Happy 25th Birthday to the Nintendo Entertainment System!

If you've fired up an Xbox 360, a PS3, or a Nintendo Wii for an evening of digital fun recently, you owe much of the opportunity to the gaming machine that set the standard for every console to come: the original Nintendo Entertainment System. The very first NES consoles hit stores in the U.S. 25 years ago today. And as any child of the 80s knows, within a couple of years, they were ubiquitous. But as Wired reports, the system was very nearly a flop:

Twenty-five years ago today, the American videogame market was in shambles. Sales of game machines by Atari, Mattel and Coleco had risen to dizzying heights, then collapsed even more quickly.

Retailers didn't want to listen to the little startup Nintendo of America talk about how its Japanese parent company had a huge hit with the Famicom (the 1983 Asian release of what became NES). In America, videogames were dead, dead, dead. Personal computers were the future, and anything that just played games but couldn't do your taxes was hopelessly backwards.

But Nintendo President Hiroshi Yamauchi, whose grandfather had started Nintendo as a playing-card company almost a century earlier, believed strongly in the quality of the NES. So he told his American executives to launch it in the most difficult market: New York City. If they could make it there, Yamauchi thought, they could make it anywhere.

They couldn't make it there. Retailers wouldn't take the NES. So Nintendo of America head Minoru Arakawa, Yamauchi's son-in-law, took a huge gamble that he didn't share with the president. He told stores that Nintendo would provide them with product and set up all the displays, and they only had to pay for the ones that sold and could return everything else. For the stores, it was a no-risk proposition, and a few agreed to sell NES.

Even then, the initial roll out didn't exactly lead to a new high score. Nintendo only sold 50,000 consoles—about half their units. But they pushed forward with the NES anyway, quickly adding to the number of cities in which you could purchase the device and then going national. Eventually, the console sold more than 61 million units before giving way to newer, more powerful gaming systems like the Super NES and the Sega Genesis—systems that, in turn, paved the way for the ultra-powerful consoles we have now.

Today, according to the Entertainment Software Association, an estimated 42 percent of American households have game consoles. And for the last half decade or so, the gaming industry (as a whole) has done even better business than the big-screen box office, and top games setting entertainment-industry sales records. Meanwhile, Nintendo's flagship games have become cultural touchstones for a whole generation. (If you didn't grok why Scott Pilgrim collected power-ups and coins after defeating his enemies in Scott Pilgrim vs. the World, it's probably because you didn't spend enough time playing the greatest NES game of all time, Super Mario Bros.)

It's a great business success story. It's also a great cultural success story. While it would be easy to over-interpret such things, I think the success of console gaming, which in some ways flips the traditional author-viewer relationship by putting the player in charge, reveals something about what the American public increasingly wants from its entertainment: individual choice, control, and digitally-enhanced free play—as well, maybe, as a shot at infinite lives (if you can get it).

Much more from Reason on video games here.