Nintendo’s Centennial Game Empire: Fighting All Temptations with “Fun”

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Source: University of Chaos (ID: hundun-university)
Nintendo is one of the miracles of only 0.00045% of the world’s businesses that can survive 100 years – it remains a formidable rival to giants and still has a deadly appeal to young people.
“There is only one wall between heaven and hell in our industry.”
——@ Yamauchi Pu Nintendo’s fourth president
It’s hard to imagine a company as old as 130 being so popular.
| The Queen of England loves Prince William’s Nintendo Game Player.
Mario, Piccaccio and Zelda are all here! This became the most exciting news in China’s game industry at the end of July, when Tencent announced that it would join Nintendo in China Joy, and everyone was looking forward to the chemical reaction of the world’s two major game giants in the Chinese market.
The Japanese game company, which started as a workshop, is ushering in its N th spring.
The game machine Switch, released in 2017, overwhelmed the iPhone X and the Dajiang UAV, and was ranked No. 1 in the Top Ten Products of the Year by Time magazine. It also helped Nintendo overcome its three consecutive years of loss.
Even more surprising is its influence in the hearts of young people, whether after the 70s, 80s or 90s, Nintendo always seems to find its own followers. Nintendo ranks sixth among the most popular brands, according to a survey of Millennials (people born in 1984-1995) by MBLM, a research institute.
| TOP 10, the most popular brand of the American Millennium Generation in 2018
Even in China, where policy restrictions are impossible to access, its classic IP pet elves and Super Mario are popular.
In Nintendo, some people want to know why it always launches subversive products, how it builds popular IP worldwide, and how it builds great creative teams…
But perhaps a more fundamental question is, do companies have souls? “Soul” – Can it be a company’s strategy?
In terms of influence, it’s hard to find a company better suited to answer this question than Nintendo.
| The Nintendo Home Game Wii was Obama’s first home appliance in the White House
Renaissance Nintendo:
Why Stand Up from the nth Failure
Living is a miracle. The Second Curve writes that with the change of technological environment, the life span of enterprises has been shortened to 14 years. In Size, West points out that the probability of becoming a 100-year-old firm is only 4.5 parts per million.
Nintendo, 130, is not only alive, but also very well.——
Founded on September 23, 1889, the Japanese company started with the production of Huazao, a kind of game poker. After several changes, it entered the game industry in the late 1970s and became a video game company.
Nintendo’s total revenue reached 76.4 billion yuan and its net income reached 12.3 billion yuan in the latest financial report for the whole year of 2018. Throughout the year, it sold 16.95 million consoles (12.7% more than the previous one) and 18.55 million games (86.7% more than the previous one).
If compared with the Chinese market, this transcript is second only to Tencent’s game business.
Never assume that Nintendo is a myth that does not lag behind. Before the release of the next generation of Switch, no one thought it could achieve another sales miracle in 2019.——
It has gone through three years of cyclical recession and loss, and people even compared it with Nokia, Blackberry and other declining giants, suggesting that Nintendo stop releasing new game console products.
Nevertheless, every time people think it will enter the palace of history, Nintendo can regain the market with a subversive product.
Sony, Microsoft, Apple and Google have all “beaten” it.
This is an industry that is always in violent fluctuation. It is based on the rapid technological change.
From arcade machines, game consoles, game handsets, PC-side games, mobile games, every subversive technology may bring earth-shaking changes to the business model of the industry, but also bring new players.
As a game company, Nintendo’s rivals have always been the most ambitious technology giants. Among them, Sony and Microsoft, which entered the market in 1994 and 2001 respectively, are their old rivals.
In 2018, Sony ranked 2nd, Microsoft 3rd and Nintendo 9th among the top 10 game companies in the world.
The competition between Nintendo and Sony began in 1994. After the Japanese appliance giant entered the market, its game consoles PS and PS2 quickly defeated Nintendo with amazing video and audio performance, bringing Nintendo a decade of decline.
As a company competing for players’attention, its competitors are not just in the game market. In 2008, the launch of Apple Store service on the iPhone represented another major trend in the game industry: the hand-to-hand market.
Easy download, high-performance hardware, and a large number of high-quality third-party games were all key elements of Nintendo’s rise. Apple’s Apple Store has almost the same advantages, but there’s one more thing: mobile phones are a necessity, while game consoles are not.
From 2012 to 2018, Nintendo’s share of the global game market dropped from 45% to 25%.
Although no game console has ever been launched, the rise of Apple has brought Nintendo a new round of stock price decline as a product that can also bring joy to users.
“There is only one wall between heaven and hell in our industry.” Yamamoto, the fourth CEO who led Nintendo to become a pioneer and founder of video games, described it this way.
_Every time we can rise with subversive products
Creating subversive game consoles is Nintendo’s killer weapon.

In 1983, Nintendo introduced the first generation of home game console NES (Red and White), which established its position in the game industry. At its peak, 30% of American households had NES.
In 2004, the game console NDS, a subversive design with dual screens and touch screens, helped Nintendo end a decade-long decline suppressed by Sony.
In 2017, Switch, which combines the functions of handset and host, came out, breaking through the long-term impact of mobile games once again and achieving counter-trend growth. In 2019, Switch has been ranked the top seller in all major game markets.
In addition to the best-selling hardware, self-developed games are also one of Nintendo’s biggest soft power. For example, “Super Mario”, “Pocket Monster” and “Legend of Zelda” series are Nintendo’s IP. By contrast, Microsoft and Sony are more like the creators of the platform’s ecosystem.
Blue Sea Strategy:
Not flexible, not against vulnerability, not to catch up with the forefront
Faced with the impact of one cross-border technology giant after another, Nintendo has never been left behind. It is neither a flexible strategy, multi-industry investment against risk, nor a technology to catch up with the forefront.
On the contrary, Nintendo’s strategy has hardly changed in more than a decade.
_The opponents are not Microsoft and Sony, but the harmful game theory.
The story begins in 2002 with Iwada Cong, the youngest president in Nintendo’s history.
As soon as he takes office, the programmer-born president is facing domestic and foreign difficulties: Nintendo is a Shannei family business started by a workshop. Although he was appointed because of the trust of Shannei Pu, the former president, who served in Nintendo for only two years, is a typical airborne soldier with insufficient internal trust.
The environment is also very unfavorable. Since Sony released the first generation of PS family game consoles in 1994, Nintendo has been pulled down from the throne of the industry, and its market share has been continuously eroded.
Sony was born in the period of rapid development of semiconductor technology. 3D technology and larger storage space make more complex games possible. Sony, Microsoft and other game makers have launched a technological arms race.
Sony’s PS2 is out of stock in the market. Nintendo has failed to catch up with Sony’s two high-tech, high-quality game consoles one by one. The whole company is wondering how to catch up with Sony and Microsoft.
Iwada sees another side of the arms race: the market is changing.
He believes that the popularity of Sony consoles is not normal. The popularity of PS2 is not because of the charm of game consoles, but because people use it as a cheap DVD. Otherwise, it’s impossible to explain why PS2’s sales are so hot that the sales of game software on it have been declining.
Iwata concludes that people are moving away from games.
In the global economic downturn, people are leaving less and less time for entertainment, adults have no time to relax when they come home from work, and children’s play time after school is strictly limited.
“We’ve been thinking about why some people don’t want to play our games no matter how wonderful they are. How can we make more people interested in games?
If people no longer like games, what’s the point of competing with Microsoft and Sony in the Red Sea? Paradise in the trough turned decisively and focused on a bigger market – the strategy of expanding the gamer team: to find those who no longer love games and never play them, so that they can feel the charm of the game again.
_Motherhood
Video games are often the trigger point of family wars. Whether children are overindulged or they don’t clean up after playing games, mothers often regard games as troubles.
Conversely, the needs of mothers are the starting point for a new generation of game consoles.
In the development of Wii, in order to be better accepted in the living room, the hardware of Wii is half smaller than other game consoles, more power-saving and durable, and more simple and humane in operation. For example, mothers are always troubled by the wiring interference of game handles, so wireless handles technology has become a breakthrough point in product development.
With the innovation of sensory operation and simple and interesting ideas, Wii quickly took over the market.
It’s worth mentioning that 46% of Wii buyers are new players and back-to-back gamers (who haven’t been in touch with games for more than three years) — a success in breaking through the circle.
The handheld game console NDS released at the same time follows the same strategic principle, and its design aim is “to get started easily without reading the instructions”. In 2004, it came out with unprecedented simplicity and hardware design style, closing the gap between game consoles and users.
In the game with NDS, health games for all age groups become the highlight. “Brain Exercise” mainly focuses on brain exercises, including quick arithmetic problems, instantaneous memory and other games. It has the ability to exercise the brain and prevent mental diseases. From mother to old man, NDS becomes a game machine that can capture an entire family.
With this strategy, Nintendo’s game consoles and games are once again popular around the world.
_Reflections on Technology
“Bamboo farmland, please don’t develop any more high-performance game consoles.”
“… Yes, I understand.”
This conversation between Iwata Cong and Game Development Minister Zhutian sounds contrary to common sense, but also comes from Nintendo’s Blue Sea strategy.
Any good game developer can hardly resist the temptation of cutting-edge technology and the most complex narrative.
However, under the guidance of the strategy of expanding the team of gamers, Nintendo does not blindly focus on the pursuit of new technology development, but more on the product of the concept of “successful technology”, that is, to transplant mature technology from other industries into the game field.
What matters is not high-tech, but a revolutionary new game experience. So, Nintendo seldom gets caught up in the trend of catching up with the latest technology, but always thinks about how to use technology to make games more fun and convenient.
For example, when 0.09 micron semiconductor technology came into being, competitors wanted to improve processor performance several times with the same volume. Nintendo was studying how to reduce the CPU to a fraction of its original size and lower power consumption under the same performance.

Over the past 16 years, the market has changed dramatically, and this strategy is still determining Nintendo’s latest product layout, helping it not get lost in the Red Sea Value Network of competitors, or in the blind pursuit of cutting-edge technology.
5G and cloud games are coming again. What will Nintendo do do?
In his latest speech in 2018, Nintendo’s new CEO Juntaro Gukawa reiterated: “If new technology can be used as a means to expand the gamer community, Nintendo will also use unique hardware and development methods to provide new play.”
However, in his view, both 5G and cloud games are in their infancy and will not affect all games in the short term, and Nintendo will keep up with the changes in the technological environment. Strategies never need to change.
Watching Nintendo’s Centennial “Soul”
Gains and losses of unique corporate culture
For a long time, Nintendo, which focuses on hardware manufacturing, has been a rare place in the Japanese industry. Since entering the game industry, Nintendo’s president has changed only three, and the team of game designers has always been known for its stability. Why does this team always have breakthrough innovation?
Because this is a company that takes “fun” as its first principle and strictly follows this principle to span many industry changes.
_The helmsman only pursues “fun games”
ZTE Nintendo’s iron-wristed president, Naipu Yamazawa, once said something like this:
Successors, without exception, abide by Yamauchi’s business philosophy: focus on the game itself, not afraid of outdated, not afraid of slow, and strive to achieve the ultimate uniqueness of the product.
“Although my business card bears the word `president’, I think more of myself as a fanatical game fan. ” Iwada Cong, the first president of the non-Shannei family, said at the developers’conference.
Super Mario and the father of Zelda Miyamoto have unparalleled influence in the hearts of gamers around the world, and he is still active in the front line. No competitor can tap the veteran game designer, because Nintendo may not get a higher salary, but he can spend the most money on game research and development to pursue the ultimate product:
“No matter how urgent the development schedule is, Miyamoto will not hesitate to do so as long as it finds that there is room for improvement. It’s like having a bowl of chopsticks on the table. While everyone is waiting for dinner, Miyamoto comes and moves the table away.
In Nintendo philosophy, there is a famous “laughter chain effect”: interesting games will change players’smiles, players’ satisfaction will change employees’sense of achievement, product sales will go smoothly, agents will be happy, and performance growth can make investors satisfied.
So Nintendo has been focusing on the game itself, neither ambitious to grab the entrance to the family living room nor interested in catching up with the trend of emerging technologies.
_Fighting all temptations with first principles
When “interesting” is considered as the first strategy, many of Nintendo’s “abnormal” behaviors can be understood:
(1) Don’t want players to spend too much money.
According to the Huaerjie Daily, Nintendo feared that a large number of players’consumption would damage Nintendo’s brand impression and reputation, so it chose to give up part of its income to avoid appearing greedy for profit.
CyberAgent Inc, a manufacturer that has worked with Nintendo to develop Hand Tour’s Lost Dragon Treaty, also confirmed the news: “Nintendo is not interested in getting a lot of revenue from a single handheld product. If we run the game independently, we may have more revenue.”
In Nintendo’s view, it wants players to continue to love the game, not to spend on impulse in the short term because it’s not healthy enough.
(2) Holding large amounts of cash and refusing to cross borders
Everyone is talking about cross-border competition. Few modern companies do not like to invest or expand their scale.
Since the Yamauchi era, we have been very cautious about expanding our business beyond games. We seldom do things beyond our capabilities, do not involve financial activities, and do not like to show off.
Many games aimed at fun are popular in the fields of health care and fitness, but Nintendo has always refused to expand into these areas.
Asked why, Iwada’s answer was extremely simple: “Because we are a game company.”
From an investor’s point of view, Nintendo, which insists on holding large amounts of cash and operating indebtedly, is a waste. But its advantage is that it can consistently innovate at the highest cost to make exciting games:
“The risk of the game industry is very high, a failure may cause a lot of losses to the enterprise, if there is no financial guarantee, Nintendo will probably no longer exist,” Iwada said.
(3) Refusing to expand its scale and fearing losing its soul
So far, Nintendo has been a representative of the company’s refusal to expand its size: the latest data show that up to now, Nintendo has only 5,944 employees, generating 76.4 billion yuan in revenue in 2019. Its staff is only 2,871 more than in 2002.
The core of the lack of expansionary desire is that the helmsman fears that a surge in the number of employees will dilute Nintendo’s “soul”.
In Nintendo Philosophy, Iwada recorded such a passage:
“If the number of Nintendo employees soars to 10 times, then the corporate culture will be diluted. Just like what we often say,’Country will not be a country’, Nintendo will no longer be Nintendo, and we will lose its soul completely.”
In fact, Nintendo does not have written social training or corporate philosophy. Its corporate culture consists of every choice, superimposed on every employee like DNA.
The company’s core strategic support, enough space and enough financial support ensure the continuous imagination and creativity of the game development team:
Nintendo’s pay is by no means high, but under its system almost every employee can use a considerable amount of R&D funds.
At the same time, on Nintendo’s official recruitment page, the total vacation time of Nintendo employees is 125 days, that is to say, one third of the annual rest.
(4) Recruiting people who don’t like game fans, but prefer subversive spirit
Nintendo’s recruitment criteria are also different from Chinese practices.

Miyamoto created the most classic games in the history of games, but did not favor veteran game fans when recruiting people – in his view, Nintendo needs truly subversive innovators, rather than standing in the shadow of great designers:
“Hope to be able to recruit developers who are not particularly enthusiastic about playing games,” and “have different hobbies and skills areas.” (Miyamoto, New York Times)
He even cited many Nintendo star producers who hadn’t even played video games before they were hired. The producer of the latest edition of Zelda Legend: The Breath of the Wild, which has sold more than 10 million sets and won a soft prize, Yingji Qingmao, is a carpenter who doesn’t play games. He has been a great success since he was appointed by the Miyamoto Committee.
The invisible soul still flows through Nintendo’s young producers.
The producer Fujilin Xiulin, who won the best game of the year for The Legend of Zelda: The Break of the Wild, thanked the game itself in addition to the company and its supporters in a routine way when he delivered his acceptance speech.
“I’m very happy to be a game maker.”