The 750,000 unit buy-in is where Greiner puts most of the blame: "I think that put us in a position where we couldn't have the flexibility to stay on a marketing par with Sega or Nintendo at that time," he says. "That had the biggest effect of us losing the marketing battle." Too much money sunk into hardware left little money for promotion.
Balkcom says that the bosses' lack of game experience hurt things: "They came from electronics sales and marketing, but not from the game business… I think the company had enough resources. I just think we didn't know enough about the game business."
"They had VCR guys selling game systems and that stuff, and that's basically how the business was run. They never really took it seriously, and didn't push what they should have done, or get someone who really knew games in there in the get-go, and that's why a lot of things got chosen," Brandstetter says.
Says Balkcom: "You know, looking back, I'm sure we would all say, 'It was the games, stupid!'" The irony is that while the games were sitting there, in Japan, ready to be released, the people at NEC didn't know how to pick them: "if you know the PC Engine lineup, it makes no sense why the TurboGrafx failed," Brandstetter says.
"The biggest mistake, in my opinion, that we made, was that we did not have very many third party software companies. ... I don't know if it was NEC's idea or Hudson's idea, but we wanted to control both hardware and software," Saito says.
The TurboGrafx with CD-ROM add-on. Photo credit: Evan Amos
"If I'm looking at the TurboGrafx with the CD-ROM attachment and compare it versus the PC Engine with the CD-ROM attachment, which would you rather have?" - Rich O'Keefe
In a last-ditch effort at salvation -- and an ironic one, given the conversation Greiner had with Electronic Arts about developing for TurboGrafx -- NEC paid EA a pile of money for the John Madden license; Hudson Soft, in Japan, developed its own CD-ROM version of the game, released under the clunky title John Madden Duo CD Football.
"[A] stupid thing that we did is, we purchased the rights to sell the John Madden game from Electronic Arts, instead of asking them to publish from EA brand. Because if we had done that, they would market their games on their own, right? Then if we just buy the games and we sell it, then it's our responsibility to market the games and advertise it, and there are a lot of costs associated with that," says Saito.
"We paid a bunch of money for Madden, which was honestly stupid on our part, because EA didn't give a shit about us," Brandstetter says. "That was kind of a bad deal, but those were the kinds of deals that were made when NEC ran everything."
There aren't many warm feelings about NEC's management of the TurboGrafx to be had. "For me, the Keith Schaefer/Keith Courage thing is just a gift-wrapped package of the wrong-headed hubris that sank the TurboGrafx before it started. It's a perfect sign of everything that was wrong there from the very beginning," Ireland says.
"I would actually put it to the management of the American side of NEC at the time. And for the Japanese side to let them get away with it," O'Keefe says.
And NEC never did end up publishing that version of Madden -- though it did come out.
NEC soldiered on through 1991 with new game releases. From the outside, it looked like business as usual, even as Nintendo launched the Super Nintendo in the U.S. that August. But behind the scenes, the company began what Wirt calls "difficult negotiations" with Hudson Soft on an agreement to exit the U.S. console market.
The goal was to get away from the TurboGrafx without "disenfranchising the customers." Says Wirt, "NEC's a very honorable company," and its management didn't want to simply abandon the players who had invested in the TurboGrafx.
Wirt left NEC in the spring of 1991. "Negotiations started before I left, but it took a good long while after I left to reach a solution that was finally meaningful to both Hudson and NEC."
Unlike NEC, Hudson had profited from the TurboGrafx. "Well, the Hudson guys certainly made a ton of money off of the TurboGrafx. I don't know if anybody -- including NEC -- made as much money on the PC Engine or the TurboGrafx," O'Keefe says. As Greiner observed earlier, Hudson was paid a royalty on each console and HuCARD produced -- whether or not it sold.
The idea that took shape was to form a new company, ultimately called Turbo Technologies, to take over the business of selling the console and releasing games. Hudson would funnel its profits into running the U.S. TurboGrafx business.
"When it came time to extinguish the NEC brand, if you will, and Turbo Technologies took over, it was really a way to ease out of the relationship for NEC, and kind of have Hudson give back what they had made and try to guide the machine," Greiner says.
Turbo Technologies, Inc. -- or TTi, as it was widely known -- finally took over the TurboGrafx business in 1992. Headquartered in Los Angeles instead of the Chicago suburb that was home to NEC, it was run by Naoyuki Tsuji, a Hudson Soft staffer who moved from Japan to the U.S. to found the company.
Hudson had never been completely satisfied with how NEC was running the TurboGrafx business in the U.S. And though Hudson had a close relationship with NEC -- "Everyday, we were in contact with them. Every single day," says Greiner -- the company had mostly stayed hands-off, and acted in only an advisory role.
For example, when NEC decided to redesign the PC Engine's casing, says Greiner, "We definitely voiced our concern -- I remember that. But it wasn't our call." But dissatisfaction grew as the situation failed to improve.
Left: The original Japanese cover for Dungeon Explorer. Right: NEC's U.S. artwork.
"I'm just remembering some of the artwork I saw on those TurboGrafx-designed covers. I'm laughing because that was probably some of the worst cover art I've ever seen in my life," Greiner said. For example: "Dungeon Explorer, which was actually a Hudson game, and we howled. We were laughing so hard at that, we were like, 'You've gotta be kidding.'"
When it came to packaging, says Balkcom, "We did not have the original materials. And I think our management believed that what we marketed in the United States needed to be different."
Hudson had lost faith in NEC, and NEC wanted out. A decision was reached. "We took a look at the large losses being recorded by the TurboGrafx operations based at NEC Chicago and decided that it was being handled by people who didn't understand the software business," Tsuji says.
Sonoko Saito was also asked to move to the U.S. for TTi by Hudson management: "they were saying it's because NEC is not doing well, and we need to get involved," she says.
John Brandstetter, who joined NEC in the final days of its involvement in the TurboGrafx business, moved over to TTi, where he was put in charge of picking the games for the U.S. market thanks to experience in the coin-op business and the fact that he was familiar with and understood the system's Japanese lineup.
"I was cleaning up a bunch of titles that were left over from NEC… So my job was just to try to survey them, see if they were worthwhile and continue them and finish them, or finish them if we had to -- contractually obligated to launch them on the console -- and then pick out the new lineup," Brandstetter says.
"I seem to recall the list of titles we were expected to make for NEC got pared down quite a bit when TTi took over," says Snook, who was producer of Beyond Shadowgate, ICOM's last game for the TurboGrafx, and one of its last releases.
TTi ended up publishing the TurboGrafx CD version of John Madden, as well as a number of other games left over from the NEC era, before canceling the rest of the development deals to focus on high-quality, already completed Japanese software.
The new company put together plans to launch the TurboDuo, an all-in-one unit that played both CD-ROM games and HuCARDs that NEC started selling in Japan in 1991. TTi took over distribution of the remaining TurboGrafx hardware and software stock, and began to release new games.
TTi direct-mailed this promo on VHS to registered TurboGrafx owners to build excitement for Lords of Thunder.
NEC's marketing was aimed at kids; TTi targeted older game enthusiasts, and touted the power of its CD-ROM games. A lot of the early advertising showcased a CD-ROM shooter, Lords of Thunder, with impressive graphics and sound. TTi even sent out a VHS video tape promoting the game to registered TurboGrafx owners. It was a relaunch that focused on the system's audiovisual strengths and the quality of its existing Japanese software library, with Hudson Soft in the driver's seat.
Since Hudson Soft already knew which games were popular in Japan, it didn't take long for the TTi crew to identify opportunities. Unlike with NEC, there wasn't much confusion. "We were starting to see which games were selling well, and then software is what drives the sales of the hardware, after all. So yeah, we felt focused on what games to bring to America," says Saito.
It wasn't long before they began to run into roadblocks, however.
Brandstetter used his background in the arcade business to set about signing deals to get coin-op hits onto the system. He brokered a deal for Mortal Kombat soon after it entered arcades, which was shot down by Japanese management.
"We had the rights to do it -- not signed, but I had the verbal agreement -- but then they didn't do it because Japan said, 'Oh, Mortal Kombat couldn't be done.' And then CES came up and we saw it on Game Gear and everything and I said, 'We could have done it! You guys didn't do it!'"
He also attempted to get the existing PC Engine version of Street Fighter II released in the West, but "NEC just wasn't willing to put up the money at that point. Because they weren't seeing revenue from the TurboGrafx on the American side," Brandstetter says.
Brandstetter also reached out to SNK, whose Neo-Geo fighting games were popular in arcades, to get them onto the TurboGrafx. "I brokered that deal, because Japan couldn't broker that deal," he says.
Tsuji brought Victor Ireland in on the SNK negotiations. "Tsuji asked me to help him get King of the Monsters 2 and World Heroes ported from SNK to TurboGrafx to bring some excitement to the system, and he funneled money to us to start that, but Japan found out and flew me to Japan to shut the project down personally," Ireland says.
The irony is that the deal went through -- on the Japanese side. The LA office had even came up with the idea of releasing a HuCARD that would add more system memory for running CD-ROM games -- enough for high-powered arcade ports. It was ultimately called the Arcade Card, and came out in Japan alongside PC Engine versions of SNK's games, some time after the TurboGrafx business was finally rolled up in the West.
SNK's World Heroes 2, from Hudson Soft, for the PC Engine with Arcade Card