Spend money and make interesting products.
Editor’s note: This article is from WeChat public account “Chaos University” (ID: hundun-university ), author | former vice president of Nintendo China, strategic leadership expert Fu Lei.
What is the relationship between video games, toys, lovers hotels, and a card company?
Yamauchi’s explanation is that these businesses are doing the same thing –
Let people laugh.
Whenever Nintendo’s product is released, you can’t think of it as a 130-year-old company:
From 1983 to early 2018, it sold more than 4.5 billion copies of software. In 2019, it was the Forbes Global 100 Economy.
There is a natural danger behind success, and escapes in the dead–West said in “Scale” that the probability of a company to live 100 years is 0.00045% (statistics say that the average life expectancy of Chinese startups is not To three years).
Nintendo with only 5,000 employees, how is it 100 years old?
Strategy:From card workshops to lovers hotels to game giants,What changes, what remains the same?
Nintendo is a game company today, but 70 years ago, it had a completely different first curve.
In 1949, the young rich second generation Yamauchi took over the family workshop from his grandfather, and his main business was playing cards. Soon, when he went to the United States to inspect the market, he found that the size of the world card market was not large, and Nintendo has become the first place in Japan, which means that its ceiling is coming.
1.Turn on the second curve:Independent attempt from the Lovers Inn to the taxi
In order to break through the ceiling, Yamauchi recruited a large number of engineers and artists in the company, and personally started a new business experiment with independent small teams, such as toys, instant noodles, taxis, lovers hotels…
What is the relationship between a toy and a love lover hotel and a card company? Yamauchi’s explanation is that these businesses are doing the same thing – Let people laugh, the logic behind them is also the mission of Nintendo’s centuries.
1969In a warehouse on the outskirts of Kyoto, Nintendo’s game department was established. Yamauchi only set a goal for the young people recruited – spend money and make interesting things.
The young people tried a variety of things. When I was at Nintendo’s top boss, Takeda Takeshi, I made a large arcade that I could put in the game hall. There was a character called King Kong, which became a burst. Another young man invented the role of Super Mario, which is also popular. .
Gradually, the game business began to be self-financing.
2.Break the threshold:Become a game industry giant
How to break the break point after determining the direction of long-term development in many fractal businesses? We use a single factor thinking model to disassemble. This is a two-step process: splitting the composite elements internally; finding features that are ten times faster on the outside.
1 Scene Disassembly
As an adult, his day’s space is divided into three scenarios: company, home and outing. In these three scenarios, the company obviously can’t play games. In the out-of-town scene, there are already a number of game halls on the market. But in this scene at home, no one actually supplied the game.
For this newly discovered market, Nintendo believes that home consoles can be launched.
2 external ten-speed change elements
In the early 1980s, the developed economies of Japan and the United States grew rapidly, and large-scale integrated circuits appeared in science and technology. The original large electronic products could be made very small, which is 10 times faster in technology. variable.
So, compared to the original large commercial game console market, Nintendo found a single element of “cheap, fun” and launched a home game console. After the first generation of home game consoles went on the market, it immediately became the mainstream of the industry. The company also smoothly crossed the discontinuity from the card workshop and became a game company.
3.Environment has changed, is the strategy going to change?
The most frequently encountered business, I often ask a question, when the external environment changes, should the corporate strategy change? As a history of 130The company of the year, Nintendo also faces this problem.
Strategic leverage has four major elements::
1 The strategic fulcrum is often the value proposition or mission of the company, and it must be stable.
2 The true North target must be a single KPI corresponding to the strategic pivot. This goal must be set.
3 The strategic engine is often evolved from the company’s initial core competencies.
4 Strategic leverage is an external element of an enterprise. It is often an external dividend and an industry enthusiasm. It must have a ten-fold change.
Among these four factors, the external environment is changing almost every year, so the strategic leverage must also change, otherwise it will not adapt; the strategic engine is also often changing. However, the strategic fulcrum and the north target will not change.
In 2001, there was another ten times better element on the outside of Nintendo. Rail transit was on the rise and people’s travel time became very long. At the same time, there was also a factor of ten times the speed of deterioration – the original home The machine market is beginning to be saturated.
Therefore, its strategy engine responded to external changes, from the original cheap, fun to playable and fun. At that time, Nintendo’s opponents chose the best and most advanced screens, so the power consumption was very good. Only Nintendo’s game consoles didn’t work well, but they were very power-efficient and could be used for 8 to 10 hours. , play while driving.
With this strategic change, Nintendo launched a portable game console that has dominated the market for more than 10 years and brought high profits.
Competition:How to break through inside and outside?
The monopoly brings high profits and brings more competitors. Soon, there were two companies outside of Nintendo that were much bigger than Nintendo – Sony and Microsoft smashed into the gaming industry, defeating Nintendo’s best-performing game console, and Nintendo lost the first game in history.
How long can Jiangshan stay? It faces this problem. Not only that, when the outside encounters the challenge of life and death, the head of the mountain is also 75 years old, how should the succession candidate be chosen?
Nintendo was originally a family business, but Yamauchi knows the harsh environment and the challenges, so he did not hand over the company to his son, son-in-law, senior vice president of the world, because he thinks these People have only experienced success. So he chose a person who really played the game – a young man who just entered the company, Iwata Satoshi, served as CEO.
How did the new official take office, how to sort out the difficulties of Nintendo?
1.What is the real dilemma of Nintendo?
Games and movies are essentially the same thing, and they are all products that occupy people’s time. This type of product has a feature that must be both artistic and technical. So, if you want to be the ultimate, should you choose technology or art?
From 1983 to 2004, Nintendo’s strategy has been to take the technical victory route until it hits the real shackles of technology—Sony has 50,000 technical engineers, Microsoft has 10,000, and Nintendo’s total employees are only 5,000. People, so it is impossible to fight the technical faction.
1 external trend
The inside does not look outside. Can Nintendo scale the scale outside and find a new factor of ten-speed change?
This is Japan’s demographic chart. There are two major trends:The birth rate has dropped, so its population has declined; second, the population is aging.
Because most of the game population is young, there will be fewer and fewer people in the future; so even if Nintendo can beat Sony and Microsoft, the market that will be available in the next 50 years is just today. 1/3 – There is a huge problem in this industry.
In terms of downsizing, Nintendo’s gamers are characterized by young age and younger people who spend more time. However, that doesn’t mean there is no time for people older than them, but adults’ time is very fragmented, often less than an hour.
So, Nintendo found an opportunity here: the core player’s requirements for the game are better, and it is best to play the game for three days and three nights. This is the psychology of the children. But for adults, the game is to kill time, to be fun, to get started quickly, and to meet in time.
In fact, the logic behind the game’s fun is the game design ability, which is art. The characteristics of Nintendo are that more than half of the employees are artists, but Sony and Microsoft are the world’s best engineers. Hit the battlefield here, Nintendo successfully achieved dislocation competition and found a way out.
Hanachichi describes Nintendo’s philosophy that the game is fun, the customer has a smile; the customer has a smile, the employee has a sense of accomplishment, the product will be hot, the agent will be satisfied; the sale is good, the investor is satisfied. The whole cycle will make every employee take customers fasterMusic is your own happiness.
In other words, earlier than Bezos, Nintendo proposed the de facto growth flywheel. And the starting point of this growth flywheel engine is that the game is fun.
In 2007, Nintendo’s performance doubled, and Iwata Satoshi and Jobs were both selected as the world’s best CEOs.
2. How to face the downside strike?
In 2007, Jobs launched the Apple phone. It stands to reason that Apple’s mobile phone and the game machine well water do not make river water. But Nintendo’s data shows that since Apple’s mobile phone has been rising, Nintendo’s portable game consoles have gone from bad to worse – due to the popularity of mobile games, Nintendo has suffered a downsizing. The so-called dimension reduction strike is to destroy you, what to do with you?
However, it also found a ten-fold better factor in the market – the original household appliances were used by the family, but since the PC came out, the household appliances began to become personal. Since household appliances can be personalized, why not have a product that can be used both domestically and portablely? This is the origin of the Switch console.
Switch This product has a main slogan: The phone is smaller than my small one. My game is better than my screen. This is a typical mismatch competition.
In 2017, Time Magazine made a list of the world’s top ten product inventions. Nintendo has two products in the top ten, and the number one is the Switch.
Bottom logic:Why are both talent and creativity big bang?
Why is Nintendo so determined every time he encounters a challenge?
1.Organization, loose but free
Most of the game companies, the software and hardware departments are unpacked. But from the beginning of the establishment of Nintendo, the software and hardware departments are playing the game, and they are also put together with operations and sales. It has set up three independent institutions from the beginning, which can independently complete the development and listing of games, and compete with each other.
So Nintendo’s internal organization is independent decision-making, personnel, financial autonomy, externalThen open a second party, third-party game production company. Overall, the internal and external forms an open system.
The biggest benefit of an open system is the increase in anti-entropy. What is entropy increase? When the company is managed neatly, as the practice progresses, it becomes confusing and finally reaches the limit. The benefits of having an open system are:
1 Big Bang. Nintendo recruits people very conveniently. The talents in the strategic decision-making level are not limited to the first party. Its two consecutive new CEOs are from its second-party companies, including Iwata Satoshi.
2 The big game of creativity. The top ten global game sales, it accounted for six, because there is a circle of small companies around it to develop together.
There are two types of companies in the world, one is a mechanical structure company, the level is strict, emphasizing strong control; the other type of company is called dissipative structure, with mission-driven employees, but not too strong management system. Mechanically structured companies dominate the business world, based on the assumption that people do not work hard without lean management.
Look at it, what is the nature of the organization? It is a group that people work together to achieve certain goals.
So looking back at the characteristics of Nintendo’s organization, first of all, it is at the surface of the organization, and those systems that implement the system are simply messed up. When I was in Nintendo, I looked down very much. Because there was no international process, I asked them to say that China has its own national conditions, and you set it yourself.
However, its corporate culture is based on human nature, and its mission is to make people laugh. Therefore, the people it wants are also based on human nature, recruiting people to see three points:
1 has a strong self-drive;
2 has a strong curiosity;
3 Don’t be in the crowd, you have to dare to make a thing in the cottage, you will be despised in Nintendo.
The book “Nintendo Philosophy” mentions that Nintendo is different from most Japanese companies. Most Japanese companies are very strict, but Nintendo has no social training, and there are no development plans. If you want to develop a product, you can just get the money.
Nintendo’s salary is not high for many times, but American companies often dig up R&D personnel, even if they don’t get 10 times their wages. Because many R & D personnel said that they have the right to use a large amount of research and development funds in Nintendo, there is no such opportunity to go to the United States.
2.Dare to subvert yourself
The organizational structure of Nintendo is an independent small institution. It never makes a cottage product of me too, and it has formed self-competition inside and even dared to destroy itself.
Larry Downs is a case in which Nintendo is specifically mentioned in The Big Bang Innovations. Traditional products range from molding to maturity.It is a relatively flat curve. However, Nintendo is characterized by a fast product, but it is also falling quickly. Moreover, each time it falls because its new product outperforms the old one. Therefore, many innovations in its history are that the competition within the organization is better than the competition outside.
This confirms the sentence: Only by constantly attacking yourself can you become a dead bird.
Future: Time Machine Principle
What inspired us in this case?
The founder of Softbank, Sun Zhengyi, once had a theory called Time Machine Theory: applying the experience gained in the national industry and the market to the post-national market, just like opening a hang, can make accurate Judge.
What are the isomorphisms of China and Japan?
1 Demographic model, today’s China’s population structure is the same as Japan 17 years ago:
So, the population problem that occurred in Japan 17 years ago will happen in China in the next 17 years.
2 Let’s look at the economic cycle. From the economic take-off to the gentle one, China and Japan are 30 years apart.
3 cultural cycles? The difference is 40 years. Japan hosted the Olympic Games and the World Expo in the 1960s and 1970s respectively. China hosted the Olympic Games and the World Expo in 2008 and 2010 respectively.
The rule of the whole world is that when a country continues to hold the Olympic Games and the World Expo, the pride of the nation will greatly increase, and its own brand will be well developed. Therefore, those well-known brands in Japan, such as SEVEN-ELEVEN, Muji, and Uniqlo, all came out during the period from the 1970s to the 1980s. China has a similar situation.
In summary, many of the external changes that Nintendo has just mentioned, and how it responds, can be used as a reference for Chinese practitioners.
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