Hiroshi Yamauchi

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Hiroshi Yamauchi (山内溥 (formerly 山内博) Yamauchi Hiroshi?, born November 7, 1927 in Kyoto) is a Japanese businessman. He was the third president of Nintendo Co., Ltd. beginning in 1949 until stepping down on May 31, 2002. Yamauchi is credited with transforming Nintendo from a small hanafuda card making company in Japan to the multi-billion dollar video game company that it is today. Yamauchi was succeeded at Nintendo by Satoru Iwata. Yamauchi also became the majority owner of the Seattle Mariners baseball team in 1992, which is now managed by former Nintendo of America chairman, Howard Lincoln.

As of 2008, Yamauchi is the richest man in Japan and 149th richest person in the world, having a net worth of approximately $7.8 billion.[1]

Contents

[edit] Biography

[edit] Early years

Hiroshi Yamauchi was born on November 7, 1927 to Shikanojo Inaba and Kimi Yamauchi. Kimi Yamauchi is the granddaughter of Shikanojo Inaba who agreed to adopt the family name and was expected to take over the Yamauchi family business. In 1933 he mysteriously abandoned his family as a result Kimi moved in with her sister. Hiroshi was left in the care of her parents Sekiryo and Tei Yamauchi. [2]

Hiroshi was sent to a preparatory school in Kyoto at age twelve and had planned to study law or engineering but World War II disrupted his studies. Since he was too young to fight he was put to work in a military factory. Once the war ended in 1945 Hiroshi went to Waseda University to study law. He married Michiko Inaba. With the absence of Yamauchi’s father, his grandparents met to arrange the marriage. [3]

[edit] Start of his career with Nintendo

Yamauchi led Nintendo in a "notoriously imperialistic style."[4] Hiroshi’s grandfather had a stroke in 1949. Since he was the president of Nintendo and had no other immediate successor, he asked Hiroshi to immediately come to Nintendo to assume the position of president. He had to leave Waseda University in order to assume the position. Hiroshi would only accept the position if he is the only family member working at Nintendo. Reluctantly Hiroshi’s grandfather agreed and died shortly after. Under the agreed upon terms, his cousin had to be fired. Due to his young age Hiroshi was viewed as lacking experience and thus some of his employees resented him. He fired many long time employees and anyone that might question his authority. He had the company named changed to Nintendo Karuta and established new headquarters in Kyoto. He was the sole judge of potential new products, and only a product that appealed to him and his usually extremely accurate instincts went on the market. [5] [6] [7]

Through a licensing agreement with Walt Disney in 1959, they sold 600,000 packs of cards in one year. Even with the great success, Hiroshi once again changed the company name to Nintendo Company Limited. In order to assist Hiroshi in financing new branches he took Nintendo public (listed on stock market) and became the chairman. [8] [9]

Some of the new areas Hiroshi ventured into included a taxi company called Daiya, a love hotel with rooms rented by the hour and individually portioned instant rice. All of these ventures eventually were stopped and Hiroshi decided to move Nintendo’s focus into entertainment. With an already established distribution system into department stores throughout the country this would assist greatly with this new focus. Hiroshi created a new department called games and setup a warehouse in Kyoto for the purposed of research and development. Gunpei Yokoi was assigned to the games department and was asked to create something great. Yokoi created the Ultra Hand, which became a great success. Hiroshi led Nintendo and push for creation of successful toys such as the Love Tester, and a light gun using solar cells for targets. [10] [11] [12]

[edit] Beginning of the Electronics Era

Hiroshi realized that technological breakthroughs in the electronic industry realized that electronics could be incorporated into entertainment products since the prices were decreasing. Atari and Magnavox were already selling gaming devices that were played on the television set. Hiroshi negotiated a license with Magnavox to sell its game system, the Magnavox Oddysey. After hiring several Sharp Electronics employees, Nintendo launched the Color TV Game 6 on in Japan, which was followed by several revisions and updates of this series.

Hiroshi decided to expand Nintendo into the United States in order to cash in on the growing American arcade market. He hired his son-in-law Minoru Arakawa to head the new American operation. When Japanese hits such as Radar Scope, Space Fever, and Sheriff did not achieve the same success in the United States, Yamauchi turned to designer Shigeru Miyamoto's pet project Donkey Kong, which became a smash hit.

Yokoi, who Hiroshi had set in charge the games department, created the first portable LCD video game featuring a microprocessor called the Game & Watch. Although the Game & Watch were successful, Hiroshi wanted something that was cheap enough that most could buy it and yet something unique enough so that they dominated the market for as long as possible. [13]

[edit] NES

The Famicom was created and Hiroshi was so confident with this device that he promised some electronics company million unit orders within two years. Famicon easily reached that goal and after selling several million units had been sold at a cost of about 100 dollars each sales were still strong. Hiroshi realized the importance of the software that ran on the game systems and made sure the system was easy to program. Hiroshi believed that technicians did not create excellent games but artists did. The Famicon was released in the United States as the Nintendo Entertainment System (NES). Hiroshi with no engineering or video game background was the only one deciding which games were to be released. His remarkable intuition for what people would want in the future was one of the main reasons for Nintendo’s success. To help spring creativity, he created three research and development groups and allowed them to compete against each other. This caused the designers to work harder to try to get their games approved. [14] [15]

[edit] SNES

In 1990 the Super Famicon was released in Japan. It was subsequently released a year later in North America as Super Nintendo Entertainment System and in 1992 in Europe. The Super Famicon had been sold out within 3 days in Japan and had gamers camping for days outside shops in hope of getting their hands on the next shipment. The SNES was redesigned for its release and was more box like as compared to its counterpart in Japan. At the same time, Game Boy was released in USA, and Nintendo spent millions in advertising for both consoles, which resulted in a big pay off as they beat other similar consoles in the figures war. Yamauchi had displayed from the beginning a knack at identifying good games even though he had never played them, and he continued to do so alone at least till 1993. One of the major reasons for the success of SNES was the abundance of good games developed for it.

In 1993, the Super FX Chip was launched that would make the SNES faster. Around the same time, Nintendo increased its research facilities. Nintendo showed major expansion during this period with new plants, R&D facilities and partnership with Rare. Later on, Donkey Kong Country was released - the first game to use 3D CGI model to produce realistic sprites with 3D appearance. In 1995 the Virtual Boy arrived on the scene, bringing with it a glimpse of the fully interactive environment that would be formed in the Wii 14 years later, but unfortunately was a big disappointment of its own. Despite the bust, Hiroshi said at a press conference that he still had faith in it and that the company would continue developing games for it. Primary developer Gunpei Yokoi was heavily criticized for the failure leading to his eventual resignation from Nintendo after 30 years of service. Yokio went on to make Wonderswan, which failed due to lack of games licenced for it. This highlighted the brilliance of Yamauchi, who always placed games above the console.

[edit] N64

In 1996, Nintendo released its new, fully 3D console, the Nintendo 64, and Yamauchi used it to draw attention away from Virtual Boy. Simultaneously Super Mario 64 was launched as the first fully 3D platform game. In 1999, Yamauchi and Nintendo announced their intentions to work on a new system with IBM Gekko processor and Matsushita DVD technology Dolphin. This system was christened GameCube. Yamauchi talked at the E3 about the impact that the release of Xbox will have on the GameCube. [16] [17]


[edit] GameCube

Main article: Nintendo GameCube

Yamauchi touted the GameCube as being a machine designed exclusively to be a video game console; an approach which he considered different from Microsoft's and Sony's for their respective Xbox and PlayStation 2 systems. He believed that the GameCube would specialize in providing the best gaming experience possible as opposed to the all-encompassing entertainment hubs being promoted in its competitor's products (both the Xbox and the PlayStation 2 have DVD and CD-ROM playback functionalities, while the Xbox also features a built-in hard drive). This bias towards "performance only" and the creation of hardware that would allow developers to "easily create games" is what Yamauchi believed would set the competitors apart from the GameCube.

Yamauchi also wanted the machine to be the least expensive available of its kind, in his belief that people "do not play with the game machine itself. They play with the software, and they are forced to purchase a game machine in order to use the software. Therefore the price of the machine should be as cheap as possible." Nintendo hence priced the GameCube significantly less expensive than its rivals in the market, although the console's games were priced identically to those designed for the competing systems.

He also sought to make sure the GameCube was a simple platform to create games for, an advantage which implied lower development costs; thus a greater number of developers would be attracted to the console, and subsequently a higher number of games would be made for it, produced and released at a faster rate.[18]

[edit] Family

In 1950, Michiko, Hiroshi’s wife gave birth to their first child, a daughter named Yoko. During the next few years, Michiko had several miscarriages and was often ill. In 1957 she gave birth to another daughter, Fujiko and shortly after a son named Katsuhito. [19]

Yamauchi’s father, Shikanojo returned years later to see his son, he refused to speak to him. When Hiroshi was close to 30, he was contacted by his half sister and informed that Shikanojo had died in stroke. Hiroshi spent a day alone thinking if he should go before finally going. At the funeral he met his father’s wife and their 4 daughters that he never even knew existed. He began feeling sorry about that he hadn't taken the opportunity to reconcile with his father when he was still alive. The death of his father changed Hiroshi, and he grieved for months and cried freely. From that day he has always made regular visits to his father's grave. [20]

[edit] Hiroshi Yamauchi and Baseball

In the early 90s, the Seattle Mariners were up for sale and the then owner asked Nintendo America to find a Japanese investor who would keep the club in Seattle. Hiroshi Yamauchi offered to buy it even though he had never been to a baseball match. Even though the owner accepted the offer, the baseball commissioner and ownership committee was strongly opposed to the idea of a non-North American owner and did not approve the deal. However, following the strong support and sentiments of the people of Seattle and press and having the decision be deemed as racist, the commissioner formally approved the deal, under the condition that Yamauchi had less than 50% votes. This was a major development in American baseball because this opened the gates for Japanese baseball players to American league teams, entry in which had been denied so far as the Japanese players were not deemed physically fit for the toughness of the sport in North America. In 2000, the club made its first profit of $2.6 million since its acquisition by Yamauchi. [21] [22]


[edit] Post-Nintendo

On May 31, 2002, Yamauchi stepped down as president of Nintendo and was succeeded by the head of Nintendo's Corporate Planning Division, Satoru Iwata. Hiroshi Yamauchi subsequently became the chairman of Nintendo's board of directors. He finally left the board in June 29, 2005 due to his age and because he felt that he was leaving the company in good hands. Yamauchi also refused to accept his retirement pension, which was reported to be around $9 million to $14 million, feeling that Nintendo could put it to better use. He is now the richest man in Japan, mainly due to Nintendo's shares practically tripling since the Wii was released, according to www.forbes.com. He reportedly donated $60 million to Kyoto University Hospital in early 2006, giving the world a rare glimpse of his soft side with his humanitarian effort. He is also Nintendo's larger shareholder despite stepping down. He still also retains a 10% share in Nintendo as of 2008.[1]

[edit] Quotes

  • "[People who play RPGs are] depressed gamers who like to sit alone in their dark rooms and play slow games." - Interview in 1999[23]
  • "I have been saying this for some time, but customers are not interested in grand games with higher-quality graphics and sound and epic stories. Only people who do not know the videogame business would advocate the release of next-generation machines when people are not interested in cutting-edge technologies." - Top 10 Tuesday: Wildest Statements Made by Industry Veterans [24]
  • Hiroshi Yamauchi had the following final words for his Nintendo executives: "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." -Final words for Nintendo executives [25]

[edit] References

[edit] External links

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Nintendo Co., LTD presidents
Fusajiro Yamauchi (1889–1929) · Sekiryo Kaneda (1929–1949) · Hiroshi Yamauchi (1949–2002) · Satoru Iwata (2002–Present)