The Life and Times of Nintendo

[Valigarmander]

Here's a pretty sweet look at Nintendo's history, and the influence it's had on the entertainment industry. Definitely worth a read. It's an interesting chronicle.

The Life and Times of Nintendo from 1UP.com

It would be difficult to argue that Nintendo is not the most important and influential game company of all time. No matter what you think of its personalities, its business practices, or its products past and present, Nintendo has been the central player in the relatively short history of the industry. Where other game makers enjoy a single era at most in which their products or philosophy were an unqualified success, only Nintendo has had three: The domination of the 8-bit era, the worldwide phenomenon of Pokémon, and the more recent blindside victory of Wii and DS.

And yet, the company is a bundle of contradictions. It constantly reinvents itself with the times, embarking on massive shifts in strategy to capture new markets -- or stoically resists change even as the rest of the industry passes it by. It develops wild new game concepts -- but is ultraconservative about expanding its development umbrella. It occasionally fails in the sphere of public opinion and marketshare -- but still generates bigger profits than any other company.

And on occasion, it gets very, very lucky.



Humble Beginnings

Let's do some role-playing for a moment. Let's pretend you're Shigeru Miyamoto's dad.

Your 24-year-old son slacked off in college and it took him five years to graduate. He doesn't want to enter the button-down corporate Japanese world. He likes drawing. With his free time, he has been making coat hangers in the shape of cartoon animals -- you know, for kids.

You'd call in some favors, right? Call an old family friend, ask him to give your offbeat son a job? As luck would have it, said family friend was Hiroshi Yamauchi, president of Nintendo, and he hired Miyamoto even though he didn't really need him there.

It was the mid-'70s, and Nintendo was about to enter its 90th year of operations. Founded in the 19th century as a maker of playing cards, the company's previous attempts at expanding into new businesses had not worked out. But it was starting to find its footing with electronic toys and games: electronic conga drums, light guns that shot plastic targets using solar cells, candy-colored vacuum cleaners. And when arcade games like Pong and Space Invaders began to take over the country, Nintendo was there, making knockoff arcade games and Pong-style home machines.



On the cluttered radar screen of the nascent Japanese game industry, Nintendo was just one small blip. But it had just unwittingly hired the Einstein of videogames: A genius who innately understood the inner workings of a medium that had just barely been born.

As the Nintendo craze swept over the world in the mid-'80s, and journalists from outlets like Time magazine flew off to Japan to find the man behind Mario, Miyamoto would first be praised for "creating magical worlds" or some variation on that theme. This first tentative explanation for his success was that if Miyamoto's games were so head-and-shoulders above everything else, it must be because he had crafted such compelling characters, or a fascinating cartoon universe.

This was missing a large part of the answer. Yes, Miyamoto deserves a great deal of credit for pioneering the use of videogames to tell stories. But Mario's face would never have been printed on a single Trapper Keeper had the gameplay in the games he was associated with had been mundane. There was simply no language to talk about game mechanics yet, no game design departments at universities, no process by which to discuss why Mario's jump was the perfect height, speed, and distance to make a player feel, the second he pressed A, completely engrossed. And the fact that it just wasn't ready to be talked about yet, or discussed, was because outsiders couldn't yet wrap their heads around the fact that Nintendo's superlative quality came not from magic but a deliberate, repeatable process.

Miyamoto's creative genius was discovering the equivalent of E=mc2. And Yamauchi's business genius was jealously guarding that secret for as long as possible.

Development

Skim through a list of almost every videogame released in 1985, the year Super Mario Bros. debuted. How many of these game franchises are still being produced? Capcom's Commando? Konami's Twinbee, at a stretch?



The fact is that while Nintendo is often accused of "relying" on its franchises, Mario, Zelda, and the like are but a handful of exceptions to the rule: Videogame franchises have a sell-by date. If "relying" on old games was so easy, Pong would be the world's best-selling tennis game, and the Wii version of Pitfall! would have sold four million copies.

Instead, Nintendo was able to carefully nurture its hits, creating new versions with generously spaced development times, always making sure to introduce new ideas into the gameplay, making sure the old formulas never grew stale. It is an inexact process, one much easier to screw up than to get right.

The company will occasionally do what the rest of the industry does: Create a game concept before iterating on it on a regular basis, putting out straight-up sequels. Nintendo released eight Mario Party games in as many years before putting the virtual board game series on indefinite hiatus in 2007. There have been three of the Mario & Luigi role-playing games, each quite similar to the last. And of course, Nintendo subsidiary The Pokémon Company pumps out its product like there's no tomorrow.

But these are exceptions. In general, Nintendo prefers to produce one title and sell it for many years, rather than sell one new title each year. This, too, keeps its franchises valuable, in the strict monetary sense: If you know Action Game 2 is going to cost $15 next year when it is rendered obsolete by the release of Action Game 3, why not wait? Meanwhile, Super Mario Galaxy will be $50 for the foreseeable future.



What Nintendo has not done -- and it is certainly arguable whether this is a good or bad thing -- is make major inroads into development outside Japan. The company briefly flirted with this idea during the GameCube era in the early part of this decade, as competitors Sony and Microsoft were beginning to build up their stables of high-profile, triple-A game makers in Europe and America.

This was a shaky proposition for everyone, requiring a lot of money to produce games that were of uneven quality at best: For every Halo, Microsoft got five Azurik: Rise of Perathias. For the most part, Nintendo canceled the games that weren't cutting the mustard, but after released games like Eternal Darkness and Geist failed to excite consumers the way that Nintendo's homegrown games did, it pulled away from its attempts to generate realistic Western-style games.

The company does continue to work with many developers outside Japan, but on more traditional projects like Punch-Out!! and Metroid Prime. While Sony took a worldwide approach to building its PlayStation business, giving autonomy to each regional office, Nintendo tightly controls the world from its office in Kyoto.

Tech

Hiroshi Yamauchi, legend has it, was pretty cheap.

Stand atop Kyoto Station and face north. Witness the beauty of a planned city capital: Bright shiny modern buildings stand intermingled with castles and temples on a neatly-laid grid of streets. Now face south, the wrong side of the tracks: Small run-down buildings and low-income workers. And Nintendo. A bright white cube plopped down in the middle of a dull brown sea. Because the land was cheaper.

The key design philosophy of the Famicom hardware -- which would become the NES in America -- was to keep the thing under $100. Nintendo ruthlessly wrangled big discounts from chip suppliers, used older parts, did whatever it could to create hardware that could replicate the graphics of its popular arcade games but would give consumers' wallets a break.



Ever since, Nintendo has followed the path of Good Enough, in terms of the hardware in the box. It doesn't add unnecessary bells and whistles -- just hits the sweet spot in terms of what the average consumer will be okay with, striking a comfortable balance between price and performance.

Sometimes this works out perfectly, and sometimes not. The Wii's CPU and graphics chip nailed the balance. The console's paltry half-gigabyte of storage vastly undercut it, leaving Nintendo to scramble to find a kludge solution.

Coulda been worse.

The Virtual Boy was not the single biggest mistake Nintendo ever made. It is the poster boy for the company's mid-nineties hubris because it was so visible, an entire game platform that Nintendo launched with great fanfare and then scrapped, all in the course of about a year. (As stereoscopic game displays are just showing the first signs of possibly becoming mainstream during the upcoming decade, we might charitably call Virtual Boy "ahead of its time," but only in the same way that trepanation preceded neurosurgery.)



No, the Big One was not putting a CD-ROM drive into the Nintendo 64. Gamers wanted it, game developers demanded it, and the technology was cheap. But Nintendo didn't want it. For one, Miyamoto and his game development crew liked using ROM cartridges for the sorts of games they made. From the business side, Nintendo was comfortable with the model -- it manufactured everybody's ROM carts, there was little piracy, and so forth.

Who gave a damn if everyone else in the equation was lined up against Nintendo? They didn't matter, because Nintendo was the king of the game industry. Whatever Nintendo said was law, and no matter how much anyone grumbled, it's not as if they had a choice: They were going to have to play ball. Sega was self-immolating and it's not as if upstart Sony knew its way around the game business.

To put it another way, success breeds complacency. When you believe that people are going to be forced to buy whatever it is you make, you will create whatever is best for your company, not your partners or your consumers.

Unfortunately for Nintendo in 1996, this was the design philosophy of the Nintendo 64. Fortunately for Nintendo ten years later, this was also the design philosophy of PlayStation 3.

Controllers

Good Enough is the philosophy behind Nintendo's selection of computer chips, but not its creation of game controllers. It seems as if Nintendo is never comfortable within the limits of any game input device, as each new game console the company releases has a radically revised controller. And it continues to release new specialty controllers that are designed alongside individual games.

This is another double-edged sword for the company's reputation. On the one hand, it is impossible to ignore that even when its game consoles were the second or third choice in the marketplace and the company's games went largely ignored in the mainstream consciousness, Nintendo's controller innovations quickly became the gold standard. Sony and Sega copied the N64's analog joystick faster than a jackrabbit on a date. Wireless controllers were a novelty until Nintendo unveiled its Wavebird.



However, it has also released far too many controllers that are more gimmicky than revolutionary. Prior to the invention of Guitar Hero, the company most responsible for piles of unused plastic toys in grown people's apartments was Nintendo, who sold its first game system with a toy robot, turned the modest videogame light gun into a massive bazooka, crafted barrel-shaped bongo drums and most recently has sold eighteen million cheap plastic toy steering wheels.

Ironically, the company that can't stop radically changing its own controllers is responsible for the standardization of the "traditional" videogame controller. An Xbox 360 pad is just a mashup of a bunch of different Nintendo ideas: It's an NES pad with the Super Nintendo's button layout, the Nintendo 64's thumbstick, the Wavebird's RF wireless signal, and... the Dreamcast's triggers.

Phase 3: Profit

Nintendo makes money.

Even if the tables had turned and the PSP had beaten the Nintendo DS, Nintendo would have made money. Even if Wii, as investors initially predicted, had only carved out a 20% marketshare, Nintendo would have made money.



This is not to say that Nintendo never makes any product that loses money -- just that it's always calculated such that it never puts itself into a situation where it could potentially not turn an overall profit even if its experiments totally bomb. This explains a great deal of its ultraconservatism as illustrated above: Nintendo won't fund massive projects that are too big to fail. It will protect its own interests even if it means that its software partners jump ship.

Nintendo lost money once, in the first half of its 2003 fiscal year, shortly after Yamauchi handed the reins to current president Satoru Iwata. It blamed the weakening of the yen and the weakening of the GameCube. Nintendo actually made money that year, but an interim loss was embarrassing enough after half a decade of nothing but black ink.

By remaining profit-focused in an industry in which companies will routinely spend billions of dollars on risky projects in the hope that they will hit the lottery, Nintendo probably passed up numerous chances to strike it rich. But it also passed up every opportunity to lose it all.

[Valigarmander]

Reinvention

None of this matters without games. You'd think this would be obvious, but there have been many companies throughout the history of this industry in which, at least from the outside, it has seemed that quality of the software was at best a secondary concern. But Nintendo's history is fundamentally a history of big hit games: Games that created genres, excited apathetic consumers, and at crucial moments, when Nintendo needed it most even redefined the company's central image, resulting in nothing so much as a rebirth. Donkey Kong put Nintendo on the map, rescuing it from having to produce cheap knockoffs of other popular arcade games. But Nintendo didn't own Japan until Super Mario Bros. and The Legend of Zelda took gaming from arcade-style five-minute experiences to lengthy adventures played out on the living room floor for hours at a time.

Game Boy was far from the first portable game system, but it was the first to be more than a disposable novelty. It was the epitome of Good Enough hardware design: Color LCD screens already existed, but Nintendo proved to be right when it selected a cheap, low-battery monochrome screen, leaving its technologically advanced competitors in the dust for the better part of a decade before introducing a color Game Boy.



Super Mario 64 made the Nintendo 64 a bigger success than it had any right to be. Game designers struggled with the world of polygonal 3-D, creating games with janky controls and unworkable cameras until Miyamoto created not just an amazingly fun videogame but a template for how to create third-person 3-D games going forward. In case anybody was still lost on this point, Zelda: Ocarina of Time illustrated the subtle but crucial differences between 3-D action and 3-D adventure.

But a handful of superlative games couldn't keep Nintendo from sliding into irrelevance after the disappointing launch and shambling zombie half-life of Nintendo 64. What saved it was Pokémon -- the game, yes, but the massive media-mix phenomenon that followed, putting Nintendo at the center of a lucrative empire built on stuffed toys, TV animation, and trading cards.



The Pokémon fad is over, but Nintendo has nurtured the property in the decade-plus since its launch such that it remains a huge moneymaker even if Pikachu is no longer in danger of winning Time magazine's Man of the Year award. Even so, it wasn't enough to keep Nintendo going on its own, so the company had to find a new hit product that no one else had ever thought of. Wii and DS, with their intuitive, exciting new control schemes and games aimed at grown-ups, did it.

But already, storm clouds are gathering. Was Wii in fact Good Enough, or will consumers want HD sooner rather than later? When Xbox 360 and PlayStation 3 add motion controls, will that eliminate Wii's advantage? With the release of the PSPgo, does that mean trouble for the DS? well, no, but you get the point.

If history holds, Nintendo is set to reinvent itself again circa fall 2016.

[Cosmonautical]

It was a decent read, although really nothing I didn't know already. Nintendo Power has been pretty good about delivering info over the years, even if they've gone over the commercialized edge these days.