JUST DO IT - THE NEXT LEVEL - Console Wars (2015)

Console Wars (2015)

PART THREE

THE NEXT LEVEL

30.

JUST DO IT

Smiles widened, glasses clinked together, and inside a chic French restaurant in San Francisco, toasts were made to celebrate revolutionizing the way videogames were advertised. Tom Kalinske then shot a quick, happy glance at Shinobu Toyoda and Ed Volkwein before taking a long sip of an oaky Bordeaux and savoring the significance of this dinner with Dan Wieden and David Kennedy. If someone had told him two years earlier that Wieden+Kennedy would be interested in becoming Sega’s agency of record, Kalinske would have either laughed, rolled his eyes, or assumed that Dan and David’s siblings had started their own ad shop. After all, these were the guys responsible for building the Nike brand into what it is today, coming up with the famous “Just do it” tagline and iconic sneaker campaigns like “Bo knows” (with Bo Jackson), “Mr. Robinson’s Neighborhood” (with David Robinson), and “Spike and Mike” (with Spike Lee and Michael Jordan). It just seemed wonderfully inconceivable that the Oregon-based agency responsible for transforming Nike into the it sneaker company now wanted to do the same for Sega in the videogame space. But here they all were.

“So, what happened next?” Wieden asked. “Come on, Tom, don’t leave us in the dark. Did the retailers rise to the challenge or not?”

“You tell me,” Kalinske said, resuming his recap of Boca. “After the presentations, our first meeting was with Toys.”

“Toys ‘R’ Us,” Volkwein clarified.

“Right, Toys ‘R’ Us,” Kalinske continued. “One of the biggest guys in the marketplace. The tastemakers, if you will.”

“Also very close relationship with Nintendo,” Toyoda piped up.

“Yup, Toys and Nintendo are peas in a pod,” Kalinske said. “And we’ve got the big pea himself, Charles Lazarus.”

“And let me guess,” Wieden said. “He didn’t accomplish all that by acting like a gunslinging risk taker.”

“Bingo,” Kalinske said. “Which is why we schedule the Toys meeting first. If they’re in, then we’ll know right away that this is going to happen. If not, then at least we’ve got three days in paradise to shake it off.”

“Go big or go home,” Kennedy said. “Gotta love it.”

“So the meeting starts, and it’s myself, Paul, Al, Diane, this guy,” Kalinske said, nudging Toyoda, “and Richard Burns, our VP of sales. First thing Mr. Lazarus wants to know is if others are on board. Now, we’ve all been down there a few days, so they don’t know that we haven’t met with anyone else yet. I’m about to tell them this, hoping that the compliment of making them our first might carry some weight, but Burns cuts me off and says that everyone is already on board and we’ve been on with Japan all night to see if they can accommodate this demand. Lazarus looks around the table, each of us trotting out our best poker faces, and he says, ‘Looks like we don’t have any choice. Count us in and make sure we get the biggest order.’ ”

“That is positively outstanding,” Wieden declared.

“I can’t even describe the size of the weight that fell off my shoulders,” Kalinske said. “Not only that, but Charles then goes on to instruct his people to work closely with us every step of the way so that both companies can set records with this thing. Amazing, just amazing, and yet . . . that wasn’t even the biggest triumph at Boca.”

Toyoda and Volkwein crinkled their faces, unsure of what exactly their boss had in mind. “Are you talking about the comment from Griffiths?”

“No, but that’s up there too,” Kalinske said, in the mood to brag and turning to Wieden and Kennedy to offer an explanation. “Jeff Griffiths is the buyer from Electronics Boutique, and he said something that reinforced how we hoped everyone in the industry was feeling. Toward the end of Boca I asked him how he felt about the event, and without the slightest hesitation, he said, ‘Empowered.’ He then said, and I quote, ‘After years of being lectured to by powerless drones at Nintendo, whose only apparent talent was an annoying ability to make us feel eternally beholden to them for the pitifully small allocations and onerous payment terms, we finally find ourselves sitting face-to-face with people willing to listen to our ideas and act on them.’ His words, not mine,” Kalinske said proudly.

“Right on,” Wieden said. “We’re honored that you’re even considering us as the guys to help you take down those drones.”

“Oh, please,” Kalinske said. He appreciated the humble words, but their guests from Oregon were far and away the front-runners for the account. After months of conducting the agency review, Sega had narrowed down their list to three candidates: Wieden+Kennedy, the gods of Nike; Foote, Cone & Belding, the masterminds behind Levi’s 501 jeans; and Goodby, Berlin & Silverstein, a boutique agency whose biggest claim to fame was how close their office was to Sega’s headquarters (a fact they emphasized often, via spontaneous drop-bys). The guys at Goodby, Berlin & Silverstein had the creative chops, no doubt, but with a limited track record and the recent departure of Andy Berlin, one of the small firm’s partners, the competition for Sega’s business was pretty much narrowed down to two. And in the next few weeks, both suitors would be pitching and Kalinske would finally have the agency that would help him bring down Nintendo. “I think your work speaks for itself,” Kalinske told them. “And I honestly can’t wait to see what you come up with.”

“Can you give us a sneak preview?” Volkwein asked.

Wieden and Kennedy glanced at each other, smiled, and shook their heads.

“Not even a hint?” Kalinske asked, goading. “Just a tiny little glimpse?”

“I could tell you, but then I’d have to kill you,” Wieden said. “And then you’d miss the presentation, so it would all kind of be for nothing.”

“But I will say,” Kennedy explained, “that you wanted something revolutionary, and this campaign will be your rallying cry.”

This got Kalinske even more excited. He couldn’t believe that it had been only a year and half since that big presentation in Japan where he had received approval to revamp Sega. Hiring a new ad agency and investing in a company-redefining campaign had always been the final step in Sega’s makeover, and it was almost time to try to win this beauty pageant. Things were coming together even quicker than Kalinske had imagined, and not just with advertising and retailer relations, but in other spheres as well. Plans for a Sonic The Hedgehog cartoon were reaching the point of reality, distributing Genesis games over television cable wires was almost possible, and the crown jewel of progress was an alliance with Sony. A few days after Boca, Sega of America and Sony Electronic Publishing announced an alliance to make games for the Sega CD. The power play involving these companies shook up the videogame industry, and it even made waves in the mainstream press. On May 21, 1992, the New York Times ran an article by Adam Bryant that explained the crux of the deal: “The broad alliance announced yesterday calls for Sony to tap its full stable of recording artists, actors and movies to create games for the new Sega machines, which will use compact disk technology.” Although Kalinske and Olafsson had wanted this for ages, getting approval from both parent companies had been no small task. After months of respectful pleading, a turning point came when Sega helped Sony out with an unsettling situation.

In the 1980s, there had been a growing fascination with full motion video (FMV) games. With real actors and hours of prerecorded footage, FMV games were essentially movies where the viewer, or in this case the player, interacted with the content (i.e., shooting monsters, avoiding obstacles) in a way that dictated how the story played out. This intersection of Silicon Valley and Hollywood led many to believe that this represented the next step in the evolution of videogames. One of those believers was Sony’s Michael Schulhof, who in 1990 acquired the rights to four FMV games that had originally been created for Hasbro’s NEMO console but became available when the toymaker pulled the plug on that system. His thinking was that these games, whose files were much too big for 16-bit consoles, would be perfect for Sony’s CD venture with Nintendo. But when that deal fell apart, Sony was left with costly assets and no place to exploit them—until the Sega CD came into focus. This would seemingly be the right home for Sony’s FMV games, but upgrading just two of the games, Night Trap and Sewer Shark, to make them playable on the Sega CD was going to cost nearly $5 million.

Sony was already lukewarm on the videogame industry and not sure that it was wise to throw more money at the FMV problem. Kalinske and Toyoda, however, really wanted to make a partnership work, not to mention that they needed more software for the upcoming Sega CD release. Given the situation, it seemed like a no-brainer for Sega to offer to foot the bill; this would forge an alliance with Sony, and also keep Sega on the cutting edge of technology. This was a dream scenario, everything Kalinske had wanted, until he took a closer look at the games in question and realized how violent they were. By movie standards, Night Trap and Sewer Shark were no worse than a schlocky horror film, but compared to the typical videogame, they may as well have been snuff films (particularly Night Trap, in which players were tasked with saving scantily clad women from a vicious flock of vampires). As Kalinske watched one of the vampires attack a defenseless girl in the shower, that pang of conscience he hoped had been vanquished returned once again louder than before. Was it really a good idea for Sega to release this kind of game? Probably not, Kalinske thought, but then was reminded of another thought that he’d had years earlier. In the tiny kitchen of Sega’s old office, he had been reading that New York Times article about Peter Main and came to the conclusion that if Nintendo represented control, Sega must offer the freedom of choice. Neither of these games were Kalinske’s cup of tea, but who was he to stand in the way of choice? And so after he decided to get out of his own way, Kalinske, with Toyoda, arranged for Sega to foot half of Sony’s bill for these two games and future FMV development costs, which ultimately helped push through an alliance between the companies.

After becoming partners on this, they decided that they would divvy up the slate of FMV games, with Sega publishing some as first-party titles and Sony publishing others under their Imagesoft label. As a courtesy, Sony gave Sega the opportunity to choose first. Well, Kalinske thought, if I’ve already decided to go down this road then I may as well ride it all the way, and he selected Night Trap, which was definitely the more violent of the two, but it was also the one he thought would sell better. The game would be released on October 15, 1992, along with the launch of the Sega CD, officially marking the beginning of a relationship between Sega and Sony that Kalinske hoped would grow much deeper. For better or worse, Sega was all about choice. That was the backbone of their videogame revolution, and it was why an agency like Wieden+Kennedy was excited to work for Sega.

“Wait,” Glen interrupted, as everyone at the table began to discuss favorite Super Bowl commercials from over the years. “What is the biggest triumph?”

“What biggest triumph?” Kalinske asked.

“Earlier,” Glen explained. “You had mentioned a sizable triumph that was neither Toys ‘R’ Us nor the comment by Jeff Griffiths. Now I’m curious.”

“Oh, that,” Kalinske said with a chuckle. He put his hand on Toyoda’s shoulder and said, “The biggest triumph of Boca was Shinobu catching a massive sailfish.”

Everyone at the table laughed and turned to Toyoda, who nodded bashfully.

“How big was the fish?” Wieden asked.

“I will show you,” Toyoda said, and then pulled out his wallet and showed off a photo of him proudly standing beside an enormous sailfish. “On the first day of Boca, Gary Kusin, who is the founder of Babbage’s, caught a big eighty-inch sailfish. To see this, I thought: wow, very amazing. But then the next day I got one that was an inch bigger and it was an incredible moment.”

As everyone gushed over Toyoda’s eighty-one-inch sailfish, it felt like the perfect end to the evening, and the beginning of a wonderful new relationship. Except that during the conversational ride off into the sunset, a waitress came by to drop off several expensive bottles of champagne wrapped with a bow.

“What’s this?” Kalinske said, delighted by the liquid generosity. “What a nice gesture,” he said, turning to his guests. “But you know we can’t let you pay for this.”

Wieden and Kennedy turned to each other with a puzzled look, but before they could say anything Kalinske picked up a note attached to the bottles. “Well,” Kalinske said after an echoing laugh, “it appears that we have an unexpected benefactor.”

“Oh, yeah?” Volkwein asked. “And who’s that?”

Kalinske answered by passing around the note, which read:

Enjoy the champagne. We eat here all the time.

Sincerely,

Goodby, Berlin & Silverstein

After everyone finished laughing, Toyoda asked the question on everybody’s mind. “Do you think we should drink it?”

Wieden and Kennedy both shrugged and left the decision up to their host.

Kalinske reread the note and slowly shook his head. It really was a nice gesture, deserving of bonus points for cleverness. But unfortunately, a bold move and offices nearby weren’t going to be enough to get Sega’s account. Maybe there was a way to throw them some business for the handheld, but the upcoming ad campaign was Sega’s big shot, and they couldn’t afford the risk of a less experienced agency.

“I’m tempted to say no,” Kalinske said. “But I can’t help but think that this move demonstrates a little bit of Sega spirit. So, what the hell?”

Once again smiles widened, glasses clinked together, and a toast was made inside a chic French restaurant in San Francisco. This time, however, it was hard to take a sip and imagine anything other than Jeff Goodby smirking somewhere in the night and thinking to himself, “Just do it.”

Shortly after dining with Wieden and Kennedy, Kalinske and company headed to Chicago for the summer CES. With the agency pitches fast approaching and more and more retailers signing on for Sonic 2sday each day, Sega went into the show with more momentum than ever before. And having already accomplished in Boca much of what would typically need to be done at CES, Sega was in the unique position of playing defense more than offense. But just because they would be playing defense didn’t mean that they’d act passive; as any football fan knows, there are tons of strategies, schemes, formations, and blitz packages. With so many permutations, the key to winning on defense is all about identifying the offense’s play as soon as possible and then calling the right audible to shut it down. That was exactly what Kalinske’s team set out to do, but after nearly two days in the Windy City, all anyone heard was that Nintendo had a big announcement planned. So Kalinske gathered the troops together in his suite at the Sheraton for an emergency meeting.

“They’re getting smarter,” Kalinske said, shaking his head. All of Sega’s top executives were crammed into the suite, as was David Rosen and Dai Sakarai, one of Nakayama’s top lieutants (someone who, in the pseudo-war between SOA and SOJ, Kalinske and the others trusted; plus he knew the lay of the land from his very brief term as interim president of SOA). “I hate them for it, but I definitely respect it.”

“Nobody’s giving me anything,” Rioux said. “I just keep hearing ‘big move’ over and over. What am I supposed to do with that?”

“Could it be a new Mario game?” Kalinske asked.

“That is not their style,” Toyoda replied. “They like to wait a few years in between the Mario titles.”

“Realistically, what could it be?” Nilsen asked, half closing his eyes, as if by doing so the answer would be psychically revealed to him. “We should be able to figure this out,” he said with frustration, upset at himself for not being able to do so.

“My money is on a theme park,” Van Buskirk said. “The Amazingly Incredible Mushroom Kingdom. Complete with real-life Koopa Troopas!”

“I’d welcome that,” Kalinske said. “Another thing to keep them distracted.”

“What about a color handheld?” Adair suggested. “They can’t just ignore how well Game Gear is doing, can they?”

“I don’t know,” Burns said. “They’ve gotten quite good at burying their heads in the sand, haven’t they? One might even call it a forte.”

“It must be a partnership,” Glen suggested. “It’s hard to imagine a world in which they don’t consider our alliance with Sony to be a slap in the face. I would venture to guess that they slap back in some fashion.”

“I doubt it,” Rioux said. “They’d never let anyone in their sandbox.”

“What about a new PR agency?” Sega’s PR agent, Brenda Lynch, suggested. “The Mariners backlash had to have woken them up.”

“You may very well be right,” Volkwein said, “but with all due respect, I don’t think a new PR agency qualifies as big news.”

“If it truly is big news,” Dai Sakarai mused, “then perhaps they have decided to give up on 16 bits and move on to a 32-bit system.”

“I like that theory,” David Rosen put in. “Do to us what we did to them.”

Back and forth everyone went, yipping, yapping, and playfully snapping at each other. Kalinske loved the energy and enthusiasm of the team he had built. He loved that they believed in the cause and weren’t afraid to act. And it was with this last part in mind that he suggested they take things into another gear. “Exactly,” he said. “It could be anything. So we’re going to have to figure this out ourselves. Does anyone object to going undercover?”

Nobody in the room objected. In fact, they thought it was about time. Their favorite part about working at Sega was the whatever-it-takes mentality and the shenanigans that often came about as a result of that. There were six industry parties scheduled for that evening, so Kalinske broke everyone up into teams and sent them around Chicago to see what they could dig up.

Adair and Van Buskirk were paired together and sent to the Electronic Arts party, where their efforts to solve the mystery initially amounted to nothing. It wasn’t that they weren’t the top-notch spies they fancied themselves to be; rather, it truly seemed as though nobody really knew what Nintendo had planned. That changed a little, however, as the night rolled on and drinks continued to be served. Finally, in tandem, Diane and Van Buskirk cornered an EA producer with close ties to Nintendo.

“Come on, I know you know,” Van Buskirk said.

“Yeah, honestly, just tell us already,” Adair added. “It’s almost midnight, anyway. How could it possibly make a difference at this point?”

“Okay,” the producer said. “What difference does it make?” He then informed them that the next day Nintendo would be dramatically dropping the price of their hardware. Without even thanking him for the intel, off they ran into the night.

They reported the news back to Kalinske, who couldn’t hide his disappointment. Nintendo was dropping the price of their deluxe SNES package (bundled with Super Mario World) to $129.95, the same as Sega. In addition, they’d also be selling an SNES without any game for $99.95. The latter piece was particularly crushing. Up until this point, Sega’s consistent advantage had been a lower price than Nintendo, but by tomorrow afternoon the Big N would be stealing headlines and beginning to undo all the work that Sega had done.

Shortly after midnight, everyone returned to Kalinske’s suite to digest the news and brainstorm possible responses. Some were sleepy-eyed and some were clearly drunk, but they all shared a manic insomniac energy and excitement. They not only worked for Sega but had become Sega, and took a strange, wonderful pride in doing whatever it took to help defeat Nintendo.

“Thank you all for being here at this hour,” Kalinske said, showing genuine gratitude. “As some of you may have already heard, Nintendo is trying to outprice us. Before we even talk about a response, I want everyone to take a moment to think about how much of a thorn in their side we must really be. They refuse to acknowledge us, they treat us like second-class citizens, but it’s because of us and only us that in the span of only eight months they have dropped their price nearly 50 percent. They may still control the market, but I’d say that counts as proof that they are no longer invincible.”

Though it was late and the news about Nintendo was disappointing, the truth behind Kalinske’s words filled everyone with a second wind. Look at how much they had done in such a short time; there had to be something, then, that they could do in the few hours before the announcement.

“I’m going to open the floor,” Kalinske said, “because I want whatever we do to be done together. What is everyone thinking?”

“What about leaking a story?” Lynch suggested. “Something about how bad finances prompted the move. Company in trouble. The end is near. Et cetera, et cetera.”

“Do we have something like that?” Kalinske asked.

“No,” Lynch said. “But we can get creative and make them waste time responding to our storyline, instead of writing their own.”

“Hang on a second,” Burns cautioned. “Maybe this isn’t as bad as it looks. They’ll have a small price advantage, sure, but we’ve got Sonic 2sday.”

“I love Sonic 2sday more than anyone,” Nilsen said, “but, believe me, Nintendo’s move is as bad as it looks.”

“There’s only one thing we should do, and we all know it,” Adair said. “We need to fire back and match them. Paul, what about that idea you mentioned to me before, of selling just the Genesis without any games? Could we sell that for $99.95?”

“You’re talking about the Core System,” Rioux replied, considering her suggestion. “Yeah, that price is doable, but we both know Japan won’t go for it. And even if they did, we simply don’t have enough time to deliver a measured response.”

“Hey,” Van Buskirk said, “haven’t any of you ever pulled an all-nighter?”

“You’re exactly right,” Kalinske said, feeling a sudden invincibility flow through his veins. She was right, and so was Adair. Beneath the mirage of possibilities, Sega really had only one option. And in no way was this option ideal, because it meant somehow cramming weeks of work into a single pressure-packed night, but if Sega wished to really become the company that deserved to decapitate Nintendo, that would revolutionize videogames, that was worthy of working with an agency like Wieden+Kennedy, then they really had no choice but to suck it up, find the fun, and just do it. “Let’s do it,” Kalinske said. “Come on, we need this. We’re on the brink of something here, and we really need this. So it’s simple: let’s make this happen.”

And just like that, everyone was flooded with energy and ready to work through the night. But in order to get to work, they needed something bigger than a hotel room, preferably something with some form of technology to help them pull this off. The hotel had a business center, but it was closed at this hour—or it was closed until Adair found a way to break in and temporarily turn the place into Sega’s workshop. They figured out the logistics, developed the strategy, and designed the necessary materials for the presentation that morning that would cut Nintendo off at the knees.

Beside the time crunch, the hardest part of pulling this off was that they had to make it appear completely preplanned. More deadly than being upstaged by Nintendo was the allegation of being reactionary. Everything that they prepared this evening had to look, sound, and feel like it had been planned out for months. Although that wasn’t factually true, emotionally it sort of was; the crux of Sega’s philosophy hinged on instant adaptability, the art of embracing opportunities in the blink of an eye. So although they only had hours to create something from scratch instead of months, if anyone could do it, it was these guys. And they did, finely crafting all of the following materials before the preshow sales meeting in the morning:

• Two hundred press kits

• Updated fall/winter price lists

• Comprehensive sell sheets for the new $99 Core System

• Price stickers and display photos to adorn Sega’s booth

• Updated pocket cheat sheets for Sega’s internal sales force

• Talking points for the press, retailers, third parties, etc.

The impossible task of putting together an entire campaign in one night was the easy part compared to changing Nakayama’s mind. Luckily, for that task Kalinske got help from Rosen and Sakarai. All through the night they strategized about which buttons to push and how hard to push them. At last they took the request to Nakayama, bracing themselves for that pivotal now-or-nothing moment.

“You’re being impulsive,” Nakayama said. He felt strongly that this would be something they would regret in the morning.

“Not at all. We’ve actually been considering this for quite some time and had all the materials ready just in case,” Kalinske said, speaking quickly so as not to get caught in a lie. It was true that Sega of America had been seriously considering a cheaper, game-free system, though not one at $99.95. But Nakayama didn’t need to know that. “Please trust me,” Kalinske pleaded. “Remember, you hired me to make decisions like this.”

There was a long pause.

“It’s the logical move,” Kalinske continued. “If not now, then we’ll do this in six months. But what’s six months of some additional profits compared to all the sales we’ll make by doing this now and taking Nintendo down in the process?”

And then a longer pause.

Kalinske looked at Rioux and Toyoda, his brothers in arms, then glanced over their shoulders at Nilsen, Adair, Van Buskirk, and the rest of his devoted employees. This had to work out; they just had to be given permission to try to pull off this miracle.

Finally Nakayama broke the silence. “Okay, Tom. If you think this is best.”

As soon as the line went dead, the team erupted with joy. In just a few hours they would return to being serious, focused, business-suit-wearing executives. In just a few hours they would match blows with Nintendo and look for new and unexpected ways to tilt the scales. But that was all a few hours away. Right now they got to stay up late and enjoy just being kids stuck in adult bodies.