The NES was known as the "Famicom" in Japan, short for "Family Computer".
But why was it given an English name in Japan, given (I assume) most people wouldn't know what the words "Family Computer" meant? Why did they not give it a name in Japanese?
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But why was it given an English name in Japan
Foreign Branding is a common marketing strategy to give a product a more distinguished name. Think 'Häagen-Dazs', a fantasy name with some Nordic 'flair' created in the US by a Polish Immigrant), or like French named 'Au Bon Pain' can be found in many US malls, but not anywhere in Europe.
given (I assume) most people wouldn't know what the words "Family Computer" meant?
Well, no need to do so, as it was repeated in all marketing material:
The sub title 'ファミリーコンピュータ' reads literally 'Family Computer'(*1), so people would be able to pronounce it when using the name even without any knowledge in English.
A name is just a name, there is no need to 'understand' the name. Or do you understand the word 'horse' beyond it naming for a kind of equid?
*1 - Well, transcription is more like 'Fu-a-mi-ri-ko-n-pi-yu-ta', pronounced like 'Famirikonpyuta'
There are several interviews with Masayuki Uemura (the creator of the familiy computer) online that contain a section about the name “family computer”. Many publications seem to be copied from each other, making it hard to find a definitive source. The following is taken from soranews24 dated April 2013:
The name “Family Computer” was chosen by Uemura himself. At that time Nintendo had its developers choose the name of its products rather than the marketing department. He often would hear the terms “personal computer” or “home computer” but liked the idea of a “family computer” and could envision a family gathered in the living room playing his machine together. Although the shortened “Famicom” came about organically in Japan, Uemura had been ahead of the trend thanks to some sage-like advice from his wife.
“When I told my wife about the name Family Computer she said ‘Why not just call it Famicom? Everyone’s just going to shorten it to Famicom anyway.’ I thought she had a good idea so I took it to my boss. He rejected it saying ‘Famicom? That makes no sense.’ (laughs)”
Japanese, as with most other human languages, has a lot of loanwords from foreign languages, such as パン (pan) from the Portugese pão, (in turn from Latin panum) meaning bread, and コンテスト (contesuto) from the English word "contest."
Both ファミリー (famirii) and コンピューター (compyuutaa) were words well known to Japanese people in the '80s, the former from at least 1973 when ファミリーマート (famirii maato, FamilyMart), a ubiquitous chain of convenience stores, was established, and the latter for obvious reasons. These words are no less familiar to Japanese people than "futon" or "sushi" are to you.
So just as you would not consider a shop named "Futon Bazaar" to be named in a foreign language, the Japanese see ファミリーコンピューター (famirii compyuutaa) as a Japanese phrase.
The shortening to ファミコン (famicom) is not something Nintendo did (due to a trademark issue), but it is a natural and organic shortening of the phrase to four mora that is extremely common in Japan, particularly (but far from exclusively) for phrases consisting of two loanwords. (The resulting words are called 短縮形 (tanshukukei, "contracted form") or 略称 (ryakushou, "abbreviation").) So:
and many, many others.
Oh, and let's not forget my favourite my favourite user group and Telegram channel here in Japan: