On September 16th, 2015, Tatsumi Kimishima was faced with an impossible task: filling the shoes of Satoru Iwata. Nintendo's former President was a gaming icon and a beloved figure, and his sudden passing was a tragedy that shook the industry. In taking the torch from Iwata, Kimishima inherited a company that was not only brokenhearted, but also struggling financially. Kimishima was not Iwata's first choice for the job, but he stepped up to the plate when no one else was prepared to do so. Three years later, Kimishima is preparing to step down and turn the Presidency over to someone new. Looking back on his brief, but important stint as President, I believe Satoru Iwata would be proud of what he accomplished.
From the beginning, Kimishima understood that his tenure at the helm of Nintendo was to be a transition period. At the age of 65, he began his term as President when most executives would be thinking about retiring or taking on reduced roles. He stepped into the role knowing that his job was to bring Iwata's projects to fruition, maintaining his vision for the company while searching for a more suitable long term leader.
In one of his first interviews after being named President, Kimishima pledged to stay the course and finish what Iwata started. That's no small task when you consider how many irons Iwata had in the fire, but over the past three years Kimishima has lived up to his word in many ways.
Nintendo Switch is unquestionably the most important of the projects started by Iwata and finished under Kimishima. Iwata first teased the mysterious "NX" console just months before his passing, and two years later it launched to an incredible reception. Switch sales were driven by The Legend of Zelda: Breath of the Wild but also by strong marketing. Under Kimishima, Nintendo made the decision to invest millions into the company's first ever Super Bowl commercial just before Switch launched, and they've continued to give it a strong advertising presence ever since.
During Iwata's final months as President, he had a change of heart regarding mobile games. Iwata had previously pledged that Nintendo would stay out of the mobile market, but in 2015 he announced a partnership with DeNA and plans for five mobile games. Under Kimishima Nintendo has already released Miitomo, Super Mario Run, Fire Emblem Heroes, and Animal Crossing: Pocket Camp. Dragalia Lost and Mario Kart Tour are both on the way, and there have even been rumors of a Zelda game for mobile. There's still plenty of room for improvement and growth, but Nintendo's mobile division pulled in ¥39.3 billion last year, or around $358 million. That's not too shabby for a division that didn't exist just two years ago.
Towards the end of Iwata's life, he began to see Nintendo as not just a video game maker, but as an entertainment company. He later elaborated on this idea by announcing plans for Nintendo theme park attractions and movies. These projects have also progressed swimmingly under Kimishima. Nintendo officially unveiled Super Nintendo World in late 2016, and construction kicked off on the first of three Nintendo theme parks last June. We also learned earlier this year that Nintendo is officially partnering with Illumination Entertainment on a Mario movie.
Iwata's vision of a broader Nintendo entertainment company is unfolding right before our eyes, and Nintendo's brand recognition is the strongest it's been in years. Combine these new ventures with a top-selling new home console and a growing mobile market, and you've got a Nintendo that Iwata would be proud to see.
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In addition to facing the daunting task of replacing Iwata and completing his projects, Kimishima had to restore Nintendo to financial stability. When Iwata passed in 2015, Nintendo was just starting to recover from three straight years of operating losses. Iwata took the fact that Nintendo lost money under his watch very seriously, even going so far as to slash his own pay in half voluntarily.
Fast forward three years to today and it's a night and day difference. Nintendo's latest financial report to investors shows that the company had an incredible operating profit of $1.6 billion for the past fiscal year—the most for the company since the height of the Wii and DS craze in 2010. Nintendo was never truly at risk of going bankrupt any time soon, but their bank account has a lot more padding these days. Nintendo reported cash and deposits of $4.465 billion back in 2015, but that number is up to nearly $7 billion today.
The company's place in the hardware market was not strong in 2015. Wii U was a commercial catastrophe, selling far less than any major Nintendo home console before it. 3DS was certainly no failure, but its slow start (which led to a massive price cut just months after launch) cost Nintendo deeply, and it couldn't compare to the selling power of the original DS.
Once again, the difference three years makes is almost unbelievable. Nintendo Switch has sold nearly 18 million units in approximately 13 months, which is about 4 million more than Wii U sold in its entire life cycle. You might think that would spell the death of 3DS, but Nintendo's dedicated handheld is still selling well enough that Nintendo plans to support it until at least 2020.
The continued sales of 3DS, record-breaking first year for Nintendo Switch, and growing mobile division have all put Nintendo back on the map in a big way. This is never more apparent than when looking at their stock, as Nintendo shares have risen from ¥21,055 to ¥46,180. In other words, the company's value has more than doubled under Kimishima. If Iwata felt responsible for the company's financial struggles from 2012 to 2014, he'd be relieved and thrilled to see how profitable they've become since then.
Preparing for the Future
As a transitional President, Kimishima's job was twofold: finish Iwata's work and prepare Nintendo for the future. Kimishima began work on the latter almost immediately. Iwata's death left Nintendo with a massive gap in leadership, so Kimishima set out to create a future-proof system of creativity and decision-making at Nintendo.
As soon as he was promoted, Kimishima announced a massive restructure for the company. This shake-up included the decision to combine Nintendo's two most important development branches into a single group led by Shinya Takahashi. It was also at this time that Shigeru Miyamoto and Genyo Takeda stepped back from their roles as General Managers. Both men still serve as advisers, but Kimishima believes it's time for younger talents to have more decision-making power.
Since this initial restructure, Kimishima has stayed true to his word on the subject of promoting talent. Kimishima promoted Shinya Takahashi to be the head of Nintendo's Entertainment Planning & Development Division, and under his guidance they just delivered two of the top-rated Nintendo games of all time: The Legend of Zelda: Breath of the Wild and Super Mario Odyssey. This excellence did not go unnoticed, and Takahashi has already been promoted again, this time to Senior Managing Executive Officer. At 39, Takahashi is much younger than many of Nintendo's key decision makers in the past.
Yoshiaki Koizumi, who serves as Takahashi's Deputy General Manager, has also been promoted for his hand in Nintendo's recent success. When Koizumi wasn't helping Takahashi oversee the development of Nintendo's biggest games, he was serving as the lead developer of Nintendo Switch hardware. Due to the console's immense success, Koizumi has been promoted to Executive Officer. Kimishima clearly prioritizes giving more influence to those who have proven themselves.
Lastly, Kimishima's preparing for the future by choosing his own replacement. Kimishima promoted Shuntaro Furukawa to Nintendo's board of Directors in 2016, and since then the two have quietly been planning Nintendo's future behind the scenes. As Kimishima has worked to make Nintendo's internal leadership structure more in touch, efficient, and effective, Furukawa has been by his side, advising him on how to put more power in the hands of Nintendo's younger creatives.
Furukawa, much like Iwata, will be more than just the President of a company that makes games. Iwata famously once said "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." I believe he'd be happy to know that his long term successor is an avid gamer who has been obsessed with Nintendo since the days of the Famicom. If Kimishima is to believed, Furukawa also has a firm grasp of Nintendo's core philosophy that won't allow him to stray from what makes Nintendo special.
No one could ever truly be expected to replace Satoru Iwata in the hearts of Nintendo fans, but Kimishima has accomplished more in his brief stint as President than anyone ever could have imagined. Under Kimishima's leadership, Nintendo has launched a record-setting console, made a splash in the mobile market, branched out into theme parks and movies, and launched some of its highest-rated games of all time.
Nintendo has progressed from bleeding money to drowning in it, and there's still more to come. In just three years Kimishima successfully capitalized on nearly all of Iwata's ideas, elevated Nintendo from financial turmoil to tremendous profitability, and promoted some of the company's brightest young talents to leadership roles to ensure Nintendo's continued success in the future. Looking back over Kimishima's Presidency, I'm sure Iwata would be proud.