The entire video game industry is going to miss Nintendo’s CEO

The video game industry lost one of its most memorable leaders yesterday, as Nintendo announced that its president and chief executive Satoru Iwata had died at 55. I have a lot of personal memories of Iwata, from watching his speeches in his early days as the leader of one of the most loved entertainment companies in the world to interviews in which he showed more of his own personality.

I didn’t always agree with his decisions, and I felt that he could have moved sooner to act on big trends that would have put Nintendo in a stronger position than it is in today. But Iwata was a wonderful leader for Nintendo and a statesman for the global gaming industry. The game industry is mourning his loss, as he passed away from complications from a bile duct growth.

The press isn’t supposed to take sides, and for the most part, I don’t. But I liked Iwata. He had a melodic voice and a good sense of humor. He had a bright personality and a smile that conveyed a lot, even when he was speaking through a translator. He was a great fit for a company whose mission is to bring joy to the lives of people. In his early years as Nintendo’s leader, Iwata liked to point out that Nintendo was an entertainment company, and its rivals were technology companies. Iwata was a game developer himself, working on Nintendo titles while at HAL Laboratory in the 1990s. That gave him a lot of credibility as a platform leader, whose decisions affected many game developers.

I remember sitting in the audience during his speech at the 2005 Game Developers Conference in San Francisco, where he spoke in careful English, “On my business card, I am a corporate president. In my mind, I am a game developer. But in my heart, I am a gamer.”

Those were perfect words to convey to thousands of game developers who had to make a decision about whether to support Nintendo’s platforms.

“Hard to beat his famous ‘In my heart, I am a gamer’ speech,” said Mark DeLoura, the former White House adviser on video games. “But I will always remember his visit to us in ‘The Cave’ at Nintendo of America, when he was still head of HAL. This was probably 1999. I don’t recall what we talked about, but it was most likely software development, GameCube architecture, and Kirby. What I do remember was how friendly and approachable he was and that he was wearing a suit and sneakers. He was one of a kind. Hard to imagine that he is gone.'”

The game industry had an outpouring of grief and condolences for Iwata, including one from Shigeru Miyamoto, the top game designer at Nintendo.

Shuhei Yoshida, president of Sony Computer Entertainment’s Worldwide Studios, said in his tweet: “I pray that Mr. Iwata, who contributed so much to the development of the gaming industry, rests in peace.”

Mike Gallagher, head of the Entertainment Software Association, the industry’s trade group, said in a statement, “Iwata-san’s passing affects us all deeply. He was a true visionary who expanded our understanding of the amazing art of video games. We offer our condolences to his family, friends, and Nintendo colleagues.”

Iwata won such respect from rivals because he made some of the smartest moves, even after some people had counted Nintendo out.

Back in the early 2000s, shortly after Iwata became CEO, he took no guff from rivals. Sony’s Kaz Hirai opened an E3 event by celebrating the sales triumph of the PlayStation 2.

“The console wars are over,” Hirai declared. In an interview, Iwata told me, “What an arrogant thing to say.”

The tables were turned in the next generation. Sony stumbled with the PlayStation 3, humbling Hirai and Sony. Iwata’s secret weapon was the motion-sensing controller for the Nintendo Wii, which smashed console sales records and eventually sold more than 100 million systems. It far outsold the PS3, and it may be one of the most brilliant moves that any company has made in the history of video games. Iwata celebrated that success, but he never rubbed it in.

The Blue Ocean

Iwata had an insightful way of looking at the game market. In an interview with me in 2009, he explained that view.

“Take the example of Wii Fit. When we talked about it two years ago, a lot of people thought the Wii Balance Board was crazy,” Iwata said. “They thought Nintendo would start selling a bathroom scale. But Wii Fit became a success because we saw a ‘Blue Ocean Strategy.‘ But now a lot of companies are fighting in the red ocean of follow-up exercise games. [As discussed in the Blue Ocean Strategy book, too many sharks in one area make a red ocean; but innovators who swim in the blue ocean have no rivals — Ed.] When we introduced the Wii controller, we were in the blue ocean, and this year is still the blue ocean. But the year 2010 may become the red ocean for motion-sensing controls, based on what Microsoft and Sony say. The advantage for Nintendo is that we always try to do things that other companies don’t try to do.”

I appreciated that he could be direct. Back in 2010, I interviewed him about the recession’s toll on video games. But he didn’t blame poor sales on the economy. He blamed it on a lack of great games, and he shouldered his own share of the responsibility for that.

“My belief is we should not blame the bad economy for the cause of slow sales of video games,” Iwata told me. “The slow sales must be due to the lack of great software that everyone wants to buy. We have not shown off the great attractions of whatever we are selling. This is not the problem of Nintendo alone but the entire video game industry. After all, something that is really fresh can make our industry grow.”

His insight was that players were getting tired of games more quickly than they did before, and the industry was boring them.

In interviews, I could tell he understood English, but he preferred to respond in Japanese and have his words translated. He would smile when I cracked a joke, and he would give thoughtful answers that were often interrupted by the translator, who sometimes had trouble keeping up.

While I liked him, I also thought he was making some big mistakes. When Apple introduced its iPhone in 2007 and its App Store in 2008, Iwata underestimated the threat. In an interview in 2009, he told me, “On the PC, there have always been free games. But finding them was not always easy. With the popular products like the iPhone, now it is easier. Apple has highly promoted the size of its free software library, so people are becoming aware of it. My opinion is that the iPhone has suddenly changed the picture. We are asking people to pay. Getting people to pay is always a matter of survival. We have to provide something new and surprising. We cannot stay where we are today. We have to be different tomorrow.”

He added, “If I thought our companies were in direct competition, I would not use a Mac in my presentations. I have never thought the two companies were in competition. The features of the iPhone and the DSi may overlap. But if we look at our differences, the areas of overlap are small. If, in the future, this overlap becomes bigger to the extent we should call it direct competition, I have to be more careful. I can’t bring out the iPhone during an interview anymore. Today, I don’t worry about it.”

Smartphones and tablets eventually became a big threat, and Nintendo acknowledged it only this year, when it teamed up with DeNA to develop mobile games in the future.

In recent years, as Iwata’s health was failing, I didn’t have direct access to him. He didn’t attend E3 2014 on the advice of his doctors, and he was also a no-show at this year’s E3. But we still got to see him on occasion on his Nintendo Direct recorded videos.

I can understand why he hoped that games could make people healthier, and he undertook projects such as the Nintendo Wii Vitality Sensor (which never made it to market) or Wii Fit. He may have been looking at his own mortality, but I would guess that he could also grasp Nintendo’s big opportunity and responsibility to improve the lives of its gamers.

Rest in peace, Mr. Iwata. I hope you’re enjoying that Blue Ocean in the sky.