Audio technology improved and gave consoles the ability to produce a greater variation and range of sound.
A notable innovation of this generation was the inclusion of cartridges with on-board memory and batteries to allow users to save their progress in a game, with Nintendo's The Legend of Zelda introducing the technology to the worldwide market.
[9] Sega's SG-1000, which preceded Sega's more commercially successful Master System, initially had little to distinguish itself from earlier consoles such as the ColecoVision and contemporary computers such as the MSX, although it was able to achieve advanced visual effects, including parallax scrolling in Orguss and sprite-scaling in Zoom 909.
[12] However, since Atari understood that Adam was a home computer, they postponed signing the agreement with Nintendo and asked the company to resolve the issue with rights.
[13] The problem was resolved, but during this time, the video game crash of 1983 had occurred and Atari began to lose influence in the market.
It became a major success in North American arcades, giving Nintendo the confidence to release the Famicom in North America as a video game console, for which there was growing interest due to Nintendo's positive reputation in the arcades.
[5] The company introduced a version of the Famicom in January 1985 at the Winter CES as the Nintendo Advanced Video System, short for NAVS.
[15] However, this did not happen and the console was shown again at the summer CES in June of that year, as an updated version called the Nintendo Entertainment System.
[16] The system was released in October 1985 as an experiment within New York City bounds with Super Mario Bros. game bundled.
[18] The Family Computer (commonly abbreviated the Famicom) became popular in Japan during this era, crowding out the other consoles in this generation.
The Famicom's Western counterpart, the Nintendo Entertainment System, dominated the gaming market in North America, thanks in part to its restrictive licensing agreements with developers.
[9] The popularity of the Japanese consoles grew so quickly that in 1988 Epyx stated that, in contrast to a video game-hardware industry in 1984 that the company had described as "dead", the market for Nintendo cartridges was larger than for all home-computer software.
reported that Nintendo's popularity caused most computer-game companies to have poor sales during Christmas that year, resulting in serious financial problems for some,[22] and after more than a decade making computer games, in 1989 Epyx converted completely to console cartridges.
Some examples are Super Mario Bros., Final Fantasy, The Legend of Zelda, Dragon Quest, Metroid, Mega Man, Metal Gear, Castlevania, Phantasy Star, Megami Tensei, Ninja Gaiden, and Bomberman.
[citation needed] Due to their reduced capacities, these systems typically were not labeled by their "bits" and were not marketed in competition with traditional video game consoles.
It was the first home system to feature a controller with a directional pad (designed by Gunpei Yokoi), which became an industry standard.
[66] The NES sold 1.1 million units in North America during 1986, much more than the Master System (125,000) and Atari 7800 (100,000) combined.
[68] Nintendo maintained its North American lead through 1991, when it had a market-share of 80% that year, much more than Atari (12%) and Sega (8%) combined.
[70] In Europe, competition was much tougher for the NES, which was trailing behind the Master System up until 1990, despite the former's hegemony of the North American and Japanese markets.