Gaming

What Started, Carried & Continues To Make Nintendo A Juggernaut

by Kevin MerisanuAug 20 2019

Nintendo has come a long way in it's 130 years. It's only 20 years younger than the entire country of Canada, so they've done and seen things we all can learn from.

Look at this as a case study - an in-depth breakdown into what started, carried and continues to make Nintendo a juggernaut.

Kyoto, Japan September 23, 1889

30 year old Fusajiro Yamauchi registers what will become one of the largest companies, in history, on both an economic and cultural level.

1949 comes around and Yamauchi calls the company:

Nintendo Karuta Co., Ltd. - selling only Hanafuda cards.

The potential for them to become lucrative on these was low, as seen by Fusajiro's grandson - Hiroshi Yamauchi in 1956. Acquiring the license to use Disney characters to drive sales for the cards wasn't much help either.

1963 rolls around, Yamauchi renamed Nintendo Playing Card Co. Ltd. to Nintendo Co., Ltd.

Fast-forward to around 1966 Nintendo Co., Ltd stock is worth only ¥60.

Nintendo now moved into the Japanese toy industry with the 'Ultra Hand', developed by engineer Gunpei Yokoi - in his free time. This prompted Yokoi to be named product developer for the new 'Nintendo Games' department.

Nintendo couldn't keep up with companies like Bandai and Tomy, and shifted focus in 1973 to Laser Clay Shooting System Ranges. Which Yokoi used in his creating of Metroid.  Eventually, they were shut down because of high costs - but Nintendo found their market.

Nintendo gets into the gaming industry by securing rights to the Magnavox Odyssey console in 1974.  This sparked Nintendo to produce in-house hardware in 1977. Going on to name it the 'Color TV-Game home. '

This was designed by a student product developer named Shigeru Miyamoto.

Shigeru worked for Yokoi and created not only the casing design for the Color TV-Game - this was only the tip of the iceberg for Shigeru - going on to create, direct and produce some of Nintendo's best and most famous games.

Then, we can dive into the details of what all of these means and how a brand like Nintendo will never die. Even if their profit was at $0.

Universal City Studios, Inc. v. Nintendo Co., Ltd:

King Kong vs. Donkey Kong Trademark Infringement Case

June 29, 1982, Universal officially sued Nintendo.

Here is a section from Wikipedia, that explains what transpires next;

On January 3, 1983, Universal then sent cease-and-desist letters to Nintendo's licensees offering three options: stop using Donkey Kong characters, obtain a license from Universal, or be sued.
Six licensees caved, but Milton Bradley refused to do so.
Lincoln hired John Kirby to represent Nintendo in court. Kirby had won other big cases for the likes of PepsiCo., General Foods, and Warner-Lambert.
Kirby researched the game's development, taking depositions from designer Shigeru Miyamoto and Nintendo president Hiroshi Yamauchi in Japan. Miyamoto claimed that he had in fact called his ape character King Kong at first, as that was a generic term in Japan for any large ape.
Universal City Studios, Inc. v. Nintendo, Co., Ltd. was heard at the United States District Court for the Southern District of New York by Judge Robert W. Sweet.
The trial lasted seven days, during which Universal, represented by the New York firm Townley & Updike, argued that the name Donkey Kong could be confused with King Kong and that the plot of the game was an infringement on that of the film.
Kirby showed key differences between Donkey Kong and King Kong. He also alleged that Universal had no rights to the King Kong characters and that they had in fact successfully sued RKO Pictures in 1975 in Universal City Studios, Inc. v. RKO General, Inc., wherein they proved that the plot of King Kong was in the public domain and thus opened the way for Dino De Laurentiis remake.
Judge Sweet ruled against Universal and chastised the company:
"Throughout this litigation, Universal knew, as a result of the RKO litigation, that it had no rights to any visual image of King Kong from the classic movie or its remake. Nonetheless, Universal, when it seemed beneficial, made sweeping assertions of rights, attempting to extract license agreements from companies incapable of or unwilling to confront Universal's "profit center"
He ruled that Universal did not own King Kong, but even if King Kong was Universal's property, the possibility that anyone would confuse Donkey Kong and King Kong was unlikely. In his opinion, Donkey Kong was "comical" and the ape character "farcical, childlike and nonsexual."

Nintendo thanked John Kirby with a $30K sailboat christened the Donkey Kong along with 'exclusive worldwide rights to use the name for sailboat'.

It's said that Nintendo's 'Kirby' series of video games is named after John Kirby - in honor of what he did for Nintendo in the DK case.

In the same year (1983), Nintendo launched the Famicom. A few cosmetic changes in '85, which launched in NA was called the Nintendo Entertainment System, or, NES. The practice of bundling became an ideology for years to come, helping Super Mario Bros. become one of the best-selling VGs in history.

Game Boy, NES + SNES

In '79, Yokoi birthed the idea of a handheld VG. Observing his fellow train commuters, he saw they spent time interacting and using their LCD calculator. This paved the way for Game & Watch.

The next year, Nintendo launches the Game & Watch handheld game series, not allowing for any interchangeability with hardware and software tied together. The first game, Ball, was released worldwide.

Along with that, Nintendo crated the modern 'cross' D-pad design in 1982, by Yokoi, for a DK game version. This later earned a Tech & Engineering Emmy Award.

Yokoi & his Nintendo R&D1 conceived the new Game boy system with the idea of merging Game & Watch's portability with the NES's cartridge interchangeability.  Releasing in Japan April 21, 1989 and on US soil July 31, 1989.

Nintendo of America's president, Minoru Arakawa,  bundled 'Tetris' with the Game Boy - which was an instant success.

Adjacently, Nintendo released the Famicom successor - the Super Famicon. This was a huge jump to 16-bit processor, including upgrades to sound, game speed and graphics.

Late to market in Japan, the re-named Super Nintendo Entertainment System (SNES), released in NA in '91 and Europe in '92 - and was the beginning of the console wars, with Sega pushing out a 16-bit Mega Drive, a.k.a the Sega Genesis.

1990-92 saw Nintendo Stores open up to the public for consumers to get first hand looks at products.

SNES had a successor, with the codename 'Project Reality'. This was a join venture between Nintendo and Silicon Graphics to bring a new 64-bit graphics gaming system.  Release date was for the end of 1995, but was subsequently delayed.

Nintendo also announced a CD drive peripheral called the 'Super NES CD-ROM Adapter' which was co-developed with Sony, with the name 'Play Station'. The 1991 CES was a huge showing for the joint development of Sony and Nintendo.

Ultimately, Nintendo wanted nothing to do with Sony going with their rival Phillips. Eventually Phillips got out of the gaming space and

Sony... well, we know how that's gone.

Nintendo followed up with a massive move to their first western-based second-party developer - Rare.  Rare had made incredible progress with real-time 3D graphics technology, using the Silicon Graphics workstations.  Nintendo immediately bought a 25% stake in the company, which became 49% and now had their entire roster of character that could have a CGI game developed around them.

First game as partners - Donkey Kong Country. It was a massive success and sold 8,000,000+ copies globally.

1994 was deemed 'Year of the Cartridge' by Nintendo - which was a true claim come '95 when one billon cartridges were sold worldwide.

Nintendo 64, GBC + GBA, GameCube, DS & Wii

Upon the release of the Ultra 64 as the Nintendo 64, it continued a tradition of classic Nintendo hardware design which is less about high performance specs, and more on design innovations intended to spark game development.

Market shares were dropping, with the Sega Saturn and partner-turned-enemy Sony PlayStation - Nintendo spent big bucks on a campaign with the slogan "Play It Loud". This was to the tune of $185 Million

That same year, the Game Boy Pocket was released in Japan. This GB was much smaller than the original, and required far less batteries. (2 as opposed to 6 lol) *

October 4, 1997 - Nintendo's famed developer Gunpei Yokoi died in a tragic car accident.

The years of 1998-2000 saw the release of the Game Boy Color. Massively improved technical specifications, allowing it to run GBC games and GB games - but with color! Along came the Game Boy Camera and Printer, but weren't very successful in selling many of those.

Hitting the market in the same year, we saw the redesigned Game Boy Advance and the GameCube. GC wasn't able to regain the large market share that was lost with the 64.

Yamauchi retires as company president, since 1949 - making Satoru Iwata the first company president to be completely unrelated to the Yamauchi family.  The following year the world saw the Game Boy Advance SP, the first clamshell design that would go on to be used with the DS + 3DS.

2004, and we see the 4th Nintendo handheld system and that clamshell design I mentioned. the Nintendo DS offered a dual touch screen and stylus.

The DS needed to work, especially on the heels of Nintendo''s first reported loss in over a 100 years!

Hiroshi Yamauchi (Form. Nintendo president) was quoted:

"If we can increase the scope of the industry, we can re-energize the global market [..] The DS represents a critical moment for Nintendo's success over the next two years. If it succeeds, we rise to the heavens, if it fails, we sink into hell."

Mario Kart DS + Nintendogs = DS success.

Nintendo also dropped the DSi and DSi XL in Japan in '09 and worldwide in 2010.  It brought more CPU and RAM, two cameras  and other bells and whistles - but wasn't a massive success.

Enter, the Nintendo 3DS, a glasses-free stereoscopic 3D display. Continuing their acquisitions at an incredible speed, Mobiclip was bought. Based in France, the R&D company was specializing in tech such as video compression. They later become Nintendo European Research & Development.

Last fiscal quarter of 2012, the Wii U released. Not selling to expectations, even being the first 8th generation console. About a year later, saw sales improving and Nintendo wanting to continue to broaden the 3DS market.

They did this with the cheaper Nintendo 2DS. It still wasn't a huge hit, and neither was the Wii Mini.

They also purchased a 28% stake in a company called PUX Corp. They specialize in face + voice  recognition technology, as well as in past working on character recognition software.

April to December 2013 saw profits drop 30% - prompting Iwata to announce he would take a 50% pay-cut, along with other execs getting 20%-30% cuts.

Nintendo Switch & Mobile

Japanese mobile developer DeNA became another Nintendo partner - with the rights to produce games for smart devices.

The first release was title Miitomo that dropped in March 2016, coupled with a same day announcement of what Nintendo deemed a "dedicated games platform with a brand new concept" - codename 'NX'.

Reports stated SDKs (software development kits) were being distributed by Nintendo to third-party developers. Talks were that the 'NX' was going to be introduced sooner then later.

An investors meeting revelated an NX release worldwide March 2017. The NX was to be a new concept, adjacent to the 3DS or Wii U, as stated by Kimishima.

Fears of having the NX duplicated by competitors, Shigeru Miyamoto refused to present the NX during E3 in 2016. This was followed by a Q&Q, revealing Nintendo was also doing R&D on virtual reality.

Pokémon Go hits the market, and the world pretty much becomes crazed trainers for about a year. It caused shares in Nintendo to double, but this was due to "investor misunderstanding" that software was property of Nintendo.

The developer of Pokémon Go was Niantic, which Nintendo later stated they owned 32%.  Nintendo would receive licensing and other revenue from the game, but profit would be limited. Stock prices fell, to the tune of 17% in a single trading day.

None of that mattered. Nintendo was still valued at over 100 times its net income.

While also being a video game giant, Nintendo of America owned 55% of the Seattle Mariners. 90% was sold to a group of investors, led by John Stanton for a cool $640 million.

Nintendo's first in-house developed mobile game Super Mario Run in September 2016, gave stock prices a huge boost. The difference between SMR and Pokémon Go was development came from Nintendo themselves. No third-party developer.

Super Mario Run was dropped in December 2016, surpassing 50 million downloads in a little under a week.

October 20, 2016, a preview trailer about the long awaited NX was released - with the official name to be the Nintendo Switch. According to Fils-Aimé, the Switch was a way for game devs to create concepts with no limits.

Fast-forward to present day, we see a Nintendo x Tencent partnership that allows for Honor of Kings to be published for the Switch. They're working with Illumination Entertainment to make an animated Mario film.

Oh, by the way, Illumination Entertainment is a division of Universal Pictures. The same Universal who sued Nintendo over 40 years ago. Business is business at the end of the day.

Right now former managing executive officer and outside director of The Pokémon Company, succeeded Kimishima as company president.

What's Next?... for Nintendo & Us...

2019-2020 will see an onslaught of Switch games, from new series titles, to the continuing of titles like Luigi's Mansion and Metroid Prime.

It seems like Nintendo is going all in on the Switch, and rightfully so.

Pokemon Lets Go, being the tease to the true Pokemon title we're waiting for.

Final Fantasy VII, crossing over to the Switch is massive for all gaming and FF fans.

Bayonetta 3, which will look to top their stunningly fun sequel.

Digimon Survive, for those of us who loved the series growing up

Mortal Kombat 11, which is a massive move for Nintendo in the console market

It's remarkable to see in 130 years where Nintendo has come, and what that means moving forward. They've seem to have become so ingrained into our lives, that it would be hard to every push them out. Even if they did release something we didn't like, the rarity of that may even make it dope.

Nintendo if a company full of lessons to be learned, from their humble Hanafuda card beginning, to working their way up to toys and eventually video games + consoles. All along the way, fighting for their position. Looking to constantly do better and be better in a market with only a few giants.

Use this blog post as a learning curve in a sense, for where you're starting to where you can end up. It may be one area or interest, but may change over time.

As Nintendo as shown, sometimes pivoting is the best move and will give your company foundation for years too come.

Link to upcoming Switch games - http://www.nintendolife.com/nintendo-switch/games/browse?status=upcoming

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