Nintendo now has the lion's share 584 00:29:24,850 --> 00:29:27,200 of the $5 billion video game market. 585 00:29:27,250 --> 00:29:29,900 Sega of America will offer two new games, 586 00:29:29,950 --> 00:29:32,080 one featuring a hedgehog. 587 00:29:32,120 --> 00:29:35,210 - Normally before a big launch of a major title, 588 00:29:35,260 --> 00:29:38,210 you would start getting early press. 589 00:29:38,260 --> 00:29:39,430 We didn't do any of that. 590 00:29:39,480 --> 00:29:42,220 We waited until the very, very last minute 591 00:29:42,260 --> 00:29:44,220 to surprise Nintendo. 592 00:29:44,260 --> 00:29:46,090 - # Show the guys that we know # 593 00:29:46,140 --> 00:29:47,880 - Ta-da. 594 00:29:47,920 --> 00:29:49,360 - # I don't know what I'm doing # 595 00:29:49,400 --> 00:29:52,100 - I can't believe it. Mario, jeez. 596 00:29:52,140 --> 00:29:54,930 - I'm a nice guy, and I felt that the nicest thing 597 00:29:54,970 --> 00:29:57,150 that I could go and do for Nintendo 598 00:29:57,190 --> 00:30:01,980 was to introduce Super NES to America for them. 599 00:30:02,020 --> 00:30:04,330 I see this reporter. 600 00:30:04,370 --> 00:30:06,240 His opening words were, 601 00:30:06,290 --> 00:30:10,070 "Super Nintendo has 32,768 colors. 602 00:30:10,120 --> 00:30:11,600 "You only have 512. 603 00:30:11,640 --> 00:30:13,340 What are you gonna do about it?" 604 00:30:13,380 --> 00:30:16,430 We walk over to where we had the two monitors stacked 605 00:30:16,470 --> 00:30:17,990 one on top of each other, 606 00:30:18,040 --> 00:30:21,130 and I said to him, "Which one has more colors?" 607 00:30:21,170 --> 00:30:22,650 - # Push it 608 00:30:22,690 --> 00:30:25,260 # Push, push, push, push it, push it # 609 00:30:25,310 --> 00:30:26,740 # Push it 610 00:30:26,780 --> 00:30:30,050 - He just turned around and walked out of the booth. 611 00:30:30,090 --> 00:30:32,270 - # Push it, push it, push it # 612 00:30:32,310 --> 00:30:34,180 # Push it, push it, push it 613 00:30:34,230 --> 00:30:35,620 - And it's like, "Hmm. 614 00:30:35,660 --> 00:30:37,270 "What can we do with this? 615 00:30:37,320 --> 00:30:39,930 "Let's do what we did at CES 616 00:30:39,970 --> 00:30:44,280 but this time a mall tour going around the country." 617 00:30:45,330 --> 00:30:46,760 - Here's the challenge. 618 00:30:46,800 --> 00:30:50,370 Super Nintendo, brand-new competitor of ours, 16 bits. 619 00:30:50,420 --> 00:30:51,510 We challenge them. 620 00:30:51,550 --> 00:30:53,120 We think we're better than them, 621 00:30:53,160 --> 00:30:55,770 but it's up to you to decide. 622 00:30:57,550 --> 00:31:00,250 - Our small initial team was very good, 623 00:31:00,300 --> 00:31:02,730 but it was clear to me we needed help. 624 00:31:02,780 --> 00:31:04,340 - The American marketplace 625 00:31:04,390 --> 00:31:07,560 is a very vibrant marketplace for the video game industry. 626 00:31:07,610 --> 00:31:09,520 - We were one of the first video game companies 627 00:31:09,570 --> 00:31:11,830 to have senior women in the management ranks. 628 00:31:11,870 --> 00:31:13,830 And Ellen Beth Van Buskirk 629 00:31:13,880 --> 00:31:16,310 was a very special find for us. 630 00:31:16,360 --> 00:31:18,620 - You have the 8-bit segments. 631 00:31:18,660 --> 00:31:22,320 I spent my entire summer going from mall to mall 632 00:31:22,360 --> 00:31:26,500 to mall to mall to introduce Sonic the Hedgehog. 633 00:31:26,540 --> 00:31:28,670 And on occasion, 634 00:31:28,720 --> 00:31:33,590 I would don the Sonic the Hedgehog character uniform. 635 00:31:33,630 --> 00:31:35,640 You could project that the little kids 636 00:31:35,680 --> 00:31:37,510 were gonna pet me. 637 00:31:37,550 --> 00:31:38,770 They were gonna wanna be hugged. 638 00:31:38,810 --> 00:31:42,340 "Oh, Sonic," kisses and hugs and sweetness. 639 00:31:42,380 --> 00:31:47,430 But the teenage boys responded to me quite differently. 640 00:31:47,470 --> 00:31:51,870 They kind of wanted to do high-fiving, fist pumping, 641 00:31:51,910 --> 00:31:53,920 and I kind of got pushed around a little bit. 642 00:31:53,960 --> 00:31:56,480 - I think Genesis is gonna win all the way. 643 00:31:56,530 --> 00:31:58,700 - They wanted something different. 644 00:31:58,750 --> 00:32:00,400 They wanted attitude. 645 00:32:00,440 --> 00:32:03,930 They wanted sass. They didn't want hugs. 646 00:32:03,970 --> 00:32:07,100 - For Christmas, I'm gonna ask my mom for a Sega Genesis 647 00:32:07,150 --> 00:32:10,320 because it's way better than Nintendo. 648 00:32:10,370 --> 00:32:13,280 - Mario was a very slow-moving, 649 00:32:13,330 --> 00:32:15,420 left-to-right scroll game, 650 00:32:15,460 --> 00:32:17,590 and Sonic was hip and fast and cool. 651 00:32:17,630 --> 00:32:18,770 - Sega Genesis is way better 652 00:32:18,810 --> 00:32:20,860 because Nintendo is kind of slow. 653 00:32:20,900 --> 00:32:23,340 - When Sonic was first released, 654 00:32:23,380 --> 00:32:25,340 everybody kind of scratched their head and said, 655 00:32:25,380 --> 00:32:27,080 "A hedge-what?" 656 00:32:27,120 --> 00:32:30,430 - You know, was it impressive that he could roll really fast? 657 00:32:30,470 --> 00:32:32,480 I don't know. You know, for me, 658 00:32:32,520 --> 00:32:33,650 I didn't probably have 659 00:32:33,690 --> 00:32:35,390 the reaction time to deal with it. 660 00:32:35,440 --> 00:32:37,390 - But for a lot of people, they found it really fun 661 00:32:37,440 --> 00:32:40,700 and liked the fast action, using that pachinko mechanic 662 00:32:40,740 --> 00:32:42,270 of lots of "ba-ding-a-ding-a-ding," 663 00:32:42,310 --> 00:32:44,270 very fun to kind of get that going and keep it going. 664 00:32:44,310 --> 00:32:46,270 And Sonic is a character. 665 00:32:46,320 --> 00:32:48,880 He had that little bit of edgy kind of wiseness 666 00:32:48,930 --> 00:32:51,930 that Mario--you know, Mario-- "hoo-hoo"--never had. 667 00:32:51,970 --> 00:32:54,540 - It wasn't empirical science when you say, 668 00:32:54,580 --> 00:32:56,540 "Which one do you like better?" 669 00:32:56,590 --> 00:32:58,760 Doot, doot, doot, doot, doot, doot. 670 00:33:00,850 --> 00:33:03,380 - In speed of action, we looked better; 671 00:33:03,420 --> 00:33:04,860 graphics, we looked better. 672 00:33:06,340 --> 00:33:08,770 They had never experienced anything like it. 673 00:33:08,820 --> 00:33:11,120 - I don't think Sonic the Hedgehog 674 00:33:11,170 --> 00:33:13,690 was a masterpiece or something, 675 00:33:13,730 --> 00:33:16,000 but it gave them additional momentum. 676 00:33:17,740 --> 00:33:19,350 - By then, I knew we had a winner, 677 00:33:19,390 --> 00:33:20,780 but we needed to find a way 678 00:33:20,830 --> 00:33:22,790 to get in the major retailers. 679 00:33:22,830 --> 00:33:25,010 - # Wal-Mart's one of those 680 00:33:25,050 --> 00:33:29,310 - Wal-Mart wouldn't agree to carry Sega products. 681 00:33:29,360 --> 00:33:31,490 - The only thing... - Hotter than Nintendo games... 682 00:33:31,530 --> 00:33:33,060 - Is Wal-Mart's price. 683 00:33:33,100 --> 00:33:35,450 - Wal-Mart was making a lot of money from Nintendo, 684 00:33:35,500 --> 00:33:40,110 and they did not need any unknown second supplier. 685 00:33:40,150 --> 00:33:43,070 - And Wal-Mart just refused because of this pressure 686 00:33:43,110 --> 00:33:44,420 that Nintendo put on them. 687 00:33:45,720 --> 00:33:50,160 - We were fanatics about retail space, okay? 688 00:33:52,030 --> 00:33:53,770 That became a thing we leveraged. 689 00:33:53,820 --> 00:33:56,250 "Hey, you're really doing well with the product, Mr. Retailer, 690 00:33:56,300 --> 00:33:59,870 "but guess how much better you could be if you had 20, 691 00:33:59,910 --> 00:34:03,130 30, 40 feet of Nintendo product." 692 00:34:03,170 --> 00:34:05,480 - And "Super Mario World"is included. 693 00:34:05,530 --> 00:34:07,790 - Okay, okay, we'll get it for him. 694 00:34:09,530 --> 00:34:13,620 - So we developed a strategy on how to change this. 695 00:34:15,190 --> 00:34:19,450 - I came up with an idea of opening a Sega Game Store 696 00:34:19,500 --> 00:34:23,500 right in front of Wal-Mart headquarter in Arkansas. 697 00:34:23,540 --> 00:34:26,420 - We rented a store in a shopping mall 698 00:34:26,460 --> 00:34:29,720 literally as close to Wal-Mart headquarters 699 00:34:29,770 --> 00:34:31,640 in Bentonville as you could get, 700 00:34:31,680 --> 00:34:35,770 and we put as many TVs and Sega Genesis 701 00:34:35,820 --> 00:34:38,510 in there as we could and a big sign out front 702 00:34:38,560 --> 00:34:41,690 that said, "Come play Sega Genesis." 703 00:34:41,740 --> 00:34:43,390 - Free of charge. 704 00:34:43,430 --> 00:34:46,300 - We had lines of teenagers out the door. 705 00:34:46,350 --> 00:34:49,920 - The store became very popular for Wal-Mart employees. 706 00:34:51,180 --> 00:34:53,530 - We bought every billboard leading in and out 707 00:34:53,570 --> 00:34:56,050 of Bentonville with Sega advertising. 708 00:34:56,100 --> 00:34:58,530 We bought the football cushions 709 00:34:58,580 --> 00:35:01,840 at the University of Arkansas football stadium. 710 00:35:04,280 --> 00:35:08,280 After a while, a senior VP of Wal-Mart called me up, 711 00:35:08,330 --> 00:35:10,760 and he said, "Tom, stop it. 712 00:35:10,810 --> 00:35:14,680 We'll give you a four-foot section in Wal-Mart stores." 713 00:35:14,720 --> 00:35:17,900 Because Wal-Mart is such a powerful retailer, 714 00:35:17,950 --> 00:35:20,640 all the other retailers gave us more space 715 00:35:20,690 --> 00:35:23,560 and were less afraid of Nintendo punishment. 716 00:35:25,470 --> 00:35:27,960 That changed the business dramatically. 717 00:35:34,610 --> 00:35:37,310 - As the company started to grow very fast, 718 00:35:37,360 --> 00:35:40,050 we brought in people from much bigger company 719 00:35:40,100 --> 00:35:43,540 because we are aiming to be a bigger company. 720 00:35:45,540 --> 00:35:47,800 - Sega was such a distant player. 721 00:35:47,840 --> 00:35:49,280 It wasn't like they were second. 722 00:35:49,320 --> 00:35:51,850 It was like they were 14th. They were that far down. 723 00:35:51,890 --> 00:35:55,590 Nintendo was so dominant. - "Nintendo Power." 724 00:35:55,640 --> 00:35:58,510 - So I got a call from Tom, from Tom Kalinske. 725 00:35:58,550 --> 00:36:01,380 He needed some help doing marketing, 726 00:36:01,420 --> 00:36:03,080 and he asked if I would do it. 727 00:36:03,120 --> 00:36:04,470 - Mario! 728 00:36:04,510 --> 00:36:07,080 - It was not dissimilar to what I did at Reebok, 729 00:36:07,120 --> 00:36:09,740 which was trying to unseat a category leader. 730 00:36:09,780 --> 00:36:12,260 - No-no-nobody. 731 00:36:12,300 --> 00:36:13,780 - Part of the reason of going to Reebok 732 00:36:13,830 --> 00:36:16,220 was the challenge of slaying the beast of Nike. 733 00:36:16,260 --> 00:36:17,440 - Impossible. 734 00:36:17,480 --> 00:36:18,440 - And we came up with this idea 735 00:36:18,480 --> 00:36:19,880 called the Reebok Pump. 736 00:36:21,180 --> 00:36:22,710 It was totally a marketing gimmick. 737 00:36:22,750 --> 00:36:24,710 It made your foot a lot hotter. 738 00:36:24,750 --> 00:36:26,970 It didn't really give you any more support. 739 00:36:29,190 --> 00:36:31,630 But at the end of the day, it was one of those things 740 00:36:31,670 --> 00:36:34,060 that just caught the consumer psyche. 741 00:36:35,980 --> 00:36:37,850 - Steve Race, the first thing we heard about 742 00:36:37,890 --> 00:36:41,550 is his wild TV commercial at Reebok. 743 00:36:41,590 --> 00:36:43,330 - One guy is wearing Nikes. 744 00:36:43,380 --> 00:36:46,080 The other guy is wearing Reebok. 745 00:36:46,120 --> 00:36:48,340 They both jump off this bridge. 746 00:36:53,480 --> 00:36:55,220 Commercial ran once. 747 00:36:56,910 --> 00:37:00,000 - Steve Race was a terrorist for A-type personalities. 748 00:37:00,050 --> 00:37:02,750 If he was a college course, he'd be Trouble and Difficulty. 749 00:37:04,660 --> 00:37:06,880 - I remember Steve and I playing tennis. 750 00:37:06,920 --> 00:37:09,270 He had a mean serve. 751 00:37:09,320 --> 00:37:11,840 I think he was aiming for my head most of the time. 752 00:37:11,890 --> 00:37:13,670 - Sega had a bad reputation. 753 00:37:18,200 --> 00:37:20,460 I just didn't wanna be the puppet that would be pulled 754 00:37:20,500 --> 00:37:23,370 by a puppet master 7,000 miles away. 755 00:37:24,720 --> 00:37:26,640 I didn't know who the puppet master was. 756 00:37:26,680 --> 00:37:28,990 Obviously, it turned out to be Nakayama-san. 757 00:37:31,510 --> 00:37:33,780 Nakayama was the head of SOJ, 758 00:37:33,820 --> 00:37:35,780 and he really was the patriarch 759 00:37:35,820 --> 00:37:37,560 and the prime mover in all of Sega. 760 00:37:37,610 --> 00:37:40,170 Nothing went out without Nakayama's approval 761 00:37:40,220 --> 00:37:41,650 and endorsement. 762 00:37:41,700 --> 00:37:46,310 - Nakayama-san was very difficult for many people. 763 00:37:46,350 --> 00:37:49,710 If you do not deliver, he was brutal. 764 00:37:49,750 --> 00:37:52,840 - We'd all be on alert that he was coming in, 765 00:37:52,880 --> 00:37:54,280 and there was this presence, 766 00:37:54,320 --> 00:37:56,760 almost of evil, that came into the office. 767 00:37:56,800 --> 00:37:59,110 - He had very long hair 768 00:37:59,150 --> 00:38:01,410 that he kind of wound around the top of his head. 769 00:38:02,760 --> 00:38:04,330 - We had all these ways that we thought 770 00:38:04,370 --> 00:38:06,550 Nakayama might meet his demise, 771 00:38:06,590 --> 00:38:09,730 and one of those was that his hair would get caught 772 00:38:09,770 --> 00:38:11,380 in the rotor blades of a helicopter 773 00:38:11,420 --> 00:38:14,470 and pull him around in a very Gatsby-esque death. 774 00:38:17,170 --> 00:38:20,520 - To me, Hayao Nakayama was a cartoon character, 775 00:38:20,560 --> 00:38:22,910 and I loved talking about him. 776 00:38:22,960 --> 00:38:24,000 I mean, we all did, you know? 777 00:38:24,040 --> 00:38:25,570 He had weird hair, 778 00:38:25,610 --> 00:38:27,050 he had a weird sensibility, 779 00:38:27,090 --> 00:38:28,740 and he carried a very big stick. 780 00:38:30,790 --> 00:38:35,710 The Japanese-U.S. relationship is kind of confusing. 781 00:38:35,750 --> 00:38:39,580 It really kind of starts with an American serviceman, 782 00:38:39,620 --> 00:38:43,590 David Rosen, in Japan during the war 783 00:38:43,630 --> 00:38:45,020 and then coming home and saying, 784 00:38:45,070 --> 00:38:46,500 "Hey, there's an opportunity me 785 00:38:46,540 --> 00:38:51,110 to sell arcade games from Japan into the U.S." 786 00:38:52,160 --> 00:38:55,950 We called each other SOJ and SOA, 787 00:38:55,990 --> 00:38:59,250 Sega of Japan and Sega of America. 788 00:39:03,170 --> 00:39:05,910 - I don't think anyone in Japan thought 789 00:39:05,960 --> 00:39:09,310 taking Nintendo on directly was a good idea, 790 00:39:09,350 --> 00:39:12,400 but it was something I felt we needed to do. 791 00:39:19,450 --> 00:39:20,970 - People hate advertising in general. 792 00:39:21,010 --> 00:39:24,710 You know, if I go to a party and I say I'm a filmmaker, 793 00:39:24,760 --> 00:39:26,020 they go, "Oh, what films did you make?" 794 00:39:26,060 --> 00:39:27,670 And they think of, like, really good films. 795 00:39:27,720 --> 00:39:29,460 And you say, "Oh, I'm an author," 796 00:39:29,500 --> 00:39:31,110 they think of a good book that they've read lately. 797 00:39:31,150 --> 00:39:32,630 And if you say you're in advertising, 798 00:39:32,680 --> 00:39:35,200 they think of the shittiest ad they've seen in months. 799 00:39:35,250 --> 00:39:37,070 - Oh, yeah! - Snap into a Slim Jim! 800 00:39:37,120 --> 00:39:38,600 - Sizzler. 801 00:39:38,640 --> 00:39:42,040 - We had four agencies pitching to us, big names, 802 00:39:42,080 --> 00:39:45,170 and Goodby was a small group. 803 00:39:45,210 --> 00:39:47,300 Jeff was the lead. 804 00:39:47,340 --> 00:39:49,910 - We, at the time, had just had 805 00:39:49,960 --> 00:39:51,610 one of our original partners leave, 806 00:39:51,650 --> 00:39:54,530 and Rich and I were left here and were kind of like, 807 00:39:54,570 --> 00:39:55,660 "We gotta win this, you know?" 808 00:39:55,700 --> 00:39:56,830 Good morning. 809 00:39:56,880 --> 00:39:58,180 Thanks for having us here. 810 00:39:58,230 --> 00:40:00,050 The pitch to Sega was probably one 811 00:40:00,100 --> 00:40:02,320 of the most elaborate pitches we've ever done. 812 00:40:02,360 --> 00:40:05,890 We had every person in the company become an expert 813 00:40:05,930 --> 00:40:08,320 in every game you could play on the Genesis. 814 00:40:08,370 --> 00:40:09,710 So everybody came out 815 00:40:09,760 --> 00:40:11,760 with these beautiful athletic jackets, 816 00:40:11,800 --> 00:40:13,410 and we put a sound system in there 817 00:40:13,460 --> 00:40:15,810 that we rented from the Grateful Dead. 818 00:40:15,850 --> 00:40:17,460 We definitely went overboard. 819 00:40:17,510 --> 00:40:19,120 Eh, lighten up. 820 00:40:19,160 --> 00:40:20,460 The agencies we were up against 821 00:40:20,510 --> 00:40:21,860 were really the best agencies in the country, 822 00:40:21,900 --> 00:40:23,770 and I really thought they'd think of something 823 00:40:23,820 --> 00:40:24,990 to beat us with. 824 00:40:25,030 --> 00:40:26,510 - This work is the best work 825 00:40:26,560 --> 00:40:28,820 we have ever done as a company. 826 00:40:28,860 --> 00:40:31,650 I can't wait to produce it. So I hope you like it. 827 00:40:31,690 --> 00:40:34,520 - This is your brain. 828 00:40:34,570 --> 00:40:37,660 This is your brain on Nintendo. 829 00:40:37,700 --> 00:40:39,480 And this is your brain on Sega. 830 00:40:45,450 --> 00:40:47,320 - Whoo! - Ooh! 831 00:40:47,360 --> 00:40:49,150 - What a ride. 832 00:40:49,190 --> 00:40:52,760 - And it worked. 833 00:40:52,800 --> 00:40:54,720 - They overwhelmed us with their pitch. 834 00:40:54,760 --> 00:40:56,540 - We did the first commercials, 835 00:40:56,590 --> 00:40:58,760 and one of them was about this guy who started off 836 00:40:58,810 --> 00:41:00,680 in a very straight kind of outfit... 837 00:41:00,720 --> 00:41:04,120 - And then transformed into a really cool guy... 838 00:41:04,160 --> 00:41:06,730 - Welcome to the next level! 839 00:41:06,770 --> 00:41:08,900 - Playing Sega Genesis. 840 00:41:11,430 --> 00:41:13,430 - Welcome to the next level. 841 00:41:13,470 --> 00:41:15,000 - I thought "Welcome to the next level" 842 00:41:15,040 --> 00:41:17,170 was a great line because it rewarded you 843 00:41:17,220 --> 00:41:18,610 for playing the thing well. 844 00:41:18,650 --> 00:41:20,440 It promised that there was depth to the games. 845 00:41:20,480 --> 00:41:22,400 You got better and could get up higher. 846 00:41:22,440 --> 00:41:23,750 - On the Sega Genesis. 847 00:41:23,790 --> 00:41:26,360 - It was also saying to the competition 848 00:41:26,400 --> 00:41:28,100 that "you're not the next level. 849 00:41:28,140 --> 00:41:29,530 You're behind." 850 00:41:29,580 --> 00:41:31,540 I thought that was absolutely brilliant. 851 00:41:32,970 --> 00:41:34,360 - But I don't think it would have worked 852 00:41:34,410 --> 00:41:36,020 without the Sega Scream. 853 00:41:36,060 --> 00:41:39,200 The Sega Scream was what really drove the thing in the end. 854 00:41:40,500 --> 00:41:41,760 Sega! 855 00:41:41,810 --> 00:41:42,850 - There was something about the way 856 00:41:42,900 --> 00:41:44,070 the guy did it... - Sega! 857 00:41:44,110 --> 00:41:45,420 - That was just really funny. 858 00:41:45,460 --> 00:41:47,600 - Sega! - It was slightly Japanese. 859 00:41:47,640 --> 00:41:48,770 - Sega! - Just absolutely-- 860 00:41:48,810 --> 00:41:49,950 you couldn't get it out of your head. 861 00:41:49,990 --> 00:41:52,340 - Sega! Sega! Sega! Sega! Sega! 862 00:41:52,380 --> 00:41:54,210 - Sega! - Sega! Sega! 863 00:41:56,040 --> 00:41:58,390 - I would go pick up my daughters at school, 864 00:41:58,430 --> 00:42:00,610 and when they saw me, they'd say, "Sega!" 865 00:42:00,650 --> 00:42:01,960 - Sega! - Sega! 866 00:42:02,000 --> 00:42:04,220 - Sega! - We kind of owned 867 00:42:04,260 --> 00:42:06,920 something that Nintendo didn't have. 868 00:42:06,960 --> 00:42:08,570 They were kind of scrubbed and clean 869 00:42:08,620 --> 00:42:10,620 and Disney-ish and so on, 870 00:42:10,660 --> 00:42:15,010 and we wanted it to be kind of uncool to be a Nintendo kid. 871 00:42:15,060 --> 00:42:17,280 That was our explicit intention. 872 00:42:17,320 --> 00:42:18,580 - Sega! Sega! 873 00:42:18,630 --> 00:42:20,800 - The advertising was extremely competitive. 874 00:42:20,850 --> 00:42:24,760 I mean, we made a lot of fun of Nintendo. 875 00:42:24,810 --> 00:42:26,200 - Look, a cat massager. 876 00:42:26,240 --> 00:42:27,590 Spread cheese snacks. 877 00:42:27,640 --> 00:42:29,200 Use them to tenderize meat. 878 00:42:29,250 --> 00:42:31,250 - Team Sega represented the antiestablishment team. 879 00:42:31,290 --> 00:42:35,160 Nintendo was the Soviet Union, and Sega were the guys 880 00:42:35,210 --> 00:42:37,300 that were throwing Molotov cocktails. 881 00:42:37,340 --> 00:42:38,860 - Hey! 882 00:42:38,910 --> 00:42:40,650 You still don't have a Sega CD? 883 00:42:40,690 --> 00:42:42,300 - Huh? - What are you waiting for, 884 00:42:42,350 --> 00:42:44,740 Nintendo to make one? Show him. 885 00:42:44,780 --> 00:42:47,260 - Whoa! 886 00:42:47,310 --> 00:42:49,960 - Whoa, color. 887 00:42:50,010 --> 00:42:51,660 - And you just try not to respond 888 00:42:51,700 --> 00:42:53,570 to those kinds of things. - Sega! 889 00:42:53,620 --> 00:42:54,880 - Treat them as though they're--you know, 890 00:42:54,920 --> 00:42:56,190 they're doing that because they're desperate. 891 00:42:56,230 --> 00:42:57,530 We kicked off each launch 892 00:42:57,580 --> 00:42:59,010 with a three-pronged attack, including... 893 00:42:59,060 --> 00:43:00,840 I joined in March of 1992. 894 00:43:00,890 --> 00:43:02,320 "Nintendo Power" coverage, and online... 895 00:43:02,370 --> 00:43:04,240 When I first arrived, there was still sort of a-- 896 00:43:04,280 --> 00:43:06,720 I wouldn't say a dismissive attitude but a feeling that, 897 00:43:06,760 --> 00:43:09,890 "You know what? This is really not serious." 898 00:43:09,940 --> 00:43:11,290 That quickly changed. 899 00:43:11,330 --> 00:43:13,510 - The Sega Genesis has blast processing. 900 00:43:13,550 --> 00:43:15,030 Super Nintendo doesn't. 901 00:43:16,810 --> 00:43:18,430 So what's blast processing do? 902 00:43:18,470 --> 00:43:20,860 - This "blast processing" thing, 903 00:43:20,910 --> 00:43:23,560 it was a total fabrication of advertising people. 904 00:43:23,600 --> 00:43:26,000 - I like the one when they said the blast processing. 905 00:43:26,040 --> 00:43:28,480 - Kids would come into focus groups, and they'd go, 906 00:43:28,520 --> 00:43:30,570 "Yeah, I know that Nintendo has 16-bit, 907 00:43:30,610 --> 00:43:33,610 but Sega has blast processing." It was crazy. 908 00:43:33,660 --> 00:43:35,920 - And what if you don't have blast processing? 909 00:43:35,960 --> 00:43:38,620 - And they have a little truck for Nintendo. 910 00:43:38,660 --> 00:43:40,880 - I would have loved to have seen the faces 911 00:43:40,930 --> 00:43:42,930 of the Nintendo people when that thing ran. 912 00:43:42,970 --> 00:43:44,410 I would just love it. 913 00:43:44,450 --> 00:43:46,060 - "Blast processing," 914 00:43:46,110 --> 00:43:48,370 as though it was technology-related, 915 00:43:48,410 --> 00:43:50,760 was kind of vaporware, but it was catchy, 916 00:43:50,810 --> 00:43:52,240 and it worked. 917 00:43:53,550 --> 00:43:56,030 - Their advertising was very effective. 918 00:43:56,070 --> 00:44:00,340 It tended to make it uncool to play Nintendo. 919 00:44:00,380 --> 00:44:01,600 - Which is fine, really, 920 00:44:01,640 --> 00:44:04,560 if you don't mind being sucked dry. 921 00:44:05,910 --> 00:44:07,820 - You gotta give them credit. - Sega! 922 00:44:07,870 --> 00:44:10,040 - I think Kalinske did a great job. 923 00:44:10,090 --> 00:44:11,740 - Sega! - Sega! 924 00:44:11,780 --> 00:44:13,870 - What Sega has been doing to make these ads, 925 00:44:13,920 --> 00:44:15,350 they should just keep on doing more of it 926 00:44:15,400 --> 00:44:17,050 because these ads are great. 927 00:44:17,090 --> 00:44:18,570 - All the kids thought it was cool. 928 00:44:18,620 --> 00:44:20,180 - Sega has the coolest ads, the best games. 929 00:44:20,230 --> 00:44:22,400 - And as a result, the company was cool. 930 00:44:22,450 --> 00:44:25,800 - Nintendo's like, "Where have they been?" 931 00:44:25,840 --> 00:44:27,760 - You saw it on TV shows. 932 00:44:27,800 --> 00:44:31,190 People were picking up the popularity of Sega. 933 00:44:31,240 --> 00:44:33,370 - I'm going to Todd's. He has Genesis. 934 00:44:33,410 --> 00:44:36,720 - She doesn't even have Sega. She's such a troglodyte. 935 00:44:36,760 --> 00:44:39,590 - Hell hath no fury like a woman scorned for Sega. 936 00:44:39,640 --> 00:44:41,460 - I mean, we were becoming 937 00:44:41,510 --> 00:44:43,900 as popular or more popular than Nintendo. 938 00:44:45,340 --> 00:44:47,640 - To Sega, we say congratulations 939 00:44:47,690 --> 00:44:50,210 for bringing us the 16-bit Game of the Year, 940 00:44:50,260 --> 00:44:52,390 Sonic the Hedgehog. 941 00:44:52,430 --> 00:44:57,350 - I got a call the other day that an 18-year-old was saying 942 00:44:57,390 --> 00:44:59,870 that Sonic the Hedgehog made him forget about girls. 943 00:44:59,920 --> 00:45:03,660 So I consider that a great achievement. 944 00:45:05,970 --> 00:45:08,400 - When the very first Sonic game came 945 00:45:08,450 --> 00:45:11,630 to be released and became very successful, 946 00:45:11,670 --> 00:45:15,110 obviously, we wanted to create a sequel. 947 00:45:15,150 --> 00:45:18,020 - And part and parcel with making that successful 948 00:45:18,070 --> 00:45:19,590 was, "How are we gonna launch it? 949 00:45:19,630 --> 00:45:22,030 How are we going to support it?" 950 00:45:22,070 --> 00:45:24,460 - We started looking at what else we could go and do. 951 00:45:24,510 --> 00:45:27,030 - "Ha! Let's do something like the movies. 952 00:45:27,080 --> 00:45:29,820 Let's do a world distribution date." 953 00:45:29,860 --> 00:45:32,520 - We were going to make the game available 954 00:45:32,560 --> 00:45:35,520 at every retail outlet on the same day. 955 00:45:35,560 --> 00:45:38,740 I know this sounds silly today, but it was hard to do. 956 00:45:41,180 --> 00:45:44,530 - "We'll do it on a Tuesday... 957 00:45:44,570 --> 00:45:46,310 Sonic Two-sday." 958 00:45:47,840 --> 00:45:51,360 - Last Christmas, the world felt its first Sonic boom 959 00:45:51,400 --> 00:45:53,280 when "Sonic the Hedgehog 1" 960 00:45:53,320 --> 00:45:57,540 became the most popular video game of 1991. 961 00:45:59,850 --> 00:46:01,280 - Writing for Tom was always great. 962 00:46:01,330 --> 00:46:02,720 I don't know what it was. 963 00:46:02,760 --> 00:46:05,200 He has a natural sense about what it will take 964 00:46:05,240 --> 00:46:06,510 to draw in the audience. 965 00:46:06,550 --> 00:46:10,160 He's charismatic, and he knows it and uses it. 966 00:46:10,210 --> 00:46:12,560 I'll say he uses it for good rather than for evil. 967 00:46:12,600 --> 00:46:16,040 - We believe "Sonic 2" will be America's hottest video game 968 00:46:16,080 --> 00:46:17,560 this Christmas, and... 969 00:46:17,600 --> 00:46:21,000 both: We project to sell more than 2 million copies... 970 00:46:21,040 --> 00:46:24,350 - In the United States between now and Christmas. 971 00:46:24,390 --> 00:46:26,960 - We have Tom speaking, and then I have Joey Lawrence 972 00:46:27,000 --> 00:46:29,180 running out from behind the curtain. 973 00:46:32,270 --> 00:46:35,270 You know, we could never afford the big Hollywood names. 974 00:46:35,320 --> 00:46:37,670 - Dustin Diamond, come on up here. 975 00:46:39,450 --> 00:46:41,500 - But we could afford teen idols. 976 00:46:41,540 --> 00:46:43,460 - And if you thought the first one was good, 977 00:46:43,500 --> 00:46:44,760 wait till you see the second one. 978 00:46:44,810 --> 00:46:47,020 - You know, "Sonic 2" is great. 979 00:46:47,070 --> 00:46:49,550 It's better than the first one. You have great graphics. 980 00:46:49,590 --> 00:46:51,900 Sonic has a new friend called Tails, 981 00:46:51,940 --> 00:46:53,510 a fox, two tails, cool. 982 00:46:57,300 --> 00:47:01,650 - Sonic Two-sday was so big. 983 00:47:01,690 --> 00:47:04,430 It was a bodacious idea. 984 00:47:04,480 --> 00:47:05,700 - Oh, it's great, and it's great 985 00:47:05,740 --> 00:47:07,040 because it's two-player, you know? 986 00:47:07,090 --> 00:47:09,570 So you get to play with more than just yourself. 987 00:47:10,960 --> 00:47:12,400 - But she's--but this is the exact same board, 988 00:47:12,440 --> 00:47:13,920 and we're playing here together, 989 00:47:13,960 --> 00:47:15,230 but she's in a different part of the board than I am. 990 00:47:15,270 --> 00:47:17,790 So it's something never seen before, really. 991 00:47:17,840 --> 00:47:19,360 It's great. 992 00:47:19,410 --> 00:47:21,100 - We launched in Japan, 993 00:47:21,150 --> 00:47:23,500 Australia, Europe, all over the world. 994 00:47:25,190 --> 00:47:26,630 "Sonic 2" is super. 995 00:47:26,670 --> 00:47:28,070 - Pretty good. - It's brilliant. 996 00:47:28,110 --> 00:47:30,680 - Never, ever been done before. 997 00:47:30,720 --> 00:47:32,200 - It's comparable to the launch 998 00:47:32,240 --> 00:47:34,290 of Madonna's "Sex" book, you know, Sonic Two-sday. 999 00:47:34,330 --> 00:47:36,160 - I'm right below you. 1000 00:47:38,420 --> 00:47:39,950 - It was an amazing hit. 1001 00:47:39,990 --> 00:47:41,560 - Sega! 1002 00:47:48,040 --> 00:47:49,130 - Oh! 1003 00:47:49,170 --> 00:47:51,000 - When Genesis succeeded so much 1004 00:47:51,050 --> 00:47:53,090 here in America, in Japan, 1005 00:47:53,130 --> 00:47:55,180 it did not necessarily do great. 1006 00:47:55,220 --> 00:47:57,490 So that way, I think Sega of America 1007 00:47:57,530 --> 00:48:01,100 became the valuable core of entire Sega business. 1008 00:48:03,540 --> 00:48:06,370 - Sega was able to make a dent in the U.S., 1009 00:48:06,410 --> 00:48:08,580 and it kept us on our toes 1010 00:48:08,630 --> 00:48:10,330 because we were in a real battle. 1011 00:48:12,070 --> 00:48:15,160 - As we grew, as we added more people, 1012 00:48:15,200 --> 00:48:17,510 Nintendo was in our target. 1013 00:48:18,900 --> 00:48:21,550 It became a kind of "Spy vs. Spy." 1014 00:48:21,600 --> 00:48:25,210 Whatever Nintendo would do, we would try to do better. 1015 00:48:25,250 --> 00:48:27,300 - With the Sega Menacer in my hands, 1016 00:48:27,340 --> 00:48:29,340 I'm not afraid of enemy tanks. 1017 00:48:29,390 --> 00:48:30,780 - Sega! 1018 00:48:32,390 --> 00:48:35,790 - At one point, I was told there was a dartboard 1019 00:48:35,830 --> 00:48:39,050 in Nintendo's office with my face on it. 1020 00:48:39,090 --> 00:48:41,140 - When we went to analyst meetings, 1021 00:48:41,180 --> 00:48:44,050 it would be Tom Kalinske and Peter Main. 1022 00:48:44,100 --> 00:48:46,320 - Well, Peter and I didn't get along very well. 1023 00:48:47,410 --> 00:48:50,230 - A lot of yelling and screaming at various events. 1024 00:48:50,280 --> 00:48:52,540 - I remember getting up to speak 1025 00:48:52,590 --> 00:48:53,980 at one of those meetings, when I said, 1026 00:48:54,020 --> 00:48:55,330 "Boy, following Peter Main 1027 00:48:55,370 --> 00:48:57,680 is like following Dr. Kevorkian." 1028 00:48:57,720 --> 00:49:01,290 - It erupted into a bit of an interesting 1029 00:49:01,330 --> 00:49:03,290 after-three-glasses-of-wine conversation 1030 00:49:03,340 --> 00:49:05,290 that carried on down Fifth Avenue 1031 00:49:05,340 --> 00:49:07,510 in a raging snowstorm. 1032 00:49:07,560 --> 00:49:11,910 Thank goodness third-party intervention happened. 1033 00:49:20,530 --> 00:49:25,050 - As '93 started, there was a big game coming... 1034 00:49:25,100 --> 00:49:28,620 and it's gonna be available not just for Super NES 1035 00:49:28,660 --> 00:49:30,800 but also for Sega Genesis. 1036 00:49:32,970 --> 00:49:34,980 - Mortal Kombat! 1037 00:49:37,020 --> 00:49:39,280 - Mortal Kombat! 1038 00:49:39,330 --> 00:49:41,680 - "Mortal Kombat" was a huge coup for us. 1039 00:49:41,720 --> 00:49:45,460 For once, we get a big title. 1040 00:49:45,510 --> 00:49:48,080 - Ahh! 1041 00:49:48,120 --> 00:49:51,210 - We had "Mortal Kombat" in its original version 1042 00:49:51,250 --> 00:49:53,780 with all the possibility for gore and, you know, 1043 00:49:53,820 --> 00:49:56,000 chopping people's heads off and stabbing them 1044 00:49:56,040 --> 00:49:57,610 and what have you. 1045 00:49:57,650 --> 00:50:00,520 - There has been so much violence swallowed into my soul 1046 00:50:00,570 --> 00:50:02,520 over the years; nothing was new. 1047 00:50:02,570 --> 00:50:05,700 I mean, consider Roadrunner. 1048 00:50:07,180 --> 00:50:11,360 - "Mortal Kombat" went into a graphic violence area 1049 00:50:11,400 --> 00:50:15,280 that Nintendo hadn't allowed on their consoles. 1050 00:50:15,320 --> 00:50:18,240 - We had long discussions about whether 1051 00:50:18,280 --> 00:50:20,410 we should allow the blood. 1052 00:50:22,410 --> 00:50:24,940 I ultimately decided that we would not. 1053 00:50:24,980 --> 00:50:26,850 - Fight! 1054 00:50:26,900 --> 00:50:29,640 - The Nintendo version showed green gore. 1055 00:50:31,070 --> 00:50:32,990 Well, what human being has green gore in them? 1056 00:50:33,030 --> 00:50:35,300 - I was expecting we might actually get 1057 00:50:35,340 --> 00:50:37,340 some positive feedback from parents that say, 1058 00:50:37,390 --> 00:50:38,340 you know, "Bless you. 1059 00:50:38,390 --> 00:50:39,820 "You kept the violence 1060 00:50:39,870 --> 00:50:41,000 out of this game." 1061 00:50:41,040 --> 00:50:42,260 And on the contrary, 1062 00:50:42,300 --> 00:50:44,480 I got lots of letters from parents 1063 00:50:44,520 --> 00:50:47,480 criticizing Nintendo for censoring the game, 1064 00:50:47,530 --> 00:50:50,090 and we got our clocks cleaned. 1065 00:50:50,140 --> 00:50:52,180 - Ahh! 1066 00:50:52,230 --> 00:50:55,660 - Tom wins! - We outsold them five to one. 1067 00:50:58,930 --> 00:50:59,890 - Sega! - Sega! 1068 00:50:59,930 --> 00:51:01,370 - Sega! - Sega! 1069 00:51:01,410 --> 00:51:02,720 - Sega! - Sega, Sega, Sega! 1070 00:51:02,760 --> 00:51:05,500 - All right, a Sega Genesis! 1071 00:51:05,540 --> 00:51:07,500 - Sega! - It's a Sega! 1072 00:51:07,550 --> 00:51:08,550 - Sega! 1073 00:51:08,590 --> 00:51:12,420 - Whoa! 1074 00:51:12,460 --> 00:51:13,680 - No way! 1075 00:51:16,640 --> 00:51:19,120 - # Back with another one of those block-rockin' beats # 1076 00:51:22,210 --> 00:51:24,480 - I mean, we dethroned Nintendo. 1077 00:51:24,520 --> 00:51:25,610 - Fight! 1078 00:51:25,650 --> 00:51:28,000 - "Mortal Kombat" on Sega Genesis 1079 00:51:28,040 --> 00:51:30,310 is the best video game ever. 1080 00:51:30,350 --> 00:51:31,920 - Urkel wins! 1081 00:51:31,960 --> 00:51:34,220 - I think "Donkey Kong" is the best game ever. 1082 00:51:34,270 --> 00:51:35,700 - "Donkey Kong" sucks. 1083 00:51:35,750 --> 00:51:37,100 - You know something? You suck. 1084 00:51:42,410 --> 00:51:44,930 - The most complimentary thing I can say about Nintendo 1085 00:51:44,970 --> 00:51:49,810 was the fact that they... reinvented video games. 1086 00:51:49,850 --> 00:51:51,330 - Thank you, Peter. 1087 00:51:51,370 --> 00:51:55,460 - They had to create, out of nothing, an industry. 1088 00:51:55,510 --> 00:51:58,550 They not only did that; they did it well. 1089 00:52:07,820 --> 00:52:11,040 - Good afternoon. Nintendo. Nintendo. please hold. 1090 00:52:11,090 --> 00:52:13,350 Thank you. May I help you? 1091 00:52:13,390 --> 00:52:16,960 - My path to Nintendo was not so purposeful. 1092 00:52:17,010 --> 00:52:20,100 It was just kind of pure luck. 1093 00:52:20,140 --> 00:52:23,190 I was at a time in my life where I was really searching 1094 00:52:23,230 --> 00:52:27,410 for something great and fun to work on, 1095 00:52:27,450 --> 00:52:29,800 and it was a place that was meant--meant for me. 1096 00:52:32,890 --> 00:52:34,680 - You always had to spell Nintendo 1097 00:52:34,720 --> 00:52:37,460 back in the early '80s. Nin-ten-do. 1098 00:52:37,510 --> 00:52:38,810 - I would get on airplanes, 1099 00:52:38,850 --> 00:52:40,160 and you'd start talking to somebody, 1100 00:52:40,200 --> 00:52:41,550 and you'd give them a business card, 1101 00:52:41,600 --> 00:52:43,510 and they'd say, "What's a Nine-tendo?" 1102 00:52:43,560 --> 00:52:45,470 - People, when I told them I was working for Nintendo, 1103 00:52:45,510 --> 00:52:47,040 they said, "Huh? 1104 00:52:47,080 --> 00:52:49,690 What a--you know, what is that? Is that a dry laundry?" 1105 00:52:50,560 --> 00:52:52,610 - For most of its 99-year history, 1106 00:52:52,650 --> 00:52:55,480 Nintendo made board games and playing cards, 1107 00:52:55,520 --> 00:52:58,830 traditional products for a traditional way of life. 1108 00:52:58,870 --> 00:53:01,660 - Nintendo was some obscure company 1109 00:53:01,700 --> 00:53:04,230 that just had these random helicopter games 1110 00:53:04,270 --> 00:53:08,360 and another kind of wannabe shooter game, 1111 00:53:08,410 --> 00:53:12,280 so it was really nothing from an arcade game standpoint. 1112 00:53:12,320 --> 00:53:16,500 But then Mr. Miyamoto came along. 1113 00:53:16,540 --> 00:53:20,720 - Mr. Miyamoto was the original developer of Donkey Kong 1114 00:53:20,770 --> 00:53:22,330 and the creator of Mario 1115 00:53:22,380 --> 00:53:25,860 as the character chasing him up the construction site. 1116 00:53:25,900 --> 00:53:29,040 - Whereas I was just a guy at Nintendo, 1117 00:53:29,080 --> 00:53:32,820 Miyamoto is the guy, the master, 1118 00:53:32,870 --> 00:53:37,090 and would go on to design some of the best games at Nintendo. 1119 00:53:39,130 --> 00:53:41,920 When "Donkey Kong" first came in, it was really cool 1120 00:53:41,960 --> 00:53:43,530 because you had this little guy 1121 00:53:43,570 --> 00:53:44,790 who you could push up on the thing, 1122 00:53:44,830 --> 00:53:46,570 and he'd climb up ladders. 1123 00:53:46,620 --> 00:53:48,230 You'd go up and, doink, make a mistake. 1124 00:53:48,270 --> 00:53:49,580 One of the barrels would get you. 1125 00:53:49,620 --> 00:53:51,100 You'd say, "Oops, I can do better," 1126 00:53:51,140 --> 00:53:53,020 and then you'd immediately start playing again. 1127 00:53:53,060 --> 00:53:55,370 I mean, just, like, it was unbelievable. 1128 00:53:55,410 --> 00:53:57,630 - We sold over $100 million worth 1129 00:53:57,670 --> 00:53:59,760 of "Donkey Kong" coin-operated video games 1130 00:53:59,810 --> 00:54:01,550 in less than one year, 1131 00:54:01,590 --> 00:54:04,070 and this is a company that had 30 employees. 1132 00:54:04,110 --> 00:54:05,290 - Nintendo of America. 1133 00:54:05,330 --> 00:54:06,640 - We'd get shipments from Japan, 1134 00:54:06,680 --> 00:54:08,680 and I wouldn't know what they were. 1135 00:54:08,730 --> 00:54:10,770 Then one of the days, I open the box, 1136 00:54:10,820 --> 00:54:14,650 and there was this little thing in it. 1137 00:54:18,080 --> 00:54:20,350 - I thought, "This is cool. This is great. 1138 00:54:20,390 --> 00:54:22,130 "Let's, like, give it to everybody. 1139 00:54:22,180 --> 00:54:24,090 Let's bring it over, sell it." 1140 00:54:24,610 --> 00:54:27,660 Well, Mr. Arakawa said, "Hmm, we need to think about this." 1141 00:54:28,880 --> 00:54:31,230 This thing was really risky, and it could fail. 1142 00:54:32,750 --> 00:54:34,750 So I started to get exposed to the fact that there was 1143 00:54:34,800 --> 00:54:38,760 this thing called the debacle of the Atari 2600 1144 00:54:38,800 --> 00:54:41,850 and that there was this thing called the "E.T." cartridge. 1145 00:54:41,890 --> 00:54:45,850 - "E.T." video game? Wow. 1146 00:54:49,290 --> 00:54:52,210 - The game was so bad, so unplayable, 1147 00:54:52,250 --> 00:54:54,640 millions of copies went unsold. 1148 00:54:54,690 --> 00:54:57,730 - It is a legendary landfill, a tomb 1149 00:54:57,780 --> 00:55:00,470 where an entire industry was buried. 1150 00:55:00,520 --> 00:55:03,560 Thousands of copies of one of the epic flops 1151 00:55:03,610 --> 00:55:05,130 in video gaming history 1152 00:55:05,170 --> 00:55:09,050 laid to rest in a New Mexico city's garbage dump. 1153 00:55:11,960 --> 00:55:14,580 - The video game industry is now becoming 1154 00:55:14,620 --> 00:55:16,750 very much like Hula-Hoops: there still may be 1155 00:55:16,800 --> 00:55:18,670 a lot of people fooling around with them, 1156 00:55:18,710 --> 00:55:20,410 but profits are getting to be quite negligible. 1157 00:55:20,450 --> 00:55:22,240 - Video game cartridges as Atari. 1158 00:55:22,280 --> 00:55:24,060 - Given the collapse of Atari, 1159 00:55:24,110 --> 00:55:25,760 the idea of actually introducing 1160 00:55:25,800 --> 00:55:27,410 a home video game system 1161 00:55:27,460 --> 00:55:29,720 in the United States was very risky. 1162 00:55:29,760 --> 00:55:33,770 - I was, "the original salesperson" at Nintendo. 1163 00:55:33,810 --> 00:55:35,160 I had family members say, 1164 00:55:35,200 --> 00:55:36,900 "You're out of your mind. You have kids. 1165 00:55:36,950 --> 00:55:38,470 "How are you gonna support your family 1166 00:55:38,510 --> 00:55:40,690 when this thing dies in six months?" 1167 00:55:40,730 --> 00:55:43,650 As far as appetite for video games, 1168 00:55:43,690 --> 00:55:44,820 there was none. 1169 00:55:44,870 --> 00:55:47,610 - Video games: play them for fun, 1170 00:55:47,650 --> 00:55:50,260 but invest in them at your own risk. 1171 00:55:50,310 --> 00:55:52,050 - But we still had really great games, 1172 00:55:52,090 --> 00:55:54,180 and that's when Mr. Arakawa said, 1173 00:55:54,220 --> 00:55:55,660 "We should do this." 1174 00:55:55,700 --> 00:55:57,010 - We ultimately made the decision 1175 00:55:57,050 --> 00:55:59,270 to introduce the NES to New York, 1176 00:55:59,320 --> 00:56:02,140 the epicenter of the toy industry. 1177 00:56:04,150 --> 00:56:05,840 - Our pitch was very simple. 1178 00:56:05,890 --> 00:56:08,060 - You're playing with power! 1179 00:56:08,110 --> 00:56:09,940 - This is not just a video game. 1180 00:56:09,980 --> 00:56:11,850 It's an entertainment system. 1181 00:56:11,890 --> 00:56:14,370 - It didn't make you think about your Atari. 1182 00:56:14,420 --> 00:56:16,770 - Will your family be the first to witness 1183 00:56:16,810 --> 00:56:20,860 the birth of the incredible Nintendo Entertainment System, 1184 00:56:20,900 --> 00:56:23,820 the first to play with R.O.B, the extraordinary video robot? 1185 00:56:23,860 --> 00:56:26,130 - Parents could say, "Oh, it's got this light gun, 1186 00:56:26,170 --> 00:56:28,130 which is totally new. Look, it's magical." 1187 00:56:29,080 --> 00:56:31,830 - We sent a number of Nintendo employees 1188 00:56:31,870 --> 00:56:33,480 to Hackensack, New Jersey, 1189 00:56:33,520 --> 00:56:37,350 where we had this warehouse that was infested with rats. 1190 00:56:37,400 --> 00:56:39,400 - I couldn't go to the bathroom in the warehouse 1191 00:56:39,440 --> 00:56:42,580 because it was that not-nice. 1192 00:56:42,620 --> 00:56:45,100 There was a huge hurricane that year, 1193 00:56:45,140 --> 00:56:47,670 and the warehouse flooded, and some barrels 1194 00:56:47,710 --> 00:56:49,890 start floating around the parking lot, 1195 00:56:49,930 --> 00:56:53,590 and they have, like, toxic waste symbols on them. 1196 00:56:53,630 --> 00:56:55,760 - For the three months, we did nothing 1197 00:56:55,810 --> 00:56:58,240 but get up in the morning and give demos to kids 1198 00:56:58,290 --> 00:57:01,290 and let kids play while we talked to their parents. 1199 00:57:01,330 --> 00:57:02,990 - Parents were saying, you know, 1200 00:57:03,030 --> 00:57:04,510 "What is this Nintendo thing?" 1201 00:57:04,550 --> 00:57:07,080 - People would show up with cameras and microphones 1202 00:57:07,120 --> 00:57:08,650 and notepads and say... 1203 00:57:08,690 --> 00:57:10,130 - "What are you, on drugs or something? 1204 00:57:10,170 --> 00:57:11,390 "Are you guys crazy? 1205 00:57:11,430 --> 00:57:12,870 No one wants to look at a video game now." 1206 00:57:12,910 --> 00:57:15,130 - I remember this woman walked up to me 1207 00:57:15,170 --> 00:57:16,700 and said, you know, "What is this?" 1208 00:57:16,740 --> 00:57:17,960 and I said, "Oh, it's Nintendo," 1209 00:57:18,000 --> 00:57:20,830 and she said, "Nintendo?" and I said, "Yeah," 1210 00:57:20,880 --> 00:57:23,530 and she goes, "I hope you fail." 1211 00:57:23,570 --> 00:57:25,490 - We left that research session 1212 00:57:25,530 --> 00:57:29,670 feeling a little unsure of ourselves. 1213 00:57:29,710 --> 00:57:33,060 - We had to go out and get rid of the doubt on so many levels. 1214 00:57:34,580 --> 00:57:35,890 We're at war, guys. 1215 00:57:35,930 --> 00:57:37,980 We gotta make believers out of the world 1216 00:57:38,020 --> 00:57:39,290 that this is for real, 1217 00:57:39,330 --> 00:57:41,590 this can happen, this can grow. 1218 00:57:41,640 --> 00:57:44,510 - The word Nintendo means, "Work hard, 1219 00:57:44,550 --> 00:57:46,290 and the fates will smile on you." 1220 00:57:46,340 --> 00:57:49,030 I like that idea that if we all just put forth 1221 00:57:49,080 --> 00:57:51,950 our best efforts, then we'd be successful. 1222 00:57:51,990 --> 00:57:54,130 - The buyer of video games at Toys "R" Us 1223 00:57:54,170 --> 00:57:57,910 was the ultimate skeptic, and his name was Hal. 1224 00:57:57,960 --> 00:57:59,610 When I came in with a video game, he said, 1225 00:57:59,650 --> 00:58:01,830 "Forget it. I don't want you to call me. 1226 00:58:01,870 --> 00:58:03,480 "I don't want you to contact me. 1227 00:58:03,530 --> 00:58:08,050 If I see it starting to sell, you'll hear from me." 1228 00:58:08,100 --> 00:58:11,190 - The day before the NES was supposed to launch, 1229 00:58:11,230 --> 00:58:13,490 commercials were on air. 1230 00:58:13,540 --> 00:58:16,890 We all went to the warehouse and opened champagne 1231 00:58:16,930 --> 00:58:20,630 and literally loaded the truck to take it to FAO Schwarz. 1232 00:58:23,290 --> 00:58:26,330 We went, and we stood outside the window of FAO Schwarz 1233 00:58:26,380 --> 00:58:29,600 and watched someone make the first purchase. 1234 00:58:31,470 --> 00:58:35,080 The person bought, like, every game. 1235 00:58:35,120 --> 00:58:36,690 - All of a sudden, the phone rings. 1236 00:58:36,730 --> 00:58:38,430 "Hey, how come you didn't call me?" 1237 00:58:38,470 --> 00:58:40,650 I said, "Well, Hal, you didn't think it was gonna sell, 1238 00:58:40,690 --> 00:58:42,000 and I didn't want to bother you." 1239 00:58:42,040 --> 00:58:44,440 "The thing's blowing out the stores. 1240 00:58:44,480 --> 00:58:46,050 "Get up here now. Today's Saturday, 1241 00:58:46,090 --> 00:58:48,090 and I'm ready to backup order immediately." 1242 00:58:48,140 --> 00:58:50,700 - It may be the most addictive toy in history. 1243 00:58:50,750 --> 00:58:52,710 - The product started selling like hotcakes. 1244 00:58:52,750 --> 00:58:54,060 - This is as big or bigger 1245 00:58:54,100 --> 00:58:57,280 than anything the toy industry has ever seen. 1246 00:58:57,320 --> 00:58:59,100 - "We're excited about the possibilities 1247 00:58:59,150 --> 00:59:02,460 for this new thing called Nintendo, whatever that is." 1248 00:59:13,210 --> 00:59:14,990 - When Nintendo entered the game, 1249 00:59:15,030 --> 00:59:18,080 the video game market was a losing proposition. 1250 00:59:18,120 --> 00:59:20,080 Nintendo says it brought it back 1251 00:59:20,130 --> 00:59:23,080 with better-quality games and graphics. 1252 00:59:25,830 --> 00:59:28,260 - We decided if we could make a video game system 1253 00:59:28,310 --> 00:59:31,350 with quality games that we would be successful. 1254 00:59:31,400 --> 00:59:32,700 We took that gamble, 1255 00:59:32,750 --> 00:59:35,010 and now I think it's appropriate for us 1256 00:59:35,050 --> 00:59:37,060 to reap the rewards of that gamble. 1257 00:59:37,100 --> 00:59:38,970 That is capitalism. 1258 00:59:41,020 --> 00:59:44,670 - If the NES had not been successfully launched 1259 00:59:44,710 --> 00:59:46,930 in New York, I think it's fair to say 1260 00:59:46,980 --> 00:59:49,890 there would not have been a home video game business. 1261 00:59:51,720 --> 00:59:55,030 - Suddenly, who knew what game was gonna come out? 1262 00:59:56,810 --> 00:59:58,820 Instead of Christmas happening once a year, it's like, 1263 00:59:58,860 --> 01:00:01,380 suddenly Christmas happened just all year long. 1264 01:00:01,430 --> 01:00:03,470 - What the hell are you? 1265 01:00:04,870 --> 01:00:06,480 - What are you? - I'm Batman. 1266 01:00:08,260 --> 01:00:09,650 - I'm from the future. 1267 01:00:12,090 --> 01:00:14,050 - Whoa! 1268 01:00:14,090 --> 01:00:15,700 all: Cowabunga! 1269 01:00:21,580 --> 01:00:23,320 - You know, I remember at the time 1270 01:00:23,360 --> 01:00:26,670 seeing Sega at every trade show and seeing the Sega people, 1271 01:00:26,710 --> 01:00:31,070 and they were trying so hard to be successful, 1272 01:00:31,110 --> 01:00:33,940 but Nintendo was the only game in town 1273 01:00:33,980 --> 01:00:36,550 until Tom came along. 1274 01:00:41,120 --> 01:00:43,300 - When Tom Kalinske joined Sega, 1275 01:00:43,340 --> 01:00:44,600 we knew his background. 1276 01:00:44,640 --> 01:00:47,080 We knew he was a very fine marketer. 1277 01:00:47,130 --> 01:00:49,870 He was a worthy competitor. 1278 01:00:49,910 --> 01:00:52,390 - When Tom showed up, it was a little bit 1279 01:00:52,430 --> 01:00:56,090 of a message to Nintendo that the game was changing. 1280 01:00:56,130 --> 01:00:58,880 - Tom Kalinske's a very smart marketing guy 1281 01:00:58,920 --> 01:01:00,400 feeding the retailer, 1282 01:01:00,440 --> 01:01:03,230 "Yeah, tell me more, tell me more, tell me more." 1283 01:01:03,270 --> 01:01:05,010 - I always thought of Tom Kalinske as, like, 1284 01:01:05,060 --> 01:01:06,450 the character in "The Music Man," 1285 01:01:06,490 --> 01:01:07,840 come into town, 1286 01:01:07,880 --> 01:01:09,710 drum up a lot of sales, get them all excited, 1287 01:01:09,760 --> 01:01:11,930 and when you look kind of behind the scenes, 1288 01:01:11,980 --> 01:01:14,330 there wasn't quite as much there as you would expect. 1289 01:01:16,070 --> 01:01:18,770 - Sega was kind of chipping away at our business, 1290 01:01:18,810 --> 01:01:22,290 and in particular, they were going after the harder edge 1291 01:01:22,330 --> 01:01:23,990 that Nintendo wouldn't do. 1292 01:01:24,030 --> 01:01:26,600 - Something down there sucked their brains out! 1293 01:01:26,640 --> 01:01:29,120 - But we weren't going to chase the other guys. 1294 01:01:29,170 --> 01:01:31,690 That was never a part of Nintendo's strategy, 1295 01:01:31,730 --> 01:01:33,130 to follow the other guys 1296 01:01:33,170 --> 01:01:34,650 or try and do what they were doing. 1297 01:01:34,690 --> 01:01:37,130 Instead it was to do what we do but just do it better. 1298 01:01:38,650 --> 01:01:40,610 - I have to admit, I was not always in favor 1299 01:01:40,660 --> 01:01:41,610 of that strategy. 1300 01:01:45,440 --> 01:01:48,620 Having been at Nintendo for a while, I was young, 1301 01:01:48,660 --> 01:01:50,800 and I still believed that a lot of my thoughts 1302 01:01:50,840 --> 01:01:52,190 were the right way to go, 1303 01:01:52,230 --> 01:01:55,500 and they weren't taken, and maybe, you know, 1304 01:01:55,540 --> 01:01:58,150 burned some bridges along the way. 1305 01:01:58,200 --> 01:01:59,890 - All of a sudden, Bill 1306 01:01:59,940 --> 01:02:03,110 started smoking cigarettes and driving sports cars. 1307 01:02:03,160 --> 01:02:05,590 You know, he'd just kind of, like, turned to the dark side. 1308 01:02:07,030 --> 01:02:11,690 Once Bill got out of Nintendo, he was--he was Bad Bill. 1309 01:02:13,950 --> 01:02:15,950 - The Sega Genesis was doing extremely well, 1310 01:02:16,000 --> 01:02:19,130 and so it made sense for me to switch teams. 1311 01:02:20,650 --> 01:02:22,050 - When he left, 1312 01:02:22,090 --> 01:02:23,660 I think Nintendo felt a sense of--of betrayal. 1313 01:02:25,700 --> 01:02:29,140 - He went to work for Tom, and hey, that's life. 1314 01:02:30,970 --> 01:02:32,530 - It was easy for me, but I think it was difficult 1315 01:02:32,580 --> 01:02:35,060 for the Sega people to accept me. 1316 01:02:35,100 --> 01:02:37,580 - We were giving him a hard time about that, 1317 01:02:37,630 --> 01:02:39,540 perhaps he wasn't true-blue Sega, 1318 01:02:39,590 --> 01:02:41,500 and he says, "You know what I think of Nintendo?" 1319 01:02:41,540 --> 01:02:43,550 and he pointed toward Seattle, 1320 01:02:43,590 --> 01:02:45,070 dropped his pants, 1321 01:02:45,110 --> 01:02:46,980 and mooned Nintendo. 1322 01:02:48,550 --> 01:02:51,810 - Tom always said that it's easy to be 1323 01:02:51,860 --> 01:02:55,690 a number two company challenged to be number one. 1324 01:02:55,730 --> 01:02:58,390 Once we become the number one company, 1325 01:02:58,430 --> 01:03:00,610 that is the real challenge starts. 1326 01:03:00,650 --> 01:03:03,780 - Video games have become a $4 billion-a-year business. 1327 01:03:03,830 --> 01:03:06,000 There is a growing concern on Capitol Hill 1328 01:03:06,050 --> 01:03:08,920 that parents who buy some of those games 1329 01:03:08,960 --> 01:03:11,440 may not realize just how much violence they're getting. 1330 01:03:11,490 --> 01:03:13,140 - Games so violent, bloody, 1331 01:03:13,180 --> 01:03:16,010 and gruesome that parents and politicians have had it. 1332 01:03:16,060 --> 01:03:18,750 - Violent, sexual games available to youngsters. 1333 01:03:18,800 --> 01:03:20,840 - The best thing about games is violence, 1334 01:03:20,890 --> 01:03:22,850 realistic things like blood. 1335 01:03:22,890 --> 01:03:24,630 - He scores--oh! - You know what, Mike? 1336 01:03:24,670 --> 01:03:26,410 You can make their heads bleed on this game. 1337 01:03:26,460 --> 01:03:28,550 - Make somebody's head bleed. - There it is, Mikey. 1338 01:03:28,590 --> 01:03:30,460 Check it out. His head's bleeding. 1339 01:03:30,510 --> 01:03:32,860 - These are not harmless toys. 1340 01:03:32,900 --> 01:03:36,380 They can indeed cause great emotional 1341 01:03:36,420 --> 01:03:38,770 and other damage to a child. 1342 01:03:39,780 --> 01:03:41,730 - They're just out for making money, 1343 01:03:41,780 --> 01:03:44,130 and they're not worrying about the kids' well-being. 1344 01:03:44,170 --> 01:03:46,570 - Along with that huge success came the criticism. 1345 01:03:46,610 --> 01:03:49,050 I did not expect the U.S. Congress to get involved. 1346 01:03:52,750 --> 01:03:54,660 - Like the Grinch who stole Christmas, 1347 01:03:54,700 --> 01:03:57,360 these violent video games threaten to rob 1348 01:03:57,400 --> 01:04:02,100 this particular holiday season of a spirit of goodwill. 1349 01:04:02,150 --> 01:04:07,020 These games teach a child to enjoy inflicting torture. 1350 01:04:07,060 --> 01:04:09,500 - They were threatening the industry 1351 01:04:09,540 --> 01:04:12,850 with severe censorship, so there was a lot at stake. 1352 01:04:12,900 --> 01:04:14,420 - It was largely political. 1353 01:04:14,460 --> 01:04:15,940 "We're gonna restrict your children 1354 01:04:15,990 --> 01:04:18,250 "from being exposed to these violent video games, 1355 01:04:18,290 --> 01:04:20,770 and we're going to make the world safe for democracy." 1356 01:04:20,820 --> 01:04:22,560 It was total nonsense, total bullshit. 1357 01:04:22,600 --> 01:04:24,210 It's business and politics 1358 01:04:24,260 --> 01:04:25,600 meeting in the worst way possible. 1359 01:04:25,650 --> 01:04:27,910 - What you're about to see are scenes 1360 01:04:27,950 --> 01:04:30,740 from the most violent new video games, 1361 01:04:30,780 --> 01:04:32,220 "Mortal Kombat." 1362 01:04:32,260 --> 01:04:36,090 Blood splatters from the contestants' heads, 1363 01:04:36,140 --> 01:04:38,830 and a player wins the so-called death sequence 1364 01:04:38,880 --> 01:04:40,880 pulling off the head of the opponent 1365 01:04:40,920 --> 01:04:43,140 with spinal cord attached. 1366 01:04:43,190 --> 01:04:45,710 I find this segment deeply offensive 1367 01:04:45,750 --> 01:04:49,850 and believe that it simply should be taken off the market. 1368 01:04:49,890 --> 01:04:52,850 Let me now call to the table Howard Lincoln, 1369 01:04:52,890 --> 01:04:54,890 senior vice president of Nintendo, 1370 01:04:54,940 --> 01:04:58,250 and Bill White, senior vice president of Sega. 1371 01:04:58,290 --> 01:04:59,900 - I'd never been in Congress before. 1372 01:04:59,940 --> 01:05:01,770 Of course, it's always a little bit intimidating 1373 01:05:01,810 --> 01:05:04,860 when the senators sit ten feet above you 1374 01:05:04,900 --> 01:05:08,040 and you're down on a little table in front of them. 1375 01:05:08,080 --> 01:05:10,000 - We debated a lot about who should go, 1376 01:05:10,040 --> 01:05:13,700 and we decided that Bill White was absolutely perfect. 1377 01:05:13,740 --> 01:05:18,180 Instead of having the senators address me and address Howard, 1378 01:05:18,220 --> 01:05:21,010 have them address Howard and another guy 1379 01:05:21,050 --> 01:05:22,400 who used to work for Nintendo. 1380 01:05:23,440 --> 01:05:25,100 - We knew that it also would irritate 1381 01:05:25,140 --> 01:05:27,100 the hell out of Howard. 1382 01:05:27,140 --> 01:05:28,580 - To meet our game guidelines, 1383 01:05:28,620 --> 01:05:31,020 we have removed the blood and death sequences 1384 01:05:31,060 --> 01:05:33,060 present in "Mortal Kombat." 1385 01:05:33,110 --> 01:05:36,070 We did this knowing that we would lose money 1386 01:05:36,110 --> 01:05:40,940 by sanitizing "Mortal Kombat," but sanitize it we did. 1387 01:05:40,980 --> 01:05:43,380 - Howard Lincoln was pontificating about 1388 01:05:43,420 --> 01:05:46,600 how Nintendo never would do anything as horrible 1389 01:05:46,640 --> 01:05:49,860 as what Sega had done with "Mortal Kombat." 1390 01:05:49,910 --> 01:05:52,260 All of a sudden, Bill White whips out this gun 1391 01:05:52,300 --> 01:05:55,430 that they used in a hunting game. 1392 01:05:55,480 --> 01:05:58,040 - Senator, I may also point out that Nintendo produces 1393 01:05:58,090 --> 01:06:02,610 product for a rapid-fire machine gun. 1394 01:06:02,660 --> 01:06:07,230 - This is a thing that-- it's called the Super Scope. 1395 01:06:07,270 --> 01:06:10,800 I think that this game is a target sh--this device 1396 01:06:10,840 --> 01:06:12,840 is for target shooting and whatnot. 1397 01:06:12,890 --> 01:06:15,190 - To me, that looks like a-- looks like a weapon. 1398 01:06:15,240 --> 01:06:17,760 It looks like an assault weapon of some kind. 1399 01:06:17,800 --> 01:06:20,590 - I was starting to get a little bit agitated with Bill. 1400 01:06:20,630 --> 01:06:23,110 He had worked for us, and he knew what was going on, 1401 01:06:23,160 --> 01:06:27,380 so I felt it was necessary to make our position 1402 01:06:27,420 --> 01:06:30,160 very clear, which I did. 1403 01:06:30,210 --> 01:06:33,040 And it seemed to go over quite well. 1404 01:06:33,080 --> 01:06:36,950 I can't sit here and allow you to be told 1405 01:06:37,000 --> 01:06:39,300 that somehow the video game business 1406 01:06:39,350 --> 01:06:43,920 has been transformed today from children to adults. 1407 01:06:43,960 --> 01:06:46,310 Small children bought this at Toys "R" Us, 1408 01:06:46,350 --> 01:06:48,360 and he knows that as well as I do. 1409 01:06:48,400 --> 01:06:50,920 We've got to get further into this. 1410 01:06:50,970 --> 01:06:53,840 - Well, thank you. Thanks for your forthrightness. 1411 01:06:53,880 --> 01:06:56,190 Thanks for assuming responsibility. 1412 01:06:56,230 --> 01:06:58,230 I appreciate--I believe you've shown some leadership here. 1413 01:06:58,280 --> 01:07:01,280 You've been a damn sight better than the competition. 1414 01:07:02,410 --> 01:07:05,110 - People were worried about video games being like drugs, 1415 01:07:05,150 --> 01:07:07,110 we were forcing them on kids. 1416 01:07:07,160 --> 01:07:09,030 They would become addicted to them. 1417 01:07:09,070 --> 01:07:10,770 They would ignore their studies. 1418 01:07:10,810 --> 01:07:13,470 And that turned out to be true. 1419 01:07:13,510 --> 01:07:15,250 No, it didn't. It wasn't true. 1420 01:07:15,300 --> 01:07:17,170 It was the opposite, actually. 1421 01:07:17,210 --> 01:07:20,340 I think that the kids that became video game aficionados 1422 01:07:20,390 --> 01:07:22,960 in many ways had better imaginations 1423 01:07:23,000 --> 01:07:26,000 and a better time with the world in some ways. 1424 01:07:27,790 --> 01:07:29,400 - After the Senate hearings, 1425 01:07:29,440 --> 01:07:33,140 Kalinske came out with some comment. 1426 01:07:33,180 --> 01:07:35,580 - What I had said was that Nintendo 1427 01:07:35,620 --> 01:07:37,190 started these hearings 1428 01:07:37,230 --> 01:07:42,630 by sending the senators videotapes of our video games. 1429 01:07:42,670 --> 01:07:45,060 - We thought Nintendo had planted this, 1430 01:07:45,110 --> 01:07:47,410 and it was convenient that Senator Lieberman 1431 01:07:47,460 --> 01:07:50,460 actually was getting reelected that year. 1432 01:07:50,500 --> 01:07:52,850 - I found that to be absolutely incredible. 1433 01:07:52,900 --> 01:07:55,420 This is the guy that sucks us into this. 1434 01:07:55,470 --> 01:07:58,770 I was trying to figure out a way to, in effect, 1435 01:07:58,820 --> 01:08:03,340 say, "Buzz off," 1436 01:08:03,390 --> 01:08:07,300 so I decided to write a poem, 1437 01:08:07,350 --> 01:08:09,520 "Roses are red, violets are blue. 1438 01:08:09,570 --> 01:08:13,220 So you had a bad day, boo hoo hoo." 1439 01:08:17,620 --> 01:08:18,920 - Come on. 1440 01:08:18,970 --> 01:08:22,410 - I think it sent a message to Sega 1441 01:08:22,450 --> 01:08:24,630 that we were gonna continue to fight them. 1442 01:08:27,410 --> 01:08:29,200 - Every year at about this time, 1443 01:08:29,240 --> 01:08:30,980 the sharpest of the cutting-edge electronics 1444 01:08:31,020 --> 01:08:32,150 are unveiled, 1445 01:08:32,200 --> 01:08:33,900 and, oh, the places you'll go. 1446 01:08:38,250 --> 01:08:39,550 - Hey. - Hey. 1447 01:08:39,600 --> 01:08:41,560 - How you doing? - What a sight for sore eyes. 1448 01:08:41,600 --> 01:08:42,900 Come and sit down for a minute. 1449 01:08:42,950 --> 01:08:44,600 - All right. 1450 01:08:44,650 --> 01:08:48,520 - We just decided to come out here on a little hunting trip. 1451 01:08:48,560 --> 01:08:49,780 As a matter of fact, 1452 01:08:49,820 --> 01:08:52,220 there's some of those little suckers again! 1453 01:08:52,830 --> 01:08:54,790 - Hey. 1454 01:08:56,270 --> 01:08:58,010 - Peter, a lot of people think that Nintendo 1455 01:08:58,050 --> 01:09:00,530 and this whole businessis going right down the river. 1456 01:09:00,570 --> 01:09:02,530 - Yeah, Nintendo had a bad year. 1457 01:09:02,580 --> 01:09:04,400 Sales dropped. Profits dropped. 1458 01:09:04,450 --> 01:09:06,280 But the future's gotta be bright. 1459 01:09:06,320 --> 01:09:07,840 - There was a feeling like, "You know what? 1460 01:09:07,890 --> 01:09:09,320 "This is a maturing industry. 1461 01:09:09,370 --> 01:09:11,540 We need to start acting that way a little bit more". 1462 01:09:11,590 --> 01:09:12,930 From now on, we'll see no repeats 1463 01:09:12,980 --> 01:09:15,200 of the "Mortal Kombat" incident. 1464 01:09:15,240 --> 01:09:17,550 "Mortal Kombat 2" will be the same 1465 01:09:17,590 --> 01:09:19,680 whether it's on our platform or on anyone else's. 1466 01:09:19,720 --> 01:09:21,120 - All right. - Yeah. 1467 01:09:21,160 --> 01:09:23,290 - We as a company had to make a decision. 1468 01:09:23,340 --> 01:09:26,470 Were we gonna waver from the Mario roots? 1469 01:09:26,510 --> 01:09:28,040 This was very tough for us. 1470 01:09:28,080 --> 01:09:29,600 - The contents may be new, 1471 01:09:29,650 --> 01:09:31,950 but the sales formula hasn't changed at all. 1472 01:09:32,000 --> 01:09:36,130 We did modify our approach but without sacrificing standard. 1473 01:09:36,180 --> 01:09:38,390 - If kids want video games to help them define 1474 01:09:38,440 --> 01:09:40,310 their image, then we're gonna do just that. 1475 01:09:40,350 --> 01:09:42,440 The music comes from two of the hottest grunge groups 1476 01:09:42,490 --> 01:09:46,010 out there, the Butthole Surfers and Sweaty Nipples. 1477 01:09:50,100 --> 01:09:54,240 So live it large, run it free, and play it loud. 1478 01:10:04,680 --> 01:10:07,340 - Play it loud! 1479 01:10:07,380 --> 01:10:10,300 - And I mean, they-- they kind of got it. 1480 01:10:10,340 --> 01:10:13,780 They started to see what the consumer wanted. 1481 01:10:13,820 --> 01:10:16,220 Hey, bravo for that. 1482 01:10:16,260 --> 01:10:18,390 Was it iterative of Sega? 1483 01:10:18,430 --> 01:10:22,220 Mm, yeah, it was, and we were complimented. 1484 01:10:22,260 --> 01:10:24,140 - Sega! 1485 01:10:24,180 --> 01:10:25,830 - We now needed to shift again 1486 01:10:25,880 --> 01:10:28,580 and try to figure out, how do we manage against a company 1487 01:10:28,620 --> 01:10:30,800 that's starting to awaken? 1488 01:10:30,840 --> 01:10:33,970 - Sega is the current leader but only by a slight margin. 1489 01:10:34,020 --> 01:10:35,670 In an effort to keep their edge, 1490 01:10:35,710 --> 01:10:38,760 Sega demonstrated the latest in player interface, 1491 01:10:38,800 --> 01:10:40,020 the Activator. 1492 01:10:40,070 --> 01:10:41,810 - Ugh. 1493 01:10:41,850 --> 01:10:44,640 - We had this strategy to use technology. 1494 01:10:44,680 --> 01:10:46,290 - Not just thinking one step ahead 1495 01:10:46,330 --> 01:10:47,990 but two and three steps ahead. 1496 01:10:48,030 --> 01:10:50,080 - You look to the right, and you see the attacker 1497 01:10:50,120 --> 01:10:51,600 coming in on the right; you look above you, 1498 01:10:51,640 --> 01:10:54,300 and you could see the airplanes coming above you. 1499 01:10:54,340 --> 01:10:56,170 - Welcome to Sega Channel. 1500 01:10:56,210 --> 01:10:58,390 It's cable, but you don't watch it. 1501 01:10:58,430 --> 01:11:00,130 You play it! 1502 01:11:00,170 --> 01:11:02,440 - We see the Internet and online gaming 1503 01:11:02,480 --> 01:11:06,270 as one of the big revolutions in this business. 1504 01:11:06,310 --> 01:11:07,570 - They were kind of just throwing things 1505 01:11:07,610 --> 01:11:09,530 against the wall to see what would work. 1506 01:11:09,570 --> 01:11:11,920 - I didn't want us to become like Nintendo 1507 01:11:11,970 --> 01:11:13,790 and let somebody pass us by, 1508 01:11:13,840 --> 01:11:16,540 and so having the next great hardware system 1509 01:11:16,580 --> 01:11:18,410 was really critical. 1510 01:11:18,450 --> 01:11:20,710 - The next big battle in the video game wars 1511 01:11:20,760 --> 01:11:23,240 is about to begin as manufacturers 1512 01:11:23,280 --> 01:11:25,940 try to get people to trash their old systems 1513 01:11:25,980 --> 01:11:28,200 and trade up to new ones. 1514 01:11:28,240 --> 01:11:31,200 - I often get to introduce our money editor, John Stehr, 1515 01:11:31,250 --> 01:11:33,160 but right now, for the first time ever, 1516 01:11:33,210 --> 01:11:36,160 I am going to become John Stehr. 1517 01:11:36,210 --> 01:11:38,080 - It's our way of introducing you 1518 01:11:38,120 --> 01:11:41,000 to the machine behind today's movie magic. 1519 01:11:42,430 --> 01:11:45,000 - It's been a year of digital distortion. 1520 01:11:45,040 --> 01:11:47,610 Artists reanimated John Kennedy... 1521 01:11:47,650 --> 01:11:49,790 - I gotta pee. - And put Brandon Lee 1522 01:11:49,830 --> 01:11:52,920 into scenes shot after his death. 1523 01:11:52,960 --> 01:11:55,970 One brand of computer made all these movies possible, 1524 01:11:56,010 --> 01:11:59,880 the blisteringly fast computers of Silicon Graphics. 1525 01:11:59,930 --> 01:12:02,150 - I got a call from Jim Clark, 1526 01:12:02,190 --> 01:12:04,450 who was chairman of Silicon Graphics. 1527 01:12:04,500 --> 01:12:06,630 Said, "Hey, we've come up with a new chipset 1528 01:12:06,670 --> 01:12:08,980 "that we think is perfect for a video game system. 1529 01:12:09,020 --> 01:12:11,110 You wanna come over here and take a look at it?" 1530 01:12:17,210 --> 01:12:20,250 We called Nakayama, explained the situation, 1531 01:12:20,300 --> 01:12:22,520 and said, "You gotta send a hardware team out." 1532 01:12:22,560 --> 01:12:24,520 Nakayama even came himself. 1533 01:12:27,350 --> 01:12:29,000 We had a good meeting at Silicon Graphics. 1534 01:12:29,040 --> 01:12:31,390 They showed off these amazing graphics. 1535 01:12:31,440 --> 01:12:33,790 - # That's what I said now 1536 01:12:33,830 --> 01:12:37,360 - They went back to Japan, and the response to us was, 1537 01:12:37,400 --> 01:12:38,970 "No, that's not good enough." 1538 01:12:39,010 --> 01:12:42,010 They thought there'd be too much wasted silicon, 1539 01:12:42,060 --> 01:12:44,190 so that was the excuse they gave. 1540 01:12:44,230 --> 01:12:46,580 - # Yeah, yeah 1541 01:12:46,630 --> 01:12:48,800 - This was the first time that a major strategy 1542 01:12:48,850 --> 01:12:52,980 that I believed in had been overridden by Nakayama. 1543 01:12:53,850 --> 01:12:55,810 - It was a surprise to me. 1544 01:12:55,850 --> 01:12:57,160 It was a surprise to Tom, 1545 01:12:57,200 --> 01:12:58,990 a surprise to everybody that this happened. 1546 01:13:02,730 --> 01:13:05,300 - Initially, I thought it was honest differences 1547 01:13:05,340 --> 01:13:07,870 in hardware architecture, 1548 01:13:07,910 --> 01:13:12,130 but I began to see that there was this jealousy 1549 01:13:12,170 --> 01:13:14,960 that was developing between Sega Japan 1550 01:13:15,000 --> 01:13:16,740 and Sega of America. 1551 01:13:16,790 --> 01:13:20,270 You could imagine every week, your CEOs walking in 1552 01:13:20,310 --> 01:13:21,840 and saying, "How come you're not as good 1553 01:13:21,880 --> 01:13:24,580 as those guys in America?" 1554 01:13:24,620 --> 01:13:26,490 And they started looking for ways 1555 01:13:26,540 --> 01:13:28,840 where they could disagree with us 1556 01:13:28,890 --> 01:13:31,850 and perhaps, to some degree, undermine us. 1557 01:13:33,330 --> 01:13:37,240 I explained the situation to Jim Clark, and he said, 1558 01:13:37,290 --> 01:13:38,770 "Well, what should I do now?" and I said, 1559 01:13:38,810 --> 01:13:41,940 "Well, there's this other video game company in Seattle. 1560 01:13:41,990 --> 01:13:44,470 Maybe you should go take a visit to them." 1561 01:13:45,860 --> 01:13:48,380 - It's a pleasure to be here this morning. 1562 01:13:48,430 --> 01:13:52,210 There's a lot of talk today about new technology 1563 01:13:52,260 --> 01:13:55,560 soon replacing 16-bit video games, 1564 01:13:55,610 --> 01:14:00,130 but ultimately, only hit games will bring you customers. 1565 01:14:00,180 --> 01:14:02,880 - The Super Nintendo was doing well and making good money, 1566 01:14:02,920 --> 01:14:04,270 and so we kept reminding ourselves, 1567 01:14:04,310 --> 01:14:05,660 "It's not about the technology. 1568 01:14:05,710 --> 01:14:07,580 It's about the fun that you deliver." 1569 01:14:07,620 --> 01:14:09,060 - Here's an old friend of mine. 1570 01:14:09,100 --> 01:14:10,880 This, of course, is Donkey Kong, 1571 01:14:10,930 --> 01:14:15,450 the star of Nintendo's 1981 arcade hit. 1572 01:14:15,500 --> 01:14:19,280 Well, ladies and gentlemen, my friendly gorilla is back 1573 01:14:19,330 --> 01:14:22,980 in his new Nintendo game, "Donkey Kong Country." 1574 01:14:29,990 --> 01:14:31,380 - Since its release, Nintendo 1575 01:14:31,430 --> 01:14:33,470 has sold more than 6 million copies. 1576 01:14:38,960 --> 01:14:42,260 - "Donkey Kong Country" was a critical game for us 1577 01:14:42,310 --> 01:14:44,920 to sustain the momentum of Super NES 1578 01:14:44,960 --> 01:14:48,840 in the battle with Sega and push it right over the top. 1579 01:14:50,050 --> 01:14:53,270 - But while we were going through the battles with Sega, 1580 01:14:53,320 --> 01:14:54,710 another competitor was behind us, 1581 01:14:54,750 --> 01:14:56,230 and he's preparing to enter the marketplace. 1582 01:14:57,980 --> 01:14:59,240 - Mommy. Mommy. Mommy! 1583 01:14:59,280 --> 01:15:01,670 - It's only a movie, 1584 01:15:01,720 --> 01:15:04,500 except on a Sony big-screen TV. 1585 01:15:06,240 --> 01:15:08,860 - Oh, good, something romantic. 1586 01:15:08,900 --> 01:15:10,810 - Sony was just desperate 1587 01:15:10,860 --> 01:15:12,640 to get into the video game business. 1588 01:15:12,690 --> 01:15:16,040 - We support the content, the formats 1589 01:15:16,080 --> 01:15:18,130 that we think the consumer's going to like. 1590 01:15:18,170 --> 01:15:21,130 - Olaf Olafsson arrived in my office one day, 1591 01:15:21,170 --> 01:15:24,260 and we started talking about ways we might work together. 1592 01:15:24,310 --> 01:15:28,400 - Sony and Sega secretly agreed to come up 1593 01:15:28,440 --> 01:15:30,620 with a common hardware unit. 1594 01:15:30,660 --> 01:15:33,270 - But we'll each make our independent profit 1595 01:15:33,310 --> 01:15:35,010 off of the software. 1596 01:15:35,060 --> 01:15:37,750 We were a much better software developer than Sony was, 1597 01:15:37,800 --> 01:15:40,060 and so I thought, "Boy, this is a win for us." 1598 01:15:43,460 --> 01:15:45,670 - Consumer electronics giants Sony and Sega 1599 01:15:45,720 --> 01:15:47,980 are teaming up on the video games, 1600 01:15:48,030 --> 01:15:49,850 putting Sony music and movie software 1601 01:15:49,900 --> 01:15:53,330 behind the video game maker. 1602 01:15:53,380 --> 01:15:57,160 - Everybody involved thought the marriage would happen. 1603 01:15:57,210 --> 01:16:00,910 - Unfortunately, Sega Japan just couldn't agree 1604 01:16:00,950 --> 01:16:03,740 with the Sony engineers on specifications. 1605 01:16:05,220 --> 01:16:06,910 I was really upset 1606 01:16:06,960 --> 01:16:10,090 and felt like they didn't try hard enough. 1607 01:16:10,130 --> 01:16:11,610 - People were coming to our door to say, 1608 01:16:11,660 --> 01:16:15,010 "Hey, we want to be part of what you're doing here." 1609 01:16:15,050 --> 01:16:16,360 For whatever reason, 1610 01:16:16,400 --> 01:16:19,400 Sega of Japan didn't want to play. 1611 01:16:19,450 --> 01:16:21,670 - Kalinske did a good job of protecting us, 1612 01:16:21,710 --> 01:16:23,230 and it wasn't easy. 1613 01:16:23,280 --> 01:16:25,020 - He was a bit like the sin eater. 1614 01:16:25,060 --> 01:16:29,070 He was eating all the sins for the entire SOA group. 1615 01:16:29,110 --> 01:16:31,160 - He would tell me what was going on over there, 1616 01:16:31,200 --> 01:16:32,630 but I didn't really internalize it 1617 01:16:32,680 --> 01:16:34,990 'cause I didn't have to go there and get yelled at 1618 01:16:35,030 --> 01:16:38,470 like he did and scared like he did. 1619 01:16:38,510 --> 01:16:40,950 - Once the decision was made 1620 01:16:40,990 --> 01:16:43,340 not to do joint hardware with Sony, 1621 01:16:43,380 --> 01:16:45,820 I knew that things were different now. 1622 01:16:46,950 --> 01:16:51,040 - Nintendo, together with Silicon Graphics, 1623 01:16:51,090 --> 01:16:54,830 have entered into a worldwide joint development 1624 01:16:54,870 --> 01:16:56,750 and license agreement 1625 01:16:56,790 --> 01:16:59,660 under which our companies will develop 1626 01:16:59,710 --> 01:17:01,920 this new and unique product. 1627 01:17:01,970 --> 01:17:04,620 It will feature a new, 1628 01:17:04,670 --> 01:17:09,720 true 64-bit multimedia engine chipset. 1629 01:17:09,760 --> 01:17:11,200 - That freaked them out at Sega 1630 01:17:11,240 --> 01:17:13,280 because there was nothing to do about it. 1631 01:17:13,330 --> 01:17:16,590 They just could not get up to a 64-bit machine right away. 1632 01:17:19,590 --> 01:17:24,250 - At that time, the strings were being pulled by Japan. 1633 01:17:24,300 --> 01:17:26,510 We had very limited degrees of freedom. 1634 01:17:26,560 --> 01:17:29,210 Our ideas were typically ignored 1635 01:17:29,260 --> 01:17:31,220 or not responded to, more often than not, 1636 01:17:31,260 --> 01:17:35,090 and I just wasn't looking for that intellectually. 1637 01:17:35,130 --> 01:17:37,870 And then I got approached by an executive search firm 1638 01:17:37,920 --> 01:17:40,270 looking for someone to run the Sony PlayStation. 1639 01:17:40,310 --> 01:17:42,440 - PlayStation. - And I said, "Well, 1640 01:17:42,490 --> 01:17:43,750 "here's another interesting challenge. 1641 01:17:43,790 --> 01:17:46,400 I can just undo what I just did at Sega." 1642 01:17:50,710 --> 01:17:55,150 - I was a little bit surprised that they went for Steve. 1643 01:17:55,200 --> 01:17:57,460 - I was done, and I just wanted to move on 1644 01:17:57,500 --> 01:18:00,680 and didn't want to stay at Sega any longer. 1645 01:18:00,720 --> 01:18:03,030 - Sony wanted to really stick it in our eye 1646 01:18:03,070 --> 01:18:04,200 at this point, 1647 01:18:04,250 --> 01:18:09,120 and clearly, Steve was delighted to do that. 1648 01:18:09,170 --> 01:18:11,120 - My former wife used to always tell me 1649 01:18:11,170 --> 01:18:13,260 that there's no chance that I'll ever get a broken heart 1650 01:18:13,300 --> 01:18:15,350 'cause I don't have one. 1651 01:18:15,390 --> 01:18:18,520 To me, it's just a decision that one makes about business. 1652 01:18:18,570 --> 01:18:20,180 You can't be terribly emotional. 1653 01:18:20,220 --> 01:18:23,220 You have to be willing to cut off your hand to save the arm. 1654 01:18:28,490 --> 01:18:30,320 - Sony was really a scary competitor. 1655 01:18:30,360 --> 01:18:32,750 It was kind of like, the show business people 1656 01:18:32,800 --> 01:18:34,150 were gonna come into this thing, 1657 01:18:34,190 --> 01:18:36,020 and their sound and graphics 1658 01:18:36,060 --> 01:18:38,630 were gonna be way above what we could do. 1659 01:18:40,070 --> 01:18:42,900 There was a lot of fear around the Sega halls about that. 1660 01:18:42,940 --> 01:18:45,160 Kalinske was coming back from Japan 1661 01:18:45,200 --> 01:18:48,550 having nervous breakdowns about what was coming up. 1662 01:18:48,600 --> 01:18:50,690 We had no product at the time. 1663 01:18:50,730 --> 01:18:53,950 - At that point, Nintendo was on the wane. 1664 01:18:53,990 --> 01:18:56,870 - The biggest problem that we have with Nintendo 64 1665 01:18:56,910 --> 01:18:58,780 is to try to figure out 1666 01:18:58,820 --> 01:19:02,260 how to make great software real-time 3-D. 1667 01:19:03,740 --> 01:19:08,180 - We were teasing the retailer for, like, two years. 1668 01:19:08,230 --> 01:19:10,270 We were showing them these great graphics, 1669 01:19:10,310 --> 01:19:12,490 but from a sales perspective, it was a killer. 1670 01:19:12,530 --> 01:19:18,020 - When Nintendo announced 64-bit system, 1671 01:19:18,060 --> 01:19:21,190 Nakayama felt that we got to make it 64 too. 1672 01:19:34,120 --> 01:19:38,040 - Introducing... - Sega Saturn. 1673 01:19:38,080 --> 01:19:42,260 - Sega Saturn was 32-bit machine to start with. 1674 01:19:42,300 --> 01:19:44,480 It was too late to redesign the machine, 1675 01:19:44,520 --> 01:19:49,400 and we ended up putting two 32-bit chips. 1676 01:19:49,440 --> 01:19:53,140 That made the programming challenging and complex. 1677 01:19:54,530 --> 01:19:56,620 - The software looked like shit. 1678 01:19:56,660 --> 01:19:59,010 Not until three months before launch did we find out 1679 01:19:59,060 --> 01:20:02,320 that the software was not gonna be there to support it. 1680 01:20:02,370 --> 01:20:04,800 - Not only did we not have enough software. 1681 01:20:04,850 --> 01:20:06,280 We didn't even have enough hardware, 1682 01:20:06,330 --> 01:20:08,680 so we had to limit 1683 01:20:08,720 --> 01:20:10,940 the retail distributors who carried it, 1684 01:20:10,980 --> 01:20:14,250 and we cut out Target and Wal-Mart, 1685 01:20:14,290 --> 01:20:17,600 and these guys were furious with us. 1686 01:20:17,640 --> 01:20:20,120 I expressed all this to Nakayama, 1687 01:20:20,170 --> 01:20:21,990 and he disagreed with me. 1688 01:20:22,040 --> 01:20:25,260 He was afraid that Sony was gonna steal our thunder, 1689 01:20:25,300 --> 01:20:31,000 so he wanted an immediate launch of Saturn at E3. 1690 01:20:32,870 --> 01:20:35,230 - When giants in the video game industry 1691 01:20:35,270 --> 01:20:37,970 square off against each other at a major trade show, 1692 01:20:38,010 --> 01:20:40,140 people pay attention. 1693 01:20:40,190 --> 01:20:42,880 With $10 billion on the line, 1694 01:20:42,930 --> 01:20:44,970 it's all about which expensive toys 1695 01:20:45,020 --> 01:20:47,370 consumers will pay to play with. 1696 01:20:47,410 --> 01:20:50,280 - This is no game; this is a multibillion-dollar gamble 1697 01:20:50,330 --> 01:20:52,020 for a lot of entertainment companies. 1698 01:20:52,070 --> 01:20:55,070 To borrow from a couple of their more popular titles, 1699 01:20:55,110 --> 01:20:56,640 they're locked in "Mortal Kombat." 1700 01:20:56,680 --> 01:20:59,210 For the losers, it could spell "Doom." 1701 01:21:02,340 --> 01:21:03,950 - Without the right games, 1702 01:21:03,990 --> 01:21:06,820 we're delaying the launch of Nintendo Ultra 64. 1703 01:21:06,870 --> 01:21:08,300 - We feel it's more important 1704 01:21:08,350 --> 01:21:09,870 to make a good first impression, 1705 01:21:09,910 --> 01:21:11,700 have the absolute best possible software when we launch. 1706 01:21:11,740 --> 01:21:13,390 - So you're willing to wait till '96? 1707 01:21:13,440 --> 01:21:15,090 - Yeah, we're gonna wait. 1708 01:21:15,130 --> 01:21:16,700 - Product launched in Japan. 1709 01:21:16,740 --> 01:21:18,880 We sold 100,000 units on the first day, 1710 01:21:18,920 --> 01:21:20,620 300,000 units in the first month. 1711 01:21:20,660 --> 01:21:23,060 We're approaching a million units sold in Japan. 1712 01:21:23,100 --> 01:21:25,100 We just need to replicate that in the United States. 1713 01:21:26,580 --> 01:21:28,410 - No question in my mind, there are gonna be casualties, 1714 01:21:28,450 --> 01:21:30,020 and there are gonna be casualties soon. 1715 01:21:41,380 --> 01:21:43,510 - Tom and I were both staying at the same hotel, 1716 01:21:43,550 --> 01:21:45,600 and they had taken over the lobby 1717 01:21:45,640 --> 01:21:46,990 and the swimming pool, 1718 01:21:47,040 --> 01:21:49,690 and they had these large inflatable balloons 1719 01:21:49,730 --> 01:21:52,950 of some of their iconic characters like Sonic. 1720 01:21:53,000 --> 01:21:55,310 Somehow those blow-up balloons wound up 1721 01:21:55,350 --> 01:21:57,260 in the bottom of the pool. 1722 01:21:57,310 --> 01:21:59,270 - He had them deflated, 1723 01:21:59,310 --> 01:22:02,360 stuck pins in them or something. 1724 01:22:02,400 --> 01:22:05,970 - After Sonic was found dead in the bottom of the pool, 1725 01:22:06,010 --> 01:22:08,010 Tom came to me and said, "Steve, can you cut it out?" 1726 01:22:08,060 --> 01:22:09,540 and I said, "Tom, no. 1727 01:22:09,580 --> 01:22:11,710 There's no way we're gonna cut it out." 1728 01:22:11,760 --> 01:22:14,850 - Clearly they were trying to out-Sega Sega. 1729 01:22:17,410 --> 01:22:18,590 - You know, if you're planning to buy 1730 01:22:18,630 --> 01:22:19,980 a new video game machine this year, 1731 01:22:20,030 --> 01:22:21,900 you better start saving for one now. 1732 01:22:21,940 --> 01:22:24,160 Some super-sophisticated new systems 1733 01:22:24,200 --> 01:22:27,120 are about to hit the market, and they are pricey. 1734 01:22:27,160 --> 01:22:28,820 - Sega rushed Saturn on the market, 1735 01:22:28,860 --> 01:22:31,470 and it sells for around $399, 1736 01:22:31,520 --> 01:22:34,560 and don't expect that price to come down anytime soon. 1737 01:22:34,610 --> 01:22:36,000 - I wish that we could say 1738 01:22:36,040 --> 01:22:37,350 we were gonna see prices come down, 1739 01:22:37,390 --> 01:22:39,000 because I think it would help my business 1740 01:22:39,040 --> 01:22:40,440 and we'd sell a lot more units. 1741 01:22:40,480 --> 01:22:42,000 - I'm gonna talk to my parents about this one. 1742 01:22:42,050 --> 01:22:43,960 I like this one a lot. 1743 01:22:44,010 --> 01:22:45,920 - You better tell them it's $399. 1744 01:22:49,010 --> 01:22:50,930 - Up next, the Sony PlayStation. 1745 01:22:53,410 --> 01:22:55,670 - I'm going to ask Sony Computer Entertainment 1746 01:22:55,710 --> 01:22:57,370 president of America, 1747 01:22:57,410 --> 01:23:02,150 Steve Race, to join me for a brief presentation. 1748 01:23:17,210 --> 01:23:19,430 - I was sitting right in front of him. 1749 01:23:19,480 --> 01:23:22,300 It was Tom and I and Shinobu, and... 1750 01:23:22,350 --> 01:23:23,960 we were just sitting there watching. 1751 01:23:34,930 --> 01:23:38,280 Sony PlayStation! 1752 01:23:41,150 --> 01:23:43,020 - What is that? What is that? 1753 01:23:43,060 --> 01:23:46,500 - It's an enormous parade, including 16 balloons. 1754 01:23:46,550 --> 01:23:49,460 - Yeah! - All right. 1755 01:23:49,510 --> 01:23:51,860 - It was a cold and windy day this Thanksgiving, 1756 01:23:51,900 --> 01:23:55,080 and some of the new balloons didn't fare terribly well. 1757 01:23:57,340 --> 01:23:59,470 Sonic the Hedgehog hit a utility pole 1758 01:23:59,520 --> 01:24:01,910 around 58th Street and Broadway. 1759 01:24:01,950 --> 01:24:05,570 - Oh! Oh! 1760 01:24:05,610 --> 01:24:07,650 - Sonic wounded an off-duty police officer 1761 01:24:07,700 --> 01:24:09,920 and caused minor injuries to a young woman 1762 01:24:09,960 --> 01:24:12,440 and a ten-year-old girl. 1763 01:24:15,140 --> 01:24:17,580 Sonic the Hedgehog didn't finish the parade. 1764 01:24:28,760 --> 01:24:30,940 - The success of Sega of America 1765 01:24:30,980 --> 01:24:34,510 really is American dream. 1766 01:24:34,550 --> 01:24:35,730 - All right. - Yeah. 1767 01:24:35,770 --> 01:24:38,510 - Americans like challenges, 1768 01:24:38,560 --> 01:24:41,080 so I think, overall, battle against Nintendo 1769 01:24:41,120 --> 01:24:45,690 was perfect for the spirit of Americans 1770 01:24:45,740 --> 01:24:48,090 to fight David and Goliath sort of battle. 1771 01:24:49,260 --> 01:24:53,180 So I think I'm very proud to be part of, 1772 01:24:53,220 --> 01:24:55,490 you know, whole Sega phenomenon. 1773 01:25:01,930 --> 01:25:04,450 - 19 more shopping days until Christmas, 1774 01:25:04,490 --> 01:25:08,410 and the heat is on for parents all over the country 1775 01:25:08,450 --> 01:25:11,280 from kids who simply have to have this year's hottest toys. 1776 01:25:11,330 --> 01:25:15,550 - It's no longer Sega. Now I'm into Nintendo. 1777 01:25:15,590 --> 01:25:17,770 - Nephew wants one, my son wants one. 1778 01:25:17,810 --> 01:25:19,330 - Oh, that's a--that's a lot of systems. 1779 01:25:19,380 --> 01:25:20,420 - Go! 1780 01:25:23,380 --> 01:25:27,130 - Nintendo's top execs traded suits and ties for helmets 1781 01:25:27,170 --> 01:25:28,820 and racing togs today. 1782 01:25:30,390 --> 01:25:31,560 - Here comes another finisher! 1783 01:25:31,610 --> 01:25:33,310 It's Howard Lincoln, 1784 01:25:33,350 --> 01:25:35,790 Howard Lincoln, ladies and gentlemen! 1785 01:25:35,830 --> 01:25:38,140 - An incredible race,an incredible effort. 1786 01:25:38,180 --> 01:25:40,660 What's with thecome-from-behind strategy here? 1787 01:25:40,700 --> 01:25:44,100 - Well, at first I thought his go-kart was faster than mine. 1788 01:25:49,060 --> 01:25:51,190 But then I found when I kept crashing into him, 1789 01:25:51,240 --> 01:25:53,190 he started moving a little bit to the right side, 1790 01:25:53,240 --> 01:25:54,670 and I was able to get by him. 1791 01:25:59,290 --> 01:26:01,770 - Hey, plumber boy, mustache man, 1792 01:26:01,810 --> 01:26:03,680 your worst nightmare has arrived. 1793 01:26:03,730 --> 01:26:05,160 Pack up your stuff. 1794 01:26:19,660 --> 01:26:22,620 - In my life, I've been very fortunate to have worked 1795 01:26:22,660 --> 01:26:25,100 with great, wonderful people, 1796 01:26:25,140 --> 01:26:28,710 and my proudest business accomplishment 1797 01:26:28,750 --> 01:26:32,410 was seeing all those people all doing so well, 1798 01:26:32,450 --> 01:26:38,240 all of you who I worked with, that I owe this--this honor to. 1799 01:27:11,100 --> 01:27:12,930 - Sega! - Sega. 1800 01:27:12,970 --> 01:27:14,410 - Sega! - Sega! 1801 01:27:14,450 --> 01:27:16,580 - Sega! - Sega! 1802 01:27:16,630 --> 01:27:18,720 - Sega! 1803 01:27:30,940 --> 01:27:33,990 - # You know very well 1804 01:27:34,030 --> 01:27:36,560 # Who you are 1805 01:27:36,600 --> 01:27:39,000 # Don't let 'em hold you down # 1806 01:27:39,040 --> 01:27:41,350 # Reach for the stars 1807 01:27:41,390 --> 01:27:42,610 # You had a goal 1808 01:27:42,650 --> 01:27:44,610 - I understand. 1809 01:27:44,650 --> 01:27:46,530 - # But not that many 1810 01:27:46,570 --> 01:27:48,400 # 'Cause you're the only one 1811 01:27:48,440 --> 01:27:50,570 # I'll give you good and plenty # 1812 01:27:50,620 --> 01:27:53,360 - # Super Nintendo, Sega Genesis # 1813 01:27:53,400 --> 01:27:55,750 # When I was dead broke, man, I couldn't picture this # 1814 01:27:58,360 --> 01:28:00,370 - We would like to convince you 1815 01:28:00,410 --> 01:28:02,370 that there is indeed a market in which 1816 01:28:02,370 --> 01:28:04,760 money can be made in the near future.