Hiroshi Yamauchi ran Nintendo for fifty-three years without, by all accounts, playing a video game. David Sheff, who interviewed Yamauchi and his engineers for his book Game Over, put it plainly: “Yamauchi has never played a video game in his life and he had little interest in them. Still, he alone was the judge and jury when it came to deciding which games Nintendo would release.” In 1949 he took over a family firm that made playing cards in Kyoto. By the time he stepped down in 2002, it had sold the Famicom, the NES and the Game Boy around the world.
The heir
Nintendo was founded in 1889 by Fusajiro Yamauchi, who made hanafuda, Japanese flower cards. Sources disagree about how Hiroshi was related to him. Nintendo Power, Nintendo of America’s own magazine, told readers in 1989 that Fusajiro’s “great grandson is now president of Nintendo Company Ltd.” N64 Magazine in 1997 instead called Fusajiro his grandfather. Nintendo’s corporate history names Fusajiro as the founder but gives no family tree.
Sheff’s account supports Nintendo Power. Fusajiro had no son, so his daughter Tei married Sekiryo Kaneda, who took the Yamauchi name and became Nintendo’s second president in 1929. Their daughter Kimi married Shikanojo Inaba, who also took the family name. Hiroshi was born to them in 1927. His father left when he was five, and his grandparents Sekiryo and Tei brought him up. The grandfather in the 1949 story is Sekiryo, not Fusajiro.
After the war Hiroshi went to Waseda University to study law. When he was twenty-one, Sekiryo had a stroke and called him in: he was to leave university and become president. Hiroshi agreed on one condition, that he would be the only member of the family working at Nintendo, so a cousin was fired. Sekiryo died soon after. The new president then fired, one by one, the managers left over from his grandfather’s time. Edge, retelling the story in 1997, called it the chance “to rid his company of the conservative elements that he despised”.
Rice, taxis and a love hotel
The card business grew under him. Nintendo made Japan’s first plastic-coated playing cards in 1953, and in 1959 it put Walt Disney characters on cards for children. Sheff records that it sold a record 600,000 packs that year. Yamauchi renamed the company Nintendo Co., Ltd. in 1963 and started looking for new businesses.
The first was individually portioned instant rice (“Add water and—presto! It was a dismal failure,” Sheff writes). Then came a “love hotel” with rooms let by the hour, and a taxi company called Daiya. Edge in 1995 listed the same three “early experiments”, and N64 Magazine in 1997 said all three failed. Sheff tells it differently: the taxi firm “thrived”, but Yamauchi tired of negotiating with the drivers’ unions and closed it. Either way, he came back to the thing Nintendo already had, a distribution network that reached toy and department shops across Japan. From then on, Sheff writes, Nintendo would be an entertainment company.
Toys, TV games and Game & Watch
The first person Yamauchi put to work on that plan was Gunpei Yokoi, an electronics graduate hired to maintain the card-making machines. In Sheff’s account, Yamauchi called Yokoi into his office and gave him a new Games department to run. “What should I make?” Yokoi asked. “Something great,” Yamauchi said. Yokoi’s extending grabber, the Ultra Hand, sold 1.2 million. After that, Yokoi’s job was to bring inventions to the chairman, who, in Yokoi’s words, “instinctively knew if a new idea would sell” and never asked for a second opinion.
Electronic toys followed, including light guns developed with Masayuki Uemura, an engineer who had come to Nintendo from Sharp. According to Edge, Yamauchi bought the rights to distribute the Magnavox video game system in Japan, and Nintendo then made its own Color TV Game 6 and Color TV Game 15 with Mitsubishi in 1977. Sheff says a million of each were sold. Yokoi’s team went on to build the Game & Watch (1980), a one-game LCD handheld made from the cheap parts of the pocket-calculator boom. In the arcades, Yamauchi gave a young designer, Shigeru Miyamoto, the job of making a new game, and Donkey Kong (1981) was the result.
The Famicom
Yamauchi’s instructions for the Family Computer, as Sheff reports them, were short and hard. It had to be something “other companies cannot copy for at least one year”, and it had to be cheap. Rival machines in Japan cost ¥30,000 to ¥50,000; Yamauchi set a target of ¥9,800. That meant custom chips at a price Ricoh called absurd. Yamauchi’s answer was to guarantee Ricoh an order for three million chips within two years, at a time when, Sheff notes, Nintendo’s best-selling TV Game consoles had sold a million each.
The Famicom went on sale in Japan on 15 July 1983 at ¥14,800. It reached America as the Nintendo Entertainment System, with a test launch in New York in autumn 1985 and a national release in 1986. Yamauchi also told Uemura the machine must “be appreciated by software engineers”, and he kept control of which games appeared on it. Nintendo made every cartridge, and a lockout chip stopped unlicensed ones from running. Edge in 1995 described the result: Nintendo “sewed up the market with brutal efficiency, then sucked thirdparty developers dry with draconian licensing terms”.
The Game Boy
Yokoi’s R&D 1 group built the Game Boy, launched in 1989. Sheff says the decision to leave out colour was Yamauchi’s, on grounds of cost and battery life. By Sheff’s account a colour screen would have needed four or eight AA batteries instead of two, though the Game Boy itself took four (Computer and Video Games, July 1989). The first 200,000 sold out in Japan in two weeks. Critics complained about the green-and-black screen, but Sheff notes that colour handhelds from Sega, Atari and NEC sold only a small fraction of the Game Boy’s numbers.
How he ran Nintendo
Yamauchi believed great games came from a few rare people. “An ordinary man,” he told Sheff, “cannot develop good games no matter how hard he tries. A handful of people in this world can develop games that everybody wants. Those are the people we want at Nintendo.” In 1984 he made himself head of all research and development. He set three groups, under Yokoi, Uemura and Genyo Takeda, to compete with each other, and he kept the marketing department out of design.
His engineers worked for his approval. “We lived for his praise,” one told Sheff; another, who had left, said “months of work can be disposed of with a scowl.” He was a strong player of Go, the Japanese board game, and Edge reported in 1997 that he held seventh-dan rank. It described his play as “forceful, aggressive” and “unstoppable in the face of weakness”. Edge told one business story in the same terms. When Nintendo’s CD-ROM partnership with Sony for the Super Famicom began to look like a threat, Yamauchi sent Minoru Arakawa (his son-in-law, who ran Nintendo of America) and Howard Lincoln to Philips in Eindhoven to arrange a rival deal. Sony announced its “PlayStation” on the first day of the 1991 Chicago CES. The next morning, at Nintendo’s own press conference, Lincoln announced that Nintendo had chosen to work with Philips.
The Seattle Mariners
Late in 1991 Arakawa was asked whether Japanese investors might help keep Seattle’s baseball team, the Mariners, from moving to Florida. According to Sheff, Yamauchi “had never played baseball nor had he ever seen a game”, but he agreed to put up $75 million of a $125 million offer. The bid made front-page news in early 1992, amid American anger at Japanese purchases. Yamauchi told The New York Times it was a way of giving something back to the country that had made him rich. Baseball’s owners approved a reworked deal that summer, with his share cut to 49 per cent. Video Games Chronicle reports that he never attended a Mariners game.
Retirement and death
In 1997 Yamauchi, then 69, said in a Japanese newspaper interview that he would retire by 2000. He stayed on until 2002, when Satoru Iwata succeeded him as president, and remained an adviser to the company. He died of pneumonia on 19 September 2013, aged 85.
Sources
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Computer and Video Games, July 1989: Game Boy preview, “takes four AA-sized batteries”.
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David Sheff, Game Over (1993; GamePress edition, 1999): his birth and family (p. 16), the succession and firing the old managers (pp. 18–19), instant rice, the love hotel and the taxi firm (p. 20), Yokoi and the Ultra Hand, and management style (pp. 19–23, 38–41), the Color TV Games, Game & Watch and the Famicom’s development and the Ricoh order (chapter 2, “In Heaven’s Hands”), R&D supervision and “never played a video game” (pp. 38–41), the Game Boy (chapter “From Russia with Love”), and the Mariners (pp. 279–80, 404–7).
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Nintendo Power issue 7, July/August 1989, p. 91: Fusajiro Yamauchi’s “great grandson is now president”.
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N64 Magazine issue 2, May 1997, Nintendo history feature from p. 90: “his grandfather, Fusajiro, suffered a stroke in 1949”; the instant rice, love hotel and taxi business “failed”.
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Nintendo Co., Ltd., “Company History: Nintendo Milestones”: founding in 1889 by Fusajiro Yamauchi; Game & Watch (1980), Family Computer (1983), Game Boy (1989) (web). https://www.nintendo.co.jp/corporate/en/history/index.html
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Edge issue 16, January 1995: “individually portioned instant rice, a ‘love hotel’ and a taxi firm”; “draconian licensing terms”.
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Edge issue 17, February 1995, PlayStation feature: Yamauchi sends Arakawa and Lincoln to Philips before the 1991 Chicago CES; Sony’s announcement and Nintendo’s press conference the next morning.
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Edge issue 43, March 1997, Yamauchi profile: appointment in 1949 and the firing of managers; Go and seventh dan; “doesn’t play videogames”.
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Edge issue 49, September 1997, news: Yamauchi, 69, to retire by 2000.
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Edge issue 108, March 2002, company histories: the Magnavox distribution rights.
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Edge issue 113, August 2002: Satoru Iwata succeeding Yamauchi.
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The Famicom’s launch date and price and the NES test markets: see the sources for Nintendo Entertainment System.
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HistoryLink.org, “A group of local investors announces plans to buy the Seattle Mariners on January 23, 1992” (web, secondary): the owners’ approval in 1992 and the reduced share. https://www.historylink.org/File/9562
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Video Games Chronicle, “That time when… Nintendo bought a baseball team” (web, secondary): that he never attended a game. https://www.videogameschronicle.com/features/that-time-when-nintendo-bought-a-baseball-team/
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Anime News Network, 19 September 2013 (web, secondary): his death, and his role as adviser after stepping down. https://www.animenewsnetwork.com/news/2013-09-19/former-nintendo-president-hiroshi-yamauchi-passes-away