In 1984 the future of video games looked bleak. Home computers were becoming more and more popular, and it seemed as if video game systems were a thing of the past. Then on October 18th 1985 the Nintendo debuted in the U.S. at the FAO Schwarz Toy Store in New York City. Around that time Nintendo started making deals with other retailers to market their new system, the NES... Promising to buy back all unsold inventory in order to get retailers to take a chance on them, Nintendo was ready to release their system nationwide in February of 1986. Upon their release Nintendo offered two different bundles to choose from. One which started at $249 and came with the R.O.B. Robot, two controllers, a lightgun, and three games. (Gyromite, Duck Hunt, and Super Mario Bros.) The other package sold for $199 and came with two controllers along with the Super Mario Bros. game cartridge. The NES was a huge success and was soon outselling competing systems by a ten-to-one ratio.

Nintendo had learned from the mistakes of its predecessors, and put into effect a very strict licensing system for third-party developers. This helped prevent the over-saturation of games for the system which was also a contributing factor for the decline of the market in 1984. Nintendo was determined not to let this happen to their system. Throughout the late '80s, the NES enjoyed tremendous popularity, blowing all the other systems out of the water. Heavily controlled advertising, distribution, production, and pricing led to Nintendo's success. Eventually retailers tried to sell unlicensed games and even offer lower prices than what Nintendo had set fourth. This led to Nintendo withholding shipments to certain retailers, and began the many lawsuits which eventually led up to investigations by the Federal Trade Commission.