Console Wars (2015)
SONIC VS. MARIO
THE UNDERDOG DAYS OF
“I’d love to sit here and promise you the world,” Kalinske said, addressing a conference room full of employees readying for battle. “Because, in my opinion, that’s what you each deserve for all the hard work you’ve put in. But the truth is that I can’t even promise you that a year from now Sega is still going to be making consoles.”
Now that Nintendo’s 16-bit machine had a release date (August 23, 1991), Sega was preparing to make the most of every minute before then. During this critical period, which they called the “Sixteen Weeks of Summer,” Kaliske, Rioux, and Toyoda would authorize a series of unorthodox hirings, promotions, and marketing strategies to blunt the impact of the SNES.
“Unfortunately,” Kalinske continued, “there’s not much I can promise in this room today. But I’ll tell you one thing I know for sure: we have this summer to give ourselves a chance at actually competing against Nintendo, and I can’t even begin to imagine what this group would be capable of accomplishing with such an opportunity.” Kalinske paused and in one swift look around the room seemed to make individual eye contact with everyone. It was time for the summer games to begin.
Week 1: Radio Killed the Video(game) Star
Nintendo’s Peter Main and Bill White ushered in the warm weather by announcing a three-month $25 million marketing blitz to promote the upcoming SNES. Because Sega’s advertising budget for the entire year was less than what Nintendo had allocated for a single quarter, Sega’s strikes had to be more strategic, and their missiles more heat-seeking. In this case, the heat that Sega sought was the older, wiser, and more wiseass-ey crowd of teens, college kids, and rebellious adults. As Sega continued to define its image, this demographic was no longer simply an economic necessity but had become an audience that helped sell a narrative vision for Sega: a technologically superior company whose advanced, offbeat products could be appreciated only by those mature enough to handle its power. Sega aspired to be not just the name on a product but the secretly whispered password of coconspirators involved in a revolution.
To reach this audience, and to do so with a fraction of Nintendo’s budget, Sega kicked off the summer with a pair of ambitious marketing campaigns in June. The first was “Graduate to Genesis,” which aimed to hammer home the concept of Sega representing the next phase of videogame evolution while also catering to a time of year filled with graduation ceremonies. Though “Graduate to Genesis” presented another opportunity to define Sega, the real goal was to further cut into Nintendo’s hold over third-party software developers. The promo offered a free third-party title (produced by one of nine companies including EA and Namco) upon the purchase of a Genesis. By doing this, Sega was able to reward the third parties who had taken a chance on them and demonstrate to other game makers that perhaps it was time to consider defecting from Nintendo.
With a campaign in place that aimed to chisel away at Nintendo’s strength, Kalinske wanted another that exploited their weaknesses. One place where Nintendo had little presence was on the radio, so that’s where Sega struck next. Nilsen put together a list of radio stations that best exemplified Sega’s desired cool, in-your-face identity. He zeroed in on Los Angeles’s 102.7 KIIS-FM and partnered with them to do an LA-wide “Sixteen Weeks of Summer” campaign with round-the-clock promos, giveaways, and updates from the Sega-verse. In addition, the station would help expand Sega’s visibility by setting up playable Genesis displays during the station’s on-location events at beaches, concerts, and hot spots around the city. Similarly named and equally invasive assaults were launched in Chicago and New York. In addition to dominating a medium that Nintendo had ignored, there was an unexpected benefit to the radio maneuver: Cheryl Quiroz, the senior account executive at KIIS-FM, was so smitten with Sega’s products that she reached out to Blockbuster Video about bringing them into the mix. At the time, Blockbuster was in the midst of a lawsuit with Nintendo, who had taken a harsh stance against videogame rentals, and so they were eager to help out. Blockbuster would gladly set up in-store displays, tout Sega’s latest games, and hold gaming contests all summer long (though they wanted to dub the promotion something that honored 102.7 KIIS-FM). Sega was gladly willing to forgo the semantics, birthing “102 Days of Summer.”
Whether it was sixteen weeks or 102 days, the summer would undoubtedly be long and stressful. Luckily, around this time, Kalinske felt incredibly rejuvenated. After nearly a year apart, his wife and three daughters were finally moving up to live with him in the Bay Area. Things appeared to be finally coming together.
Week 2: Mr. Extremely Dangerous
While Kalinske and his family searched for a dream home in the Bay Area, Sega began aggressively putting together a dream team of new employees. Like the brand they were cultivating and the hedgehog they had helped create, Kalinske, Rioux, and Toyoda searched for people with a distinct Sega-ness: sharp, scrappy go-getters who craved long odds and last-second victories.
As Kalinske continued to look for ways to embody the tone depicted in that Reebok “Extremely Dangerous” bungee-jump ad, he went straight to the source: Reebok’s marketing manager, Steve Race. “We’re building a team to go to war against Nintendo,” Kalinske said. “We’re going to take over the videogame market. Will you join us?”
Race was a clever, foul-mouthed prankster who used his boisterous personality to hide the fact that he was a brilliant marketing strategist. An impossible challenge? Shit, of course he was in. But Race wasn’t yet ready to jump feet-first into the pool, and for the time being he wanted to run Sega’s marketing department as a consultant. If that was what it took, then Kalinske was okay with it.
“Just one question,” Race said. “What the hell is a videogame?”
Kalinske’s eyes went wide. Even he had known more than this going in.
“Kidding,” Race said with a cheeky smile. Not only did Race know what a videogame was, but upon joing Sega he’d immediately become the company’s most senior expert. Back in the early eighties, he had been the vice president of marketing and communications for Atari’s International Division (selling in territories where, notably, no crash had been caused) before cofounding Worlds of Wonder, the toy company that first nationally distributed the NES. “Don’t worry about me,” Race explained. “I was selling videogames back when you were pimping out plastic dolls.”
Week 3: The Electronics Expert
Sega was adamantly focused on positioning their products as being more than just a simple toy, unlike Nintendo’s; they were consumer electronics and should be marketed and sold as such. To make inroads into that realm of retail, Sega’s executives targeted Richard Burns, a VP of sales at Sony who moved and spoke with the quiet but powerful demeanor of an assassin.
“We don’t just want you, Richard,” Kalinske said. “We need you.”
Burns scratched his forehead, intrigued by the idea of moving from bleak New England to sunny California, but concerned about entering a business that overlapped with the pesky terrain of the toy world. “Why me?” he asked. “What I know about videogames could sit on the end of your finger.”
Kalinske nodded. “Good. You’ll be perfect.”
Burns agreed to take the leap and run the sales department, thus beginning the mission to position the Genesis (and videogames as a whole) as consumer electronics, no different from the stereos, VCRs, or camcorders he’d sold during his days at Sony. Burns had been around long enough to feel confident in his ice-to-Eskimos sales skills, but he quickly discovered that getting retailers to take Sega seriously was only half of the challenge. The bigger problem was that his predecessor had either had terrible organizational skills or was an outright anarchist. A lack of any sort of filing system was merely a nuisance, but not having a formalized sales structure was just plain leaving money on the table. There were limited records of which systems and games retailers had ordered from Sega, and almost no information about what had sold through, what had been marked down, and what had been returned. In an environment where it took about eight months to develop a game and two months to produce and ship it, knowing these kinds of things wasn’t just helpful but mandatory.
Week 4: Tiny Billboards
The sheer speed of Sonic The Hedgehog was bound to make it a hit, but that wasn’t the only goal here—not even close. Kalinske wanted Sonic to become an instantly recognizable cultural icon who could define the decade and eventually grow into a multibillion-dollar intellectual property that would continue to pump money into Sega for decades even after he’d left the company. This was why Sega of America had been so protective of Sonic. They didn’t want him to join that long list of videogame characters whose innovative gameplay had made them celebrities but whose lack of dimension had caused them to fade away. They had to make sure that Sonic would find a better fate than one-hit wonders like Dig-Dug, Frogger, or even Mr. & Mrs. Pac-Man, all of which had aged with the ungraceful gawkiness of a former child star.
Grand aspirations were certainly admirable, but without proper execution they were nothing more than delusions of grandeur. Transforming a 16-bit critter into the next Mickey Mouse, however, presented the same problem as marketing against the Super Nintendo: money. Without a war chest full of financial resources, Sega relied on the kindness of strangers. Or, more specifically, writers from the most popular gaming magazines of the era: GamePro, VideoGames & Computer Entertainment (VG&CE), and Electronic Gaming Monthly (EGM), which had been created to fill the growing appetite for videogame previews, reviews, and rumors. Though they differed in subtle ways (GamePro slanted younger, VG&CE skewed older, and EGM swung for mainstream), the editors at each all had one thing in common: a distaste for Nintendo. To Nintendo’s credit, Nintendo Power editor in chief Gail Tilden consistently churned out a colorfully brilliant issue each month. But they kept the best content for themselves, and so it was exceptionally difficult for the other magazines to adequately cover the industry when the already close-lipped company who dominated over 90 percent of the market felt little incentive to share information.
Up until now, Kalinske’s formula for success had always been to rely on his charm, wit, and facility with public speaking, but he was quickly discovering that none of those talents could compare to the power of harnessing the hatred for his competitor. In the same way that Blockbuster had been eager to rain on Nintendo’s parade, Sega hoped that the scorned magazines could help advance their agenda. Kalinske knew that the gaming magazines typically appealed to only the most hard-core fans, but it wasn’t just them he wanted to reach. The magazines’ greatest asset wasn’t the readership but rather the physical space they occupied. With wide circulations, these magazines populated newsstands, kiosks, and drugstores around the country, which made each cover almost like a tiny billboard. So maybe John Doe didn’t care at all about videogames, but when buying his paper each morning, he would inadvertently notice the bright game magazine covers and a small imprint would be created. It would be only seconds each day, but they would add up.
To make the math work, Kalinske relied on Nilsen. Ever since joining Sega in 1989, Nilsen had always made it a priority to build strong relationships with the press. He made it a personal policy to return every call, from anyone at any publication, and when doing so he would always have a memorable quote ready. He was all about going the extra mile, whether that entailed flying out to Los Angeles to have lunch with writers from VG&CE or trekking out to Lombard, Illinois, to meet new members of the EGM team. Nilsen took great pleasure in seducing the tastemakers, but what really made his tactics work was that they were not tactics at all. As he saw it, these people were devoting their lives to writing about what he did for a living; they made his life easier, and he wanted to return the favor. It was less about sneakily seeking competitive advantages and more about demonstrating good manners. And if his sentiment contrasted with that of Nintendo, then that was just the cherry on top.
This all put Nilsen in a great position to ask for assistance when it came time to make Sonic a star. He coordinated a three-pronged attack of magazine covers, hitting EGM in May 1991 and then VG&CE and GamePro one month later. In addition, Sega released a sixteen-page promotional Sonic comic, which not only grabbed more eyeballs on newsstands but was Trojan-horsed inside other publications like Disney Adventures and an issue of Superman.
As the warm days grew longer and Sega of Japan neared completion of Sonic The Hedgehog, Kalinske didn’t quite know what to expect. But he was feeling optimistic, and pleased that Nilsen had acquired so much tiny but omnipresent real estate.
Week 5: Superstars Wanted
In addition to attracting eyeballs, Kalinske also craved hands. More specifically, he wanted to get Sega products into the hands of people who personified verve and coolness. In a perfect world, Sega would have hired young celebrities to star in commercials. In a less perfect world, they would have at least run ads during shows that featured those young celebrities. In reality, however, money was tight, airtime was expensive, and networks weren’t in the business of granting discounts to unknown companies. Still, Kalinske knew that if Sega could only afford an ad buy during one primetime show, it was still worth the risk. They’d just better be damn sure they found the right show. ABC’s Full House? NBC’s Saved by the Bell? CBS’s Major Dad?
But why pick only one when you can have them all? In the Sega spirit of killing a flock of birds with a single stone, Kalinske and his team developed a crafty solution. Instead of running an ad during a hit show, they would create a hit show of their own. Nilsen spearheaded a deal with producer Richard Rovsek to create a syndicated prime-time special, shot at Universal Studios, in which young sitcom stars would compete against one another in a series of zany athletic events for their favorite charities. Sega financed the operation, and between naming the special and including challenges like hedgehog races and Game Gear duels, they benefited from a parade of product placement. It would have been easy to dismiss this as shameless promotion, but with such a bright constellation of trendsetting teenage stars, no one complained.
They would all be there, the princes and princesses of the TV universe. Hunks and babes (like Saved by the Bell’s Mark-Paul Gosselaar and Tiffani Amber Thiessen), loving on-screen sisters (Full House’s Candace Cameron and Jodie Sweetin), squabbling on-screen brothers (Home Improvement’s Jonathan Taylor Thomas and Zachary Ty Bryan), and even a few second fiddles from Blossom, Growing Pains, and Who’s the Boss, each hoping to seize the spotlight. All of them had eagerly signed up to star in the Sega Star Kid Challenge, breaking free of laugh tracks and very special episodes to compete in raft races, obstacle courses, and tug-of-wars set above a pool of whipped cream.
Though the show would not air until June, filming had taken place on April 18-19 at Universal Studios Hollywood. Kalinske and Nilsen had flown down to oversee the proceedings, along with an excited Toyoda, who brought his daughter to marvel at Sega’s intersection with glitz and glamour. As they had hoped, it turned out to be a wonderfully raucous event, tied together by host Scott Baio and his happy daze.
Filming had gone off without a hitch, and now, two months later, they tuned in to see the fruits of their labor. The high ratings, coupled with a costumed Sonic The Hedgehog persistently lurking in the background of most scenes, indicated to Sega of America that things were looking rather peachy.
The only foreseeable pit was running out of money. Even on a shoestring budget, their plans to launch Sonic (and, in effect, relaunch Genesis, the Sega name, and their own careers) were adding up very quickly to some serious cash. Still, Kalinske knew that now was not the time to back down. What’s another hundred thousand dollars today, he thought, to build a hundred-million-dollar property tomorrow? Nakayama, however, didn’t see things as clearly when Kalinske called seeking additional funds.
“We have budgets for a reason,” Nakayama reminded him. “Correct?”
“Believe me, I know that you don’t love getting calls like these,” Kalinske said. “But it’s my job to evaluate opportunities and then ask.”
“As with Wal-Mart?” Nakayama asked with a tiny groan.
Kalinske was rendered momentarily speechless, as things had still not progressed on that front as well as he hoped. While Sega had been running the Genesis store in Bentonville and taken over the city’s billboards, for the time being Wal-Mart continued to stonewall Sega, though Kalinske was convinced they were about to crack. “Hey,” Kalinske said, “it takes money to—”
“To make money, yes.”
“I was going to say that it takes money to take people’s money, but I admit my wording was primarily a function of attempting to spice things up.”
Nakayama chuckled, though his skepticism was still evident. Neither man said anything for a while. Finally Nakayama broke the silence. “Okay, Tom, keep doing what you are doing. Sega of Japan will help out.”
Nakayama hung up, though Kalinske could still hear Nakayama’s groan ringing in his head.
Week 6: Altering the Beast
“Make a fucking decision already!” Steve Race shouted and then slammed down the phone. Race’s words were loud enough to draw Kalinske to his office, but rational enough not to cause him concern.
“What’s wrong?” Kalinsked asked.
“I don’t know,” Race said, trying to shrink complex frustrations into a string of intelligible words. “Just having my patience tested by our friends in Japan. First they won’t show me game footage, then they won’t even share a synopsis, then all of a sudden they might send me some screenshots, but a synopsis is still off the table. How the hell do they expect me to sell a mystery box with goddamn question mark inside?”
“Don’t worry about that nonsense right now,” Kalinske suggested. “There’s a whole other beast I could use your help with.”
With the marketing plans coming together, Sega was now faced with the logistical conundrum of getting Sonic from production lines in Japan into living rooms in America. Because the game would be bundled with the Genesis, this wasn’t simply a matter of sorting, shipping, and selling. The situation was made more complicated by the fact that at this very moment Sega’s warehouses were overflowing with about 150,000 unsold Genesis systems containing Altered Beast, with about 100,000 more collecting dust on shelves at retailers all across the United States. Financially Sega couldn’t afford to just write off a quarter of a million systems, but commercially they couldn’t in good conscience sell soon-to-be obsolete systems to customers who would feel foolish or deceived that they didn’t get Sonic. Sega could have waited until the rest of the Altered Beast systems sold out, but they weren’t selling all that fast to begin with. Besides, the whole point of unleashing Sonic now was to cuckold the Super Nintendo.
The whole situation had a vaguely solve-for-X middle-school-algebra feel to it and ideas were tossed around for days. Finally, they found a way to kill two birds with one stone, and set a schedule to make it happen:
June 15: Lower price of Genesis + Altered Beast to $149.95
June 30: Third-party “Graduate to Genesis” promotion ends
July 1: Begin promotion entitling customers to receive a free Sonic game by mail
Mid-July: Begin shipping Genesis units + Sonic The Hedgehog to retailers
Mid-July to mid-August: Ship remaining Genesis units + Altered Beast to select retailers
September 15: Exclusively sell Genesis + Sonic The Hedgehog at $149.95
This final strategy would offer the best of all worlds. Customers would be happy to get two games for the price of one, and retailers would be happy to unload the old hardware systems. Meanwhile, while the retailers were busy unloading the 100,000 units of old inventory, SOA and SOJ were busy with their own 150,000 units, though the product didn’t physically travel far. The employees on both continents would open boxes of the old systems, remove the console, and then repackage it into a brand-new box containing Sonic on the cover and the new game inside.
Week 7: Sonic Boom
Unlike movies, books, and music albums, in 1991 there was no official release date for videogames. When a game hit stores was a matter of logistics, not premeditation. There were just too many variables and too many unaffiliated retailers; besides, mostly the product came in from Japan in dribs and drabs. As a result, there was no game-changing D-day for Sonic The Hedgehog but rather a period of several weeks in late June and early July when the blue blur started showing up in stores. Nevertheless, as soon as Sonic sped into the homes and hearts of a few players around the country, word spread exponentially—in schoolyards, on college campuses, and around watercoolers. And because Kalinske had been granted approval from Japan to pack Sonic with the system, it wasn’t just $50 games that were flying off the shelves, but Genesis consoles that cost three times that much. And when people bought a Genesis, not only would they end up buying more games later but, most important, they likely would not purchase a Super Nintendo. A line had been drawn in the sand, and the only way to hang out with Sonic was by stepping onto Sega’s side.
As sales of the Genesis doubled, tripled, and then quadrupled, Kalinske couldn’t help but stare at the figures in his office and secretly want to see the faces of Sega’s board of directors in Japan. He knew how stupid they’d thought he was to give it away for free; he remembered how condescending their smiles had been when they shouted at him in Japan. What were they feeling at this very moment, Kalinske wondered, and what would they be feeling a month from now when Sega of America’s success continued to grow? Kalinske allowed himself just a moment to gloat.
Then Kalinske reminded himself that Sega was one company, and together SOJ and SOA were inciting a pop-cultural revolution. And yet, even as he had this thought, a small part of him couldn’t help but root for Sega of America to beat the living daylights out of Sega of Japan and make those directors choke on their condescending smiles. It was only a small part of him, but it was a part of him nonetheless.
Week 8: The Happiest Place on Earth
Financial reports, sales figures, and market breakdowns can capably tell a story, but the power of numbers will never compare to that of anecdotal evidence. And in the weeks following Sonic’s release, everyone at Sega had their own story. A friend called to say that his son kept curling up in a ball and trying to zoom around the house. Some kids at the mall were tapping their shoes like Sonic. The guys at the comic store were arguing about who would win a race between Sonic and the Flash. The realization amongst Sega’s employees that what they did in this small office made real-life ripples filled their lives with an anything-is-possible excitement that most of them had lost at some point during their childhood.
Kalinske collected similarly inspiring anecdotes of his own, though his favorites were the secondhand stories that his daughters shared about their Sonic-loving friends at summer camp. To celebrate Sonic-mania, he took his family to Disneyland. Kalinske and Karen locked arms and led the way, the giddy girls scampering along by their side. Together, they strolled through the crisscrossing little streets of Kalinske’s favorite section of the park, Fantasyland. In addition to the teacups, it had the Matterhorn, Mr. Toad’s Wild Ride, and It’s a Small World. He knew that it was en vogue to mock It’s a Small World, to call those animatronic dolls creepy or brush off the music as maniacal, but he loved how it was one of the few rides that actually tried to impart a message: peace, love, unity, community. It strived for more and maybe it failed, but there was something respectable about how it tried.
Kalinske was humming the ride’s hypnotic music when Karen gently nudged him. “Look,” she said.
Kalinske assumed that it must be another Sonic The Hedgehog devotee, doing something hedgehoggy. But it wasn’t. He followed the path of his wife’s gaze to a father and daughter moving in the opposite direction. The father was sweaty and tired but trying his best to remain enthusiastic as he pushed a pale little girl in a wheelchair. It was Bruce Kaspar and his daughter Anique, Kalinske’s former neighbors from Los Angeles.
Karen flagged them down, and they all talked and laughed and remembered when. A couple of times Tom and Karen kindly tried to probe about what was wrong with Anique, but Bruce brushed off the question and explained that she was just sick. Following this encounter, the Kalinskes would learn that Anique had pediatric AIDS, but even before they were aware of the diagnosis, they could tell that the situation was bad. Despite the gravity of her illness, however, Anique wore the biggest smile of them all. Happy and upbeat, she shone with a joy so real that it was contagious.
The two families spoke for a while, vowed to keep in better contact, and then went their separate ways, each enjoying a day in the happiest place on earth.
Week 9: Humans Against Genesis
“Play it again,” Kalinske instructed during a meeting between Sega’s marketing team and account executives from Bozell, the advertising agency that Michael Katz had worked with to create Sega’s previous “Nintendon’t” campaign. The executives were presenting the first national Sonic The Hedgehog commercial. In the spot, a fashionably bespectacled woman dressed like a librarian sits at a desk and speaks to the camera in a saintly, nun-like tone of voice. As the president of a fictitious organization called HAG (Humans Against Genesis), she denounces Sonic for his blazing speed and smarty-pants attitude, and ends by asking why he can’t be more like “that nice boy Mario.” After running the ad for a second time, the executive stopped the tape. “So?” he asked expectantly.
As all eyes redirected toward Kalinske, he remained silent for a moment. “So?” Kalinske finally said emotionlessly, matching the executive’s cadence. “That about sums it up. So what? So this woman is telling us to ignore Sonic and we’re supposed to care? What’s the point of this?”
Kalinske looked around. “I mean it. What’s the point of this commercial? What’s the message? What do we want people to feel when they watch this?” The room was stunned into silence. They had never seen Kalinske like this before, at least not in the office. He continued on, questioning the reason for the commercial’s existence—not in a particularly cruel way, but not in a particularly kind way either.
“It’s supposed to be funny,” an executive finally said in defense.
“Yes,” Kalinske said. “It’s supposed to be funny. But this is just derivative. It’s an obvious rip-off of Saturday Night Live’s Church Lady. But at least she’s less likable. She’s prissy without any glimpse of warmth. She’s angry on the outside, not the inside, and that makes the HAG joke fall flat.”
“Kalinske’s spot-on,” Race interjected. “If we’re serious about going to war with Nintendo, then it’s time for us to start launching grenades.”
“There you go,” Kalinske said, nodding to Race. “Someone who gets it.”
“But you approved the HAG concept!” the executive reorted.
“Yes,” Kalinske said with a slap in his voice. “And I’d approve it again and again. It’s a clever idea if done right. It’s supposed to make Genesis owners feel proud to be outsiders, but this is just confusing. It doesn’t work.” Kalinske shook his head. He had a lot more to say but saw no point in saying it. It was too late—this was the spot they had produced. “I don’t like it,” he said, and left the room.
Kalinske and Race went to his office and began scribbling ideas on a pad. None great, but some decent. Better than the Church Lady ripoff, at least. He kept filling up the page until he felt certain of the answer. He didn’t yet know the what, but he knew the how, and he needed to speak with Shinobu Toyoda. “Hang tight,” Kalinske said to Race. “I need to speak with our friend Shinobu.”
“Be careful what you say around him,” Race cautioned.
Kalinske paused before opening the door. “Why’s that?”
“Oh come on,” Race said, as if it were obvious. “The guy’s a banana. Yellow on the outside, white on the inside; who knows where his allegiance truly lies.”
Kalinske rolled his eyes, left the room, and made his way to Toyoda’s office. He knew that some at Sega still questioned Toyoda’s devotions, but there wasn’t a doubt in Kalinske’s mind which side he was on. That’s why he was completely unafraid to approach Toyoda with what he was about to ask. “I need your help.”
“Of course,” Toyoda said, waving him in. “Tell me what is required.”
“That ad is all wrong. I know it’s tongue-in-cheek, but we’re going after ourselves when we ought to be going after Nintendo. Steve is right, we need to go negative, and I need you to get Japan on board.”
Toyoda gave a noncommittal nod. “There is a chance this can be done,” he said. “But hard because they did not even like us to say ‘Genesis does what Nintendon’t.’ ”
“Good,” Kalinske said, “because that’ll be complimentary compared to what we need to do. I’m talking head-to-head, in-their-face, no-turning-back stuff. Like what we did at CES, but on a national scale.”
Toyoda adjusted a shirt cuff as he thought this over. “I know how we can do this,” Toyoda said at last with a proud smile. “But we can only get away with something like this once.”
Week 10: Attention Nintendo Console Owners
Toyoda’s strategy for slipping a new commercial past the Japanese gatekeepers was quite simple: he wouldn’t tell them until it was too late. He and Rioux would move money around to pay for the new ad, which could be done with relative ease due to the skyrocketing sales of the Genesis. Meanwhile, Sega’s marketing team would work with Bozell to create the new ad, which would be ready in time for the release of the Super Nintendo. Three days prior to the start of the campaign, Toyoda would inform Japan about the spot. He would act as if he had been caught off guard, and would offer to do everything in his power to pull the ad. In reality, however, it would be too late to stop the process, and the commercial would air, at least for a few days. If SOJ was angry, at least SOA would get a few days out of the ad. And if SOJ was okay with the ad, so much the better. Either way, the commercial would air.
Kalinske was in his office working with Nilsen on a concept to deliver an uppercut to Nintendo on national television. Or, rather, that’s what they were supposed to be doing. Instead they’d gotten sidetracked as Nilsen paged through a newspaper in search of an article that might be worth reading aloud in his best radio-announcer voice. For most of July, newspaper-fishing had become a favorite pastime as a string of small but unfavorable developments at Nintendo translated into lucky breaks over at Sega.
It had started on July 5 when a federal judge ruled in favor of Galoob Toys, makers of the Game Genie, in a copyright infringement that would likely cost Nintendo of America $15 million. Then on July 19, Mike Tyson, the face of Nintendo’s popular boxing game, was arrested and charged with the rape of Miss Black America contestant Desiree Washington. Two days later, on July 21, for the first time in three years, a Nintendo product was not the number-one-selling toy in the country. They had been displaced by a gigantic water gun called the Super Soaker. Kalinske made it a point to use every piece of good news, no mater how small, to motivate the troops. He would also clip these articles and send them to Wal-Mart each week along with a barrage of sales reports to show them how quickly the Genesis was flying up the sales charts.
“Anything good in there today?” Kalinske asked.
“Let us see, let us see,” Nilsen said, flipping through the newspaper. “Here’s something,” he said, though didn’t seem particularly pleased. He laid the paper on the desk for Kalinske to see for himself. It was a notice that occupied more than a quarter of the page and began with the headline “Attention Nintendo Console Owners.” In the line below that, it read:
Did you buy a Nintendo Entertainment System game console between June 1, 1988, and December 31, 1990?
If so you are entitled to a $5 coupon.
The notice went on to explain how the attorneys general from all fifty states had brought a price-fixing case against Nintendo, which had been settled when Nintendo agreed to pay back $25 million to their customers—in coupons.
“Those brilliant bastards,” Kalinske said, more impressed than annoyed. For years Nintendo had been fighting federal pressure regarding their business tactics at the retail level. Some called their tactics monopolistic, some believed Nintendo was merely being admirably aggressive, and others believed the government’s case was nothing more than a witch-hunt, another case of Americans trying to stymie the influence of Japan (an argument partially aided by the fact that the initial charges were brought against Nintendo on December 7, 1989, which also happened to be the anniversary of the 1941 attack on Pearl Harbor). Whether the charges were valid, the government’s threat was undoubtedly real, and for years Nintendo had been operating with the sword of Damocles dangling over its head. Now, however, it seems they had managed to steal away the sword and invert the entire situation into an advantage. Instead of facing stiff, crippling penalties like those inflicted upon AT&T and General Electric in years past, Nintendo’s punishment was to offer $5 off to customers, who’d have to spend at least $50 to use the coupon. That wasn’t even a slap on the wrist—it was more like a government-issued printing press allowing Nintendo to keep minting money.
“You worried?” Nilsen asked.
“Worried?” Kalinske said. He believed that the 8-bit NES was nearing the end of its life cycle, so the coupon itself didn’t particularly bother him. What nagged him, however, was Nintendo’s political savvy. It was as impressive as it was ominous. “Worried? Hardly!” Kalinske belted. “The stronger they are, the sweeter it’ll be when we finally take them down.”
“My thoughts exactly,” Nilsen said, sporting a feisty smile. “And for what it’s worth, no amount of bureaucratic mumbo-jumbo can change the fact that when a kid walks into a store and sees a Genesis and a Super Nintendo sitting right next to each other, they’ll know exactly what to do. You know what I mean?”
Kalinske knew exactly what he meant but failed to reply because his mind was busy replaying the scenario Nilsen had just mentioned. A kid walks into a store . . .
Week 11: Spy vs. Spy
A kid walks into a store.
No, Kalinske thought, that’s not right. We’re going after teens and adults, the kids are just a bonus. Okay, so someone walks into a store. Someone? Really? That’s so vague. Who, then? A teen wearing a leather jacket? A jock wearing a sweaty uniform? A curvy college coed wearing . . . not that much? Don’t want to alienate any segment of the market, so maybe all of them should walk into the store? Nah, too crowded, too rehearsed, too diversity-for-the-sake-of-television. Kalinske felt like he had the commercial on the tip of his tongue, but every time he opened his mouth to try to let it out, the idea slid down his throat and hid. Okay, let’s try this again: Someone walks into a store. Wait, what kind of store is this anyway?
A tap on the frame of his already open door dragged Kalinske out of his head. It was Toyoda, standing in the doorway with what was meant to be a blank expression. Over the past year, however, Kalinske had grown familiar with the nuances of Toyoda’s seemingly empty expressions and had grown adept at filling in the blanks. This one, for example, said: good news. Not great news, but better than bad news, no?
“What is it?” Kalinske asked with a hint of concern in his voice. Though Kalinske believed he had decoded Toyoda’s expressions, he made sure to keep this to himself. Perhaps it was due to his Japanese heritage, or perhaps it was meant to serve as an ode to the furtive nature of an idealized businessman, but Toyoda seemed to place a premium on ambiguity, and Kalinske was happy to play along. “Is everything okay?”
Toyoda stepped forward, and broke into an unambiguous smile. “Nintendo has made the price official. It shall be $199.”
Kalinske matched his smile. “Just as we had expected.”
“Just as we had hoped,” Toyoda said. Kalinske was unsure if Toyoda’s words were meant to echo enthusiasm or remove any insinuation of overconfidence, but they managed to accomplish both goals.
Kalinske nodded humbly. “You are absolutely correct. This is great news.” Kalinske thought once again of his teenager, jock, or curvy coed walking into a store. They would see a Genesis and a Super Nintendo and have to make a choice. The Genesis would be cheaper and faster, and it would feature a much bigger library of games. No, Kalinske thought, with a subtle shake of the head. The library didn’t matter, at least not at the moment; all that mattered was the single game that came with the console. “Hey, did Nintendo announce which game would be bundled with the system?”
Toyoda lightly shook his head. “Not yet.”
“Thanks for the update,” Kalinske said. “Why don’t you go fill Paul in?”
As Toyoda moved toward Rioux’s office, Kalinske dialed up Nilsen. “Good news, pal. As expected, Nintendo’s pricing their machine at $199, though there’s been no decision on which game yet.”
In his own office, Nilsen nodded as he listened to Kalinske. A price of $199 was perfecto! Dear Nintendo, thank you for digging your own grave. But as quickly as Nilsen’s mind swelled with excitement, it just as quickly filled with a strange flavor of disappointment. The high price point was good news, but it wasn’t anything that he had earned. It was Nintendo’s decision, pure and simple, and would have been just the same in a Nilsen-less universe. This prompted Nilsen to decide that he would take action. What kind of action he didn’t yet know, but he was committed to giving his colleagues something to be more excited about than just the expected. He thanked Kalinske for the intel, hung up the phone, and walked out of his office like a man on a mission.
Not knowing where to go, Nilsen followed his feet as they led the way. Eventually, after wandering through the building in a nebulous quest for the unexpected, he found himself inside the office of Richard Burns.
“Um, Al?” Burns asked. “Do you need something?”
Nilsen’s mind whirred as he looked around the office, playing a light-speed game of I Spy (stapler, family photo, Wite-Out), which evolved to thoughts of Spy vs. Spy. Like an actor onstage who remembers his line just in time, Nilsen asked Burns if he knew of any retailers who were especially loyal to Nintendo, “guys who you think would pass along to the other side any information you give them.”
Burns thought a moment, then said he did.
Nilsen’s eyes lit up. “Here’s what I want you to do. Call them up and tell them that we are desperately worried that they will pack the new Mario game with the Super Nintendo. And then make it sound like you just slipped up and told them something you shouldn’t have.” Burns chuckled and agreed to put on his best dramatic performance.
A few weeks later, Nintendo announced that Super Mario World would be bundled with the $199 SNES. Nilsen realized it was unlikely that his ruse had been the reason for this, but at least there was a chance it was because of him. A war was coming, and he didn’t just want to be on the winning side—he wanted to be the reason for victory.
And now that Nilsen knew for sure that everything would come down to Sonic vs. Mario, he had another idea: something big, something memorable, something unexpected. Across the office, Kalinske was having his own why-didn’t-I-think-of-that-earlier moment. Many years ago, during his Barbie days, a toy company named Topper began making dolls based on a character named Dawn. Like Barbie, Dawn was pretty and friendly-looking and had many outfits, but unlike Barbie, she sold for less. By 1972, the Dawn dolls started to sell pretty well—until Kalinske intervened. He created a promotion where, for only two bucks, customers could swap their cheap Dawn dolls for a luxurious Barbie. One year later, Topper went out of business. Now Kalinske had an idea to do something similar to Nintendo, but he needed Steve Race to help him pull it off.
Week 12: The Haves and the Have-Nots
There are only two occasions when it is perfectly acceptable for a grown man to yelp like a little boy: on New Year’s Eve and when watching sports. Tom Kalinske and Steve Race took advantage of the latter when a harshly hit line drive drove in two runs and gave the San Francisco Giants a late-inning lead. They were not alone in momentarily unleashing their inner children, as everyone in the forgettable bar they’d found after work seemed to hoot, holler, and high-five like they were ten years old and had just learned how to make s’mores. Ravenous excitement filled the room until a strikeout by the next batter led to a commercial break and, in unison, all the buzzed businessmen snapped back to their real age.
“Did you ever play?” Kalinske asked Race as they sat back down at a small table with a pair of nearly empty beer bottles between them.
“Damn straight. I was very nearly going to play center field for the New York Yankees,” Race said wistfully. “Except of course they had no idea about this.”
Kalinske laughed. “Reminds me of the time I almost dated Kathy Ireland.”
“Well put,” Race said, and then leaned back in his chair with a smile that seemed to say, This is what life’s all about: beer, broads, and baseball. “So, what’s on your mind? You’re looking rather exhausted these days. Exuberant, but exhausted.”
“You think so?” Kalinske asked, trying to shield any hint of vulnerability.
“You hide it well, but it’s there to see at certain angles.”
Kalinske shrugged. Maybe he was more exhausted than he realized, but he had a job to do. “I have a wife and three daughters. I’m fairly certain that my days of not looking exhausted are long gone.”
“Fair enough,” Race said. “So have you brought me out tonight to play marriage therapist? I’m okay with that role, but if that’s the case, then expect a hefty invoice.”
“Ha,” Kalinske said. “Not quite. But I did want to discuss your role. I obviously appreciate having you here as a consultant, but I think it’s time for you to officially come in-house and take control of marketing. We’re on the cusp of doing something extraordinary, and I want you leading the charge.” It was Kalinske’s job to always believe that Sega was on the cusp and to make others believe it too, but for the first time the facts were starting to look like they warranted his confidence.
Ever since Sega of America had dropped the price of the Genesis and put Sonic in the box, units had been flying off the shelves. Sales of the console skyrocketed throughout July: 20,000 sold one week, 25,000 the next, 30,000 the week after that. Sega of America was on pace to sell more consoles in the summer of 1991 (500,000 units) than they had sold in all of 1990 (400,000 units). And the best part was that with each Genesis sold, the consumer would typically buy more than three games per year. No, strike that—the best part was that each sale of the Genesis likely meant one less sale of the Super Nintendo. You were either a Sega person or a Nintendo person; you couldn’t choose both. Videogames were quickly becoming a religion, and luckily for Sega, the company was offering a 16-bit console that could be worshipped today, while Nintendo’s system wouldn’t be accepting prayers until early September. “This year is going to be good,” Kalinske said, “next year is going to be great, and I don’t know what adjective will describe the year after that, but I’m honestly thrilled to find out.”
“I think you’re absolutely right,” Race said. “And I’d like to be at Sega for a while, but every time I start to think this is the right place for me, I run into some bullshit with the Japanese that makes me want to quit on the spot.”
“Don’t let that stuff get to you, Steve. I can help with SOJ.”
“Believe me, I already know how much shit you shield us from. I don’t know how you put up with Nakayama and his cohorts, but I tip my cap to you.”
“Come on, I can’t really believe that your dislike of the Japanese—”
“It’s not like that. I’m not racist or anything,” Race broke in. “It’s the whole culture. It’s the passive way they do things. It’s the fact that when I come into work in the morning, it’s not uncommon to discover that they’ve made a decision in the middle of the night that cancels out everything I did yesterday.”
Kalinske shook his head, disappointed but unable to fully disagree. Nakayama had certainly given him the leeway to do things his way, but many of his decisions still led to unnecessary battles, even if they did work out in Sega of America’s favor. “I admit that it can be tough at times, but when push comes to shove we’ve always been allowed to do things our way. Just look at the Genesis. They let us drop the price, they let us put Sonic in the box, and you see how well that’s going.”
“I do see that and I think it’s great,” Race said, unconvinced. “But did you ever wonder what they think when they see Sega of America doing so well? In my experience, stories about the haves and the have-nots don’t end too well.”
The situation between Sega of America and Sega of Japan was hardly as dire as Race insinuated, but there was certainly noticeable difference in recent sales results. Sega of Japan had chosen to give Yuji Naka, Sonic The Hedgehog’s chief designer, a few additional weeks to fix any kinks and then launched the game in Japan in late July 1991, one month after Sega of America. In addition to the delay, the other notable difference was that in Japan Sonic did not come included for free with the hardware. The game was sold separately for 6,000 yen, and though it quickly became Sega of Japan’s best-selling software title, it paled in comparison to Sonic-mania in America. The first week Sonic The Hedgehog was released in Japan, it sold 7,178 copies. The next week it held steady at 7,062 copies until the following week sales dipped down to 6,086 units. By the end of the year, Sonic The Hedgehog would eventually become a hit in Japan, but not the mega-hit that it was in America. And because the game didn’t come with the hardware, it didn’t dynamically increase the installed base. Though it was rare to hear anyone at SOJ acknowledge the sales disparity, when they did they attributed the weaker results to Nintendo’s iron grip over retailers, a lack of third-party support, and the subtle ways that SOA had altered Sonic to work in America and not in Japan.
“It’s not a matter of haves and have-nots,” Kalinske said. “We’re one company, and the better we do, the better they do. Besides, Nakayama is thrilled by how we’re doing, and his is the voice that counts. Trust me, Steve, this is going to work. And when the roads get rocky, we can lean on Shinobu for help.”
“Shinobu? Their spy? Don’t get me started on him.”
“Fine, fine,” Kalinske said. “Why don’t we table the issue for a little while and focus on less abstract matters.”
“I thought you’d never ask,” Race said. “What’s next?”
“Do you remember a doll named Dawn?” Kalinske began, though he could immediately feel Race’s interest slipping. “Anyway, I think we should run a promotion where customers can turn in their old NES and get a brand-new Genesis.”
“I love it.”
“Absolutely. But I’m fairly certain that’s illegal these days, pal. And I’d go to war for you Tom, I really mean it, but not jail.”
“Damn,” Kalinske replied, and then tried not to appear too deflated. “Then let’s talk about this Sega World Tour,” he quickly suggested with an optimistic smile. This was Nilsen’s big idea.
To convince anybody still waiting for the SNES that it was time to stop that nonsense and buy a Genesis, he’d dreamed up a nationwide thirty-city mall tour. Much like at CES, the goal was to set up a side-by-side comparison between Sonic and Mario and let players decide which game was better.
“The Sega World Tour?” Race echoed, rolling his eyes. “Maybe we should go back to discussing the many merits of working for the Japanese.”
“What? You don’t like Al’s idea?” Kalinske asked.
“The idea is excellent, but the execution is a nightmare,” Race said. He was right. The dare-to-be-bold idea looked great on paper, but it was positively hellish to actually put together. Different cities, different mall managers, and different setups posed challenges, which were compounded by the fact that to truly steal Nintendo’s thunder the events of the tour should take place at multiple locations on the same day, which meant different crews and multiple equipment rentals. Nilsen had an undeniable talent for thinking big, but what Kalinske needed right now was for Race to take Nilsen’s oversized thought bubbles and transform them into something real.
“Execution is certainly the issue,” Kalinske said. “So can you think of anyone that we can hire to be our, um, executioner?”
“Let me think about that,” Race said, before suddenly becoming distracted by the baseball game on television. The Giants were still winning by a run, but now the Dodgers had a runner in scoring position and a hot hitter at the plate. Kalinske followed Race’s eyes to the television and eagerly watched the at-bat. Strike one, strike two, and then Race threw Kalinske for a loop when he said, “Let’s go, Dodgers. Come on now, a single here brings in a run.”
“What? I thought you were a Giants fan?”
“Nah,” Race said. “I root for whoever is losing.”
“So if the Dodgers take the lead, then you’ll root for the Giants again?”
“What can I say? I like comebacks and exciting endings,” Race said.
Strike three. Like many in the bar, Kalinske emitted a tiny yelp. Race, however, just shrugged, his mind already spinning on something else entirely. “For the Sega World Tour, I have an idea about the job: EBVB.”
“EBVB?” Kalinske asked. “Is that a person, place, or thing?”
Week 13: EBVB
Few people know that Lake Tahoe’s Squaw Valley was the site of the 1960 Winter Olympics. Even fewer know that it has a base elevation of 6,200 feet, a vertical rise of nearly half that, and an annual snowfall of 450 inches. Ellen Beth Van Buskirk, however, knew all of this and much more. She knew that there were twenty-six chairlifts and a state-of-the-art gondola, and that not only had it hosted the 1960 Winter Olympics, but also that those were the first Olympic events to be televised. She even knew that the broadcasters had freaked out because there was no snowfall until the week before the games began. When it came to Squaw Valley, EBVB knew it all.
It wasn’t that she was a devout skier (her sports were basketball and distance running) or some kind of skiing-trivia savant. But as marketing services manager of the brand-new Resort at Squaw Creek, she felt compelled to memorize everything there was to know. A lesser manager, or a less neurotic individual, might have been content to know that many of these facts were safely tucked away inside a brochure somewhere, but Van Buskirk felt more secure when information was locked up in the vault inside her head. It was more challenging this way, more like a game, and that helped reduce the reality that her life had come down to filling 405 rooms at a ski lodge.
She had grown up in an era where it was considered more adorable than ambitious for a woman to work. She always found that notion ridiculous and took pride in never just wanting a job, a place at the table, a spot on the team, but wanting the top job, the best seat at the table, the starring role on the team. True, she rarely got the the and often had to settle for an a, but the no-no-no of the status quo didn’t extinguish her fire. She developed a precocious talent for spinning negatives into positives, and interpreted her 5-foot 11-inch frame to be the Lord’s not-so-subtle way of telling her to keep thinking big. No matter how many times the world tried to teach her that she was lucky just to participate, she never stopped trying to teach the world that it was flat-out wrong.
Until now, perhaps. Van Buskirk hadn’t quite given up, but there were signs: she heard her own voice quieting, saw her worldview blurring. To her, moving to Squaw Valley meant raising the white flag. Throughout 1990, she had been able to do her job from an office at the Rincon Center in downtown San Francisco, where they had a small, street-level retail storefront decorated by photos, sketches, and a massive architectural model of the resort (so large, in fact, that it had to be placed in the office before installing the windows because the doorway was too narrow). In 1991, however, the resort had opened to the public, and they wanted Van Buskirk to move out there permanently. She thought the mountain was beautiful but dreaded the move because she believed San Francisco to be the center of action. Unfortunately, however, there didn’t appear to be any other option besides occasionally staring at the phone and willing for it to ring.
Eventually it did, and it was Steve Race. “What are you up to?” he asked.
“Oh you know,” Van Buskirk said, “everything, nothing, and the occasional something.” She had known Race for nearly five years now, and he still had a knack for both impressing and bewildering her with his brashness. They had met back in 1986 at Worlds of Wonder, when she was learning the ropes of the public relations game. He used to say that big things were in her future; she didn’t know if this was just something he said to everyone, but the way he said it made her believe it to be true. “I’m not up to much. Just home, watching TV, thinking about going for a run.”
“I meant more generally,” he said. “Job-wise.”
“Ah, okay. I’m managing a ski resort in Lake Tahoe.”
“Oh,” he said, seemingly as surprised as she was that this was her job. “What about the rah-rah ladies’ PR agency?” Race was referring to Van Buskirk, Morris, Webster & Smith, a firm that she had formed in 1988 with three other female rising stars in the PR industry. It had begun with the best of intentions but had come apart a couple of years later amidst mistrust and finger-pointing. Van Buskirk wasn’t too pleased about how the agency had fallen apart, which explains why Race didn’t know that it had.
“What happened with that?”
“Long story,” she said with a familiar sigh. “But the short story version is that women are crazy. Myself included.”
“I could have told you that!” Race bellowed.
“I could have told myself that,” she replied. “Oh, well. Lesson learned.”
“You sound borderline convincing, EB,” he said. “Anyway, this is good. Well, not for you, but for me. I need your help.” Race went on to provide a brief overview of Nilsen’s mall tour and then sold her hard on Sega, using many of the facts that Kalinske had been using on him. “I realize that the job is below your pay grade, but we’re about to give Nintendo a run for their money, and who knows what happens next?”
“What’s the name of the company again?” Van Buskirk asked. She couldn’t believe it. Amazingly, an opportunity had come along at the eleventh hour, but why oh why did it have to be with a company she had never heard of before? The only thing she feared more than moving to Squaw Valley was taking a job with a company that would be extinct only a few months later. And even if this thing did work out, she was quite sure that “mall tour organizer” didn’t exactly pop off a résumé. “Can I think about it?”
“Think about it? What are we, Greek philosophers?” Race retorted. “I prefer you talk about it, Lady Socrates. I’m setting you up on a lunch date with this Nilsen guy.”
“Okay, cool,” she said, relieved. She thought the world of Race, loved how he could motivate people to walk through walls for him, but knew that he tended to charge in and out of companies, either because he’d grown bored with the lack of challenge or had worn out his welcome. As a result, she realized that even if she decided to join this Sega place, there was a chance that Race might already be gone, so she was happy to meet with someone who likely went through life and jobs in less of a hurry than Race did.
Nilsen met Van Buskirk for lunch at a Chinese restaurant in San Francisco’s South City. Before going, he was given explicit instructions by Race to “reel her in.” Nilsen felt confident in his metaphorical fisherman skills but wasn’t sure that he’d need to use them. He urgently wanted someone to help bring his mall tour to life but was uncertain that he and Race valued the same qualities in a potential employee. Race was aggressive, impulsive, and unapologetic, leading Nilsen to half expect that he’d be meeting someone who looked and sounded just like Race, but with a ponytail and painted fingernails.
She was, happily, nothing like that. Van Buskirk was elegant, insightful, and self-aware in the best way possible—not self-conscious, but gracefully conscious of herself. If Race ran through life as if it were a sprint, Van Buskirk moved with a well-measured marathon approach. After an exchange of names, biographies, and small talk, she handed Nilsen her portfolio, which was mostly filled with stuff about Squaw Valley. He opened it, scanned through it in a matter of seconds, and then handed it back to her.
“That bad, huh?” she asked.
He opened his mouth to respond but then decided not to, curious if this would ruffle her feathers. Nilsen liked testing people in small and strange ways, believing that most of life was small and strange and that things like this revealed a lot about a person. She didn’t seem bothered whatsoever, already happily discussing the etymology of the term “duck sauce.” “I thought it was such a strange name,” she said. “Soy sauce is made from soy, hot mustard is both hot and made of mustard, but duck sauce . . .”
Nilsen inspected the tiny bowl of orange sauce. “I venture to say that no ducks were harmed in the making of this sauce.”
“My thoughts exactly!” she said. “So I went to the library and looked this up. Turns out that in Hong Kong and southern China, whenever you order roast duck it comes with this sauce. They give it out to mask the gamy duck flavor and also hide the occasional taste of fat. So even though it’s actually made with pickled plums, sugar, vinegar, and occasionally pickled pits, they called it duck sauce, and the name just stuck.”
Nilsen was impressed. Not only did Van Buskirk crave answers to the most wonderfully inane questions, but she actually went the extra mile to get answers. From there, he bombarded her with a barrage of questions. The more he liked what she said, the harder the questions got. He didn’t want good, he wanted awesome.
“Where’s the best place to start the mall tour?”
“You want me to say New York or Los Angeles,” she said, “but I’d opt for somewhere close to Nintendo. Seattle, maybe?”
“There’s a mall in Bellevue, Washington,” he said with a smile. “Five miles from Nintendo’s headquarters.” Since initially conceiving the idea, Nilsen had added some flourishes to his master plan. For one, he wanted to open the Sega World Tour in his competitor’s backyard. Another change was that he didn’t just want mall-goers to see Sonic vs. Mario and get the point; he wanted that point to be reportable and irrefutable. To accomplish this, visitors would not only play both games but also be asked to vote on which was better. “Players Enjoy Sega 16-Bit System at Mall” would have made for a nice story, but “80 percent Choose Sega over Nintendo” would be a headline for the ages. With this alteration to the plan, whoever ran the mall tour would not only have to serve as executioner but also arrange for a judge and jury.
After lunch, Nilsen met with Race to talk it over. They agreed that she was overqualified for the job, but both thought that she was wise enough to see the potential of Sega. After a pleasantly awkward moment where both men realized they were in a rare state of complete agreement, Race gave Nilsen the green light to hire Van Buskirk.
“What about approval from Tom and Paul?” Nilsen asked.
“No problem,” Race said. “I already spoke with them.”
“When?” Nilsen asked, not quite sure when that could have happened, but happy to have the answer he wanted.
“Don’t worry about it,” Race said. “We’re good.”
Nilsen set up another meeting with EBVB and started off by handing her a small box. “What’s this?” she asked. Again he ignored her, and again she passed the test she didn’t know she was taking by opening the box with curiosity as opposed to caution. Inside was a big fishing lure. She turned to Nilsen, not knowing what to make of this.
Nilsen sported an isn’t-it-obvious smile. “I’ve been told to reel you in.”
Van Buskirk laughed, then smiled, and then did both at the same time. There was no logical reason to join Sega, but then again, there was the fishing lure in her hand, and the fun, puns, and blissful insanity that it no doubt symbolized. How could she resist?
Week 14: Rolling Thunder
From his office across the hall, Kalinske couldn’t make out many of the words between Al and Paul, but he could hear the thunder of their conversation. Al wanted money for something, and Paul was responding in his normal frigid, frugal manner. Normally, Kalinske didn’t mind hearing Rioux’s bad-cop routine, but today he didn’t want to deal with any distractions. With the Super Nintendo launch just around the corner, time was feeling less like an abstract concept and more like a noose. He knew that they needed to have a new commercial ready soon if they wanted to avoid being hung. He had been working with the ad guys at Bozell but continued to be less than pleased with their work. They were good guys with good ideas, but the days of “good enough” had burned away with the summer. Kalinske thought about switching agencies, as he had been (reluctantly) green-lit to do by Nakayama and the board of directors in Japan. But a proper agency review takes months and a good chunk of money, two resources that Sega couldn’t afford at the moment.
What they could afford, just barely, was a head-to-head against Nintendo. There was still a decent chance that Japan would pull the commercial after Toyoda revealed what Sega of America had planned, and there was also a chance that Nintendo would sue them for showing Nintendo products in their ad, but Kalinske was intent on moving forward with an ad they referred to as “The Salesman.” In the spot, a pushy salesman ferociously tries to hawk the Super Nintendo to a customer who keeps getting distracted by the many benefits of the Genesis: cheaper, faster, et cetera. Though he felt that Bozell’s execution was a bit hokey, he believed that it did the trick of throwing down the gauntlet at Nintendo’s feet. With the what, where, and when coming together, his remaining concern was the who. Whom did Sega want to identify as their ideal customer? The teen wearing the leather jacket? The jock wearing the sweaty uniform? The curvy college coed?
Kalinske was contemplating this and looking over the storyboard when he heard footsteps approaching his office. It was probably Rioux, headed his way with someone’s head on a platter. Or maybe it was Nilsen, bursting in with another idea about how to get Nintendo’s goat. Or maybe it was Race, pissed off by another roadblock in his way. Unless it was Burns, with new Sega of America sales data to send down to Wal-Mart. Or Toyoda, with new Sega of Japan sales data and a grenade of disappointment they’d have to fall on. Or maybe it was . . .
Anyone. That was the answer Kalinske had been seeking. Nintendo wanted kids, but Sega wanted anyone, and that’s exactly what the commercial should show. If the ad was shot from the perspective of the customer, then the customer would be anyone—the teen, the jock, the college coed, and millions of others. The ad that Bozell had readied accomplished this perfectly. Though the salesman in the ad looked like he’d graduated from the University of Used Car Salesmen, by having the customer be no one instead of someone, Sega’s ideal customer would be anyone and everyone.
As the commercial went through postproduction, Sega of America worked on a plan to deploy their head-to-head missile. For budgetary reasons and out of fear that Japan would pull the plug, they developed a strategy called “Rolling Thunder.” Instead of evenly broadcasting the commercial over several weeks or spacing it out for a slow build of momentum, they would air it as much as possible at first, and then sporadically after that. Start with a bolt of lightning, make sure everyone notices it, and then reinforce the message with smaller thunderclaps in the following weeks.
Well, assuming that Shinobu Toyoda could successfully hold off Sega of Japan.
Week 15: Coke vs. Pepsi
The moment of truth was upon him. For months, Toyoda had been watering down information and finagling reports to Nakayama and Sega of Japan so that he and his colleagues could proceed as they saw fit. This was true not only in regard to the new commercial but also when it came to Sega of America’s unabashedly aggressive attitude in general (CES, the mall tour, and so on). Now, however, with the Super Nintendo about to be released and Sega of America’s plans too far along to be stopped, the time to come clean had finally arrived.
It was just after midnight, and as usual, Toyoda was the last one left at the office. He searched for a comfortable position in his desk chair and prepared for his nightly update call to Nakayama, who would just be waking up. Toyoda was not one to assume the worst, but given Nakayama’s tendency to be temperamental, he knew there was a chance this could be his last day at Sega. He looked around the office, filled with Sonic mementos and photos of his family, and felt good about all that he had done. If he wasn’t fired outright, there was also a chance he’d be recalled back to Japan. If so, he’d likely be forced to endure the cultural practice of murahachibu, in which a dissenting employee is overtly shunned by his colleagues until it is decided that he’s paid the price for his transgression or has appropriately demonstrated his loyalty.
Whatever the outcome, Toyoda had decided that he would not let this deter his American dream. No matter what, he would find a way to stay in America, provide for his family, and elevate himself through effort, excellence, and entrepreneurial spirit.
Toyoda called up Nakayama and spoke clearly and confidently, revealing everything as if he had just now learned of these details. Once it was done, he instinctively adjusted the collar of his shirt, bracing for the worst. It was all out in the open now, and even as the ensuing silence chipped away at Toyoda’s confidence, he regretted nothing. This was America, the land of opportunity.
“Very interesting,” Nakayama said in a perky tone. “Those are good ideas!”
“You think?” Toyoda asked, unsure if Nakayama was being sincere. After all, Sega’s head honcho had a flair for the dramatic, and nothing made for better drama than building someone up before watching him fall.
“Most certainly,” Nakayama explained. “I have just finished reading this great book by Mr. John Scully, who is now the president of Apple, and before this he was the president of PepsiCo. He talks at length about making bold moves to go head-to-head against market leader Coca-Cola. Our Sonic against Mario, it is very much like the taste-test challenge that he describes.”
“Oh, yes,” Toyoda said. “I can see how they are similar.” He was so relieved that he was amazed he could even speak. Nakayama was not always the easiest man to deal with, but at this moment Toyoda felt overwhelmingly fortunate to be working for him. He was a rare breed, one of the few Japanese business leaders who not only had an admiration for Western business tactics but was willing to admit it. With Nakayama in Japan and Kalinske in America, Toyoda saw no reason that Sega would not dominate for decades to come.
Week 16: After the Summer Comes the Fall
Shortly after Toyoda’s surprising conversation with Nakayama, Kalinske enjoyed an unexpected one of his own. He was in his office reading the September 2 issue of Forbes. Well, not reading so much as rereading the same sentence over and over. “We don’t regard [Sega] as a competitor in the U.S.,” Nintendo’s Yamauchi had said in a recent interview. Kalinske chuckled at the words and then began to read them again when he was interrupted by a call from Wal-Mart’s electronics merchant. And, as was always the case, the man spoke with a level of stress-induced grouchiness that Kalinske had nearly come to appreciate.
“My nemesis,” Kalinske said, sitting upright. “To what do I owe the honor of receiving a call from the beloved 501 area code?”
In addition to sending Wal-Mart a packet of sales reports and news clippings each week, Kalinske had been calling the merchant to share marketing plans and product development information, attempting to walk the fine line between persistence and pestering. This was no easy thing, particularly in light of the fact that he never acknowledged that Sega had been trying to take over Bentonville, Arkansas, for almost a year now. The endless struggle sometimes got to Kalinske, and on his worst days he viewed himself as Don Quixote pathetically tilting at windmills with a sword made of rubber. Still, despite the occasional doubt, something deep inside him welcomed the challenge. Kalinske had never tried so hard to get a retailer on board, and as a result, he had never wanted it so badly. “Did you get the latest figures I faxed—”
“Look,” the electronics merchant said, interrupting without remorse. “We give up. We’ll carry Sega. Just close that damn store already and stop all the advertising in Bentonville. My boss and his boss are driving me crazy with questions about why we’re not carrying the Genesis, and I can’t take it anymore. You win.”
And just like that, Sega was in Wal-Mart. Not all stores at first, just initial test regions, but where the product was sold mattered less than the fact that it was being sold at all. If mighty Wal-Mart was carrying Sega products, then other retailers had no excuse not to do the same. The curse had been broken.
It had been a long summer, but things were really starting to come together. Electronic Arts enjoying their most profitable quarter to date, and Nakayama had recently persuaded Acclaim to risk Nintendo’s wrath and start publishing games for both systems; it was only a matter of time before all the third parties followed suit. And any retailers, third-party publishers, or consumers who remained unconvinced of the future that Sega promised would be swayed soon enough—if not with games or advertisements, then by EBVB’s execution of Nilsen’s fantasy.
“You did it,” Nilsen said, smiling like a proud papa bear whose cub has just swiped his first fish out of the water. He was standing toward the front of a rapidly growing crowd as Sega’s side-by-side world tour was getting started at the Alderwood Mall in Seattle. In the center of the hubbub, below a giant Genesis banner, was a black-on-black stage set up with several stations for people to discover the difference between Sonic and Mario. In just a few moments, kids, teens, and adults of all ages would be invited to step right up and see for themselves which 16-bit system was worth buying. “It’s like you found a secret portal into my mind, took photos of my imagination, and then brought what you saw to life in a way that actually made sense.”
Van Buskirk put an arm on his shoulder and nodded with pride. “Busted.”
After Seattle, the mall tour would go on to hit twenty-four malls in sixteen cities, converting the masses from Peabody, Massachusetts, to Torrance, California. To get even more mileage out of Sega’s avant-garde traveling circus, Nilsen sewed up a partnership with Nickelodeon to “borrow their cool” and start encroaching on Nintendo’s grip on six-to-twelve-year-olds. Nickelodeon, the number one kids television channel, would be running “Where Is the Sega Tour Now?” spots throughout their programming, and also run a promotion called the “Slime Time Sweepstakes” where viewers could win Sega products if they answered questions correctly live on air when randomly called by a television host.
This was what Nilsen loved most: taking a big idea and stretching it bigger and bigger until it enveloped the world. After he brought on Nickelodeon, EBVB recognized the immense opportunity and was granted permission to hire a new PR firm to help rebrand Sega. She selected Manning, Selvage & Lee (MS&L), whose Sega efforts would be led by Brenda Lynch, a peppy publicist with the compulsive habit of getting others to see the world in whatever shades of gray that she thought were appropriate. Lynch took it upon herself to make sure that everything Sega did, made, or thought would be seen by the world in the context of Sega vs. Nintendo: hip vs. lame, new vs. old.
Kalinske hoped that with so much momentum behind it, the mall tour would prove to nongamers what videogame players were quickly discovering: Sega was a force to be reckoned with. The new price point of the Genesis seemed to have hit a consumer sweet spot, and the incredible launch of Sonic The Hedgehog had given Sega the Mario-killer they had so badly craved for years. Well, that was true in America, at least. In Japan, Sega’s 16-bit sales were improving, but they were still unable to reach more than about 10 percent of the market. Kalinske was a bit troubled by the disparity but figured that if push came to shove, then Sega of Japan could always just follow Sega of America’s blueprint for success: aggressive pricing, aggressive marketing, and unrelentingly aggressive employees who refused to rest until Nintendo had been toppled.
“What a second,” Nilsen said, pulling Van Buskirk away from the hoopla in progress. Ten people had already tested out both consoles and eight of them chose Sega. “Is that who I think it is?”
Van Buskirk squinted and couldn’t help but cackle. “I realize this kind of makes me sound like a witch,” she admitted, “but if ever there were a time, right?”
Lurking behind the crowd and moving with the slow stalk of a shadow was a familiar face. It was Nintendo’s Peter Main, and he did not appear to be particularly amused.