Atari-Nintendo Famicom Partnership

Satoru Iwata was the instigator of the purposed Atari-Nintendo partnership. He was just a mere programmer at HAL Laboratory at the time. In fact, he was new and had not programmed anything for Nintendo yet.


Howard Lincoln credits Hiroshi Yamauchi.

Though it is perfectly understandable that Howard Lincoln would not know the idea originated from a new programmer from a different company.

There were many barriers to the deal. According to some, Nintendo negotiated with an attitude of "hubris". The agreement would highly favor Nintendo, basically reducing Atari to distributor and advertiser for flat rates. No royalties for Atari. Atari would buy the games outright from Nintendo ($28 each) and then sell them as prices set by Nintendo (pretty much $1.95 per game sale for Atari, and then subtract from the $1.95, the expense of putting the game onto store shelves). Nintendo would basically be taking all the profit. But these things didn't kill the deal, Atari agreed. Perhaps the deal was their backup plan, as they were already looking at what would become the Atari 7800, in which they had a lot of confidence. But then Coleco announced they would released the Adam computer, packaged with Donkey Kong. At that time, Donkey Kong (owned by Nintendo) was licensed to Atari for all home videogame systems (not just Atari consoles). But not for home computers. Coleco thought they had the rights from Atari to sell Donkey Kong for the Adam; they probably did, according to Atari's agreement with them. But Atari didn't have the right to sell those rights. Atari when after Coleco to resolve the situation since Coleco hadn't bothered to inform Atari or Nintendo about their plans with Donkey Kong (which may not have been required by the letter of the contract, but it would have be good business practice). But these things didn't kill the deal. The CEO, Ray Kassar, the guy at Atari that was agreeing to all this, was fired. For a whole list of reasons big reasons (charges of insider trading for example), and also the Coleco Donkey Kong affair. This put the deal on the back burner for a while, but still didn't kill it. Atari by now had taken a good look at GCC's MARIA graphics chip that would become the showcase of the Atari 7800. Judging the 7800 to be far more profitable and superior to the Famicom, and the only chance of recovering from the market crash. Someone who didn't want to handle the deal was assigned to close, they relegated the Nintendo deal to someone else who apparently didn't want it. Nevertheless, Bruehl, Moone, Malloy, Lynch, Hennick, Mitoh, Henricks, Remson, and Justin from Atari were in Kyoto for various reasons and they all met with
Messers, Yamauchi, Takeda, Arakawa, Howard Lincoln, Uemura, Todori and two electrical engineers from Nintendo. The unfinished but working Nintendo AVS was demonstrated with Donkey Kong Jr. and Popeye. It was at this time Nintendo revealed there would be "2 custom chips" added to the AVS that Atari would buy to solder into the motherboards of the AVS but not allowed to know the inner workings of (presumably these were lockout chips). Also, Atari agreed they would never know the inner workings of the CPU and PPU of the AVS. Atari continued to agree to all this, presumably, because they would have exclusive rights to Famicom distribution, as many units as they asked for (yup, "unlimited"), world-wide (everywhere except Japan) guaranteed for 4 years with the option to renew every 4 years. But in the end, Atari decided to go all-in with the 7800 and nixed the deal.


Try moving that many sprites around an NES screen. Possible, but not that easy.


The Nintendo AVS and accessories.