Origins and acquisition of Atari Japan (1955–1977) On June 1, 1955, Japanese businessman
Masaya Nakamura founded in Ikegami,
Tokyo. The son of a shotgun repair business owner, Nakamura proved unable to find work in his chosen profession of ship building in the struggling post-
World War II economy. Nakamura established his own company after his father's business saw success with producing
pop cork guns. Beginning with only ¥300,000 (US$12,000), Nakamura spent the money on two hand-cranked rocking horses that he installed on the roof garden of a
Matsuya department store in
Yokohama. The horses were loved by children and turned a decent profit for Nakamura, who began expanding his business to cover other smaller locations. A 1959 business reorganization renamed the company Nakamura Seisakusho Company, Ltd. Along with
Taito, Rosen Enterprises, and
Nihon Goraku Bussan, Nakamura Seisakusho became one of Japan's leading amusement companies. As the business grew in size, it used its clout to purchase amusement machines in bulk from other manufacturers at a discount, and then sell them to smaller outlets at full price. Though the manufacturing facility was largely reserved for its Disney and anime rides, Nakamura also used it to construct larger, more elaborate
electro-mechanical games. The first of these was
Torpedo Launcher (1965), a submarine warfare shooting gallery later titled
Periscope. Its other products included
Ultraman-themed
gun games and
pinball-like games branded with
Osomatsu-kun characters. The name Namco was introduced in 1971 as a brand for several of its machines. The company grew to having ten employees, which included Nakamura himself. The company also established a robotics division to produce robots for entertainment centers and festivals, such as those that distributed pamphlets, ribbon making machines, and a robot named Putan that solved pre-built mazes. In August 1973, American game company
Atari began establishing a series of divisions in Asia, one of which was named Atari Japan. Its president, Kenichi Takumi, approached Nakamura in early 1974 to have his business become the distributor of Atari games across Japan. The Atari Japan purchase was not an immediate success, in part due to the
medal game fad of the 1970s. Nakamura agreed to the proposal, and on September 1, 1978, established Namco-America in
Sunnyvale, California. As the video game industry prospered in Japan during the 1970s with the release of Taito's
Space Invaders, Namco turned its attention towards making its own video games. While its licensed Atari games were still profitable, sales were decreasing and the quality of the hardware used began deteriorating. Designed by new hire
Toru Iwatani, it is a video pinball game that incorporates elements from
Breakout and similar "block breaker" clones. Though
Gee Bee fell short of the company's sales expectations and was unable to compete with games such as
Space Invaders, it allowed Namco to gain a stronger foothold in the video game market. In 1979, Namco published its first major hit
Galaxian, one of the first video games to incorporate
RGB color graphics, score bonuses, and a
tilemap hardware model.
Galaxian is considered historically important for these innovations, and for its mechanics building off those in
Space Invaders. It was released in North America by
Midway Manufacturing, the video game division of Bally, where it became one of its best-selling games and formed a relationship between Midway and Namco.|alt=Pac-Man in his "limbed" designed The space shooter genre became ubiquitous by the end of the decade, with games such as
Galaxian and
Space Invaders becoming commonplace in Japanese amusement centers. As video games often depicted the killing of enemies and shooting of targets, the industry possessed a predominately male playerbase.
Puck Man was test-marketed in Japan on May 22, 1980 and given a wide-scale release in July.
Pac-Mans simplicity and abstract characters made it a fixture in popular culture, spawning a multi-million-selling media franchise. Namco regularly released several successful games throughout the early 1980s. It published
Galaga, the follow-up to
Galaxian, in 1981 to critical acclaim, usurping its predecessor in popularity with its fast-paced action and power-ups. 1982 saw the release of
Pole Position, a racing game that is the first to use a real racetrack (the
Fuji Speedway) and helped laydown the foundations for the racing genre. It released
Dig Dug the same year, a maze chaser that allowed players to create their own mazes. Namco's biggest post-
Pac-Man success was the vertical-scrolling shooter
Xevious in 1983, designed by new-hire
Masanobu Endō.
Xeviouss early usage of pre-rendered visuals, boss fights, and a cohesive world made it an astounding success in Japan, The game's success led to merchandise, tournament play, and the first video game soundtrack album. The same year, Namco released
Mappy, an early side-scrolling platformer, and the
Pole Position sequel
Pole Position II. Endō went on to design
The Tower of Druaga a year later, a maze game that helped establish the concept for the
action role-playing game.
Druagas design influenced games such as Nintendo's
The Legend of Zelda. 1984 also saw the release of
Pac-Land, a
Pac-Man-themed platform game that paved the way for similar games such as
Super Mario Bros., and
Gaplus, a moderately successful update to
Galaga. The success of Namco's arcade games prompted it to launch its own print publication,
Namco Community Magazine NG, to allow its fans to connect with developers.
Success with home consoles (1984–1989) In July 1983,
Nintendo released the
Family Computer, a
video game console that utilized interchangeable
cartridges to play games. The console's launch came with ports of some of Nintendo's popular arcade games, like
Donkey Kong, which at the time were considered high quality. Though Namco recognized the system's potential to allow consumers to play accurate versions of its games, the company chose to hold off on the idea after its ports for platforms such as the
Sord M5 flopped. A subsidiary named was established in 1984 to act as Namco's console game division. According to former Namco
video game music composer , "T" means "Tomorrow" and was capitalised for emphasis.
Tomorrow was derived from
EPCOT (Experimental Prototype Community of
Tomorrow). It released its first four games in September:
Galaxian,
Pac-Man,
Xevious, and
Mappy.
Xevious sold over 1.5 million copies and became the Famicom's first "
killer app". Namcot also began releasing games for the
MSX, a popular Japanese computer. By the time the
video game crash of 1983 concluded in 1985 with the release of the
Nintendo Entertainment System (NES), Atari had effectively collapsed. After enduring numerous financial difficulties and losing its control in the industry, parent
Warner Communications sold the company's personal computer and home console divisions to
Commodore International founder
Jack Tramiel, who renamed his company Tramel Technology to
Atari Corporation. Warner was left with Atari's arcade game and computer software divisions, which it renamed
Atari Games. Namco America purchased a 60% stake in Atari Games on February 4, 1985, through its AT Games subsidiary, with Warner holding the remaining 40%. Viewing the majority-acquisition as a failure, in 1987 Namco America sold 33% of its ownership stake to a group of Atari Games employees led by Nakajima. This prompted Nakajima to resign from Namco America and become president of Atari Games. He established
Tengen, a publisher that challenged Nintendo's licensing restrictions for the NES by selling several unlicensed games, which included ports of Namco arcade games. Though its selloff made Atari Games an independent entity, Namco still held a minority stake in the company and Nakamura retained his position as its board chairman until the middle of 1988. In Japan, Namco continued to see expeditious growth. It published
Pro Baseball: Family Stadium for the Famicom, which was critically acclaimed and sold over 2.5 million copies. Its sequel, ''Pro Baseball: Family Stadium '87
, sold an additional two million. It also released Sweet Land'', a popular candy-themed
prize machine. One of Namco's biggest hits from the era was the racing game
Final Lap from 1987. It is credited as the first arcade game to allow multiple machines to be connected—or "linked"—together to allow for additional players.
Final Lap was one of the most-profitable coin-operated games of the era in Japan, remaining towards the top of sales charts for the rest of the decade. Namco's continued success in arcades provided its arcade division with the revenue and resources needed to fund its research and development (R&D) departments. Its high development costs prevented it from being massed-produced. In 1988, Namco became involved in film production when it distributed the film
Mirai Ninja in theaters, with a
tie-in video game coinciding with its release. Namco also developed the
beat 'em up Splatterhouse, which attracted attention for its fixture on gore and dismemberment, and
Gator Panic, a derivative of
Whack-a-Mole that became a mainstay in Japanese arcades and entertainment centers. the company demonstrated its power through the Formula One racer
Winning Run. With an arcade cabinet that shook and swayed the player as they drove, and garnered significant attention from the press. convincing Namco to continue researching 3D video game hardware.
Expansion into other markets (1989–1994) Namco saw continued success in the consumer game market as a result of the "Famicom boom" in the late 1980s. By 1989, sales of games for the Famicom and NES accounted for 40% of its annual revenue. During the same time frame, the company's licensing contract with Nintendo expired; when Namco attempted to renew its license, Nintendo chose to revoke many of the preferential terms it originally possessed.
Electronic Gaming Monthly claimed that the system, which was nearing completion, featured hardware comparable to the then-upcoming Nintendo
Super Famicom. While the console was never released, it allowed Namco to familiarize itself with designing home video game hardware. Tadashi Manabe replaced Nakamura as president of Namco on May 2, 1990. Manabe, who had been the company's representative director since 1981, was tasked with strengthening relationships and teamwork ethics of management. Namco began distributing games in North America directly from its US office, rather than through Atari. Namco Hometek was established as the home console game division of Namco America; the latter's relations with Atari Games and Tengen made the company ineligible to become a Nintendo third-party licensee, instead relying on publishers such as
Bandai to release its games in North America. As part of the company's idea of "hyperentertainment" video games, In arcades, Namco released
Starblade, a 3D rail shooter noteworthy for its cinematic presentation. This led to Namco dominating the Japanese dedicated
arcade cabinet charts by October 1991, holding the top six positions that month with
Starblade at the top. In February 1992, Namco opened its own theme park,
Wonder Eggs, in the Futakotamagawa Time Spark area in
Setagaya, Tokyo. Described as an "urban amusement center", Wonder Eggs was the first amusement park operated by a video game company. In addition to
Galaxian3 and
The Tower of Druaga, the park featured carnival games, carousels, motion simulators, and
Fighter Camp, the first flight simulator available to the public. The park saw regularly high attendance numbers; Namco created the park out of its interest in designing a Disneyland-inspired theme park that featured the same kind of stories and characters present in its games. Wonder Eggs contributed to Namco's 34% increase in revenue by December 1992. Namco also designed smaller, indoor theme parks for its larger entertainment complexes across the country, such as Plabo Sennichimae Tempo in Osaka. Manabe instead served as the company's vice chairman until his death in 1994. The company's arcade division, in the meantime, began work on a new 3D arcade board named
System 22, capable of displaying polygonal 3D models with fully-textured graphics. Namco enlisted the help of
Evans & Sutherland, a designer of combat flight simulators for
The Pentagon, to assist in the board's development. The System 22 powered
Ridge Racer, a racing game, in 1993.
Ridge Racer usage of 3D textured polygons and
drifting made it a popular game in arcades and one of Namco's most-successful releases, and is labeled a milestone in 3D computer graphics. The company followed its success with
Tekken, a 3D fighting game, a year later. Designed by
Seiichi Ishii, the co-creator of Sega's landmark fighting game
Virtua Fighter,
Tekkens wide array of playable characters and consistent framerate helped it outperform Sega's game in popularity, and launched a
multi-million-selling franchise as a result. The company continued expanding its operations overseas, such as the acquisition of Bally's Aladdin's Castle, Inc., the owners of the Aladdin's Castle chain of mall arcades. In December, Namco acquired
Nikkatsu, Japan's oldest-surviving film studio that at the time was undergoing bankruptcy procedures. The purchase allowed Nikkatsu to utilize Namco's computer graphics hardware for its films, while Namco was able to gain a foothold in the Japanese film industry. In early 1994, Sony announced that it was developing its own video game console, the 32-bit
PlayStation. The console began as a collaboration between Nintendo and Sony to create a CD-based peripheral for the
Super Nintendo Entertainment System in 1988. Fearing that Sony would assume control of the entire project, Nintendo silently scrapped the add-on. The company began work on a conversion of
Ridge Racer, its most-popular arcade game at the time. The PlayStation was released in Japan on December 3, 1994, with
Ridge Racer as one of its first games. Sony moved 100,000 units on launch day alone; publications attributed
Ridge Racer to the PlayStation's early success, giving it an edge over its competitor, the
Sega Saturn. For a time, it was the best-selling PlayStation game in Japan. its final game was a PlayStation port of
Tekken, published in March in Japan and in November worldwide.
Tekken was designed for Namco's
System 11 arcade system board, which was based on raw PlayStation hardware; this allowed the home version to be a near-perfect rendition of its arcade counterpart.
Tekken became the first PlayStation game to sell one million copies and played a vital role in the console's mainstream success. Namco was also given the rights to produce controllers, such as the
NeGcon, which it designed with the knowledge it gained through developing its cancelled console. As a means to draw players into its video arcades, Namco's arcade game division began releasing games that featured unique and novel control styles and gameplay.
Time Crisis, a lightgun shooter noteworthy for its pedal ducking mechanic, helped set the standard for the genre as a whole, while
Prop Cycle gained notoriety for its usage of a bicycle controller the player pedaled. The
photo booth machine
Star Audition, which offered players the chance of becoming a star in the show business, became a media sensation in Japan. Namco Operations, which was renamed Namco Cybertainment in 1996, acquired the
Edison Brothers Stores arcade chain in April. Namco also introduced the Postpaid System, a centralized card payment system, as a means to combat the piracy of
IC Cards in Japanese arcades. In September 1997, Namco announced it would begin development of games for the
Nintendo 64, a console struggling to receive support from third-party developers. Namco signed a contract with Nintendo that allowed the company to produce two games for the console:
Famista 64, a version of its
Family Stadium series, and an untitled RPG for the
64DD peripheral. The RPG was never released while the 64DD went on to become a
commercial failure. In October 1998, which one publication described as being "the most stunning alliance this industry has seen in a long while", For its PlayStation-based
System 12 arcade board, Namco released the weapon-based fighting game
Soul Edge a couple years back in 1996. Its 1999 Dreamcast sequel, which features multiple graphical enhancements and new game modes, is an early instance of a console game being better than its arcade version.
Soulcalibur sold over one million units, won multiple awards, and contributed to the early success of the Dreamcast.
Financial decline and restructuring (1998–2005) Namco began experiencing decline in its consumer software sales by 1998 as a result of the
Japanese recession, which affected the demand for video games as consumers had less time to play them. Namco's arcade game
Tekken 3, launched in March 1997, had been well-received, and the console version of its arcade game
Tekken 2 also became a hit selling over three million units. The company's arcade division had similar struggles, having slumped by 21% at the end of its fiscal year ending March 1998. Namco's US subsidiary Namco Cybertainment filed for
Chapter 11 bankruptcy protection on January 29, 1998, citing reduced mall traffic, though it planned to close fewer than 50 of its 370 mall locations during the bankruptcy reorganization and even open new locations. In its 1998 annual report, Namco reported a 26.3% drop in net sales, which it partly blamed on low
consumer spending. As a means to diversify itself from its arcade and consumer game markets, Namco entered the mobile phone game market with the Namco Station, a marketplace for
i-Mode cellular devices that featured ports of its arcade games like
Pac-Man and
Galaxian. In October 1999, the company teamed up with former
Square alum
Tetsuya Takahashi to establish a development studio called
Monolith Soft, which later become an
action role-playing game developer best known for creating & developing the
Xenosaga series with Namco provided funding for the new franchise and majority-acquired the new development studio turning it as a subsidiary within Namco. It continued introducing novel concepts for arcades to help attract players, such as the Cyber Lead II, an arcade cabinet that features PlayStation and Dreamcast VMU memory card slots. Namco's financial losses worsened in the 2000s. In October 2000, the Japanese newspaper
Nihon Keizai Shimbun reported that the company projected a loss of 2.1 billion ($19.3M) for the fiscal year ending March 2001. Namco had previously hinted at this during an event with industry analysts, blaming its struggles on the depressed Japanese economy and dwindling arcade game market. The company closed its Wonder Eggs park on December 31, 2000, which by that point saw an attendance number of six million visitors, in addition to shuttering many of its video arcades that returned substandard profits. In February 2001, Namco updated its projections and reported it now expected a 6.5 billion ($56.3M) net loss and a drop in revenue by 95% for the fiscal year ending March 2001, which severely impacted the company's release schedule and corporate structure. The company's earnings forecasts were lowered to accommodate its losses, its development strategy was reorganized to focus largely on established franchises, Following its financial struggles, Namco's arcade division underwent mass reorganization.
Taiko no Tatsujin became a best-seller and created one of the company's most popular and prolific franchises. Namco's North American divisions, in the meantime, underwent reorganization and restructuring as a result of decreasing profits. Namco Hometek was stripped of its research and development divisions following Namco's disappointment in the quality of its releases. Its continuing expansion into other non-video game divisions, including
rehabilitation electronics and travel agency websites, prompted the creation of the Namco Incubation Center, which would control these businesses. The Incubation Center also hosted the Namco Digital Hollywood Game Laboratory game school, which designed the
sleeper hit Katamari Damacy (2004). Nakamura resigned as company president later in the year, being replaced with Kyushiro Takagi. Anxious about the company's continuing financial struggles, Nakamura suggested that Namco begin looking into the possibility of merging with another company. Namco first looked to
Final Fantasy developer
Square and
Dragon Quest publisher
Enix, offering to combine the three companies into one. Sega was already discussing a merge with pachinko manufacturer
Sammy Corporation; executives at Sammy were infuriated at Sega's consideration of Namco's offer. A failed attempt to overturn the merge led Namco to withdraw its offer the same day Sega announced it turned down Sammy's. Shigeichi Ishimura, the son in-law of Nakamura, succeeded Takagi as Namco president on April 1, 2005; Nakamura retained his role as the company's executive chairman. Namco also opened the Riraku no Mori, a companion to its Namja Town park that held massage parlors for visitors; Namco believed it would help make relaxation a source of entertainment.
The Idolmaster, a rhythm game that incorporated elements of life simulations, was widely successful in Japan and resulted in the creation of
a multi-million-grossing franchise.
Bandai takeover and dissolution (2005–2006) In early 2005, Namco began merger talks with Bandai, a manufacturing toy and anime production company. The two discussed a year prior about a possible business alliance after Namco collaborated with Bandai subsidiary
Banpresto to create and develop an arcade & PS2 game called
Mobile Suit Gundam: One Year War based on
Mobile Suit Gundam. The business
takeover, where Bandai acquired Namco for 175.3 billion ($1.7bn), was finalized on September 29. Kyushiro Takagi, Namco's vice chairman, was appointed chairman and director of Namco Bandai Holdings. The combined revenues of the new company were estimated to be 458 billion ($4.34bn), making Namco Bandai the third-largest Japanese game company after Nintendo and
Sega Sammy Holdings. As its parent company was preparing for a full business integration, Namco continued its normal operations, such as releasing
Ridge Racer 6 as a launch game for the newly unveiled
Xbox 360 in October and collaborating with Nintendo to produce the arcade game
Mario Kart Arcade GP. The company honored the 25th anniversary of its
Pac-Man series with
Pac-Pix, a puzzle game for the
Nintendo DS, and entered the
massively multiplayer online game market with
Tales of Eternia Online, an action role-playing game based on its
Tales franchise. ) headquarters in
Shinagawa, Tokyo|alt=Namco Bandai Games headquarters On January 4, 2006, Namco's American game developing division Namco Hometek was merged with Bandai's American consumer game division Bandai Games to create Namco Bandai Games America Inc., absorbing Namco America's subsidiaries and completing Namco and Bandai's merge in North America and was housed within Namco Hometek's former premises. Namco's console game, business program, mobile phone, and research facility divisions were merged with Bandai's console division to create a new company, Namco Bandai Games, on March 31, as Namco was effectively dissolved. The Namco name was repurposed for a new Namco Bandai subsidiary the same day, which absorbed its predecessor's amusement facility and theme park operations. Both Namco and Bandai continued working independently under the newly formed Bandai Namco Holdings until 31 March 2006, when its video game operations were merged to form Namco Bandai Games. On October 30, Namco's European video game division would merge with Bandai's European game division as well, forming Namco Bandai Games Europe S.A.S. Namco's European division was folded into Namco Bandai Networks Europe on January 1, 2007, as it was reorganized into the company's mobile game and website division. Until April 2014, Namco Bandai Games used the Namco logo on its games to represent the brand's legacy. The Namco Cybertainment division was renamed Namco Entertainment in January 2012, and to Namco USA in 2015. A division of Bandai Namco Holdings USA, Namco USA worked with chains such as
AMC Theatres to host its video arcades in their respective locations. The second Namco company was renamed Bandai Namco Amusement on April 1, 2018, following a corporate restructuring by its parent. Amusement took over the arcade game development branch of Bandai Namco Games, which renamed itself to Bandai Namco Entertainment in 2015. Namco USA was absorbed into Bandai Namco Amusement's North American branch in 2021 following its parent company's decision to exit the arcade management industry in the United States. This makes Namco Enterprises Asia and
Namco Funscape―Bandai Namco's arcade division in Europe―the last companies to use the original Namco trademark in their names. Bandai Namco Holdings and its subsidiaries continue to use the Namco name for a variety of products, including mobile phone applications, streaming programs, and
eSports-focused arcade centers in Japan. ==Legacy==