Nintendo is an interesting case that may dispel some of the stereotypes about Japanese companies and management styles.
First, the company is quite old (1889, I believe). It started out manufacturing playing cards, yet had a pretty remarkable evolution after its post-war CEO (a member of the founding family, surnamed Yamauchi) took over. While it was a top-down organization, Yamauchi recognized and encouraged some out-of-the box and risky thinking. The company at one point was invested in things like hotels and food, but started to develop a new business in the 1970s around video games. Keep in mind that in 1977 video games were not nearly as popular as they are now, and the nearest product line Nintendo had at the time was toys. Famicom/NES was launched in the mid 1980s, at a time when the videogame market was in a slump (this was post-Atari 2600). It turned out to be a massive hit, that really kept Nintendo on top of the console market until Sony came out with the PlayStation.
The Wii is another example of an innovative approach to product design. It was not designed by focus groups, as the company was worried about leaks. Rather, the design of the console and controller came from an internal group made up mostly of career Nintendo engineers like Shigeru Miyamoto (of Mario Bros. fame). Yamauchi's successor, Satoru Iwata (himself a former game developer) was also on the team. They recognized that they couldn't win the hardware arms race with Sony and Microsoft, a race that focused on specs and pleasing hardcore gamers. They thought of a different set of users, and not only kids and senior citizens waving around a Wiimote. The team even considered how housewives would react to a new console in the living room, and therefore designed a box that was sleek and stylish, and not much bigger than a stack of DVD boxes.
There's a great interview series with the Wii design team, called "Iwata asks". It talks about many of the issues they had to overcome, and the prototyping process. It was published on Nintendo websites all over the world -- I think Iwata wanted to do a little victory lap, and get on record how they came up with the brilliant ideas behind the Wii. You can start reading it here:
I think Nintendo's success primarily has to do with them employing one of, if not, the best game designers that has ever lived - Shigeru Miyamoto. By trusting and empowering him they are able to have taste, just as Jobs's taste defined Apple, Miyamoto's defines Nintendo.
I would actually give a lot of the credit for Apple's taste to Jonathon Ive, with the backing, direction, and final approval of Jobs. I think Shigeru and Ive were both masters of design and interface, and besides their influence on the look and feel of the product, could operate at the level of actually engineering/creating.
For the Wii project, some of Miyamoto's ideas didn't make it into the final product. For instance, he wanted to create a low-cost machine in order to devote more effort to the interface, but hardware requirements and costs got in the way:
Originally, I wanted a machine that would cost $100. My idea was to spend nothing on the console technology so all the money could be spent on improving the interface and software. If we hadn't used NAND flash memory [to store data such as games and photos] and other pricey parts, we might have succeeded. ... We set out to design a console that would sell for less than 25,000 yen ($211). It was a tall hurdle. But unless you start off with a target, you can't control costs and you'll inevitably lose money. Also, we thought a low-cost console would make moms happy.
I have a blog article brewing on this, but for now: what drove Apple was Steve Jobs' /taste/ and that others believed in his taste.
The first time Tim Cook presents a computer with a major feature missing - ie: no CD drive or no floppy drive, the audience will think he's crazy, and will think it's proof that the company can no longer work without Steve-o.
It wasn't the coming up with new ideas that drove Apple. It was a single man knowing which of those ideas were good, and which were bad, and people having enough faith in him to go with it, and seriously consider and get behind the ones that other executives would have labelled crazy-sauce.
Maybe you just picked a poor example, but CD drive is actually something Jobs would take out, so critics would likely see it is a continuation in his spirit. Tim Cook would be more likely to be chastised if, say, the new laptop were covered in brand stickers.
Some of the best graduates from Tokyo University wind up at Nintendo. It was considered one of the best places to get a job.
Nintendo is not a company I would want to emulate. It is getting squeezed by Sony and Microsoft, and even its innovations in terms of casual gaming seem to be on the verge of going away. I consider it a colossal waste, but I guess YMMV.
Disclaimer: I thought the same when the DS came out. I was very very wrong.
Before burying Nintendo, it may be worth taking a moment to remember that in terms of market share this generation, Nintendo Wii + Nintendo DS is about 237 million, and XBox 360 + PS3 + PSP has sold about 179 million[1], and the totals are not made up with software sales either [2].
This looks less like a company getting "squeezed" and more like a company that has run the board in this console generation.
I'm not a huge fan of the Wii either, and the next Nintendo generation is looking decidedly shaky, but from a business perspective I can't fault them based on present data.
Sony's network problems will haunt them for years. I think they're done in the game industry. Microsoft is lacking in innovation in every single category I can think of.
This would be the perfect time for Nintendo to crush them both.
How xbox 360 escaped the ring-of-death is baffling to me. I guess the $1billion hit they took to extend warranties either really spoke to consumers, or people just don't care if they have a 1 in 3 (or was it 1 in 4?) change of getting a dud.
They replaced several of mine for free, waiving all shipping and repair costs. I can't think of another experience I've had like that. They're also a US company, and they have the best online gaming experience... those are just a few of the reasons I can think of.
One of the reasons why one does not typically experience something like that is because most companies would go out of business if they blew that much money on a faulty product. Microsoft has other revenue streams that allow them to throw billions at any problem.
I agree that Nintendo is interesting but their iterations are notoriously slow and they are usually several steps behind the cutting edge. Also, unlike companies like Amazon or Apple they never leverage core competencies or intellectual property to branch out into other areas.
First, the company is quite old (1889, I believe). It started out manufacturing playing cards, yet had a pretty remarkable evolution after its post-war CEO (a member of the founding family, surnamed Yamauchi) took over. While it was a top-down organization, Yamauchi recognized and encouraged some out-of-the box and risky thinking. The company at one point was invested in things like hotels and food, but started to develop a new business in the 1970s around video games. Keep in mind that in 1977 video games were not nearly as popular as they are now, and the nearest product line Nintendo had at the time was toys. Famicom/NES was launched in the mid 1980s, at a time when the videogame market was in a slump (this was post-Atari 2600). It turned out to be a massive hit, that really kept Nintendo on top of the console market until Sony came out with the PlayStation.
The Wii is another example of an innovative approach to product design. It was not designed by focus groups, as the company was worried about leaks. Rather, the design of the console and controller came from an internal group made up mostly of career Nintendo engineers like Shigeru Miyamoto (of Mario Bros. fame). Yamauchi's successor, Satoru Iwata (himself a former game developer) was also on the team. They recognized that they couldn't win the hardware arms race with Sony and Microsoft, a race that focused on specs and pleasing hardcore gamers. They thought of a different set of users, and not only kids and senior citizens waving around a Wiimote. The team even considered how housewives would react to a new console in the living room, and therefore designed a box that was sleek and stylish, and not much bigger than a stack of DVD boxes.
There's a great interview series with the Wii design team, called "Iwata asks". It talks about many of the issues they had to overcome, and the prototyping process. It was published on Nintendo websites all over the world -- I think Iwata wanted to do a little victory lap, and get on record how they came up with the brilliant ideas behind the Wii. You can start reading it here:
http://us.wii.com/iwata_asks/wii_console/