All right, gather ' round children. Let grandpa Zoy tell you about the late 1980s, when Nintendo held an unprecedented 90% U.S. market share for home video game consoles, trailed distantly by Sega and the last remaining vestiges of the original company called Atari.
As we all know, the NES wasn' t technically the most powerful of the consoles then available, but its vast library of games, most of which were by 3rd party developers and publishers, was one of its main appeals. But it wasn' t that 3rd party companies didn' t want to develop for the SMS, it was that they were prevented from doing so by Nintendo through practices that were later determined to be illegal in a series of antitrust lawsuits settled by the Federal Trade Commission (FTC) in 1991 -- the first such action by the FTC in over a decade.
Nintendo had already established certain shady practices -- older gamers will recall a so-called " chip shortage" circa 1988 that turned out to be completely trumped-up -- in order to maintain an iron-fist style of control over both 3rd parties and retailers.
The " Nintendo Seal of Approval" was one such aspect of control that 3rd party companies bristled against, since it restricted their creative freedom by limiting their annual number of releases -- for example, Konami subsequently created the imprint Ultra in order to be able to release more games than Nintendo was allowing them to. In another notable case, Atari Games (at this point a separate company than the one that made the home consoles) reverse-engineered the NES cartridge interface and created an imprint, Tengen, that released games without the Nintendo Seal of Approval -- including licensed Sega ports! (Nintendo later tangled with Tengen/Atari Games of the coveted Tetris license, as Atari Games had the license for coin-ops and Nintendo claimed to have it for home consoles.)
On the retail end, the " chip shortage" enabled Nintendo to effectively price-fix the market and prevent retailers from lowering the prices of games to compete with each other. This was ultimately ruled illegal by the FTC, but in a brilliantly slimy move, Nintendo ' remedied' the situation around 1991 by issuing $5 coupons to people who had previously bought their games at what were determined to be artificially inflated prices. It was a brilliantly slimy move because these were not rebates -- they were coupons that could only be redeemed by purchasing an additional NES cartridge! In effect, Nintendo spun their punishment to encourage consumers to buy even more from them.
Nintendo' s reign of scuz was eventually ended as 3rd party companies emerged from their exclusivity windows (which, unlike the typical sorts of 6-month or 1-year exclusivity windows we see these days, back in the 8-bit days lasted several years -- long enough to stifle the competition from the Master System) and began developing for the Sega Genesis / Mega Drive.
Look at the difference between the market share of the 8-bit era, and the market shares of console manufactures for each subsequent era. The difference is that Nintendo both bent and broke the law in the 8-bit era. The outcome has always been very different when they have had to compete on a level playing field. (Relatively level, that is. This is capitalism we' re talking about, after all.)
Anyway, hope you enjoyed storytime. You can find more details by googling on terms like Nintendo + antitrust + nes.
< Message edited by Zoy -- 20 Feb 07 8:35:09 >