Where does Nintendo go without Iwata?

By Peter Allen Clark

 

With President Satoru Iwata’s unfortunate passing July 12, a tumultuous era for Nintendo goes as well. Now, the questions of what the future will bring loom even larger.

 

Leaving with a legacy

It’s difficult to understate the impact of Iwata’s 2002 ascension to the presidency of Nintendo.

His rise from a game developer through the 1990s working on perennial Nintendo franchises like Pokémon and Kirby put him in an insider position as he took the company’s helm.

In the aftermath of his death, it’s easy to find many obituaries to the man that run his quote from a 2005 GDC Conference speech.

“On my business card, I am a corporate president,” he said. “In my mind, I am a game developer. In my heart I am a gamer.”

It’s a nice quote and drives home how Iwata wanted to be viewed as the head of the legacy company. What it hides, however, is just how unlikely or unpredictable his presidency would prove.

 

Iwata replaced the former president Hiroshi Yamauchi in 2002.  Yamauchi had helmed the big N since 1939 coming from the same Yamauchi family that began the company, which started as selling card games in 1889.

Both coming from outside the family and from a development background brought Iwata from the fringes to decision-making process and it couldn’t have come at a rougher time.

In 2002, Nintendo faced a continued dive after the relative Nintendo 64 slump. Sony’s first Playstation solidly won the fifth generation of video game consoles and Nintendo was setting itself up for yet another failure with the 2001 release of the GameCube. The Playstation 2 would go on to stomp that little purple box, which sold over 10 million less than the Nintendo 64 in its lifespan.

The company needed a change of philosophy and Iwata brought one.

Through both the accessible friendliness of the Nintendo DS and the family console of the Wii (as evidenced by retirement Wii bowling tournaments), Iwata wanted to focus on finding that casual market to prop up sales. This would ensure Nintendo wouldn’t have to compete on the technology front with longtime electronics hardware manufacturer Sony and, later, software behemoth Microsoft.

Iwata’s lasting legacy can be found in the success of those two consoles, although he would only hope for it at the time.

“Even though I had confidence that our direction was the right one, the truth is I had no idea things were going to happen the way they did, as quickly as they did,” he told Nihon Keizai Shimbun reporter Osamu Inoue. “On the contrary, it made me think, wow, when things change, they sure change fast. I still can’t be sure what it is that will make people react strongly to what we do.”

Over the last few years however, doubt has solidly risen over Nintendo’s future and it has been often bandied about that the draw of the Wii was nothing more than a fluke of technological faddism.

The same could be possibly argued about the DS, but rather it is the smartphones that has shrank the handheld market.

 

 

Leaving with lasting questions

That leaves Nintendo in the currently difficult place of determining whether Iwata’s strategy was a lasting one for success.

Did the goodwill of casual consumers run its course as evidenced by flagging Wii U and 3DS sales? Or are the current offerings merely missteps in a grander plan?

 

Mario/Link/Donkey Kong creator Shigeru Miyamoto has had to step up, at least temporarily, to fill some part of Iwata’s role.

In his sentimental response to his longtime friend’s death, he provides a possible answer to the above questions.

“I am truly surprised and saddened by this unexpected news,” Miyamoto said in a statement passed to Eurogamer. “The entire development team at Nintendo will remain committed to our development policy which Mr. Iwata and we have been constructing together and to yield the development results which Mr. Iwata would appreciate.”

Just over two weeks before his passing, Iwata commented on some of the more pressing matters facing Nintendo’s future to the company’s shareholders during an annual meeting.

One of the biggest subjects was the next console, codenamed the ’NX’, which Iwata unexpectedly mentioned last March.

To the shareholders, he continued to keep the company’s cards close to the vest, making the future direction all the more mysterious.

“If I mention every detail of what we are newly thinking, it could be persuasive but it could also give other companies the opportunity to come up with counterplans or implement the ideas that they find interesting," he said. “There may also be the possibility that it will spoil the sense of surprise for consumers. Of course these factors are all against the interest of the entire company and they would ultimately harm the interest of our shareholders, so we appreciate your understanding in this respect.”

The other looming question is over Nintendo’s future in the mobile gaming sphere. Iwata delivered yet another surprising revelation that the company would begin taking steps into the market that it had routinely avoided the same day as mentioning the NX.

To the shareholders, Iwata continued referencing the very vague plan.

“We are trying to make applications that appeal to a wide variety of people so that the games can receive payments widely but shallowly from each consumer,” he said. “In other words, even if a consumer makes a relatively small payment, because of the large consumer base, the game can generate big revenue. This is the business model we would like to realize. I think the shareholder has just asked these questions partially because he is concerned that Nintendo might shift to the notorious business model that asks a small number of people to pay excessive amounts of money and that Nintendo’s brand image might be hurt.”

 

Considering that it took a few years after Iwata assumed the presidency for Nintendo to begin its rebound, first with growing DS numbers and then with the bonanza sparked by the Wii, it’s only logical to assume Nintendo will continue along the same path for the time being.

That said, as recently as June 26, Nintendo’s shareholder meeting brought out very pointed questions about the future. As a publicly traded company, the woes faced by declining 3DS sales and the rough reception of the Wii U into homes has been well documented. Either leadership changes will arrive or Nintendo’s investors will have to make sterner demands of whoever takes the large task of filling Iwata’s role.