Albeit Tatsumi Kimishima hasn’t had the longest runs as being the President of Nintendo, he has had a great one and this year, he’ll be stepping down. It is a shame to see him go, but soon to be President (Shuntaro Furukawa) has big plans. Before we get to see those take flight though, there were plenty of questions focused on the change of power and these are the answers:
The New President’s Agenda:
Shuntaro Furukawa: “The company will be managed by the members of a new executive management committee under a next-generation collective leadership system. Mr. Kimishima has shown through his own actions what it means to manage a company collectively rather than relying on the efforts of a single person, and I understand my role as one of continuing on that same course. We have executive officers in charge of hardware development, in charge of software development, and in charge of sales and marketing. They all have their different strengths, so I intend to have frequent one-on-one conversations with them, share any background or context behind how things are done, and do everything I can to be mindful of engaging in management together as a team.
As for issues, my highest priority task right now is to accelerate the momentum behind Nintendo Switch and to expand the business. Other issues include the question of how to expand our smart-device business, and whether we can nudge the scale of that business into a larger portion of our overall business. I am also looking at the topic of the yet-to-be-realized theme park and movie projects that are part of our strategy of expanding the number of people who have access to Nintendo IP (Intellectual Property), and how we can lay down new pathways that positively enhance our dedicated video game platform business.”
Creating New and Innovative Content is Where Nintendo Needs to Invest Cash Reserves the Most:
Tatsumi Kimishima: “With regards to the use of cash reserves, we managed to turn a substantial profit in the previous fiscal year (ended March 2018), as was announced. And as you can see in our Earnings Release, the annual dividends this time total 70.8 billion yen. And if you read through the statement of income, you will see that we need to pay corporate income tax and some other taxes. So even though our profits grew, that does not necessarily build up more of our cash reserves, because we have those dividends and taxes to pay. At its core, the Nintendo business revolves around creating new and innovative content, so that is where we must invest the most. We want to keep consumers engaged, and with technology advancing at such a tremendous pace, we will want to consider investing in parties that have technologies we feel are a good match for Nintendo, if we can find them. I cannot provide any details at this time, but we are looking at all kinds of possibilities, and will continue to do so.”
What it Takes to be the President and What a Good President should Do:
Tatsumi Kimishima: “I have my own thinking about why Mr. Yamauchi talked about being unusual when he named Mr. Iwata as president. Mr. Yamauchi worked for more than 50 years in the game business and he stubbornly stuck to his beliefs. He always felt that software is key to the game business, and that creating the software naturally takes time and labor as well as money, and that you have to go all out and never quit. He also always felt that the purpose of the hardware is to bring the best out of the software, and he never changed his thinking on this. I imagine he would say that a person who would readily bend Nintendo’s core attitudes would be unfit for the job. In a sense, he was calling for a stubborn person, or as he might say, a thoroughly unusual person. My understanding is that he used that word to mean someone who would not change, no matter what other people or what other companies said, and would want to preserve any aspect that makes Nintendo different from the others.
As to whether Mr. Furukawa is in any way unusual, I can just say he has extremely strong inner fortitude. He has clear and articulated opinions, he understands the Nintendo point of view, and he can express that to everyone in his own words. The Corporate Planning Department (headed by Mr. Furukawa) has the important mission of conveying the Nintendo point of view to all employees, including people involved in development and sales as well as people in other countries. It is important that the department remain on point no matter where the conversation leads, and he has been extremely competent at that.
Another component has something to do with the fact that more than half of Nintendo’s 5,500 employees work outside of Japan. It would be hard for anyone to lead Nintendo if unable to directly communicate their views to overseas workers, including those in important senior positions, or if they could not make decisions quickly, and lacked the capabilities to follow through. That is why I see Mr. Furukawa’s overseas work experience as something that makes him a good choice for our new president. After Mr. Yamauchi’s presidency, there was a change in the environment surrounding Nintendo, where no longer could any single person decide matters on their own. That was the start of the collective leadership system that I, too, have carried on. In my view, Mr. Furukawa’s role as president is to bring the best out of the excellent people responsible for software development, hardware development, sales, and marketing. He must steer Nintendo as a whole, and push for the points that must not change. The executive board resolved to choose Mr. Furukawa as the right person for that role.
Shuntaro Furukawa: “The one thing we must never forget when running Nintendo is that we are a company that makes entertainment products and playthings, not necessities. It is a business where our mere existence could be quickly forgotten if consumers stopped considering our products to be fun and interesting. No matter how the era or the environment changes, the essence of our business will not change. It is a high-risk business, so there will be times when business is good and times when business is bad, but I want to manage the company in a way that keeps us from shifting between joy and despair. As for the question of what kind of company I want to make of Nintendo, this is a company that continues to be an integrated hardware and software business in the world of dedicated video game platforms. We work hard to keep the odds of success in our favor, but there are times when things go well, and times when they do not. This is a high-risk business by its very nature, and that will not change. But we need to be a company that continues to ask ourselves what we can do to maintain our relationships with consumers, and how we can leverage our ingenuity to mitigate the risks even a little bit, and never come to the conclusion that there is nothing we can do.”
This may conclude our coverage of the Q&A, but more Nintendo news is inbound, so if you’re in the mood for reading, there’s still plenty to come.