History of the Nintendo Entertainment System
In the late 80s, Nintendo's dominance was threatened by newer, technologically superior consoles. 1987, NEC and Hudson Soft released the PC Engine, and a year later, Sega released the 16 bit Mega Drive. Both were introduced in North America in 1989, where they were respectively marketed as the "TurboGrafx-16" and the "Genesis." Facing new competition from the PC Engine in Japan, and the Genesis in North America, Nintendo's market share began to erode. Nintendo responded in the form of the Super Famicom ("Super Nintendo Entertainment System" in North America and Europe), the Famicom's 16-bit successor, in 1990. Although Nintendo announced their intention to continue to support the Famicom alongside their newer console, the success of the newer offering began to draw even more gamers and developers from the original NES, whose decline accelerated. However, Nintendo did continue support of the NES for about three years after the September 1991 release of the Super NES, with the NES's final first-party games being "" and "Wario's Woods".
Video game crash of 1983
Nintendo reserved a large part of NES game revenue for itself by limiting most third-party publishers to only five games per year on its systems (some companies tried to get around this by creating additional company labels like Konami's Ultra Games label); Nintendo would ultimately drop this rule by 1993 with the release of the Super Nintendo Entertainment System. It also required all cartridges to be manufactured by Nintendo, and to be paid for in full before they were manufactured. Cartridges could not be returned to Nintendo, so publishers assumed all the financial risk of selling all units ordered. As a result, some publishers lost more money due to distress sales of remaining inventory at the end of the NES era than they ever earned in profits from sales of the games.