1 00:00:02,000 --> 00:00:07,000 Downloaded from YTS.MX 2 00:00:08,000 --> 00:00:13,000 Official YIFY movies site: YTS.MX 3 00:00:08,138 --> 00:00:10,575 [static crackling] 4 00:00:10,619 --> 00:00:11,750 [bright tone] 5 00:00:11,794 --> 00:00:14,231 [ominous notes] 6 00:00:14,275 --> 00:00:17,234 [dramatic music] 7 00:00:17,278 --> 00:00:21,543 ♪ 8 00:00:21,586 --> 00:00:24,546 [static crackling] 9 00:00:24,589 --> 00:00:31,335 ♪ 10 00:00:34,425 --> 00:00:35,992 - So my partner Bill and I 11 00:00:36,036 --> 00:00:37,733 are going to play ping-pong for you. 12 00:00:38,864 --> 00:00:40,257 Here we go. 13 00:00:40,301 --> 00:00:42,781 The demo represents some of the recent developments 14 00:00:42,825 --> 00:00:46,829 in the new business of audience participation in TV. 15 00:00:46,872 --> 00:00:49,527 Watch me take him out in a minute. 16 00:00:49,571 --> 00:00:50,746 Ah, didn't do it. 17 00:00:52,574 --> 00:00:54,271 Ah, I did it this time. 18 00:00:54,315 --> 00:00:56,099 ♪ 19 00:00:56,143 --> 00:00:58,145 We would like to convince you 20 00:00:58,188 --> 00:01:00,103 that there is indeed a market 21 00:01:00,147 --> 00:01:02,671 in which money can be made in the near future. 22 00:01:02,714 --> 00:01:09,721 ♪ 23 00:01:11,984 --> 00:01:13,464 - It was like magic. 24 00:01:13,508 --> 00:01:17,120 ♪ 25 00:01:17,164 --> 00:01:19,862 You could make something happen on the screen. 26 00:01:19,905 --> 00:01:22,212 ♪ 27 00:01:22,256 --> 00:01:24,127 You know, having grown up with all 28 00:01:24,171 --> 00:01:27,304 of this preprogrammed stuff on the television screen, 29 00:01:27,348 --> 00:01:29,263 you'd never been able to change that. 30 00:01:29,306 --> 00:01:32,048 - America's most incredible video game. 31 00:01:32,092 --> 00:01:33,745 - Suddenly, with this little controller, 32 00:01:33,789 --> 00:01:35,312 you could actually control something on the screen. 33 00:01:35,356 --> 00:01:36,792 - You control the players 34 00:01:36,835 --> 00:01:38,707 as if you were coaching your own team. 35 00:01:38,750 --> 00:01:41,623 - It was just unbelievable, magical. 36 00:01:41,666 --> 00:01:43,973 ♪ 37 00:01:44,016 --> 00:01:45,757 [blipping] 38 00:01:45,801 --> 00:01:48,151 - There is a new addiction in America: 39 00:01:48,195 --> 00:01:49,587 Nintendo video games. 40 00:01:49,631 --> 00:01:51,546 - How many of you own a Nintendo? 41 00:01:51,589 --> 00:01:56,594 ♪ 42 00:01:56,638 --> 00:01:58,553 - Joining us from the company's inner sanctum, 43 00:01:58,596 --> 00:02:01,686 Nintendo game master Howard Phillips. 44 00:02:01,730 --> 00:02:03,732 - This one's got about 12 times the memory. 45 00:02:03,775 --> 00:02:06,038 The graphics are-- graphics are much better. 46 00:02:06,082 --> 00:02:07,170 Oh. 47 00:02:07,214 --> 00:02:08,171 [bright electronic music] Got it. 48 00:02:08,215 --> 00:02:09,912 [upbeat music] 49 00:02:09,955 --> 00:02:12,436 - People, animals, wizards, spells, 50 00:02:12,480 --> 00:02:15,091 you see this spread out over different worlds. 51 00:02:15,135 --> 00:02:17,920 ♪ 52 00:02:17,963 --> 00:02:19,661 - Nintendo Gameplay, David speaking. 53 00:02:19,704 --> 00:02:20,923 How may I help you? 54 00:02:20,966 --> 00:02:22,620 - It's not just stick figures anymore. 55 00:02:22,664 --> 00:02:24,709 There's much more involved in playing the game, 56 00:02:24,753 --> 00:02:27,059 a better use of colors, better use of music. 57 00:02:27,103 --> 00:02:29,888 [blipping] 58 00:02:29,932 --> 00:02:33,414 - He is a computerized Italian swashbuckling adventurer, 59 00:02:33,457 --> 00:02:35,633 as Mario is clearly number one. 60 00:02:35,677 --> 00:02:36,765 [applause] 61 00:02:36,808 --> 00:02:38,984 - Not only for this coming Christmas 62 00:02:39,028 --> 00:02:41,378 but for an entire new generation. 63 00:02:41,422 --> 00:02:44,207 [video game blipping] [crowd cheering] 64 00:02:44,251 --> 00:02:47,384 ♪ 65 00:02:47,428 --> 00:02:50,344 - The "Mario Bros." game cartridge is so hot, 66 00:02:50,387 --> 00:02:52,737 it is impossible to find in stores. 67 00:02:52,781 --> 00:02:55,436 - I've done seven stores a day for three weeks now. 68 00:02:55,479 --> 00:02:56,785 I cannot find it. 69 00:02:56,828 --> 00:02:58,439 - Can you do something? My kid wants it. 70 00:02:58,482 --> 00:03:00,267 His friend has it, and they're not friends anymore 71 00:03:00,310 --> 00:03:01,833 'cause he doesn't have it. 72 00:03:01,877 --> 00:03:04,314 - Nintendo's only been around for three years 73 00:03:04,358 --> 00:03:08,492 but will ring up mind-boggling sales of $1.7 billion 74 00:03:08,536 --> 00:03:09,624 by Christmas. 75 00:03:09,667 --> 00:03:12,235 [blipping] 76 00:03:12,279 --> 00:03:14,237 - We were the video game industry. 77 00:03:14,281 --> 00:03:16,021 - We can't underestimate the value 78 00:03:16,065 --> 00:03:17,893 of 60 million players. 79 00:03:17,936 --> 00:03:19,199 - Tetris! 80 00:03:19,242 --> 00:03:21,113 - Nobody could conceive of how Nintendo, 81 00:03:21,157 --> 00:03:23,551 with so many great games, 82 00:03:23,594 --> 00:03:25,248 with 95% or more of the marketplace, 83 00:03:25,292 --> 00:03:26,728 could ever get toppled. 84 00:03:26,771 --> 00:03:28,077 - The last "Super Mario Bros. 2" 85 00:03:28,120 --> 00:03:29,426 was just sold. 86 00:03:29,470 --> 00:03:32,560 - My eight-year-old would kill for one. 87 00:03:32,603 --> 00:03:34,388 - [laughs] - Nintendo! 88 00:03:34,431 --> 00:03:35,824 - Yeah! 89 00:03:35,867 --> 00:03:38,000 [children screaming] 90 00:03:38,043 --> 00:03:39,958 - Nintendo! Nintendo! 91 00:03:40,002 --> 00:03:43,353 - Nintendo! [all scream] 92 00:03:43,397 --> 00:03:47,618 - Today Nintendo controls the home video game market. 93 00:03:47,662 --> 00:03:49,446 - Let's play Nintendo! 94 00:03:49,490 --> 00:03:52,449 - Anybody would have found that to be a Herculean task, 95 00:03:52,493 --> 00:03:55,104 to try and unseat Nintendo. 96 00:03:55,147 --> 00:03:57,149 All the other companies were always trying, 97 00:03:57,193 --> 00:03:58,412 but, you know, they had maybe one game 98 00:03:58,455 --> 00:03:59,630 or one thing going on, 99 00:03:59,674 --> 00:04:02,067 whereas Nintendo just had everything. 100 00:04:02,111 --> 00:04:04,156 We're gonna be here forever. 101 00:04:04,200 --> 00:04:06,681 But then it changed. 102 00:04:06,724 --> 00:04:09,684 ♪ 103 00:04:09,727 --> 00:04:12,861 [blipping] 104 00:04:12,904 --> 00:04:15,864 [Howard Jones' "Things Can Only Get Better"] 105 00:04:15,907 --> 00:04:22,914 ♪ 106 00:04:26,222 --> 00:04:27,963 - ♪ We're not scared to lose it all ♪ 107 00:04:28,006 --> 00:04:30,400 ♪ Security thrown through the wall ♪ 108 00:04:30,444 --> 00:04:31,749 ♪ Future dreams 109 00:04:31,793 --> 00:04:33,185 - When I first came to America 110 00:04:33,229 --> 00:04:36,014 was with the Mitsubishi Corporation. 111 00:04:36,058 --> 00:04:38,713 What I really felt here in the States 112 00:04:38,756 --> 00:04:41,455 was people really have the opportunity 113 00:04:41,498 --> 00:04:43,500 of making American dream happen. 114 00:04:43,544 --> 00:04:47,287 That spirit of sort of entrepreneurship, 115 00:04:47,330 --> 00:04:50,333 I really fell in love with that. 116 00:04:50,377 --> 00:04:53,118 After working for Mitsubishi for three years, 117 00:04:53,162 --> 00:04:56,208 Japan headquarters said, "You must come back," 118 00:04:56,252 --> 00:04:59,168 but I wanted to stay in America. 119 00:04:59,211 --> 00:05:05,174 So secretly, I sent my résumé to an American sort of 120 00:05:05,217 --> 00:05:06,915 recruiting firm, 121 00:05:06,958 --> 00:05:10,527 and I had a call at the company called Sega. 122 00:05:10,571 --> 00:05:12,007 I had no idea what it was, 123 00:05:12,050 --> 00:05:14,749 but they are looking for someone 124 00:05:14,792 --> 00:05:18,361 to launch their new video game business in the States. 125 00:05:18,405 --> 00:05:19,971 [daunting music] 126 00:05:20,015 --> 00:05:22,974 - And so it was, late in the 20th century, 127 00:05:23,018 --> 00:05:26,674 terminal boredom swept the countryside. 128 00:05:26,717 --> 00:05:30,068 The maker looked down and was not pleased by what he saw. 129 00:05:30,112 --> 00:05:31,331 [explosion booms] 130 00:05:31,374 --> 00:05:33,202 And so it was he brought forth... 131 00:05:33,245 --> 00:05:37,337 [echoing] Genesis. 132 00:05:37,380 --> 00:05:40,340 [cheerful music] 133 00:05:40,383 --> 00:05:45,954 ♪ 134 00:05:45,997 --> 00:05:47,782 [car horns honk] [seal squeaks] 135 00:05:47,825 --> 00:05:50,785 - The moment I started to work for Sega of America, 136 00:05:50,828 --> 00:05:54,832 I started to commute to Sega San Francisco headquarter 137 00:05:54,876 --> 00:05:57,400 because my family actually lived in Texas, 138 00:05:57,444 --> 00:06:01,317 and I stayed always in Comfort Suites. 139 00:06:02,797 --> 00:06:06,191 This small hotel room became my home away from home. 140 00:06:06,235 --> 00:06:07,889 ♪ 141 00:06:07,932 --> 00:06:13,547 I checked in there in, I think, October of '89, 142 00:06:13,590 --> 00:06:16,724 and by the way, I haven't checked out ever since. 143 00:06:16,767 --> 00:06:19,248 - 800-521-2-- 144 00:06:19,291 --> 00:06:21,337 - I don't think many people knew. 145 00:06:21,381 --> 00:06:24,166 I mean, I'm still shocked that he still stays there, 146 00:06:24,209 --> 00:06:28,823 personally, but I lived there for about a year and a half 147 00:06:28,866 --> 00:06:31,173 when I first started at Sega. 148 00:06:32,479 --> 00:06:34,437 - Hi, welcome to Sega. 149 00:06:34,481 --> 00:06:36,961 - It was hard to build an organization from scratch 150 00:06:37,005 --> 00:06:41,662 and launch a major video game system in the United States. 151 00:06:41,705 --> 00:06:43,838 There's so many hurdles to get into the business 152 00:06:43,881 --> 00:06:46,014 with all the retailers. 153 00:06:46,057 --> 00:06:47,450 You know, they just won't buy from anybody. 154 00:06:47,494 --> 00:06:49,844 You have to prove yourself. 155 00:06:49,887 --> 00:06:52,629 - The challenges we had in those days 156 00:06:52,673 --> 00:06:56,024 were the very strong presence of Nintendo. 157 00:06:56,067 --> 00:06:58,853 - Let's play Nintendo! 158 00:06:59,897 --> 00:07:01,290 -"Nintendo Power" magazine goes out 159 00:07:01,333 --> 00:07:03,901 bimonthly to players all around the country. 160 00:07:03,945 --> 00:07:06,208 Right now, it's about 1.7 million. 161 00:07:06,251 --> 00:07:08,123 On a weekly average, 162 00:07:08,166 --> 00:07:10,734 we get about 140,000 phone calls in here. 163 00:07:10,778 --> 00:07:12,257 - The key is in the hidden town. 164 00:07:12,301 --> 00:07:14,651 You have to cast a spell at the dead end. 165 00:07:14,695 --> 00:07:16,392 - Ah. 166 00:07:16,436 --> 00:07:17,872 - "Nintendo Power." 167 00:07:17,915 --> 00:07:20,048 - Another Nintendo game! 168 00:07:20,091 --> 00:07:23,268 - And parents are now faced with portable Nintendo. 169 00:07:23,312 --> 00:07:25,923 all: We are Nintendo. 170 00:07:25,967 --> 00:07:27,447 - Say what you want about Nintendo, 171 00:07:27,490 --> 00:07:30,406 but they were pretty cocky about their position 172 00:07:30,450 --> 00:07:34,758 and felt assured that we wouldn't have much success. 173 00:07:34,802 --> 00:07:38,240 - Nintendo's a very, very strong company, 174 00:07:38,283 --> 00:07:40,198 and so far, its competition hasn't been more 175 00:07:40,242 --> 00:07:41,330 than a blip on the screen. 176 00:07:41,373 --> 00:07:43,375 - This is the Sega Genesis. 177 00:07:43,419 --> 00:07:46,117 This is their next-generation video game machine. 178 00:07:46,161 --> 00:07:50,165 - The first year, the expectation was to sell 179 00:07:50,208 --> 00:07:53,603 1 million units of Sega Genesis, 180 00:07:53,647 --> 00:07:56,693 but sales was not that great. 181 00:07:56,737 --> 00:08:00,610 - We were struggling at the time, no doubt about it. 182 00:08:00,654 --> 00:08:04,484 - The president at that time held a weekly lineup meeting, 183 00:08:04,527 --> 00:08:08,139 and he always somehow seemed to forget 184 00:08:08,183 --> 00:08:10,751 about what we discussed previous week. 185 00:08:10,794 --> 00:08:13,188 So it repeated and repeated and repeated and so forth. 186 00:08:13,231 --> 00:08:15,756 - [yawns] 187 00:08:15,799 --> 00:08:18,280 [bright tones] 188 00:08:18,323 --> 00:08:21,283 - So we were stuck between a rock and a hard place. 189 00:08:22,589 --> 00:08:25,548 - We needed someone to turn the tide around. 190 00:08:25,592 --> 00:08:29,465 So Sega brought in Tom Kalinske, 191 00:08:29,509 --> 00:08:30,988 the prince of toy business. 192 00:08:31,032 --> 00:08:33,513 ♪ 193 00:08:33,556 --> 00:08:35,384 [upbeat rock music] 194 00:08:35,427 --> 00:08:38,605 - When I was about to graduate, I got a job 195 00:08:38,648 --> 00:08:40,476 with J. Walter Thompson in New York City. 196 00:08:40,520 --> 00:08:42,565 ♪ 197 00:08:42,609 --> 00:08:43,871 We were given the assignment 198 00:08:43,914 --> 00:08:46,874 to develop a new children's vitamin, 199 00:08:46,917 --> 00:08:48,919 and we developed Flintstones Vitamins. 200 00:08:48,963 --> 00:08:51,269 - Yabba-dabba-doo! Yabba-dabba-doo! 201 00:08:51,313 --> 00:08:52,793 - Oh, great idea, Fred. 202 00:08:52,836 --> 00:08:55,360 - Within six months, it was the number one vitamin 203 00:08:55,404 --> 00:08:57,101 in the United States. 204 00:08:57,145 --> 00:08:59,103 - Yabba-dabba-doo! 205 00:08:59,147 --> 00:09:00,757 - But shortly thereafter, 206 00:09:00,801 --> 00:09:04,326 the Senate had a subcommittee on children's advertising. 207 00:09:04,369 --> 00:09:06,546 - Super Sugar Crisp is coated with super sugar 208 00:09:06,589 --> 00:09:08,373 to make it taste so sweet. 209 00:09:08,417 --> 00:09:10,767 - The feeling at the time was that 210 00:09:10,811 --> 00:09:12,900 children's sugared cereal advertising 211 00:09:12,943 --> 00:09:16,556 and somehow children's vitamins advertising was bad. 212 00:09:16,599 --> 00:09:18,340 - They're great! 213 00:09:18,383 --> 00:09:19,863 - And the next thing I know, 214 00:09:19,907 --> 00:09:22,300 Senator Margaret Chase Smith looks at me and says, 215 00:09:22,344 --> 00:09:23,867 "So, Mr. Kalinske, 216 00:09:23,911 --> 00:09:28,132 you think selling drugs to children is a good idea?" 217 00:09:28,176 --> 00:09:29,830 And so I read a letter that a mom had actually 218 00:09:29,873 --> 00:09:32,659 written to me that talked about how grateful she was 219 00:09:32,702 --> 00:09:35,009 because we're selling a vitamin that the children 220 00:09:35,052 --> 00:09:36,750 actually want to take, and I said, 221 00:09:36,793 --> 00:09:38,665 "By the way, I have 5,000 more letters like that. 222 00:09:38,708 --> 00:09:40,841 Would you like me to read some more of them to you?" 223 00:09:40,884 --> 00:09:43,321 And she said, "No, Mr. Kalinske, that's enough." 224 00:09:43,365 --> 00:09:45,019 Well, the Mattel guys were there, 225 00:09:45,062 --> 00:09:47,848 and the next thing I know, they flew me out, 226 00:09:47,891 --> 00:09:49,589 and I was offered a job. 227 00:09:49,632 --> 00:09:53,114 - You can tell it's Mattel. It's swell. 228 00:09:53,157 --> 00:09:56,204 - Ruth Handler founded Mattel. 229 00:09:56,247 --> 00:09:57,858 She came into my office, and she said, 230 00:09:57,901 --> 00:10:00,077 "Tom, the retailers say it's over for Barbie. 231 00:10:00,121 --> 00:10:01,426 "Forget about Barbie. 232 00:10:01,470 --> 00:10:02,863 "Let's get on to something else. 233 00:10:02,906 --> 00:10:04,342 What do you think about that?" 234 00:10:04,386 --> 00:10:06,649 And I said, "Ruth, that's the dumbest thing 235 00:10:06,693 --> 00:10:08,172 "I have ever heard. 236 00:10:08,216 --> 00:10:10,914 Barbie will be around long after you and I are gone." 237 00:10:10,958 --> 00:10:12,612 And she said, "That's what I wanted to hear! 238 00:10:12,655 --> 00:10:15,179 You're now in charge of the Barbie business." 239 00:10:15,223 --> 00:10:16,703 Barbie could be anything 240 00:10:16,746 --> 00:10:18,661 that a little girl wanted her to be. 241 00:10:18,705 --> 00:10:20,881 - Barbie's taking her driver's test. 242 00:10:20,924 --> 00:10:22,665 - I love her long hair. 243 00:10:22,709 --> 00:10:24,406 - Is there room in Barbie's dream pool for me? 244 00:10:24,449 --> 00:10:25,668 - Oh, Daddy. [laughter] 245 00:10:25,712 --> 00:10:27,888 [exciting music] 246 00:10:27,931 --> 00:10:29,106 - And the business just took off. 247 00:10:29,150 --> 00:10:31,456 ♪ 248 00:10:31,500 --> 00:10:32,588 It grew like crazy. 249 00:10:32,632 --> 00:10:34,677 ♪ 250 00:10:34,721 --> 00:10:39,290 And then we created a series of different product lines 251 00:10:39,334 --> 00:10:41,423 that would appeal to young boys. 252 00:10:41,466 --> 00:10:46,123 And out of this research came this very muscular character. 253 00:10:46,167 --> 00:10:49,431 - [grunts] - I have the power! 254 00:10:49,474 --> 00:10:51,694 - And it became a pretty good hit. 255 00:10:51,738 --> 00:10:54,654 ♪ 256 00:10:54,697 --> 00:10:57,657 So I got promoted to CEO. 257 00:10:57,700 --> 00:11:00,660 [relaxing music] 258 00:11:00,703 --> 00:11:06,448 ♪ 259 00:11:06,491 --> 00:11:10,670 In 1990, I took a vacation with Karen and the kids... 260 00:11:10,713 --> 00:11:12,715 ♪ 261 00:11:12,759 --> 00:11:15,457 And literally kind of lying on the beach... 262 00:11:15,500 --> 00:11:18,634 [birds squawking] 263 00:11:18,678 --> 00:11:21,811 And all of a sudden, this guy appears. 264 00:11:21,855 --> 00:11:27,121 It was Hayao Nakayama, CEO of Sega Japan. 265 00:11:27,164 --> 00:11:28,252 And I said, "What are you doing here?" 266 00:11:28,296 --> 00:11:29,819 He said, "I'm looking for you." 267 00:11:29,863 --> 00:11:31,908 He said, "Well, I want you to come to Japan with me 268 00:11:31,952 --> 00:11:35,520 because we've got this great 16-bit technology." 269 00:11:35,564 --> 00:11:37,827 - Sega. - "We want you to run Sega 270 00:11:37,871 --> 00:11:39,611 and take on Nintendo." 271 00:11:39,655 --> 00:11:40,961 And I argued with him. 272 00:11:41,004 --> 00:11:42,527 I didn't really want to go, 273 00:11:42,571 --> 00:11:44,442 but my daughter Ashley said, 274 00:11:44,486 --> 00:11:47,097 "This man came all the way from Japan to find you. 275 00:11:47,141 --> 00:11:49,099 "You have to go back with him 276 00:11:49,143 --> 00:11:50,622 to see what he's talking about." 277 00:11:50,666 --> 00:11:52,233 - It's your destiny. 278 00:11:52,276 --> 00:11:54,888 - After a long discussion with family, 279 00:11:54,931 --> 00:11:56,846 I did go to Japan. 280 00:11:56,890 --> 00:12:00,981 [airplane engine roaring] 281 00:12:01,024 --> 00:12:03,940 [dynamic music] 282 00:12:03,984 --> 00:12:08,162 ♪ 283 00:12:08,205 --> 00:12:09,772 And I must say, 284 00:12:09,816 --> 00:12:13,863 I was very, very impressed by what 16-bit technology was 285 00:12:13,907 --> 00:12:17,301 compared to what I had known as 8-bit Nintendo. 286 00:12:17,345 --> 00:12:18,738 [blipping] 287 00:12:18,781 --> 00:12:21,262 And I thought, "This really is revolutionary," 288 00:12:21,305 --> 00:12:24,787 but at the same time, I was somewhat fearful of Nintendo. 289 00:12:24,831 --> 00:12:26,833 [ominous music] 290 00:12:26,876 --> 00:12:28,443 - The men sitting in this room 291 00:12:28,486 --> 00:12:31,011 control the American video game industry. 292 00:12:31,054 --> 00:12:34,579 - The NES continues to havea unit sales projection 293 00:12:34,623 --> 00:12:37,757 through Decemberof 2 million units. 294 00:12:37,800 --> 00:12:41,412 - Nintendo was extremely arrogant as a company. 295 00:12:41,456 --> 00:12:43,937 - To marketing vice president Peter Main, 296 00:12:43,980 --> 00:12:45,852 selling Nintendo is easy. 297 00:12:45,895 --> 00:12:48,724 - They come, they try, they like, and they buy, 298 00:12:48,768 --> 00:12:50,770 and it's a fun business. 299 00:12:50,813 --> 00:12:52,075 [blipping] 300 00:12:52,119 --> 00:12:54,991 - Especially fun if there's no competition. 301 00:12:55,035 --> 00:12:58,603 - Nintendo threatened the leading software companies 302 00:12:58,647 --> 00:13:01,128 that if they developed for any other system, 303 00:13:01,171 --> 00:13:05,175 they would not give them approval of games on the NES. 304 00:13:05,219 --> 00:13:08,135 - They were able to, one by one, 305 00:13:08,178 --> 00:13:12,487 contact all major retailers and intimidate them 306 00:13:12,530 --> 00:13:15,577 or induce them not to handle Tengen product. 307 00:13:16,752 --> 00:13:18,101 - It was like blackmail. 308 00:13:18,145 --> 00:13:19,233 - No, I don't think so. 309 00:13:19,276 --> 00:13:20,930 No. Sorry. 310 00:13:22,410 --> 00:13:26,153 We were adamant that this was a legal tactic. 311 00:13:26,196 --> 00:13:27,937 - Retailers were the same way. 312 00:13:27,981 --> 00:13:32,072 Retailers were afraid to carry any other system. 313 00:13:32,115 --> 00:13:33,856 - The retailers didn't like us, okay? 314 00:13:33,900 --> 00:13:35,510 We were not liked. 315 00:13:35,553 --> 00:13:37,904 I don't think we were ever liked, 316 00:13:37,947 --> 00:13:39,166 but we were respected. 317 00:13:39,209 --> 00:13:40,602 [gavel banging] 318 00:13:40,645 --> 00:13:42,865 - They were anxious to sue just about anybody 319 00:13:42,909 --> 00:13:45,433 that got in their way of doing business. 320 00:13:45,476 --> 00:13:46,651 - Please, just go away. 321 00:13:46,695 --> 00:13:49,306 We established the rule 322 00:13:49,350 --> 00:13:51,874 that Nintendo was not gonna get pushed around. 323 00:13:51,918 --> 00:13:55,443 - We were extremely on top of execution, 324 00:13:55,486 --> 00:13:57,575 willing to put resources 325 00:13:57,619 --> 00:13:59,926 where they needed to be at the right time. 326 00:14:01,710 --> 00:14:04,408 - What Nintendo was doing was monopolistic 327 00:14:04,452 --> 00:14:05,757 and was wrong. 328 00:14:05,801 --> 00:14:07,977 - Nintendo acts like a unchained 329 00:14:08,021 --> 00:14:10,458 800-pound gorilla swinging its way 330 00:14:10,501 --> 00:14:12,155 through America's toy stores. 331 00:14:12,199 --> 00:14:14,244 [dramatic music] 332 00:14:14,288 --> 00:14:16,290 - Save you! - Help me! Ah! 333 00:14:16,333 --> 00:14:17,900 - Federal and state officials charge today 334 00:14:17,944 --> 00:14:19,641 that Nintendo threatened to cut off 335 00:14:19,684 --> 00:14:21,599 supplies of its video games 336 00:14:21,643 --> 00:14:24,907 if retailers charged less than Nintendo wanted. 337 00:14:24,951 --> 00:14:27,518 - As a law violator, a lawbreaker, 338 00:14:27,562 --> 00:14:31,000 you did wrong to your loyal customers. 339 00:14:31,044 --> 00:14:35,526 - Nintendo! Oh, man! 340 00:14:35,570 --> 00:14:37,572 - Our relationship with our customers 341 00:14:37,615 --> 00:14:40,270 is our number one priority, and that's the reason 342 00:14:40,314 --> 00:14:41,402 that we reached this 343 00:14:41,445 --> 00:14:43,491 comprehensive settlement today. 344 00:14:43,534 --> 00:14:46,102 I think we had to pay $5 million. 345 00:14:46,146 --> 00:14:50,454 All of the rest of the penalty was in the form of coupons 346 00:14:50,498 --> 00:14:51,934 that we would give out, 347 00:14:51,978 --> 00:14:55,677 allowing people to buy more Nintendo games, 348 00:14:55,720 --> 00:14:57,940 which was pretty slick, if you think about it. 349 00:14:57,984 --> 00:15:00,247 - Do you see that price coming down in the future? 350 00:15:00,290 --> 00:15:03,293 - I was asked on the witness stand, 351 00:15:03,337 --> 00:15:04,599 "Do you consider yourself 352 00:15:04,642 --> 00:15:06,993 to be an aggressive person, Mr. Main?" 353 00:15:07,036 --> 00:15:08,385 I said, "I'm in marketing. 354 00:15:08,429 --> 00:15:09,952 "It's about growing market share. 355 00:15:09,996 --> 00:15:11,475 "And whatever gets in your way, 356 00:15:11,519 --> 00:15:13,956 "you try and work around it or over it or past it. 357 00:15:14,000 --> 00:15:15,566 Is that what you mean?" 358 00:15:15,610 --> 00:15:18,395 He said, "That's what I mean." I said, "That's what we do." 359 00:15:18,439 --> 00:15:20,832 [tense music] 360 00:15:20,876 --> 00:15:24,314 - I found something a lot more scary than cocaine. 361 00:15:24,358 --> 00:15:26,229 It's called Nintendo. 362 00:15:26,273 --> 00:15:28,623 [laughter] [video games blipping] 363 00:15:28,666 --> 00:15:30,581 - Nintendo was so powerful, 364 00:15:30,625 --> 00:15:34,585 they had a 95% share of the market. 365 00:15:34,629 --> 00:15:36,500 It was a dominant position 366 00:15:36,544 --> 00:15:39,851 not like which I've ever seen in my business career, 367 00:15:39,895 --> 00:15:43,203 so the idea of taking on this giant, Nintendo, 368 00:15:43,246 --> 00:15:47,947 that everybody said is too powerful, too big, 369 00:15:47,990 --> 00:15:51,254 it's an impossible task, that just appealed to me. 370 00:15:51,298 --> 00:15:53,387 [dramatic music] 371 00:15:53,430 --> 00:15:56,781 I knew that Japanese companies tended to tightly control 372 00:15:56,825 --> 00:15:58,522 their operations outside of Japan, 373 00:15:58,566 --> 00:16:02,613 so before I accepted, I told Nakayama I needed 374 00:16:02,657 --> 00:16:06,878 to do things my way, the American way. 375 00:16:06,922 --> 00:16:10,578 He told me he agreed with me and he understood that. 376 00:16:10,621 --> 00:16:15,322 So I decided to take this role on. 377 00:16:15,365 --> 00:16:17,846 [car horn honking] 378 00:16:17,889 --> 00:16:20,022 Sega of America was a small building, 379 00:16:20,066 --> 00:16:21,676 and there was no real lobby. 380 00:16:21,719 --> 00:16:25,897 People could wander in and out very easily, not well lit. 381 00:16:25,941 --> 00:16:27,725 It was so different 382 00:16:27,769 --> 00:16:30,641 than what I was used to at Mattel. 383 00:16:30,685 --> 00:16:34,210 It was initially a shock to the system. 384 00:16:34,254 --> 00:16:36,821 - The day Tom, you know, came to Sega 385 00:16:36,865 --> 00:16:39,259 was a very crucial time. 386 00:16:39,302 --> 00:16:42,914 Tom was someone who can really grow the company big. 387 00:16:42,958 --> 00:16:45,656 - Shinobu mentioned to me that Tom was coming, 388 00:16:45,700 --> 00:16:48,181 and I said, "Great," you know. 389 00:16:48,224 --> 00:16:50,052 "It's all uphill from here." 390 00:16:50,096 --> 00:16:54,013 - There were executives at other companies 391 00:16:54,056 --> 00:16:55,710 that were pretty dismissive 392 00:16:55,753 --> 00:16:58,495 of my coming into the video game industry 393 00:16:58,539 --> 00:17:00,149 and really having any impact. 394 00:17:00,193 --> 00:17:02,238 They thought I was just another toy guy. 395 00:17:02,282 --> 00:17:05,111 They thought all I knew how to do was market Barbie dolls 396 00:17:05,154 --> 00:17:06,721 and Hot Wheels cars. 397 00:17:06,764 --> 00:17:09,724 There were even analogies to, "Oh, here comes Ken 398 00:17:09,767 --> 00:17:12,292 "to save the Sega-- the video game company, 399 00:17:12,335 --> 00:17:13,902 and, boy, that's not gonna work." 400 00:17:13,945 --> 00:17:16,078 So personally, that was at stake for me, 401 00:17:16,122 --> 00:17:20,343 and none of us really knew if this thing with Sega 402 00:17:20,387 --> 00:17:22,345 was gonna be a success or not. 403 00:17:22,389 --> 00:17:25,740 I didn't even initially move my family up to San Francisco. 404 00:17:25,783 --> 00:17:27,611 I stayed in a Comfort Inn 405 00:17:27,655 --> 00:17:30,701 very close to the Sega offices. 406 00:17:30,745 --> 00:17:33,052 It happened to be a place that Shinobu Toyoda 407 00:17:33,095 --> 00:17:35,010 was also staying at. - Hi, Tom. 408 00:17:35,054 --> 00:17:37,099 - Tom started staying at the Comfort Inn, 409 00:17:37,143 --> 00:17:38,622 and then Tom and I decided 410 00:17:38,666 --> 00:17:41,103 that we would, you know, get, like, a two-bedroom suite 411 00:17:41,147 --> 00:17:42,931 someplace for about the same price. 412 00:17:42,974 --> 00:17:45,847 - Paul was a great roommate. We were both baseball fans. 413 00:17:45,890 --> 00:17:47,675 So we'd go back to the apartment. 414 00:17:47,718 --> 00:17:50,112 We'd have pizza and drink beer 415 00:17:50,156 --> 00:17:52,245 and got up early and went to Sega. 416 00:17:52,288 --> 00:17:53,420 - [belches] 417 00:17:53,463 --> 00:17:54,899 [uplifting music] 418 00:17:54,943 --> 00:17:57,032 I knew Paul Rioux for a long, long time. 419 00:17:57,076 --> 00:17:58,642 I knew him at Mattel. 420 00:17:58,686 --> 00:18:01,036 So we did discuss his experience in Vietnam. 421 00:18:01,080 --> 00:18:03,778 - I've had the mustache since I was, 422 00:18:03,821 --> 00:18:06,607 like--I got out of Vietnam. 423 00:18:06,650 --> 00:18:09,958 That's why I wanted to get out, so I could grow a mustache. 424 00:18:10,001 --> 00:18:12,047 - I knew he had gone through battle. 425 00:18:12,091 --> 00:18:13,222 [gunfire] 426 00:18:13,266 --> 00:18:15,746 He'd had explosions occur near his head, 427 00:18:15,790 --> 00:18:19,402 where he lost part of the hearing in one ear. 428 00:18:19,446 --> 00:18:23,145 To Paul, being in business was very similar to combat. 429 00:18:23,189 --> 00:18:25,191 He wanted to crush the enemy. 430 00:18:25,234 --> 00:18:26,366 [descending notes] 431 00:18:26,409 --> 00:18:29,151 - You gotta be ready to fight... 432 00:18:29,195 --> 00:18:30,500 similar in business. 433 00:18:30,544 --> 00:18:32,981 It's not as life-threatening 434 00:18:33,024 --> 00:18:35,375 in the business world, but sometimes it may be. 435 00:18:37,420 --> 00:18:40,902 - ♪ She-Ra, Princess of Power ♪ 436 00:18:40,945 --> 00:18:43,296 - I always felt that one of my strengths 437 00:18:43,339 --> 00:18:45,211 is coming up with unique strategies 438 00:18:45,254 --> 00:18:47,126 that either make companies successful 439 00:18:47,169 --> 00:18:49,345 and either work or don't. 440 00:18:49,389 --> 00:18:51,391 And it seemed to me that Nintendo 441 00:18:51,434 --> 00:18:53,044 was selling games designed 442 00:18:53,088 --> 00:18:55,090 for a very young audience. 443 00:18:55,134 --> 00:18:57,701 So I saw an opportunity to go after 444 00:18:57,745 --> 00:19:00,095 the teenage and college audience, 445 00:19:00,139 --> 00:19:03,185 and let's leave Nintendo with the kids. 446 00:19:03,229 --> 00:19:06,493 [dramatic music] 447 00:19:06,536 --> 00:19:08,538 So I worked with Paul and Shinobu 448 00:19:08,582 --> 00:19:10,061 on putting together a plan 449 00:19:10,105 --> 00:19:12,890 on how we were gonna take on Nintendo. 450 00:19:12,934 --> 00:19:19,332 ♪ 451 00:19:26,556 --> 00:19:30,212 - Tom and I went to Sega Japan headquarter, 452 00:19:30,256 --> 00:19:33,520 where there is a big room called Decision Room, 453 00:19:33,563 --> 00:19:36,436 full of executives and managers... 454 00:19:36,479 --> 00:19:39,743 and Nakayama-san sitting in the center. 455 00:19:39,787 --> 00:19:42,572 - I'm not one to just go into a business 456 00:19:42,616 --> 00:19:44,835 where I think I'm gonna be second place. 457 00:19:45,880 --> 00:19:48,578 I had studied the market and had a strategy 458 00:19:48,622 --> 00:19:50,972 for what I thought we needed to do. 459 00:19:51,015 --> 00:19:55,368 First, I wanted to do more American licenses from TV shows 460 00:19:55,411 --> 00:19:57,326 and movies in the United States... 461 00:19:57,370 --> 00:19:59,023 - [screams] 462 00:19:59,067 --> 00:20:02,244 - Because Japan didn't understand those licenses. 463 00:20:02,288 --> 00:20:04,377 - Montana, touchdown! 464 00:20:04,420 --> 00:20:06,117 - And I didn't think the development 465 00:20:06,161 --> 00:20:08,076 could occur in Japan. 466 00:20:08,119 --> 00:20:11,253 Then I said, "We've gotta lower the price of Genesis." 467 00:20:11,297 --> 00:20:15,214 - We wanted to make it very competitive against Nintendo. 468 00:20:15,257 --> 00:20:18,347 - And I wanted us to take on Mario, 469 00:20:18,391 --> 00:20:21,176 and so I wanted our best character 470 00:20:21,220 --> 00:20:23,918 to be included with the hardware. 471 00:20:23,961 --> 00:20:28,139 - Nakayama's face turned very white, and he said, 472 00:20:28,183 --> 00:20:31,621 "What, crazy? That's our lifeblood. 473 00:20:31,665 --> 00:20:32,883 Give it free?" 474 00:20:32,927 --> 00:20:35,538 And Tom told Nakayama-san, 475 00:20:35,582 --> 00:20:38,498 "By the way, in addition to this"... 476 00:20:38,541 --> 00:20:41,762 - I wanted to take Nintendo on directly in advertising 477 00:20:41,805 --> 00:20:43,894 and make fun of them. 478 00:20:43,938 --> 00:20:46,419 - Of course, there was a fear that Nintendo may sue us 479 00:20:46,462 --> 00:20:48,595 or somehow try to stop that. 480 00:20:48,638 --> 00:20:51,859 ♪ 481 00:20:51,902 --> 00:20:55,079 - After my presentation, they all talked in Japanese. 482 00:20:55,123 --> 00:20:57,647 Shinobu would try to translate in my ear, 483 00:20:57,691 --> 00:21:00,563 but I could tell this was not going over well. 484 00:21:00,607 --> 00:21:03,305 And I thought, "Well, that's the shortest career 485 00:21:03,349 --> 00:21:05,655 anybody ever had with a company." 486 00:21:05,699 --> 00:21:10,269 - Nakayama-san got so mad, his face turning very pale. 487 00:21:10,312 --> 00:21:11,748 - Nakayama said, 488 00:21:11,792 --> 00:21:15,491 "Well, nobody agrees with anything that you've said." 489 00:21:15,535 --> 00:21:19,321 - He literally stood up from chair and almost, 490 00:21:19,365 --> 00:21:20,627 like, kicking the chair. 491 00:21:20,670 --> 00:21:22,759 I really don't remember physically did he 492 00:21:22,803 --> 00:21:24,021 kick the chair or not, 493 00:21:24,065 --> 00:21:27,242 but he quickly walked to the door. 494 00:21:27,286 --> 00:21:29,679 ♪ 495 00:21:29,723 --> 00:21:31,551 [blipping] 496 00:21:31,594 --> 00:21:33,509 - But he turned at the door, and he said, 497 00:21:33,553 --> 00:21:36,077 "When I brought you on board, I said you could make 498 00:21:36,120 --> 00:21:39,036 "the decisions for the company in the United States, 499 00:21:39,080 --> 00:21:42,779 and therefore go ahead and do what you just proposed." 500 00:21:42,823 --> 00:21:45,782 [crowd cheering] 501 00:21:45,826 --> 00:21:48,785 [victorious music] 502 00:21:48,829 --> 00:21:51,658 [bells jingling] 503 00:21:51,701 --> 00:21:53,355 - For the third year in a row, 504 00:21:53,399 --> 00:21:55,749 it's on the top of everyone's Christmas list. 505 00:21:55,792 --> 00:21:57,490 - What do you wantfor Christmas? 506 00:21:57,533 --> 00:21:58,882 - Nintendo. 507 00:21:58,926 --> 00:22:01,015 - There were competitors, 508 00:22:01,058 --> 00:22:04,279 home video game companies that were in the business, 509 00:22:04,323 --> 00:22:06,107 and certainly one of the companies was Sega. 510 00:22:07,848 --> 00:22:09,415 One of the things that we always did 511 00:22:09,458 --> 00:22:12,766 was have our game people play their games. 512 00:22:12,809 --> 00:22:14,158 [upbeat electronic music] 513 00:22:14,202 --> 00:22:18,337 The feedback was uniformly, "Great graphics, 514 00:22:18,380 --> 00:22:20,339 but the games are lousy." 515 00:22:20,382 --> 00:22:22,297 ♪ 516 00:22:22,341 --> 00:22:25,082 As long as we were hearing that... 517 00:22:25,126 --> 00:22:26,257 we weren't too concerned. 518 00:22:26,301 --> 00:22:29,696 ♪ 519 00:22:29,739 --> 00:22:31,611 - Welcome to the Fight Palace. 520 00:22:31,654 --> 00:22:35,005 [eerie electronic music] 521 00:22:35,049 --> 00:22:37,660 ♪ 522 00:22:37,704 --> 00:22:39,270 - The title that was packed 523 00:22:39,314 --> 00:22:41,664 into the Genesis was "Altered Beast." 524 00:22:41,708 --> 00:22:43,057 - [roars] 525 00:22:43,100 --> 00:22:45,451 - Not a particularly good game in my opinion, 526 00:22:45,494 --> 00:22:48,105 but it also sounded like devil worship 527 00:22:48,149 --> 00:22:49,585 for half of the United States, 528 00:22:49,629 --> 00:22:51,544 where that would be just unacceptable. 529 00:22:51,587 --> 00:22:54,329 And we needed something to compete with Mario. 530 00:22:54,373 --> 00:22:55,896 [dynamic music] 531 00:22:55,939 --> 00:22:59,639 - So there was company-wide efforts to come up 532 00:22:59,682 --> 00:23:01,075 with something new. 533 00:23:01,118 --> 00:23:04,208 Yuji Naka, our genius programmer, 534 00:23:04,252 --> 00:23:08,561 came up with algorithm to move object very fast, 535 00:23:08,604 --> 00:23:12,086 and he needed a character to move fast. 536 00:23:12,129 --> 00:23:13,435 - [speaking Japanese] 537 00:23:13,479 --> 00:23:16,482 - So he asked the art designer, 538 00:23:16,525 --> 00:23:18,484 Naoto Ohshima, to come up 539 00:23:18,527 --> 00:23:20,268 with some sort of characters. 540 00:23:20,311 --> 00:23:23,314 - [speaking Japanese] 541 00:23:27,318 --> 00:23:28,755 - It was Al Nilsen, 542 00:23:28,798 --> 00:23:30,321 our director of marketing, 543 00:23:30,365 --> 00:23:32,454 who had to pick the characters. 544 00:23:32,498 --> 00:23:33,716 - First game I have here 545 00:23:33,760 --> 00:23:35,109 is "Michael Jackson's Moonwalker," 546 00:23:35,152 --> 00:23:37,894 which was actually designed by Michael himself. 547 00:23:39,156 --> 00:23:42,203 - Al was one of the very first employees hired 548 00:23:42,246 --> 00:23:44,466 to launch Sega Genesis. 549 00:23:44,510 --> 00:23:49,340 He was the game guru, marketer, PR, everything. 550 00:23:49,384 --> 00:23:53,780 - Al's the best gamer I've ever seen. 551 00:23:53,823 --> 00:23:55,825 - He was like a big kid 552 00:23:55,869 --> 00:23:58,437 who played video games all the time. 553 00:23:58,480 --> 00:24:00,090 - Shinobu came into my office 554 00:24:00,134 --> 00:24:02,397 and explained about this contest 555 00:24:02,441 --> 00:24:06,314 that Sega Japan had had to develop our Mario. 556 00:24:06,357 --> 00:24:09,448 He says, "Nakayama has chosen you. 557 00:24:09,491 --> 00:24:11,580 "They're happy with two finalists, 558 00:24:11,624 --> 00:24:13,147 and they want you to choose." 559 00:24:13,190 --> 00:24:16,150 The first one was Eggs. 560 00:24:16,193 --> 00:24:17,804 ♪ 561 00:24:17,847 --> 00:24:19,501 "Okay, let's see what the other one is." 562 00:24:19,545 --> 00:24:21,198 ♪ 563 00:24:21,242 --> 00:24:23,287 "A hedgehog? 564 00:24:23,331 --> 00:24:26,203 What in the world is a hedgehog?" 565 00:24:26,247 --> 00:24:28,597 And there was this rock band. 566 00:24:28,641 --> 00:24:31,513 - He also had a girlfriend named Madonna, 567 00:24:31,557 --> 00:24:34,211 who was very voluptuous. [wolf whistle] 568 00:24:34,255 --> 00:24:38,955 - So I've got Eggs and a hedgehog... 569 00:24:38,999 --> 00:24:41,784 so I chose Sonic the Hedgehog. 570 00:24:43,046 --> 00:24:45,745 I said, "You gotta get rid of the rock band, 571 00:24:45,788 --> 00:24:47,616 and you gotta get rid of Madonna." 572 00:24:47,660 --> 00:24:49,009 - We said, of course, "No, no, no. 573 00:24:49,052 --> 00:24:50,663 we can't use the name Madonna for this." 574 00:24:50,706 --> 00:24:52,491 - But there were some other tweaks 575 00:24:52,534 --> 00:24:53,622 to the way he looked... 576 00:24:53,666 --> 00:24:55,537 ♪ 577 00:24:55,581 --> 00:24:58,279 Just to go and round off his edges. 578 00:24:58,322 --> 00:25:00,194 - The folks in Japan didn't like that 579 00:25:00,237 --> 00:25:01,848 because it was their creation 580 00:25:01,891 --> 00:25:05,373 and didn't want anyone to touch. 581 00:25:05,416 --> 00:25:06,896 - It went all the way up 582 00:25:06,940 --> 00:25:09,725 inside of the Japan culture to Nakayama, 583 00:25:09,769 --> 00:25:12,641 and he eventually said, "No, do what the U.S. wants done." 584 00:25:12,685 --> 00:25:15,035 [dramatic music] 585 00:25:15,078 --> 00:25:17,211 - Six months later, I'm at Sega Japan. 586 00:25:17,254 --> 00:25:20,649 We walk over to a screen, and here's this guy Sonic. 587 00:25:20,693 --> 00:25:21,998 [captivating music] 588 00:25:22,042 --> 00:25:24,653 Never seen a video game move that fast... 589 00:25:24,697 --> 00:25:27,482 and look at these vibrant colors. 590 00:25:27,526 --> 00:25:30,398 After my visit, I went back, and I said, 591 00:25:30,441 --> 00:25:33,357 "Sega Japan created something that we can go 592 00:25:33,401 --> 00:25:35,229 "and put up against Mario. 593 00:25:35,272 --> 00:25:39,102 This can be our number one game." 594 00:25:39,146 --> 00:25:45,369 ♪ 595 00:25:45,413 --> 00:25:48,764 [blipping] 596 00:25:48,808 --> 00:25:50,897 - "It's gonna be the best game Sega ever did." 597 00:25:50,940 --> 00:25:53,203 Coming from Al, that was, like, you know, 598 00:25:53,247 --> 00:25:55,075 "Hey, we got a runner." 599 00:25:55,118 --> 00:25:56,250 [blipping] 600 00:25:56,293 --> 00:25:58,992 - That changed the mood and tide, 601 00:25:59,035 --> 00:26:02,386 so to speak, of the company immediately. 602 00:26:02,430 --> 00:26:04,693 And the rest is history, 603 00:26:04,737 --> 00:26:08,436 and, uh...yeah. 604 00:26:08,479 --> 00:26:10,394 [applause] 605 00:26:10,438 --> 00:26:12,788 - Let's play Nintendo! 606 00:26:12,832 --> 00:26:15,835 [cheers and applause] 607 00:26:17,184 --> 00:26:19,229 - It is the video game craze, 608 00:26:19,273 --> 00:26:22,058 the Nintendo craze, but this year, Nintendo 609 00:26:22,102 --> 00:26:25,105 may be up against some serious competition. 610 00:26:25,148 --> 00:26:27,760 - You get better graphics, more levels of play, 611 00:26:27,803 --> 00:26:31,590 better animation on the screen, longer games, 612 00:26:31,633 --> 00:26:33,113 just more fun to play. 613 00:26:33,156 --> 00:26:35,550 - Nintendo, however, does not plan 614 00:26:35,594 --> 00:26:37,421 to relinquish any ground. 615 00:26:37,465 --> 00:26:40,642 - Introducing the next generation from Nintendo. 616 00:26:40,686 --> 00:26:44,124 - Almost as soon as the NES was launched in the United States, 617 00:26:44,167 --> 00:26:46,822 Nintendo was working on the Super NES. 618 00:26:46,866 --> 00:26:48,911 - What do you do after you've made a fortune 619 00:26:48,955 --> 00:26:50,521 selling American kids on a product 620 00:26:50,565 --> 00:26:52,306 that drives their parents crazy? 621 00:26:52,349 --> 00:26:54,351 You declare it obsolete, of course, and introduce 622 00:26:54,395 --> 00:26:56,049 a new and improved version next month. 623 00:26:56,092 --> 00:26:59,661 - Nintendo wants a generation of video freaks 624 00:26:59,705 --> 00:27:01,968 to forsake the gear they've already spent 625 00:27:02,011 --> 00:27:03,839 several hundred dollars on 626 00:27:03,883 --> 00:27:06,494 for this, Super Nintendo. 627 00:27:06,537 --> 00:27:09,323 [dramatic music] 628 00:27:09,366 --> 00:27:11,499 - So we arranged with Sega Japan 629 00:27:11,542 --> 00:27:14,894 to go and pick up one of the new systems for us. 630 00:27:14,937 --> 00:27:16,896 And we all got together in Tom's office, 631 00:27:16,939 --> 00:27:18,724 took it out of the box, 632 00:27:18,767 --> 00:27:21,727 hooked it up to the TV, hit the on switch, 633 00:27:21,770 --> 00:27:24,468 and we were ready to see what they had in store for us. 634 00:27:24,512 --> 00:27:25,687 [blipping] 635 00:27:25,731 --> 00:27:27,950 - We had a Mario launch game. 636 00:27:29,169 --> 00:27:33,216 I knew instantly we had a winner. 637 00:27:33,260 --> 00:27:35,566 That game was that good. 638 00:27:35,610 --> 00:27:37,830 - "Are you sure?" 639 00:27:37,873 --> 00:27:41,616 This didn't look like 16-bit. 640 00:27:41,660 --> 00:27:44,619 It kind of looked 12-bit, if I want to coin a phrase. 641 00:27:44,663 --> 00:27:47,274 ♪ 642 00:27:47,317 --> 00:27:50,712 It just wasn't taking it to the next level. 643 00:27:50,756 --> 00:27:54,237 I was like, "Yeah, we're okay. 644 00:27:54,281 --> 00:27:57,284 "We've got this guy named Sonic in our back pocket. 645 00:27:57,327 --> 00:28:00,591 This could go and be very, very interesting." 646 00:28:00,635 --> 00:28:04,117 So I came up with an idea. 647 00:28:04,160 --> 00:28:06,162 - ♪ Ah, push it 648 00:28:06,206 --> 00:28:09,513 ♪ 649 00:28:09,557 --> 00:28:13,039 - Ask not what machines can do for you. 650 00:28:13,082 --> 00:28:16,216 Ask what you can do for machines. 651 00:28:16,259 --> 00:28:21,308 ♪ 652 00:28:21,351 --> 00:28:25,051 - The Consumer Electronics Show is a twice-a-year extravaganza. 653 00:28:25,094 --> 00:28:29,969 More than 140,000 products are now on display. 654 00:28:30,012 --> 00:28:32,058 Hundreds of companies are taking part, 655 00:28:32,101 --> 00:28:34,669 and more than a third of the industry's annual business 656 00:28:34,713 --> 00:28:36,192 is done right there. 657 00:28:36,236 --> 00:28:37,759 - But this time, it's for the ducks. 658 00:28:37,803 --> 00:28:39,456 - Wait. - Uh-oh. 659 00:28:40,544 --> 00:28:42,459 - Whenever you're at war, 660 00:28:42,503 --> 00:28:44,418 you always hit the guy in the mouth 661 00:28:44,461 --> 00:28:45,767 as hard as you can. 662 00:28:45,811 --> 00:28:47,464 If you can't hit him hard, 663 00:28:47,508 --> 00:28:49,379 you might as well not even fight. 664 00:28:49,423 --> 00:28:51,991 That's the attitude in real war, 665 00:28:52,034 --> 00:28:53,775 and it's the attitude in business. 666 00:28:53,819 --> 00:28:55,734 You've gotta be prepared to take on 667 00:28:55,777 --> 00:28:57,561 the competition and win. 668 00:28:57,605 --> 00:28:59,650 ♪ 669 00:28:59,694 --> 00:29:02,828 - ♪ Ow, dig it 670 00:29:02,871 --> 00:29:04,264 - Do you think the technology exists 671 00:29:04,307 --> 00:29:06,309 that these'll shrink even more? 672 00:29:06,353 --> 00:29:08,137 - I don't know how much smaller they can get. 673 00:29:08,181 --> 00:29:09,399 You know what the problem with them getting smaller 674 00:29:09,443 --> 00:29:11,097 is holding them steady, 675 00:29:11,140 --> 00:29:13,099 because if it's lightweight, it tends to move. 676 00:29:13,142 --> 00:29:14,317 ♪ 677 00:29:14,361 --> 00:29:15,492 - ♪ Salt-N-Pepa, Salt-N-Pepa ♪ 678 00:29:15,536 --> 00:29:16,972 - Nintendo had some new games 679 00:29:17,016 --> 00:29:18,669 and accessories on display 680 00:29:18,713 --> 00:29:21,063 inside the enormous Nintendo pavilion. 681 00:29:21,107 --> 00:29:22,499 [women scream] 682 00:29:22,543 --> 00:29:24,414 Nintendo now has the lion's share 683 00:29:24,458 --> 00:29:26,808 of the $5 billion video game market. 684 00:29:26,852 --> 00:29:29,506 Sega of America will offer two new games, 685 00:29:29,550 --> 00:29:31,682 one featuring a hedgehog. 686 00:29:31,726 --> 00:29:34,816 - Normally before a big launch of a--of a major title, 687 00:29:34,860 --> 00:29:37,819 you would start getting early press. 688 00:29:37,863 --> 00:29:39,038 We didn't do any of that. 689 00:29:39,081 --> 00:29:41,823 We waited until the very, very last minute 690 00:29:41,867 --> 00:29:43,825 to surprise Nintendo. 691 00:29:43,869 --> 00:29:45,696 - ♪ Show the guys that we know ♪ 692 00:29:45,740 --> 00:29:47,481 - Ta-da. [laughs] 693 00:29:47,524 --> 00:29:48,961 - ♪ I don't know what I'm doing ♪ 694 00:29:49,004 --> 00:29:51,702 - I can't believe it. Mario, jeez. 695 00:29:51,746 --> 00:29:54,531 - I'm a nice guy, and I felt that the nicest thing 696 00:29:54,575 --> 00:29:56,751 that I could go and do for Nintendo 697 00:29:56,795 --> 00:30:01,582 was to introduce Super NES to America for them. 698 00:30:01,625 --> 00:30:03,932 I see this reporter. 699 00:30:03,976 --> 00:30:05,847 His opening words were, 700 00:30:05,891 --> 00:30:09,677 "Super Nintendo has 32,768 colors. 701 00:30:09,720 --> 00:30:11,200 "You only have 512. 702 00:30:11,244 --> 00:30:12,941 What are you gonna do about it?" 703 00:30:12,985 --> 00:30:16,031 We walk over to where we had the two monitors stacked 704 00:30:16,075 --> 00:30:17,598 one on top of each other, 705 00:30:17,641 --> 00:30:20,731 and I said to him, "Which one has more colors?" 706 00:30:20,775 --> 00:30:22,255 - ♪ Push it 707 00:30:22,298 --> 00:30:24,866 ♪ Push, push, push, push it, push it ♪ 708 00:30:24,910 --> 00:30:26,346 ♪ Push it 709 00:30:26,389 --> 00:30:29,653 - He just turned around and walked out of the booth. 710 00:30:29,697 --> 00:30:31,873 - ♪ Push it, push it, push it ♪ 711 00:30:31,917 --> 00:30:33,788 ♪ Push it, push it, push it 712 00:30:33,832 --> 00:30:35,224 - And it's like, "Hmm. 713 00:30:35,268 --> 00:30:36,878 "What can we do with this? 714 00:30:36,922 --> 00:30:39,533 "Let's do what we did at CES 715 00:30:39,576 --> 00:30:43,885 but this time a mall tour going around the country." 716 00:30:43,929 --> 00:30:44,886 [children shouting] 717 00:30:44,930 --> 00:30:46,366 - Here's the challenge. 718 00:30:46,409 --> 00:30:49,978 Super Nintendo, brand-new competitor of ours, 16 bits. 719 00:30:50,022 --> 00:30:51,110 We challenge them. 720 00:30:51,153 --> 00:30:52,720 We think we're better than them, 721 00:30:52,763 --> 00:30:55,375 but it's up to you to decide. 722 00:30:55,418 --> 00:30:57,116 [upbeat music] 723 00:30:57,159 --> 00:30:59,858 - Our small initial team was very good, 724 00:30:59,901 --> 00:31:02,338 but it was clear to me we needed help. 725 00:31:02,382 --> 00:31:03,949 - The American marketplace 726 00:31:03,992 --> 00:31:07,169 is a very vibrant marketplace for the video game industry. 727 00:31:07,213 --> 00:31:09,128 - We were one of the first video game companies 728 00:31:09,171 --> 00:31:11,434 to have senior women in the management ranks. 729 00:31:11,478 --> 00:31:13,436 And Ellen Beth Van Buskirk 730 00:31:13,480 --> 00:31:15,917 was a very special find for us. 731 00:31:15,961 --> 00:31:18,224 - You have the 8-bit segments. 732 00:31:18,267 --> 00:31:21,923 I spent my entire summer going from mall to mall 733 00:31:21,967 --> 00:31:26,101 to mall to mall to introduce Sonic the Hedgehog. 734 00:31:26,145 --> 00:31:28,277 And on occasion, 735 00:31:28,321 --> 00:31:33,195 I would don the Sonic the Hedgehog character uniform. 736 00:31:33,239 --> 00:31:35,241 You could project that the little kids 737 00:31:35,284 --> 00:31:37,112 were gonna pet me. 738 00:31:37,156 --> 00:31:38,374 They were gonna wanna be hugged. 739 00:31:38,418 --> 00:31:41,943 "Oh, Sonic," kisses and hugs and sweetness. 740 00:31:41,987 --> 00:31:47,035 But the teenage boys responded to me quite differently. 741 00:31:47,079 --> 00:31:51,474 They kind of wanted to do high-fiving, fist pumping, 742 00:31:51,518 --> 00:31:53,520 and I kind of got pushed around a little bit. 743 00:31:53,563 --> 00:31:56,088 - I think Genesis is gonna win all the way. 744 00:31:56,131 --> 00:31:58,307 - They wanted something different. 745 00:31:58,351 --> 00:32:00,005 They wanted attitude. 746 00:32:00,048 --> 00:32:03,530 They wanted sass. They didn't want hugs. 747 00:32:03,573 --> 00:32:06,707 - For Christmas, I'm gonna ask my mom for a Sega Genesis 748 00:32:06,750 --> 00:32:09,928 because it's way better than Nintendo. 749 00:32:09,971 --> 00:32:12,887 - Mario was a very slow-moving, 750 00:32:12,931 --> 00:32:15,020 left-to-right scroll game, 751 00:32:15,063 --> 00:32:17,196 and Sonic was hip and fast and cool. 752 00:32:17,239 --> 00:32:18,371 - Sega Genesis is way better 753 00:32:18,414 --> 00:32:20,460 because Nintendo is kind of slow. 754 00:32:20,503 --> 00:32:22,941 - When Sonic was first released, 755 00:32:22,984 --> 00:32:24,943 everybody kind of scratched their head and said, 756 00:32:24,986 --> 00:32:26,683 "A hedge-what?" 757 00:32:26,727 --> 00:32:30,035 - You know, was it impressive that he could roll really fast? 758 00:32:30,078 --> 00:32:32,080 I don't know. You know, for me, 759 00:32:32,124 --> 00:32:33,255 I didn't probably have 760 00:32:33,299 --> 00:32:34,996 the reaction time to deal with it. 761 00:32:35,040 --> 00:32:36,998 - But for a lot of people, they found it really fun 762 00:32:37,042 --> 00:32:40,306 and liked the fast action, using that pachinko mechanic 763 00:32:40,349 --> 00:32:41,872 of lots of "ba-ding-a-ding-a-ding," 764 00:32:41,916 --> 00:32:43,874 very fun to kind of get that going and keep it going. 765 00:32:43,918 --> 00:32:45,876 And Sonic is a character. 766 00:32:45,920 --> 00:32:48,488 He had that little bit of edgy kind of wiseness 767 00:32:48,531 --> 00:32:51,534 that Mario--you know, Mario-- "hoo-hoo"--never had. 768 00:32:51,578 --> 00:32:54,146 - It wasn't empirical science when you say, 769 00:32:54,189 --> 00:32:56,148 "Which one do you like better?" 770 00:32:56,191 --> 00:32:58,367 Doot, doot, doot, doot, doot, doot. 771 00:32:58,411 --> 00:33:00,413 [imitates whoosh] 772 00:33:00,456 --> 00:33:02,981 - In speed of action, we looked better; 773 00:33:03,024 --> 00:33:04,460 graphics, we looked better. 774 00:33:04,504 --> 00:33:05,896 [blipping] 775 00:33:05,940 --> 00:33:08,377 They had never experienced anything like it. 776 00:33:08,421 --> 00:33:10,727 - I don't think Sonic the Hedgehog 777 00:33:10,771 --> 00:33:13,295 was a masterpiece or something, 778 00:33:13,339 --> 00:33:15,602 but it gave them additional momentum. 779 00:33:17,343 --> 00:33:18,953 - By then, I knew we had a winner, 780 00:33:18,997 --> 00:33:20,389 but we needed to find a way 781 00:33:20,433 --> 00:33:22,391 to get in the major retailers. 782 00:33:22,435 --> 00:33:24,611 - ♪ Wal-Mart's one of those 783 00:33:24,654 --> 00:33:28,919 - Wal-Mart wouldn't agree to carry Sega products. 784 00:33:28,963 --> 00:33:31,096 - The only thing... - Hotter than Nintendo games... 785 00:33:31,139 --> 00:33:32,662 - Is Wal-Mart's price. 786 00:33:32,706 --> 00:33:35,056 - Wal-Mart was making a lot of money from Nintendo, 787 00:33:35,100 --> 00:33:39,713 and they did not need any unknown second supplier. 788 00:33:39,756 --> 00:33:42,672 - And Wal-Mart just refused because of this pressure 789 00:33:42,716 --> 00:33:44,022 that Nintendo put on them. 790 00:33:45,327 --> 00:33:49,766 - We were fanatics about retail space, okay? 791 00:33:49,810 --> 00:33:51,594 [funky music] 792 00:33:51,638 --> 00:33:53,379 That became a thing we leveraged. 793 00:33:53,422 --> 00:33:55,859 "Hey, you're really doing well with the product, Mr. Retailer, 794 00:33:55,903 --> 00:33:59,472 "but guess how much better you could be if you had 20, 795 00:33:59,515 --> 00:34:02,736 30, 40 feet of Nintendo product." 796 00:34:02,779 --> 00:34:05,086 - And "Super Mario World"is included. 797 00:34:05,130 --> 00:34:07,393 - Okay, okay, we'll get it for him. 798 00:34:09,134 --> 00:34:13,225 - So we developed a strategy on how to change this. 799 00:34:13,268 --> 00:34:14,748 [blipping] 800 00:34:14,791 --> 00:34:19,057 - I came up with an idea of opening a Sega Game Store 801 00:34:19,100 --> 00:34:23,104 right in front of Wal-Mart headquarter in Arkansas. 802 00:34:23,148 --> 00:34:26,020 - We rented a store in a shopping mall 803 00:34:26,064 --> 00:34:29,328 literally as close to Wal-Mart headquarters 804 00:34:29,371 --> 00:34:31,243 in Bentonville as you could get, 805 00:34:31,286 --> 00:34:35,377 and we put as many TVs and Sega Genesis 806 00:34:35,421 --> 00:34:38,119 in there as we could and a big sign out front 807 00:34:38,163 --> 00:34:41,296 that said, "Come play Sega Genesis." 808 00:34:41,340 --> 00:34:42,993 - Free of charge. 809 00:34:43,037 --> 00:34:45,909 - We had lines of teenagers out the door. 810 00:34:45,953 --> 00:34:49,522 - The store became very popular for Wal-Mart employees. 811 00:34:50,784 --> 00:34:53,134 - We bought every billboard leading in and out 812 00:34:53,178 --> 00:34:55,658 of Bentonville with Sega advertising. 813 00:34:55,702 --> 00:34:58,139 We bought the football cushions 814 00:34:58,183 --> 00:35:01,447 at the University of Arkansas football stadium. 815 00:35:01,490 --> 00:35:03,840 ♪ 816 00:35:03,884 --> 00:35:07,888 After a while, a senior VP of Wal-Mart called me up, 817 00:35:07,931 --> 00:35:10,369 and he said, "Tom, stop it. 818 00:35:10,412 --> 00:35:14,286 We'll give you a four-foot section in Wal-Mart stores." 819 00:35:14,329 --> 00:35:17,506 Because Wal-Mart is such a powerful retailer, 820 00:35:17,550 --> 00:35:20,248 all the other retailers gave us more space 821 00:35:20,292 --> 00:35:23,164 and were less afraid of Nintendo punishment. 822 00:35:23,208 --> 00:35:25,035 [upbeat music] 823 00:35:25,079 --> 00:35:27,560 That changed the business dramatically. 824 00:35:27,603 --> 00:35:34,175 ♪ 825 00:35:34,219 --> 00:35:36,917 - As the company started to grow very fast, 826 00:35:36,960 --> 00:35:39,659 we brought in people from much bigger company 827 00:35:39,702 --> 00:35:43,141 because we are aiming to be a bigger company. 828 00:35:43,184 --> 00:35:45,099 [exciting music] 829 00:35:45,143 --> 00:35:47,406 - Sega was such a distant player. 830 00:35:47,449 --> 00:35:48,885 It wasn't like they were second. 831 00:35:48,929 --> 00:35:51,453 It was like they were 14th. They were that far down. 832 00:35:51,497 --> 00:35:55,196 Nintendo was so dominant. - "Nintendo Power." 833 00:35:55,240 --> 00:35:58,112 - So I got a call from Tom, from Tom Kalinske. 834 00:35:58,156 --> 00:36:00,984 He needed some help doing marketing, 835 00:36:01,028 --> 00:36:02,682 and he asked if I would do it. 836 00:36:02,725 --> 00:36:04,074 - Mario! 837 00:36:04,118 --> 00:36:06,686 - It was not dissimilar to what I did at Reebok, 838 00:36:06,729 --> 00:36:09,341 which was trying to unseat a category leader. 839 00:36:09,384 --> 00:36:11,865 - No-no-nobody. 840 00:36:11,908 --> 00:36:13,388 - Part of the reason of going to Reebok 841 00:36:13,432 --> 00:36:15,825 was the challenge of slaying the beast of Nike. 842 00:36:15,869 --> 00:36:17,044 - Impossible. 843 00:36:17,087 --> 00:36:18,045 - And we came up with this idea 844 00:36:18,088 --> 00:36:19,481 called the Reebok Pump. 845 00:36:20,787 --> 00:36:22,310 It was totally a marketing gimmick. 846 00:36:22,354 --> 00:36:24,312 It made your foot a lot hotter. 847 00:36:24,356 --> 00:36:26,575 It didn't really give you any more support. 848 00:36:26,619 --> 00:36:28,751 ♪ 849 00:36:28,795 --> 00:36:31,232 But at the end of the day, it was one of those things 850 00:36:31,276 --> 00:36:33,669 that just caught the consumer psyche. 851 00:36:33,713 --> 00:36:35,541 ♪ 852 00:36:35,584 --> 00:36:37,456 - Steve Race, the first thing we heard about 853 00:36:37,499 --> 00:36:41,155 is his wild TV commercial at Reebok. 854 00:36:41,199 --> 00:36:42,939 - One guy is wearing Nikes. 855 00:36:42,983 --> 00:36:45,681 The other guy is wearing Reebok. 856 00:36:45,725 --> 00:36:47,944 They both jump off this bridge. 857 00:36:47,988 --> 00:36:50,599 [dynamic music] 858 00:36:50,643 --> 00:36:53,036 ♪ 859 00:36:53,080 --> 00:36:54,821 Commercial ran once. 860 00:36:56,518 --> 00:36:59,608 - Steve Race was a terrorist for A-type personalities. 861 00:36:59,652 --> 00:37:02,350 If he was a college course, he'd be Trouble and Difficulty. 862 00:37:02,394 --> 00:37:04,222 ♪ 863 00:37:04,265 --> 00:37:06,485 - I remember Steve and I playing tennis. 864 00:37:06,528 --> 00:37:08,878 He had a mean serve. 865 00:37:08,922 --> 00:37:11,446 I think he was aiming for my head most of the time. 866 00:37:11,490 --> 00:37:13,274 - Sega had a bad reputation. 867 00:37:13,318 --> 00:37:15,798 ♪ 868 00:37:15,842 --> 00:37:17,757 [telephone rings] 869 00:37:17,800 --> 00:37:20,063 I just didn't wanna be the puppet that would be pulled 870 00:37:20,107 --> 00:37:22,979 by a puppet master 7,000 miles away. 871 00:37:24,329 --> 00:37:26,244 I didn't know who the puppet master was. 872 00:37:26,287 --> 00:37:28,594 Obviously, it turned out to be Nakayama-san. 873 00:37:28,637 --> 00:37:31,074 [ominous music] 874 00:37:31,118 --> 00:37:33,381 Nakayama was the head of SOJ, 875 00:37:33,425 --> 00:37:35,383 and he really was the patriarch 876 00:37:35,427 --> 00:37:37,167 and the prime mover in all of Sega. 877 00:37:37,211 --> 00:37:39,779 Nothing went out without Nakayama's approval 878 00:37:39,822 --> 00:37:41,259 and endorsement. 879 00:37:41,302 --> 00:37:45,915 - Nakayama-san was very difficult for many people. 880 00:37:45,959 --> 00:37:49,310 If you do not deliver, he was brutal. 881 00:37:49,354 --> 00:37:52,444 - We'd all be on alert that he was coming in, 882 00:37:52,487 --> 00:37:53,880 and there was this presence, 883 00:37:53,923 --> 00:37:56,361 almost of evil, that came into the office. 884 00:37:56,404 --> 00:37:58,711 - He had very long hair 885 00:37:58,754 --> 00:38:01,017 that he kind of wound around the top of his head. 886 00:38:02,367 --> 00:38:03,933 - We had all these ways that we thought 887 00:38:03,977 --> 00:38:06,153 Nakayama might meet his demise, 888 00:38:06,196 --> 00:38:09,330 and one of those was that his hair would get caught 889 00:38:09,374 --> 00:38:10,984 in the rotor blades of a helicopter 890 00:38:11,027 --> 00:38:14,074 and pull him around in a very Gatsby-esque death. 891 00:38:14,117 --> 00:38:15,336 - [grunts] 892 00:38:15,380 --> 00:38:16,729 [yelling] 893 00:38:16,772 --> 00:38:20,123 - To me, Hayao Nakayama was a cartoon character, 894 00:38:20,167 --> 00:38:22,517 and I loved talking about him. 895 00:38:22,561 --> 00:38:23,605 I mean, we all did, you know? 896 00:38:23,649 --> 00:38:25,172 He had weird hair, 897 00:38:25,215 --> 00:38:26,652 he had a weird sensibility, 898 00:38:26,695 --> 00:38:28,349 and he carried a very big stick. 899 00:38:28,393 --> 00:38:30,351 [upbeat music] 900 00:38:30,395 --> 00:38:35,313 The Japanese-U.S. relationship is kind of confusing. 901 00:38:35,356 --> 00:38:39,186 It really kind of starts with an American serviceman, 902 00:38:39,229 --> 00:38:43,190 David Rosen, in Japan during the war 903 00:38:43,233 --> 00:38:44,626 and then coming home and saying, 904 00:38:44,670 --> 00:38:46,106 "Hey, there's an opportunity me 905 00:38:46,149 --> 00:38:50,719 to sell arcade games from Japan into the U.S." 906 00:38:51,764 --> 00:38:55,550 We called each other SOJ and SOA, 907 00:38:55,594 --> 00:38:58,858 Sega of Japan and Sega of America. 908 00:38:58,901 --> 00:39:02,731 ♪ 909 00:39:02,775 --> 00:39:05,517 - I don't think anyone in Japan thought 910 00:39:05,560 --> 00:39:08,911 taking Nintendo on directly was a good idea, 911 00:39:08,955 --> 00:39:12,001 but it was something I felt we needed to do. 912 00:39:12,045 --> 00:39:14,961 [upbeat rock music] 913 00:39:15,004 --> 00:39:16,832 ♪ 914 00:39:16,876 --> 00:39:17,877 - [screams] 915 00:39:17,920 --> 00:39:19,008 - [screams] 916 00:39:19,052 --> 00:39:20,575 - People hate advertising in general. 917 00:39:20,619 --> 00:39:24,318 You know, if I go to a party and I say I'm a filmmaker, 918 00:39:24,362 --> 00:39:25,624 they go, "Oh, what films did you make?" 919 00:39:25,667 --> 00:39:27,277 And they think of, like, really good films. 920 00:39:27,321 --> 00:39:29,062 And you say, "Oh, I'm an author," 921 00:39:29,105 --> 00:39:30,716 they think of a good book that they've read lately. 922 00:39:30,759 --> 00:39:32,239 And if you say you're in advertising, 923 00:39:32,282 --> 00:39:34,807 they think of the shittiest ad they've seen in months. 924 00:39:34,850 --> 00:39:36,678 - Oh, yeah! - Snap into a Slim Jim! 925 00:39:36,722 --> 00:39:38,201 - Sizzler. 926 00:39:38,245 --> 00:39:41,640 - We had four agencies pitching to us, big names, 927 00:39:41,683 --> 00:39:44,773 and Goodby was a small group. 928 00:39:44,817 --> 00:39:46,906 Jeff was the lead. 929 00:39:46,949 --> 00:39:49,517 - We, at the time, had just had 930 00:39:49,561 --> 00:39:51,214 one of our original partners leave, 931 00:39:51,258 --> 00:39:54,130 and Rich and I were left here and were kind of like, 932 00:39:54,174 --> 00:39:55,262 "We gotta win this, you know?" 933 00:39:55,305 --> 00:39:56,437 Good morning. 934 00:39:56,481 --> 00:39:57,786 Thanks for having us here. 935 00:39:57,830 --> 00:39:59,658 The pitch to Sega was probably one 936 00:39:59,701 --> 00:40:01,921 of the most elaborate pitches we've ever done. 937 00:40:01,964 --> 00:40:05,490 We had every person in the company become an expert 938 00:40:05,533 --> 00:40:07,927 in every game you could play on the Genesis. 939 00:40:07,970 --> 00:40:09,319 So everybody came out 940 00:40:09,363 --> 00:40:11,365 with these beautiful athletic jackets, 941 00:40:11,409 --> 00:40:13,019 and we put a sound system in there 942 00:40:13,062 --> 00:40:15,413 that we rented from the Grateful Dead. 943 00:40:15,456 --> 00:40:17,066 We definitely went overboard. 944 00:40:17,110 --> 00:40:18,720 Eh, lighten up. 945 00:40:18,764 --> 00:40:20,069 The agencies we were up against 946 00:40:20,113 --> 00:40:21,462 were really the best agencies in the country, 947 00:40:21,506 --> 00:40:23,377 and I really thought they'd think of something 948 00:40:23,421 --> 00:40:24,596 to beat us with. 949 00:40:24,639 --> 00:40:26,119 - This work is the best work 950 00:40:26,162 --> 00:40:28,426 we have ever done as a company. 951 00:40:28,469 --> 00:40:31,254 I can't wait to produce it. So I hope you like it. 952 00:40:31,298 --> 00:40:34,127 - This is your brain. 953 00:40:34,170 --> 00:40:37,260 This is your brain on Nintendo. 954 00:40:37,304 --> 00:40:39,088 And this is your brain on Sega. 955 00:40:39,132 --> 00:40:41,395 [heavy rock music] 956 00:40:41,439 --> 00:40:45,007 [singer screaming] 957 00:40:45,051 --> 00:40:46,922 - Whoo! - Ooh! 958 00:40:46,966 --> 00:40:48,750 - What a ride. 959 00:40:48,794 --> 00:40:52,362 [light applause] - And it worked. 960 00:40:52,406 --> 00:40:54,321 - They overwhelmed us with their pitch. 961 00:40:54,364 --> 00:40:56,149 - We did the first commercials, 962 00:40:56,192 --> 00:40:58,368 and one of them was about this guy who started off 963 00:40:58,412 --> 00:41:00,283 in a very straight kind of outfit... 964 00:41:00,327 --> 00:41:03,722 - And then transformed into a really cool guy... 965 00:41:03,765 --> 00:41:06,333 - Welcome to the next level! 966 00:41:06,376 --> 00:41:08,509 - Playing Sega Genesis. 967 00:41:08,553 --> 00:41:10,990 [angelic music] 968 00:41:11,033 --> 00:41:13,035 - Welcome to the next level. 969 00:41:13,079 --> 00:41:14,602 - I thought "Welcome to the next level" 970 00:41:14,646 --> 00:41:16,778 was a great line because it rewarded you 971 00:41:16,822 --> 00:41:18,214 for playing the thing well. 972 00:41:18,258 --> 00:41:20,042 It promised that there was depth to the games. 973 00:41:20,086 --> 00:41:22,001 You got better and could get up higher. 974 00:41:22,044 --> 00:41:23,350 - On the Sega Genesis. 975 00:41:23,393 --> 00:41:25,961 - It was also saying to the competition 976 00:41:26,005 --> 00:41:27,702 that "you're not the next level. 977 00:41:27,746 --> 00:41:29,138 You're behind." 978 00:41:29,182 --> 00:41:31,140 I thought that was absolutely brilliant. 979 00:41:31,184 --> 00:41:32,533 [soft music] 980 00:41:32,577 --> 00:41:33,969 - But I don't think it would have worked 981 00:41:34,013 --> 00:41:35,623 without the Sega Scream. 982 00:41:35,667 --> 00:41:38,800 The Sega Scream was what really drove the thing in the end. 983 00:41:38,844 --> 00:41:40,062 [rock music] 984 00:41:40,106 --> 00:41:41,368 - [screams] Sega! 985 00:41:41,411 --> 00:41:42,456 - There was something about the way 986 00:41:42,500 --> 00:41:43,675 the guy did it... - Sega! 987 00:41:43,718 --> 00:41:45,024 - That was just really funny. 988 00:41:45,067 --> 00:41:47,200 - Sega! - It was slightly Japanese. 989 00:41:47,243 --> 00:41:48,375 - Sega! - Just absolutely-- 990 00:41:48,418 --> 00:41:49,550 you couldn't get it out of your head. 991 00:41:49,594 --> 00:41:51,944 - Sega! Sega! Sega! Sega! Sega! 992 00:41:51,987 --> 00:41:53,815 - Sega! - Sega! Sega! 993 00:41:53,859 --> 00:41:55,600 [captivating music] 994 00:41:55,643 --> 00:41:57,993 - I would go pick up my daughters at school, 995 00:41:58,037 --> 00:42:00,213 and when they saw me, they'd say, "Sega!" 996 00:42:00,256 --> 00:42:01,562 - Sega! - Sega! 997 00:42:01,606 --> 00:42:03,825 - Sega! - We kind of owned 998 00:42:03,869 --> 00:42:06,524 something that Nintendo didn't have. 999 00:42:06,567 --> 00:42:08,177 They were kind of scrubbed and clean 1000 00:42:08,221 --> 00:42:10,223 and Disney-ish and so on, 1001 00:42:10,266 --> 00:42:14,619 and we wanted it to be kind of uncool to be a Nintendo kid. 1002 00:42:14,662 --> 00:42:16,882 That was our explicit intention. 1003 00:42:16,925 --> 00:42:18,187 - Sega! Sega! 1004 00:42:18,231 --> 00:42:20,407 - The advertising was extremely competitive. 1005 00:42:20,450 --> 00:42:24,367 I mean, we made a lot of fun of Nintendo. 1006 00:42:24,411 --> 00:42:25,804 - Look, a cat massager. [cat meows] 1007 00:42:25,847 --> 00:42:27,196 Spread cheese snacks. 1008 00:42:27,240 --> 00:42:28,807 Use them to tenderize meat. 1009 00:42:28,850 --> 00:42:30,852 - Team Sega represented the antiestablishment team. 1010 00:42:30,896 --> 00:42:34,769 Nintendo was the Soviet Union, and Sega were the guys 1011 00:42:34,813 --> 00:42:36,902 that were throwing Molotov cocktails. 1012 00:42:36,945 --> 00:42:38,468 - Hey! [cat meows] 1013 00:42:38,512 --> 00:42:40,253 You still don't have a Sega CD? 1014 00:42:40,296 --> 00:42:41,907 - Huh? - What are you waiting for, 1015 00:42:41,950 --> 00:42:44,344 Nintendo to make one? Show him. 1016 00:42:44,387 --> 00:42:46,868 - Whoa! 1017 00:42:46,912 --> 00:42:49,567 - Whoa, color. 1018 00:42:49,610 --> 00:42:51,264 - And you just try not to respond 1019 00:42:51,307 --> 00:42:53,179 to those kinds of things. - Sega! 1020 00:42:53,222 --> 00:42:54,484 - Treat them as though they're--you know, 1021 00:42:54,528 --> 00:42:55,790 they're doing that because they're desperate. 1022 00:42:55,834 --> 00:42:57,139 We kicked off each launch 1023 00:42:57,183 --> 00:42:58,619 with a three-pronged attack, including... 1024 00:42:58,663 --> 00:43:00,447 I joined in March of 1992. 1025 00:43:00,490 --> 00:43:01,927 "Nintendo Power" coverage, and online... 1026 00:43:01,970 --> 00:43:03,842 When I first arrived, there was still sort of a-- 1027 00:43:03,885 --> 00:43:06,322 I wouldn't say a dismissive attitude but a feeling that, 1028 00:43:06,366 --> 00:43:09,499 "You know what? This is really not serious." 1029 00:43:09,543 --> 00:43:10,892 That quickly changed. 1030 00:43:10,936 --> 00:43:13,112 - The Sega Genesis has blast processing. 1031 00:43:13,155 --> 00:43:14,635 Super Nintendo doesn't. 1032 00:43:14,679 --> 00:43:16,376 [curious music] 1033 00:43:16,419 --> 00:43:18,030 So what's blast processing do? 1034 00:43:18,073 --> 00:43:20,467 - This "blast processing" thing, 1035 00:43:20,510 --> 00:43:23,165 it was a total fabrication of advertising people. 1036 00:43:23,209 --> 00:43:25,603 - I like the one when they said the blast processing. 1037 00:43:25,646 --> 00:43:28,083 - Kids would come into focus groups, and they'd go, 1038 00:43:28,127 --> 00:43:30,172 "Yeah, I know that Nintendo has 16-bit, 1039 00:43:30,216 --> 00:43:33,219 but Sega has blast processing." It was crazy. 1040 00:43:33,262 --> 00:43:35,525 - And what if you don't have blast processing? 1041 00:43:35,569 --> 00:43:38,224 - And they have a little truck for Nintendo. 1042 00:43:38,267 --> 00:43:40,487 - I would have loved to have seen the faces 1043 00:43:40,530 --> 00:43:42,532 of the Nintendo people when that thing ran. 1044 00:43:42,576 --> 00:43:44,012 I would just love it. 1045 00:43:44,056 --> 00:43:45,666 - "Blast processing," 1046 00:43:45,710 --> 00:43:47,973 as though it was technology-related, 1047 00:43:48,016 --> 00:43:50,366 was kind of vaporware, but it was catchy, 1048 00:43:50,410 --> 00:43:51,846 and it worked. 1049 00:43:53,152 --> 00:43:55,633 - Their advertising was very effective. 1050 00:43:55,676 --> 00:43:59,941 It tended to make it uncool to play Nintendo. 1051 00:43:59,985 --> 00:44:01,203 - Which is fine, really, 1052 00:44:01,247 --> 00:44:04,163 if you don't mind being sucked dry. 1053 00:44:04,206 --> 00:44:05,468 [mosquito squeaks] 1054 00:44:05,512 --> 00:44:07,427 - You gotta give them credit. - Sega! 1055 00:44:07,470 --> 00:44:09,647 - I think Kalinske did a great job. 1056 00:44:09,690 --> 00:44:11,344 - Sega! - Sega! 1057 00:44:11,387 --> 00:44:13,476 - What Sega has been doingto make these ads, 1058 00:44:13,520 --> 00:44:14,956 they should just keep ondoing more of it 1059 00:44:15,000 --> 00:44:16,654 because these ads are great. 1060 00:44:16,697 --> 00:44:18,177 - All the kids thought it was cool. 1061 00:44:18,220 --> 00:44:19,787 - Sega has the coolest ads, the best games. 1062 00:44:19,831 --> 00:44:22,007 - And as a result, the company was cool. 1063 00:44:22,050 --> 00:44:25,401 - Nintendo's like, "Where have they been?" 1064 00:44:25,445 --> 00:44:27,360 - You saw it on TV shows. 1065 00:44:27,403 --> 00:44:30,798 People were picking up the popularity of Sega. 1066 00:44:30,842 --> 00:44:32,974 - I'm going to Todd's.He has Genesis. 1067 00:44:33,018 --> 00:44:36,325 - She doesn't even have Sega.She's such a troglodyte. 1068 00:44:36,369 --> 00:44:39,198 - Hell hath no fury like a woman scorned for Sega. 1069 00:44:39,241 --> 00:44:41,069 - I mean, we were becoming 1070 00:44:41,113 --> 00:44:43,506 as popular or more popular than Nintendo. 1071 00:44:43,550 --> 00:44:44,899 [air whistles] 1072 00:44:44,943 --> 00:44:47,249 - To Sega, we say congratulations 1073 00:44:47,293 --> 00:44:49,817 for bringing us the 16-bit Game of the Year, 1074 00:44:49,861 --> 00:44:51,993 Sonic the Hedgehog. 1075 00:44:52,037 --> 00:44:56,955 - I got a call the other day that an 18-year-old was saying 1076 00:44:56,998 --> 00:44:59,479 that Sonic the Hedgehog made him forget about girls. 1077 00:44:59,522 --> 00:45:03,265 So I consider that a great achievement. 1078 00:45:03,309 --> 00:45:05,528 [techno music] 1079 00:45:05,572 --> 00:45:08,009 - When the very first Sonic game came 1080 00:45:08,053 --> 00:45:11,230 to be released and became very successful, 1081 00:45:11,273 --> 00:45:14,712 obviously, we wanted to create a sequel. 1082 00:45:14,755 --> 00:45:17,627 - And part and parcel with making that successful 1083 00:45:17,671 --> 00:45:19,194 was, "How are we gonna launch it? 1084 00:45:19,238 --> 00:45:21,631 How are we going to support it?" 1085 00:45:21,675 --> 00:45:24,069 - We started looking at what else we could go and do. 1086 00:45:24,112 --> 00:45:26,636 - "Ha! Let's do something like the movies. 1087 00:45:26,680 --> 00:45:29,422 Let's do a world distribution date." 1088 00:45:29,465 --> 00:45:32,120 - We were going to make the game available 1089 00:45:32,164 --> 00:45:35,123 at every retail outlet on the same day. 1090 00:45:35,167 --> 00:45:38,344 I know this sounds silly today, but it was hard to do. 1091 00:45:38,387 --> 00:45:40,738 ♪ 1092 00:45:40,781 --> 00:45:44,132 - "We'll do it on a Tuesday... 1093 00:45:44,176 --> 00:45:45,917 Sonic Two-sday." 1094 00:45:45,960 --> 00:45:47,396 [cameras shutters snapping] 1095 00:45:47,440 --> 00:45:50,965 - Last Christmas, the world felt its first Sonic boom 1096 00:45:51,009 --> 00:45:52,880 when "Sonic the Hedgehog 1" 1097 00:45:52,924 --> 00:45:57,145 became the most popular video game of 1991. 1098 00:45:57,189 --> 00:45:59,408 [bluesy rock music] 1099 00:45:59,452 --> 00:46:00,888 - Writing for Tom was always great. 1100 00:46:00,932 --> 00:46:02,324 I don't know what it was. 1101 00:46:02,368 --> 00:46:04,805 He has a natural sense about what it will take 1102 00:46:04,849 --> 00:46:06,111 to draw in the audience. 1103 00:46:06,154 --> 00:46:09,767 He's charismatic, and he knows it and uses it. 1104 00:46:09,810 --> 00:46:12,160 I'll say he uses it for good rather than for evil. 1105 00:46:12,204 --> 00:46:15,642 - We believe "Sonic 2" will be America's hottest video game 1106 00:46:15,685 --> 00:46:17,165 this Christmas, and... 1107 00:46:17,209 --> 00:46:20,603 both: We project to sell more than 2 million copies... 1108 00:46:20,647 --> 00:46:23,955 - In the United States between now and Christmas. 1109 00:46:23,998 --> 00:46:26,566 - We have Tom speaking, and then I have Joey Lawrence 1110 00:46:26,609 --> 00:46:28,786 running out from behind the curtain. 1111 00:46:28,829 --> 00:46:31,832 [crowd cheering] [cameras shutters snapping] 1112 00:46:31,876 --> 00:46:34,879 You know, we could never afford the big Hollywood names. 1113 00:46:34,922 --> 00:46:37,272 - Dustin Diamond, come on up here. 1114 00:46:37,316 --> 00:46:39,013 [crowd cheering] 1115 00:46:39,057 --> 00:46:41,102 - But we could afford teen idols. 1116 00:46:41,146 --> 00:46:43,061 - And if you thought the first one was good, 1117 00:46:43,104 --> 00:46:44,366 wait till you see the second one. 1118 00:46:44,410 --> 00:46:46,629 - You know, "Sonic 2" is great. 1119 00:46:46,673 --> 00:46:49,154 It's better than the first one. You have great graphics. 1120 00:46:49,197 --> 00:46:51,504 Sonic has a new friend called Tails, 1121 00:46:51,547 --> 00:46:53,114 a fox, two tails, cool. 1122 00:46:53,158 --> 00:46:55,421 [cameras shutters snapping] 1123 00:46:55,464 --> 00:46:56,857 [blipping] 1124 00:46:56,901 --> 00:47:01,253 - Sonic Two-sday was so big. 1125 00:47:01,296 --> 00:47:04,038 It was a bodacious idea. 1126 00:47:04,082 --> 00:47:05,300 - Oh, it's great, and it's great 1127 00:47:05,344 --> 00:47:06,649 because it's two-player, you know? 1128 00:47:06,693 --> 00:47:09,174 So you get to play with more than just yourself. 1129 00:47:09,217 --> 00:47:10,523 [video game blipping] 1130 00:47:10,566 --> 00:47:12,003 - But she's--but this is the exact same board, 1131 00:47:12,046 --> 00:47:13,526 and we're playing here together, 1132 00:47:13,569 --> 00:47:14,832 but she's in a different part of the board than I am. 1133 00:47:14,875 --> 00:47:17,399 So it's something never seen before, really. 1134 00:47:17,443 --> 00:47:18,966 It's great. 1135 00:47:19,010 --> 00:47:20,707 - We launched in Japan, 1136 00:47:20,750 --> 00:47:23,101 Australia, Europe, all over the world. 1137 00:47:23,144 --> 00:47:24,754 - [speaking French] 1138 00:47:24,798 --> 00:47:26,234 "Sonic 2" is super. 1139 00:47:26,278 --> 00:47:27,670 - Pretty good. - It's brilliant. 1140 00:47:27,714 --> 00:47:30,282 - Never, ever been done before. 1141 00:47:30,325 --> 00:47:31,805 - It's comparable to the launch 1142 00:47:31,849 --> 00:47:33,894 of Madonna's "Sex" book, you know, Sonic Two-sday. 1143 00:47:33,938 --> 00:47:35,765 - I'm right below you. 1144 00:47:35,809 --> 00:47:37,985 [whistles, applause] 1145 00:47:38,029 --> 00:47:39,552 - It was an amazing hit. 1146 00:47:39,595 --> 00:47:41,162 - Sega! 1147 00:47:41,206 --> 00:47:42,990 [high-pitched squeal] [car horns honking] 1148 00:47:43,034 --> 00:47:44,252 [coins clinking] 1149 00:47:44,296 --> 00:47:47,603 [frantic music] 1150 00:47:47,647 --> 00:47:48,735 - Oh! 1151 00:47:48,778 --> 00:47:50,606 - When Genesis succeeded so much 1152 00:47:50,650 --> 00:47:52,695 here in America, in Japan, 1153 00:47:52,739 --> 00:47:54,784 it did not necessarily do great. 1154 00:47:54,828 --> 00:47:57,091 So that way, I think Sega of America 1155 00:47:57,135 --> 00:48:00,703 became the valuable core of entire Sega business. 1156 00:48:00,747 --> 00:48:03,097 [upbeat rock music] 1157 00:48:03,141 --> 00:48:05,970 - Sega was able to make a dent in the U.S., 1158 00:48:06,013 --> 00:48:08,189 and it kept us on our toes 1159 00:48:08,233 --> 00:48:09,930 because we were in a real battle. 1160 00:48:09,974 --> 00:48:11,627 ♪ 1161 00:48:11,671 --> 00:48:14,761 - As we grew, as we added more people, 1162 00:48:14,804 --> 00:48:17,111 Nintendo was in our target. 1163 00:48:18,504 --> 00:48:21,159 It became a kind of "Spy vs. Spy." 1164 00:48:21,202 --> 00:48:24,814 Whatever Nintendo would do, we would try to do better. 1165 00:48:24,858 --> 00:48:26,904 - With the Sega Menacer in my hands, 1166 00:48:26,947 --> 00:48:28,949 I'm not afraid of enemy tanks. 1167 00:48:28,993 --> 00:48:30,385 - Sega! 1168 00:48:30,429 --> 00:48:31,952 [ceremonious music] 1169 00:48:31,996 --> 00:48:35,390 - At one point, I was told there was a dartboard 1170 00:48:35,434 --> 00:48:38,654 in Nintendo's office with my face on it. 1171 00:48:38,698 --> 00:48:40,743 - When we went to analyst meetings, 1172 00:48:40,787 --> 00:48:43,659 it would be Tom Kalinske and Peter Main. 1173 00:48:43,703 --> 00:48:45,923 - Well, Peter and I didn't get along very well. 1174 00:48:47,011 --> 00:48:49,839 - A lot of yelling and screaming at various events. 1175 00:48:49,883 --> 00:48:52,146 - I remember getting up to speak 1176 00:48:52,190 --> 00:48:53,582 at one of those meetings, when I said, 1177 00:48:53,626 --> 00:48:54,932 "Boy, following Peter Main 1178 00:48:54,975 --> 00:48:57,282 is like following Dr. Kevorkian." 1179 00:48:57,325 --> 00:49:00,894 - It erupted into a bit of an interesting 1180 00:49:00,938 --> 00:49:02,896 after-three-glasses-of-wine conversation 1181 00:49:02,940 --> 00:49:04,898 that carried on down Fifth Avenue 1182 00:49:04,942 --> 00:49:07,118 in a raging snowstorm. 1183 00:49:07,161 --> 00:49:11,513 Thank goodness third-party intervention happened. 1184 00:49:11,557 --> 00:49:14,516 [dramatic music] 1185 00:49:14,560 --> 00:49:20,087 ♪ 1186 00:49:20,131 --> 00:49:24,657 - As '93 started, there was a big game coming... 1187 00:49:24,700 --> 00:49:28,226 and it's gonna be available not just for Super NES 1188 00:49:28,269 --> 00:49:30,402 but also for Sega Genesis. 1189 00:49:30,445 --> 00:49:32,534 ♪ 1190 00:49:32,578 --> 00:49:34,580 - Mortal Kombat! 1191 00:49:34,623 --> 00:49:36,582 [crowd shouting] 1192 00:49:36,625 --> 00:49:38,888 - Mortal Kombat! 1193 00:49:38,932 --> 00:49:41,282 - "Mortal Kombat" was a huge coup for us. 1194 00:49:41,326 --> 00:49:45,069 For once, we get a big title. 1195 00:49:45,112 --> 00:49:47,680 - Ahh! 1196 00:49:47,723 --> 00:49:50,813 - We had "Mortal Kombat" in its original version 1197 00:49:50,857 --> 00:49:53,381 with all the possibility for gore and, you know, 1198 00:49:53,425 --> 00:49:55,601 chopping people's heads off and stabbing them 1199 00:49:55,644 --> 00:49:57,211 and what have you. 1200 00:49:57,255 --> 00:50:00,127 - There has been so much violence swallowed into my soul 1201 00:50:00,171 --> 00:50:02,129 over the years; nothing was new. 1202 00:50:02,173 --> 00:50:05,306 I mean, consider Roadrunner. 1203 00:50:05,350 --> 00:50:06,742 [tense music] 1204 00:50:06,786 --> 00:50:10,964 - "Mortal Kombat" went into a graphic violence area 1205 00:50:11,008 --> 00:50:14,881 that Nintendo hadn't allowed on their consoles. 1206 00:50:14,924 --> 00:50:17,840 - We had long discussions about whether 1207 00:50:17,884 --> 00:50:20,017 we should allow the blood. 1208 00:50:20,060 --> 00:50:21,975 [Scorpion moaning] 1209 00:50:22,019 --> 00:50:24,543 I ultimately decided that we would not. 1210 00:50:24,586 --> 00:50:26,458 - Fight! 1211 00:50:26,501 --> 00:50:29,243 - The Nintendo version showed green gore. 1212 00:50:29,287 --> 00:50:30,636 [Sub-Zero grunting] 1213 00:50:30,679 --> 00:50:32,594 Well, what human being has green gore in them? 1214 00:50:32,638 --> 00:50:34,901 - I was expecting we might actually get 1215 00:50:34,944 --> 00:50:36,946 some positive feedback from parents that say, 1216 00:50:36,990 --> 00:50:37,947 you know, "Bless you. 1217 00:50:37,991 --> 00:50:39,427 "You kept the violence 1218 00:50:39,471 --> 00:50:40,602 out of this game." 1219 00:50:40,646 --> 00:50:41,864 And on the contrary, 1220 00:50:41,908 --> 00:50:44,084 I got lots of letters from parents 1221 00:50:44,128 --> 00:50:47,087 criticizing Nintendo for censoring the game, 1222 00:50:47,131 --> 00:50:49,698 and we got our clocks cleaned. 1223 00:50:49,742 --> 00:50:51,787 - [grunts] - Ahh! 1224 00:50:51,831 --> 00:50:55,269 - Tom wins! - We outsold them five to one. 1225 00:50:55,313 --> 00:50:58,490 [The Chemical Brothers' "Block Rockin' Beats"] 1226 00:50:58,533 --> 00:50:59,491 - Sega! - Sega! 1227 00:50:59,534 --> 00:51:00,970 - Sega! - Sega! 1228 00:51:01,014 --> 00:51:02,320 - Sega! - Sega, Sega, Sega! 1229 00:51:02,363 --> 00:51:05,105 - All right, a Sega Genesis! 1230 00:51:05,149 --> 00:51:07,107 - Sega! - It's a Sega! 1231 00:51:07,151 --> 00:51:08,152 - Sega! 1232 00:51:08,195 --> 00:51:12,025 - Whoa! - [laughing excitedly] 1233 00:51:12,069 --> 00:51:13,287 - No way! 1234 00:51:13,331 --> 00:51:16,203 ♪ 1235 00:51:16,247 --> 00:51:18,727 - ♪ Back with another one of those block-rockin' beats ♪ 1236 00:51:18,771 --> 00:51:21,774 ♪ 1237 00:51:21,817 --> 00:51:24,081 - I mean, we dethroned Nintendo. 1238 00:51:24,124 --> 00:51:25,212 - Fight! 1239 00:51:25,256 --> 00:51:27,606 - "Mortal Kombat" on Sega Genesis 1240 00:51:27,649 --> 00:51:29,912 is the best video game ever. 1241 00:51:29,956 --> 00:51:31,523 - Urkel wins! 1242 00:51:31,566 --> 00:51:33,829 - I think "Donkey Kong" is the best game ever. 1243 00:51:33,873 --> 00:51:35,309 - "Donkey Kong" sucks. 1244 00:51:35,353 --> 00:51:36,702 - You know something? You suck. 1245 00:51:36,745 --> 00:51:38,921 ♪ 1246 00:51:38,965 --> 00:51:41,968 [man screams] 1247 00:51:42,011 --> 00:51:44,536 - The most complimentary thing I can say about Nintendo 1248 00:51:44,579 --> 00:51:49,410 was the fact that they... reinvented video games. 1249 00:51:49,454 --> 00:51:50,933 - Thank you, Peter. 1250 00:51:50,977 --> 00:51:55,068 - They had to create, out of nothing, an industry. 1251 00:51:55,112 --> 00:51:58,158 They not only did that; they did it well. 1252 00:51:58,202 --> 00:52:01,161 [serene music] 1253 00:52:01,205 --> 00:52:07,385 ♪ 1254 00:52:07,428 --> 00:52:10,649 - Good afternoon. Nintendo. Nintendo. please hold. 1255 00:52:10,692 --> 00:52:12,955 Thank you. May I help you? 1256 00:52:12,999 --> 00:52:16,568 - My path to Nintendo was not so purposeful. 1257 00:52:16,611 --> 00:52:19,701 It was just kind of pure luck. 1258 00:52:19,745 --> 00:52:22,791 I was at a time in my life where I was really searching 1259 00:52:22,835 --> 00:52:27,013 for something great and fun to work on, 1260 00:52:27,056 --> 00:52:29,407 and it was a place that was meant--meant for me. 1261 00:52:32,497 --> 00:52:34,281 - You always had to spell Nintendo 1262 00:52:34,325 --> 00:52:37,066 back in the early '80s. Nin-ten-do. 1263 00:52:37,110 --> 00:52:38,416 - I would get on airplanes, 1264 00:52:38,459 --> 00:52:39,765 and you'd start talking to somebody, 1265 00:52:39,808 --> 00:52:41,158 and you'd give them a business card, 1266 00:52:41,201 --> 00:52:43,116 and they'd say, "What's a Nine-tendo?" 1267 00:52:43,160 --> 00:52:45,074 - People, when I told them I was working for Nintendo, 1268 00:52:45,118 --> 00:52:46,641 they said, "Huh? 1269 00:52:46,685 --> 00:52:49,296 What a--you know, what is that? Is that a dry laundry?" 1270 00:52:50,167 --> 00:52:52,212 - For most of its 99-year history, 1271 00:52:52,256 --> 00:52:55,084 Nintendo made board games and playing cards, 1272 00:52:55,128 --> 00:52:58,436 traditional products for a traditional way of life. 1273 00:52:58,479 --> 00:53:01,265 - Nintendo was some obscure company 1274 00:53:01,308 --> 00:53:03,832 that just had these random helicopter games 1275 00:53:03,876 --> 00:53:07,967 and another kind of wannabe shooter game, 1276 00:53:08,010 --> 00:53:11,884 so it was really nothing from an arcade game standpoint. 1277 00:53:11,927 --> 00:53:16,105 But then Mr. Miyamoto came along. 1278 00:53:16,149 --> 00:53:20,327 - Mr. Miyamoto was the original developer of Donkey Kong 1279 00:53:20,371 --> 00:53:21,937 and the creator of Mario 1280 00:53:21,981 --> 00:53:25,463 as the character chasing him up the construction site. 1281 00:53:25,506 --> 00:53:28,640 - Whereas I was just a guy at Nintendo, 1282 00:53:28,683 --> 00:53:32,426 Miyamoto is the guy, the master, 1283 00:53:32,470 --> 00:53:36,691 and would go on to design some of the best games at Nintendo. 1284 00:53:38,737 --> 00:53:41,522 When "Donkey Kong" first came in, it was really cool 1285 00:53:41,566 --> 00:53:43,132 because you had this little guy 1286 00:53:43,176 --> 00:53:44,395 who you could push up on the thing, 1287 00:53:44,438 --> 00:53:46,179 and he'd climb up ladders. 1288 00:53:46,223 --> 00:53:47,833 You'd go up and, doink, make a mistake. 1289 00:53:47,876 --> 00:53:49,182 One of the barrels would get you. 1290 00:53:49,226 --> 00:53:50,705 You'd say, "Oops. I can do better," 1291 00:53:50,749 --> 00:53:52,620 and then you'd immediately start playing again. 1292 00:53:52,664 --> 00:53:54,970 I mean, just, like, it was unbelievable. 1293 00:53:55,014 --> 00:53:57,234 - We sold over $100 million worth 1294 00:53:57,277 --> 00:53:59,366 of "Donkey Kong" coin-operated video games 1295 00:53:59,410 --> 00:54:01,150 in less than one year, 1296 00:54:01,194 --> 00:54:03,675 and this is a company that had 30 employees. 1297 00:54:03,718 --> 00:54:04,893 - Nintendo of America. 1298 00:54:04,937 --> 00:54:06,243 - We'd get shipments from Japan, 1299 00:54:06,286 --> 00:54:08,288 and I wouldn't know what they were. 1300 00:54:08,332 --> 00:54:10,377 Then one of the days, I open the box, 1301 00:54:10,421 --> 00:54:14,251 and there was this little thing in it. 1302 00:54:14,294 --> 00:54:17,645 - [speaking Japanese] 1303 00:54:17,689 --> 00:54:19,952 - I thought, "This is cool. This is great. 1304 00:54:19,995 --> 00:54:21,736 "Let's, like, give it to everybody. 1305 00:54:21,780 --> 00:54:23,695 Let's bring it over, sell it." 1306 00:54:24,217 --> 00:54:27,264 Well, Mr. Arakawa said, "Hmm, we need to think about this." 1307 00:54:28,482 --> 00:54:30,832 This thing was really risky, and it could fail. 1308 00:54:32,356 --> 00:54:34,358 So I started to get exposed to the fact that there was 1309 00:54:34,401 --> 00:54:38,362 this thing called the debacle of the Atari 2600 1310 00:54:38,405 --> 00:54:41,452 and that there was this thing called the "E.T." cartridge. 1311 00:54:41,495 --> 00:54:45,456 - "E.T." video game? Wow. 1312 00:54:45,499 --> 00:54:48,850 [rock music] 1313 00:54:48,894 --> 00:54:51,810 - The game was so bad, so unplayable, 1314 00:54:51,853 --> 00:54:54,247 millions of copies went unsold. 1315 00:54:54,291 --> 00:54:57,337 - It is a legendary landfill, a tomb 1316 00:54:57,381 --> 00:55:00,079 where an entire industry was buried. 1317 00:55:00,122 --> 00:55:03,169 Thousands of copies of one of the epic flops 1318 00:55:03,212 --> 00:55:04,736 in video gaming history 1319 00:55:04,779 --> 00:55:08,653 laid to rest in a New Mexico city's garbage dump. 1320 00:55:08,696 --> 00:55:11,525 ♪ 1321 00:55:11,569 --> 00:55:14,180 - The video game industry is now becoming 1322 00:55:14,223 --> 00:55:16,356 very much like Hula-Hoops: there still may be 1323 00:55:16,400 --> 00:55:18,271 a lot of people fooling around with them, 1324 00:55:18,315 --> 00:55:20,012 but profits are getting to be quite negligible. 1325 00:55:20,055 --> 00:55:21,840 - Video game cartridges as Atari. 1326 00:55:21,883 --> 00:55:23,668 - Given the collapse of Atari, 1327 00:55:23,711 --> 00:55:25,365 the idea of actually introducing 1328 00:55:25,409 --> 00:55:27,019 a home video game system 1329 00:55:27,062 --> 00:55:29,326 in the United States was very risky. 1330 00:55:29,369 --> 00:55:33,373 - I was, "the original salesperson" at Nintendo. 1331 00:55:33,417 --> 00:55:34,766 I had family members say, 1332 00:55:34,809 --> 00:55:36,507 "You're out of your mind. You have kids. 1333 00:55:36,550 --> 00:55:38,073 "How are you gonna support your family 1334 00:55:38,117 --> 00:55:40,293 when this thing dies in six months?" 1335 00:55:40,337 --> 00:55:43,252 As far as appetite for video games, 1336 00:55:43,296 --> 00:55:44,428 there was none. 1337 00:55:44,471 --> 00:55:47,213 - Video games: play them for fun, 1338 00:55:47,256 --> 00:55:49,868 but invest in them at your own risk. 1339 00:55:49,911 --> 00:55:51,652 - But we still had really great games, 1340 00:55:51,696 --> 00:55:53,785 and that's when Mr. Arakawa said, 1341 00:55:53,828 --> 00:55:55,264 "We should do this." 1342 00:55:55,308 --> 00:55:56,614 - We ultimately made the decision 1343 00:55:56,657 --> 00:55:58,877 to introduce the NES to New York, 1344 00:55:58,920 --> 00:56:01,749 the epicenter of the toy industry. 1345 00:56:01,793 --> 00:56:03,708 [crowd cheering] 1346 00:56:03,751 --> 00:56:05,449 - Our pitch was very simple. 1347 00:56:05,492 --> 00:56:07,668 - You're playing with power! 1348 00:56:07,712 --> 00:56:09,540 - This is not just a video game. 1349 00:56:09,583 --> 00:56:11,455 It's an entertainment system. 1350 00:56:11,498 --> 00:56:13,979 - It didn't make you think about your Atari. 1351 00:56:14,022 --> 00:56:16,373 - Will your family be the first to witness 1352 00:56:16,416 --> 00:56:20,464 the birth of the incredible Nintendo Entertainment System, 1353 00:56:20,507 --> 00:56:23,423 the first to play with R.O.B, the extraordinary video robot? 1354 00:56:23,467 --> 00:56:25,730 - Parents could say, "Oh, it's got this light gun, 1355 00:56:25,773 --> 00:56:27,732 which is totally new. Look, it's magical." 1356 00:56:28,689 --> 00:56:31,431 - We sent a number of Nintendo employees 1357 00:56:31,475 --> 00:56:33,085 to Hackensack, New Jersey, 1358 00:56:33,128 --> 00:56:36,958 where we had this warehouse that was infested with rats. 1359 00:56:37,002 --> 00:56:39,004 - I couldn't go to the bathroom in the warehouse 1360 00:56:39,047 --> 00:56:42,181 because it was that not-nice. 1361 00:56:42,224 --> 00:56:44,705 There was a huge hurricane that year, 1362 00:56:44,749 --> 00:56:47,273 and the warehouse flooded, and some barrels 1363 00:56:47,316 --> 00:56:49,493 start floating around the parking lot, 1364 00:56:49,536 --> 00:56:53,192 and they have, like, toxic waste symbols on them. 1365 00:56:53,235 --> 00:56:55,368 - For the three months, we did nothing 1366 00:56:55,412 --> 00:56:57,849 but get up in the morning and give demos to kids 1367 00:56:57,892 --> 00:57:00,895 and let kids play while we talked to their parents. 1368 00:57:00,939 --> 00:57:02,593 - Parents were saying, you know, 1369 00:57:02,636 --> 00:57:04,116 "What is this Nintendo thing?" 1370 00:57:04,159 --> 00:57:06,684 - People would show up with cameras and microphones 1371 00:57:06,727 --> 00:57:08,250 and notepads and say... 1372 00:57:08,294 --> 00:57:09,730 - "What are you, on drugs or something? 1373 00:57:09,774 --> 00:57:10,992 "Are you guys crazy? 1374 00:57:11,036 --> 00:57:12,472 No one wants to look at a video game now." 1375 00:57:12,516 --> 00:57:14,735 - I remember this woman walked up to me 1376 00:57:14,779 --> 00:57:16,302 and said, you know, "What is this?" 1377 00:57:16,345 --> 00:57:17,564 and I said, "Oh, it's Nintendo," 1378 00:57:17,608 --> 00:57:20,437 and she said, "Nintendo?" and I said, "Yeah," 1379 00:57:20,480 --> 00:57:23,135 and she goes, "I hope you fail." 1380 00:57:23,178 --> 00:57:25,093 - We left that research session 1381 00:57:25,137 --> 00:57:29,271 feeling a little unsure of ourselves. 1382 00:57:29,315 --> 00:57:32,666 - We had to go out and get rid of the doubt on so many levels. 1383 00:57:34,189 --> 00:57:35,495 We're at war, guys. 1384 00:57:35,539 --> 00:57:37,584 We gotta make believers out of the world 1385 00:57:37,628 --> 00:57:38,890 that this is for real, 1386 00:57:38,933 --> 00:57:41,196 this can happen, this can grow. 1387 00:57:41,240 --> 00:57:44,112 - The word Nintendo means, "Work hard, 1388 00:57:44,156 --> 00:57:45,897 and the fates will smile on you." 1389 00:57:45,940 --> 00:57:48,639 I like that idea that if we all just put forth 1390 00:57:48,682 --> 00:57:51,555 our best efforts, then we'd be successful. 1391 00:57:51,598 --> 00:57:53,731 - The buyer of video games at Toys "R" Us 1392 00:57:53,774 --> 00:57:57,517 was the ultimate skeptic, and his name was Hal. 1393 00:57:57,561 --> 00:57:59,214 When I came in with a video game, he said, 1394 00:57:59,258 --> 00:58:01,434 "Forget it. I don't want you to call me. 1395 00:58:01,478 --> 00:58:03,088 "I don't want you to contact me. 1396 00:58:03,131 --> 00:58:07,658 If I see it starting to sell, you'll hear from me." 1397 00:58:07,701 --> 00:58:10,791 - The day before the NES was supposed to launch, 1398 00:58:10,835 --> 00:58:13,098 commercials were on air. 1399 00:58:13,141 --> 00:58:16,493 We all went to the warehouse and opened champagne 1400 00:58:16,536 --> 00:58:20,235 and literally loaded the truck to take it to FAO Schwarz. 1401 00:58:22,890 --> 00:58:25,937 We went, and we stood outside the window of FAO Schwarz 1402 00:58:25,980 --> 00:58:29,201 and watched someone make the first purchase. 1403 00:58:31,072 --> 00:58:34,685 The person bought, like, every game. 1404 00:58:34,728 --> 00:58:36,295 - All of a sudden, the phone rings. 1405 00:58:36,338 --> 00:58:38,036 "Hey, how come you didn't call me?" 1406 00:58:38,079 --> 00:58:40,255 I said, "Well, Hal, you didn't think it was gonna sell, 1407 00:58:40,299 --> 00:58:41,605 and I didn't want to bother you." 1408 00:58:41,648 --> 00:58:44,042 "The thing's blowing out the stores. 1409 00:58:44,085 --> 00:58:45,652 "Get up here now. Today's Saturday, 1410 00:58:45,696 --> 00:58:47,698 and I'm ready to backup order immediately." 1411 00:58:47,741 --> 00:58:50,309 - It may be the most addictive toy in history. 1412 00:58:50,352 --> 00:58:52,311 - The product started selling like hotcakes. 1413 00:58:52,354 --> 00:58:53,660 - This is as big or bigger 1414 00:58:53,704 --> 00:58:56,881 than anything the toy industry has ever seen. 1415 00:58:56,924 --> 00:58:58,709 - "We're excited about the possibilities 1416 00:58:58,752 --> 00:59:02,060 for this new thing called Nintendo, whatever that is." 1417 00:59:02,103 --> 00:59:09,110 ♪ 1418 00:59:12,810 --> 00:59:14,594 - When Nintendo entered the game, 1419 00:59:14,638 --> 00:59:17,684 the video game market was a losing proposition. 1420 00:59:17,728 --> 00:59:19,686 Nintendo says it brought it back 1421 00:59:19,730 --> 00:59:22,689 with better-quality games and graphics. 1422 00:59:22,733 --> 00:59:25,387 ♪ 1423 00:59:25,431 --> 00:59:27,868 - We decided if we could make a video game system 1424 00:59:27,912 --> 00:59:30,958 with quality games that we would be successful. 1425 00:59:31,002 --> 00:59:32,307 We took that gamble, 1426 00:59:32,351 --> 00:59:34,614 and now I think it's appropriate for us 1427 00:59:34,658 --> 00:59:36,660 to reap the rewards of that gamble. 1428 00:59:36,703 --> 00:59:38,575 That is capitalism. 1429 00:59:38,618 --> 00:59:40,577 ♪ 1430 00:59:40,620 --> 00:59:44,276 - If the NES had not been successfully launched 1431 00:59:44,319 --> 00:59:46,539 in New York, I think it's fair to say 1432 00:59:46,583 --> 00:59:49,498 there would not have been a home video game business. 1433 00:59:49,542 --> 00:59:51,283 ♪ 1434 00:59:51,326 --> 00:59:54,634 - Suddenly, who knew what game was gonna come out? 1435 00:59:54,678 --> 00:59:56,375 ♪ 1436 00:59:56,418 --> 00:59:58,420 Instead of Christmas happening once a year, it's like, 1437 00:59:58,464 --> 01:00:00,988 suddenly Christmas happened just all year long. 1438 01:00:01,032 --> 01:00:03,077 - What the hell are you? 1439 01:00:03,121 --> 01:00:04,426 ♪ 1440 01:00:04,470 --> 01:00:06,080 - What are you? - I'm Batman. 1441 01:00:06,124 --> 01:00:07,821 ♪ 1442 01:00:07,865 --> 01:00:09,257 - I'm from the future. 1443 01:00:09,301 --> 01:00:11,651 ♪ 1444 01:00:11,695 --> 01:00:13,653 - Whoa! 1445 01:00:13,697 --> 01:00:15,307 all: Cowabunga! 1446 01:00:15,350 --> 01:00:21,139 ♪ 1447 01:00:21,182 --> 01:00:22,923 - You know, I remember at the time 1448 01:00:22,967 --> 01:00:26,274 seeing Sega at every trade show and seeing the Sega people, 1449 01:00:26,318 --> 01:00:30,670 and they were trying so hard to be successful, 1450 01:00:30,714 --> 01:00:33,542 but Nintendo was the only game in town 1451 01:00:33,586 --> 01:00:36,154 until Tom came along. 1452 01:00:36,197 --> 01:00:39,157 [dramatic music] 1453 01:00:39,200 --> 01:00:40,680 ♪ 1454 01:00:40,724 --> 01:00:42,900 - When Tom Kalinske joined Sega, 1455 01:00:42,943 --> 01:00:44,205 we knew his background. 1456 01:00:44,249 --> 01:00:46,686 We knew he was a very fine marketer. 1457 01:00:46,730 --> 01:00:49,471 He was a worthy competitor. 1458 01:00:49,515 --> 01:00:51,996 - When Tom showed up, it was a little bit 1459 01:00:52,039 --> 01:00:55,695 of a message to Nintendo that the game was changing. 1460 01:00:55,739 --> 01:00:58,480 - Tom Kalinske's a very smart marketing guy 1461 01:00:58,524 --> 01:01:00,004 feeding the retailer, 1462 01:01:00,047 --> 01:01:02,833 "Yeah, tell me more, tell me more, tell me more." 1463 01:01:02,876 --> 01:01:04,617 - I always thought of Tom Kalinske as, like, 1464 01:01:04,661 --> 01:01:06,053 the character in "The Music Man," 1465 01:01:06,097 --> 01:01:07,446 come into town, 1466 01:01:07,489 --> 01:01:09,317 drum up a lot of sales, get them all excited, 1467 01:01:09,361 --> 01:01:11,537 and when you look kind of behind the scenes, 1468 01:01:11,580 --> 01:01:13,931 there wasn't quite as much there as you would expect. 1469 01:01:15,672 --> 01:01:18,370 - Sega was kind of chipping away at our business, 1470 01:01:18,413 --> 01:01:21,895 and in particular, they were going after the harder edge 1471 01:01:21,939 --> 01:01:23,592 that Nintendo wouldn't do. 1472 01:01:23,636 --> 01:01:26,204 - Something down there sucked their brains out! 1473 01:01:26,247 --> 01:01:28,728 - But we weren't going to chase the other guys. 1474 01:01:28,772 --> 01:01:31,296 That was never a part of Nintendo's strategy, 1475 01:01:31,339 --> 01:01:32,732 to follow the other guys 1476 01:01:32,776 --> 01:01:34,255 or try and do what they were doing. 1477 01:01:34,299 --> 01:01:36,736 Instead it was to do what we do but just do it better. 1478 01:01:38,259 --> 01:01:40,218 - I have to admit, I was not always in favor 1479 01:01:40,261 --> 01:01:41,219 of that strategy. 1480 01:01:41,262 --> 01:01:45,005 [thunder booming] 1481 01:01:45,049 --> 01:01:48,226 Having been at Nintendo for a while, I was young, 1482 01:01:48,269 --> 01:01:50,402 and I still believed that a lot of my thoughts 1483 01:01:50,445 --> 01:01:51,795 were the right way to go, 1484 01:01:51,838 --> 01:01:55,102 and they weren't taken, and maybe, you know, 1485 01:01:55,146 --> 01:01:57,757 burned some bridges along the way. 1486 01:01:57,801 --> 01:01:59,498 - All of a sudden, Bill 1487 01:01:59,541 --> 01:02:02,719 started smoking cigarettes and driving sports cars. 1488 01:02:02,762 --> 01:02:05,199 You know, he'd just kind of, like, turned to the dark side. 1489 01:02:06,635 --> 01:02:11,292 Once Bill got out of Nintendo, he was--he was Bad Bill. 1490 01:02:11,336 --> 01:02:13,512 [moody music] 1491 01:02:13,555 --> 01:02:15,557 - The Sega Genesis was doing extremely well, 1492 01:02:15,601 --> 01:02:18,735 and so it made sense for me to switch teams. 1493 01:02:20,258 --> 01:02:21,650 - When he left, 1494 01:02:21,694 --> 01:02:23,261 I think Nintendo felt a sense of--of betrayal. 1495 01:02:25,306 --> 01:02:28,745 - He went to work for Tom, and hey, that's life. 1496 01:02:28,788 --> 01:02:30,529 ♪ 1497 01:02:30,572 --> 01:02:32,139 - It was easy for me, but I think it was difficult 1498 01:02:32,183 --> 01:02:34,663 for the Sega people to accept me. 1499 01:02:34,707 --> 01:02:37,188 - We were giving him a hard time about that, 1500 01:02:37,231 --> 01:02:39,146 perhaps he wasn't true-blue Sega, 1501 01:02:39,190 --> 01:02:41,105 and he says, "You know what I think of Nintendo?" 1502 01:02:41,148 --> 01:02:43,150 and he pointed toward Seattle, 1503 01:02:43,194 --> 01:02:44,673 dropped his pants, 1504 01:02:44,717 --> 01:02:46,588 and mooned Nintendo. 1505 01:02:48,155 --> 01:02:51,419 - Tom always said that it's easy to be 1506 01:02:51,463 --> 01:02:55,293 a number two company challenged to be number one. 1507 01:02:55,336 --> 01:02:57,991 Once we become the number one company, 1508 01:02:58,035 --> 01:03:00,211 that is the real challenge starts. 1509 01:03:00,254 --> 01:03:03,388 - Video games have become a $4 billion-a-year business. 1510 01:03:03,431 --> 01:03:05,607 There is a growing concern on Capitol Hill 1511 01:03:05,651 --> 01:03:08,523 that parents who buy some of those games 1512 01:03:08,567 --> 01:03:11,048 may not realize just how much violence they're getting. 1513 01:03:11,091 --> 01:03:12,745 - Games so violent, bloody, 1514 01:03:12,789 --> 01:03:15,617 and gruesome that parents and politicians have had it. 1515 01:03:15,661 --> 01:03:18,359 - Violent, sexual games available to youngsters. 1516 01:03:18,403 --> 01:03:20,448 - The best thing about games is violence, 1517 01:03:20,492 --> 01:03:22,450 realistic things like blood. 1518 01:03:22,494 --> 01:03:24,235 - He scores--oh! - You know what, Mike? 1519 01:03:24,278 --> 01:03:26,019 You can make their heads bleed on this game. 1520 01:03:26,063 --> 01:03:28,152 - Make somebody's head bleed. - There it is, Mikey. 1521 01:03:28,195 --> 01:03:30,067 Check it out. His head's bleeding. 1522 01:03:30,110 --> 01:03:32,460 - These are not harmless toys. 1523 01:03:32,504 --> 01:03:35,986 They can indeed cause great emotional 1524 01:03:36,029 --> 01:03:38,379 and other damage to a child. 1525 01:03:39,380 --> 01:03:41,339 - They're just out for making money, 1526 01:03:41,382 --> 01:03:43,732 and they're not worrying about the kids' well-being. 1527 01:03:43,776 --> 01:03:46,170 - Along with that huge success came the criticism. 1528 01:03:46,213 --> 01:03:48,650 I did not expect the U.S. Congress to get involved. 1529 01:03:49,738 --> 01:03:52,306 [gavel banging] 1530 01:03:52,350 --> 01:03:54,265 - Like the Grinch who stole Christmas, 1531 01:03:54,308 --> 01:03:56,963 these violent video games threaten to rob 1532 01:03:57,007 --> 01:04:01,707 this particular holiday season of a spirit of goodwill. 1533 01:04:01,750 --> 01:04:06,625 These games teach a child to enjoy inflicting torture. 1534 01:04:06,668 --> 01:04:09,106 - They were threatening the industry 1535 01:04:09,149 --> 01:04:12,457 with severe censorship, so there was a lot at stake. 1536 01:04:12,500 --> 01:04:14,024 - It was largely political. 1537 01:04:14,067 --> 01:04:15,547 "We're gonna restrict your children 1538 01:04:15,590 --> 01:04:17,854 "from being exposed to these violent video games, 1539 01:04:17,897 --> 01:04:20,378 and we're going to make the world safe for democracy." 1540 01:04:20,421 --> 01:04:22,162 It was total nonsense, total bullshit. 1541 01:04:22,206 --> 01:04:23,816 It's business and politics 1542 01:04:23,860 --> 01:04:25,209 meeting in the worst way possible. 1543 01:04:25,252 --> 01:04:27,515 - What you're about to see are scenes 1544 01:04:27,559 --> 01:04:30,344 from the most violent new video games, 1545 01:04:30,388 --> 01:04:31,824 "Mortal Kombat." 1546 01:04:31,868 --> 01:04:35,697 Blood splatters from the contestants' heads, 1547 01:04:35,741 --> 01:04:38,439 and a player wins the so-called death sequence 1548 01:04:38,483 --> 01:04:40,485 pulling off the head of the opponent 1549 01:04:40,528 --> 01:04:42,748 with spinal cord attached. 1550 01:04:42,791 --> 01:04:45,316 I find this segment deeply offensive 1551 01:04:45,359 --> 01:04:49,450 and believe that it simply should be taken off the market. 1552 01:04:49,494 --> 01:04:52,453 Let me now call to the table Howard Lincoln, 1553 01:04:52,497 --> 01:04:54,499 senior vice president of Nintendo, 1554 01:04:54,542 --> 01:04:57,850 and Bill White, senior vice president of Sega. 1555 01:04:57,894 --> 01:04:59,504 - I'd never been in Congress before. 1556 01:04:59,547 --> 01:05:01,375 Of course, it's always a little bit intimidating 1557 01:05:01,419 --> 01:05:04,465 when the senators sit ten feet above you 1558 01:05:04,509 --> 01:05:07,642 and you're down on a little table in front of them. 1559 01:05:07,686 --> 01:05:09,601 - We debated a lot about who should go, 1560 01:05:09,644 --> 01:05:13,300 and we decided that Bill White was absolutely perfect. 1561 01:05:13,344 --> 01:05:17,783 Instead of having the senators address me and address Howard, 1562 01:05:17,826 --> 01:05:20,612 have them address Howard and another guy 1563 01:05:20,655 --> 01:05:22,005 who used to work for Nintendo. 1564 01:05:23,049 --> 01:05:24,703 - We knew that it also would irritate 1565 01:05:24,746 --> 01:05:26,705 the hell out of Howard. 1566 01:05:26,748 --> 01:05:28,185 - To meet our game guidelines, 1567 01:05:28,228 --> 01:05:30,622 we have removed the blood and death sequences 1568 01:05:30,665 --> 01:05:32,667 present in "Mortal Kombat." 1569 01:05:32,711 --> 01:05:35,670 We did this knowing that we would lose money 1570 01:05:35,714 --> 01:05:40,545 by sanitizing "Mortal Kombat," but sanitize it we did. 1571 01:05:40,588 --> 01:05:42,982 - Howard Lincoln was pontificating about 1572 01:05:43,026 --> 01:05:46,203 how Nintendo never would do anything as horrible 1573 01:05:46,246 --> 01:05:49,467 as what Sega had done with "Mortal Kombat." 1574 01:05:49,510 --> 01:05:51,860 All of a sudden, Bill White whips out this gun 1575 01:05:51,904 --> 01:05:55,038 that they used in a hunting game. 1576 01:05:55,081 --> 01:05:57,649 - Senator, I may also point out that Nintendo produces 1577 01:05:57,692 --> 01:06:02,219 product for a rapid-fire machine gun. 1578 01:06:02,262 --> 01:06:06,832 - This is a thing that-- it's called the Super Scope. 1579 01:06:06,875 --> 01:06:10,401 I think that this game is a target sh--this device 1580 01:06:10,444 --> 01:06:12,446 is for target shooting and whatnot. 1581 01:06:12,490 --> 01:06:14,796 - To me, that looks like a-- looks like a weapon. 1582 01:06:14,840 --> 01:06:17,364 It looks like an assault weapon of some kind. 1583 01:06:17,408 --> 01:06:20,193 - I was starting to get a little bit agitated with Bill. 1584 01:06:20,237 --> 01:06:22,717 He had worked for us, and he knew what was going on, 1585 01:06:22,761 --> 01:06:26,983 so I felt it was necessary to make our position 1586 01:06:27,026 --> 01:06:29,768 very clear, which I did. 1587 01:06:29,811 --> 01:06:32,640 And it seemed to go over quite well. 1588 01:06:32,684 --> 01:06:36,557 I can't sit here and allow you to be told 1589 01:06:36,601 --> 01:06:38,907 that somehow the video game business 1590 01:06:38,951 --> 01:06:43,521 has been transformed today from children to adults. 1591 01:06:43,564 --> 01:06:45,914 Small children bought this at Toys "R" Us, 1592 01:06:45,958 --> 01:06:47,960 and he knows that as well as I do. 1593 01:06:48,004 --> 01:06:50,528 We've got to get further into this. 1594 01:06:50,571 --> 01:06:53,444 - Well, thank you. Thanks for your forthrightness. 1595 01:06:53,487 --> 01:06:55,794 Thanks for assuming responsibility. 1596 01:06:55,837 --> 01:06:57,839 I appreciate--I believe you've shown some leadership here. 1597 01:06:57,883 --> 01:07:00,886 You've been a damn sight better than the competition. 1598 01:07:02,018 --> 01:07:04,716 - People were worried about video games being like drugs, 1599 01:07:04,759 --> 01:07:06,718 we were forcing them on kids. 1600 01:07:06,761 --> 01:07:08,633 They would become addicted to them. 1601 01:07:08,676 --> 01:07:10,374 They would ignore their studies. 1602 01:07:10,417 --> 01:07:13,072 And that turned out to be true. 1603 01:07:13,116 --> 01:07:14,856 No, it didn't. It wasn't true. 1604 01:07:14,900 --> 01:07:16,771 It was the opposite, actually. 1605 01:07:16,815 --> 01:07:19,948 I think that the kids that became video game aficionados 1606 01:07:19,992 --> 01:07:22,560 in many ways had better imaginations 1607 01:07:22,603 --> 01:07:25,606 and a better time with the world in some ways. 1608 01:07:27,391 --> 01:07:29,001 - After the Senate hearings, 1609 01:07:29,045 --> 01:07:32,744 Kalinske came out with some comment. 1610 01:07:32,787 --> 01:07:35,181 - What I had said was that Nintendo 1611 01:07:35,225 --> 01:07:36,791 started these hearings 1612 01:07:36,835 --> 01:07:42,232 by sending the senators videotapes of our video games. 1613 01:07:42,275 --> 01:07:44,669 - We thought Nintendo had planted this, 1614 01:07:44,712 --> 01:07:47,019 and it was convenient that Senator Lieberman 1615 01:07:47,063 --> 01:07:50,066 actually was getting reelected that year. 1616 01:07:50,109 --> 01:07:52,459 - I found that to be absolutely incredible. 1617 01:07:52,503 --> 01:07:55,027 This is the guy that sucks us into this. 1618 01:07:55,071 --> 01:07:58,378 I was trying to figure out a way to, in effect, 1619 01:07:58,422 --> 01:08:02,948 say, "Buzz off," 1620 01:08:02,991 --> 01:08:06,908 so I decided to write a poem, 1621 01:08:06,952 --> 01:08:09,128 "Roses are red, violets are blue. 1622 01:08:09,172 --> 01:08:12,827 So you had a bad day, boo hoo hoo." 1623 01:08:13,828 --> 01:08:15,656 - [laughs] 1624 01:08:17,223 --> 01:08:18,529 - Come on. 1625 01:08:18,572 --> 01:08:22,010 - I think it sent a message to Sega 1626 01:08:22,054 --> 01:08:24,230 that we were gonna continue to fight them. 1627 01:08:24,274 --> 01:08:26,972 [energetic drum music] 1628 01:08:27,015 --> 01:08:28,800 - Every year at about this time, 1629 01:08:28,843 --> 01:08:30,584 the sharpest of the cutting-edge electronics 1630 01:08:30,628 --> 01:08:31,759 are unveiled, 1631 01:08:31,803 --> 01:08:33,500 and, oh, the places you'll go. 1632 01:08:33,544 --> 01:08:36,199 [applause] 1633 01:08:37,852 --> 01:08:39,158 - Hey. - Hey. 1634 01:08:39,202 --> 01:08:41,160 - How you doing? - What a sight for sore eyes. 1635 01:08:41,204 --> 01:08:42,509 Come and sit down for a minute. 1636 01:08:42,553 --> 01:08:44,207 - All right. 1637 01:08:44,250 --> 01:08:48,124 - We just decided to come out here on a little hunting trip. 1638 01:08:48,167 --> 01:08:49,386 As a matter of fact, 1639 01:08:49,429 --> 01:08:51,823 there's some of those little suckers again! 1640 01:08:52,432 --> 01:08:54,391 - Hey. 1641 01:08:54,434 --> 01:08:55,827 [applause] 1642 01:08:55,870 --> 01:08:57,611 - Peter, a lot of people thinkthat Nintendo 1643 01:08:57,655 --> 01:09:00,136 and this whole businessis going right down the river. 1644 01:09:00,179 --> 01:09:02,138 - Yeah, Nintendo had a bad year. 1645 01:09:02,181 --> 01:09:04,009 Sales dropped. Profits dropped. 1646 01:09:04,052 --> 01:09:05,880 But the future's gotta be bright. 1647 01:09:05,924 --> 01:09:07,447 - There was a feeling like, "You know what? 1648 01:09:07,491 --> 01:09:08,927 "This is a maturing industry. 1649 01:09:08,970 --> 01:09:11,147 We need to start acting that way a little bit more". 1650 01:09:11,190 --> 01:09:12,539 From now on, we'll see no repeats 1651 01:09:12,583 --> 01:09:14,802 of the "Mortal Kombat" incident. 1652 01:09:14,846 --> 01:09:17,153 "Mortal Kombat 2" will be the same 1653 01:09:17,196 --> 01:09:19,285 whether it's on our platform or on anyone else's. 1654 01:09:19,329 --> 01:09:20,721 - All right. - Yeah. 1655 01:09:20,765 --> 01:09:22,897 - We as a company had to make a decision. 1656 01:09:22,941 --> 01:09:26,074 Were we gonna waver from the Mario roots? 1657 01:09:26,118 --> 01:09:27,641 This was very tough for us. 1658 01:09:27,685 --> 01:09:29,208 - The contents may be new, 1659 01:09:29,252 --> 01:09:31,558 but the sales formula hasn't changed at all. 1660 01:09:31,602 --> 01:09:35,736 We did modify our approach but without sacrificing standard. 1661 01:09:35,780 --> 01:09:37,999 - If kids want video games to help them define 1662 01:09:38,043 --> 01:09:39,914 their image, then we're gonna do just that. 1663 01:09:39,958 --> 01:09:42,047 The music comes from two of the hottest grunge groups 1664 01:09:42,090 --> 01:09:45,616 out there, the Butthole Surfers and Sweaty Nipples. 1665 01:09:45,659 --> 01:09:49,663 [laughter and applause] 1666 01:09:49,707 --> 01:09:53,841 So live it large, run it free, and play it loud. 1667 01:09:53,885 --> 01:09:56,844 - [belches] [rock music] 1668 01:09:56,888 --> 01:09:59,847 ♪ 1669 01:10:04,287 --> 01:10:06,941 - Play it loud! 1670 01:10:06,985 --> 01:10:09,901 - And I mean, they-- they kind of got it. 1671 01:10:09,944 --> 01:10:13,383 They started to see what the consumer wanted. 1672 01:10:13,426 --> 01:10:15,820 Hey, bravo for that. 1673 01:10:15,863 --> 01:10:17,996 Was it iterative of Sega? 1674 01:10:18,039 --> 01:10:21,826 Mm, yeah, it was, and we were complimented. 1675 01:10:21,869 --> 01:10:23,741 - Sega! - [belches] 1676 01:10:23,784 --> 01:10:25,438 - We now needed to shift again 1677 01:10:25,482 --> 01:10:28,180 and try to figure out, how do we manage against a company 1678 01:10:28,224 --> 01:10:30,400 that's starting to awaken? 1679 01:10:30,443 --> 01:10:33,577 - Sega is the current leader but only by a slight margin. 1680 01:10:33,620 --> 01:10:35,274 In an effort to keep their edge, 1681 01:10:35,318 --> 01:10:38,364 Sega demonstrated the latest in player interface, 1682 01:10:38,408 --> 01:10:39,626 the Activator. 1683 01:10:39,670 --> 01:10:41,411 [bell dings] - Ugh. 1684 01:10:41,454 --> 01:10:44,240 - We had this strategy to use technology. 1685 01:10:44,283 --> 01:10:45,893 - Not just thinking one step ahead 1686 01:10:45,937 --> 01:10:47,591 but two and three steps ahead. 1687 01:10:47,634 --> 01:10:49,680 - You look to the right, and you see the attacker 1688 01:10:49,723 --> 01:10:51,203 coming in on the right; you look above you, 1689 01:10:51,247 --> 01:10:53,901 and you could see the airplanes coming above you. 1690 01:10:53,945 --> 01:10:55,773 - Welcome to Sega Channel. 1691 01:10:55,816 --> 01:10:57,992 It's cable, but you don't watch it. 1692 01:10:58,036 --> 01:10:59,733 You play it! 1693 01:10:59,777 --> 01:11:02,040 - We see the Internet and online gaming 1694 01:11:02,083 --> 01:11:05,870 as one of the big revolutions in this business. 1695 01:11:05,913 --> 01:11:07,175 - They were kind of just throwing things 1696 01:11:07,219 --> 01:11:09,134 against the wall to see what would work. 1697 01:11:09,177 --> 01:11:11,528 - I didn't want us to become like Nintendo 1698 01:11:11,571 --> 01:11:13,399 and let somebody pass us by, 1699 01:11:13,443 --> 01:11:16,141 and so having the next great hardware system 1700 01:11:16,184 --> 01:11:18,012 was really critical. 1701 01:11:18,056 --> 01:11:20,319 - The next big battle in the video game wars 1702 01:11:20,363 --> 01:11:22,843 is about to begin as manufacturers 1703 01:11:22,887 --> 01:11:25,542 try to get people to trash their old systems 1704 01:11:25,585 --> 01:11:27,805 and trade up to new ones. 1705 01:11:27,848 --> 01:11:30,808 - I often get to introduce our money editor, John Stehr, 1706 01:11:30,851 --> 01:11:32,766 but right now, for the first time ever, 1707 01:11:32,810 --> 01:11:35,769 I am going to become John Stehr. 1708 01:11:35,813 --> 01:11:37,684 - It's our way of introducing you 1709 01:11:37,728 --> 01:11:40,600 to the machine behind today's movie magic. 1710 01:11:40,644 --> 01:11:41,993 - [screams] 1711 01:11:42,036 --> 01:11:44,604 - It's been a year of digital distortion. 1712 01:11:44,648 --> 01:11:47,215 Artists reanimated John Kennedy... 1713 01:11:47,259 --> 01:11:49,392 - I gotta pee. - And put Brandon Lee 1714 01:11:49,435 --> 01:11:52,525 into scenes shot after his death. 1715 01:11:52,569 --> 01:11:55,572 One brand of computer made all these movies possible, 1716 01:11:55,615 --> 01:11:59,489 the blisteringly fast computers of Silicon Graphics. 1717 01:11:59,532 --> 01:12:01,752 - I got a call from Jim Clark, 1718 01:12:01,795 --> 01:12:04,058 who was chairman of Silicon Graphics. 1719 01:12:04,102 --> 01:12:06,234 Said, "Hey, we've come up with a new chipset 1720 01:12:06,278 --> 01:12:08,585 "that we think is perfect for a video game system. 1721 01:12:08,628 --> 01:12:10,717 You wanna come over here and take a look at it?" 1722 01:12:10,761 --> 01:12:13,372 [Spin Doctors' "Two Princes"] 1723 01:12:13,416 --> 01:12:16,767 ♪ 1724 01:12:16,810 --> 01:12:19,857 We called Nakayama, explained the situation, 1725 01:12:19,900 --> 01:12:22,120 and said, "You gotta send a hardware team out." 1726 01:12:22,163 --> 01:12:24,122 Nakayama even came himself. 1727 01:12:24,165 --> 01:12:26,907 ♪ 1728 01:12:26,951 --> 01:12:28,605 We had a good meeting at Silicon Graphics. 1729 01:12:28,648 --> 01:12:30,998 They showed off these amazing graphics. 1730 01:12:31,042 --> 01:12:33,392 - ♪ That's what I said now 1731 01:12:33,436 --> 01:12:36,961 - They went back to Japan, and the response to us was, 1732 01:12:37,004 --> 01:12:38,571 "No, that's not good enough." 1733 01:12:38,615 --> 01:12:41,618 They thought there'd be too much wasted silicon, 1734 01:12:41,661 --> 01:12:43,794 so that was the excuse they gave. 1735 01:12:43,837 --> 01:12:46,187 - ♪ Yeah, yeah 1736 01:12:46,231 --> 01:12:48,407 - This was the first time that a major strategy 1737 01:12:48,451 --> 01:12:52,585 that I believed in had been overridden by Nakayama. 1738 01:12:53,456 --> 01:12:55,414 - It was a surprise to me. 1739 01:12:55,458 --> 01:12:56,763 It was a surprise to Tom, 1740 01:12:56,807 --> 01:12:58,591 a surprise to everybody that this happened. 1741 01:12:58,635 --> 01:13:02,290 [suspenseful music] 1742 01:13:02,334 --> 01:13:04,902 - Initially, I thought it was honest differences 1743 01:13:04,945 --> 01:13:07,470 in hardware architecture, 1744 01:13:07,513 --> 01:13:11,735 but I began to see that there was this jealousy 1745 01:13:11,778 --> 01:13:14,564 that was developing between Sega Japan 1746 01:13:14,607 --> 01:13:16,348 and Sega of America. 1747 01:13:16,392 --> 01:13:19,873 You could imagine every week, your CEOs walking in 1748 01:13:19,917 --> 01:13:21,440 and saying, "How come you're not as good 1749 01:13:21,484 --> 01:13:24,182 as those guys in America?" 1750 01:13:24,225 --> 01:13:26,097 And they started looking for ways 1751 01:13:26,140 --> 01:13:28,447 where they could disagree with us 1752 01:13:28,491 --> 01:13:31,450 and perhaps, to some degree, undermine us. 1753 01:13:32,930 --> 01:13:36,847 I explained the situation to Jim Clark, and he said, 1754 01:13:36,890 --> 01:13:38,370 "Well, what should I do now?" and I said, 1755 01:13:38,414 --> 01:13:41,547 "Well, there's this other video game company in Seattle. 1756 01:13:41,591 --> 01:13:44,071 Maybe you should go take a visit to them." 1757 01:13:44,115 --> 01:13:45,421 [applause] 1758 01:13:45,464 --> 01:13:47,988 - It's a pleasure to be here this morning. 1759 01:13:48,032 --> 01:13:51,818 There's a lot of talk today about new technology 1760 01:13:51,862 --> 01:13:55,169 soon replacing 16-bit video games, 1761 01:13:55,213 --> 01:13:59,739 but ultimately, only hit games will bring you customers. 1762 01:13:59,783 --> 01:14:02,481 - The Super Nintendo was doing well and making good money, 1763 01:14:02,525 --> 01:14:03,874 and so we kept reminding ourselves, 1764 01:14:03,917 --> 01:14:05,266 "It's not about the technology. 1765 01:14:05,310 --> 01:14:07,181 It's about the fun that you deliver." 1766 01:14:07,225 --> 01:14:08,661 - Here's an old friend of mine. 1767 01:14:08,705 --> 01:14:10,489 This, of course, is Donkey Kong, 1768 01:14:10,533 --> 01:14:15,059 the star of Nintendo's 1981 arcade hit. 1769 01:14:15,102 --> 01:14:18,889 Well, ladies and gentlemen, my friendly gorilla is back 1770 01:14:18,932 --> 01:14:22,588 in his new Nintendo game, "Donkey Kong Country." 1771 01:14:22,632 --> 01:14:25,591 [relaxed drum music] 1772 01:14:25,635 --> 01:14:29,552 ♪ 1773 01:14:29,595 --> 01:14:30,988 - Since its release, Nintendo 1774 01:14:31,031 --> 01:14:33,077 has sold more than 6 million copies. 1775 01:14:33,120 --> 01:14:35,253 ♪ 1776 01:14:35,296 --> 01:14:38,517 [Tarzan yell] 1777 01:14:38,561 --> 01:14:41,868 - "Donkey Kong Country" was a critical game for us 1778 01:14:41,912 --> 01:14:44,523 to sustain the momentum of Super NES 1779 01:14:44,567 --> 01:14:48,440 in the battle with Sega and push it right over the top. 1780 01:14:49,659 --> 01:14:52,879 - But while we were going through the battles with Sega, 1781 01:14:52,923 --> 01:14:54,315 another competitor was behind us, 1782 01:14:54,359 --> 01:14:55,839 and he's preparing to enter the marketplace. 1783 01:14:57,580 --> 01:14:58,842 - Mommy. Mommy. Mommy! 1784 01:14:58,885 --> 01:15:01,279 - It's only a movie, 1785 01:15:01,322 --> 01:15:04,108 except on a Sony big-screen TV. 1786 01:15:05,849 --> 01:15:08,460 - Oh, good, something romantic. 1787 01:15:08,504 --> 01:15:10,418 - Sony was just desperate 1788 01:15:10,462 --> 01:15:12,246 to get into the video game business. 1789 01:15:12,290 --> 01:15:15,641 - We support the content, the formats 1790 01:15:15,685 --> 01:15:17,730 that we think the consumer's going to like. 1791 01:15:17,774 --> 01:15:20,733 - Olaf Olafsson arrived in my office one day, 1792 01:15:20,777 --> 01:15:23,867 and we started talking about ways we might work together. 1793 01:15:23,910 --> 01:15:28,001 - Sony and Sega secretly agreed to come up 1794 01:15:28,045 --> 01:15:30,221 with a common hardware unit. 1795 01:15:30,264 --> 01:15:32,876 - But we'll each make our independent profit 1796 01:15:32,919 --> 01:15:34,617 off of the software. 1797 01:15:34,660 --> 01:15:37,358 We were a much better software developer than Sony was, 1798 01:15:37,402 --> 01:15:39,665 and so I thought, "Boy, this is a win for us." 1799 01:15:39,709 --> 01:15:43,016 [dramatic music] 1800 01:15:43,060 --> 01:15:45,279 - Consumer electronics giants Sony and Sega 1801 01:15:45,323 --> 01:15:47,586 are teaming up on the video games, 1802 01:15:47,630 --> 01:15:49,457 putting Sony music and movie software 1803 01:15:49,501 --> 01:15:52,939 behind the video game maker. 1804 01:15:52,983 --> 01:15:56,769 - Everybody involved thought the marriage would happen. 1805 01:15:56,813 --> 01:16:00,512 - Unfortunately, Sega Japan just couldn't agree 1806 01:16:00,556 --> 01:16:03,341 with the Sony engineers on specifications. 1807 01:16:04,821 --> 01:16:06,518 I was really upset 1808 01:16:06,562 --> 01:16:09,695 and felt like they didn't try hard enough. 1809 01:16:09,739 --> 01:16:11,218 - People were coming to our door to say, 1810 01:16:11,262 --> 01:16:14,613 "Hey, we want to be part of what you're doing here." 1811 01:16:14,657 --> 01:16:15,962 For whatever reason, 1812 01:16:16,006 --> 01:16:19,009 Sega of Japan didn't want to play. 1813 01:16:19,052 --> 01:16:21,272 - Kalinske did a good job of protecting us, 1814 01:16:21,315 --> 01:16:22,839 and it wasn't easy. 1815 01:16:22,882 --> 01:16:24,623 - He was a bit like the sin eater. 1816 01:16:24,667 --> 01:16:28,671 He was eating all the sins for the entire SOA group. 1817 01:16:28,714 --> 01:16:30,760 - He would tell me what was going on over there, 1818 01:16:30,803 --> 01:16:32,239 but I didn't really internalize it 1819 01:16:32,283 --> 01:16:34,590 'cause I didn't have to go there and get yelled at 1820 01:16:34,633 --> 01:16:38,071 like he did and scared like he did. 1821 01:16:38,115 --> 01:16:40,552 - Once the decision was made 1822 01:16:40,596 --> 01:16:42,946 not to do joint hardware with Sony, 1823 01:16:42,989 --> 01:16:45,426 I knew that things were different now. 1824 01:16:46,558 --> 01:16:50,649 - Nintendo, together with Silicon Graphics, 1825 01:16:50,693 --> 01:16:54,435 have entered into a worldwide joint development 1826 01:16:54,479 --> 01:16:56,350 and license agreement 1827 01:16:56,394 --> 01:16:59,266 under which our companies will develop 1828 01:16:59,310 --> 01:17:01,529 this new and unique product. 1829 01:17:01,573 --> 01:17:04,228 It will feature a new, 1830 01:17:04,271 --> 01:17:09,320 true 64-bit multimedia engine chipset. 1831 01:17:09,363 --> 01:17:10,800 - That freaked them out at Sega 1832 01:17:10,843 --> 01:17:12,889 because there was nothing to do about it. 1833 01:17:12,932 --> 01:17:16,196 They just could not get up to a 64-bit machine right away. 1834 01:17:16,240 --> 01:17:19,156 ♪ 1835 01:17:19,199 --> 01:17:23,856 - At that time, the strings were being pulled by Japan. 1836 01:17:23,900 --> 01:17:26,119 We had very limited degrees of freedom. 1837 01:17:26,163 --> 01:17:28,818 Our ideas were typically ignored 1838 01:17:28,861 --> 01:17:30,820 or not responded to, more often than not, 1839 01:17:30,863 --> 01:17:34,693 and I just wasn't looking for that intellectually. 1840 01:17:34,737 --> 01:17:37,478 And then I got approached by an executive search firm 1841 01:17:37,522 --> 01:17:39,872 looking for someone to run the Sony PlayStation. 1842 01:17:39,916 --> 01:17:42,048 - PlayStation. - And I said, "Well, 1843 01:17:42,092 --> 01:17:43,354 "here's another interesting challenge. 1844 01:17:43,397 --> 01:17:46,009 I can just undo what I just did at Sega." 1845 01:17:46,052 --> 01:17:50,274 ♪ 1846 01:17:50,317 --> 01:17:54,757 - I was a little bit surprised that they went for Steve. 1847 01:17:54,800 --> 01:17:57,063 - I was done, and I just wanted to move on 1848 01:17:57,107 --> 01:18:00,284 and didn't want to stay at Sega any longer. 1849 01:18:00,327 --> 01:18:02,634 - Sony wanted to really stick it in our eye 1850 01:18:02,678 --> 01:18:03,809 at this point, 1851 01:18:03,853 --> 01:18:08,727 and clearly, Steve was delighted to do that. 1852 01:18:08,771 --> 01:18:10,729 - My former wife used to always tell me 1853 01:18:10,773 --> 01:18:12,862 that there's no chance that I'll ever get a broken heart 1854 01:18:12,905 --> 01:18:14,951 'cause I don't have one. 1855 01:18:14,994 --> 01:18:18,128 To me, it's just a decision that one makes about business. 1856 01:18:18,171 --> 01:18:19,782 You can't be terribly emotional. 1857 01:18:19,825 --> 01:18:22,828 You have to be willing to cut off your hand to save the arm. 1858 01:18:22,872 --> 01:18:25,439 [Jax yells] 1859 01:18:28,094 --> 01:18:29,922 - Sony was really a scary competitor. 1860 01:18:29,966 --> 01:18:32,359 It was kind of like, the show business people 1861 01:18:32,403 --> 01:18:33,752 were gonna come into this thing, 1862 01:18:33,796 --> 01:18:35,623 and their sound and graphics 1863 01:18:35,667 --> 01:18:38,235 were gonna be way above what we could do. 1864 01:18:39,671 --> 01:18:42,500 There was a lot of fear around the Sega halls about that. 1865 01:18:42,543 --> 01:18:44,763 Kalinske was coming back from Japan 1866 01:18:44,807 --> 01:18:48,158 having nervous breakdowns about what was coming up. 1867 01:18:48,201 --> 01:18:50,290 We had no product at the time. 1868 01:18:50,334 --> 01:18:53,554 - At that point, Nintendo was on the wane. 1869 01:18:53,598 --> 01:18:56,470 - The biggest problem that we have with Nintendo 64 1870 01:18:56,514 --> 01:18:58,385 is to try to figure out 1871 01:18:58,429 --> 01:19:01,867 how to make great software real-time 3-D. 1872 01:19:03,347 --> 01:19:07,786 - We were teasing the retailer for, like, two years. 1873 01:19:07,830 --> 01:19:09,875 We were showing them these great graphics, 1874 01:19:09,919 --> 01:19:12,095 but from a sales perspective, it was a killer. 1875 01:19:12,138 --> 01:19:17,622 - When Nintendo announced 64-bit system, 1876 01:19:17,665 --> 01:19:20,799 Nakayama felt that we got to make it 64 too. 1877 01:19:20,843 --> 01:19:23,802 [serene music playing] 1878 01:19:23,846 --> 01:19:30,548 ♪ 1879 01:19:33,725 --> 01:19:37,642 - Introducing... - Sega Saturn. 1880 01:19:37,685 --> 01:19:41,864 - Sega Saturn was 32-bit machine to start with. 1881 01:19:41,907 --> 01:19:44,083 It was too late to redesign the machine, 1882 01:19:44,127 --> 01:19:49,001 and we ended up putting two 32-bit chips. 1883 01:19:49,045 --> 01:19:52,744 That made the programming challenging and complex. 1884 01:19:54,137 --> 01:19:56,226 - The software looked like shit. 1885 01:19:56,269 --> 01:19:58,619 Not until three months before launch did we find out 1886 01:19:58,663 --> 01:20:01,927 that the software was not gonna be there to support it. 1887 01:20:01,971 --> 01:20:04,408 - Not only did we not have enough software. 1888 01:20:04,451 --> 01:20:05,888 We didn't even have enough hardware, 1889 01:20:05,931 --> 01:20:08,281 so we had to limit 1890 01:20:08,325 --> 01:20:10,544 the retail distributors who carried it, 1891 01:20:10,588 --> 01:20:13,852 and we cut out Target and Wal-Mart, 1892 01:20:13,896 --> 01:20:17,203 and these guys were furious with us. 1893 01:20:17,247 --> 01:20:19,727 I expressed all this to Nakayama, 1894 01:20:19,771 --> 01:20:21,599 and he disagreed with me. 1895 01:20:21,642 --> 01:20:24,863 He was afraid that Sony was gonna steal our thunder, 1896 01:20:24,907 --> 01:20:30,608 so he wanted an immediate launch of Saturn at E3. 1897 01:20:32,479 --> 01:20:34,830 - When giants in the video game industry 1898 01:20:34,873 --> 01:20:37,571 square off against each other at a major trade show, 1899 01:20:37,615 --> 01:20:39,747 people pay attention. 1900 01:20:39,791 --> 01:20:42,489 With $10 billion on the line, 1901 01:20:42,533 --> 01:20:44,578 it's all about which expensive toys 1902 01:20:44,622 --> 01:20:46,972 consumers will pay to play with. 1903 01:20:47,016 --> 01:20:49,888 - This is no game; this is a multibillion-dollar gamble 1904 01:20:49,932 --> 01:20:51,629 for a lot of entertainment companies. 1905 01:20:51,672 --> 01:20:54,675 To borrow from a couple of their more popular titles, 1906 01:20:54,719 --> 01:20:56,242 they're locked in "Mortal Kombat." 1907 01:20:56,286 --> 01:20:58,810 For the losers, it could spell "Doom." 1908 01:21:01,944 --> 01:21:03,554 - Without the right games, 1909 01:21:03,597 --> 01:21:06,426 we're delaying the launch of Nintendo Ultra 64. 1910 01:21:06,470 --> 01:21:07,906 - We feel it's more important 1911 01:21:07,950 --> 01:21:09,473 to make a good first impression, 1912 01:21:09,516 --> 01:21:11,301 have the absolute best possible software when we launch. 1913 01:21:11,344 --> 01:21:12,998 - So you're willing to wait till '96? 1914 01:21:13,042 --> 01:21:14,695 - Yeah, we're gonna wait. 1915 01:21:14,739 --> 01:21:16,306 - Product launched in Japan. 1916 01:21:16,349 --> 01:21:18,482 We sold 100,000 units on the first day, 1917 01:21:18,525 --> 01:21:20,223 300,000 units in the first month. 1918 01:21:20,266 --> 01:21:22,660 We're approaching a million units sold in Japan. 1919 01:21:22,703 --> 01:21:24,705 We just need to replicate that in the United States. 1920 01:21:26,185 --> 01:21:28,013 - No question in my mind, there are gonna be casualties, 1921 01:21:28,057 --> 01:21:29,623 and there are gonna be casualties soon. 1922 01:21:29,667 --> 01:21:32,626 [suspenseful music] 1923 01:21:32,670 --> 01:21:34,890 ♪ 1924 01:21:40,983 --> 01:21:43,115 - Tom and I were both staying at the same hotel, 1925 01:21:43,159 --> 01:21:45,204 and they had taken over the lobby 1926 01:21:45,248 --> 01:21:46,597 and the swimming pool, 1927 01:21:46,640 --> 01:21:49,295 and they had these large inflatable balloons 1928 01:21:49,339 --> 01:21:52,559 of some of their iconic characters like Sonic. 1929 01:21:52,603 --> 01:21:54,910 Somehow those blow-up balloons wound up 1930 01:21:54,953 --> 01:21:56,868 in the bottom of the pool. 1931 01:21:56,912 --> 01:21:58,870 - He had them deflated, 1932 01:21:58,914 --> 01:22:01,960 stuck pins in them or something. 1933 01:22:02,004 --> 01:22:05,572 - After Sonic was found dead in the bottom of the pool, 1934 01:22:05,616 --> 01:22:07,618 Tom came to me and said, "Steve, can you cut it out?" 1935 01:22:07,661 --> 01:22:09,141 and I said, "Tom, no. 1936 01:22:09,185 --> 01:22:11,317 There's no way we're gonna cut it out." 1937 01:22:11,361 --> 01:22:14,451 - Clearly they were trying to out-Sega Sega. 1938 01:22:17,019 --> 01:22:18,194 - You know, if you're planning to buy 1939 01:22:18,237 --> 01:22:19,586 a new video game machine this year, 1940 01:22:19,630 --> 01:22:21,501 you better start saving for one now. 1941 01:22:21,545 --> 01:22:23,764 Some supersophisticated new systems 1942 01:22:23,808 --> 01:22:26,724 are about to hit the market, and they are pricey. 1943 01:22:26,767 --> 01:22:28,421 - Sega rushed Saturn on the market, 1944 01:22:28,465 --> 01:22:31,076 and it sells for around $399, 1945 01:22:31,120 --> 01:22:34,166 and don't expect that price to come down anytime soon. 1946 01:22:34,210 --> 01:22:35,602 - I wish that we could say 1947 01:22:35,646 --> 01:22:36,952 we were gonna see prices come down, 1948 01:22:36,995 --> 01:22:38,605 because I think it would help my business 1949 01:22:38,649 --> 01:22:40,042 and we'd sell a lot more units. 1950 01:22:40,085 --> 01:22:41,608 - I'm gonna talk to my parents about this one. 1951 01:22:41,652 --> 01:22:43,567 I like this one a lot. 1952 01:22:43,610 --> 01:22:45,525 - You better tell them it's $399. 1953 01:22:48,615 --> 01:22:50,530 - Up next, the Sony PlayStation. 1954 01:22:53,011 --> 01:22:55,274 - I'm going to ask Sony Computer Entertainment 1955 01:22:55,318 --> 01:22:56,972 president of America, 1956 01:22:57,015 --> 01:23:01,759 Steve Race, to join me for a brief presentation. 1957 01:23:01,802 --> 01:23:04,762 [applause] 1958 01:23:09,245 --> 01:23:12,204 [cheers and applause] 1959 01:23:12,248 --> 01:23:15,207 [desolate music] 1960 01:23:15,251 --> 01:23:16,774 ♪ 1961 01:23:16,817 --> 01:23:19,037 - I was sitting right in front of him. 1962 01:23:19,081 --> 01:23:21,909 It was Tom and I and Shinobu, and... 1963 01:23:21,953 --> 01:23:23,563 we were just sitting there watching. 1964 01:23:23,607 --> 01:23:30,614 ♪ 1965 01:23:31,310 --> 01:23:34,487 - [screams] 1966 01:23:34,531 --> 01:23:37,882 Sony PlayStation! 1967 01:23:37,925 --> 01:23:40,711 [cheers and applause] 1968 01:23:40,754 --> 01:23:42,626 - What is that? What is that? 1969 01:23:42,669 --> 01:23:46,108 - It's an enormous parade, including 16 balloons. 1970 01:23:46,151 --> 01:23:49,067 - Yeah! - All right. 1971 01:23:49,111 --> 01:23:51,461 - It was a cold and windy day this Thanksgiving, 1972 01:23:51,504 --> 01:23:54,681 and some of the new balloons didn't fare terribly well. 1973 01:23:56,944 --> 01:23:59,077 Sonic the Hedgehog hit a utility pole 1974 01:23:59,121 --> 01:24:01,514 around 58th Street and Broadway. 1975 01:24:01,558 --> 01:24:05,170 - Oh! Oh! 1976 01:24:05,214 --> 01:24:07,259 - Sonic wounded an off-duty police officer 1977 01:24:07,303 --> 01:24:09,522 and caused minor injuries to a young woman 1978 01:24:09,566 --> 01:24:12,047 and a ten-year-old girl. 1979 01:24:14,745 --> 01:24:17,182 Sonic the Hedgehog didn't finish the parade. 1980 01:24:17,226 --> 01:24:20,185 [warm music] 1981 01:24:20,229 --> 01:24:27,236 ♪ 1982 01:24:28,367 --> 01:24:30,543 - The success of Sega of America 1983 01:24:30,587 --> 01:24:34,112 really is American dream. 1984 01:24:34,156 --> 01:24:35,331 - All right. - Yeah. 1985 01:24:35,374 --> 01:24:38,116 - Americans like challenges, 1986 01:24:38,160 --> 01:24:40,684 so I think, overall, battle against Nintendo 1987 01:24:40,727 --> 01:24:45,297 was perfect for the spirit of Americans 1988 01:24:45,341 --> 01:24:47,691 to fight David and Goliath sort of battle. 1989 01:24:48,866 --> 01:24:52,783 So I think I'm very proud to be part of, 1990 01:24:52,826 --> 01:24:55,090 you know, whole Sega phenomenon. 1991 01:24:55,133 --> 01:25:01,487 ♪ 1992 01:25:01,531 --> 01:25:04,055 - 19 more shopping days until Christmas, 1993 01:25:04,099 --> 01:25:08,015 and the heat is on for parents all over the country 1994 01:25:08,059 --> 01:25:10,888 from kids who simply have to have this year's hottest toys. 1995 01:25:10,931 --> 01:25:15,153 - It's no longer Sega. Now I'm into Nintendo. 1996 01:25:15,197 --> 01:25:17,373 - Nephew wants one, my son wants one. 1997 01:25:17,416 --> 01:25:18,939 - Oh, that's a--that's a lot of systems. 1998 01:25:18,983 --> 01:25:20,027 - Go! 1999 01:25:22,987 --> 01:25:26,730 - Nintendo's top execs traded suits and ties for helmets 2000 01:25:26,773 --> 01:25:28,427 and racing togs today. 2001 01:25:29,994 --> 01:25:31,169 - Here comes another finisher! 2002 01:25:31,213 --> 01:25:32,910 It's Howard Lincoln, 2003 01:25:32,953 --> 01:25:35,391 Howard Lincoln, ladies and gentlemen! 2004 01:25:35,434 --> 01:25:37,741 - An incredible race,an incredible effort. 2005 01:25:37,784 --> 01:25:40,265 What's with thecome-from-behind strategy here? 2006 01:25:40,309 --> 01:25:43,703 - Well, at first I thought his go-kart was faster than mine. 2007 01:25:44,704 --> 01:25:48,621 ♪ 2008 01:25:48,665 --> 01:25:50,797 But then I found when I kept crashing into him, 2009 01:25:50,841 --> 01:25:52,799 he started moving a little bit to the right side, 2010 01:25:52,843 --> 01:25:54,279 and I was able to get by him. 2011 01:25:54,323 --> 01:25:58,849 ♪ 2012 01:25:58,892 --> 01:26:01,373 - Hey, plumber boy, mustache man, 2013 01:26:01,417 --> 01:26:03,288 your worst nightmare has arrived. 2014 01:26:03,332 --> 01:26:04,768 Pack up your stuff. 2015 01:26:04,811 --> 01:26:11,818 ♪ 2016 01:26:14,256 --> 01:26:17,215 [applause] 2017 01:26:19,261 --> 01:26:22,220 - In my life, I've been very fortunate to have worked 2018 01:26:22,264 --> 01:26:24,701 with great, wonderful people, 2019 01:26:24,744 --> 01:26:28,313 and my proudest business accomplishment 2020 01:26:28,357 --> 01:26:32,012 was seeing all those people all doing so well, 2021 01:26:32,056 --> 01:26:37,844 all of you who I worked with, that I owe this--this honor to. 2022 01:26:37,888 --> 01:26:44,895 ♪ 2023 01:27:10,703 --> 01:27:12,531 - Sega! - Sega. 2024 01:27:12,575 --> 01:27:14,011 - Sega! - Sega! 2025 01:27:14,054 --> 01:27:16,187 - Sega! - Sega! 2026 01:27:16,231 --> 01:27:18,320 - Sega! 2027 01:27:18,363 --> 01:27:25,370 ♪ 2028 01:27:30,549 --> 01:27:33,596 - ♪ You know very well 2029 01:27:33,639 --> 01:27:36,163 ♪ Who you are 2030 01:27:36,207 --> 01:27:38,601 ♪ Don't let 'em hold you down ♪ 2031 01:27:38,644 --> 01:27:40,951 ♪ Reach for the stars 2032 01:27:40,994 --> 01:27:42,213 ♪ You had a goal 2033 01:27:42,257 --> 01:27:44,215 - I understand. - [chuckles darkly] 2034 01:27:44,259 --> 01:27:46,130 - ♪ But not that many 2035 01:27:46,173 --> 01:27:48,001 ♪ 'Cause you're the only one 2036 01:27:48,045 --> 01:27:50,177 ♪ I'll give you good and plenty ♪ 2037 01:27:50,221 --> 01:27:52,963 - ♪ Super Nintendo, Sega Genesis ♪ 2038 01:27:53,006 --> 01:27:55,357 ♪ When I was dead broke, man, I couldn't picture this ♪ 2039 01:27:55,400 --> 01:27:57,924 [blipping] 2040 01:27:57,968 --> 01:27:59,970 - We would like to convince you 2041 01:28:00,013 --> 01:28:01,972 that there is indeed a market in which one money-- 2042 01:28:02,015 --> 01:28:04,366 money can be made in the near future. 2043 01:28:04,409 --> 01:28:07,369 [dramatic music] 2044 01:28:07,412 --> 01:28:10,372 ♪ 2045 01:28:10,415 --> 01:28:13,375 [dramatic electronic music] 2046 01:28:13,418 --> 01:28:20,425 ♪