Nintendo was never meant to be a family friendly video game company.
Previously we covered how Nintendo sold illegal playing cards to
the Yakuza, operated a taxi company and ran a love hotel.
The company has always taken risks and made bold decisions,
but how far can they go this time?
This story begins with the 3rd President of Nintendo--Hiroshi; and how his
employees stole inspiration from America, and pocketed millions of dollars.
This is part 2 of Nintendo’s race to survival.
One evening, Hiroshi met a childhood friend for dinner.
He was an executive at an electronics conglomerate who told Hiroshi about
the latest developments: semiconductors and microprocessors were becoming cheap
enough to use for entertainment products.
Hiroshi was intrigued and looked into how they were being used.
He discovered that American companies were selling video game
consoles that connected to TV sets.
He had a hunch that they could lead to Nintendo's next breakthrough product,
but he was unsure how it was possible.
Their operations weren't advanced enough to develop and manufacture
the required circuit boards.
Fortunately, one Nintendo engineer, Masayuki Uemura, came up with an
idea: teaming up with Mitsubishi.
Two years later, Nintendo launched its first video game
console: the Color TV-Game.
And just one week later, it launched a more powerful sequel.
While they brought in millions, Hiroshi’s instincts told him the
excitement would soon wear off.
So he encouraged his team to throw away their old ideas and
come up with something new.
One day, Nintendo’s janitor-turned-toymaker, Gunpei, stumbled
upon an idea in an unlikely place.
While riding a train one day, he woke up from a nap and saw a man playing
with a calculator out of boredom.
"What if there was a game small enough that an adult could play
discreetly while commuting?"
he thought to himself.
For a while, he sat on the idea until he was asked to drive Hiroshi to a meeting.
Hiroshi listened and even nodded but didn’t seem interested.
One week later, a group of executives from Sharp visited Nintendo.
They were not only there to see Hiroshi but, to Gunpei's surprise, him as well.
It turns out that at Hiroshi's meeting, he sat beside the head
of Sharp and shared Gunpei's idea.
Gunpei suggested they make a video game the size of a cardholder
that a person could hold in their lap and play with their thumbs.
The Sharp executives looked intrigued but were skeptical.
"Is it worth becoming partners to reuse technology that
had just become dirt cheap?"
they questioned.
Still, they agreed to team up with Nintendo to help build Gunpei's idea.
Three years later, Nintendo launched the Game and Watch series:
its first handheld video game console the size of calculators.
The company hoped to sell at least 100,000 units.
Instead, they sold 600,000 in the first year and couldn’t keep up
with the international demand.
As they worked on expanding the series, Hiroshi set his eyes on a
new goal: breaking into arcade games.
In the US, it became the biggest business in entertainment — above movies and TV.
Billions of dollars were pouring into coin-operated machines,
and Hiroshi wanted to cash in.
But first, he would have to put his faith in a man whom he once
struggled to cut off from his family.
The year that the Game and Watch series launched, Hiroshi’s
daughter, Yoko, visited Kyoto.
For the past few years, she had been living in Vancouver, Canada,
with her husband, Minoru Arakawa.
Like Yoko, Minoru came from a wealthy family but didn’t
depend on them financially.
After studying architecture at MIT, he became a trainee at Marubeni and worked
on real estate projects outside Japan.
Minoru was excited by all the experience he was gaining, but Yoko felt deserted.
He was away from home so much that he once walked right past her as she
waited to pick him up from the airport.
Hiroshi was furious that Yoko was being neglected and urged her to divorce him.
She considered it but changed her mind after welcoming their first child.
Their relationship improved after moving to Vancouver, where Minoru was tasked with
leading a challenging real estate project.
Over time, Hiroshi became impressed by not only Minoru’s management skills
but perseverance and dedication.
The last time he saw Minoru, he asked him to join the family
business, but Minoru refused.
Marubeni was having financial troubles and depended on him to save the company.
Fortunately, Minoru succeeded by the time he and Yoko visited Kyoto again.
Knowing this, Hiroshi insisted Minoru join the family business.
And this time, he made an offer that was difficult to refuse.
“You would be on your own.
The president of an independent subsidiary backed by my
company: Nintendo of America.”
Minoru questioned if Hiroshi was overestimating Nintendo’s potential.
But he was intrigued by the idea of starting a company in an industry he knew
nothing about and accepted his offer.
“Yoko and I were both from rich families.
We could have lived our lives without working, so money wasn’t a motivation.
When it isn’t, something else compels you.”
Minoru’s first task as Nintendo of America’s president was to
break into the arcade business.
So he and Yoko moved to New York to set up the company’s
headquarters and hire a sales team.
In the beginning, they were able to sell Nintendo’s first arcade game, Space Fever,
in bars, restaurants, and bowling alleys.
But as the industry slowed down, they struggled to sell more and warned
Minoru that Nintendo needed a new hit.
Fortunately, shipments of a new game called Radar Scope was
already on its way from Japan.
Minoru had already tested the market and saw positive results.
He was so confident that it would turn business around
that he placed a large order.
But by the time it arrived, the excitement had died down.
Radar Scope was considered old and boring, and few businesses
were interested in buying it.
Minoru had no choice but to tell Hiroshi he needed a new game quickly.
Hiroshi was furious and regretted his decision to let Minoru take over.
Neither of them would have ever imagined Radar Scope’s failure would
lead to Nintendo’s first big hit.
And it was all thanks to a designer who had never made a game before.
Shigeru Miyamoto was one of the few designers at Nintendo.
Since he was a child, he was always distracted by sketching or reading
books — so much that it took him a while to finish his industrial design degree.
When he finally did graduate, he worried about what kind of job he should take.
He had no interest in working for a traditional company and knew he
wouldn’t survive its rigid structure.
Eventually, he decided to try his luck at Nintendo.
Hiroshi wasn’t looking to hire designers and only made an exception
after seeing Shigeru’s portfolio.
But there wasn’t anything design-related that he could work
on, so he was assigned to be an apprentice in the planning department.
Three years later, Shigeru was given a new and rare opportunity when Minoru
frantically called Hiroshi for a new game.
At the time, only engineers and programmers developed games,
but all of Nintendo's were busy.
So Hiroshi had no choice but to take a chance on Shigeru.
Shigeru had never made a game before but always wondered why they didn't
draw on great stories like books and movies and decided to try himself.
Inspired by Beauty and the Beast and King Kong, he came up with a story where a man
must save his girlfriend from his pet ape.
He wanted the character to be relatable instead of heroic, so he made him
an ordinary and goofy carpenter.
The engineers could only make a simple animation, so Shigeru drew him in a way
where his movements would be noticeable.
Chubby with stocky arms and clothed in bright overalls.
Shigeru also hid the character's hair under a hat since he was
told it would be challenging to display when he moved up and down.
As for the game's title, Shigeru chose Donkey Kong since the ape
was goofy like the carpenter.
When Nintendo of America’s team heard about the game, they were shocked.
“Donkey Hong?” “Konkey Dong?
“Honkey Kong?” “The best-selling games use words like destroy or
assassinate,” they complained.
They were even more disappointed when they played and discovered there were
no battles between heroes and aliens.
One hated Donkey Kong so much that he started to look for a new job.
Hiroshi ignored warnings about the game being a failure and
instructed Minorou to release it.
While he had never played a video game in his life, something
told him that it would sell.
Minoru reluctantly agreed and started thinking of character names with his team.
For the carpenter, they chose the name of their building landlord, Mario.
And for his girlfriend, they chose the name of their warehouse
manager’s wife, Pauline.
When Donkey Kong launched, every single shipment sold and
players lined up outside to play.
It became Nintendo’s first big hit overnight and brought
in millions of dollars.
Still, Hiroshi didn’t celebrate.
In Japan, he discovered a new threat that stood in the way of Nintendo’s survival.
And no company around was willing to partner with him.
This is the end of part two of Nintendo’s story.
In the next part, the company is shunned in Japan and must claw
their way back onto the market.