video games a passing fad, and greatly reduced or discontinued the inventory of such products. Nintendo of America's market research was met with warnings to stay away from home consoles, with US retailers refusing to stock game consoles. Meanwhile, the arcade industry also had a slump as the golden age of arcade video games came to an end, but arcades were able to recover and stabilize with the help of software conversion kit systems. Hiroshi Yamauchi realized there was still a market for video games in North America, where gamers were gradually returning to arcades in significant numbers. Yamauchi still had faith there was a market for the Famicom, so he decided to introduce it to North America through the arcade industry. Nintendo developed the VS. System with the same hardware as the Famicom, and introduced it as the successor to their Nintendo-Pak arcade system, which had been used for titles such as Donkey Kong 3 and Mario Bros. While technologically weaker than Nintendo's more powerful Punch-Out arcade hardware, the VS. System was relatively inexpensive, epitomizing Gunpei Yokoi's philosophy of "lateral thinking with withered technology." The VS. System was also able to offer a wider variety of games, due to being able to easily port over games from the Famicom. Upon release, the VS. System generated excitement in the arcade industry, receiving praise for its easy conversions, affordability, flexibility and multiplayer capabilities. The VS. System became a major success in North American arcades. Between 10,000 and 20,000 arcade units were sold in 1984, while individual Vs. titles often appeared as top-earners on the US arcade charts, such as VS. Tennis and VS. Baseball in 1984, then Duck Hunt and VS. Hogan's Alley in 1985. By 1985, 50,000 units had been sold, having established Nintendo as an industry leader in the arcades. The Vs. System went on to become the highest-grossing arcade machine of 1985 in the United States. By the time the NES launched in North America, nearly 100,000 VS. Systems had been sold to American arcades. The success of the VS. System gave Nintendo the confidence to release the Famicom in North America as a video game console, which would later be called the Nintendo Entertainment System (NES). Nintendo's strong positive reputation in the arcades generated significant interest in the NES. It also gave Nintendo the opportunity to test new games as VS. Paks in the arcades, to determine