Hiroshi Yamauchi, Nintendo Chief Passes Away At 85

Hiroshi Yamauchi, once Japan’s richest man, passed away yesterday. His 53 year run as the chief put Nintendo on the map and made it the household name that it is today. He passed as the second largest Nintendo Co., Ltd (ADR) (OTCMKTS:NTDOY) (TYO:7974) shareholder with a stake of around 10 percent according to Bloomberg News.

Hiroshi Yamauchi, Nintendo Chief Passes Away At 85

Nintendo gaming origins

The great-grandson of Nintendo Co., Ltd (ADR) (OTCMKTS:NTDOY) (TYO:7974)’s founder led the company from 1949 to 2002, taking the company from its humble origins as a maker of Japanese playing cards and turning it into the video game giant that it is today, based on the success of the Super Mario franchise and Zelda titles. When he stepped down he was replaced by current president Satoru Iwata, though he remained at Nintendo for three years in an advisory capacity.

Forbes Asia ranked him the richest man in Japan in 2008. At the time, the Wii console was selling like hotcakes and his net worth was estimated at $7.8 billion. His place on the top of the list was not long lived as Nintendo Co., Ltd (ADR) (OTCMKTS:NTDOY) (TYO:7974) shares have fallen over 80 percent since its record high in 2007. The Wii U has underperformed as casual game players have shifted to both smartphone and tablet game play.

Hiroshi Yamauchi bankruptcy

Hiroshi Yamauchi succeeded his father in 1949, and nearly filed for bankruptcy in the 60’s after numerous failed attempts to expand the company’s offerings. Those failures included forays into toy guns, baby carriages, and strangely….fast food.

Hiroshi Yamauchi was a staunch man when it came to debt. He refused to borrow money to fund operations, a policy that continues a decade after he stepped down. Nintendo Co., Ltd (ADR) (OTCMKTS:NTDOY) (TYO:7974) is debt free and holds around $8.7 billion of cash and equivalents as of June 30, according to data compiled by Bloomberg.

Yamauchi believed in quality video games

Hiroshi Yamauchi’s success was based on the fact that he believed that quality video games were more important than the consoles that would ultimately play them. In 1977, this policy paid off when he met and hired Shigeru Miyamoto, Nintendo’s chief game designer. That philosophy and personnel decision ended up giving the world the iconic Donkey Kong, Mario, and  Zelda.

Nintendo Co., Ltd (ADR) (OTCMKTS:NTDOY) (TYO:7974) rose 1.5 percent to 11,090 yen yesterday. The stock’s 21 percent advance this year trails the broader Topix Index’s 41 percent climb.

About the Author

Brendan Byrne
While studying economics, Brendan found himself comfortably falling down the rabbit hole of restaurant work, ultimately opening a consulting business and working as a private wine buyer. On a whim, he moved to China, and in his first week following a triumphant pub quiz victory, he found himself bleeding on the floor based on his arrogance. The same man who put him there offered him a job lecturing for the University of Wales in various sister universities throughout the Middle Kingdom. While primarily lecturing in descriptive and comparative statistics, Brendan simultaneously earned an Msc in Banking and International Finance from the University of Wales-Bangor. He's presently doing something he hates, respecting French people. Well, two, his wife and her mother in the lovely town of Antigua, Guatemala. To contact Brendan or give him an exclusive, please contact him at theflask@gmail.com