It’s tempting to portray Satoru Iwata, the President & CEO of Japanese gaming giant Nintendo for the past 13 years, simply as a man who allowed his inner child to run free.
It is certainly true that Iwata, who sadly died of cancer on Saturday (July 11), rarely let his corporate obligations preclude him from having fun.
This is one reason why thousands of Nintendo fans from around the world are now paying tribute to the exec in suitably creative style.
Iwata proved that running a commercial behemoth in the manner of a passionate, playful customer can pay major dividends.
You have to wonder how many other modern kings of enterprise would inspire such heartfelt devotion amongst their consumers.
Ultimately, Iwata will be remembered as the man who turned around Nintendo – a publicly-traded giant with a current market cap of $20bn – from an also-ran of the ultra-competitive gaming industry into one of Japan’s richest companies.
At one point under his watch, Nintendo claimed the biggest valuation on the Japanese stock market, ahead of Toyota, Mitsubishi and Sony.
Iwata, born and raised in Sapporo in the north of Japan, was certainly more immersed in the world of his customers than your average business honcho; see his smile-filled presentations at annual industry conference E3 or his colourful ‘investor’ Nintendo Direct videos (alongside Mario and Luigi, pictured) for proof.
As the video games world mourns perhaps its most cherished business commander, it’s an appropriate time to mark the outstanding leadership qualities of Iwata-san – and politely suggest how the music industry’s top dogs could learn a thing or two from this remarkable executive.
create something Unexpected
Easier said than done, of course. But how many times do we hear me-too conservatism in the music business excused by the fact that execs have quarterly targets or a requirement to feed the short-term demands of shareholders?
When Satoru Iwata took over as President of Nintendo in 2002, the company was beginning to fail.
Locked into a technological arms race with old enemy Sony and new pretender Xbox, Nintendo lacked the sheer spending might of its rival console manufacturers, let alone their Silicon Valley connections.
Although much-loved in some quarters, its Gamecube device fell behind because its horsepower just couldn’t compete.
Iwata’s reaction could have been to dig deeper and try (and inevitably fail) to edge ahead with powerful new systems.
Instead, he took a huge risk: he shifted strategic focus towards the qualities that historically made Nintendo an international treasure – innovation and creativity – rather than gangbusting technology.
In the wrong hands this would have made the CEO a laughing stock, and brought great public embarrassment to the historic family brand of Nintendo.
“An outflanked, third-ranked creative company trusted a huge audience would fall in love with them.”
Yet Iwata sensed that the video games industry was ostracising a potentially huge section of the market with its typically testosterone-drenched, aggressive fare – and that people beyond this ‘core’ audience would appreciate some silly fun in their life.
He was more right than even he could have predicted.
The result was the Nintendo DS; a dual-screen handheld gadget whose most successful games (New Super Mario Bros, Nintendogs, Mario Kart DS) were a world away from the voguish and grisly shoot-to-kill ‘adult’ titles that previously dominated games.
When Iwata first revealed the DS to the world in 2004, critics were bemused; compared to Sony’s rival, the slick black PlayStation Portable, it looked and behaved like a plastic kids’ toy.
To date, the DS series has sold more than 150m units worldwide. It is the second biggest-selling video games device in history. The PlayStation Portable, which sold little over 50m units, has long since been discontinued.
The Wii followed in the same vein from Iwata’s Nintendo; a home console with unspectacular tech credentials, but a motion-sensitive controller perfectly suited for family gaming.
It raced ahead of Sony and Microsoft’s new gaming beasts, the PlayStation 4 and Xbox 360, surpassing 100m sales.
Some of Wii and DS’s most successful titles were the least fancied. Wii Fit, which was barely a game, was an interactive fitness title that spurred chubby parents to get active in the house; Dr. Kawashima’s Train Your Brain, entirely an Iwata idea, promised to keep our intellects healthy as the aging process took hold.
There are surely parallels for the music industry here: an outflanked, third-ranked creative company (howdy Warner!) trusted that a huge audience would fall in love with them if they could just (a) be brilliant and (b) uniquely suit modern mainstream habits.
Not only that, but Iwata’s Nintendo had no concept of – or possibly actively eschewed – concerns over what was de rigueur amongst gaming’s most vocal, but ultimately niche, consumer tribe.
The outcome: fantastic success.
BACK THE TALENT
Music industry executives now nodding in agreement at the oft-parroted line above, ask yourself, would you go this far for your artists?
Like, really?
Nintendo is unlike any major music company because the talent behind its biggest products – Mario, Zelda, Metroid, Wii Fit – are employees.
The superstars are on the payroll.
To cut to the chase, one of these employees, Shigeru Miyamoto, is basically the Beatles of video games. On his own.
In the first decade of his career, Miyamoto (now tipped to become Iwata’s successor as Nintendo CEO) created Donkey Kong, Super Mario Bros and The Legend Of Zelda.
If you’re unaccustomed to games lore, that’s basically like knocking out Sgt Pepper, Thriller and Songs In The Key Of Life by the time you’re 35.
Commercially-speaking, Miyamoto had endured some pretty barren years before Iwata’s arrival.
But the new Nintendo CEO had unwavering faith in Miyamoto’s ability to delight audiences – he just thought he’d been playing to the gallery.
“I sincerely doubt employees who fear they may be laid off will be able to develop impressive software titles.”
Satoru iwata, Nintendo
Nudging him in a new direction of cross-family entertainment, Iwata gave Miyamoto the loose creative parameters he needed to help create a procession of industry-changing titles – Wii Fit, Wii Sports, Nintendogs and Super Mario Galaxy amongst them.
All of those games arrived in Nintendo’s second golden age. But it would be imprecise to suggest that Iwata’s leadership was nothin’ but net.
After the phenomenal success of the mid-noughties, Nintendo’s rivals – including Apple‘s iPhone – began aping this ‘everyone can play’ approach. (You can draw a direct line from Iwata’s philosophy to modern gaming giants such as Candy Crush and Minecraft.)
Iwata struggled to propel Nintendo’s Wii and DS success to further heights, especially as completely new consoles such as the Wii-U and 3DS were seen as mere iterative updates by fans.
But check this out: as shareholder pressure grew on Iwata to cut his creative staff – a unique team of Miyamoto protegees – he steadfastly refused.
In 2013, he simply told investors: “If we reduce the number of employees for better short-term financial results, employee morale will decrease.
“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.”
‘Hi Vivendi. We refuse to sign fewer artists – and we’re not signing artists on shorter contracts. If we do that, they will suffer from uncertainty and be less creative.’
Just imagine.
Don’t mistake Iwata’s belief in talent as a lack of business acumen, either.
In the same investor call, he added: “We should of course cut unnecessary costs and pursue efficient business operations… [but] I believe that laying off a group of employees will not help to strengthen Nintendo’s business in the long run.”
Lesson: without signing the best creative talent, showing it encouragement and placing it in a securely financed environment, greatness cannot prevail.
love music – and spend time at an indie
It’s been said that the music business is held back by containing too many fans and not enough pure-bred businesspeople.
Satoru Iwata would have likely dismissed this theory as nonsense.
In a keynote address to games developers in 2005, he said: “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.”
Rapturous applause followed, but there was much more to this remark than stirring rhetoric.
Iwata never plotted to become a CEO of a corporation.
He adored games from an early age. After leaving university he set up independent development house HAL so he could create them.
“On my business card, I am a corporate president. In my mind, I am a developer. But in my heart, I am a gamer.”
Like most independent company owners, Iwata did a bit of everything – partly how he discovered his aptitude for financial management.
“Sometimes people ask me what I did when I was hired at HAL,” he later explained. “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.”
Iwata’s experiences at HAL meant that, even under the fierce fiscal pressures of a public corporate, he never lost his ability to think like his customers – nor his respect for Nintendo’s fans.
The final banner piece of software release by Iwata’s Nintendo before his passing was the cartoonish action title Splatoon.
Notably, this bucked the trend for a prevalent penny-pinching model in video games today; releasing extra unlockable content post-release as paid-for ‘DLC’.
On Splatoon, the unlockable content existed, but it was all on the disc kids bought in shops. It cleverly began to appear weeks after purchase – no additional payment required.
Iwata’s formative experiences at HAL clearly helped him develop the self-assurance he needed to laugh at himself. Only the best leaders can laugh at themselves.
In a 2005 presentation, Iwata explained that HAL was a tribute to Stanley Kubrick’s 2001: A Space Odyssey, before presenting an old photo of himself, looking not a little awkward and try-hard on the back of a motorcycle.
“We thought that name [HAL] was very cool,” he said. “This is what I looked like back then. Like all game creators, I was extremely cool, too…”
Your salary should reflect your performance.
It is a wonder that the salary of the music business’s top execs isn’t put under more scrutiny more often.
Recent reports suggest that the top dogs of the biggest major labels in the US may be on somewhere between a monstrous $15m -$20m annually.
Just for fun, here’s a quick calculation: it would take around 2.9bn streams of tracks on Spotify to raise that much money for the music industry.
As for Satoru Iwata? A man who headed up a public company, not a subsidiary; who revolutionised an entire industry; and who made his employer the most successful firm in all of Japan?
His salary was reportedly worth around US $2m each year.
That is, until 2011.
Disappointed by the performance of the Nintendo DS’s successor, the 3DS, Iwata and his executive team did not offer Nintendo shareholders excuses or blame the ‘digital climate’ for their under-performance.
They took a massive, self-inflicted paycut. No-one asked them to do so.
Iwata bore the brunt; he slashed his own income in half.
The power of entertainment really does matter
Throughout his career, Satoru Iwata demonstrated one characteristic above any other: a complete belief in the importance of the product.
With the right amount of creativity and invention, he felt that success was almost an inevitability.
This perhaps came back to bite him when you look at the muddy marketing of his biggest failure, the Wii U console.
There’s undoubtedly something valuable in his approach, though, whether you judge your career – and the industry you find yourself in – entirely on fiscal prowess or, as Iwata would prefer, something deeper.
“Like any other entertainment medium, we must create an emotional response in order to succeed,” he once told his fellow developers.
“Laughter, fear, joy, affection, surprise, and – most of all – accomplishment. In the end, triggering these feelings from our players is the true judgment of our work.”
“triggering laughter, fear, joy, surprise… is the true judgment of our work.”
How, though, do you really know if what you’ve created is good enough – or even worth the effort?
Many people in the music business will tell you that the metric of success should be judged with charts, YouTube counts or Shazams. They seem mighty reassuring.
Iwata, as so often was the case, saw things a little more romantically.
One of proudest moments of his career came after he worked on the creation of a game called Super Smash Bros for Nintendo 64, released in 1999.
On the one hand, SSB borrowed from a hackneyed format; a ‘beat ’em up’ in which the winner was the first to knock their opponent to the floor.
But Iwata knew it could be made fresh, made fun, by stuffing it with Nintendo’s trademark charm and artfully balanced game mechanics.
Nintendo’s bosses were not impressed. The ‘A&R man’ of the video games world had some serious convincing to do.
Iwata once recalled: “When we brought the idea to Nintendo, the concept did not sound hip or cool or revolutionary.
“Because of all this, there were people both inside and outside Nintendo who did not strongly favor the idea.”
“People smiled. They laughed. They began shouting at each other. that moment stays with me always.”
He added: “That attitude remained until the moment of truth – the moment the testers began picking up the controllers and actually playing the game.
“This is what happened: People smiled. They laughed. Then began shouting at each other.
“Yes, the Smash Bros. series has become a great worldwide success because it’s sold more than 10 million copies.
“But the memory of that first moment when the testers began to play stays with me always.
“That is the moment I call success.”Music Business Worldwide
