Sunday, October 1, 2023

Nintendo's 1989 company overview shows their bold network ambition

In today's blog post, we will explore Nintendo's 1989 company overview (会社概況). This document presents the then-century-old company poised to enter the networked information age, riding on the massive success of the Famicom and NES game consoles and their related games, as the company aimed for even greater ventures.

The overview spans sixteen pages, all printed in full color, with all text in Japanese.

The opening pages depict an aspirational image of a home console soaring across the globe, accompanied by the caption: 'Leading the world of home entertainment' (ホームエンターテインメントの世界をリードする).

The text begins with:

In 1983, the world of home entertainment entered a new era with the introduction of Nintendo's "Family Computer" or "Famicom" for short. The Famicom quickly became a household staple across Japan. In 1985, it was introduced in the United States under the name "Nintendo Entertainment System (NES)," and, like in Japan, it rapidly gained popularity in American households.

But even greater things were on the horizon:

Nintendo is currently exploring the creation of "Famicom Network" to fully harness this power. The Famicom Network is a network of new gaming and communication possibilities using regular telephone lines. With this network, people can enjoy games with others from far away, engage in stock trading with information from securities companies, go shopping, reserve tickets, and more. Since the fall of 1988, we have already partnered with securities companies to offer various stock market information through "Famicom Trade," and the number of users has been steadily increasing.

The conclusion states:

As Nintendo envisions the Famicom Network expanding worldwide, we are confident that people's communication will become richer, and home entertainment will offer even more diverse and enjoyable experiences.

Next is an introduction by Nintendo's Director and President, Hiroshi Yamauchi (山内 薄). The title of the introduction is called 'Our company's direction' (当社の路線).

It begins by recounting the success of our first cartridge-based game console, the 1983 Family Computer, or Famicom for short, and its 1985 Western version, the Nintendo Entertainment System, or NES:

... the "Family Computer" [...] has already spread to approximately 14 million households in Japan and the rapidly spreading "Nintendo Entertainment System" (NES) in the United States (the American version of the Family Computer), will be adopted by a combined total of several tens of millions of households in Japan and the United States by the mid-1990s.

Based on this, the company positioned itself as a key player in a new market extending beyond toys, games, and entertainment:

Our company plans to build a vast network that was previously unthinkable, using these devices [the Famicom and NES] as communication terminals within households, utilizing the telephone network. We aim to provide information that is deemed essential for household life, including entertainment, as well as financial, securities, and health management information. Furthermore, we are promoting partnerships with authorities in each field and considering ways to make various beneficial information easily and inexpensively accessible.

All of this was in placed the context of 'The advent of a highly information-oriented society.' The introduction text mentioned the word 'information' no less than eight times while using 'entertainment' only once. This was a stark shift from the company's focus until just a few years earlier.

Yamauchi-san was around 62 years old at this time, having already led the company for an astounding forty years, beginning as President at the age of 21. From 1989, he continued as Nintendo's President for another thirteen years, up until the GameCube era when he handed over his position to Satoru Iwata. He remained involved as chairman of the board of directors until his retirement in 2005 at the age of 77.

But all of that was still far into the future when this company overview was created. Let's delve into the company information provided.

The total business Nintendo was involved in (営業 品 目) in 1989 was listed as:

  • Home Leisure Equipment
  • Commercial Leisure Equipment
  • Playing Cards, Karuta.
  • Other Entertainment and Leisure Equipment

This was further specified in the following categories of activities or purpose (目的) of the company:

  1. Manufacture and sale of playing cards and related products.
  2. Manufacture and sale of entertainment and leisure equipment, sports equipment, audio equipment, and vehicles.
  3. Manufacture and sale of office machinery and office supplies.
  4. Manufacture and sale of educational materials, childcare products, household items, and electrical products.
  5. Processing and sale of printing, publishing, and paper products.
  6. Processing and sale of synthetic resins, metal products, and wooden products.
  7. Manufacture and sale of communication machinery, electronic application machinery, and devices.
  8. All related business activities pertaining to the above.

It's interesting to note that, even in 1989, the manufacture of playing cards remained listed first. Additionally, some unexpected activities were included, such as the manufacture of 'metal products' and 'wooden products', likely in support of the core business rather than standalone endeavors.

The diagram below illustrates changes in Nintendo's capital position (資本の変遷), resulting from profits and potentially from attracting investments through the listing of stock. The six dates mentioned, along with the capital position, are as follows:

  • February 1982 / 1,750,000,000円
  • March 1982 / 1,925,000,000円
  • September 1982 / 2,117,500,000円
  • April 1983 / 2,541,000,000円
  • February 1986 / 9,800,400,000円
  • October 1987 / 10,065,400,000円

To provide context for the values, in 1987, the capital amounted to 10 billion yen, approximately equivalent to around 120 million US dollars. The significant capital increase from April 1983 to February 1986 was undoubtedly a direct result of the success of the Famicom and games like Super Mario Bros. and Zelda.

The following pages present an overview of important dates and events in the company's history, which began in 1889.

The image showcases Nintendo's main office at the time, located in Kyoto, with the Kyoto Tower visible in the background.

The next section provides an overview of Nintendo's products:

Our main product line can be divided into computer technology-based hardware for games and the game software itself.

First and foremost among the hardware is the Famicom, which has become one of our flagship products. Additionally, the 'Game Boy,' released in April 1989 and powered by batteries, is portable hardware that allows you to enjoy games anytime, anywhere using dedicated cartridges, and it quickly garnered positive reviews.

Global aspirations are evident from the inclusion of a group of people who appear very Western. They are depicted with the Japanese market Famicom to avoid confusing the Japanese target audience of this company overview. The Famicom Network Adapter also takes center stage in these illustrations.

The text continues:

We have offered a wide range of game software, including the mega-hit Super Mario Brothers, with approximately 600 titles designed for the Japanese market and about 200 titles for international markets.

In the future, we will continue to promote the development of both hardware and software, collaborating not only within our company but also with game software companies and information providers.

A diagram explains how customers connect to the Family Computer Network System and the related services using a dial-up modem called the Family Computer Network Adapter and their home telephone line. 

One of the network services envisioned was an online fitness program connecting the Famicom to an exercise bike.

Traditional gamers were not forgotten, including this gentleman who bears a resemblance to company president Hiroshi Yamauchi, known to love the game of Go.

Next is an overview of the Planning & Development department (企画・開発).

It lists the four divisions that make up this part of the company:

Development Division 1: Planning and development of hardware and game software such as Game & Watch and Game Boy.

Development Division 2: Research primarily focused on hardware such as communication adapters for the planning and development of Famicom (NES in the United States) and network-related projects.

Development Division 3: Planning and development of hardware and game software for video games.

Information Development Division: Planning and development of game software for Famicom (NES in the United States).

Most of this work is carried out in the head office development building located in the Higashiyama area of Kyoto.

This includes hardware development...

... as well as game sound creation.

The next section shows part of the Production (生産) facilities:

Our company's products are computers equipped with high-density and high-integration ICs and LSIs, and we manufacture them in a clean environment in our factories. We have established a rigorous quality control system, with a focus on the inspection department.

Many affiliate companies are involved in the production of our products, with a total workforce of up to 10,000 employees. Each factory is equipped with state-of-the-art facilities and is dedicated to delivering high-quality products while adhering to strict delivery schedules. Our motto is to provide fast and perfect products to people worldwide.

The image below showcases an auto-insertion machine (自動挿入機). This is a machine that can automatically insert components and parts onto printed circuit boards.

Nintendo established production facilities in Uji, south of Kyoto. Pictured below are the Nintendo Uji Ogura Factory (宇治小倉工場)...

...and the Uji Factory (宇治工場).

The final section of this company overview is dedicated to Nintendo's overseas (海外) or Global Business. This focuses mainly on the United States, Nintendo's most important market outside of Japan:

Our overseas business operations are primarily conducted by the Export Department, and our products are exported to markets such as the United States, Europe, and East Asia. The United States stands as our largest market.

The first export of NES (Nintendo Entertainment System) to the United States took place in 1985. NES received overwhelming acclaim, penetrated the American market, and is now cherished in approximately 14 million American households. 

The offices of Nintendo of America are located in Redmond, Washington.

Sales activities in the United States are managed by the local subsidiary, Nintendo of America Inc.

Part of Nintendo's success in America can be attributed to their team of game counselors. At a time when detailed game strategies and walkthroughs were less widely and easily available than they are now, they provided help that allowed gamers to continue gaming without frustration. As the brochure states:

In addition to numerous sales representatives, they have a team of over a hundred game software counselors who cater to customer requests and questions. 

And another factor was a near domination of retail space:

Moreover, they are expanding the establishment of "Nintendo WORLD," a shopping corner selling NES hardware, a multitude of software, and various NES character merchandise, in leading retail stores across the United States. The number of these establishments is rapidly increasing.

A picture is also included of the Nintendo booth at a Consumer Electronics Show (CES).

And a world map shows the countries where Nintendo's products are available.

Based on the success in the American market, we are eager to continue ambitious marketing efforts in various regions around the world.

This concludes the overview of Nintendo in 1989, showcasing its achievements and aspirations.

The network system introduced with much fanfare in this document was never released outside of Japan, where it had only modest success. Although Nintendo did not fully stop its online ambitions, continuing with some experiments over time, it did return its focus to offline game experiences. It was only with the introduction of the Wii, fifteen years later in 2006, that online features made a more prominent return.

For an interesting look on what was going on at Nintendo two decades earlier, check out this 1970 company brochure.

A big thank you to Fabrice Heilig (@Yamafuda on Twitter/X) for kindly allowing these scans to be shared here.

No comments:

Post a Comment