Corporate Comebacks: Nintendo

To call the company a culture phenomenon would be a gross understatement: Nintendo (NTDOY) has left an historical footprint since entering the fray in the mid-1980s. The names it's introduced -- Mario and Luigi, Zelda and Link, Mega Man and Metroid -- are permanently embedded in the lexicon. And childhood memories? Hum the opening bars to Super Mario Bros. and watch the nostalgia wash over the listener's face.

But only in the last few years has Nintendo enjoyed the prominence it did during the heyday of its original game console. Against the better judgment of many analysts, the Nintendo Wii has become a giant seller. In March 2009, the company celebrated the popular system's fifty-millionth sale, making it the fastest-selling console in history. The Wii has already surpassed the Super Nintendo (SNES) in sales and is now within reach of becoming the company's number 1 all-time seller.

After 12 years of lagging behind, Nintendo is back on top.

Released in the US in 1985, the Nintendo Entertainment System (NES) capitalized on legions of quarter-popping arcade junkies in search of a new home entertainment system. Having already earned a rabid fan base in Japan under the name Famicom, the NES earned similar accolades in America and rescued the ailing video game market after a slew of low quality Atari and Intellivision titles.

The console remained in production until 1995 in America (2003 in Japan), and eventually sold 61.91 million units.

It wasn't until the early 90s that Nintendo began seeing real competition for the top spot. In August 1989, Sega released the 16-bit Genesis, which boasted better graphics and sound. Nintendo followed suit with their own 16-bit system -- the SNES -- in 1991, but found itself neck-and-neck with Sega.

After years of intense counter-advertising, the SNES eventually won,  selling 49 million units to Sega's 29 million.

But if the Sega Genesis proved to be a worthy opponent, the Sony (SNE) PlayStation emerged as an all-star ringer.

In 1995, Sony ushered in a new era of video games with the 32-bit PlayStation. Unlike Nintendo's earlier offerings, the PlayStation ran games off CD-ROM which allowed for more data and deeper gameplay. Nintendo countered with Nintendo 64, released in 1996, but its decision to stick with cartridge-based games proved to be the console's undoing. Costlier to produce, the cartridges dissuaded third-party developers from creating games for what they saw as an antiquated platform.

The Sony PlayStation dominated worldwide sales with 102 million units sold to the Nintendo 64's 33 million.

Nintendo's second attempt at a comeback was hampered by another curious choice: Its 2001 GameCube was formatted for mini-optical discs with a drive that couldn't read audio CDs or DVDs. With Sony's PlayStation 2 already dominating the market as a 2-in-1 gaming system/DVD player and Microsoft's (MSFT) first Xbox beginning to garner its own share of the market, the GameCube was left in third place.

Nintendo was in desperate need of reinvention. Its handheld Nintendo DS was proving to be wildly popular, but its next home video game console needed to cut a large swath.

Released at the end of 2006, the Nintendo Wii did just that. The device distanced itself from its competitors by introducing interactive play that appealed to an entirely new video game audience - namely women and people out of their thirties.

Advertisements touted group play and the (marginal) health benefits of the Wii Fit  game. Even with a weaker processor than the PlayStation 3 and Xbox 360, the Wii's family-friendly lineup and emphasis on "fun" have led to sales in excess of the other two unites combined.

Not bad for a system named after genitalia.