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Essays 21 July 2015, 15:07

author: Anna Krampus

Satoru Iwata: A Remembrance

He was there when Wii and DS elevated Nintendo to the peaks of fame; he was there when Nintendo suffered the painful defeat of WiiU. Satoru Iwata, the CEO at Nintendo since 2002, passed away on the 11th of July.

If someone were to run a popularity contest for the nicest CEO, Satoru Iwata would most likely take the number 1 spot. Always smiling, speaking that characteristic English and always ready to embrace the gaming community. During his 30 year long professional career in the gaming industry, he had an enormous influence on that part of the industry that wanted to do things differently. Just like Nintendo, he introduced his original solutions that went against the market trends and eventually became a new trends themselves. In his 13 year long history as a CEO, Satoru Iwata tasted both the sweetness of victory and the bitterness of defeat. Unfortunately, when the new Nintendo console storms the market in the future Satoru Iwata won’t be there to witness it. On the 11th of July 2015 Satoru Iwata passed away at the age of 55 due to a bile duct growth.

Iwata before Nintendo

Satoru Iwata was born in 1959 in Hokkaido prefecture. His interests in IT that began when he was a child continued in his teens when electronic appliances, like calculators, started to flood Japanese households. It was on such basic, programmable devices where Satoru wrote his first, simple games. He wasn’t the only one interested in programming at that time and exchanging experiences with his friend helped transform his coding into something more than amusement. Many years later Iwata recalled this experience during one of the interviews saying that this may have been the reason he got interested in creating video games in the first place.

Commodore PET with a built-in casette tape recorder. - 2015-07-21
Commodore PET with a built-in casette tape recorder.

Satoru Iwata got his first Commodore PET by the end of 1970s, when the advancement in technology brought the emergence of first PCs affordable to every household. We don’t know if his particular copy had 4 or 8-bit memory but for him it was the first step to serious coding. The first thing he did, however, was taking the computer apart to see how exactly it was built. The gaming industry has seen similar cases, like Peter Molyneux who performed a vivisection of his first console, but while for Molyneux’s console it was the end of the road, the particular PET Iwata disassembled actually worked for many years after it was pieced back together. That wasn’t the last time his Commodore proved useful to him since some time later it was revealed that the Famicom console (known as NES to the rest of the world) employs similar solutions to the ones used in PET’s CPU.

This is the legendary Famicom. - 2015-07-21
This is the legendary Famicom.

After graduating high school Satoru proceeded to study IT on the Tokyo Institute of Technology. Iwata managed to face this respectable institution without losing his playfulness and wrote his first commercial game as a student. Super Billiards, written for the then very popular in Japan 8-bit MSX, allowed the players to have fun on a virtual billiard table. The game was published by Tokyo based HAL Laboratory – the company that became Iwata’s first workplace.

Since its founding in 1980, HAL Laboratory remained closely tied to Nintendo. As a HAL Laboratory worker, Iwata became convinced that he could handle console programming as well. Therefore, when he finally got the chance he didn’t hesitate to take it. After he gained experience as the person responsible for the production of first-party NES Tournament Golf and Balloon Fight he could finally start working on his own game starring the sphere-shaped character Kirby, created by another HAL Laboratory worker – Masahiro Sakai. Iwata was a skilled programmer and his reputation was consolidated by feats like successfully fixing the mess-of-a-code the Earthbound was. Combining his positions as a programmer and a producer Iwata rewrote thousands of lines of code, organized them and made the whole thing run on SNES without a hitch. A similar thing happened years later, in 1998, when Iwata wrote the code responsible for executing battles in Pokemon Stadium in a week.

Nintendo fans certainly aren’t lacking in devotion. - 2015-07-21
Nintendo fans certainly aren’t lacking in devotion.

In 1993 Iwata became the CEO of HAL Laboratory; he managed to save the company from going under a few years later and proceeded to strengthen the company’s ties with Nintendo.

Nintendo is currently the longest standing company in the digital entertainment industry. Founded in 1889 in Kyoto by Fusajiro Yamauchi, in the beginning of its history the company’s scope included mostly decorating cards for traditional Japanese games. The Nintendo as we know it was born in 1966, almost 80 years later, when Hiroshi Yamauchi, the then and simultaneously the longest standing CEO in Nintendo’s history, gave permission to start the production of Ultra Hand – a retractable grapple arm operated with one hand. The idea came from Gunpei Yokoi – another important figure in Nintendo’s history. Yokoi’s most famous achievement is simultaneously one of Nintendo’s biggest accomplishments - Game Boy, the first handheld console to sell in large numbers.

Nintendo was a family business since its very beginning. In the span of its 113 year long history the company had only 3 CEOs - each one of them a Yamauchi. Since 1952 and for the next 52 years this position was taken by Hiroshi Yamauchi and under his reign Nintendo became one of the global players in the gaming industry. Two things made it possible: the saturation of electronic entertainment market in the west with its subsequent collapse in 1983 and Shigeru Miyamoto, a young game designer. Donkey Kong stormed the households around the world and while Atari and other competitors were struggling to stay afloat, Nintendo thrived and prepared a further assault with the Famicom console.

Hiroshi Yamauchi – the long-standing CEO of Nintendo. - 2015-07-21
Hiroshi Yamauchi – the long-standing CEO of Nintendo.

Nintendo dictated the terms of the game until 1995. In the meantime, SEGA and some other minor companies tried to challenge this state of affairs albeit with moderate success; the international symbol for electronic entertainment remained the letter N. Things changed when Sony and their PlayStation entered the fray effectively ending Yamauchi’s monopoly. New hardware with a CD drive and software that allowed the gamers to play in fully textured 3D environment; that was a whole new level of experience. Nintendo was put on the defensive and instead of pushing the limits they were forced to chase the new leader. Hiroshi Yamauchi believed that his company must work differently than its competition. It must work “the other way around”. That was the only way to creatively respond to market changes. “To do something unique, something different than the competition, and to make hardware work in favor of software experience above everything else” This vision led Nintendo to releasing Nintendo 64 with its outdated and offering low capacity cartridges and later the GameCube with discs offering less than 2 GB of space - half the capacity of a standard DVD. That’s when Satoru Iwata became the CEO of Nintendo – the first non-Yamauchi to take the position.

Iwata presents the first DS. - 2015-07-21
Iwata presents the first DS.

In 2002, the same year Iwata became the CEO of Nintendo, last copies of Game Boy left the factories. The new CEO would later introduce a console that would elevate the Japanese company on whole a new level. The dual-screen DS console was Iwata’s idea but it was inspired by lecture of a book by doctor Kawashima, a famous Japanese scientist, promoting brain exercises through solving mathematical riddles to help one develop his mental abilities. Faithfull to his predecessor’s philosophy, Iwata worked “the other way around” and promptly hit the jackpot causing Nintendo DS to become one of the best selling consoles in history with over 150 million buyers all around the world. The corporation associated with infantile characters like Mario or Pokemon proved that, given the right software and unique hardware, it can reach even clients that were never interested in digital entertainment; including seniors that were soon to become the main marketing target for Nintendo’s next, stationary console. At the same time, Iwata didn’t break his commitment to younger customers: “I’ve never once been embarrassed that children have supported Nintendo. I’m proud of it. That’s because children judge products based on instinct. […] That doesn't mean we're making products just for children. We believe that there's interactive entertainment that people in their 60s, 70s and 80s can enjoy."

The foundations for the company’s new strategy were laid and a new generation of consoles was to follow. In December 2005 Xbox 360 hit the stores while Nintendo was wrapping up the development of GameCube’s successor, codenamed Revolution. In many interviews the CEO consistently promoted the company’s philosophy that “less is more”: "Making games look more photorealistic is not the only means of improving the game experience. […] If anyone appreciates graphics, it’s me! But my point is that this is just one path to improved game. We need to find others. Improvement has more than one definition."

Iwata proudly presents the future of Nintendo. - 2015-07-21
Iwata proudly presents the future of Nintendo.

Nintendo, however, realized that using the code name for the final product would be improper for many reasons. The name had to be short, easy to pronounce and to remember. Wii was an attractive and fitting name for a console given its task of uniting the generations in front of the TV. Although there were people spitefully noticing that the name sounds similar to a certain physiological phenomenon… Except for the gyroscope and motion sensor technology used in its controller, Wii may have paled in comparison to its competitors but that didn’t hinder the sales. The Wii boom before the 2006 Christmas left the shelves empty and people formed long queues to test this fresh gaming solution. While the Americans were having trouble to buy even one copy, in Europe there were Wii a plenty left in stores since PlayStation dominated the European gaming scene. "In the first place, Sony and Microsoft are taking about the same approach for the future by making machines with powerful and sophisticated technology. Nintendo is taking a little bit different approach, and I think this is an interesting contrast," Iwata said.

The results were self-explanatory – Nintendo found the right approach. In the first week since its debut Wii sold in more than 350 thousand copies. By mid-2007 the sales of “duct taped GameCube”, as some called it, exceeded those of Xbox 360 AND PlayStation 3 collectively. In the span of the next three years customers bought more that 100 million copies of Wii. Most games released for Wii had intuitive controls and simple gameplay making the console seem very approachable and consecutively, it became the first platform for many households.

Nintendo is me. - 2015-07-21
Nintendo is me.

While earning big money Nintendo began to lose some of its fan’s trust on the grounds of ignoring their needs. Although the Wii platform saw some very good, signature releases, the fans wanted more than the company could deliver. The first party developers had no time to rest while the third party developers’ games aimed at quick profits and were anything but ambitious. Iwata was well aware of the fact when he said: "I cannot imagine any first party title could be priced for more than $50. In the US, we're going to see the next-generation cost an awful lot. I really don't think that there's going to be a lot of acceptance by current customers of the $60 price tag. They may allow that for a limited number of premium titles, but not all."

The success of Wii launched a new trend - move controllers. The people were still hungry for novelty and both Sony and Microsoft knew what return they’re going to get when they started designing Muve and Kinect. Both controllers proved to be more technically advanced than the one used in Wii. The Wii controller was quite primitive to begin with until the motion sensor was employed but on the other hand, the Wii Remote came first and that was the crucial part to this competition.

Nintendo DS remained as a stronghold of more ambitious titles and eventually spawned a successor. The new console employed the freshly introduced 3D image displays technology, a luxurious solution indeed, especially for Nintendo. Iwata understood, however, that the 3D technology will dominate the market in the next few years and called the first shot.

Iwata presents the padlet. - 2015-07-21
Iwata presents the padlet.

Nintendo always had a clear policy on backwards compatibility. Whenever it was possible, the next-gen hardware could run earlier generations of games. If not directly, then by the means of attachments enabling gamers to do so. The company was ready to produce them for the sake of the idea that the players should be able to enjoy even the older games without getting their homes crammed with old hardware. Satoru Iwata wanted every new Nintendo console to be able to run every game Nintendo has ever created.

In the same year the company introduced Wii’s successor with the letter „U” added in its name. The business strategy remained unchanged: to show something completely new. The new console was designed with an original controller resembling a tablet in hope that this type of device will remain too costly and niche to effectively compete for the market. This prediction was wrong, however, and turned out to be partially responsible for the customer’s indifference to the new console. One more reason why the WiiU failed to impress was its resemblance to its predecessor. Many people for years thought that the new controller was just a new kind of attachment to add to the old Wii. WiiU lacked one more thing – computing power. Despite the bombastic declarations of third party developers’ support, after the first wave of ports, including AAA titles like Mass Effect 3, Deus Ex: Human Revolution or Assassin’s Creed 3, the same developers turned their backs on Nintendo to brace for the incoming next-gen. WiiU was the first Nintendo console that failed to net any profits. “[…] for the home console our biggest market opportunity was in the overseas markets in the U.S. and Europe, but because of the valuation of the yen and the exchange rates into dollars and euro, it made it a difficult proposition for us to capitalize on that, because of the cost that we were forced to sell the system at.” In the coming years Nintendo recorded nothing but losses causing Iwata to cut his own salary by 50% in 2014. He did it again when the next year’s financial statement showed no real improvement.

On February 2015 Nintendo released the improved version of 3DS called the New 3DS. The new handheld’s 3D image display performed much better thanks to the addition of an eye-tracking sensor. Before that you had to keep the console motionless for this feature to properly work. Surprisingly, at first, this solution was missing on the drawing boards. As Iwata said during one of the interviews - “[…] we were able to bring the super-stable 3D to reality by looking technically at what we can do to solve those challenges and finding those steps along the way to make it happen. This is where my background in technology is quite helpful, because it means that the engineers can’t trick me.”

The nicest CEO in the whole industry. - 2015-07-21
The nicest CEO in the whole industry.

A month later Nintendo fans were dumbstruck when the company made an announcement about signing a partnership agreement with DeNA – company owning the Mobage, a web portal and social networking service dedicated to mobile gaming and e-commerce. Nintendo acquired 182 million dollars worth of DeNA’s shares (10%) while their partner bought 1.24% of the console maker’s stocks for the same price. In an interview for Time Iwata stressed that the company’s intention is not merely porting already existing games but developing brand new software that, although relying on already existing brands, won’t damage Nintendo’s IP in any way. The market may have developed new business models but Iwata himself, in contrast to many other developers, wasn’t very enthusiastic about the free-to-play model. “I do not like to use the term ‘Free-to-play,'” says Iwata. “I have come to realize that there is a degree of insincerity to consumers with this terminology, since so-called ‘Free-to-play’ should be referred to more accurately as ‘Free-to-start.'” First of the five games described in the premises of this cooperation is to be released this year; further four titles will be launched before the coming of March 2017.

The steps taken by Iwata were aimed at putting an end to Nintendo’s weaker period. Gartner research company reported that the 2014 global tablet and smart phone sales reached 1,4 billion items. In comparison, the two best selling gaming platforms in history – DS and PlayStation 2 – needed a decade to reach sales of 150 million items each.

After Iwata’s death the flags at Nintendo HQ were lowered to half mast. - 2015-07-21
After Iwata’s death the flags at Nintendo HQ were lowered to half mast.

Satoru Iwata believed in uniting the environments of handheld and stationary consoles. The new, currently developed console, codenamed NX, is to pave way for this process. Unfortunately, he will not be the one to present it on one of the future editions of Nintendo Direct. “Engineering is not quite as important as imagination” as he once said.

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