Console Wars (2015)

PART THREE

THE NEXT LEVEL

28.

BOCA

Walking onto the stage at the Irvine Amphitheatre, hosting the hottest party at the Consumer Electronics Show, sharing a dinner with Sony’s top executives at an exclusive top-floor dining room—there was something addictive about the power and pleasure of stepping into the spotlight. It validated all those invisible hours of hard work Kalinske had put in. And he craved more of these moments, many more, which seemed inevitable with his company now controlling 25 percent of the videogame market and seemingly going nowhere but up. The rocket ship had blasted off, loudly and irrevocably, and what lay ahead was a thrilling space race with Nintendo.

But even as the stars seemed to align, there was still one factor with enough gravitational force to potentially send Sega crashing back to earth: the company’s lack of a proven track record. This was less a criticism than an undeniable and unavoidable fact. It was the equivalent of watching a rookie ballplayer smack a home run in his first big-league at bat and lamenting that there was no way such a pace could be sustained. But still, there was an element of validity to the concern. And it hinted at the larger question on everyone’s mind: was Sega the next Nintendo, or merely a one-hit wonder? That was what secretly scared retailers, and what less secretly scared Sony.

With everything that Sega of America had in the works, Kalinske was certain that his company had staying power. But the retailers didn’t necessarily know that. All they had to rely on was the past, the present, and a tiny glimpse into the future gleaned from a few hours at the Consumer Electronics Show. Part of the reason Kalinske had been brought in was that his long track record could substitute for Sega’s short one. But in the booming videogame industry, his personal reputation could only go so far. Since Kalinske had taken over, the retailers had quietly supported Sega’s coup, but now he wanted them to take that next step and loudly herald his company’s claim to the throne. What he needed was an opportunity to pull retailers behind the curtain, dazzle them, and prove that Sega was here to stay. Lo and behold, after much deliberation, there did appear to be such a way, and that way went straight through Boca.

“Welcome to sunny Florida,” Kalinske announced from the front of a large, sparkling, red-carpeted ballroom. The room was teeming with retailers for the opening-night cocktail party of Sega’s newest innovation. “More specifically,” Kalinske continued, finding the pulse of the room, “welcome to the Boca Raton Club, where you are all invited to spend the next three days golfing, fishing, drinking, and getting to know the men and women who have made Sega a stunning success. And don’t worry, I’ve instructed them not to talk business on the golf course. Well, not on the front nine, at least.”

Laughter ricocheted from wall to wall. There were about four hundred retailers in all, sporting smiles and the varying hues of recently acquired tans. And it wasn’t just senior buyers and CEOs in attendance. Sega wanted its friendship with the retail community to be a long-lasting one. So they also invited midlevel executives, junior associates, and even a few assistants. In the best-case scenario, these would be tomorrow’s decision makers; in the worst-case scenario, they’d talk up Sega by the watercooler.

The event formally began on May 11, 1992, but Kalinske and his team had arrived in Florida a couple of days earlier. Though guests were promised fun and sun, for Sega’s employees this was a Broadway performance designed to make retailers forget about Nintendo. Nobody in the videogame industry had ever planned anything like this in advance of the trade shows, and so there was a lot on the line. Typically, retailers placed their big Christmas orders at the June CES, which put Sega in the position of competing directly against Nintendo. Since buyers only had a finite budget to spend on videogames, an unexpected dazzle from Nintendo would indirectly frazzle Sega. An event in May, however, removed this element of surprise and gave Sega an opportunity to tempt retailers into blowing their budgets before they even saw what Nintendo had to offer. “So if you need anything, anything at all,” Kalinske said, gazing out into the packed hall, “don’t hesitate to speak up. We’re here to make sure you have a good time. You deserve it. And if it should happen that by the end of the trip you’ve forgotten about our friends in Redmond, then all the better!”

Kalinske finished speaking and sat down to an ovation. But that kind of applause came easily when there was an open bar involved. The real challenge would be the next few days. Boca presented an opportunity unlike any other, and there was little margin for error. If we ever want to pass Nintendo, Kalinske thought, then even perfection today isn’t good enough; we have to offer a guarantee of perfection tomorrow as well. In the fairy tale that Sega was writing, there was no room for too hot or too cold—everything had to be just right. Somewhat neurotically heeding his own dictum, Kalinske found himself looking over his shoulder to make sure nobody was watching as he used the end of a tablecloth to quickly polish a spoon whose shine was mildly dulled.

“Not afraid to get your hands dirty?” Nilsen asked, catching Kalinske in the act.

Kalinske smiled. Busted. “Whatever it takes, right?”

“Mind if I pitch in?” Nilsen asked.

“I would not object to that,” Kalinske said, happy to have a partner in crime.

For a short, strange moment, the two men stood in silence, polishing pieces of silverware that were already acceptable and whose shine nobody would ever notice.

The absurdity of the moment was heightened by the fact that this was likely something neither man would ever do at home. Kalinske probably hadn’t helped Karen with the dishes in over a decade, and Nilsen gave the impression of someone who circumvented such busywork by using plastic utensils. But this was different—this was Sega—and the rules of normal life didn’t apply.

“Out, damned spot,” Nilsen playfully said.

“Channeling your inner Lady Macbeth?” Kalinske asked. “Does that mean that we’ve already slain the king?”

“We’ve been number one in 16 bits for three years running!”

“Well,” Kalinske said with a hint of amusement, “it’s certainly easier to be number one when you’re the only game in town.”

“I do not deny that fact,” Nilsen said. “But still, numbers don’t lie!”

“Good one,” Kalinske said. “That’s exactly the kind of propaganda I’m looking forward to hearing tomorrow.” Tomorrow, like today, would include an itinerary of golf, tennis, and lounging by the pool. But unlike today, tomorrow would also include formal presentations by Kalinske (general), Burns (sales), Adair (Game Gear), and Nilsen (Genesis). Inside the Trojan horse that was Boca, this was the carefully coordinated Greek invasion. As Kalinske thought more about that, he relaxed a little. A successful event in Boca hinged on tennis, golf, and persuasive speeches from himself and three of his most trusted employees. And like a pitcher going into the sixth inning without having given up a walk or a hit, he started to believe that he might really have a chance at pulling off a perfect game after all. Kalinske put down the spoon and looked out into the bustling room. “Actually,” he said, “how would you feel about tapping into that propaganda right now? I see a room full of folks sitting on the fence who need to be pushed over once and for all. Shall we go help them make the right decision?”

“Of course,” Nilsen said, putting down the silverware. “It’s what I do best.”

“Me too,” Kalinske said, surprised by how true the words felt coming off his lips. “Me too,” he said again before the two men moved into the crowd to do what they did best, and prove to the world that Sega was no one-hit wonder.

“In 1992 hot advertising is going to be very, very important,” Nilsen boomed from the edge of a twenty-foot-long stage that had been constructed in the ballroom. In a matter of hours, the venue had transformed from a place designed to dole out tiny hors d’oeuvres to a place designed to bring in big orders. Nilsen spoke beside a wooden podium with a large projection screen behind him and hundreds of retailers jammed into seats in front of him. “So we’ve searched high and low trying to find the perfect spokesperson for Sega Genesis.”

Kalinske watched from the front row, toggling his focus between Nilsen’s words and John Sullivan’s eyes. Sullivan, sitting beside him, was the buyer for Toys “R” Us. Ever since 1985, when the chain’s founder, Charles Lazarus, and executive vice president Howard Moore had taken the leap and become the first national chain to gamble on Nintendo, Toys “R” Us had developed a reputation as the community’s tastemakers. That torch had been passed to Sullivan, who was so dead set on having the largest quantity of the best games available that he often couldn’t even wait for product to be delivered to his stores. Instead, he would routinely send out a fleet of trucks to pick up the inventory as it entered the country, and then funnel it out to the eight hundred Toys “R” Us locations nationwide. Though Wal-Mart, Kmart, and Target each had more stores, it could easily be argued that Toys “R” Us was the most important account of them all.

“The perfect spokesperson has to be knowledgeable about videogames and also possess unimpeachable integrity,” Nilsen said. As he readied the projection screen for the big reveal, Sullivan tilted his head toward Kalinske. “Could it be?” he asked under his breath. “Someone even better than Sonic?”

Kalinske nodded with confidence. “Two someones, actually.”

“Right now,” Nilsen said, “I’d like to introduce you to the first of our new spokespeople.” As soon as he finished the sentence, a large photo of Nintendo’s Howard Lincoln popped up on the screen. Below the portrait of Sega’s competitor was a statement that Lincoln had made about Sonic during the Tengen trial: “They came up with a darn good game. They’re going to be a very strong competitor.”

After a brief moment of are-we-allowed-to-laugh-at-this silence, everyone gave in and erupted in laughter. Before the chuckling could dissipate, Nilsen surfed forward on the wave of momentum. “And to help promote our third-party licensees, I’d like you to meet our second new spokesperson.” This time, a large photo of Nintendo’s Minoru Arakawa popped up, with an equally incriminating quote of his praise for EA’s John Madden Football for the Sega Genesis.

Kalinske noticed Sullivan bending forward to try to contain a bout of belly laughter, and he couldn’t help but think back to the baseball analogy from last evening. The perfect game was still in progress, but now he felt like he was headed into the ninth with only the bottom of the order standing in his way. Kalinske had started off day 2 with an inspiring speech. He’d wanted to get everyone as excited about peeking into Sega’s future as he had been a couple of years ago when Nakayama took him to that R&D lab. When Kalinske felt like his words had done the trick, he passed the baton to Burns, who happily bombarded the audience with sales figures and forecasts. More than anyone else, he spoke their language, and there was no translator needed to see how much the retailers liked what he had to say. After Burns described how much there was to be made, it was up to Adair and Nilsen to pull back the curtain and prove that this was possible. Adair spoke first, using Sega’s colorful Game Gear as a metaphor to describe everything that Nintendo’s black-and-white Game Boy could never be. And then finally, to close the deal, Nilsen took over.

Nilsen announced that Sega was dropping the price of the Genesis to $129.95 and then disclosed Sega’s war plan for 1992, which consisted of having the “hottest games,” the “hottest promotions,” and the “hottest advertising backed up by Sega’s largest advertising budget ever.” Though Kalinske loved a good game as much as the next guy and took great pride in clever promotions, it was this last bit that excited Kalinske the most. Since bringing on Ed Volkwein, Sega’s search for a new ad agency had been narrowed down to five choices, including the front-runner and his personal favorite, Wieden+Kennedy, an Oregon-based firm that had become famous for their work with Nike during the past decade. While Kalinske would readily admit that he missed Steve Race, there was a poetic justice to losing the man behind Reebok and gaining the men behind Nike. Kalinske was thrilled that Wieden+Kennedy had joined the field of competitors, and he was looking forward to watching them win the account next month, when each agency would formally pitch Sega. He knew that a company like Wieden+Kennedy would help him finish Sega’s reinvention, and he wanted the new national campaign to veer memorably outside the box. If Sega could do that and also get the retailers on their side, there would be no stopping them. But Kalinske knew that he was getting ahead of himself. One step at a time, he reminded himself. Wind up and pitch. Catch and throw. Finish the perfect game.

“After all is said and done,” Nilsen said with folksy charm, “what is it that kids want? Great games. It’s that simple. And in 1992, we’ve got the must-have games that kids will be clamoring to buy in your stores.”

Kalinske nodded to Nilsen, who was controlling the room magnificently. “Starting off our new titles for the second half of 1992 is David Robinson Basketball.” Nilsen paused to play a tape featuring some of the gameplay, then glided back into his speech. “We’re talking a full-on, full-court running game here. With two dozen incredible moves that were digitized from videotapes of real basketball action, David Robinson Basketball includes all the elbow-pumpin’, board-crashin’, ball-stealin’ excitement the floor can dish out.”

Nilsen had a fast-talking, strangely enticing style that somehow made it seem like he was making fun of specific games, of videogames in general, and even of himself, while simultaneously expressing reverence for all those things, including himself. It was hard to say how he did all this, but he did it well as he continued through the highlights of Sega’s upcoming roster.

There was Taz-Mania, which featured “seventeen levels of postcard-quality Tasmanian scenery, including whirling waterspouts and perilous quicksand.” And there was also Evander Holyfield’s Real Deal Boxing, a game centered around the fighter who had once knocked out Buster Douglas. “It’s 360 degrees of nonstop action in the ring!” Nilsen boasted, before moving on to Super Monaco GP 2 (“The ultimate fantasy for anyone who’s ever been thrilled by the smell of burning rubber”), Batman Returns (“Holy bat smoke! It’s Batmobile versus Duckmobile as Batman hurls into acrobatic action against the death-dealing Penguin”), and TaleSpin (“You’ll circumnavigate the globe while Don Karnage and his air pirates try to thwart your progress”).

Nilsen was on a roll, and the crowd loved it, Kalinske most of all. Nilsen was throwing strikes left and right, showing off the full arsenal. Fastball. Curveball. Slider. Even a knuckleball from time to time. “In October we’ll be rereleasing some of our previous best-sellers, like Michael Jackson’s Moonwalker, under the banner of Sega Classics, and they’ll be available to customers at only $29.95.” Kalinske could feel the momentum building. Perfection might be an abstract concept, but it had a specific feeling, and Kalinske was sure that everyone in the room must have felt it.

Then Nilsen introduced the next game—and something went horribly wrong. “In November,” he announced, “comes a game with the most unusual goal. For the first time ever, you want to die,” Nilsen said. Seconds later, the power went out. The air-conditioning cut out, the projection screen went black, and though slivers of sunlight trickled through the window shades, the hundreds of retailers who would decide Sega’s fate suddenly found themselves in the dark.