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Profile: Satoru Iwata

Sunday, September 28, 2003

"[Iwata] has the instincts you need to survive in this business."
Hiroshi Yamauchi

Profile: Satoru Iwata
The Future of Nintendo

In May of 2002, Satoru Iwata became Nintendo Co., Ltd.'s fourth president since the company's founding by Fusajiro Yamauchi in 1889. And, despite a relatively short period of time in the position, he has already carved out a specific direction for Nintendo's long-term future.

Prior to becoming Nintendo's president, Iwata played a key role in shaping the company's strategy both before and during the introduction of the Nintendo GameCube console in 2001. In particular, Iwata's vision of developing simple, fun-to-play products helped Nintendo to generate a staggering 41% increase in profit to $953 million, on sales of $4.4 billion at the end of the 2001 fiscal year. These figures accounted for a 20% increase in sales on the previous year. And, ultimately, Iwata's tremendous success within Nintendo's Corporate Planning Division made the decision of who to name as a successor significantly easier for Nintendo's former president, Hiroshi Yamauchi.

Gaming From the Beginning

Satoru Iwata was born in 1959, in the Hokkaido Prefecture of Japan. Unlike some Nintendo employees who started life doing something other than producing games - such as Shigeru Miyamoto, who was originally a graphic designer - Iwata demonstrated an early interest in the creation of video games. He came steeped in the tradition of computer programming. And, during his high school years, Iwata produced electronic games at home as a hobby. He produced several simple number games, which used an electronic calculator. He'd then share these creations with his schoolmates.

After leaving high school, Iwata enrolled at the prestigious Tokyo Institute of Technology, where he majored in Computer Science. It was in this environment that Iwata's technical expertise and love of games would propel him directly into the video game industry. Initially, Iwata began to work as a part-time games programmer for HAL Laboratory, Inc., while continuing to pursue his tertiary studies. And finally, in 1982, Iwata joined HAL on a full-time basis. Despite Iwata's obvious enthusiasm for video games, his family wasn't so impressed with the idea of him pursuing a career in the video game industry. In fact, Iwata himself once commented that "My father didn't talk to me for about six months after I joined HAL. They must have thought I was joining a religious cult."

It didn't take long for Satoru Iwata to demonstrate that the video game industry is truly where he belonged. During the 1980's, Iwata was involved with many projects for HAL. And, in turn, HAL provided various levels of support for NCL's own in-house development studios. On several occasions, Iwata branched out and worked for NCL on a freelance basis. He was responsible for programming a number of NCL-developed games, including Balloon Fight and NES Open Golf among others. Only a year after joining HAL, Satoru Iwata began coordinating software production and development of various Nintendo-published titles. It was during this time when Iwata played an important role in what would become one of Nintendo's most popular and well known franchises.

Creating a Dreamland

Although Satoru Iwata worked as a programmer on several games (both independent HAL releases as well as Nintendo releases), his most notable creation would have to be the Kirby series of games. Whilst Satoru Iwata is often credited with being the game's creator, it was actually Masahiro Sakurai who developed the Kirby character as well as the basic concept for the game. However, it was Iwata's heavy involvement in the project that ultimately brought about the very first title in the series. And Kirby's Dreamland was the game that started it all. The game was designed for Nintendo's original Game Boy handheld system and the intention was to create a game for beginners; one where a player of any skill level could reach the ending. Kirby's Dreamland was released in Japan on the 27th of April, 1992 and saw its American release in August of that same year.

Over the next decade, Iwata played key roles in the development of some of Nintendo's most important games. During the GameCube-era in particular, Iwata's involvement with game development greatly increased. He played a role in the development of games such as Super Mario Sunshine, Star Fox Adventures, Metroid Prime, Eternal Darkness: Sanity's Requiem, Animal Crossing and The Legend of Zelda: The Wind Waker among many others.

During the 1990's, Satoru Iwata also demonstrated a strong understanding of the video game industry. Soon after HAL Laboratory virtually went bust in 1992, Iwata was appointed president of the company. Iwata's presidency lasted around seven years, between 1993 and 2000. And during that time, he is credited with having brought HAL back into the black.

Satoru Iwata's willingness to make decisive moves to save the company not only revived HAL itself, but also nabbed the interest of Hiroshi Yamauchi. As it would turn out, Iwata's time at HAL was being closely watched; his success with that business would ultimately lead him down a highly influential path at NCL.

Man With a Plan

In 2000, Satoru Iwata moved from HAL to NCL. He was made the head of Nintendo's Corporate Planning Division, where he was responsible for Nintendo's corporate planning on a global basis. This new job, directly within NCL itself, gave Iwata an even greater opportunity to demonstrate his strengths. Iwata's experiences within HAL over an 18 year period proved to be highly valuable to Nintendo, especially in regard to the launch of its latest game system.

The realities of the industry were clearly apparent to Iwata; games were becoming more and more expensive to develop and as a result, profitability for the entire industry was dropping. In addition, Iwata felt that game players were no longer as surprised or interested in elaborate 3D graphics as they had been during the previous generation. With that in mind, Iwata's goal was twofold; make development time much shorter and less expensive and; focus on creating entirely new game experiences and add a unique spin to existing concepts.

Ultimately, Satoru Iwata's growing commitment to Nintendo came to a single, defining point in May of 2002. It was on an afternoon in May that Iwata was summoned to Hiroshi Yamauchi's office. And, for the two hours that followed, Yamauchi lectured Iwata on the many challenges that he had faced during his half-century-long presidency at Nintendo. Yamauchi explained, in great detail, how he had overcome these challenges and transformed Nintendo from a simple playing card manufacturer into one of the world's most powerful entertainment companies. During subsequent interviews, Iwata commented that he originally suspected that Yamauchi wanted to fire him. Of course, Yamauchi's intentions were quite the opposite; he had decided that Satoru Iwata would be the company's next president.

"The reason for Iwata-san's selection comes down to his knowledge and understanding of Nintendo's hardware and software." -- Hiroshi Yamauchi

Satoru Iwata became Nintendo's president soon after his meeting with Yamauchi. Hiroshi Yamauchi subsequently became an advisor to Nintendo's new board of directors (a position which he still holds today). And, although Satoru Iwata has only been at the helm for just over two years, his impact is already being felt. Iwata is largely credited as being the man who spearheaded Nintendo's pursuit of specific third party developers (such as Sega, Namco and Capcom), who continue to play an ever-increasing role in GameCube's software development.

Yamauchi's View

Nintendo's former president, Hiroshi Yamauchi, is one of the most respected men in the video game industry. It was Yamauchi who introduced Nintendo to the world of electronic entertainment and it was Yamauchi who successfully guided the company into almost complete market domination during the 1980's and early 1990's. Considering Yamauchi's uncanny ability to predict trends in pop-culture and to imagine the industry's position several years into the future, it was clear that NCL's next president needed to be an exceptional individual.

During a press conference in August of 2002, Hiroshi Yamauchi took the opportunity to discuss the transition. Specifically, Yamauchi explained why he chose Satoru Iwata as his successor. "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," said Yamauchi, "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."

In addition to pointing out Iwata's past experience with Nintendo and his understanding of the game industry at large, Yamauchi also addressed Iwata's age. Members of the Japanese press in particular seemed interested in Iwata's age and they wondered whether or not Yamauchi had considered age to be a factor. Although Yamauchi did not consider age to be of primary concern, he did acknowledge that a younger president would be able to travel around the world with much greater ease than he had been able to, during his time with Nintendo. Specifically, Yamauchi felt that Nintendo's ability to communicate on an international scale had been insufficient, as a result of his own health concerns in previous years.

Satoru Iwata himself also acknowledged that contact between Japan and the United States was going to be increasingly important, as at the time, 70 per cent of Nintendo's sales came from territories outside Japan. Iwata mentioned that during the development of the GameCube, he had been travelling to the United States once a month and that during the console's development cycle, he had covered some 40 round-trips between Japan and America.

At the end of the press conference, Hiroshi Yamauchi was asked if he had any words for Nintendo's new management executives. "As I retire from management," said Yamauchi, "I have no words to share. Coincidental to my leaving the company, I would like to make one request: that Nintendo give birth to wholly new ideas and create hardware which reflects that ideal. And make software that adheres to that same standard. Furthermore, this software should attract consumers as new and interesting. Lastly, and of equal importance, is completing these products quickly and at a cost comparable to today's current market. I imagine most people question the feasibility of my request, but Nintendo has always pursued those objectives. I'd ask that the company continue to follow this goal as my final and only request to the new management staff. I can't say what these new types of software will be, but I'm sure they'll release it during my lifetime."

The Industry According to Iwata

As Satoru Iwata settled into his role as NCL's president, two things became apparent. Firstly, Iwata shared Yamauchi's concerns about the current state of the video game industry. And secondly, Iwata was determined to do more than talk; he wanted to implement Nintendo's vision for the industry at every level, from games to hardware.

Iwata's view of the industry has been criticized by various observers in the media on several occasions; he has been criticized for being slow to warm to online gaming and for suggesting that game designers need to place a greater emphasis on simplicity, in a time when games are becoming increasingly complex. In terms of online gaming, Iwata feels that the current model for delivering online games isn't suitable for Nintendo. Despite the fact that Iwata does not see online gaming as the "be all and end all" of the industry's future, he does acknowledge that Nintendo would like to deliver online games at some point. However, unlike its competitors, the ideal model for Nintendo would be a system where games could be played online for free (that is, there would be no extra cost incurred after a player purchases the software). In one interview held in 2002, Iwata elaborated on his concerns in regard to online gaming. "The thing about online is that people are talking about it and bringing it up as this kind of direction for gaming," said Iwata, "but the fact of the matter is that many aren't really paying attention to a lot of the hurdles that have to be jumped before online becomes viable. One of the biggest ones, I think is, what's really going to be the penetration for broadband connections around the world? Where is that going to be in a few years? So people are talking about this and seem to focus only on online, but they fail to answer many of the questions surrounding it."

Iwata continued, "We have a lot of experience in online as I'm sure you're aware. We think very positively about the possibilities. We've done a lot of online experiments in the past. But until these hurdles are met and these problems are solved, I don't think that we should just jump into online because people think there's strength there right now. So we're certainly not in a position where we can say 'there will be an online Mario Kart in 2003.'

Perhaps the most telling summary of Nintendo's online policy can be provided by Iwata himself: "We're not negative toward the idea of going online. We're just practical."

In addition to the ever-popular online issue, Satoru Iwata has expressed serious concerns with the direction that the video game industry is heading, in terms of new software development. Specifically, Iwata is concerned about the increasing complexity of games and what this means for game developers such as Nintendo. In addition, Iwata has previously explained that as games become more complex and sophisticated (and as gamers themselves grow older and go through a change in personal tastes), the industry starts to become saturated with certain types of games (perhaps this could be considered a reference to games such as Grand Theft Auto, and the various games that have followed its lead). In an effort to support his view on the state of the industry, Iwata has mentioned Pokemon several times, citing that the franchise has sold well over 10 million GBA games worldwide, even though the games do not feature highly sophisticated 3D graphics. This, suggests Iwata, is evidence that simple concepts and truly fun ideas can be enough to attract a diverse audience.

"Although many believe that technology automatically enables more realistic expression, I believe that is just not correct." -- Satoru Iwata

Perhaps the most significant contrast between Nintendo and its competitors can be found with the Nintendo DS and Sony's PSP. Whereas the PSP is essentially a portable PlayStation 2 console, with highly sophisticated graphics, the DS is Nintendo's attempt to create something entirely unique. The philosophy behind DS itself is simple; games have become increasingly complex since the early days of the industry and now, Nintendo wishes to "bring gamers back to the start line of 20 years ago." In a sense, the DS is almost the epitome of Nintendo's vision for the future, which could explain why Hiroshi Yamauchi had said that Nintendo would be crushed if the machine fails in the market. Of course, if the DS were to fail in the market, this would not be enough to bring down Nintendo itself. However, it would definitely call the company's overall philosophy into question.

Nevertheless, it's early days yet for DS. And therefore, Satoru Iwata's application of Nintendo's ultimate vision for the industry is still unfolding before our very eyes. Of course, DS itself is just part of the equation. As Nintendo's competitors move into the next generation with consoles that promise to integrate even more non-game-related functionality into their designs, Satoru Iwata himself has left us with the promise of what amounts to an enormous one-two punch from his company; the first being Nintendo DS, the second being GameCube's successor, codenamed "Revolution." At this year's E3, Iwata mentioned that the new game console's codename is based on its central goal: to create a gaming revolution.

It is true to say that at this point in time, Nintendo is at a crossroads. Satoru Iwata has made his company's position clear; Nintendo will not simply follow its competitors. It will instead create its own path, with the goal of reconnecting gamers to the feeling of wonder and excitement that they had when they first played classics like Super Mario Bros. and The Legend of Zelda for the first time.

N-Sider would like to wish Iwata-san the best of luck in his career. We have no doubt that he is more than capable of leading Nintendo into the next generation and beyond.

James Burns



Thanks to Businessweek, Bloomberg, Famitsu, MobyGames, Computer & Video Games, GamePro, EDGE Magazine, GB-Advance Magazine and nDream. Also, a big thanks to Glen Bayer and Anthony JC for their support.