History of Nintendo

Responding to technological change

Fusajiro Yamauchi (1889 – 1940) Founded in 1889 to sell playing cards. Most playing cards were illegal in Japan

They had been used for gambling Hanafuda cards were legal, but not very

popular Mr. Yamauchi decided the problem was quality

Color printing was pretty primitive Solved it by

hand-painting the cards

花札

山内 房治郎

Business wisdom

When a productdoesn’t sell,

improveit.

Fusajiro Yamauchi (1889 – 1929) When more card games became legal, was

positioned to sell them. Stayed in

charge untilhe was 70,in 1929.

Replaced byhis son in law Sekiryo Kaneda

Sekiryo Kaneda (1929 – 1949) Kept the company running through WWII and

the US occupation. Had a stroke in 1949 and died soon

afterwards. Left the company to Hiroshi Yamauchi, his

grandson.

Hiroshi Yamauchi (1949 – 2002) Born 1927. Too young to fight in WWII, so he worked in a

factory. Inherited Nintendo when his grandfather died

in 1949, aged 21. Dropped out of law school to manage

the business. Wasn’t taken seriously by the workers

until he fired those who didn’t do theirjobs.

山内 溥

Perception of cards Yamauchi brought the idea to use plastic-

covered cards. The public saw cards as (illegal) gambling

Yamauchi made a licensing deal with Disney (1959) for their characters.

Provided an instruction booklet for card games with their cards.

Changed the perception of cards to family entertainment.

Business wisdom

Figure yourmarket segment

and make an appropriate

product

The limits of the card business Yamauchi visited the United States Playing

Card Company. He saw that the world’s largest playing card

company is still pretty small. He decided to diversify.

Business wisdom

Every business hasa maximum

possiblemarket.

To grow beyond that, you need to

diversify.

Bad ideas Nintendo instant rice Nintendo taxi company Nintendo hotel

Business wisdom

Make mistakes,admit them, and

move on.

Nintendo toys In 1966 Yamauchi saw Yokoi Gunpei, a

maintenance engineer, playing with a hand he created on his break.

Yamauchi realized Nintendo had an important asset: the card distribution chain.

Instead of building a completely new business,diversify into toys.

Made Yokoi Gunpei atoy designer.

Business wisdom

When you see an employee doing something good,

use it.

When you diversify, use your

existing assets.

Video games (1977-now) In 1972 Atari was opened to sell video game

systems. Yamauchi decided to pursue this new opportunity

in 1974. In 1977, Nintendo released its first video game:

Color TV-Game 6. Japan-only

Huge success in Japan. Of course,the game was primitive by ourstandards.

Business wisdom

Know what is happening in your

industry. Other people also have

good ideas.

Expansion to the US market US is a bigger, richer market First few games they tried to sell in the US

failed They got their first US hit, Donkey-Kong, in

1981 One of the first

platform games

Handheld games Yokoi Gunpei saw on the train a bored

businessman playing with his calculator (1979).

Starting in 1980, Nintendo released small handheld games in black and white (the Game & Watch series).

Each device could only do one game.

Replaced by the Gameboy in 1989.

Business wisdom

Keep your eyes open.

What can you do to improve people’s

lives?