Codenamed "Project Reality", the Nintendo 64 design was mostly complete by mid-1995, but its launch was delayed until 1996, when Time named it Machine of the Year. It was launched with three games: Super Mario 64 and Pilotwings 64 (worldwide) and Saikyō Habu Shōgi (exclusive to Japan). As part of the fifth generation of gaming, the system competed primarily with the Sony PlayStation and the Sega Saturn. The suggested retail price at its United States launch was US$199.99, and 32.93 million units were sold worldwide. In 2015, IGN named it the ninth-greatest video game console of all time.
Around the end of the 1980s, Nintendo led the video game industry with its Nintendo Entertainment System (NES). Although the NES follow-up console, the Super NES (SNES), was successful, sales took a hit from the Japanese recession. Competition from long-time rival Sega, and relative newcomer Sony, emphasized Nintendo's need to develop a successor for the SNES, or risk losing market dominance to its competitors. Further complicating matters, Nintendo also faced a backlash from third-party developers unhappy with Nintendo's strict licensing policies.
Development
Silicon Graphics, Inc. (SGI), a long-time leader in graphics visualization and supercomputing, was interested in expanding its business by adapting its technology into the higher volume realm of consumer products, starting with the video game market. Based upon its MIPS R4000 family of supercomputing and workstation CPUs, SGI developed a CPU requiring a fraction of the resources—consuming only 0.5 watts of power instead of 1.5 to 2 watts, with an estimated target price of US$40 instead of US$80–200. The company created a design proposal for a video game system, seeking an already well established partner in that market. Jim Clark, founder of SGI, initially offered the proposal to Tom Kalinske, who was the CEO of Sega of America. The next candidate would be Nintendo.
The historical details of these preliminary negotiations were controversial between the two competing suitors. Tom Kalinske said that he and Joe Miller of Sega of America were "quite impressed" with SGI's prototype, inviting their hardware team to travel from Japan to meet with SGI. The engineers from Sega Enterprises claimed that their evaluation of the early prototype had uncovered several unresolved hardware issues and deficiencies. Those were subsequently resolved, but Sega had already decided against SGI's design. Nintendo resisted that summary conclusion, arguing that the real reason for SGI's ultimate choice of partner is that Nintendo was a more appealing business partner than Sega. While Sega demanded exclusive rights to the chip, Nintendo was willing to license the technology on a non-exclusive basis. Michael Slater, publisher of Microprocessor Report said, "The mere fact of a business relationship there is significant because of Nintendo's phenomenal ability to drive volume. If it works at all, it could bring MIPS to levels of volume [SGI] never dreamed of".
Jim Clark met with Nintendo CEO Hiroshi Yamauchi in early 1993, thus initiating Project Reality. On August 23, 1993, the two companies announced a global joint development and licensing agreement surrounding Project Reality, projecting that the yet unnamed eventual product would be "developed specifically for Nintendo, will be unveiled in arcades in 1994, and will be available for home use by late 1995 ... below $250". This announcement coincided with Nintendo's August 1993 Shoshinkai trade show.
"Reality Immersion Technology" is the name SGI had given the set of core componentry, which would be first utilized in Project Reality: the MIPS R4300i CPU, the MIPS Reality Coprocessor, and the embedded software. Some chip technology and manufacturing was provided by NEC, Toshiba, and Sharp. SGI had recently acquired MIPS Computer Systems (renamed to MIPS Technologies), and the two worked together to be ultimately responsible for the design of the Reality Immersion Technology chips under engineering director Jim Foran and chief hardware architect Tim Van Hook.
The initial Project Reality game development platform was developed and sold by SGI in the form of its US$100,000–US$250,000 Onyx supercomputer loaded with the namesake US$50,000 RealityEngine2 graphics boards and four 150 MHz R4400 CPUs, and with early Project Reality application and emulation APIs based upon Performer and OpenGL. This graphics supercomputing platform had served as the source design which SGI had reduced down to become the Reality Immersion Technology for Project Reality.
The system's game controller was a Super NES controller modified to have a primitive analog joystick and Z trigger. Under maximal secrecy even from the rest of the company, a LucasArts developer said his team would "furtively hide the prototype controller in a cardboard box while we used it. In answer to the inevitable questions about what we were doing, we replied jokingly that it was a new type of controller—a bowl of liquid that absorbed your thoughts through your fingertips. Of course, you had to think in Japanese..."
On June 23, 1994, Nintendo announced the new official name of the still unfinished console as "Ultra 64". The first group of elite developers selected by Nintendo was nicknamed the "Dream Team": Silicon Graphics, Inc.; Alias Research, Inc.; Software Creations; Rambus, Inc.; MultiGen, Inc.; Rare, Ltd. and Rare Coin-It Toys & Games, Inc.; WMS Industries, Inc.; Acclaim Entertainment, Inc.; Williams Entertainment, Inc.; Paradigm Simulation, Inc.; Spectrum Holobyte; DMA Design Ltd.; Angel Studios; Ocean; Time Warner Interactive; and Mindscape.
By purchasing and developing upon Project Reality's graphics supercomputing platform, Nintendo and its Dream Team could begin prototyping their games according to SGI's estimated console performance profile, prior to the finalization of the console hardware specifications. When the Ultra 64 hardware was finalized, that supercomputer-based prototyping platform was later supplanted by a much cheaper and fully accurate console simulation board to be hosted within a low-end SGI Indy workstation in July 1995. SGI's early performance estimates based upon its supercomputing platform were ultimately reported to have been fairly accurate to the final Ultra 64 product, allowing LucasArts developers to port their Star Wars game prototype to console reference hardware in only three days.
The console's design was publicly revealed for the first time in late Q2 1994. Images of the console displayed the Nintendo Ultra 64 logo and a ROM cartridge, but no controller. This prototype console's form factor would be retained by the product when it eventually launched. Having initially indicated the possibility of utilizing the increasingly popular CD-ROM if the medium's endemic performance problems were solved, the company now announced a much faster but space-limited cartridge-based system, which prompted open analysis by the gaming press. The system was frequently marketed as the world's first 64-bit gaming system, often stating the console was more powerful than the first moon landing computers. Atari had already claimed to have made the first 64-bit game console with their Atari Jaguar, but the Jaguar only uses a general 64-bit architecture in conjunction with two 32-bit RISC processors and a 16/32-bit Motorola 68000.
Further information on Nintendo's storage strategies: Nintendo 64 Game Pak and 64DD
Later in Q2 1994, Nintendo signed a licensing agreement with Midway's parent company which enabled Midway to develop and market arcade games and formed a joint venture company called "Williams/Nintendo" to market Nintendo-exclusive home conversions of these games. The result is two arcade games, Killer Instinct and Cruis'n USA, which boasted their upcoming debut on the arcade branch of the Nintendo Ultra 64 platform. Completely unrelated to Project Reality's console-based branch of Ultra 64, the arcade branch uses a different MIPS CPU, has no Reality Coprocessor, and uses onboard ROM chips and a hard drive instead of a cartridge. Killer Instinct features 3D character artwork pre-rendered into 2D form, and CG movie backgrounds that are streamed off the hard drive and animated as the characters move horizontally.
Previously, the plan had been to release the console with the name "Ultra Famicom" in Japan and "Nintendo Ultra 64" in other markets. Rumors circulated attributing the name change to the possibility of legal action by Konami's ownership of the Ultra Games trademark. Nintendo said that trademark issues were not a factor, and the sole reason for any name change was to establish a single worldwide brand and logo for the console. The new global name "Nintendo 64" was proposed by Earthbound series developer Shigesato Itoi. The prefix for the model numbering scheme for hardware and software across the Nintendo 64 platform is "NUS-", a reference to the console's original name of "Nintendo Ultra Sixty-four".
Announcement
The newly renamed Nintendo 64 console was fully unveiled to the public in playable form on November 24, 1995, at Nintendo's 7th Annual Shoshinkai trade show. Eager for a preview, "hordes of Japanese schoolkids huddled in the cold outside ... the electricity of anticipation clearly rippling through their ranks". Photos of the event were disseminated online by Game Zero magazine two days later. Official coverage by Nintendo followed later via the Nintendo Power website and print magazine.
The console was originally slated for release by Christmas of 1995. In May 1995, Nintendo delayed the release to April 1996. Consumers anticipating a Nintendo release the following year at a lower price than the competition reportedly reduced the sales of competing Sega and Sony consoles during the important Christmas shopping season. Electronic Gaming Monthly editor Ed Semrad even suggested that Nintendo may have announced the April 1996 release date with this end in mind, knowing in advance that the system would not be ready by that date.
In its explanation of the delay, Nintendo claimed it needed more time for Nintendo 64 software to mature, and for third-party developers to produce games. Adrian Sfarti, a former engineer for SGI, attributed the delay to hardware problems; he claimed that the chips underperformed in testing and were being redesigned. In 1996, the Nintendo 64's software development kit was completely redesigned as the Windows-based Partner-N64 system, by Kyoto Microcomputer, Co. Ltd. of Japan.
The Nintendo 64's release date was later delayed again, to June 23, 1996. Nintendo said the reason for this latest delay, and in particular the cancellation of plans to release the console in all markets worldwide simultaneously, was that the company's marketing studies now indicated that they would not be able to manufacture enough units to meet demand by April 1996, potentially angering retailers in the same way Sega had done with its surprise early launch of the Saturn in North America and Europe.
To counteract the possibility that gamers would grow impatient with the wait for the Nintendo 64 and purchase one of the several competing consoles already on the market, Nintendo ran ads for the system well in advance of its announced release dates, with slogans like "Wait for it..." and "Is it worth the wait? Only if you want the best!"
Release
Popular Electronics called the launch a "much hyped, long-anticipated moment". Several months before the launch, GamePro reported that many gamers, including a large percentage of their own editorial staff, were already saying they favored the Nintendo 64 over the Saturn and PlayStation.
The console was first released in Japan on June 23, 1996. Though the initial shipment of 300,000 units sold out on the first day, Nintendo successfully avoided a repeat of the Super Famicom launch day pandemonium, in part by using a wider retail network which included convenience stores. The remaining 200,000 units of the first production run shipped on June 26 and 30, with almost all of them reserved ahead of time. In the months between the Japanese and North American launches, the Nintendo 64 saw brisk sales on the American grey market, with import stores charging as much as $699 plus shipping for the system. The Nintendo 64 was first sold in North America on September 26, 1996, though having been advertised for the 29th. It was launched with just two games in the United States, Pilotwings 64 and Super Mario 64; Cruis'n USA was pulled from the lineup less than a month before launch because it did not meet Nintendo's quality standards. In 1994, prior to the launch, Nintendo of America chairman Howard Lincoln emphasized the quality of first-party games, saying "... we're convinced that a few great games at launch are more important than great games mixed in with a lot of dogs". The PAL version of the console was released in Europe on March 1, 1997. According to Nintendo of America representatives, Nintendo had been planning a simultaneous launch in Japan, North America, and Europe, but market studies indicated that worldwide demand for the system far exceeded the number of units they could have ready by launch, potentially leading to consumer and retailer frustration.
Originally intended to be priced at US$250, the console was ultimately launched at US$199.99 to make it competitive with Sony and Sega offerings, as both the Saturn and PlayStation had been lowered to $199.99 earlier that summer. Nintendo priced the console as an impulse purchase, a strategy from the toy industry. The price of the console in the United States was further reduced in August 1998.
Further information: Nintendo 64 § Sales
Promotion
The Nintendo 64's North American launch was backed with a $54 million marketing campaign by Leo Burnett Worldwide (meaning over $100 in marketing per North American unit that had been manufactured up to this point). While the competing Saturn and PlayStation both set teenagers and adults as their target audience, the Nintendo 64's target audience was pre-teens.
To boost sales during the slow post-Christmas season, Nintendo and General Mills worked together on a promotional campaign that appeared in early 1999. The advertisement by Saatchi and Saatchi, New York began on January 25 and encouraged children to buy Fruit by the Foot snacks for tips to help them with their Nintendo 64 games. Ninety different tips were available, with three variations of thirty tips each.
Nintendo advertised its Funtastic Series of peripherals with a $10 million print and television campaign from February 28 to April 30, 2000. Leo Burnett Worldwide was in charge again.
