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Nintendo’s Godfather: Winners in Gaming 2

“I tell people that ‘entertainment is valuable when it is different from other entertainment,’ and these are Yamauchi’s words. It was Yamauchi who laid the foundation of our universal way of thinking and the foundation of Nintendo today.” — Current Nintendo president Shuntaro Furukawa

Hiroshi Yamauchi, Third President of Nintendo

Nintendo has only had three presidents since it became a gaming company. They’ve been in gaming for about 80 years, and one man sat at the helm for 60 of those 80 years. That man was Hiroshi Yamauchi, the godfather of Nintendo. He didn’t follow the typical path, but he exemplifies winning in gaming. Most of the influential figures in gaming history are passionate creators. You have the John Carmacs, the Shigeru Miyamotos, even the Vince Zampellas. Yamauchi does not fit this mold. He was not an engineer, and he knew nothing about making games. He didn’t even play video games. He preferred to play Go. He was, however, one of the biggest winners gaming has ever seen.

Yamauchi brought Nintendo into gaming. When he started, they made playing cards. He shepherded them from playing cards to the move into games all the way into the GameCube era. He led the company for almost 60 years, which blows other industry leaders out of the water. His actions often hid behind the scenes, but you can see his impact. Nintendo nearly went out of business multiple times early in his tenure, but he crafted them into one of the biggest juggernauts in gaming, and the largest gaming company in Japan. He made Nintendo what it is today.

This is the second post in the Winner’s In Gaming series. If you enjoy it, check out the first one on Phil Spencer.

He learned to deal with adversity early

Yamauchi’s young life was rough. His father left him and his mother when he was young. His mother gave him up to her parents. His grandfather, Sekiryo Kaneda, owned Nintendo. Yamauchi had a strict upbringing: he went to prep school, and then law school. He didn’t even get to finish law school. His grandfather asked him to take over Nintendo when he was only 21. This sort of upbringing sets him apart from others at his level. He didn’t have a technical education, he didn’t grow up playing games, and he didn’t have a passion for tech. He took charge of Nintendo because of his grandfather’s failing health.

Yamauchi was a hard man

Yamauchi had one condition for taking over Nintendo: his grandfather had to fire every other family member who worked there. He got his own cousin fired and took over the company. Immediately, the factory workers went on strike. Yamauchi fired them all. He even set up multiple R&D departments that directly competed against one another. He was a hard man.

These things are at odds with how we see Nintendo from the outside. They made playing cards, then toys, and finally video games. Their mascot is Mario, who always smiles. They appeal to all ages. Yet, Yamauchi set all of these things in place. He was the one who moved Nintendo into toys and into gaming, and he insisted that they be a family-friendly company.

Yamauchi had a hard upbringing, and he saw Nintendo as a business, not a passion project. In many ways, he resembles a similar figure: Walt Disney. Disney was seen as tyrannical to many, and he also insisted on his company being family-oriented. Yamauchi pushed for success first. He put the company first. In his mind, making video games was just the best way to achieve that.

There were some choices he made that people wouldn’t agree with today. He was considered a tyrant. He worked his team hard. He even set up his teams in competition with one another. He had two R&D teams competing for funding. That work environment sounds difficult, maybe even toxic. However, employees of his reported that they thought he was a good boss. He resembles Steve Jobs, Bill Gates and other tech giants. He had high expectations and saw markets well ahead of their time.

He created the NES

Photo by Jason Leung on Unsplash

Yamauchi was ahead of the curve on game consoles. Nintendo didn’t release the first gaming console, but Yamauchi’s approach was unique. He wanted something other companies couldn’t copy for at least a year, but at the same time something so cheap almost everyone could buy it. He wanted to make a console that they could sell reliably for years.

He saw the hardware as a means to an end, and that set the tone for Nintendo from their beginnings as a game company until today. His vision for the NES was to make a cheap system that was easy to program for. In a lot of ways, he resembles an early Bill Gates. He was more interested in getting Nintendo consoles with games into people’s homes than with turning a large profit on a per-console basis.

He focused on games, not hardware

Yamauchi focused on games first, setting the tone for Nintendo as a company. He personally approved every game that Nintendo released for years. He didn’t even play games, but he had a great idea of what would sell in the market. He picked out the people who would make them, too. He hired Shigeru Miyamoto. He gave Miyamoto a chance on Donkey Kong, Miyamoto’s pet project. Others saw Miyamoto as a dreamer without business sense, but Yamauchi saw the talent in him. Donkey Kong sold great, and Miyamoto would go on to create Super Mario Bros., Zelda and other greats.

Photo by Cláudio Luiz Castro on Unsplash

Yamauchi valued his developers as creators, not for their technical skills. From the book Game Over by David Sheff: “Nintendo would, Yamauchi decided, become a haven for video-game artists, for it was artists, not technicians, who made great games.” Even though he made the final decision on whether to ship a game, he still valued talent, and he trusted his team enough to have them make innovative games.

He left the company on good terms

Yamauchi held the office of president at Nintendo for 53 years, but not on purpose. He wanted to leave around 1996, but didn’t until 2002 because he failed to find a good successor. Not surprising, because he had such a close hand on the company that he approved each game. He didn’t know if the company could handle itself without him.

After that, he stayed on the board for a number of years until Satoru Iwata became the CEO. At that point, he felt the company was in good hands. He didn’t even draw a pension, despite his being worth millions, because he felt he had enough with his equity in the company. He wanted the money to be put to good use in the company. It really shows his character. He cared more about Nintendo as a company than most people would.

Yamauchi created the most dominant gaming company in the world, and he did it by his own vision. He took risks. Under his leadership, Nintendo almost went out of business many times. He presided over the rise of Nintendo, and personally picked many of the current leaders in the company. He is undoubtedly one of the greatest winners in gaming.

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