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Nintendo does not reward risk taking - Adelman

By James Brightman

Nintendo does not reward risk taking - Adelman

Wed 21 Jan 2015 10:24pm GMT / 5:24pm EST / 2:24pm PST
Publishing

Dan Adelman, who oversaw digital efforts for nine years at Nintendo, reveals some insights into the company's inherent problems

While Microsoft and Sony battle it out with extremely similar consoles and technologies, Nintendo by and large marches to the beat of its own drum. Nintendo has always done things its own way, and while that means it can produce incredibly unique products, that also unfortunately means that sometimes the company gets in its own way. Former executive Dan Adelman, who left Nintendo after nine years last August and has been a champion for indies both before and after Nintendo, offered up a fascinating explanation to Dromble for why Nintendo is well... Nintendo.

"Nintendo is not only a Japanese company, it is a Kyoto-based company. For people who aren't familiar, Kyoto-based are to Japanese companies as Japanese companies are to US companies. They're very traditional, and very focused on hierarchy and group decision making. Unfortunately, that creates a culture where everyone is an advisor and no one is a decision maker - but almost everyone has veto power," he began.

"Even Mr. Iwata is often loathe to make a decision that will alienate one of the executives in Japan, so to get anything done, it requires laying a lot of groundwork: talking to the different groups, securing their buy-in, and using that buy-in to get others on board. At the subsidiary level, this is even more pronounced, since people have to go through this process first at NOA or NOE (or sometimes both) and then all over again with headquarters. All of this is not necessarily a bad thing, though it can be very inefficient and time consuming. The biggest risk is that at any step in that process, if someone flat out says no, the proposal is as good as dead. So in general, bolder ideas don't get through the process unless they originate at the top."

Moreover, Adelman suggested that Nintendo's top brass are no longer fully in touch with the modern games industry. He noted thar they "cut their teeth during NES and Super NES days...so adopting things like online gaming, account systems, friends lists, as well as understanding the rise of PC gaming has been very slow. Ideas often get shut down prematurely just because some people with the power to veto an idea simply don't understand it."

That's no doubt frustrating for someone trying to bring a fresh perspective to the company, but an even larger problem, Adelman pointed out, is that the company simply doesn't make it advantageous for the employees to take big risks on products. "...there is very little reason to try and push these ideas. Risk taking is generally not really rewarded. Long-term loyalty is ultimately what gets rewarded, so the easiest path is simply to stay the course," he said. "I'd love to see Nintendo make a more concerted effort to encourage people at all levels of the company to feel empowered to push through ambitious proposals, and then get rewarded for doing so."

Adelman also addressed the longstanding criticism that Nintendo can't secure proper third-party support. He believes it's become a self-fulfilling prophecy over the years as it often doesn't make much business sense for third-parties to get involved. "...publishers feel that they can't compete with Nintendo first party, so they choose not to invest in making high quality products for the platform. There are some notable exceptions to this over the years like Rayman Legends but many times third party publishers set low sales projections for their games, and then decide a development budget based on that. I can't say outright that they're wrong either.

"There have been cases where companies decided to pull out the stops and make a great game for Nintendo platforms only to find that consumers weren't interested. And it could be because consumers have been burnt by third party games on Nintendo platforms before."

Adelman thinks Nintendo can do better in communicating which third-party efforts are worth consumers' time and money, however. "For Nintendo to break this cycle, I think they need to invest and absorb some of the risk for third parties who try to embrace the features of Nintendo platforms and help communicate to consumers which games are on par with Nintendo first party games in terms of quality. Sony and Microsoft spend a lot of money securing exclusives - or at least exclusive features - on the top games and since Nintendo doesn't really do that, third parties focus on the other systems. I'm not sure about Sony, but I know Microsoft also has a team of technical people that will go work with a studio for a few weeks or even months to help them make their games as good as they can be on those platforms," he added. "If Nintendo doesn't want to be a first-party-only system, they may need to be more aggressive in securing those games and making sure that they're high quality."

The full interview has plenty more insight and is well worth your time.

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8 Comments

Daniel Hughes PhD Researcher, Bangor University

34 82 2.4
Popular Comment
It's a really revealing interview. It's interesting that the two points where long-standing board members have stood down, significant changes have taken place. With the removal of Yamauchi in 2003/04, and some other board members, projects like DS, Wii and the touch generation software went into production.

Several board members 'retired' last year after the poor financial results continued, and within a couple of months Iwata announced moves into the NFC figurine market, that future consoles would be network based, that portable and home console R&D would be consolidated, and the internal "Garage" development project was initiated, the first product of which will be Splatoon. It'd be great if these kind of changes could come a long more often, and if NoE/NoA could become more than regional outposts. Nintendo have the funds to invest in their own Western development structure, so why aren't they doing that?

Posted:A year ago

#1

Andrew Ihegbu Studying Bsc Commercial Music, University of Westminster

490 219 0.4
Sometimes you build a great, powerful and entirely self supporting ship, which has absolutely everything it needs.... except a big enough rudder.

That is the picture this article gives me in my head. That Nintendo can go forth, fast, hard, and powerfully. They innovated really well with the Wii, cultivated a ridiculously good array of first party titles, and had more rock star moments with their actual products than I thought possible. They had everything they needed, the console, the games for the console, and a year after the Wii, they had all the sales and money to really kick ass this gen. It really looked like the difference between the Wii as a product and the complete dominance of the next generation was simple: More Power and a control system that the core gamer can take as a more traditional option. Instead they decided to to the Wii what the Wii did to the Gamecube and make it even more wild.

Suddenly, they are in dangerous waters. But taking the sharp turns they need is outside the capability of Iwata. He simply can't turn the ship around if he wants to because everyone in management wants to wrestle for control of the helm and veto left right and center.

The image left in my mind suggests that if Iwata had his own way, the WiiU might have been a very different product. That to me is not a good thing. Ever.

Edited 1 times. Last edit by Andrew Ihegbu on 22nd January 2015 5:19pm

Posted:A year ago

#2

Keldon Alleyne Handheld Developer, Avasopht Ltd

611 702 1.1
many times third party publishers set low sales projections for their games, and then decide a development budget based on that. I can't say outright that they're wrong either
As an owner of the N64 and GC I can attest to this being a massive problem.

While the Playstation had Metal Gear Solid the N64 had Hybrid Heaven, which was a great game concept but it was clear from the moment you fired up the game that they had put little effort into the game. That put me off of third parties.

On the GC you had games like F1 Career Challenge which was again, a great game in concept but poorly executed. You could clearly see that they just didn't put the time into polishing the title.

So I was always weary of shoddy third party games. Every time someone releases a sub standard game I wonder why they released it at all because their lousy execution is a sure fire way to guarantee failure.

Posted:A year ago

#3

Jeff Kleist Writer, Marketing, Licensing

685 447 0.7
Not quite, because Nintndo is unable to produce a current gen console, and don't have the people to support it if they did.

They don't even look at their competitors when trying to design competing systems they have no experience with

The Wii was a gimmick, they marketed it well to the mainstream, most of whom didn't buy games beyond WiiSports. As ivecsaid for years, and now a former NINTENDO exec says, ?Nintendo, like many large Japanese firms, are completely disconnected from the Internet, as Not only are they disconnected from the way the electronic world now works, but Japan is an anomoly. Poor broadband penetration in the home, no streaming, consoles dying,

The WiiU is what they wanted it to be. It's designed from the ground up for Japanese homes where there is little privacy, so that junior can have his own screen while mom and dad watch the news. This looks great, because they understand these situations and concepts.

Nintendo is completely out of their depth. Notice how Sony improved when they released control to the west on PS4. Nintendo won't do that, and it's way too late for them to build a meaningful online ecosystem to compete.

Posted:A year ago

#4

Anthony Gowland Consulting F2P Game Designer, Ant Workshop

313 1,362 4.4
they marketed it well to the mainstream, most of whom didn't buy games beyond WiiSports
Didn't the Wii have the highest attach rate of any of the previous gen consoles? The only figures I can find are from 2008 where it was beating PS3.

Posted:A year ago

#5

Daniel Hughes PhD Researcher, Bangor University

34 82 2.4
@ Anthony

Wii had an attach rate of 8 games per system, at least, if I recall correctly. It might be 9 per system, which is a very healthy attach rate. Obviously Nintendo sold the lion's share of that, but they were the only publisher on board from day one in a meaningful way. Jeff's argument is a myth, you can see he has a low opinion of Nintendo and what drove the Wii to success ;-)

Not disputing that they've got things wrong with Wii U, of course, but I think longer term success is more likely now due to changes at board level.

Posted:A year ago

#6

Paul Jace Merchandiser

1,169 1,947 1.7
"Even Mr. Iwata is often loathe to make a decision that will alienate one of the executives in Japan, so to get anything done, it requires laying a lot of groundwork: talking to the different groups, securing their buy-in, and using that buy-in to get others on board. At the subsidiary level, this is even more pronounced, since people have to go through this process first at NOA or NOE (or sometimes both) and then all over again with headquarters. All of this is not necessarily a bad thing, though it can be very inefficient and time consuming. The biggest risk is that at any step in that process, if someone flat out says no, the proposal is as good as dead. So in general, bolder ideas don't get through the process unless they originate at the top."
I wonder how many people they need to approve having Minecraft come to their platforms.

Posted:A year ago

#7

Jeff Kleist Writer, Marketing, Licensing

685 447 0.7
As I recall, Notch was pretty much in the "not worth it" camp

Chances are anyone who eants to play has it already on a far more lucrative platform.

Posted:A year ago

#8

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