In some of my previous articles, I mentioned that I wanted to create a new series of articles focusing on industry individuals/entities. As some of you might know, I’m really into the History of our industry and always keen on discovering who are its builders and unsung heroes. I also like to share and discuss the knowledge I gathered. For this series, I don’t pretend to know it all, nor that I’m an investigative journalist, hence; I’ll highlight some key points, and give you links to longer and more thorough pieces if you want to delve into it.
Being a life-long Japanese industry fan led me to study some of its figures, being the kind of “learning as a lifelong habit” person pushed me to read, and understand more about the actors of our industry, being a life-long Nintendo fan led me to analyse its public figures… For the first article, I decided to start with one of the persons I admire the most in the industry: Satoru Iwata. Unfortunately, the CEO of Nintendo passed away on July 11, 2015, he was 55.
This is what Satoru Iwata means to me.
Satoru Iwata (1959 Sapporo – 2015 Kyoto)
“I have known Iwata for over 30 years,” Yash Terakura recalls in an email (Article available on Gamasutra). “Iwata was one of many college and high school students who used to flock my office to gather new information on Commodore computers. I think he was a sophomore or junior in university at the time.”
Beginnings at HAL Laboratory:
He embraced his career in gaming despite his parents being against it, and his father deciding to not talk to him during 6 months. His time at HAL Laboratory was an interesting one; Iwata said during his famous 2005 GDC Keynote (“Heart of a Gamer”): “The answer is that I was a programmer. And an engineer. And a designer. And I marketed our games. I also ordered food. And I helped clean up. And, it was all great fun“. During his tenure as a programmer, engineer, designer, Iwata-san has shown a tremendous talent in coding on NES, but also on C64, VIC-20 and MSX (Thanks to John for his tips). One of his first games was Balloon Fight, this awesome episode of the Japanese Show “Game Center CX” gives some insights:
One of the things I like the most about this video is Iwata’s well-known sense of humour and humbleness.
If you want to understand the extent of his work during that era, take a look at the following tab, taken from Nintendo Wikia (I voluntarily left some games after 1992/1993 and his appointment as CEO):
In 1992, Iwata-san, Masahiro Sakurai and the folks at HAL Laboratory created Kirby’s Dreamland. Despite the success of the pink fluffy character; HAL was on the brink of bankruptcy. Hiroshi Yamauchi (Nintendo’s 3rd President) decided to invest in HAL, but with two conditions: they become a 2nd Party studio, and Satoru Iwata becomes its CEO. HAL accepted and started to work closer than ever with Nintendo. This relationship yielded solid results: Mother 2 (Earthbound), Pokémon Snap, Pokémon Stadium, Smash Bros etc. Speaking of this era, here is an interesting bit from an old interview which originally appeared in the 1999 quarterly edition of JP Used Games magazine:
—On Shigesato Itoi’s site, I read that during that time, Nintendo offered to help HAL out of bankruptcy on the condition that they make you President.
Iwata: About that, well… I’m afraid I’m not at liberty to go into the details. (laughs) Itoi knows a little bit of the background from that time, so I think he just said that in an offhand way. It’s definitely true things weren’t going well for HAL, but many people at Nintendo had faith in us: “If they can just unleash their true potential, they’ll be a great developer.” People like Miyamoto, who had known firsthand about our contribution to Nintendo since the early Famicom days, were saying stuff like that, and so were several other key people at Nintendo. In the past, we had applied ourselves and made solid, quality games that were profitable.
After being appointed as the CEO of HAL, Iwata-san and his teams managed to make the company profitable. But aside from this, what probably caught Hiroshi Yamauchi’s eye was his ability to manage his teams and keep in mind Nintendo’s vision. For the record; Hiroshi Yamauchi was a fierce business man, who famously didn’t like playing video games, but had an incredible talent to find “the best”; indeed, he is the one who found Gunpei Yokoi, who was working in the factory and promoted him (I’ll come back to him in a dedicated article), and Shigeru Miyamoto (fresh hire)…
Work on Pokémon:
As mentioned above, Satoru Iwata was known as a very talented developer, programmer, designer… Thanks to his skills, he helped tremendously Game Freak on Pokémon Red/Green/Blue, Pokémon Snap, Pokémon Stadium, Pokémon Silver/Gold. How did he help you might ask? In this episode of “Iwata Asks”, Morimoto-san and Ishihara-san of The Pokémon Company International sat with him to discuss Pokémon:
Although I wasn’t working for Nintendo at that stage, I ended up acting as a go-between for Nintendo and you for some reason. (laughs)
At that time I wasn’t a Nintendo employee but was President of HAL Laboratory. At the same time, I was a board member at Creatures Inc. and I ended up being involved in analysing the best way to localize the overseas versions of Pokémon Red and Pokémon Green. For that reason, I got hold of the source code for Pokémon Red and Pokémon Green and I would study that and suggest ways to localize it to the relevant department at Nintendo.
At the same time, Pokémon Stadium came out…
Right. (laughs) You decided to release Pokémon Stadium for the Nintendo 64 and the first task was to analyse the Pokémon Red and Pokémon Green battle logic and send it over to Miyamoto-san and his team. You’d normally expect there to be a specification document, but there was nothing of the sort…
I’m so sorry! (laughs)
No, no, it’s fine! (laughs) Studying the program for the Pokémon battle system was part of my job.
I created that battle program and it really took a long time to put together. But when I heard that Iwata-san had been able to port it over in about a week and that it was already working… Well, I thought: “What kind of company president is this!?”(laughs)
I was saying things like: “Is that guy a programmer? Or is he the President?”(laughs)
To be blunt, at the time I was more of a programmer than I was a company president. (laughs)
(laughs) I was really taken aback that you could get to grips with such a complicated program in such a short space of time.
I remember thinking that there just weren’t that many people out there who would be able to read the entire Game Boy source code, which was by no means written in a highly-refined programming language, and grasp how everything connected with everything else. So Iwata-san, you analysed the whole thing and reworked the code, decided on the way to localize Pokémon Red and Pokémon Green, got the battle system running on N64… I was surprised that you managed all of that…
Well at that time, I felt that for the whole team at Nintendo, the biggest priority was not to do anything that would adversely influence the development of Pokémon Gold and Pokémon Silver. So I very naturally slotted in on the development side for Pokémon.
What’s more, there were the tools for compressing the Pokémon graphic code…
Ah yes, the compression tools.
You were kind enough to create those tools.
NOTE: The compression tools allowed Game Freak to fit in Johto and Kanto worlds in a single cartridge, while before Iwata-san’s work, they barely could fit Johto in it…
Working with Shigesato Itoi:
“Shigesato Itoi is a Japanese copywriter, author and game designer. He is most well known for his simple yet striking works in copywriting, and his works have greatly influenced modern Japanese culture as it is known today. His website “Hobo Nikkan Itoi Shinbun” (Almost Daily Itoi News) receives over 1.5 million page views per day, and hosts a series of interviews with many cultural icons including Satoru Iwata and Shigeru Miyamoto of Nintendo. Among gaming enthusiasts in the West he is most well known as the creator of Nintendo’s Mother series (known as EarthBound in the United States).” (Source: Iwata Asks – Vol. 1: And That’s How the Nintendo 3DS Was Made)
On Shigesato Itoi’s official site/blog, there is an interesting interview between Mother’s creator and Satoru Iwata:
Itoi: Some of our new staffs may not know, but Mr.Iwata was one of the start-up members of Hobonichi.
Iwata: I was the IT manager of Hobonichi. (laugh) Is it still valid?
Itoi: Of course, yes. I don’t remember firing you. (laugh)
Iwata: For those who don’t know, Hobo Nikkan Itoi Shinbun started on June 6th, 1998. About one month before that, I met Mr.Itoi. He took me to Nezumiana (where the office of Tokyo Itoi Shigesato Office was located at the time), and he said “I want to start up a web site here”. I was knocked off of my feet. This was only one month before the start up!
Itoi: I didn’t know what I was saying. (laugh). I don’t have much knowledge now, but at that time, I had close to zero.
Iwata: I think it was because that you had such small knowledge that you were able to say you were going to start up a web site in a month.
From then I arranged computers and Internet providers, put together a LAN, and said “I think you can start now.”
Itoi: Pretty bad, huh? (laugh)
Iwata: No, I had fun. I’ve been the IT manager of Hobobnichi ever since.
Their relationship was more than that, indeed, Itoi-san’s way of communicating inspired Satoru Iwata and the folks at Nintendo to create the “Iwata Asks” series. Aside from that, the two were very close friends, as you will see through the heartfelt message Itoi-san posted when Iwata-san passed away…
In 2000, Satoru Iwata was appointed as General Manager of the Corporate Planning Division at NCL, where he was responsible for Nintendo’s corporate planning on a global scale. His 18 years spent in HAL proved to be pretty useful for launching Nintendo’s new systems, and games. The gaming industry was changing massively, games costed more than before to develop, profitability for all companies was going downwards, marketing costs skyrocketed, plus he felt that globally, gamers weren’t as enthusiastic about “horsepower” and “3D graphics”. Based on these thoughts, he ordered studies that ended up confirming the direction they should take: make development time shorter and less expensive but focusing on creating new game experiences and add a unique spin to existing concepts. His vision of gaming, but also Nintendo’s, can be summed up with this quote from him: “Above all, video games are meant to just be one thing: Fun for everyone.”
After two successful years in his new role, Satoru Iwata was appointed as the new CEO of Nintendo by Hiroshi Yamauchi. This was a gigantic change in the Nintendo galaxy for many reasons, among them: first CEO outside of the Yamauchi bloodline and different style of management & personalities.
When appointing him as the new CEO, Hiroshi Yamauchi said:
“[Iwata] has the instincts you need to survive in this business.”
“The reason for [Iwata] selection comes down to his knowledge and understanding of Nintendo’s hardware and software”.
“Within our industry, there are those who believe that they will succeed simply because of their successes in other ventures or their wealth, but that doesn’t guarantee success. Looking at their experiences since entering the gaming world, it’s apparent that our competitors have yielded far more failures than successes. It’s been said that Sony is the current winner in the gaming world. However, when considering their “victory,” you should remember that their success is only a very recent development. Though Sony is widely held to be the strongest in the market, their fortunes may change. Tomorrow, they could lose that strength, as reversals of fortune are part of this business. Taking into account the things I’ve encountered in my experiences as Nintendo president, I have come to the conclusion that it requires a special talent to manage a company in this industry. I selected Iwata-san based on that criteria. Over the long-term, I don’t know whether Iwata-san will maintain Nintendo’s position or lead the company to even greater heights of success. At the very least, I believe him to be the best person for the job.”
Hiroshi Yamauchi was an exceptional business man and visionary, who led Nintendo to glory, and walking into his steps was no easy feat… As he took the role, Iwata-san was aware that Nintendo wasn’t as strong as it used to be:
- Sony was leading the market
- Xbox/Microsoft joined the market
- Nintendo was isolated from 3rd Parties, partly due to Yamauchi-san’ way of doing things (Note: He did a lot of amazing things, but also some mistakes)
During his first years as the new CEO, Nintendo launched two of the most successful systems of all time but also started to go even further in the “Above all, video games are meant to just be one thing: Fun for everyone.” vision:
- Nintendo DS in 2004 (Sold 154m units as of June 2016)
- Nintendo Wii in 2006 (Sold 101m units as of June 2016)
Both consoles were massive successes and put Nintendo’s stock at an all-time high (back then)… However, the follow-ups to these systems weren’t as successful. Indeed the 3DS (2011) and the Wii U (2013) were considered as far less successful, especially the Wii U which is deemed as a straight failure. Most of the issues were due to a very bad marketing (What was the difference with the Wii etc.?), and lack of support from 3rd parties. During this dark period, stocks sunk faster than the Titanic, morale was at an all-time low and stakeholders were asking for massive actions as you can read in this extract from an IR Report in June 2013 (bold parts by me):
Question from Shareholder: Both the sales of the last fiscal year and the year before have dropped to a level of 600 billion yen, but around the year 2000, sufficient profit was made even at a similar level of sales. You have suffered operating losses in the recent two fiscal years, but I believe you could have made the same level of profit as before if your cost structures had been equal. If high costs were the reason, shouldn’t you have carried out corporate restructuring?
Answer from Iwata-san: One more difference from that time is Nintendo’s head-count. The manpower required for increasingly complex and advanced product development has totally changed from that of the past. Hence, the number of employees has increased and higher costs have been incurred. In addition, due to the development of more elaborate software titles than before, for example, costs associated with localizing titles in English or other languages have risen.
Regarding why we have not reduced the number of the personnel, it is true that our business has its ups and downs every few years, and of course, our ideal situation is to make a profit even in the low periods, return these profits to investors and maintain a high share price. I believe we should continue working toward this ideal. If we reduce the number of employees for better short-term financial results, however, employee morale will decrease, and I sincerely doubt employees who fear that they may be laid off will be able to develop software titles that could impress people around the world. I believe we can become profitable with the current business structure in consideration of exchange rate trends and popularization of our platforms in the future. We should, of course, cut unnecessary costs and pursue efficient business operations. I also know that some employers publicize their restructuring plan to improve their financial performance by letting a number of their employees go, but at Nintendo, employees make valuable contributions in their respective fields, so I believe that laying off a group of employees will not help to strengthen Nintendo’s business in the long run. Our current policy is to achieve favourable results by continuously cutting unnecessary expenses and increasing business efficiency. Thank you for listening.
This is the kind of management I believe in. This is the kind of manager I’d like to become. Of course, life isn’t all about fairy tales and unicorns; sometimes tough decisions need to be made – but sacrificing employees for short term gain/equilibrium isn’t always the right choice.
Here is another interesting bit regarding his vision, management, and strengths:
(Courtesy of Simon Parkin, New Yorker)
Still on the management topic; Satoru Iwata famously took a 50% salary cut (Miyamoto & Takeda 30%, other directors 20%) twice in his career; when the 3DS failed and when the Wii U failed. These salary cuts have confirmed, once again, that Satoru Iwata took responsibility for the failures to deliver good products, have killer apps (à-la Wii Sports) or make the right decisions (cutting the price of the consoles, convincing 3rd parties, better marketing etc...)
Those two dark stains in his resumé didn’t break his will to innovate, to bring joy to millions as it helped shape the future of Nintendo: Switch, Pokémon Go, mobile. Speaking of the future, one of the big shocks back in 2013 came when Nintendo announced the merger of two of their biggest divisions: handheld & home consoles… Does this sound familiar? Yes, it surely does today.
His vision of mobile gaming:
If you remember, in 2011, when asked about Nintendo doing smartphone games, Satoru Iwata famously said to the Nikkei: “This is absolutely not under consideration, if we did this, Nintendo would cease to be Nintendo. Having a hardware development team in-house is a major strength. It’s the duty of management to make use of those strengths. It’s probably the correct decision in the sense that the moment we started to release games on smartphones we’d make profits. However, I believe my responsibility is not short term profits, but Nintendo’s mid and long term competitive strength”. See how he mentions mid/long term again, vs a more short-term approach?
However, on March 17, 2015, Nintendo have announced that they were entering into a broad partnership with the Japanese mobile juggernaut: DeNA. What happened to the statement made by Iwata in 2011? His interview with TIME on March 18, 2015, gives some insights:
TIME: What prompted this move now, in the light of all you’ve said about Nintendo’s reluctance to craft games for smartphones?
Satoru Iwata: In the digital world, content has the tendency to lose value, and especially on smart devices, we recognize that it is challenging to maintain the value of our content. It is because of this recognition that we have maintained our careful stance. However, we have been seriously and continuously considering how we should make use of smart devices. We made the announcement yesterday because we finally found solutions to the problems we identified. More specifically, we will not merely port games developed for our dedicated game systems to smart devices just as they are—we will develop brand new software which perfectly matches the play style and control mechanisms of smart devices.
We have come to the stage where we can say that we will be able to develop and operate software which, in the end, will not hurt the value of Nintendo IP but, rather, will become an opportunity for the great number of people around the world who own smart devices—but do not have interest in dedicated video game hardware—to be interested in Nintendo IP and eventually to become fans of our dedicated game systems. Yesterday, we finally came to the stage where we were able to announce the alliance with DeNA, which plays a key role in these solutions.
This was a pretty massive turning point in Nintendo’s history and strategy! Of course, people have been expecting Nintendo to turn to smartphones at one point as they were literally sitting on some of the most valuable IPs of the world, plus they were in a bad situation following the 3DS missed opportunities and Wii U failure. But we need to keep in mind that Nintendo is a Japanese company, and from Kyoto: meaning that changes take time, no matter how determinate and driven you are. With this announcement, the stocks instantly soared (Note: Switch was mentioned under its project name: NX), and media/fans started to fantasize, or be negative, about this new venture. Two years later, Super Mario Run and Fire Emblem Heroes have been released and have generated far more than just recouping the costs (I might have helped, heavily, with Fire Emblem Heroes...). This won’t end here; as Animal Crossing and The Legend of Zelda (According to WSJ) will be coming to smartphones.
We can’t speak about Nintendo and its mobile efforts, without mentioning the biggest phenomenon we have witnessed in the gaming industry in the past years:
Miitomo Pokémon GO. While it is mostly managed by Niantic and The Pokémon Company International, Nintendo still makes money out of it as they own 33% of TPCi. Even further than that, it had a tremendous impact on Nintendo’s stock:
Nintendo’s Market Cap evolution during the past 5 years. The dot coincides with PokéGO release, the second high is related to the Nintendo Switch Release
Mentioning Pokémon GO might sound weird to some, as Satoru Iwata had already passed away when the game released on July 5, 2016. However, Pokémon GO can be considered as part of “Iwata’s Legacy”, as mentioned in this article by the Nikkei:
“Even after undergoing surgery in June 2014, Iwata said, “I still have unfinished business.”
He made his last public appearance at an annual Nintendo shareholders meeting at the end of June 2015 before passing away two weeks later.
He continued to work in a hospital room until the last moment, using his favourite PC and exchanging views on “Pokemon Go” with Tsunekazu Ishihara, the Pokemon Company’s president and his close friend.
Iwata had an unshakable belief in his company’s products. Many Nintendo fans are children, so he was critical of conventional smartphone games. “Children can enjoy ‘Pokemon Go’ without spending too much money. This is probably what Iwata-san aimed for,” said an executive at a game-related company who knew Iwata well.
Nintendo changed its standpoint on the mobile gaming industry, and that’s good for them – now let’s see how this will impact their revenue streams/balance over the long term.
Iwata & the Nintendo Switch:
In the TIME interview “10 things Nintendo’s Shigeru Miyamoto Told Us About Switch and More”, we discovered the following bits:
TIME: Is there anything in particular about Switch that reflects Satoru Iwata’s involvement? [Iwata was Nintendo’s president from 2002 to 2015, and passed away in July 2015.]
Shigeru Miyamoto: I mentioned that Mr. Iwata, Mr. Takeda and myself provided feedback and made decisions, but ultimately Mr. Iwata was the head of development, so he put a lot of thought and time into Switch. I think that the idea of Nintendo Switch being a device you can take out and anywhere, and the idea of it being a system that really allows networking and communicating with people, I think that’s something Mr. Iwata put a lot of emphasis on.
Because Mr. Iwata was tech-savvy, a lot of our discussion involved trying to figure out how to make the technical things like network capabilities or servers or whatever fun. For example, think about when we added the ability to use a browser on the DS [Nintendo’s two-screen gaming handheld—the browser was added to North American systems in 2007]. As time goes on, all of these services become more and more advanced, and so we need to think about “How do we incorporate mobile devices or new browser features that come up?” That’s something Mr. Iwata and I discussed a lot, really trying to decide what to do and what not to do in our hardware.
Of course, Miyamoto-san, Takeda-san (Note: he retired earlier this year) and the young generation at Nintendo helped a ton, which is reassuring to see, as Nintendo seems to be between good hands.
Iwata & communication:
During his early years at HAL, and beginnings at Nintendo, Iwata-san spent a lot of time working, programming and assuming his management duties. When he moved on to be CEO of NC (and then NoA), he started to become the company’s face, as opposed to Yamauchi-san who wasn’t necessarily keen on doing these activities. Among the ventures Satoru Iwata helped bring to success and/or took part in:
His GDC 2005 speech “Heart of a Gamer” (Transcript available here)
His 2006 GDC speech – Disrupting Development
- One of my favourite communication means in the whole industry, the “Iwata Asks” series – Please, do yourself a favour and read some of them, it’s a goldmine! As mentioned earlier, this seems to have been inspired by Shigesato Itoi’s way of communicating on his own blog.
- Nintendo Direct: “Nintendo Direct is a series of online digital presentations, typically hosted by Iwata, detailing information and gameplay videos about upcoming Nintendo products, first starting on October 21st, 2011 in Japan, before heading overseas with a number of other directs dedicated to specific regions around the world. Within the directs, Iwata became known for his act of gesturing his hands towards the camera whenever the term “direct” is mentioned, spawning a number of parodies within the community, and even from Nintendo themselves.”.
Iwata’s last ND
Iwata’s last Digital Event, in June 2015
To conclude this lengthy article… I’d like to use a quote from his GDC 2005 keynote, Iwata told the audience that “on my business card, I am a corporate president. In my mind, I am a game developer. But in my heart, I am a gamer“.
I have a hard time imagining other CEOs of big corporations taking this stance…? The same enthusiastic stance that drove him his whole life: whether he was a student coding on calculators, or ordering food at HAL Laboratory, or coding Pokémon Gold/Silver or finding solutions to steer the Nintendo ship towards their goals, and the vision he inherited from Hiroshi Yamauchi.
For all these reasons, for the man he was, the management style he used, the vision he had: I admire him.
INDUSTRY COLLEAGUES AND COMMUNITY PAY TRIBUTE TO IWATA:
Part of my way of paying tribute was to go in front of HAL/Nintendo small office near Akihabara (Tokyo) back in April 2017. Unfortunately, it was on a Sunday and everything was closed…
(Please ignore the distasteful introduction music…)
Masahiro Sakurai (creator of Smash Bros series and very close to Iwata-san):
“Nintendo President Iwata has passed away. He was my boss at my last company, and even changing positions and locations, he was the person who most understood me. As a hard worker and a virtuous person, he always quickly derived balanced summaries and proposals. I thought that he was the best possible leader. I pray for his happiness in the next world. … It’s not a normal day and it’s not a normal mental state, but I came to work and threw myself into development as normal. It’s also for Iwata-san. I’m doing what I have to do.”
Shigesato Itoi wrote a heartfelt message:
“When I’m parting with a friend, regardless of the circumstances, I find it best to just say, “See you later.” We’ll meet again. After all, we’re friends.
That’s right—nothing unusual about it. I’ll see you later.
You went on a trip far, far away, even though it was planned for many years from now. You wore your best outfit and said “Sorry for the short notice,” though you didn’t say it out loud.
You always put yourself last, after you’d finished helping everyone else. You were so generous as a friend that this trip might be your very first selfish act.
I still can’t grasp what’s happened. It feels like I could still get a light-hearted e-mail asking me out to lunch at any moment—after you’ve made sure lunch wouldn’t disrupt my schedule, of course.
You can invite me out whenever you want. I’ll invite you, too.
So for now, let’s plan on meeting again. You can call me up whenever you like, and I’ll give you a call, too. I still have a lot to talk to you about, and if I come up with any particularly good ideas, I’ll let you know.
So let’s meet again.
No–I suppose we’re already meeting. Right here, right now.”
Thank you very much for reading. I hope you enjoyed. The next article will be about Yuzo Koshiro.
On top of the sources in the article, please find below other links to delve into his life:
My favourite video about Satoru Iwata, made by Norman “Gaming Historian” Caruso:
Video Game Story Time take on Satoru Iwata’s feats with Game Freak & Pokémon.
- 1999 Quarterly edition of jp Used Games Magazine Interview
- 2004 “Profile: Satoru Iwata” (IGN)
- 2007 Hobo Nikkan Itoi Shinbun interview (Itoi Shigesato)
- 2015 Why Nintendo President Satoru Iwata Mattered (TIME)
- 2015 Read Satoru Iwata’s Unpublished Quotes From TIME’s Interview
- 2015 A former mentor recalls the early career of Satoru Iwata (John Andersen)
- 2015 The Legacy of Satoru Iwata (Imran Khan for Paste Magazine)
- 2015 Satoru Iwata: a career in pictures (Eurogamer)
- 2015 Postscript: Satoru Iwata 1959-2015 (Simon Parkin for the New Yorker)
- 2015 The Video Game Community Pays Tribute to Satoru Iwata (Luke Plunkett for Kotaku)
- 2016 Super Mario’s Reluctant Leap to the iPhone (Simon Parkin for The New Yorker)