The ascension of Nintendo was one of the great triumphs of entertainment marketing. In just five years the Japanese company transformed a moribund U.S. video-game market into a $4 billion industry and created a video character, Mario, whose popularity rivals that of Mickey Mouse. But fads are subject to the law of gravity. Even as it was announcing record earnings for 1990, the world's largest computer-game maker confirmed last week what retailers have been saying for months: the Nintendo market has gone into a spin.
Shipments of Nintendo's basic game-playing unit, which peaked at 9 million in 1989, dropped to 7.2 million last year and could fall to 4.5 million or fewer in 1991, according to figures released at the Winter Consumer Electronics Show. Nintendo is counting on its hand-held Game Boy and a more powerful machine due out later this year to take up the slack. But this time Nintendo is playing catch-up to rival products from Sega and NEC. And analysts say none of the new devices have what it takes to make another Super Mario.