Now, in the late 1980s to the early 1990s, there was something interesting going on in the Japanese computer market. NEC was releasing two different computers at the time - the PC-88XX for the home market, and the newer and faster PC-98XX series for the business market. At the same time, Sharp released its X68000 - a computer which had the processing power as fast as normal arcade machines at the time with excellent sound (PC-98XX lacked any sound support). Fujitsu released its FM-TOWNS series, which shocked the industry with being the first computer with standard internal CD-ROM drive.
One would assume that the PC-98XX, which lacked the "specials" that Sharp and Fujitsu had would be the loser in the computer race. However, NEC's PC-98XX series was clearing leading the path as it dominated the computer market in Japan.
Why? At the front, people were saying "softwares such as Ichitaro (A Japanese word processor) and Lotus 1-2-3 that I use at work are easy to install and use it at home too." The reality was "there are tons of ero-games for the PC-98XX!" and "I can spend four times as much and get the more powerful X68000, or I can settle for less and get the PC-98XX to play tons of ero-games!!"
The PC-98XX's picture quality was 16-bit, 4096 colors, with a screen resolution of 640 x 400 pixels. While this was not enough to put in normal pictures, it was good enough to display anime-type drawings at a pretty good quality. But then, you may say "The Sharp X68000 and the Fujitsu's FM-TOWNS series were able to handle over 30,000 colors - weren't those displays better to show even higher quality anime pictures?" Ah, touche. Yes, 30,000 colors would look better - except that at that time - games were still played on a thing called "a floppy disk" and only few pictures were be able to stored into a such a high/double density formatted floppy disk. And sure, the FM-TOWNS had the CD-ROM drive, but it was very slow (single speed), and there was no internal hard drive back then (the thought of installing software from a CD-ROM to your hard drive was not considered yet).
So the PC-98XX established itself as the computer standard for...ero-games. Ero-games back then were what it said: "an erotic game." Much of the software out there were simple no-brainer & no-story plotlines where you just rape a girl that pops up on the screen. It was good while it sold, but eventually people became exhausted in spending over 8800 yen for something that had mindless sex after sex with a plotline along the lines of a "bad 1980s American porno."
Hence, ASCII took a bold step with its "Chaos Angel" - an RPG ero-game. It's success lead to several softhouses such as Elf releasing "Dragon Knight" series, and AliceSoft's "Rance" series.
Yet, ero-games were still porno games. A postive light is that at least a good story and plot was introduced into a mindless ramble of "just having sex." But still, "to be an ero-game, it is obvious to have sex scenes" still stood. You still had weak sex/pick-up lines where "the main character goes around and fucks girls everywhere he sees, setting up his own harlem world. Even when an enemy female character comes along, he takes her as captive and rapes her. All the girls that meets the main character falls in love with him instantaneously."
Softhouses still clinged on to the idea that "who gives a crap about plot lines - ero-games sells because it has sex scenes!" However, consumers were once again getting bored of repetitive and boring ideas with cheap and somewhat obtrusive plot such as "the girl will die if she doesn't have sex, etc. etc."
I mean, c'mon after playing two or three of the same type of games with everything that is out there practically the same thing, do you want to spend another 8800 yen for something that is going to be as similar to what you just played?
Just when consumer frustration was mounting, Elf released what was to be the most successful ero-game at the time:
The biggest thing that pulled in consumers was the amount of freedom this game had. You were able to control the main character and move freely among the [two] towns.
What was (and was probably Elf's risk and gamble) appalling was the idea "the main character does not need to fuck every girl he sees."
Elf did some thinking here.
Being an ero-game, these games needed to have sex in them
But sacrificing sex scenes in order to develop a detailed and interesting plot line will also get complaints from consumers: "why can't I have sex with this character? yada yada)
Yet, if we were to listen to all of their arguments and have the main character go around having sex with every girl he sees, then its the same thing as the other dozens or so games that are already out there.
Why not have stories for each different female character, so that the player (consumer) can go after which girl he likes - and if he wants to, can play it again and go after a different girl next time?
The Simulation RPG genre was born.
What the consumers felt by playing this revolutionary game:
There is no "easy sex" here - the player actually had to make the correct choices to make the girl you like to like you as well.
You get the motivation that "Yes! I'm one step closer to getting laid" by going on dates, etc. etc.
And the reward that you get after going through the hardships, you are rewarded with a sex scene.
Elf also went one step further by "how to make the pictures look as if it has many different colors when we can only use 16 colors?" I don't know the proper English word for it, but Elf's patented "dithering" management in combining different colors over another per pixel to "make-believe" that many colors exist was practically an art on its own.