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The key word was stubborn.
In 1981, a young Shigeru Miyamoto was looking for a name for his new, revolutionary videogame character. It was a gorilla, and he had decided that it would be an unusually stubborn ape. So he turned to the Japanese word for “stubborn” in a translation dictionary and picked out one of the English equivalents. Donkey Kong was born.
The character would star in the first project that the 29-year-old Miyamoto was overseeing personally at Nintendo. He had come to the company straight out of art school, and had no grasp of the intricacies of the Zilog Z80 microprocessor that powered Nintendo’s arcade machines. He just wanted to make a game in which a villainous, and stubborn, ape tossed obstacles at a character controlled by the player while it glared and grinned and pounded its chest arrogantly.
Miyamoto already knew what Nintendo’s engineers, who actually knew how the hardware worked, would say about his creation: No. A character with shifting facial expressions and flailing arms would use up the limited memory that was required to run the rest of the game. Donkey Kong was impossible.
But Miyamoto was stubborn too. He anticipated the engineers’ objections to his elaborate game idea. Drawing a series of pixelated images on graph paper, he laid out how the big gorilla could be broken up into sections, each with its own simple animation. “The parts were moving separately, even though it looks like they were all moving together,” he later recalled. “The engineers sometimes said ‘no’ to me, but in this case they said ‘OK, that’s going to work.’”
Today, Miyamoto’s stubbornness is woven into Nintendo’s DNA. As the console maker gears up to launch its new Wii U on Sunday, it is thumbing its nose at all of the prevailing trends in the game industry. Pundits say Nintendo should do everything differently: Dump hardware and put its popular games out on smartphones; ditch the disc and embrace a digital-only business model; pursue free-to-play games with in-app purchases. But its president, a former game designer, says he believes 99-cent apps are killing the game business like a virus. And Shigeru Miyamoto, the company’s game design genius, who went on to create Super Mario and countless other legendary titles, is unwavering in his belief that the real future of home gaming is a crazy idea Nintendo tried 10 years ago and failed at.
A Reputation For Being Loud
Miyamoto told me the Donkey Kong story in 2003 at Nintendo’s headquarters in Kyoto, Japan. After the worldwide success of Donkey Kong, he designed many more arcade hits. As the business model of the games industry shifted from arcades to home consoles, he had overseen the development of hundreds of games that have sold over 4 billion copies. In the process, Miyamoto had risen to become the head of all of Nintendo’s game development efforts and the manager of the company’s Entertainment Analysis and Development division. By the time I first spoke to him, Nintendo had begun marketing Miyamoto as a sort of Willy Wonka of game design, complete with a big goofy grin and a childlike sense of wonder.
That, he said at the time, was not the way he was perceived within his company. “I think that I have a reputation for being loud, being hard on everybody, sticking to minute detailed points,” he told me. “Many would maybe agree that I am a person who even at midnight fights for his own opinions.”
Nintendo was built on Miyamoto’s convictions. Everyone said the American game industry was dead after Atari’s bust; Nintendo refused to believe it and single-handedly resurrected the industry through its tenacity. Rivals introduced portable game systems with color screens; Nintendo dug in its heels with the cheap black-and-white Game Boy for nearly a decade and made a killing.
But its refusal to follow trends sometimes hurt, big time. When the rest of the gaming industry moved to the CD-ROM, Nintendo felt it best to stick with cartridges. What resulted was nothing less than a mass exodus of nearly all of its publishing partners, which moved to the far less risky disc medium and away from Nintendo.
When I sat down with Miyamoto in 2003, there was a growing sense that the stubbornness that had served it well was now destroying Nintendo. The videogame industry had changed drastically, and Nintendo refused to go with the flow. Everyone, including Wired, had advice for the company as it prepared to release its next console: Ditch the cartoony aesthetic for a gritty cinematic game that could appeal to 18- to 25-year-old men, refocus the console around online connectivity, or simply get out of the hardware business entirely and sell software that runs on Microsoft’s and Sony’s machines.
Nintendo rejected all of this advice, pursuing its own vision of simple, immediately gratifying gameplay experiences for all ages. And over the next few years, it experienced a level of success that the game industry had never seen before. The Wii outsold its more technologically sophisticated rivals, the PlayStation 3 and Xbox 360, by tens of millions of units. The Nintendo DS handheld became the best-selling gaming device ever, moving 150 million units. Twelve of the top 20 best-selling games of all time were made by Nintendo for the Wii or the DS. By 2007, the company had a market cap of $73 billion, making it the second biggest company in Japan, well ahead of Sony and just behind Toyota.
It was one of the most dramatic corporate turnarounds of the last decade. But now, Nintendo needs to reinvent itself all over again. Wii peaked early and sales crashed. Smartphones and tablets are eating the lunch of the formerly lucrative gaming handheld business; U.S. sales of the new Nintendo 3DS werelower in the same period of 2012 than they were when it launched in 2011, even after a price drop. Earlier this year, the company posted its first loss since it went public in the 1960s, and recently cut its forecasts for the current fiscal year.
