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Forums - Sales - Reconstructing Gaming History: NYTimes From 6/1/1991 - NES @ 9m in 1989?

One of my pet peeves with sales data is that it is almost impossible to find reliable sell through info on NES/Genesis and SNES in the USA for the pre-internet/pre-94'/95' days. But with newspapers now desperate to survive, some of them are making their archives free on the internet.

I only looked for about 20 minutes, but this is one interesting piece I found from June 1, 1991 in the New York Times:

Nintendo Goal: Bigger-Game Hunters

By EBEN SHAPIRO


Published: June 1, 1991

Nintendo of America, which generated frenzied demand for its original video games by limiting the supply, must now build sales of an improved system rapidly enough to overcome a rival's head start.

Nintendo is planning to open the Consumer Electronics Show in Chicago today by introducing a video-game machine with sharper graphics and better sound to compete with a system that Sega Enterprises has been selling since 1989. Nintendo aims to continue its domination of the $4.7 billion video-game market.

The market is expected to grow rapidly because of the new games, and it is attracting huge, sophisticated competitors. The Sony Corporation announced yesterday that it planned to enter the video-game business with a powerful system that was also capable of playing games on compact disks.

The new Nintendo machines are bound to start confrontations not only with Sega, but also between children and their parents. Many parents, who already regard video games as mindless diversions, may object to paying the expected $199 price of the new Nintendo -- especially after they have invested hundreds of dollars in hardware and game cartridges for the original machine. The more than 160 million game cartridges purchased for the original Nintendo machines will not work on the new ones.

With purchases of its original $100 machine down sharply, Nintendo is counting on the new machine to revitalize sales. But Nintendo faces the delicate task of persuading enthusiasts to trade up, without alienating most of the 28 million households that own the older Nintendo units (TheSource: I'm assuming this means NES shipped 28m in the USA by mid-1991).

"Most technology companies really have trouble making a smooth transition from one generation of product to the next," said Bing Gordon, senior vice president of marketing for Electronic Arts, a maker of software for computer and video games. "It is a hard thing to do, especially if the upgraded machine is something that is going to make the old one obsolete."

The machines are simple computers that use video-game cartridges to display the games on television sets. Nintendo makes money not only by selling its own machines and cartridges, but also by licensing more than 60 other companies to make cartridges for its system.

In a tribute to Nintendo's drawing power, Philips N.V. of the Netherlands has reached an agreement for Nintendo to provide its games for Philips's new interactive compact disk player, which lets users manipulate characters on a television screen. The arrangement is expected to give the Philips machine an edge over competing products.

For 1991, Nintendo of America expects sales of more than $4 billion, including $2.25 billion from the original Nintendo games and cartridges, $1.1 billion from its hand-held Game Boy, and $700,000 from the new Super Nintendo Entertainment System. Sales of cartridges for the old Nintendo system remain strong, but many in the industry expect these to fade as the newer systems gain popularity.

'Grew Out of Nintendo'

To many young people, like Brad Warner of West Los Angeles, who is 12 years old, Nintendo has lost its hypnotic appeal. "He grew out of Nintendo a year ago," said his mother, Andrea Warner. Brad said he was spending more time playing advanced computer games.

Ben Diederich, a 12-year-old in Tujunga, Calif., a section of Los Angeles, also grew bored with Nintendo and traded up to Sega's Genesis machine. He bought the machine by selling his old 8-bit Nintendo and 30 games for $300. "That is what a lot of my friends did, too," he said.

Sales of Nintendo machines peaked at 9 million in 1989 (My interpretation: Gameboy released late in 1989, but odds are this is only NES machines, since at the time Gameboy was referred to as a handheld, and shipments for the Americas, rather than USA sales at that), and dropped by about 20 percent, to 7.2 million, last year. Nintendo expects to sell 4.5 million of the original units this year.

To regain sales, Nintendo is bringing out its Super Nintendo Entertainment System, or Super NES, powered by a 16-bit computer chip. That chip makes possible more challenging games, richer color and better sound than the current 8-bit systems. Parents Sent Scrambling

This time, the Japanese company will not have the field to itself, as it did when its first 8-bit machines arrived in the United States in 1986. The company filled only a fraction of retailers' cartridge orders, and parents tramped from store to store searching for the most popular games. In April, Nintendo settled a price-fixing suit brought by several states, agreeing to provide buyers $25 million in rebates.

 

Nintendo still controls more than 85 percent of the video-game market. But Sega, also based in Japan, has already sold 1.4 million of its 16-bit Genesis machines in the United States. "We are not going to give up our leadership," vowed Alfred J. Nilsen, vice president of marketing for Sega of America. To combat the Super NES, Sega plans to slash the price of its Genesis machine to $149.99, from $189.95.

Despite Sega's advantage, many industry executives expect Nintendo to capture the lead in the 16-bit market quickly. Executives of Electronic Arts estimate that 50 percent of the owners of 8-bit machines will buy the new Nintendo systems. Nintendo expects to sell two million of the new games this year, although they will not arrive at stores until fall.

The company's new machine got off to a strong start in Japan, selling 1.6 million units since it was introduced in November. Such success has aroused considerable anticipation in the United States even before a $25 million advertising campaign begins.

Nintendo's greatest challenge may be to win over parents. They are likely to be uneasy about spending hundreds of dollars on a new video game system and cartridges that will make their children's current games seem old and slow.

"We don't take those parents for granted for one second," said Peter Main, vice president of marketing for Nintendo of America. He said the company planned to continue introducing games for the old 8-bit machines. Still, the fourth and latest version of the popular Super Mario games will be introduced only for the 16-bit system.

Toy industry executives count on children's wheedling to overcome parental resistance. Mrs. Warner said Brad would probably end up with the new Nintendo system. "We were becoming resistant to spending all this money," she said. But, she added, "He has a way of getting what he wants in the end."

Robert F. Kleiber, an analyst with Piper, Jaffray & Hopwood Inc. in Minneapolis, said the new games would enjoy a burst of popularity for only two to three years, compared with five years for the old games. The 16-bit systems will be replaced by games that derive new features from the huge storage capacity of compact disks, he said. The NEC Corporation, a Japanese electronics company, already has such a system, as well as a 16-bit machine.

The compact disk player that Sony announced yesterday for video games will also play Nintendo's 16-bit cartridges. "Finally, Nintendo has the attention of the real players in this business," Mr. Kleiber said.

But Nintendo, sometimes underestimated, is not about to concede anything to larger electronics companies. "We continue to be very aware of the Sonys, the Apples and the Mircosofts," said Nintendo's Mr. Main. "We are not taking our past success for granted." (Pretty Prescient Quote huh)



People are difficult to govern because they have too much knowledge.

When there are more laws, there are more criminals.

- Lao Tzu

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Nice Find, that was a interesting read



http://query.nytimes.com/gst/fullpage.html?res=9D0CE4D8163EF932A35755C0A967958260&sec=&spon=&pagewanted=2

Thats the link for those curious. What strikes me is that even though the numbers are shipped, it still means NES probably had a higher peak than PS1, and almost as high a peak in the USA as PS2.



People are difficult to govern because they have too much knowledge.

When there are more laws, there are more criminals.

- Lao Tzu

Also note:

USA Population in 2003 - 291m. PS2 peaked in 2002, so probably ~289m

USA Population in 1990 - 248m. NES peaked in 1989, so probably ~245m

So the USA 2002 Pop= USA 1989 Pop * 1.17

If NES sold ~7.5-8.0m of those shipped units in the USA in 1989, and if I'm remembering correctly, PS2 did 8-9m in the USA in 2002, then PS2 roughly only peaked 17% higher than NES - exactly in line with USA population growth.

Thats all estimation but still fairly stunning if even remotely true.



People are difficult to govern because they have too much knowledge.

When there are more laws, there are more criminals.

- Lao Tzu

what a nice find, a very good read

Nintendo really was doing well back then, funny how they mentioned microsoft



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An absolutely wonderful find, Source. While they made some errors (such as the NES launching in 1986 in the US), it brought out some parallels to todays industry yet also showed just how much it has changed.



The rEVOLution is not being televised

This article also validates two claims I can remember hearing in the early and mid 90s:

1) Nintendo was the first software company to profit > $1 billion in a year (selling 160m units of software in one region helps)

2) Nintendo accounted for 1/10 of the USA-Japan trade defecit in 1989 (makes sense if thats when NES peaked and GB came out)



People are difficult to govern because they have too much knowledge.

When there are more laws, there are more criminals.

- Lao Tzu

I like the doubt that people would adopt to a new console.

Also, 1991? Sony kept repeating at their press conference that they decided at a meeting in 1993.



I would cite regulation, but I know you will simply ignore it.

TheSource said:

2) Nintendo accounted for 1/10 of the USA-Japan trade defecit in 1989 (makes sense if thats when NES peaked and GB came out)

 

 Holy crap.  I never would have guessed it'd be anywhere near that.  Really, that seems too high to be real.



You do not have the right to never be offended.

If Genesis hadn't come out with decent momentum, I don't think we'd have seen a new Nintendo platform until 1994 or 1995. NES had more users than PCs did in the USA until the middle of the 1990s



People are difficult to govern because they have too much knowledge.

When there are more laws, there are more criminals.

- Lao Tzu