Playing to Wiin E-Book

Daniel Sloan

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 381

Veröffentlichungsjahr: 2010

Beschreibung

How Nintendo reclaimed its spot at the top of one of the world's most competitive industries Nintendo was once the dominant force in home video gaming--until Sony and Microsoft pummeled them with powerful new consoles. As those two giants battled each other for market share, Nintendo looked dead and buried. Then, true to its secretive, low-profile approach, Nintendo roared back into the market with its revolutionary Wii console and portable Nintendo DS system. Taking a completely different approach to gaming while embracing its creative roots, the company was back at the top of its game. But how did a struggling Japanese family company, with its origins in nineteenth-century playing cards, come to dominate a competitive, high-tech industry? Playing to Wiin details the key succession issue for Nintendo, the development of the DS and Wii consoles, and the creation of remarkable new gaming software. All these factors combined to drive Nintendo back to the top of the gaming world. * Reveals the business strategy that led Nintendo back to the top of the gaming industry amidst fierce competition from bigger rivals * An inspirational story of a stunning business turnaround and the hyper-creative minds behind it * Written by an acclaimed financial and business journalist based in Tokyo Offering a fascinating inside look at a market-leading company once left for dead, Playing to Wiin is a must-read for executives and leaders interested in one of the greatest business turnarounds in history.

Leseprobe

CONTENTS

Acknowledgments

Introduction

Chapter 1 : Leave Luck to Heaven

Origins

A New Game

Gamer Drift

Notes

Chapter 2 : The Kid

All in The Family

A New Breed

Gamecubed

Year One

Burying The Hatchet

Notes

Chapter 3 : Character Issues

Shifting Gears

Mature Content

The Father of Mario

New Growth

Monster Success

Cards to Cards

Notes

Chapter 4 : The Console Wars

Ultra-Hand

Game Boy

Famicom

Nintendo 64

When in Romania

Day of The Dolphin

Hand-to-Hand Combat

Cubed

Sega’s SAGA

King of The Hill

Notes

Chapter 5 : The Sony Shock

Father of Playstation

Transformation 60

Sir Howard

Notes

Chapter 6 : Manifest DS-Tiny

DS Impact

New Concepts

DS Lite

Creative DS-Truction

Notes

Chapter 7 : The Third Way

XBox

Losses Mount

Seat Changes

Selling 360

XBox TV

Notes

Chapter 8 : Revolution in the Streets

Game Hybrids

Core Concerns

WII Launch

For The Masses

Notes

Chapter 9 : Wiining the Day

Game Changers

Mario Returns

Sony United

Notes

Chapter 10 : Wealth and Legacy

Play Ball

A Lifeline

Public Relations

Japan’s Wealthiest

The Bottom Line

Notes

Chapter 11 : Bouts of Ennu-Wii

Unhealthy Demand

Apple

Viral Gaming

Microsoft’s Move

Price Pinch

Sony Struggles

Back to the Future

The Best Face

Notes

Chapter 12 : 3D and the Next Small Thing

Hands-Free

Two Dimensions of 3D

Glasses-Free

The Next Generation

High Definition

Notes

Epilogue

Index

Copyright © 2011 John Wiley & Sons (Asia) Pte. Ltd.

Published in 2011 by John Wiley & Sons (Asia) Pte. Ltd.

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Library of Congress Cataloging-in-Publication Data

ISBN 978-0-470-82512-9 (Hardcover)

ISBN 978-0-470-82891-5 (ePDF)

ISBN 978-0-470-82691-1 (Mobi)

ISBN 978-0-470-82693-5 (ePub)

For Hiroyuki Muramoto, who by example made others better colleagues and people.

ACKNOWLEDGMENTS

If there was a video game in which the main task was to write a book and the players could choose avatars based on professional and personal history related to the subject, I know whom I’d select. I’d be a Kyoto taxi driver—the one I met in late 2009, who detailed Nintendo’s travails over the last half-century, as well as its leaders Hiroshi Yamauchi and Satoru Iwata, as they pushed the firm and its wares beyond the former capital city to the farthest corners of the world.

When explaining the timing of Nintendo’s move to its current headquarters south of Kyoto station, the local cabbie put it in the plainest of terms for an outsider: “It was when the Seattle Mariners acquired Ichiro.”

Thankfully, he and many others—particularly journalists covering the industry—have shared directly or indirectly their passion for this company and its story. This work’s aim is to distill all into the last decade of change for the company and its main competitors, when it faced an existential crisis in leadership and product and—as befitting a card company—came up aces.

In particular, two books have been instrumental in showing how such a task should be undertaken and respected: Game Over: How Nintendo Conquered the World, by David Sheff, and The Ultimate History of Video Games, by Steven L. Kent. The numerous other articles and authors I consulted are listed in the notes for each chapter.

Playing to Wiin looks to portray changes faced by Nintendo and its industry. It focuses on the way unorthodox business decisions—by Hiroshi Yamauchi in choosing his successor, and by Satoru Iwata and others in charting 21st-century direction—returned to Nintendo, at least for a time, the mantle of the world’s greatest video game company.

The book is indebted to many who have covered and analyzed the industry, as well as to Nintendo itself through its “Iwata Asks” Web segments and appearances by Satoru Iwata and Shigeru Miyamoto at the Foreign Correspondents’ Club of Japan and other corporate events. Nintendo in no way facilitated my undertaking, which may reflect its past experiences or the still large shadow of Hiroshi Yamauchi and his penchant for corporate aloofness, for which Kyoto itself is also famous.

My deepest thanks to those at John Wiley & Sons who launched the book and led it to fruition—C.J. Hwu and Nick Wallwork, and to my friend Ken Belson, my mother Nancy Sloan, and the countless others who read early versions of the book, colleagues at Reuters who gave encouragement, and my family—Kanae, Theo, and Sera—who offered space and time to complete the job.

INTRODUCTION

By late in the 20th century, Nintendo had become a multibillion-dollar company. Since its formation as a boutique house for Kyoto artisans making playing cards, it had grown into a colossus producing the world’s most popular video games—always under the control of the Yamauchi family and nearly always linked to reasonably priced entertainment. In an industry known for volatility and brief attention spans, Nintendo was synonymous with gaming itself. It boasted a loyal following of consumers and investors alike for Mario, Zelda, and other iconic characters, including ones in its Pokemon franchise, as well as for its hardware—revolutionary handheld and monitor-linked consoles that included the Game Boy, Nintendo Entertainment System, and Super Nintendo Entertainment System.

The company, which began with the master brushstrokes and entrepreneurial genius of its 19th-century founder, Fusajiro Yamauchi, featured a stable of already legendary designers including Shigeru Miyamoto, who had pushed video games toward multidimensions and myriad purposes. Some even credited Nintendo with saving the industry on the back of its hit games in the 1980s.

However, not all was well in the “House of Mario” as its long-serving president, Hiroshi Yamauchi, neared retirement after five decades of often imperial rule without a clear successor. A number of corporate bridges had been burned as Nintendo rose to the top of the industry and other firms such as Atari withered or failed, and few would lament the Kyoto firm’s humbling as its own hardware and software businesses began to struggle in the 1990s. By late in the decade, Nintendo ceded the global sales title to upstart Sony, which had found tremendous success with its PlayStation console, while new video game entrant Microsoft, insulated with billions of IT dollars, now aimed to become a player with its Xbox.

Some viewed Nintendo’s troubles as a divine comeuppance for a company and president who had often been haughty and demanding while leading the industry. After former rival Sega abruptly decided to stop making consoles entirely after substantial losses, some corporate analysts looked at Nintendo’s two latest hardware efforts, the Nintendo 64 and GameCube consoles, and encouraged the Kyoto giant to consider the same course, safely prospering off its software and branding rights.

Neither Yamauchi nor his successor would entertain such a proposition, but the bottom line for Nintendo was that the gaming population and sales had stopped growing, while in Japan a “gamer drift” phenomenon had started. Building consoles that doubled processing power every four or five years had become untenable—yielding only minimal changes to business performance along with substantial risk and cost. Yamauchi said Nintendo would no longer play by such rules or expectations, and the company that once touted the Nintendo “difference” badly needed more adults to play as well as pay for video games. Without that, it faced a further fall to the industry’s bottom rung.

For Yamauchi, going against the business grain had been a recurring theme of his career ever since he took the helm of the family playing card firm from his grandfather at the age of 21. He purged the company of potential challengers, led its then provincial business toward international ties, including with Disney, and later tried a raft of unsuccessful ventures before migrating to the technology and potential of video games in the early 1970s. His business acumen was exceeded only by his disdain for established hierarchies, either societal or professional, and until late in his life, he eschewed recognition of the power of industry associations or of the feats that his own company had achieved as a waste of time and resources.

Many expected Yamauchi to tap son-in-law, Minoru Arakawa, to follow him, becoming only the fourth president in Nintendo’s history. However, despite launching and leading its North American operations to unprecedented returns, Arakawa was not on the same page in terms of life and corporate returns as Yamauchi. He retired with his wife, Yoko, to Hawaii—with golf, an ocean view, and few regrets—as Nintendo began to take a very unconventional comeback path.

The 74-year-old patriarch selected a relative newcomer to lead the $4 billion company: Satoru Iwata, a software maven with a Dutch-boy haircut, neither family, Kyoto born, nor Nintendo bred. The decision defied corporate tradition and sparked some financial market disappointment, as reflected in the company’s share performance, which continued to be a corporate barometer over the decade.

Iwata had been chief executive at a small start-up software maker, HAL Laboratory, which had gone from the brink of bankruptcy to become a profitable Nintendo stable firm. He joined the Kyoto company shortly before the new millennium, eventually becoming its president at 42. The age was exceptionally young for a Japanese boardroom and seen as either a reflection of his immense potential to lead or an indication of how desperate times had become.

He inherited a raft of problems beyond just trailing in the sales column: Nintendo saw its first loss in years; the GameCube was shaping up as its worst-performing hardware ever, and corporate critics claimed that Nintendo’s games were immature and would never expand substantially beyond a pre-teen market. Some analysts questioned how much freedom Yamauchi would allow the new boss to make his own difference, tagging Iwata a puppet for the older man to continue his reign from the shadows, during an apparent Kyoto semi-retirement.

However, what Yamauchi saw in Iwata proved well-rewarded, while one handover the younger man would come to relish was the next-generation handheld console, a two-screen dynamo that wound up rewriting nearly every Nintendo sales record. The success of the Nintendo DS from its launch in 2004 relied heavily on the genius of Shigeru Miyamoto and a 21st-century team of game artisans, along with renewed third-party developer ties. The games would prove among the company’s most popular ever, helping to alter the industry with Iwata’s “Blue Ocean” strategy, which involved laying nets in consumer markets where others had yet to sail.

Iwata, from the rural north of Japan, became in an unassuming way Yamauchi’s opposite, a president schooled in issues central to gamers and those developing their software and hardware for profit, while also refreshingly adept at managing others to greater achievement and corporate self-respect without relying on inspiring fear of his wrath. Moreover, he exuded public confidence but could laugh at himself, while Miyamoto and others such as new Nintendo of America boss Reggie Fils-Aime underscored that gaming was first and foremost about fun.

Nintendo’s comeback did not occur in a vacuum, and the DS handheld thrived against a new portable console from Sony, while its self-training software irrevocably widened the definition and demographics of gaming. The company redesigned the DS with different sizes and added functions while still early in the console’s business cycle. The new approach kept demand strong, as Nintendo looked to make the lifestyle product ubiquitous, resembling a smartphone in everything but the ability to make phone calls.

However, Nintendo’s bombshell in the wings helped reclaim the overall crown from Sony and the slowly charging Microsoft. The Wii and its cordless remote untethered gaming from a sedentary experience. Indeed, some games actually linked an entertainment long known for its couch-potato ways with health, or at least a greater cognizance of well-being. The “Wii Sports” and “Wii Fit” franchises debuted in an era when yoga, Pilates, and fending off “metabolic syndrome” had become widespread, while families looked for activities they could do together regardless of age or game skill sets. The slim console would go on from late 2006 to trounce Sony’s PlayStation 3 and Microsoft’s Xbox 360, as each company faced its own set of development issues and corporate intrigue, while trying to sell more expensive hardware models as a global financial crisis loomed.

Sony’s troubles escalated during the decade, forcing a change in leadership that would bring the company its first foreign CEO, while also ushering out the “Father of the PlayStation,” Ken Kutaragi. Microsoft, meanwhile, spent billions of dollars before finding a profitable niche in the industry with its online retail services, but would have to scale back its own expectations from becoming No. 1 to finding a comfortable market share, before ultimately seeing its own changing of the guard.

Playing to Wiin: Nintendo and the Video Game Industry’s Greatest Comeback is the story of a company in an existential crisis that not only found its way but regained the mantle of industry leader. With new hit products and games, as well as a new definition and demographics for the entertainment field, the Kyoto giant reached heights and wealth that all three generations of its past leadership could only have dreamed of.

CHAPTER 1

Leave Luck to Heaven

After more than a half a century as Nintendo’s president and with hundreds of billions of yen to show for it, Hiroshi Yamauchi approached retirement and the new millennium financially secure. Yet even though prosperous and a legend in his own industry after more than a half century in charge, he was in dire need of a hit product and a worthy successor to manage it.

Yamauchi had led Nintendo to a corporate pinnacle in the 1990s, yet despite the fire still raging in his words and deeds, the hour for transfer of the corporate baton was at last nearing. The imperious 74-year-old Yamauchi, only the third boss in Nintendo’s 113-year history, would—as he did with most company issues—decide when and how he would leave the headquarters of the Kyoto entertainment giant.

Yamauchi, a man who had known only one company in his entire career (and only one title—boss), had floated the idea of departure before. But he’d always stepped back from it, returning to the exacting management style that had established one of the world’s great companies and made him both loved and loathed. Nintendo had become synonymous with the game industry’s tremendous growth—from dark arcades and bars to living rooms across the world—a global business estimated around the year 2000 to be worth more than $20 billion.

As a soon-to-be-retiree, the dapper Yamauchi remained a handsome gentleman with slicked-back gray hair, tinted glasses, and a fondness for purple suits and ties. His astute leadership and blunt style included occasional outbursts at game industry competitors and suppliers, as well as at reporters covering the industry. This overt indifference to traditional Japanese business operations—and appearance—had included refusal to pick a successor at any point in his long tenure.