Word of Yamauchi’s death arrived while the Tokyo Game Show is in full swing, the sad news instantly sobered the upbeat atmosphere. Hiroshi Yamauchi, the Japanese businessman that transformed Nintendo who used to make business card collection to become one of the leading gaming companies in the world, died at 85 years of age. Yamauchi ran the company for over 50 years since 1949, making it one of the most successful brands of video games of the digital age.
Yamauchi was the grandson of the founder, Fusajiro Yamauchi, who founded the company in 1889. Known as “the godfather of the console,” Hiroshi Yamauchi was the most charismatic president of Nintendo for 53 years. He had led the group from 1949 to 2002 before finally Satoru Iwata took over the post.
The man who became a business card in a multinational
Yamauchi took charge of the company in 1949, when he was just 22 years old. Nintendo was founded in 1889 by his grandfather Fusajiro Yamauchi as a manufacturer of Hanafuda, traditional Japanese playing cards with pictures of flowers on their faces. Yamauchi dropped out of Waseda University to lead Nintendo.
“It would be a lie if I said I was excited about taking charge of Nintendo,” said Yamauchi in 1986, as quoted in the 2010 book A History of Nintendo. “I was young and had mixed feelings, but in front of me was a family business without heads and all employees waiting to know what would happen to them.”
Yamauchi was only the third president that Nintendo and ran the company until 2002. At the end of his tenure, the company was in good shape: sales reached 4.5 billion dollars and profits almost tripled to 1.3 billion dollars, thanks in part to the success of a new handheld video game player, Nintendo DS.
The company is responsible for multiple games and continues to have a profound influence on developers, designers, and gamers. Today, Nintendo faces strong competition from Sony and Microsoft in the console market–as well as in the mobile gaming scene–but has still held its own in a sea of cultural change.
New Ways
Though much has been made of how this man turned Nintendo into a leader and innovator in the field of video games worldwide, his influence stretches much further back. In the ’60s, Nintendo began to make toys, creating many famous products as the “Love Tester”, the first electronic product designed for women and men, intended to determine how (or how much) two people loved each other.
Hiroshi Yamauchi, according to those who knew him, had ambition to become the best-known game and toy maker and he personally oversaw the production lines. Yamauchi also gave their developers the freedom to create the best possible games.
In his years as head of the company Nintendo introduced a number of heroes like Mario and Donkey Kong, or Princess Peach further popularized portable games, long before there were smartphones or portable games.
Yamauchi also became a household name in the Pacific Northwest after he purchased the Seattle Mariners baseball team in 1992, although he allegedly had never been to a game. The business deal is argued to have opened the gates to Major League Baseball for Japanese baseball players.
The rise of Nintendo
Although the company was the leading manufacturer of Hanafuda and karuta cards, Yamauchi dreamed into something much bigger. In the 1950s, he began selling traditional western charts and reached an agreement with Disney to produce licensed cards with Mickey Mouse and other characters, which were a great success. In the 1960s it launched the entry of Nintendo in the bag and when sales of cards fell, Yamauchi embarked on several companies such as food, taxis and hotels, which lost money.
The company was facing bankruptcy after the series of failed enterprises, which led the young Yamauchi to establish a policy that avoided borrowing money.
When these failed efforts, he decided to refocus Nintendo in the gaming business with the introduction of a line of board games. When these became popular, the company expanded in electronic games in the 1970s, which was his entry into the market for video games.
The legendary Nintendo Family Computer (Famicom) home video game console, released in 1983, became the company’s first big hit game machine. Its success built Nintendo into an enterprise with excellent earnings. With popular software titles such as Super Mario Bros., the name Nintendo became globally synonymous with video games.
Yamauchi led Nintendo as advanced in the business of arcade, with hits like Donkey Kong, NES, SNES, Game Boy line, N64 and Gamecube, all transformers pieces of electronic entertainment.
“Video games are merely one type of entertainment,” Yamauchi once said. “Because they are not necessities of life, they cannot sell well unless they are really amusing.”
After the luck of the NES, Yamauchi and the company cemented their empire in 1990 by launching the second home console, the Super Nintendo (or Super NES), a formidable machine from the technological point of view. Under his guidance, Nintendo created Gameboy, Nintendo Entertainment System, Nintendo-64, and Nintendo GameCube, which are some of the most successful gaming platforms in history.
Unerring instinct
Yamauchi’s most significant bad business decision that really transformed the video game industry was to ignore the analysts, retail chains, and the recommendations from studies based on consumer groups that said no one in the U.S. wanted to keep buying video game consoles.
Yamauchi was never afraid to break new ground. The Game & Watch Mini LCD console followed in 1989. The Game Boy, Nintendo’s the cash cow for many years failed to extend cash flow in Nintendo business, following the rise of Sony PlayStation console.
Five years ago, Forbes named him as the richest man in Japan, when Nintendo was flying on the wings of a new motion sensitive controller. But since then the company has faltered with gamers who have moved more and more on smartphones and tablets. His estate was valued then at $7.8 billion, fell today to $2.1 billion.
Under pressure from cheap smartphone and tablet games and competitors with high-end consoles such as Microsoft and Sony, Nintendo’s stock is suffering with its latest videogame offering, the Wii U, putting up anemic sales. Industry analysts have faulted Nintendo for failing to adapt.
No doubt it is difficult times for Nintendo, since it has lost the figure who shaped the company for more than half a century.
Hiroshi Yamauchi transformed a run-of the-mill trading card company into an entertainment empire in video games, said Ian Livingstone, co-founder of Games Workshop and life president of games developer Eidos. He understood the social value of play, and the economic potential of electronic gaming. Most importantly, he steered Nintendo on its own course and was unconcerned by the actions of his competitors. He was a true visionary. Rest in peace.