Question: Analyze and record problems and their Core elements from the case below.

Iwatas Influence

Iwata, an experienced game developer and former president of game studio Hal Laboratory, became president of Nintendo in 2002. Even though he was not a member of the founding family, Yamauchi believed Iwata was the right leader to take Nintendo into the new millennium.50 After becoming CEO, Iwata pushed for several changes in Nintendos organizational culture. First, he asked Nintendo executives to think about what made initiatives succeed or fail. In his mind, the process was more important than the result. He pressed executives and employees over why certain business results had occurred. Even if sales were great, executives couldnt sit back and bask in their success Iwata would demand to know the factors that had led to the positive outcome.51

This emphasis on understanding led to improved communication across departments. The companys strategy became better understood among the 1,300 rank-and-file employees, which resulted in more autonomy across the organization.52

Coming from outside of Nintendo, Iwata made it a rule to talk with staff and persuade them of his vision for the company. This practice created a culture of discussion in an organization that had previously been managed in a top-down way. This culture of discussion reinforced coordination among the companys software and hardware divisions, which had been established during the development of the Nintendo DS. This culture proved beneficial as the Revolution project got underway.

Revolution

While Hiroshi Yamauchi would never have been able to participate in the highly technical discussions that took place during earlier console development projects in the 1980s and 1990s, Iwata relished rolling up his sleeves for the Revolution project and diving into the problems with his top lieutenants and engineers. (See Figure 1 for a description of the core product team.) We brainstormed with each other from square one, Iwata recalled. We were all running into the same walls, and we made the critical decisions together. I talked with a lot of people, such as Takeda-san and Miyamoto-san, along the way at each juncture.

Figure 1 Revolution Core Product Team Genyo Takeda - General Manager, Integrated Research and Development Division

Shigeru Miyamoto - General Manager, Entertainment Analysis and Development Division. Miyamoto was a legend in the industry for his software development work and design for games such as Donkey Kong and early NES titles such as Super Mario Bros. He had also worked on titles for the GameCube, including Legend of Zelda.

Kou Shiota - Integrated Research and Development Division, Product Development Department, Development Group No. 2. Shiotas specialty was semiconductor design. He, too, had worked on the GameCube.

Kenichiro Ashida - Integrated Research and Development Division, Product Development Department, Design Group. Ashida was a long-time Nintendo employee who had worked on the Super NES, Nintendo 64, and GameCube, and for the Revolution was responsible for the design of the console, controller, packaging, and logos.

Akio Ikeda - Integrated Research and Development Division, Product Development Department, Development Group No. 5. Ikeda had developed several games in the past that had used accelerometers and innovative interfaces.

Junji Takamoto - Integrated Research and Development Division, Product Development Department, Development Group No. 3. Takamoto was responsible for all hardware parts on the Revolution with the exception of the circuit board.

As planning began on Nintendos next-generation gaming console in the months following the release of the GameCube, the team began to think about the core concepts that would underlie the project. Takeda described the typical development process for a new console:

As soon as we complete one system, we start thinking about the next one. Needless to say we dont design new components or technologies from scratch. Rather, we have to base our designs on existing technologies. In the world of technology, there are so-called Roadmaps (overviews of proposed technologies/products) that are used by each industry in order to make general forecasts about where semiconductor technology is heading, as well as the evolution of disc and wireless technologies. Engineers and developers normally refer to these Roadmaps while developing hardware.

However, some Nintendo executives and engineers had begun to question the importance of traditional hardware preferences, such as faster processors, slick graphics, and sophisticated controllers. Even before the Revolution project, Miyamoto worked on a game called Animal Forest, which was launched for the Nintendo 64 console in 2001. He deliberately designed it to be easy to play and appeal to a wide range of people. Takeda had also considered non-traditional gamers in his earlier work on the GameCube, which had a controller with an extra large A button for inexperienced gamers. In 2003, Takeda proposed that the Revolution project should depart from the technological roadmap, believing that the performance arms race, which drove Sony and Microsofts console efforts, was ultimately futile for Nintendo:

After speaking with Nintendos development partners, I became keenly aware of the fact that there is no end to the desire of those who just want more. Give them one, they ask for two. Give them two, and next time they will ask for five instead of three. Then they want ten, thirty, a hundred, their desire growing exponentially. Giving in to this will lead us nowhere in the end. I started to feel unsure about following that path about a year into development.56

Iwata and the team began to discuss how best to approach the challenge of developing a console that would increase the population of gamers beyond its traditional customer base. Certain elements from the GameCube, including the CPU and GPU, could be upgraded for the Revolution, but other elements would have to be completely redesigned, based on new product concepts. By 2003, the team had identified several basic concepts for the console:

The Revolution was not just a toy for children. The console had to be familiar enough to be played by all family members, right in the living room.

It had to be designed in a way that it would be acceptable to mothers, as they have control over the living room in most households. This meant a small, polished design. The console should be inexpensive compared to rival products namely, Sony PlayStation and Microsofts Xbox. Ideally, the price should be less than 10,000 yen (about $100). Software should be easy enough to play so that every family member can play, even for a short time. The console would need to stay on for 24 hours, consume little electricity, and make little sound.57

There were other requirements, as well. Besides appealing to mothers, Nintendo had to entice partners, particularly developers. Further, the Revolution had to be backwards compatible with older GameCube games and even games from earlier Nintendo consoles, such as the Nintendo 64. This would help the Revolution launch with a back catalog, and would also appeal to loyal Nintendo customers who had invested in GameCube games.

This new approach to console design was extended to the controller. Designer Kenichiro Ashida explained the evolution of his thinking about the controller:

I felt strongly that this would be a console that I, too, could enjoy. More specifically, I felt that it might be time to reconsider the entire game-play style of grasping the controller with two hands, sitting glued to the TV until morning. Of course, Im not rejecting that intense style of play, but I did feel that taking the whole idea of grasping the controller with two hands back to the drawing board offered a glimpse of the future.

The rest of the design team, right up to the CEO, was supportive of the new approach. Iwata, as someone who had started developing computer games on a programmable calculator when he was a teenager, appreciated evolutionary steps in game-play and hardware design, and encouraged the team to think creatively. However, there were limits to how far the team would go, as Miyamoto noted:

This was good in the sense that it allowed us to consider ideas such as not using hands at all, or even putting the controller on your head. Of course, going too far in that direction would just lead to something that is different just for the sake of being different. An eccentric design like that might work well for some games, but could never be used as a standard, making it a difficult choice for a consoles primary controller. So we wanted to come up with a bold and daring design that would be within the bounds of reason.

Takeda formed a special controller development team. He believed that the controller was not just a console peripheral, but also an intermediary between man and machine, and even an extension of the human body. As the controller would be the most frequently used part of the console, the controller development team aimed to create a simple and comfortable controller, which everyone would like to touch.

The team created a series of prototypes. Early designs were molded out of clay or Styrofoam. The more promising designs were turned into plastic prototypes with working buttons. One prototype had a touch panel like the Nintendo DS. Another featured a mouse-like pointing device. There was also a track pad, and even a hat-like controller that allowed gamers to play without using their hands. The team constantly experimented with the designs, but decided a pointer-based controller was the best way to go.

But within the team, there were debates about what the controller should look like. Console gaming had been based on a two-handed experience since the first joysticks were developed in the 1970s. One pointer-based design was a two-handed controller with a pointer in the middle. This prototype was named Gunbai, after the referees fan in Japanese Sumo wrestling. However, Miyamoto was interested in a one-handed device perhaps something that resembled a familiar device like a mobile phone that was easy to use and not intimidating to new gamers. Iwata seized upon the idea of something that looked like a TV remote control. Eventually, Ashida and his staff drew up a rodshaped pointer, and a demonstration unit was prepared.

Decision Point Iwata eagerly entered the conference room and looked at the new rod-shaped device on the table. He had tried pointer-based prototypes before, but this single-handed design appealed to him: From the moment I picked it up, it just felt right. I had handled other pointer devices before, but they are not normally responsive and leave you feeling more frustrated than relaxed. The pointer idea itself was also good, but in this case it was the sense of control, the finish of the product, that was particularly good.

But some members of the team had reservations. Ashida reminded the group of the need for the Revolution to be able to play GameCube games as well as popular titles dating from Nintendos NES from the 1980s. Most of these games required two-handed play. On top of that, they also had to consider the traditional gamer audience. Despite all of the attention on the mom crowd and other new audience segments, Nintendo needed to convince serious gamers to give the Revolution a chance. The team knew that overseas gamers preferred first-person shooters and other action titles that worked well with two-handed controllers.

In addition, Ashida pointed to game developers, who had their own ideas about innovation: There were also requests from the development teams for Metroid and other software titles asking for a new kind of controller that uses both hands, that can offer a new type of game-play.66

Iwata knew that the team was taking a big gamble with a new controller design. While they had brainstormed and experimented extensively, the company refused to bring in focus groups to test out the designs, partially out of fear of leaks. As a result of this decision, the company would only know user reaction after the Revolutions launch.

Besides user reaction, there was also the question of how the proposed one-handed rod could be used with older Nintendo console games that had been designed for two-handed controllers. Backwardscompatibility with the older games was required, to give an incentive for the existing customers who owned them to upgrade to the new console. How could the Revolutions rod controller be modified for two-handed action?

Iwata and his team had little time. At the 2005 E3 gaming exposition in Los Angeles, Nintendo planned to announce the Revolution, and maybe even demonstrate the console and controller. Industry buzz was pointing to both Microsoft and Sony announcing their own next-generation consoles at E3. Would Nintendo be able to deliver?