Console Wars (2015)

PART ONE

GENESIS

3.

THE STORY OF TOM KALINSKE

Nakayama took Kalinske to a popular hostess bar downtown. Despite the sizable crowd of businessmen, their sporadic drunken chuckles, and the constant flirtatious giggling of the pale-faced women dressed as naive schoolgirls, the place offered a certain level of solitude. Perhaps it was the dim lighting, or maybe it was the collective sentiment that everyone there seemed to want nothing more than a moment of privacy and had no interest in getting entangled in the business of anyone else.

“What exactly are your concerns?” Nakayama asked, as one of the bar’s geisha girls strolled over to him and Kalinske with small glasses of sake.

“For starters, I’m not too thrilled about the idea of uprooting my family.” Sega of America’s headquarters were in San Francisco, and Kalinske would have to move his family there from Los Angeles.

“Northern California is the place to be. That’s where things happen. What else?”

Kalinske sipped his sake. “What else? A lot of things.”

Nakayama skeptically squinted his eyes. “I think that beneath ‘a lot of things’ is just one thing. So tell me, what is the problem?”

Perhaps Nakayama was right. Perhaps the stresses that came to mind were just tiny planets of anxiety that were all orbiting a single sun. “Okay,” Kalinske said, gathering his concerns. “I don’t want to put in everything I have only to watch the carpet get pulled out from under me. I want to be able to try things. I want to be able to fail. I want to be able to make this exactly what I think it ought to be and not have to explain myself every step of the way. Basically, I don’t want Mattel to happen again.”

Kalinske abruptly finished, realizing that he’d struck a nerve that had been buried for years. Nakayama finished his glass of sake. “Okay, fine,” he said. “You come work for me and I let you do things your way. This is the deal. No tricks.”

These were the magic words that Kalinske had been waiting for, but when they finally came he was momentarily distracted by something unusual across the bar.

“Do you have an answer?” Nakayama asked.

Kalinske heard the words, but his mind was locked on a well-dressed man sitting at a table about twenty feet away. This man, whose elegant outfit screamed success, was surrounded by beautiful women, scheming friends, and copious amounts of alcohol. Yet despite these temptations, the well-dressed man was completely entranced by only one thing: a Game Boy. As his fingers jabbed the buttons of Nintendo’s handheld console, nothing else in the world mattered.

“Tom?” Nakayama asked, trying not to sound too curious.

“I need to think about it,” Kalinske replied, and then he pulled out the Game Gear he had received earlier as if this might somehow hold the answer. Could he seriously see himself jumping into the videogame industry? Did he actually believe he had what it took to topple Nintendo? And, for that matter, did anyone? As he considered these questions and thought more about the well-dressed man, the machine came alive in his hands and Tom Kalinske’s life flashed before his eyes.

Suddenly his mind was flooded with the sights, sounds, and feelings of being a little boy, racing a red die-cast toy car up and down his legs in the backseat of the family’s station wagon, wedged uncomfortably between his brother and sister, as his family moved from Iowa to Chicago. The family had moved a lot during his childhood, which was difficult on a small boy, but he remembered it being a little easier because he always had that toy car by his side. He loved it not only because it was always there for him but because he had built it from a kit and painted it the exact color he wanted. He’d savored so much being the creator of something.

He remembered liking Chicago, mostly because he was only five years old, liked life, and thought that life was Chicago. But then his father got a new job at a water treatment facility in Tucson, Arizona, and the family moved again. Tom had been nervous, but he had his toy car, which he felt kept him safe from everything changing around him.

His family stayed in Tucson for good, and that allowed Tom to dive headfirst into the thick desert heat and become many things: a Boy Scout, an athlete, a baseball card collector. When he was twelve years old, his mother convinced him that he had a beautiful singing voice and dragged him down to the so-called Temple of Music and Art. There he auditioned for and was accepted into the prestigious Tucson Boys Chorus, whose past members included George Chakiris and John Denver. He soon discovered that he really was good at singing, which filled him with red-hot ambition. Within nine months, Tom was promoted to the chorus’s traveling group. Over the next five years, he toured the entire country, sang on The Ed Sullivan Show, performed at the White House, and traveled through Australia, Mexico, and Canada while cutting albums for Capitol Records.

That period of his life had moved fast—it was still a whirl in his mind all these years later—but the velocity had served him well. He returned home full-time to Arizona for his junior year of high school and made heads turn with his blazing speed. He joined the track team and earned a scholarship to the University of Wisconsin but lost it junior year when he got injured in a car accident. Even now, so many years later, he could still viscerally feel not just fragments of the pain, emotional as well as physical, but also how his now-or-nothing persona had emerged at that time. Without the scholarship, he needed to make money in order to pay for classes and graduate, so at twenty-two, with his back up against the wall, that red-hot ambition returned, steering him toward marketing.

Tom Kalinske and his friend Jonathan Pelligrin had both recently taken an advertising class and decided that male students were a very hard demographic to reach. So Kalinske and Pelligrin decided to start a magazine, called Wisconsin Man, that was specifically designed to reach male students. The magazine would feature stories about sports, cars, women, and how to do things like ski, barbecue, or interview for jobs. Local and national advertisers recognized the value in targeting the readers of Wisconsin Man and paid handsomely for space in the magazine.

This experience proved to Tom that he was capable of bigger things, so he enrolled in business school at the University of Arizona to study marketing. This time, to pay for school, he wrote and sold ads for a local company that owned radio and television stations. In 1968, his writing, résumé, and colorful life experiences earned him a job with J. Walter Thompson, the renowned New York advertising firm. His responsibility was to come up with new product lines for existing customers. Within a couple of months, Kalinske made a name for himself with the work he did on the Miles Laboratory account.

Miles Laboratory was a health products company that had risen to prominence in the 1940s with their One A Day multivitamins. In the 1960s, they wanted to expand their business to children, and developed Chocks, the first chewable vitamin. Though parents liked the idea of providing supplemental nutrition to their children, kids avoided the vitamins because they seemed to be too much like medicine. To change the minds of this fickle demographic, Kalinske suggested that the vitamins be shaped like characters that kids liked, and arranged for the licensing rights to a recently syndicated cartoon from the animation company Hanna-Barbera. This deal resulted in the creation of a successful new product called Flintstones Chewable Vitamins.

As all these memories flooded back to Kalinske, he couldn’t help but feel a certain retroactive naturalness to the trajectory his life had taken, and recognize the confidence that had been a constant presence throughout his life. That confidence had never been more on display than in 1970, when Senator Margaret Chase Smith arranged for a series of subcommittee hearings to investigate the advertising tactics used to sell high-sugar products that were heavily fortified with vitamins and minerals. The allegation was that advertisers were attempting to create a false perception that the health hazards of such products (like cereal, juices, and candy-like chewable vitamins) were offset by the added nutrients. During the hearings, Kalinske took the stand, where he was reprimanded by Senator Smith for essentially selling candy wrapped in a flimsy excuse of good health. “So, Mr. Kalinske,” she said, pointing a finger at him. “Do you really think selling drugs to children is a good idea?”

Kalinske knew that he was supposed to sit up there and transform himself into a fountain of apologies, but with the finger pointed in his face, he decided to opt for the truth. “I think it’s a great idea! Fifty percent of America’s children are malnourished, and, frankly, I don’t care how they get their vitamins as long as they get them. We’re helping kids stay healthy.” The room went silent. After he was dismissed from the stand, he was approached by executives from Mattel who had been watching the proceeding and were impressed with his performance. They offered him a position as product manager of their preschool business.

Two years later, he was invited to speak with the founder and president of Mattel, and experienced his first career-defining moment. “People are saying that Barbie’s done, finished, kaput,” Ruth Handler proclaimed in her usual raspy, exasperated, yet somehow optimistic voice. “Barbie just had her first-ever down year last year. And you know what that means. In this business, once you dip, you drop and you don’t stop.” She finished her rant with a powerful but gentle nod of the head. “People are saying it’s time to kill Barbie and devote our resources to other things. What do you say?”

An idealistic but unpolished twenty-seven-year-old Tom Kalinske stood in front of her desk, wearing a pleasant smile, as he tried to make sense of what he’d just heard. He desperately wanted to impress his boss, the living legend responsible for making Barbie the most famous plastic doll ever. To avoid saying the wrong thing, Tom continued to hide behind the shield of his smile.

“Nope,” Ruth said, her eyes unflinching. “You don’t get to where I am without becoming fluent in the language of smiles. And that one you’ve got slapped across your face right now says, ‘I have no idea how to answer her question, so I should try to remind her that I’m handsome and charming.’ Am I right?”

Tom chuckled, and this time he gave her a very different kind of smile.

“Okay then, that’s much better. But just because I called you charming and handsome doesn’t mean you’re off the hot seat. Now answer the question, mister.”

“Well, Ruth,” he said, almost surprised to hear himself sound so calm, “that’s the craziest thing I ever heard. Barbie, done? No way.” Kalinske shook his head profoundly, now controlling the room with his every word, gesture, and expression, a gift that would reveal itself to him more and more over the years. “Look, I think it’s fair to say that both you and I are in good health and seem destined to live nice long lives. And let me tell you something: Barbie will be around long after you and I are gone.”

“Oh, is that a fact?” she asked.

“It is,” he said confidently.

Ruth’s eyes zeroed in on his. “What makes you so sure that people won’t get bored of a doll, albeit a fetching blond one?” A tiny smile delicately bent half of Ruth’s face. She wasn’t the only one fluent in the language of smiles, and Tom knew what it meant: genuine curiosity, with the potential for an impulsive decision.

“They won’t get bored,” he said, “because Barbie’s not just a doll. She’s an idea, a promise to girls of all ages that you can fulfill any dream or fantasy out there. Through Barbie, a girl can be anything she wants to be!” Kalinske nodded slowly. “And yeah, it doesn’t hurt that she’s not bad-looking.”

Ruth emphatically slapped her desk. “Great, that’s the right answer. You’re promoted. You’re now the marketing director on Barbie.” Without missing a beat or giving him a moment to gloat, she shooed him away. “You’ve convinced me. Now get out of my office and go convince the rest of the world.”

And that’s exactly what he did. He revived the Barbie line with the novel idea of segmenting the market. Instead of simply selling one doll per season, Mattel would offer a multitude of Barbies for differing interests, at diverse price points, and targeted at girls of different ages along the spectrum. There would be a Twist N’ Turn Barbie, Ballerina Barbie, Hawaiian Barbie, and even President Barbie. In addition, Mattel would vigorously expand the line for her family and friends with the likes of Big Business Ken and Growing Up Skipper, a version of Barbie’s younger sister whose breasts would get larger and waist would shrink with the rotation of her left arm. Looking to fill every possible segment of the market, Kalinske even started a line of high-priced collectible Barbie dolls, which came with limited-edition fashions by famous designers like Oscar de la Renta and Bob Mackie. As a result of this new approach, annual sales soon skyrocketed from $42 million per year to $550 million by the end of the decade.

Kalinske’s ability to sell particularly came in handy when he met a woman who made his mind feel both empty and infinite. At the 1979 Toy Fair, there she was: a striking young woman hired to dress as Barbie and present the doll’s latest accessories at the Mattel booth. Karen Panitz was her name, a New York actress who’d recently had a bit part in Saturday Night Fever. She tried to resist his charm, but that didn’t last long, because it was obvious that he understood her and she very much understood him. It wasn’t quite love at first sight, but what they had was much better than that: a romance built to last through the many splendors and tragedies of life, and in 1983 they married.

Even though he had it all, there was always a need for more. More ideas, more discoveries, and more to do—the instability was always his favorite part. So when Mattel needed a new toy that could replicate for boys what Barbie did for girls, Kalinske rose to the challenge. He commissioned the development of a heroic male action figure, testing out spacemen, military heroes, firefighters, and superheroes—everything under the testosterone-infused sun. The concept that tested strongest was a muscular, sword-wielding, brown-haired conqueror. Kalinske asked the designer to make the hero’s hair blond, and then he and his team worked on digging deeper into their character and coming up with his personality, backstory, and supporting cast. The end result was a unique universe for its master, their new character, He-man. The action figure became one of the year’s best-selling toys and quickly rose to the top of the character popularity charts. This led to the creation of a comic series, collectible trading cards, and the hugely popular animated TV show He-Man and the Masters of the Universe.

Between Barbie, He-Man, and everything in between, people would say that Kalinske had the “magic touch.” He liked when people said it, even though he knew it wasn’t true. There was no such thing as a magic touch, and it wouldn’t have mattered if there were, because the only thing it takes to sell toys, vitamins, or magazines is the power of story. That was the secret. That was the whole trick: to recognize that the world is nothing but chaos, and the only thing holding it (and us) together are stories. And Kalinske realized this in a way that only people who have been there and done that possibly can: that when you tell memorable, universal, intricate, and heartbreaking stories, anything is possible.

“More?” interrupted the geisha girl from earlier, appearing beside Kalinske with a warm jug of sake. “Yes, maybe?” she asked hopefully, pointing to his glass.

Kalinske nodded, returning to the moment. But before the girl could fix him a drink, she suddenly became transfixed by the Game Gear and, as with the well-dressed man, the world suddenly shrunk around her. Well, would you look at that, Kalinske mused, while having a revelation that would shape Sega, the videogame industry, and the face of entertainment as a whole. Videogames weren’t just for kids; they were for anyone who wanted to feel like a kid. Anyone who missed the freedom and innocence that comes with endless wonder. Videogames were for everyone; they just didn’t realize it yet.

“What is this?” the geisha girl asked, finally refilling Kalinske’s glass.

As he considered the question, Nakayama noticed that a grin had grown across Kalinske’s face, and he seemed to know that it had nothing to do with the sake. This was the kind of expression that you remember someone by for the rest of his life. The kind of expression that either starts or ends a story.

“Can’t you see?” Kalinske said to the girl as if it were obvious. “It’s the future.”