"...Nintendo strong-armed game developers to sign exclusive licensing contracts, introduced technical innovations that let the company strictly manage which companies could develop games for the Nintendo Entertainment System, and (some charged, though Nintendo denies it) created inventory scarcities by squeezing the supply of chips that gave gamemakers access to the console. Nintendo's monopoly shaped the growing industry..."
"...Howard Lincoln (senior VP, Nintendo of America): ...We were convinced that we had to be very controlling in the way we handled expansion, compensation, and all those issues..."
"...Dan Van Elderen (president, Atari Games/Tengen): In '89 to '90, we launched our consumer division under the name Tengen, and began producing games for NES. Nintendo controlled everything from the volume of cartridges you could produce to the number and kind of titles you could do..."
"...Tom Kalinske (president and CEO, Sega of America): Nintendo was a tough competitor. I admire them for it. They went to all the third-party developers and said, "If you support Sega, we won't get you your gamechips on time." Or they told retailers, "If you put Sega games on your shelf, you're not gonna get your new Mario games for a while..."
"...Van Elderen: The way Nintendo did business was like Ford introducing a car that could only use Ford gasoline. There was a stint where we tried to reverse-engineer the Nintendo platform. We even tried litigation..."
"...Lincoln: We were hit with a few suits; one was a major antitrust suit brought by the Atari Corporation. We ultimately loosened the exclusivity clause for third parties, but I don't believe it had to do with the litigation - just a feeling that it wasn't necessary. My recollection is that we eliminated the restriction on the number of games they could produce annually, but not the quality control. I still believe the exclusivity clause was perfectly legal..."
"...Van Elderen: The Sega Genesis came out in 1989, and it was a big boost technically. It was a more powerful system that allowed us to do some of the things we were doing on the arcade side, which was still far more advanced. But it also allowed us to get away from the market forces that we'd been struggling against..."
"...By the end of the '80s, it seemed that every gamer owned an NES, and that Nintendo had exclusive contracts with all the best arcade-game developers. But Sega had cracked open Nintendo's monopoly with the 16-bit Genesis and started the video-console arms race..."
"...Katz: Ironically, one year after Sega approached Atari, I took over Sega of America, where I was in the same position I'd been in all along: Nintendo had all the hot arcade licensees tied up. We needed a character to introduce with Genesis and compete with Mario. Nobody knew who Sonic was. American kids didn't even know what a hedgehog was, but it didn't matter. It was a terrific game that you could get only on Genesis..."
"...Jim Whims (executive VP, Worlds of Wonder): You have to understand - Nintendo had the most lucrative model in the world. A third party had to put an order in 90 days in advance and put a letter of credit up right away. Nintendo didn't take any risks with inventory, sales, or marketing. They had enormous margins, and the royalties that third parties paid to use the system were huge. And they produced their own games, too, so as a third party, you were actually competing against Nintendo. That really helped Sega..."
"...Greg Fischbach (CEO, Acclaim): When we released Mortal Kombat, it revolutionized the industry, in terms of the attention it got and the older players that came to the game. Nintendo felt the no-blood version was more appropriate for its system; Sega told us to put a label on the box so people would know what they were getting. And we sold three times as many units for Sega..."
- Wired
