Nintendo’s New President

Nintendos New President alt (1)

Please welcome Nintendo’s new president, Tatsumi Kimishima.

Who Is Tatsumi Kimishima

Born on April 21st, 1950 Tatsumi Kimishima has quite the résumé. In April of 1973, Mr. Kimishima started his career in banking, working for The Bank of Tokyo-Mitsubishi UFJ, Ltd. (formally The Sanwa Bank, Ltd). He would later be promoted to General Manager of the Shinbashi Branch located in Tokyo, Japan. Later, in December of 2000 he joined Nintendo as a Representative Director of the Pokemon Company. After the retirement of Minoru Arakawa, he became Director of Nintendo of America in 2002 and a director of Nintendo (the parent company) the same year. From May 2006 until June 2013, he served as Chairman and Chief Executive Officer of Nintendo of America until Iwata took his place. Since then, he served as Managing Director, General Manager of Corporate Analysis and Administration and in charge of the Human Resources Division before being named President on September 14, 2015.

Why He is a Good Fit for President

The biggest advantages that Kimishima has are his previous banking experience and an understanding of Nintendo’s unique business. Banking is an industry that requires a great deal of knowledge about other business.  This is because bank managers need to understand their customers, their needs, activities and financials. As such, Kimishima has an idea of not just how a well-run video game business should look, but how any well-run businesses should look like. In contrast, Satoru Iwata was very knowledgeable about video games, but he did not have the same business experiences as Kimishima. Iwata’s management experiences was with HAL Laboratories and Nintendo. Kimishima has been involved in a completely different industry where a strong understanding of other businesses is key. Additionally, Kimishima, during his tenure with The Bank of Tokyo-Mitsubishi, was posted in New York, Los Angeles, Central America and the Caribbean. Nintendo likely made Kimishima CEO of Nintendo of America because he had a better understanding of America than any other director at Nintendo.

On the other hand, Nintendo is a very closely knit company. Hiroshi Yamauchi was the third, and last, of the Yamauchi family to run the company, and he personally chose Iwata as his successor. Although Nintendo could find someone  suitable from outside the company, Kimishima has a better understanding of Nintendo and its philosophies. Nintendo is a company that was built on their their successful game series including Mario, the Legend of Zelda, and Pokemon. Having an understanding of Nintendo’s unique brands and culture is paramount to its continued success. Furthermore, Kimishima was privy to the strategic direction of Nintendo that Iwata established. When you consider this, he makes perfect sense to take the reigns of the company, even if he doesn’t have the same charm that Iwata portrayed.

The Future of the Company

Nintendo has solved the short term problem of finding a president; however, the company will now have to carefully consider its future.  Succession planning is paramount to the long-term success of a company, and even moreso if key management is old, ill, or just so critical.  As an example from my bank examiner experience, we had a bank where the succession plan was simply that the President would replace the CEO in his absents.  However, the President was out of the bank due to treatment and chemotherapy for brain cancer. Furthermore, the Chief Financial Officer was overworked and ran most of the bank’s crucial functions.  The plan wasn’t enough to address the real potential of a death of absents of key management of the bank.  In Nintendo’s case, Iwata was the major figure in the company and was likely solely responsible for its strategic direction.  Its clear that there was a major disruption with Iwata out of the picture, and Nintendo will likely not want to run into this problem again.

Iwata was 55 before his unexpected death in July of 2015, but Kimishima is 65 years old. Being a president of a company is very taxing, and Nintendo will likely need to consider finding a long term replacement in the near future. Genyo Takeda echoed this sentiment stating the aim is to establish a “future-proof” group leadership system inside Nintendo. This likely means the company is looking for a younger employee to take over the company in a few years.

Kimishima has made it clear that he has no plan to deviate from the strategic direction Iwata was taking the company.  Nintendo’s short-term plans were likely laid out before Iwata’s passing.  Given this, perhaps Kimishima was chosen to administer the current strategy until a new president could be named who would take over the company. Nintendo is likely looking for someone who could be groomed and would take the role of president in a few years.

End of the News Drought

Iwata giving his classic “Directly to you” pose

[1]One other interesting fact that was brought up (via Japanese news outlet Nikkei) is that the restructure was rushed due to the upcoming holiday season where Nintendo makes 50 percent of their sales. Naturally, the company didn’t want to go into the season in a holding pattern. News about Nintendo games has been scarce since Iwata’s passing. Nintendo has halted their Directs and some fans have been worried if they will still happen.  Nintendo didn’t seem to want to talk much without someone manning the helm. 

In regards to Smash, we will likely hear more soon. Nintendo often holds a media conference in the fall. Japan has a large trade show known as the Tokyo Game Show which happens in September. Nintendo has historically skipped this event in favor of their own event. In fact, it was one of these media events where Sonic was unveiled for Super Smash Bros Brawl. These events were co-opted by the directs starting in 2011. With a new president, the company can continue business as usual, and will likely show off information about Nintendo games soon. With the next DLC for Smash Brothers coming September 30th, we won’t have to wait long to see what’s in store for the games.

The Restructure

Nintendo has also changed the corporate structure. The company named Shigeru Miyamoto as “Creative Fellow” and Genyo Takeda was named “Technology Fellow.” Nintendo describes a fellow as “An individual selected from among the Representative Directors who has advanced knowledge and extensive experience, and holds the role of providing advice and guidance regarding organizational operations in a specialized area.” Additionally, Nintendo combined its game development studios into the Entertainment Planning and Development division, now headed by Shinya Takahashi. Nintendo also established a new division, the Business Development Division, that will refining the business model for the dedicated video game system business.”  This division will also handle licensing and smart phone games.

This restructure was likely planned for even before Iwata’s death.  Iwata restructured the company in 2002 when he became president and again in 2013.  This restructure was likely to facilitate Nintendo’s strategy as it pertains to the NX.  There has been much discussion about what the NX is especially with Nintendo’s most recent patent filings.  Sean Malstorm, author of Birdman and the Causal Fallacy, wrote that Nintendo new system would be a platform and not bound by hardware.  It remains to be seen what Nintendo will do, but I can safely say that these next few years will be interesting.

[1]The article uses the term “troika” which commonly refers to a group of three. In Russian, the term means a “triumvirate” or group of three. This is a reference to the corporate structure of a creative fellow and a technology fellow with the company headed by the president. Thanks to Frostwraith for pointing this out!

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