Console Wars

The Genesis and SNES were neck and neck. Game Gear was about to catch up to Nintendo’s Game Boy. And Sega CD, Sega Channel, and development on Sonic 3 were all great examples of the company’s continued commitment to reaching the Next Level. For the time being, Sega was firing on all cylinders, but it was the future that had Kalinske concerned.
Particularly when it came to a next-generation console. After Sega and Sony had spent nearly six months trying to jointly develop 32-bit hardware, it appeared that they couldn’t come to an agreement on the system’s architecture, and the entire thing fell apart. What it boiled down to was that Sony’s Ken Kutaragi wanted to create a machine that was 100 percent dedicated to 3-D graphics, whereas Sega’s Hideki Sato wanted to build a machine that could also accommodate the typical 2-D sprite-based gaming. This didn’t make any sense to Kalinske; weren’t three dimensions undoubtedly better than two? Hadn’t Sega CD proven that players craved lifelike graphics? What was the issue here? But when Kalinske pressed for an answer, he was told that this was better because developers would have a very difficult time making games in 3-D.

In 1971, when he was only three days old, Ryan White was diagnosed with hemophilia A. As treatment for this disorder, he was given weekly transfusions of a blood-clotting protein called factor VIII. This enabled him to live a relatively normal life throughout most of his childhood, but that changed in 1984 when the thirteen-year-old was rushed to the hospital with symptoms of pneumonia. Following a partial lung transplant, he was diagnosed with AIDS, which he had acquired through a transfusion. White was given only six months to live, but after beating those odds and regaining some of his strength, he wanted to try to resume a normal life. A large part of that normalcy entailed returning to school, but when community members learned of his intentions, they protested.
Fearing that he might be contagious, fifty teachers and over a hundred local parents signed a petition to ban Ryan White from Western Middle School. Even though the health commissioner of Indiana informed the school that White posed no risk to other students, he was expelled from the school. The White family challenged this decision and turned to the legal system to get their son readmitted. Over the next year, White remained at home as his case went through various courts and appeals until finally, in August 1986, he was allowed to return to school for eighth grade. Although this appeared to be a major victory, White was generally unhappy upon returning to classes because he had few friends and was often accused of “being a queer.” Meanwhile, his family received threats on a nearly daily basis, and after a bullet zinged through their living room, they decided to withdraw their son from the school.

The reason they could do this was because of the extremely liberal return policies that most retailers had in place.

In 1991, someone could walk into a store with no receipt and no original packaging—they didn’t even have to have all the parts (“Um, I don’t remember this NES coming with a controller”)—and receive a full refund by claiming there was a defect. No proof had to be provided, nor did the retailers even really care. In their eyes, the customer was always right, and financially it didn’t hurt them much because they would just send the supposedly defective product back to the manufacturer for their own refund. As a result of retailers empowering their customers with the gift of infinite rightness, companies like Nintendo would suffer the costs of that moral wrongness.

This change of heart led Nintendo to go behind Sony’s back and sign a deal with Philips. As per their arrangement, Philips would create a CD-ROM drive that hooked up to the Super Nintendo to play games on CD. Additionally, the CD titles that Nintendo created would be compatible with Philips’s CD-I players. Naturally, Nintendo would control the licensing rights to all CD games regardless of which system they wound up being used on. Because Japanese contracts tended to be succinct, with a large reliance on good faith, Yamauchi felt that he could break the contract and ditch Sony without penalty. He also decided not to inform Sony of his side deal with Philips, to ensure that Sony’s humiliation was made public.

What neither of them knew was that only a few weeks earlier, Arakawa and Lincoln had flown to the Philips world headquarters in Eindhoven, Netherlands, for a meeting with Gaston Bastiaens, head of the Compact Disc Interactive (CD-I) group. The Nintendo executives had traveled there at the behest of Yamauchi, who was growing concerned about an alliance with Sony. He had realized that the deal he signed in 1988 gave Sony the right to control software for a joint CD venture. This detail hadn’t appeared to be a problem back then, when Sony was exclusively a consumer electronics company, makers of televisions, stereos, and music devices like the Walkman and MiniDisc player. But with their acquisition of CBS Records and Columbia/TriStar films and now the creation of an electronic publishing group, they were growing too ambitious for Yamauchi’s tastes.

Blah, blah, blah, Olafsson thought. Hand out a memo, smile for the camera, and let’s move on to more important matters. Everyone already knows what you’re about to say: Sony + Nintendo = CD-ROMance.
“Compact discs will play a key role in Nintendo’s vision for the future,” Lincoln finally announced, now ready to reveal the plans for Nintendo’s new CD unit. Olafsson stirred in his seat as the crowning moment inched closer. “And who better to partner with than the company that invented the audio compact disc: Philips Electronics.”

handle EA’s enormous talents

It had all started about a year ago when Hawkins had a significant change of heart. Since founding Electronic Arts, he had been viciously resistant to the idea of creating software for videogame consoles. He saw them as pesky toys, nothing at all compared to the future of personal computers. This mind-set had made him look like a genius when Atari blew up in 1983, but by 1987, when the Nintendo phenomenon was in full effect, it made him look like some combination of foolish and pretentious. Even as Nintendo continued to rise, Hawkins vehemently defended his position, believing that the NES was no more than a Cabbage Patch Kid–like fad, and reminding his employees that the computer was the future. Besides, the graphics on the NES were mediocre at best and couldn’t

figure until an experiment gone awry turned him into an evil villain

Day after day, Kalinske, Schroeder and Nilsen worked to turn this critter into something more than lines on a page. At first their primary focus was subtraction, removing the fangs, the collar, the guitar, and the girlfriend. Then as he began to look more and more like a lost little hedgehog, they worked to add back some of that attitude, focusing less on gimmicks like a guitar or a girlfriend and more on his backstory and character. To better understand this speedy blue hedgehog, Kalinske had Schroeder write a thirteen-page bible that detailed the who, what, where, when, and why of his personality. He had grown up in Nebraska, lost his father at a young age, trained hard to develop world-class speed, and befriended a brilliant scientist who acted as a father