The Famicom Revolution
Nintendo began developing Famicom after several other videogame-related ventures; Color TV Game 6 and Color TV Game 15 were systems that played a single game with multiple variations (six and fifteen variations respectively).
Game & Watch was Nintendo's next project and it came about largely as a result of the booming electronic calculator market, and Nintendo's consideration of how it could use that existing and cheap technology for entertainment purposes.
Although these two projects were successful in their own right, they did not represent the revolutionary product that Nintendo really desired. In addition, the console market had become increasingly saturated by videogame systems from a variety of companies, including Atari, Commodore, Epoch, Bandai, Takara, Tomy, Casio and Sharp.
Hiroshi Yamauchi had two primary ideas in mind with Famicom. First and foremost, it was important that the system use interchangeable cartridges rather than built-in software; this would ensure that the machine would constantly provide new, fresh content (it would therefore have a significantly longer lifespan than Nintendo's previous home console efforts).
And secondly, Yamauchi wanted Famicom to be "so much better" than other platforms that there would be no question as to which system consumers would want to purchase. A key element was the idea that competitors should not be able to copy the system's core technology within the first year of its release.
In order to be successful, Nintendo had to avoid the key pitfall that killed Atari. Specifically, the company had to convince retailers (and consumers) that its games were not going to suffer from the same quality problems as Atari's. In addition, it had to support this promise by ensuring that there was a strong internal focus on quality rather than quantity.
This emphasis on quality also extended to licensees, who were limited to producing only a handful of games per year; Nintendo felt that if developers were only able to produce around five games per year, they would take more care with each game. Nintendo also offered to assist developers with quality control, so as to ensure that all Famicom games were as high quality as possible. As a result, sales for individual Famicom games were usually significantly higher than games on other platforms.
Nintendo's software development policies had a profound impact on the entire industry, but the design of the Famicom system itself was also different from what had come before.
Not only was Famicom unlike any of Nintendo's previous hardware ventures, it was also significantly different from competing platforms at the time. Unlike other platforms, Famicom was designed specifically for fast animation and smooth on-screen movement with as many colors as possible. Competing platforms were often designed with an "office computer mentality", in that they could produce high-quality still images and could perform complex calculations, but were not particularly well-suited to gameplay; Nintendo considered that it was important to build a game-centric machine, rather than a system with a general computing foundation.
As important as the system's technological capability was its price. Yamauchi observed that other gaming platforms at the time retailed for anywhere between $200 and $350. Nintendo's engineers were instructed to produce a system that would retail for no more than $75 - and still be superior to competitors' offerings. Famicom ended up selling for around $100 in Japan, but it was still significantly cheaper than other consoles at the time.
Despite the fact that Famicom was capable of producing sophisticated on-screen graphics, Nintendo had managed to keep the retail price low by cutting back in key areas. For example, a 16-bit processor would have been ideal, but an 8-bit processor could provide generally similar results while being significantly cheaper.
In addition, Nintendo avoided extraneous features that were not central to gameplay; keyboards, modems, computer-like disk drives and other components were discarded during the planning and development process. Instead, Yamauchi instructed his engineers to include, at very little extra cost, an expansion connector that could transmit and receive unmodified data to the CPU. The idea was that Nintendo could easily add extra components to Famicom in the future while keeping the cost of the core unit as low as possible. Additionally, Yamauchi considered it important that Famicom use cartridges rather than floppy disks; not only were floppy disks intimidating to non-computer users, but they were also incredibly easy to copy.
Once core technical details had been nailed down, it was necessary to consider more aesthetic features. Engineers and designers worked tirelessly on the system's controller and casing design.
The controller was also quite different to what had come before; Nintendo included enough buttons for a variety of gameplay options but avoided confusing consumers with too many buttons. Engineers also introduced the four-way digital pad as a replacement for the more traditional joystick, which confused some (but ended up becoming the industry standard, largely due to comfort and control accuracy).
Also, Nintendo wanted Famicom to look different. Instead of creating a computer-like outer casing, a simple red-and-white casing with rounded edges was chosen. The intention was to create a system that looked more like a toy than a sophisticated computer, thereby making it far more appealing to the mass market (particularly consumers who were not familiar with videogames or personal computers).