These 3 Brilliant Men Are Driving Nintendo into the Ground

As a conservative Japanese company, Nintendo (NASDAQOTH: NTDOY  ) has had very little turnover when it comes to upper management. Hiroshi Yamauchi, the recently deceased former President, ran the company for over 53 years and repeatedly steered Nintendo to profits and growth. Yamauchi saw the company transform from a playing card manufacturer into the biggest name in video games and become an innovator in the interactive medium. The company's star has faded in recent years amid credible threats to its long-term future.

While Sony (NYSE: SNE  ) and Microsoft (NASDAQ: MSFT  ) have pursued the hardware tech race with the hopes that they can make their devices central to online and entertainment experiences, Nintendo has remained decidedly stuck in the past. Its inability to modernize and correctly react to market realities has put the company in serious danger of losing its place in the gaming industry. There are the three brilliant men who are responsible for driving Nintendo into the ground.

Senior Managing Director Genyo Takeda
As the man in charge of guiding and overseeing Nintendo's development of hardware, Genyo Takeda bears substantial responsibility for the fiasco that is the Wii U. He's also the man largely responsible for the incredible successes of 2006's Wii and 2004's DS and the creator of games like Punch-Out!! and StarTropics.

The man has shown a clear talent for introducing innovations that fundamentally alter the landscape of the industry, but there's reason to believe that he is out of touch with the demands of the current market. Takeda has been managing Nintendo's integrated research division since 1981.

One of Genyo Takeda's chief philosophies in developing Nintendo's recent hardware has been to de-emphasize the importance of technological specs. While this worked out great for the Wii console thanks to the popularity of motion controls, the strategy looks to be one of the primary contributors to Wii U's early demise. Takeda's aversion to the tech race encouraged Nintendo's developers to become complacent and played a major role in the difficulties that Nintendo has seen in transitioning to HD.

In terms of sales, the Wii U will be crushed by the PlayStation 4 and the Xbox One. After the longest console generation on record, consumers wanted extra hardware power, media features, and expanded online ecosystems. Sony and Microsoft are delivering these assets to varying degrees, while Takeda and Nintendo have served up a box that may be less capable than 2005's Xbox 360.

Senior Managing Director Shigeru Miyamoto
Whereas Genyo Takeda is largely responsible for Nintendo's hardware failings, Shigeru Miyamoto must shoulder much of the blame for the company's lagging software performance. Miyamoto is regarded as one of the greatest minds in the industry and he has created revolutionary series like "Mario" and "The Legend of Zelda." He's also failed to deliver a noteworthy hit since 2006's Wii Sports.

As a Senior Managing Director of the company, Miyamoto rarely develops games himself these days. His role finds him overseeing much of the software development that goes on at Nintendo, and the man has a great deal of say as to which titles go into production. Unfortunately, the once-visionary creator is out of touch. In a recent investor Q&A session, Miyamoto stated his belief that he and Nintendo have done an acceptable job of supplying the Wii U with the right software content.

President Satoru Iwata
Satoru Iwata was chosen by former-President Hiroshi Yamuachi as his successor and the man who would return Nintendo to its former glory. The successes of the original Wii and DS did just that and then some. Unfortunately, these systems were followed up by confusing successors that tried to recapture previous magic with rote and undesirable features. As President of the company, Iwata has repeatedly demonstrated a proclivity for ignoring obvious market realities. He is also responsible for facilitating the failings of Genyo Takeda and Shigeru Miyamoto.

The last console cycle made it abundantly clear that Western game development was on the rise and that online functionality would be key to future success. In light of these obvious truths, Iwata and company became increasingly focused on Japan and delivered a joke of an online ecosystem. Nintendo of America used to be something more than a glorified PR wing. The Kyoto-based company used to maintain partnerships with a number of Western studios, which gave its software lineups some much-needed lineup diversity. Iwata's recent strategy has been to spurn Western tastes in hopes that the industry will fall in line with more Japanese philosophies. His management of the company in recent years has been nothing short of disastrous.

Nintendo needs new players
Nintendo's expected operating loss of over $300 million is symptomatic of the belief that the company is above following trends. Iwata, Takeda, and Miyamoto were blinded by the successes of the Wii and DS, which spurred them on to hubris that now threatens to ruin the company. The close personal and working relationship between these three men has yielded a philosophy that rejects the importance of outside influence and exaggerates the extent of Nintendo's genius. While their pasts are littered with brilliant achievements, there is little reason for optimism while these men call the shots.

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Read/Post Comments (11) | Recommend This Article (5)

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Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On February 10, 2014, at 7:56 AM, masterimmortal wrote:

    Another day...another Nintendo article

  • Report this Comment On February 10, 2014, at 8:20 AM, Amberyerno wrote:

    It's Monday, time for another "Nintendo is doomed!" article.

  • Report this Comment On February 10, 2014, at 8:44 AM, Ebby720 wrote:

    Yes they are pukin money......but consoles won't get them there....stay with the portables, invent new games based on their inventory.....port to other portable devices.....and port the big games to the other boxes....I guarantee you will never get those of us who have Sony or Xbox or both ANY OTHER way....it is getting that additional pure profit THAT way or NO way....or just die the slow death you are.

  • Report this Comment On February 10, 2014, at 9:12 AM, carmelwhitworth wrote:

    Are you even serious right now.

    "He's also failed to deliver a noteworthy hit since 2006's Wii Sports."

    No. ARE YOU KIDDING ME RIGHT NOW.

  • Report this Comment On February 10, 2014, at 9:29 AM, targeyone wrote:

    Again, motleyfool and contributors, everyone and their grandmother has chimed in on Nintendo already. The fact that everyone says the "key" to Nintendo's problems is something different only shows no one knows what's actually going on.

    Mr. Yamauchi (please look up the spelling of the late former president's name before referencing him) held the philosophy that one shouldn't be afraid of failure in order to try new things, and Mr. Iwata has kept that philosophy alive. Whether you like it or hate it, the Wii U gamepad is the most radical change to console gaming since the original Wii.

    Lower specs allowed Nintendo to strike gold with the Wii, when everyone claimed (just as they are now) that hi-spec=success. It was an ingenious move at the time, one that no other company came up with.

    Of course we all have 20/20 vision in hindsight, but Genyo Takeda's gamble wasn't flawed. The only mistake was thinking the same strategy would work a 2nd time. But as the original Wii proved, the actual approach is not flawed at all.

    The notion that a new player will do a better job of managing a world-wide company than someone who has been involved in it for 30 years because of a single failure is...based on what, exactly? It appears all you want is for Nintendo to act like a duplicate of Sony's Playstation division.

  • Report this Comment On February 10, 2014, at 11:17 AM, TheMightyPikachu wrote:

    Good post by targeyone. I'm betting someone at Motley Fool has put options on Nintendo, super big-time.

  • Report this Comment On February 10, 2014, at 1:56 PM, govofwoodbury wrote:

    Yeah, blame the guy that has been making great games for Nintendo all along. How dare Miyamoto take his time to create quality products for Nintendo.... This article is bull. The problem with Nintendo is that they continue to make consoles, rather than push their small niche of amazing games on a more successful platform. Why not Zelda on the PS4 and Metroid on the Xbox One? That would be HIGHLY profitable. And it would probably explode the industry sales-wise, more than making up for their console failings. Metroid, Zelda, and Mario, all on different platforms, would make a huge impact on the gaming industry. I smell gold already.... Mario could easily jump platforms (pun intended), while releasing exclusive versions of the games for either major console. Why not Smash Bros versions for Xbox and PS? It would be like Soul Calibur for each platform in the PS2/xbox/gamecube generation. Master Chief would be GREAT for Smash Bros!

  • Report this Comment On February 10, 2014, at 2:27 PM, BHGamer wrote:

    First of all. "Its inability to modernize and correctly react to market realities has put the company in serious danger of losing its place in the gaming industry." the market isn't really all that different. Is Sony really doing anything all that different from PS1 to PS4? Other than some stuff here and there it's still a game system with standard controller and features. Nintendo doesn't need to react to market realities, it needs to COME BACK to market realities. The Wii was a dream that faded, it wasn't reality and what gamers wanted, they are paying the price for that now.

  • Report this Comment On February 10, 2014, at 4:32 PM, brianpdx wrote:

    Nintendo started declining in the 90s under that schmuck Howard Lincoln, whom Yamauchi moved over to run (and ruin) the Mariners hoping he would do less damage to them then he was doing to Nintendo. I was a witness. Would be nice if you "journalists" knew the true facts once in a while.

  • Report this Comment On February 10, 2014, at 9:53 PM, thejmurphy wrote:

    theyre not driving Nintendo into the ground..

    hack writers who have some weird grudge against nintendo are driving it into the ground.. why does the motley fool hate nintendo??.. this is the worst rag ive ever read on yahoo.. whenever i see an article bashing Nintendo, on yahoo, low and behold its ALWAYS the Motley Fool.. let it go already.. jesus christ

  • Report this Comment On February 11, 2014, at 2:25 PM, phade33 wrote:

    Nintendo from 1985 until the mid 1990's was arguably the king of the video game industry in the home console market then they lost sight !

    While Sega and new comer Sony unveiled cd based consoles, Nintendo opted to stick with their very successful cart based business model and when game developers realized they could make cd based games far cheaper than N64 cart games, it was game over for Nintendo who then went on a campaign of quality over quantity !

    Their ineptness and refusal to embrace technology to their consoles has ultimately doomed Nintendo !

    Their colossal failure with the Virtual Boy was the beginning of the end for Nintendo in terms of innovation !

    Lastly their continued alliance with their kiddie themed in house franchises kept them relevant but now as more adults are becoming gamer's, no one just wants Mario, Donkey Kong, and Zelda as their only outlet for gaming and sadly Nintendo doesn't quite get this !

    People who grew up with Mario, Zelda and DK are now adults who do not want to play the same kiddie themed games they played as kids !

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