Nintendo's Lincoln (almost) retiring

On Monday - his 60th birthday - Howard Lincoln is retiring as chairman of Nintendo of America.

Not that he's moving far away from the Redmond-based giant of the electronic gaming industry. He's plunging fully into his relatively new career as chairman and chief executive of the Seattle Mariners, whose principal owner, Hiroshi Yamauchi, is chairman of Nintendo in Japan.

In baseball circles, the retirement is but a ripple involving an executive who has already been actively involved in the team's operations since last year. In the video-game industry, however, the move marks a major transformation.

In the 20 years he's been associated with the company, Nintendo has grown from a struggling game seller to a $5 billion company worldwide.

For his part, Lincoln has helped shape the video-game world to what it is today.

No replacement has been named, though Nintendo of America President Minoru Arakawa, Yamauchi's son-in-law, is running the company.

It was Arakawa, in fact, who first brought Lincoln to the company - for outside legal help - in 1980.

At the time, Nintendo of America was basically a five-man operation struggling to break into the American arcade business, and Lincoln was an attorney with the Seattle-based firm of Sax & MacIver.

Ward Sax, one of the legal firm's partners, said Lincoln was a good lawyer who showed a dogged streak when needed. "Howard helped me on several cases," says Sax. "He has the ability to be tough, but he also has the ability to go the other way."

Among Lincoln's clients was an accountant who did the books for Ron Judy and Al Stone, Nintendo of America's sales representatives. When Judy and Stone needed a contract reviewed, their accountant sent them to Lincoln for help.

Lincoln first became involved with video games in the middle of a two-year boom that began in 1979. In 1981, the peak year, Americans dropped 20 billion quarters into arcade machines; but in 1979 and 1980, relatively few of them went to Nintendo.

By contrast, other names of the period - Atari, Namco and Taito/Midway - were riding high, with now classic games such as "Missile Command," "Pac-Man" and "Space Invaders." Nintendo, on the other hand, had forgettable titles: "Space Fever," "Sheriff" and "Radarscope."

Judy and Stone had spent their personal savings and gone into debt trying to sell Nintendo's first games.

Broke and frustrated, they told Arakawa that they could no longer stay with Nintendo. He responded that a new game was coming from Japan that would be bigger than "Pac-Man" and that he would give them a contract to be its sole distributors.

Arakawa and the salesmen went to Lincoln to arrange the trademark on the game.

"Poor Ron," Lincoln recalls. "I can still see him sitting there when Mr. Arakawa said, `We have this new game and we need to get it trademarked. The name of the game is "Donkey Kong." '

"I said, `Pardon me. What was that? "Donkey Kong"? How do you spell that?' " Arcade blockbuster

Thinking that a game named "Donkey Kong" would never amount to much and not wanting to take on a new client in such desperate straits, Lincoln suggested other attorneys for the job. But Arakawa was impressed with Lincoln and persisted.

As it turned out, "Donkey Kong" was an arcade blockbuster surpassed only by "Pac-Man" in American arcades.

The next time Lincoln heard from Judy and Stone, they were millionaires.

Following on the "Donkey Kong" introduction, Lincoln's next project for Nintendo would be to help defend "Donkey Kong" against Universal Studios, which claimed the "Donkey Kong" name and storyline infringed on Universal's property. The studio, headed by its powerful president, Sid Sheinberg, had released the movie "King Kong" in 1976. A fight over `Donkey Kong'

Sheinberg's ultimate goal apparently was to receive a licensing fee for every product that bore the "Kong" label. But Lincoln sensed something in the threats and recommended that Nintendo fight the case.

"He took a hard-nosed approach to a lot of situations," says David Rosen, founder of Sega, one of Nintendo's chief competitors. "More often than not, he proved to be correct."

He was. Nintendo successfully demonstrated that Universal had no legal claim.

That led Arakawa in late 1982 to offer Lincoln a full-time job as vice president of Nintendo of America. He accepted and started the new post at the beginning of 1983.

The challenges didn't cease. Lincoln joined Nintendo at a time the game industry hit the wall. The few companies that did survive abandoned their video-game business and concentrated on personal-computer markets.

But Nintendo had a winner when it launched the Nintendo Entertainment System (NES) in the New York market around the 1985 Christmas season. Within a year, the system was a national phenomenon.

The success, however, was tempered in the social arena. Critics said the company contributed to America's trade deficit with Japan, manufactured games that distracted kids from schoolwork, and caused stress in homes. Some church groups claimed there were satanic images in certain Nintendo games.

Lincoln's response to these challenges was characteristic: take them head on. But his public-relations team persuaded him to take a softer approach.

"Howard Lincoln had a legalistic way of dealing with it, but it wasn't going to do much for us in terms of our public persona, especially at that critical juncture," says one former Nintendo spokesman. Instead of confronting protesters, Nintendo became involved in charities and earned a reputation for participating in the Seattle community.

By 1989, Nintendo dominated the by-then multibillion-dollar video-game industry. Sega controlled less than 3 percent of the console market, and former industry leader Atari still controlled another 3 percent.

Then Sega released the 16-bit Genesis, a system with twice the processing power of the NES and the ability to play good translations of arcade games. "We didn't really take Sega seriously," admits Lincoln.

More than a year would pass before Nintendo would respond with its 16-bit Super NES, giving Sega the opportunity to establish a firm hold on the market.

"For their own reasons, Nintendo was a year late going from eight-bit to 16-bit," says Rosen. "This was a great break."

Over the next four years, Nintendo went from dominating 93 percent of the overall market to controlling 48 percent of the 16-bit market.

It was during this period that video-game violence became a national issue, and Nintendo used one episode in it to best Sega in a kind of corporate image game.

Sen. Joseph Lieberman, D-Conn., launched Senate hearings to look into ways of regulating video-game violence.

Lincoln, who was by this time a senior vice president, used the hearings as a forum for wreaking a little revenge on Sega.

Sega spokesman Bill White, a former Nintendo employee, testified that while Sega's games were more violent than Nintendo's, Sega's customers were also older. Lincoln challenged this claim.

"It was terrible," says a former Sega spokesman. "First there was Lieberman, who had it out for us, then Howard who was all over us. And we'd get back from the hearings only to find out that Howard had blasted us in the press as well." An industry visionary

Shortly after the hearings, Howard Lincoln was promoted to chairman of Nintendo of America in 1994.

Sega's Rosen describes Lincoln as a "straight-talking and tough competitor, but a healthy competitor; a visionary who has been good for the industry."

Lincoln has had to rely on these qualities over the past few years as Nintendo has weathered a lot of criticism.

In 1995, as Sega and Sony prepared to launch their 32-bit, CD-ROM-based game consoles, Nintendo failed to release its long-promised Nintendo 64 cartridge-based system. Instead, it released the ill-fated Virtual Boy.

In 1996, when Nintendo 64 finally came out but with only a few games, Lincoln steadfastly defended his company again, never backing down when reporters challenged the quality of Nintendo products.

As Rare Ltd. (the game company that developed "Donkey Kong Country," "Goldeneye 007" and "Killer Instinct" for Nintendo) co-founder Joel Hochberg puts it, "My buddy Howard is capable and in control, a trained abogado (Spanish for lawyer)."

Lincoln, who has had to divide his attention between Nintendo and the Mariners, is looking forward to being able to focus on one business.

"I've been doing both jobs for a while," he says. "I'm looking forward to having just one job." Steven L. Kent is a free-lance writer in Bothell and veteran observer of video games and the electronic gaming industry.