When in the same sentence together Brazil and videogames you know that the thing promises. Land of immeasurable beauty and even greater controversy, the relationship of the largest country in Latin America with the world of video games is one of the biggest soap operas in the industry that you can throw yourself in the face.
And what better way to approach it than with the most epic play that has ever been experienced, that of a Brazilian company that managed to troll Nintendo, deceiving Japanese and Americans, while becoming the first foreign factory in the history of the great N.
Gradiente, the Brazilian giant
Revered as one of the most iconic firms in the country, Gradient is an electronic company that manufactures televisions, sound systems, the first Brazilian DVD players and, of course, as the main protagonist of this story, also consoles and video games.
Their journey in the video game market began in the early 80s when, in a market already saturated by clone copies of the Atari 2600, they reached an agreement with the US firm to license the console and officially launch it in the country.
As you will discover below, the relationship of the Brazilian video game industry with clone consoles and piracy is part of its history, but if something can be recognized in the Gradient from that time is that they intended to try to do things right.
The years go by and the company is happy enough with Atari as to continue working together in the manufacture and launch of the Atari 7800 in Brazil, but two key events force the company to rethink its strategy.
On the one hand, there is the rival Tectoy, which with a fabulous marketing campaign is sweeping the market thanks to the distribution of the Master System of SEGA in Brazil. On the other hand, a visit to the American CES makes the faith for Atari of the directors of Gradient wobble: the NES of Nintendo aims to be the winning horse in the console war to come.
The Gradient NES
Aware that following the path of Atari they will not get anywhere, in Gradient decide to contact Nintendo to try to distribute their console on Brazilian soil, but the Japanese are not about to enter a market highly marked by piracy.
Neither short nor lazy, Brazilians are made with a couple of NES those who reverse engineer to create their own model. After succeeding in their attempt to manufacture an alternative version compatible with their televisions, the managers travel to Japan with their invention and teach the bosses of Nintendo how they have managed to create a machine capable of moving their color games on a PAL-M television.
Unfortunately for them – and luckily for the development of this story – in Nintendo they refuse to support the movement and the Brazilians return home empty-handed. Well, almost empty, because they actually have a product that moves games of NES using proprietary technology, so they don’t really need Big N to distribute it.
Said and done. They fine-tune their factories, use the carcass that was to be used to build the Atari 7800, copy the design of the controller from Megadrive, the light gun from Master System and, “early!”, Gradient already has its own NES: the Phantom System.
Manaus, capital of electronic manufacturing
Far from being left alone in the system and embracing piracy like the rest of clone consoles, Gradient went one step further to sell the games officially. It contacted the large distributors and licensees in the United States and reached an agreement to manufacture and distribute its games in Brazil with their own molds.
At this point you are probably wondering what need a North American or Japanese supercompany has to be dealing with Brazilian companies to sell their games and gadgets there, but the key is in the internal economy of the country.
Foreign distribution agreements and taxes in Brazil They were incredibly expensive, so the only way to get there was through the Manaus. A region with specific tax benefits that eliminated export taxes and, even more important, import taxes as long as companies in the area acted as assemblers.
On the theory of job creation in the area and the illegal deforestation of the Amazon that followed, there is a lot of cloth to cut, but it is a story for another day and a half. The key to what is to come is that if you wanted your electronic product in Brazil, the most advisable thing so that you do not have to inflate the prices was to go through that ring.
The legal cartwheels of the Brazilian NES
In short, we have a Phantom System that despite being a NES in fact it is not such a thing, and that it uses games of NES but that in a way they are not. Not at a legal level, of course. And that’s precisely the wall that he ran into Nintendo. They could not report anyone because they were neither selling their console without authorization nor were they doing the same with their games.
What Nintendo did not market the NES in Brazil, the console Gradient It was the original machine for legal purposes, and since the technology that made the NES possible was not patented there, Gradient curled the curl and patented the Phantom System.
The most epic script twist in this story not only guaranteed Gradient being able to continue selling his machine without problems also required Nintendo to ask permission if one day he decided to distribute his NES officially.
The only but was that, despite all the legal cartwheels of Gradient, the most mythical NES games like Super Mario Bros, The Legend of Zelda or Metroid were still out of the equation because they were Nintendo. Users of the Phantom System they had to grab onto adapters and pirated copies in order to play them. In addition, the Master System continued to sell in spades.
Gradiente’s legacy
In front of that play to Nintendo He had no choice but to twist his arm. Came to an agreement with Gradient to stop the distribution of the Phantom System, and commissioned the company to manufacture its consoles and games for distribution in Brazil and, later, also in other countries such as the United States.
Gradient became the first company outside of Japan to manufacture products of NintendoBut that also caused the need to pay for licenses to make their products more expensive, leading to less competitive prices and a red carpet for Tectoy and its alliance with SEGA.
Playtronic, the subsidiary of Gradient created for such a company, it would end up manufacturing the Brazilian SNES, NES, Game Boy, Virtual Boy and Nintendo 64, even getting involved in the translation into Portuguese of several games, but unlike what happened in the rest of the globe, no one could stop the insane advance of SEGA.
And so, born almost from nowhere and facing one of the largest companies in the industry, the Phantom System from Gradient made a niche for himself in the history of videogames, and the company that gave life to him earned our utmost respect despite being the great loser in this story.