page_title: Video games in Japan
section_title: 1980s–early 2000s
hierarchical_section_title: Video games in Japan / History / 1980s–early 2000s
caption_attribution_description: The PC Engine video game console, shown with controller. Released in 1987 in Japan, this console was produced in a joint venture between the electronics company NEC and the gaming software company Hudson Soft. The PC Engine would later be brought to North America and Europe as the rebranded and redesigned TurboGrafx-16 in 1989.
context_page_description: Video gaming in Japan is a major industry. Japanese game development is often identified with the golden age of video games, including Nintendo under Shigeru Miyamoto and Hiroshi Yamauchi, Sega during the same time period, Sony Computer Entertainment when it was based in Tokyo, and other companies such as Taito, Namco, Capcom, Square Enix, Konami, NEC, and SNK, among others.
  The space is known for the catalogs of several major publishers, all of whom have competed in the video game console and video arcade markets at various points. Sega - Service Games, founded by American veterans in Japan after World War II - released Periscope in 1966, a major arcade hit in Japan, preceding several decades of success in the arcade industry there. Nintendo, a former hanafuda playing card vendor, rose to prominence during the 1980s with the release of the home video game console called the Famicom or "Family Computer", which became a major hit as the Nintendo Entertainment System or "NES" in the United States.
context_section_description: From 1980 to 1991, Nintendo produced a line of handheld electronic games called Game & Watch. Created by game designer Gunpei Yokoi, each Game & Watch features a single game to be played on an LCD screen. It was the earliest Nintendo product to gain major success.
  Konami's Scramble, released in 1981, is a side-scrolling shooter with forced scrolling. It was the first scrolling shooter to offer multiple, distinct levels. Vertical scrolling shooters emerged around the same time. Namco's Xevious, released in 1982, is frequently cited as the first vertical scrolling shooter and, although it was in fact preceded by several other games of that type, it is considered one of the most influential.
  The first platform game to use scrolling graphics was Jump Bug (1981), a simple platform-shooter game developed by Alpha Denshi.
  The North American video game industry was devastated by the 1983 video game crash, but in Japan, it was more of a surprise to developers, and typically known in Japan as the "Atari Shock". After the video game crash, analysts doubted the long-term viability of the video game industry. At the same time, following a series of arcade game successes in the early 1980s, Nintendo made plans to create a cartridge-based console called the Famicom, which is short for Family Computer. Masayuki Uemura designed the system. The console was released on July 15, 1983 as the Family Computer (or Famicom for short) alongside three ports of Nintendo's successful arcade games Donkey Kong, Donkey Kong Jr. and Popeye. The Famicom was slow to gather momentum; a bad chip set caused the initial release of the system to crash. Following a product recall and a reissue with a new motherboard, the Famicom's popularity soared, becoming the best-selling game console in Japan by the end of 1984. By 1988, industry observers stated that the NES's popularity had grown so quickly that the market for Nintendo cartridges was larger than that for all home computer software. By mid-1986, 19% (6.5 million) of Japanese households owned a Famicom; one third by mid-1988. In June 1989, Nintendo of America's vice president of marketing Peter Main, said that the Famicom was present in 37% of Japan's households. By the end of its run, over 60 million NES units had been sold throughout the world. In 1990 Nintendo surpassed Toyota as Japan's most successful corporation.
  Because the NES was released after the "video game crash" of the early 1980s, many retailers and adults regarded electronic games as a passing fad, so many believed at first that the NES would soon fade. Before the NES/Famicom, Nintendo was known as a moderately successful Japanese toy and playing card manufacturer, but the popularity of the NES/Famicom helped the company grow into an internationally recognized name almost synonymous with video games as Atari had been, and set the stage for Japanese dominance of the video game industry. With the NES, Nintendo also changed the relationship between console manufacturers and third-party software developers by restricting developers from publishing and distributing software without licensed approval. This led to higher quality software titles, which helped change the attitude of a public that had grown weary from poorly produced titles for earlier game systems. The system's hardware limitations led to design principles that still influence the development of modern video games. Many prominent game franchises originated on the NES, including Nintendo's own Super Mario Bros., The Legend of Zelda and Metroid, Capcom's Mega Man franchise, Konami's Castlevania franchise, Square's Final Fantasy, and Enix's Dragon Quest franchises.
  Following the release of the Famicom / Nintendo Entertainment System, the global video game industry began recovering, with annual sales exceeding $2.3 billion by 1988, with 70% of the market dominated by Nintendo. In 1986 Nintendo president Hiroshi Yamauchi noted that "Atari collapsed because they gave too much freedom to third-party developers and the market was swamped with rubbish games". In response, Nintendo limited the
caption: The PC Engine, released in 1987.
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