Hiroshi Yamauchi

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.ref|money

Biography

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. ref|4

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. ref|4

tart of his career with Nintendo

Yamauchi led Nintendo in a "notoriously imperialistic style."ref|Kent 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 were the only family member working at Nintendo. Reluctantly Hiroshi’s grandfather agreed and died shortly after. Under the agreed upon terms, his older cousin had to be fired. Due to his young age and total lack of any management experience, most employees did not take Hiroshi seriously and many resented him. Soon after taking over, he had to deal with a strike by factory employees who expected him to cave in easily. Instead, he asserted his authority by firing many long time employees who questioned 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. ref|1 ref|4 ref|7

He was the first to introduce the plastic Western playing card into the Japanese market. Western playing cards were still a novelty in Japan and the public associated them with Western-styled gambling games such as poker and bridge. Most gambling activities were technically illegal by default with only a few legally sanctioned exceptions (horse racing, pachinko, lottery). Therefore, the market for anything which was associated with gambling, including Hanafuda, was limited. Yamauchi's first "hit" came when he made a licensing agreement with Walt Disney in 1959 for his plastic playing cards. Nintendo targeted its playing cards as a tool for party games that the whole family could enjoy, a foreshadowing of the company's approach going into the 21st Century. Disney's tie-in was made towards that end. Nintendo's Disney playing card was also accompanied by a small, thin booklet with many tutorials for different card games. The strategy succeeded and the product sold 600,000 units in one year, soon gracing Nintendo with the domination of Japanese playing card market. With this success, Hiroshi once again changed the company name to Nintendo Company Limited and took the company public (listed on stock market) and became the chairman. ref|1 ref|7 He then decided to travel to the U.S. to visit the United States Playing Card Company, the world's biggest manufacturer of playing cards. Upon arriving in Cincinnati, Yamauchi was disappointed to see a small-scale office and factory. This led to the realization that card manufacturing was an extremely limited venture.

Upon his return to Japan, Hiroshi Yamauchi decided to diversify the company. Some of the new areas he 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 failed and brought the company into the brink of bankruptcy. However, one day, Yamauchi spotted a factory engineer named Gunpei Yokoi playing with a simple extendable claw, something Yokoi made to amuse himself during his break. Yamauchi ordered Yokoi to develop the extendable claw into a proper product. The product was named Urutora Hando (Ultra Hand) and was an instant hit. It was then that Hiroshi decided to move Nintendo’s focus into toy making. With an already established distribution system into department stores for its playing cards, the transition was a natural one for Nintendo. Hiroshi created a new department called Games and Setup, manned initially by only Yokoi and another employee who looked after the finances, and was situated in a warehouse in Kyoto for the purpose of research and development. Gunpei Yokoi was solely assigned to develop new products. Yokoi utilised his degree in engineering by developing what is now known as electric toys such as the Love Tester, and a light gun using solar cells for targets. These electric toys were quite a novelty in the 60s when most other toys were simple in origin, such as toy blocks or dolls. Eventually Nintendo succeeded in establishing itself as a major player in the toy market. ref|1 ref|4 ref|7

Beginning of the Electronics Era

Hiroshi Yamauchi realized that technological breakthroughs in the electronic industry meant 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 Odyssey. After hiring several Sharp Electronics employees, Nintendo launched the Color TV Game 6 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 of the games department, created the first portable LCD video game featuring a microprocessor called the Game & Watch. Although the Game & Watch was 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. ref|4

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 Famicom 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. ref|1 ref|4

NES

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 11 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. Yokoi 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.

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. ref|1 ref|2

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. [http://members.aol.com/mips36/hiroshi_yamauchi.htm]

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. ref|4

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. ref|3

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 game. 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. ref|4 ref|5

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. [ [http://www.nintendo.co.jp/ir/en/stock/index.html#02 Investor Relations Information : Stock Information ] ]

Quotes

*" [People who play RPGs are] depressed gamers who like to sit alone in their dark rooms and play slow games." - Interview in 1999 [http://ds.ign.com/articles/695/695790p1.html]

*"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 [http://ds.ign.com/articles/695/695790p1.html]

*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 [http://stars.ign.com/objects/919/919303_biography.html]

References

* cite web | title=Hiroshi Yamauchi at Forbes.com | url=http://www.forbes.com/lists/2008/10/billionaires08_Hiroshi-Yamauchi_LZWJ.html| accessdate=March 8 | accessyear=2008
* cite book | author=Kent, Steven L. | title=The Ultimate History of Video Games | publisher=Three Rivers Press | year=2001 | id=ISBN 0-7615-3643-4
* cite book | author=Sheff, David | title=Game Over | publisher=Random House | year=1993 | id=ISBN 0-679-40469-4

*cite web | title=History of Nintendo on Gamespy.com | url=http://nindb.classicgaming.gamespy.com/1889.shtml | accessdate=May 7 | accessyear=2008
*cite web | title=History of Nintendo on NintendoDomain.net | url=http://nintendodomain.net/content.php?news=73| accessdate=May 7 | accessyear=2008
*cite web | title=Hiroshi Yamauchi on Nintendoland.com | url=http://www.nintendoland.com/home2.htm?profiles/h_yamahi.htm| accessdate=May 7 | accessyear=2008
*cite web | title=Hiroshi Yamauchi on n-sider.com | url=http://www.n-sider.com/articleview.php?articleid=272 | accessdate=May 7 | accessyear=2008
*cite web | title=Hiroshi Yamauchi at Forbes.com | url=http://www.forbes.com/2000/11/22/1122faces.html| accessdate=May 7 | accessyear=2008
*cite web | title=Inverview of Hiroshi Yamauchi | url=http://cube.ign.com/articles/492/492253p1.html| accessdate=May 7 | accessyear=2008
*cite web | title=History of Nintendo on Nintendoland.com | url=http://www.nintendoland.com/home2.htm?history/hist1.htm| accessdate=May 7 | accessyear=2008

External links

* [http://cube.ign.com/articles/608/608277p1.html IGN's report] on Yamauchi's leaving of the board of directors
* [http://n-sider.com/articleview.php?articleid=272 N-Sider.com's article on "The Mind Behind the Empire"]
* [http://cube.ign.com/articles/492/492253p1.html IGN's summary] of the Hiroshi Yamauchi interview at Nikkei Business Daily
* [http://web.archive.org/web/20021101115055/http://classicgaming.com/features/articles/yamauchi/index2.shtml ClassicGaming.com - Hiroshi Yamauchi Retires From Nintendo] (Waybacked)
* [http://www.findarticles.com/p/articles/mi_zd1up/is_200402/ai_ziff119142 "Hiroshi Yamauchi On Nintendo's Future"] from 1UP on FindArticles.com
* [http://www.nintendoland.com/home2.htm?profiles/h_yamahi.htm Biography of Hiroshi Yamauchi] at Nintendo Land
* [http://www.forbes.com/lists/2008/10/billionaires08_Hiroshi-Yamauchi_LZWJ.html]
* [http://www.n-chicken.net/vs/miyamoto-yamauchi.shtml Parody: Miyamoto vs Yamauchi]
* [http://middaysoftware.com/MinhsBlogs/articles/223.aspx Reprint of the Hiroshi Yamauchi Wired Interview that was confirmed to be a hoax]