All Your Bases Are Belong To Us: When Japan Dominated the Video Game Market

While video games may have been an American invention, the Japanese have always played a major role. In fact, not too long ago, all of the major home consoles were produced by Japanese companies, and even the top 10 games, were consistently comprised of Japanese games.
During the late 80s and all of the 90s, Japanese games dominated not only the US market, but globally as well. How did this all happen, and what has lead to its scaling back? In this article, we explore the history of the video game market when Japan rose to power.

Origins of the Japanese Video Game Market

The video game market got its start from the release of Pong in 1972 by Atari. While “Atari” is a Japanese word, the company was a US company at the time. (Atari was bought out in 2008 by the French company, Infogrames, and subsequently, the company changed its name to Atari, SA in 2009) As video games grew in popularity, Atari released its cartridge-based system, the Atari 2600 (aka Atari Video Computer System) in the late 1970s that created a huge video game craze through the early 1980s. The video game market crashed in 1983 due to sub-par quality of games, and thus ending this early generation of video games.

Over in Japan, Taito kicked things off in 1978, with its wildly popular video game, Space Invaders, which also proved to be a big hit in the US. However, not much more was heard about video games from Japan until a small playing card company decided to take a chance to enter the video game market, and became a distributor of the Magnavox Odyssey — one of the first home game consoles that played variations of Pong. This company went on to produce its own video games, and in 1984, after the video game crash in the US, came up with its own cartridge-based system, the Nintendo Famicom, which was later introduced to the US as the Nintendo Entertainment System. And this started the formal Japanese invasion of the US market for video games.

The Rise of Japan

With Atari down for the count, Nintendo dominated the US market with the introduction of the Nintendo Entertainment System (NES) in 1985. The games from the NES had the same quality as those found in video game arcades across the nation, thus, increasing its popularity. During this same time, Sega started to hit the scene with a similar platform known as “The Sega Master System”. While nowhere near the popularity of the NES, it proved to Sega that the US was a viable market for video games.

In the late 1980s, Sega was first to attack with its Sega Genesis, followed by Nintendo with the Super Nintendo Entertainment System. (SNES) While there were other Japanese consoles being sold in the US at the time such as NEC’s TurboGrafx-16 and SNK’s Neo Geo, the battle for the US market was primarily fought between Nintendo and Sega. While Japan could push the technology envelope further, it was also able to produce games that would establish rabid fan bases, whether it be games such as the Mario franchise from Nintendo, or Sonic the Hedgehog from Sega. Many of these games strayed from the arcade experience of a few minutes, to very long, interactive stories, that could take hours, or even days to play through completely.

In the early 1990s, we begin to see the US companies coming back on the scene with the introduction of the Atari Jaguar and The 3DO Company’s 3DO Interactive Multiplayer. Both machines were ahead of their time, and showed much promise, with stunning graphics, and the introduction of 3D gaming. Unfortunately, both consoles had very low sales and very few quality games, that they both folded rather quickly, and Nintendo and Sega continued to dominate.
Japan reached its height when two new game systems entered the US market: the Sega Saturn and the Sony Playstation. Both machines played even higher quality games, and brought CD-ROM based games into the mainstream. With the added capacity of CDs, the games were much more feature-rich, and Sony also gave birth to a new genre of video game with Parappa the Rapper — a rhythm-based game, where players had to hit buttons in time to music. This lead to future hit titles such as Dance! Dance! Revolution and Guitar Hero.

How Japan Started to Fall

Nintendo did eventually catch-up by releasing the Nintendo 64, but was too late to the party, and by then, Sony and Sega were already getting ready to release their next consoles, the Playstation 2 and the Dreamcast, respectively. The Dreamcast suffered dismal sales, and eventually lead to Sega disbanding its hardware business, and its exit from the console market. The Playstation 2 continued to dominate, and defeated both the Nintendo 64, and its next-generation, the GameCube. At this time, the US finally stepped up again, and the Microsoft Xbox debuted in 2001. While the Xbox did not manage to defeat the Playstation 2, it did pick up in sales, and proved that the US could still stand up in a Japanese dominated video game market.

With Sega out of the picture, Microsoft could pick up where Sega left off, and proved to be a worthy contender. In 2006, Nintendo, Microsoft, and Sony all debuted their current game consoles: Wii, Xbox 360, and Playstation 3. The Wii was revolutionary with motion-based gaming. I remember sitting in a room at the Game Developer Conference in 2006, when Nintendo CEO, Satoru Iwata introduced the Nintendo Wii. While Sony and Microsoft were showing off the graphics capabilities of their next-gen systems, Iwata-san dismissed all of this, stating that Nintendo has lost on this front, but were going back to basics, and were concentrating on making games fun again. While this is similar to how the Crosley Jukebox is making old 1950s style jukeboxes fun again, I couldn’t help but think that the once almighty Nintendo, pushed itself out as a market leader, while Sony and Microsoft kept duking it out.

The Rise of Microsoft

Today, Microsoft tends to reign supreme in the US. While the Playstation 3 is still alive and kicking, and Nintendo seems to be a distant 3rd place in sales, Microsoft has been steadily gaining game titles that were once reserved solely for play on the Playstation. Microsoft has also pushed the envelope further by providing the Xbox Kinect, which allows certain games to be controlled without a controller at all, but simply by the gamer’s physical motions.

While Japan seems to be losing ground in the console market in the US, the influence of Japanese games is still very strong in the US, as is much of Japanese pop culture. Whether it be the anime-style of games, the various genres and themes of games, or even popular titles such as Final Fantasy, Metal Gear, and Mario, Japan is definitely here to stay.

Sophie Evans is an at-home freelance writer, who is a self-confessed Starbucks junkie and huge fan of Disneyland. Similar to Beth at, she is “holding down the fort” with two kids, while living with her husband Rick in Balboa Beach, California.

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One comment on “All Your Bases Are Belong To Us: When Japan Dominated the Video Game Market

  1. Very enjoyable read Sophie!

    What you think the Xbox 720, do you think it will dominate the next gen consoles?

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