Console Wars (2015)

PART FOUR

CIVIL WAR

50.

THE TIPPING POINT

The main attraction of Summer CES was, by far, Acclaim’s Mortal Kombat. In just a few months, the game would be released for both the Genesis and SNES on a day the software publisher was calling “Mortal Monday,” September 13, 1993.

“Have you taken a close look at this game?” asked Takuya Kozuki, Konami of America’s president, as he and Emil Heidkamp neared Acclaim’s booth at the show.

“No, but I have already seen enough,” Heidkamp replied, ignoring the game footage playing on the nearby assortment of large, larger, and largest televisions.

“Come, let us see,” Kozuki requested.

Heidkamp followed his boss to one of the large televisions, where a demo was playing Sega’s bloody version of Mortal Kombat. A yellow ninja callously harpoons an opponent. A blue ninja shoots ice and then decks his frozen rival with an uppercut. A mercenary with a metal plate on his face throws daggers and then does something called a “psycho kick.”

“Oh, wow,” Kozuki remarked. “Did you see that one?”

Was this game really so bad? These were cartoon characters, after all. Heidkamp took a step forward, close enough to see the actual pixels that created the violence. Was this the tipping point, or just another foot or two further down on the slippery slope? Heidkamp stared at the pixels—the blues, the greens, and all of those many reds. For a moment it was all a blur, and then instantly it wasn’t. On the screen, the yellow ninja spewed fire and charred his opponent to a crisp, the blue ninja ripped out a woman’s spine, and the man with the half-metal face tore out someone’s heart. There were more moves like these, and each earned the player extra points.

“Emil,” Kozuki said, attempting not to sound rehearsed, “we must do a game like this. Don’t you think?”

“Remember our deal?” Heidkamp asked, shaking his head. “Besides, Kozuki-san, we are already doing great.”

“Yes, but one can always do better.”

“No, not like this.”

“Now, now,” Kozuki said, turning to Heidkamp. “Think of them as fairy tales.”

“We have had a great run together,” Heidkamp replied. “What a great ride this has been. But if we’re going to do this type of game, then it is time for me to leave.”

Takuya Kozuki looked upward in thought, but there was a sense that the thoughts filtering through his mind had already been circling around in there for days. Kozuki and Heidkamp walked the floor a final time together before cordially shaking hands and going their separate ways.

When the Consumer Electronics Show ended, Nilsen flew out to London. Or was it France? Or was it actually Brazil? He couldn’t remember; they were all blurring together. And then after traveling to London (or France, or Brazil), the president of a third-party developer in Japan urgently requested his presence for a meeting. The company was thinking about expanding into the U.S. marketplace and wanted to sit down with Nilsen and learn the business—to see if this opportunity was worth the risk, and what kind of product and marketing support could be provided by Sega and its subsidiaries. So later that day Nilsen hopped on another plane (another chance to push the limits of insomnia), and he arrived in Tokyo the next morning.

Baggage claim. Restroom. Cab. Location change.

The this-and-then-that wasn’t usually the hard part; the real devil of it all was doing this-and-then-that with a smile. It was staying energetic, motivated, and with the desire to conquer the world. If the job had led to big changes, then maybe it would have been easier. But after six months in this new role Nilsen wasn’t sure that he was making any difference at all. In the room, everyone loved his ideas, the potential, the possibility, and the risk, but then he’d fly off and excitement would give way to bureaucratic inertia and business as usual.

Meanwhile, back in Redwood Shores, SOA continued to move at a million miles per hour. But from afar, Nilsen wasn’t so sure that everyone was moving in the same direction. Sega was emerging as the leader of the videogame industry, but what kind of leader did the company plan to be? What would be its hallmark? The gimmicky Blast Processor? The bloody game Mortal Kombat? The athletes behind Sega Sports? And what happened to being the good old-fashioned blue dudes with attitude? Or maybe those things all meshed together nicely, Nilsen thought; maybe he was just upset not to be at the center of it all. He wanted to be there in Redwood Shores, but instead he was walking into an unmemorable silver building for the meeting that had brought him to Japan.

Show ID. Speak broken Japanese. Sign in. Tiny elevator upward.

Even though Nilsen had some concerns about what was happening back at Sega of America, he had no doubt that Kalinske would find a way to make everything magically work out. That’s what he did, over and over. Tom was a magician, always pulling Barbies and He-Men and hedgehogs out of his hat, but what if someone was tampering with his magic wand? It wasn’t really Redwood Shores that Nilsen was worried about, but quiet, unspoken friction between SOA and SOJ. Having spent more time in Japan recently, he saw it firsthand: the glances, the subtle comments, the references to “those guys over there.” Was this kind of thing normal, or was it a cause for concern? More important, if it did turn out to be the latter, what could actually be done to remedy the situation? How could peace be found during an invisible war?

Elevator dings. Arrive on floor. Speak broken Japanese. Wait.

And wait.

And wait some more.

Then someone came over to let him know the meeting had been canceled. Apologies. Smiles. Let’s reschedule. Then more waiting, more flying, and more hours spent not sleeping through the night on his way back to London. Or France. Or Brazil.

“Is this a joke?” Kalinske asked as Nilsen paced around his office.

“No, Tom, I’m very serious,” Nilsen replied. “I wasn’t actively looking for something else, but the more I think about Viacom’s offer, the more sense it’s beginning to make.” Viacom’s offer, as it turned out, was actually three offers: he could choose between vice president of Viacom’s new media division, vice president of consumer products marketing for Nickelodeon, or a hybrid job to oscillate between the two (with some MTV work thrown in from time to time). The main takeaway was that Viacom was flexible; they didn’t care exactly what Nilsen did as long as he was doing it for them.

“Are you feeling unappreciated?” Kalinske asked. “Is that it?”

“Me? No, not at all. I don’t need a pat on the back whenever I come up with a good idea. It’s not like that.”

“Then tell me what it’s really like.”

“I’m trying, Tom,” Nilsen replied, taking a deep breath. “It’s a combination of things, really, but it starts with all the traveling.”

“But you love to travel!”

“I thought so too. But not like this. Nobody could like to travel like this.”

“You’re right,” Kalinske said. “And I imagine it can’t be good for your health.”

“Exactly!” Nilsen replied. “And you know I can’t sleep on planes.”

“That’s right,” Kalinske said. “Well, then, why don’t we take a closer look at your schedule and see where we can cut?”

“It’s not just the travel,” Nilsen said, shaking his head. “It’s also the job itself.”

Kalinske knew that Nilsen wasn’t thrilled with the job, but he hadn’t quite realized the level of his dissatisfaction. “What is it about the job that you don’t like? Is it something specific that maybe we can fix, or just a general feeling?”

Nilsen stopped pacing and took a seat. This was a good question, one he hadn’t asked himself nearly enough. Everything had blurred together to such an extent that he’d stopped taking notice of the difference between specifics and generalizations. “Well, a lot of times,” Nilsen began, thinking back on his least favorite meetings, “most of the time, I just feel like, ‘I’ll go in,’ and then what happens is . . .” he said, then trailing off. At that moment he realized that this wasn’t about specifics or generalizations, but actually about influence. And when he played it all over in his head, he realized that he had none. “I’m like a diplomat without a country.”

“What do you mean?” Kalinske asked.

“I’m heading this group and traveling around the world, but nobody I speak with actually has to listen to me,” Nilsen said, figuring this all out as he spoke. “I’m supposed to be the head of global marketing, but when I go to Sega of Europe, I’m just an employee from SOA, and when I go to Sega of Japan, I’m just an employee of SOA. And then the worst part is that when I finally do come back here, they look at me like I’m no longer a part of SOA.”

Kalinske didn’t know what to say. This wasn’t the first conversation they’d had about Nilsen’s frustrations, but it was the first that made him think it was more than just Nilsen venting about jet lag. Still, as bad as it all sounded, he knew that Nilsen could never leave Sega. He was Sega; how could he go somewhere else? And especially now, when the company was poised to finally surpass Nintendo. “I hear what you’re saying, and I don’t disagree with any of it,” Kalinske said. “These are all extremely valid concerns, and hearing what you’re going through gives me an even deeper appreciation for everything that you’ve accomplished this past year.”

“What have I accomplished?” Nilsen asked.

Kalinske laughed, thinking this was a joke. Turned out it wasn’t. “Oh, Al, don’t get down on yourself like that. Sega is on the precipice of something big, and you’re the one holding everyone together.”

Nilsen sighed. “Maybe, but I don’t know how much more of this I can take.”

“Can you just give it a little bit more time?” Kalinske asked.

“I don’t think so,” Nilsen said, surprising both of them with that response.

“So what are you saying?” Kalinske asked.

“I don’t know,” Nilsen replied. “But it has to mean something that I haven’t told Viacom no yet, right?”

“It does,” Kalinske said. “It means you need to take a step back and figure out what’s really important to you. So while you’re doing that, why don’t I see what can be done to ease your burden?”

“All right,” Nilsen said, standing up. “Thanks for listening.”

“Always, Al,” Kalinske replied. “I mean it—always.”

Nilsen walked toward the door, but before leaving he turned around with one more question. “I just realized that in all this talk about me, I forgot to ask how you were doing. So: how are you doing?”

“Don’t worry about me,” Kalinske advised. “Things are going great.”

Although this was likely the same answer that Tom Kalinske would have given even if the sky were falling, things at Sega really were going great. The Genesis and SNES were neck and neck. Game Gear was about to catch up to Nintendo’s Game Boy. And Sega CD, Sega Channel, and development on Sonic 3 were all great examples of the company’s continued commitment to reaching the Next Level. For the time being, Sega was firing on all cylinders, but it was the future that had Kalinske concerned.

Particularly when it came to a next-generation console. After Sega and Sony had spent nearly six months trying to jointly develop 32-bit hardware, it appeared that they couldn’t come to an agreement on the system’s architecture, and the entire thing fell apart. What it boiled down to was that Sony’s Ken Kutaragi wanted to create a machine that was 100 percent dedicated to 3-D graphics, whereas Sega’s Hideki Sato wanted to build a machine that could also accommodate the typical 2-D sprite-based gaming. This didn’t make any sense to Kalinske; weren’t three dimensions undoubtedly better than two? Hadn’t Sega CD proven that players craved lifelike graphics? What was the issue here? But when Kalinske pressed for an answer, he was told that this was better because developers would have a very difficult time making games in 3-D. And when Kalinske requested more information beyond that, he was told, in a variety of ways, that he wasn’t an engineer and simply could not understand. Just like that, the future that Kalinske had envisioned was now nothing more than a what-if buried in the sands of time.

And the worst part was that Sony planned to continue with its 3-D system and enter the console market on its own, creating a whole other foe for Sega to contend with besides Nintendo. No, forget it, that wasn’t even the worst part. Not only would Sony be entering the console market on their own, but they now had the advantage of knowing exactly what Sega had up its sleeve. Wait, scratch that as well, because there was something even worse: what Sega had up its sleeve was not very good at all.

“In a word,” Joe Miller said, looking at a prototype of the system, “it’s lousy.”

“How lousy?” Kalinske asked, feeling his stomach sink.

SOJ had recently sent Shinobu Toyoda a prototype of this new 32-bit system, which they were calling the Saturn, and when it arrived he and Kalinske naturally brought it to Joe Miller, SOA’s resident tech expert.

“I can’t say for sure at this point,” Miller explained. “I mean all I’m looking at is hardware here, chips and processors, but it’s much less sophisticated than I would have expected. Whether or not it will run smoother than what Sony has planned, who knows? That will depend on a lot of factors, and good software has a proclivity for making tech problems disappear, but . . .” Instead of trying to finish the sentence, Miller just slowly shook his head.

Thank you, SOJ, Kalinske sarcastically thought over and over, and he would continue to sporadically shake his head in frustration until he realized there was still time to fix this. At the earliest, the Saturn wouldn’t launch until 1995, which meant that there was still an opportunity to salvage the situation. SOJ didn’t want to work with Sony? Fine. Then Kalinske would find someone they would be willing to work with.

As it turned out, it was Doug Glen who actually found the right match: Silicon Graphics (SGI). They were one of Silicon Valley’s top manufacturers of high-performance hardware and software, most famous for inventing those magical computer systems that Hollywood used to make its most elaborate special effects (like in Jurassic Park and Terminator 2). Apparently they had developed a revolutionary new chip that would propel the videogame industry forward, and they were looking for a partner.

“This is fantastic!” Kalinske exclaimed, giving Glen a giant mental hug. SGI had a reputation that had to be taken seriously, but not the consumer electronics track record (or the perceived arrogance) to rub Sega of Japan the wrong way.

To see if this possible match was really as good as it sounded, Kalinske went with Miller and Glen to SGI’s headquarters in Mountain View, California. There they had an incredible meeting with Jim Clark, the founder of Silicon Graphics, and Ed McCracken, the company’s president. The chipset they had developed was apparently quite something. “It’s going to be far more powerful than anything out there in the market today,” Clark proclaimed. “I guarantee it!”

“Wow,” Kalinske said. “I have to say, this all just sounds incredible.”

“The next logical step in gaming,” Miller added.

“Why don’t you show them the demo?” Glen suggested.

“You’ve already got something to show us?” Kalinske asked. “You guys sure do know how to impress a guest.”

“Just wait until you see what it can do,” Clark said as the demo started. And he was right. Kalinske was completely and utterly blown away. He hadn’t felt this way since seeing the Genesis for the first time. And boy oh boy, was it good to feel this way again.

Kalinske wasn’t the only one checking out new technologies. Tony Harman was traveling around Europe in his search for the right company to make his great game. There was so much impressive work being done at a variety of places, but Harman didn’t find what he was looking for until arriving in Leicestershire, England, where he met with a company called Rare.

Although each software company is fundamentally unique, Rare Ltd. had managed to rise above the pack and live up to the inherent boast behind their name. From corporate history to creative vision, they really were a rarity. That’s why, in the eighties, they were the only British developer chosen to ride Nintendo’s wave, and it’s also why, come the nineties, Rare had seemingly fallen off the face of the earth.

It all started with the Stamper brothers, Tim and Chris. In 1982, after years of programming games for various arcade companies, the Stampers opened their own shop and started making games for the Sinclair ZX Spectrum. From a creative perspective, developing for the Spectrum made complete sense (at the time, it was the most sophisticated, fastest-processing personal computer available in the UK), but from a business perspective it was a little bit dicey (less than a million people actually owned the computer). Nevertheless, the Stampers were committed to making the best games for the best system available, so that’s exactly what they did. And in 1983 they released their first game, Jetpac, which amazingly went on to sell more than 300,000 copies.

In a medium where players rarely gave a second thought to who made the games they played, Tim and Chris Stamper were the exception. Most of this fanfare could be attributed to consistently releasing hits (like Pssst, Tranz Am, and Cookie), but a small part stemmed from the brothers’ seemingly reclusive behavior. The Stampers rarely gave interviews, never attended developer conferences, and generally showed no interest in coming out from behind the curtain and taking a bow. Were they really as shy as this reputation made them out to be? Probably not, but it also didn’t really matter, because they were much more interested in making games than talking about making them. The Stampers believed that the quality of a game directly correlated to how much time was spent making it, which is why they famously worked eighteen-hour days, seven-day weeks, and three-hundred-and-sixty-four-day years (they took off Christmas). Given this incredible work ethic, fans anticipated great games for many years to come, but the Stampers shocked the industry in 1985 when they sold their publishing label and suddenly stopped making games.

They must have burned out, their fans rationalized. After three years (and only three days off), the Stampers must have gone just a little bit insane. That was the only logical explanation, and that theory certainly made a lot of sense, except that it was the complete opposite of what had actually happened. The Stampers weren’t burned out; no, they were actually more fired up than ever. It’s just that they were no longer lit by the Sinclair ZX Spectrum, but rather by a Japanese console called the Family Computer.

One year earlier, Tim and Chris Stamper had gotten hold of Nintendo’s 8-bit system and were immediately convinced that this represented the future of videogames. The only problem with this new interest was that, at the time, Nintendo didn’t grant licenses to developers outside of Japan. Since the Stampers were incapable of suddenly becoming Japanese, they decided to do the next best thing: reverse-engineer the console, teach themselves how to make games for this system, and then travel to Kyoto and convince Nintendo that they were worthy. They did all of this under a subdivision of their company code-named “Rare.” Not long afterward, they visited Nintendo and were not only granted a license to make games but given an unrestricted one that enabled them to release as many as they wanted. In 1987, they made two games for Nintendo, and in 1988 they made four. In 1989 that total shot up to sixteen, and by 1990, with eighteen games, they were making more than any other developer.

This much productivity and this many quality games had been enormously profitable for both companies. Naturally, Nintendo assumed this relationship would continue for many years to come, but when they launched the SNES, the Stampers appeared to have little interest in programming for Nintendo’s new 16-bit system. And similar to what had happened in 1985, the Stampers appeared to have mysteriously lost interest in the videogame market. This time they must have burned out for real, right? What other explanation could there be? But like before, there was a good explanation, and when Tony Harman learned it, he was absolutely stunned.

All he saw was about ten frames of a three-dimensional boxer, but it was enough to do the trick. The smoothness of the gaming environment, how quickly it rendered in real time—it was incredible. This was it, this was the one. But the boxer had to go. To make a great game they would need an iconic character. So they either had to start creating one from scratch or see if Miyamoto might be in a giving mood.