Nintendo: Its History of Reinvention, Business Practices, and Soft Power

Right. So, today's video is a little bit more different. I wrote this paper for a course in contemporary Japanese society that I did last year. I figured I'd turn it into a video on Nintendo. Nintendo's reinvention, business practices, and soft power. To be specific, Nintendo is a brand beloved by generations of gamers. From American adults who spend their childhoods playing on their S, NES, and Game Boy consoles to the hundreds of millions of people worldwide today who have purchased over 143 million units of the Nintendo Switch console. This global business has been a dominant force across the gaming industry ever since it entered the space in the late 1980s and early 1990s. The company has bucked a number of industry trends and established others. Its practices variously having served as harbingers of developments to come as well as occasional re relics of aged institutional perceptions. Across the body of this essay, I will examine the company's place in the industry and especially how some of the business's uniquely Japanese practices have allowed it to continue to command a leadership position across the sphere. I will also discuss its role as a purveyor of soft power for Japan at large as well as how its history of extreme litigous practice against members of various online fan communities hurts Nintendo's standing in the project of soft power it offers its country of origin. Across the first part of the essay, I argue that certain characteristics of Nintendo are uniquely its own. its capacity for reinvention, its refusal to engage in an increased use of part-time labor, for example, while others are characteristic of a larger Japanese work culture, namely the tendency of CEOs to cut their own salaries rather than to let employees go at times of financial hardship, as well as a significant gender pay gap. My argument across the second part of this essay is that Nintendo's performance has increased Japan's soft power. However, a pension for litigation serves to blemish its reputation in the gaming industry. Nintendo, a mainstay of the gaming industry. Nintendo's story is that of a company capable of reinvention. Nintendo began as a familyowned business that produced Hanafuda playing cards in 1891. In the early days after these cards were legalized during the Maji Restoration, an early lucrative opportunity that Ashcraft argues for Polygon was at least in part as successful as it was because of some association with gambling and organized crime. The playing cards business would prove to be a lucrative one indeed, sustaining the company throughout the first half of the 20th century, eventually allowing it to expand to toys, arcade games, and beginning in the 1980s to video games. After its ve into the gaming business, Nintendo became an exemplar of a Japanese company that needed neither state aid in the form of loans or government funding by the early 1990s. This as well as its decision to escue traditional Japanese corporate networks or ketsu offered Nintendo significant independence to act both domestically and abroad. As an actor within the gaming industry, Nintendo is far from a singular leviathan entity. It is however something of a trailblazer. Already with its introduction of the Famcom/ NES consoles in the early 1980s, Nintendo set a precedent for one of the console markets long-standing practices. The selling of consoles, I quote, at a loss, emphasizing the importance of software sales as a mechanism to make money, close quotes. This has been the case for every one of the consoles released by Nintendo's contemporary competitors in the console market, Sony and Microsoft. Nintendo itself, however, has managed to escape the seemingly all-pervading logic of the console hardware market by refusing to sell its two most successful consoles at a loss. Both the Wii and the Nintendo Switch were sold at a profit from their release. This is owed in part by the vastly graphically underpowered technological components within both consoles as compared to their respective competitors at Microsoft's Xbox division in Sony's PlayStation. Graphics has rarely been at the forefront of Nintendo's agenda. The one time that the company put an accent on it during its 21st century history was with the most disastrous hardware release in Nintendo's history. Wii's failed successor, the Wii U. One of Nintendo's most characteristically Japanese traits corresponds to what Jeff Kingston calls the lifetime employment ideal, which involves a full-time job at the same company for an entire career. At Nintendo, this trait is best encapsulated by what the celebrated fourth president of Nintendo, Satu Iwata, who passed away in 2015, called Nintendo, described by scholar Osamo Ino, as something like the company's DNA passed continuously along from person to person. Employees rarely leave once they have come to understand this Nintenderness, which Ino argues strengthens the company's lineage and makes employees feel at home. The economic trend since the 1990s that saw Japanese companies more and more often accentuates on non-regular and part-time jobs does not seem to have influenced Nintendo. The company's performance in the gaming industry across the 21st century has been characterized by a constant, if fairly slow, growth. Between 2003 and 2022, the number of its employees have grown from some 3,100 strong to over 6,700. For a company of Nintendo's influence, this number of employees is scant indeed. The closest company in global influence in employees to Nintendo's is Electronic Arts with its 12,900 employees in 2022. Nearly twice as much as Nintendo's in 2024, or 2022 rather. In addition to a far leaner staffing than other commanding presences in the gaming industry, Nintendo is also regarded with respect, even reverence at times for executives thought capable and far less greedy than their western counterparts. In a year when Microsoft lays off 650 Xbox employees while the company's top executive sees his pay rise by 63% to a fantastical $79 million, one cannot help but feel a great deal of nostalgia for the tenure of Nintendo president Satu Iwata, who took a 50% pay cut in order to retain his employees after the commercial flop of the Wii U. Norrisata unique in this. Alexander Putio offers another example in the face of Kuruka Nishimatsu who cut his own salary by 60% in response to Japan Airlines own struggles in 2007. Such actions at the executive level exemplify a corporate culture which prioritizes the long over the short term of a company and shows a different mindset at work than the one that dictates the actions of industry leaders elsewhere. One feature that Nintendo sadly shares with many other Japanese companies is a pay gap between male and female workers with women working at Nintendo paid on average 72% of what men are paid. The same 2023 report notes that female managers in Nintendo's Japan headquarters are a very small percentage of the overall number of managers, a mere 4.2% 2% which suggests that the company's 2021 Nintendo Women and Allies initiative leaves much to be desired. One hopeful development from earlier in 2024 suggests that the initiative might at last begin to bring dividends. As Fortune Chris Morris reports, Nintendo has nominated three women to its board of directors. Though little has been reported about addressing the gender pay gap in the company, this change offers reason to hope that further change may begin from the top. Nintendo, a pav of soft power for Japan. The Japan times celebrated 2023 as a year for best ever series of soft power hits for Japan. Author Gioid Ry draws many of his chief examples from Nintendo, citing both his fresh foray into film in the face of the Super Mario Bros. movie as well as its celebrated 2023 first party release, Legends of Zelda: Tears of the Kingdom. These are crowning achievements in the third year of a decade filled with resounding successes for Nintendo. The company's Switch console has been something of a global phenomenon, selling 143.2 million copies in the 7 years since it first came out, perhaps eight since I first wrote this essay. The Nintendo Switch has made portable gaming fashionable again, and what's more, it has made it cool. Beyond this, it has served to revitalize many of Nintendo's franchises for a new generation of players and longtime fans alike. Games such as Mario Kart 8, Super Smash Bros. Ultimate, and Super Mario Odyssey was sold in the tens of millions. A special mention must be made of Animal Crossing: New Horizons. Released at the very beginning of the coid9 pandemic, this game served as much needed escapism for the 11 million gamers who purchased it within the first two weeks of release. Animal Crossing grew into a social activity that caught the imaginations of millions more as late night shows, social media, and many other sources of entertainment came to be enamored with the escapist fantasy of an animal-filled island. one can furnish however they wish. None of these properties is directly representational of Japan. They take place in fantastical secondary worlds bound by their own sets of rules and internal logic. Yet they are created by artists, writers, programmers, engineers, and various others who are overwhelmingly Japanese and so reflect the worldview and imagination of people whose cultural background is much different than that of the vast majority of what of that catch all and far too inaccurate term, Westerners. What a company such as Nintendo succeeds in doing is to quote expose its audience to alternative imaginary worlds. Close quote. As David Lehini writes, an interest in Japan develops naturally from there. Though I must agree with Lehini when uh he argues that this would hardly compel anyone to agree with the disagreeable quote unquote hard power policy that some Japanese government might wish to enact. Beyond the intangibility of such concepts as goodwill and intellectual curiosity, the most clear-cut way through which Nintendo's popularity translates to a tangible benefit for Japan beyond corporate tax is tourism. Nintendo's themed area in Universal Studios Japan, for example, is a tourist draw. So are the three Nintendo stores opened across Japan since 2019. Nintendo has earned a great deal of goodwill for many of its products from games to hardware to most recently film. It has however also earned the confusion and even eyeire of fans, industry journalists and influencers, competitors, consumers among others. Nintendo's status as a particularly liigious company is not recent. In fact, its liigious practices can be successfully mapped onto the company's history across the gaming industry. Starting with its attempt to bar the practice of game rentals in 1989 by suing Blockbuster. Toad's suit ultimately failed. Nintendo's appetite for litigation has only sharpened. As Nicholls notes, the company has worked to have removed fan-made games, YouTube videos, and trailers, and even game tournaments stopped or removed from their respective platforms. While it is only natural for a company to protect its intellectual property, Nintendo goes above and beyond, suing fan projects that show love and dedication for their many properties without charging anything. These latigious practices are a stain on Nintendo's reputation and cast a shadow over what is otherwise considered one of gaming's more consumer-friendly leaders. Conclusion. Nintendo's history spans 135 years for a reason. The company has shown a remarkable ability for reinvention. From its humble beginnings as a playing card manufacturer to its present role as one of the gaming industry's most significant companies. With a recent taste for diversification across film, physical stores, and theme parks, Nintendo continues to show the signs of a business willing to change with the times. This marks it as something of an outlier in a country whose companies are sometimes too bound to tradition. Yet Nintendo shares many features with other Japanese companies, both favorable and not. The concept of Nintend espoused by company president Satro Yuata recalls an error in Japanese employment whereby employees very rarely leave, choosing instead to spend their entire careers within a company that benefits from their institutional knowledge and loyalty. The gender pay gap is a more problematic feature the company shares with others in Japan and must be addressed regardless. I have argued that Nintendo's successes across the gaming industry have resulted in increasing Japan's soft power even as that soft power has its own limits and is itself somewhat tarnished by Nintendo's reputation as one of the industry's most lious companies. This is not reflected in diminishing sales or interest on the part of consumers overall. However, Nintendo's myriad successes suggest that the company's future is bright indeed. Let me know if this kind of more academic essayistic approach is of interest to anyone and I will endeavor to make certain that there is something more to come in this period. Uh, it was certainly an enjoyable paper to write. Got top marks for it as well if you care. I I think I would like to do more deep dives. And this by no means is a particularly deep dive into Nintendo, but I thought it was an interesting um perspective to an interesting lens rather to view this fascinating company. True. their history, especially the fact that when they began as a company, they were actually embroiled in like local Yakuza politics as well because gambling with the type of cards that Nintendo was producing early on was very much gang territory. So, I learned all kinds of uh interesting bits and pieces. by writing this essay. And so so much more is to be said about Nintendo and has been said by many many wonderful researchers. I have added on my blog the written form of this uh essay. Alongside it, I have also added the references that I have used. Everything is cited as you might imagine. Um, and if you feel the need to go and learn about any part of Nintendo's history, you should feel very very welcome to consult the literature that I have referenced here in this video and in this essay. I promise a lot of it is very much worth the read, especially some of the longer [Music] um booksized approaches. Excellent stuff. Absolutely excellent stuff. At any rate, I'm Philip Magnus. You are not. And I will see you next time with some gaming stuff and things stuff and things. Yes, it'll be fun probably.