thumb|right|The Nintendo Entertainment System was released in North America, Europe, Australia, Asia, and Brazil.
The history of the Nintendo Entertainment System (NES) spans the 1982 development of the Family Computer, to the 1985 launch of the NES, to Nintendo's rise to global dominance based upon this platform throughout the late 1980s. The or was developed in 1982 and launched in 1983 in Japan. Following the North American video game crash of 1983, the Famicom was adapted into the NES which was launched in North America in 1985. Transitioning the company from its arcade game history into this combined global 8-bit home video game console platform, the Famicom and NES continued to aggressively compete with next-generation 16-bit consoles, including the Sega Genesis. The platform was succeeded by the Super Famicom in 1990 and the Super Nintendo Entertainment System in 1991, but its support and production continued until 1995. Interest in the NES has been renewed by collectors and emulators, including Nintendo's own Virtual Console platform.
1981–1984: Origins
1981–1983: Development
The video game industry experienced a period of rapid growth and unprecedented popularity during the late 1970s to early 1980s, with the golden age of arcade video games and the second generation of video game consoles: Space Invaders (1978) and its shoot 'em up clones had become a phenomenal success across arcades worldwide,
Led by Masayuki Uemura, Nintendo's R&D2 team began work on a home system in 1982, ambitiously targeted to be less expensive than its competitors, yet with performance that could not be surpassed by its competitors for at least one year. Their main competition was the Epoch Cassette Vision, the best-selling console in Japan at the time, with Nintendo president Hiroshi Yamauchi telling employees he wanted them to develop a console both more powerful and cheaper than the Cassette Vision.
Meanwhile, in North America, the toy manufacturer Coleco was working on a new home console to compete with the Atari 2600 and which would be capable of handling fairly accurate ports of arcade games. Coleco demonstrated a prototype of the ColecoVision to Nintendo R&D2 engineers, who were impressed by the smoothly animated graphics. It left a strong impression on Sawano and Uemara, who had the ColecoVision in mind while working on Nintendo's new console in Japan. However, while the ColecoVision was a significant improvement over the Atari 2600, there was still no console comparable to the original Donkey Kong arcade hardware.
Uemura sent the engineers Katsuya Nakakawa and Masahiro Ootake to meet with Ricoh, a semiconductor manufacturer that had previously worked with Nintendo on arcade games. One of Ricoh's supervisors was Hiromitsu Yagi, a former Mitsubishi Electronics engineer who had previously designed the large-scale integration (LSI) chips for the Nintendo Color TV-Game consoles in the 1970s. To determine the system specifications of the new console, Nakakawa and Masahiro brought along a Donkey Kong arcade machine for Ricoh to analyze, in order to help build a console more powerful than any consoles at the time and which would be comparable to the Donkey Kong arcade hardware.
1983–1984: Famicom release in Japan
thumb|Family Computer (Japan)Nintendo held its own exhibition to unveil the Famicom, becoming a sensation among toy show exhibitors. Shortly after, the competing SG-1000 was unveiled at the Tokyo Toy Show.
Launching on July 15, 1983, the Family Computer (commonly known by the Japanese-English term Famicom) is an 8-bit console using interchangeable cartridges. The Famicom was released in Japan for (about $150 at the time, or equivalent to $ in ). Its launch game list is Donkey Kong, Donkey Kong Junior, and Popeye. The console was intentionally designed to look like a toy, with a bright red-and-white color scheme and two hardwired gamepads that are stored visibly at the sides of the unit.
It sold well in its early months, at 500,000 units in its first two months. However, many Famicom units reportedly had faulty graphics chips and froze during gameplay. After tracing the problem to a faulty circuit, Nintendo voluntarily recalled all Famicom systems just before the holiday shopping season, and temporarily suspended production of the system while the concerns were addressed, costing Nintendo millions of dollars. The Famicom was subsequently reissued with a new motherboard. The Famicom easily outsold its primary competitor, the SG-1000. By the end of 1984 Nintendo had sold more than 2.5 million Famicoms in the Japanese market. This made it the best-selling console in Japan, surpassing the Cassette Vision.
Nintendo had planned to be the exclusive provider of Famicom games during its launch year. Major arcade developer Namco approached Nintendo about Famicom development, as they had no means of cartridge production. They contracted a 30% fee to Nintendo per game sold, consisting of 10% as a licensing fee for the console, and 20% as the production cost of new cartridges. By 1984, third party Famicom games were published. This 30% fee became a de facto standard in console and storefront licensing for video game publishing through the 2010s.
1984–1987: Going international
1983: Marketing negotiations with Atari
Bolstered by its success in Japan, Nintendo soon turned its attention to foreign markets. As a new console manufacturer, Nintendo had to convince a skeptical public to embrace its system. To this end, Nintendo entered into negotiations with Atari to release the Famicom outside Japan as the Nintendo Enhanced Video System, with plans to release the system by the end of 1983. Though the two companies reached a tentative agreement, with final contract papers to be signed at the 1983 Summer Consumer Electronics Show (CES), Atari refused to sign at the last minute, after seeing Coleco, one of its main competitors in the market at that time,
North America
1984–1986: Nintendo VS. System
Famicom hardware debuted in North America in the arcades, in the form of the Nintendo VS. System in 1984; the system's success in arcades paved the way for the official release of the NES console. After the video game crash of 1983, many American retailers considered video games a passing fad, and greatly reduced or discontinued the inventory of such products.
The VS. System became a major success in North American arcades. and individual Vs. games often appeared as top-earners on the US arcade charts, and VS. Baseball in 1984, then Duck Hunt By 1985, 50,000 units had been sold, having established Nintendo as an industry leader in the arcades. The Vs. System went on to become the highest-grossing arcade machine of 1985 in the United States. By the time the NES launched in North America, nearly 100,000 VS. Systems had been sold to American arcades.
The success of the VS. System gave Nintendo the confidence to release the Famicom in North America as a video game console, which would later be called the Nintendo Entertainment System (NES). Nintendo's strong positive reputation in the arcades generated significant interest in the NES. It also gave Nintendo the opportunity to test new games as VS. Paks in the arcades, to determine which games to release for the NES launch. Nintendo's software strategy was to first release games for the Famicom, then the VS. System, and then for the NES. This allowed Nintendo to build a solid launch line-up for the NES. Many games made their North American debut on the VS. System before releasing for the NES, which led to many players being "amazed" at the accuracy of the arcade "ports" for the NES, though most VS. System games originated on the Famicom. Clockwise from the left: data recorder, keyboard, joystick, Zapper light gun, controllers.]]
Nintendo president Hiroshi Yamauchi said in 1986, "Atari collapsed because they gave too much freedom to third-party developers and the market was swamped with rubbish games." based on the Famicom Data Recorder and Family BASIC package that were released in Japan in 1984. The AVS was showcased at the Winter Consumer Electronics Show held in Las Vegas during January 5–8, 1985, The March 1985 issue of Electronic Games magazine stated that "the videogame market in America has virtually disappeared" and that "this could be a miscalculation on Nintendo's part". Roger Buoy of Mindscape allegedly said that year, "Hasn't anyone told them that the videogame industry is dead?" Video game historian Chris Kohler reflected, "Retailers didn't want to listen to the little startup Nintendo of America talk about how its Japanese parent company had a huge hit with the Famicom (the system from which the NES was adapted from). In America, videogames were dead, dead, dead. Personal computers were the future, and anything that just played games but couldn't do your taxes was hopelessly backwards."
1985: Redesign as the Nintendo Entertainment System
thumb|[[R.O.B. (Robotic Operating Buddy) had a short product lifespan, but was launched to help market the NES.]]