Apple should look to Nintendo’s past

 
Steve Dinneen
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THOSE who say Steve Jobs’ eventual departure from Apple could start a terminal decline at the company are wrong. In fact, a glance at the history of another great innovator of the technology world, Nintendo, suggests his exit, whenever it may be, could turn out to be its salvation.

Jobs’ strategy with Apple has been to ignore what consumers thought they wanted and give them what they actually wanted. Focus groups, he once declared, were what kept computers beige for so many years. Nobody thought they wanted a small metal box housing their entire music collection. It turns out they did.

But Jobs’ bull-headed approach to design is mirrored in his dealings with suppliers and third-party developers. The philosophy goes: if you want a job, you’d better agree with Jobs. The similarities with Nintendo at the time of its iron grip on the gaming market in the 1980s and early 90s are striking, although the origins of the firms could hardly be further apart.

Nintendo was founded in 1889 as a playing card firm and spent much of its existence selling games to the infamous Yakuza gangsters (a story wonderfully detailed in new book Playing to Wiin: Nintendo and the Video Game Industry’s Greatest Comeback by Daniel Sloan).

But Nintendo, like Apple, has been dominated by a single name – Yamauchi (albeit spread over several generations, with the first non-family president only taking the reins in 2002).

In the 1970s Hiroshi Yamauchi – a man so power hungry that when he took over the firm he demanded all other family members quit the firm to leave no illusion as to who was really in charge – decided to push Nintendo into electronic gaming.

Yamauchi, like Jobs, was notoriously stubborn, achieving incredible (or impossible, depending which side of the divide you were on) deals with suppliers that left them struggling to find a margin while Nintendo amassed a vast war-chest. He also imposed draconian rules on third-party developers, with Nintendo fiercely guarding the software that was allowed onto its platform.

Jobs, too, closely vets what is allowed onto his machines, an attitude that led to his famous (and very public) bust-up with Adobe over its Flash video software. Apple has also been criticised over the amount of revenue it siphons off from app developers, which, at around a third, is far more than its rivals.

At Nintendo these tactics, while catapulting the firm to global dominance during its glory years, eventually led to problems. Spats broke out with developers who were tired of Nintendo’s “no carrot big stick” approach to business and some even defected to rivals (as with Square Enix taking its hugely profitable Final Fantasy franchise to Sony).

This helped to give Sony a vital foothold for its PlayStation console and cast Nintendo into the gaming wilderness for a decade. Part of its penance involved patching up relationships with the firms it had parted company with on less than amicable terms.

Jobs’ has taken Apple to the top of the tree, creating the biggest technology firm in the world with a veritable cult of devoted followers. But getting there and staying there are very different things. And if the halo one day slips, Apple may need somebody more willing to extend the proverbial olive branch than Steve Jobs.

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