This week I was in the rare position to be able to learn about the design of the Nintendo Famicom (that’s the NES to us Westerners) from its designer Masayuki Uemura. He spoke for a couple of hours at The National Videogame Arcade run by GameCity in Nottingham. It was a great event where we heard about design decisions, successes and failures of the Famicom from it’s inception in Japan to becoming a global phenomenon.
What follows are the lessons that stood out to me as important for anyone in business.
Nintendo is an older company than you might realise. They were founded in Kyoto in 1889 and originally made playing cards before moving into traditional toys and games much later. In the early eighties Nintendo launched what would become the hugely popular Game and Watch line of LCD handheld games. There were plenty of these types of games available from other manufacturers but Nintendo did something different. Where most of the other games on the Japanese market tried to emulate the success of games like Space Invaders Nintendo made games around what would become iconic characters. The created Donkey Kong and Mario and produced games with characters licensed from Disney. Their games stood out in the market and this differentiation lead to huge sales.
Beware of false economy
After the success of Game and Watch Nintendo started working on the home console that would become the Famicom. They were expanding into a new market so wanted to keep costs down. One of the ways they did this was to hardwire the two controllers directly into the body of the console meaning they couldn’t be unplugged or replaced by players. This saved a small amount of money as fewer components were needed in manufacture. This decision was made after rigorous testing of the buttons which found the controllers could withstand over 10 million button presses. But the testing made assumptions about how gamers would press the buttons without finding out how they would actually use the pads. Nintendo realised their mistake when they started receiving consoles returned due to faulty controllers. After investigation they found that people were pressing the buttons slightly diagonally rather than straight down from directly above. This seemingly insignificant difference resulted in a 10% failure rate and as the controllers were not replaceable this meant huge numbers of consoles were returned. A costly mistake that could have been avoided by either not trying to cut corners or testing in a real world situation rather than a lab.
You may be unaware who the true audience is for your product
Along with the Famicom Nintendo created various accessories, one of which was the Family Basic Keyboard. This was intended to help children learn to program at home. When Nintendo started getting lots of calls from children on behalf of their parents they discovered that adults were using the Family Basic Keyboard as a practice device for the word processors that were being introduced into Japanese offices at the time. Apparently children weren’t actually that interested in the keyboard.
Failure can lead to expansion
Nintendo set itself a sales target for the Famicom of one million units within six months. Unfortunately only 440,000 sales were made in the first year after launch. This lead to an evaluation of the US market to see whether the product might perform any better over there. The short story is: it did. In total Nintendo sold around 34 million units in the United States. Had they hit their original Japanese sales targets they may never have entered the American market. Or they may have been less careful about how they launched which could have reduced their success. More on that below.
Test the water with a soft launch
To gauge how Americans would react to the Famicom games Nintendo created an arcade cabinet called the Nintendo VS System. While it looked like a traditional arcade machine it was really just a Famicom, two joysticks and a screen in a big box. The VS System was introduced into American video game arcades to assess the popularity of games. When it became clear America was enjoying the games Nintendo had already created they decided the time was right to launch the home console into its new market.
Tweak your offering for new markets
After missing the target at home in Japan Nintendo wanted to make sure the American launch of the Famicom was a greater success. They redesigned the console physically to resemble a VCR as these were hugely popular in American houses of the time. Having learned their lesson on the false economy of the hardwired controllers they opted to use detachable units. The final thing to decide on was a name. ‘Famicom’ could not be used as another company was already marketing a product called the Family Computer. The name NES (Nintendo Entertainment System) was decided on just one month before launch. Another option was the ‘Nintendo Learning System’. It’s interesting to ponder whether the NES would have done as well had it been saddled with that name. My guess is that it wouldn’t.
Find out what your audience loves
The other change Nintendo made for the US market was to bundle the system with their light gun because, as Uemura told us with a smile, “America loves gun.” They also made an optional robot available to make the system “appear futuristic” and tie in with American popular culture of the time.
So after initial disappointment Nintendo went on to create one of the greatest successes in video game history. Even though they no longer occupy the same position in the market there’s a lot we can take from Nintendo’s successes and, perhaps more importantly, their failures.
Oh, and if you don’t know about the National Videogame Arcade and GameCity you should check them out, they’ve just been named as one of the UK’s most creative companies by Creative England.