Friday, May 09, 2008

Hiroshi Yamauchi: Richest Man of Japan

Do you know about Hiroshi Yamauchi? Here is a clue; he has made you sit in front of your television for hours. Still did not get it? Well, Hiroshi Yamauchi is the former president of famous Japanese gaming company, Nintendo. He became president in 1949 and stepped down in 2002. Within these 53 years, this man single handedly turned the company from a small ‘hanafuda’ card maker into a multi billion-dollar multi-national gaming company.

Hiroshi was born in November 1927 to Shikanojo Inaba and Kimi Yamauchi. Hiroshi went to a preparatory school at the age of twelve. He was planning to study law or engineering. During the Second World War, he used to work in a military factory. After the war was over, he went to study law at Waseda University.

Nintendo (company background):
Now let’s talk about Nintendo a little bit. Nintendo Company Limited (TYO:7974), the famous gaming console producer of the world started in 1889 by Fusajiro Yamauchi, great grand father of Hiroshi Yamauchi. In the beginning, the company made a name for its ‘hanafuda’ playing cards. Hiroshi Yamauchi, is the third president of the company. Hiroshi became president of the company at a very young age. Hiroshi tried other businesses such as, taxi company, love hotel where rooms would be rented by the hour, instant rice. None of these ventures were very successful. Hiroshi then focused on entertainment. With this in mind, the newly established department stores become a major strength for the company. He then created a games department and set up a research and development facility in a warehouse. Gunpei Yokoi was assigned as the department head. The company then created various toy products like Love Tester, solar cell light guns and so on.

Hiroshi Yamauchi as Nintendo’s President:
Hiroshi’s grandfather had a stroke in 1949. Since he was the president of Nintendo and had no other immediate successor, he asked Hiroshi to assume the position of president. Hiroshi had to leave Waseda University. Hiroshi gave a condition that he would only accept the position if he was the only family member working at Nintendo. Hiroshi’s grandfather agreed. Under the agreed upon terms, his cousin had to be fired.

As the president of Nintendo, the odds were huge against Hiroshi. Many of the employees thought that he was young and lacked experience. This led to disagreement between him and many old employees of Nintendo, who were fired by Hiroshi. Hiroshi ran Nintendo in a very autocratic style. He never tolerated any opposition.However, he had a god gifted intuition which helped him to become very successful as Nintendo’s president.

Success of Nintendo:
In 1959, through a licensing agreement with Walt Disney, Nintendo sold 600,000 packs of cards in one year. During this time, Hiroshi changed his company name two times; first, Nintendo Karuta and then Nintendo Company Limited. He also shifted company headquarter to Kyoto. He then made Nintendo a public limited company and became the chairman.

Hiroshi then tried various businesses and even gained success as a toy producer. The company fully became a video game developer and producer after 1974. As a game producer, the company first tasted success in 1981 with Donkey Kong. Through this game, we also get another most famous gaming character Mario. In 1980, Nintendo released its hand held games that also became a big hit. From 1983 onwards, Nintendo became a famous gaming console producer and it is the only console gaming company to survive till today.

Hiroshi was never a big game addict but he had very good instinct to understand people’s taste. He was the sole judge of all the gaming products. Despite all the odds, Hiroshi became very successful in turning Nintendo into a big multi-national company.

Baseball club:
In 1992, Nintendo Company Limited took over Seattle Mariners baseball team. Hiroshi Yamauchi bought the club with $125 million. The club is now controlled by Nintendo America’s former chairman, Howard Lincoln.

Legacy of Nintendo:
Nintendo Company Ltd. is now one of the most valuable companies of Japan with a market value of US$85 billion. The company was honored for its user interface of Nintendo Wii at the 59th Annual Technology & Engineering Emmy Awards.

Fall in gaming business and rise in Baseball in 2000:
In 2000, Nintendo experienced a downslide in business. The company’s revenue dropped to 7.4% and Sony’s play station dominated the majority of the market. Nintendo may did poor in game business but its base baseball club was doing well. In 1999, The Seattle Mariners earned $2.6 million. Yamauchi bought up all the top Japanese players brought them to play in the USA.

Hiroshi Yamauchi Japan’s richest man:
Currently, 80 year old Hiroshi Yamauchi has been declared the richest man in Japan by famous business magazine Forbes. According to the May 2008 issue of the magazine, Hiroshi moved over Akira Mori, Japan’s property developer. Yamauchi’s current net worth has risen from $3 billion to $7.8 billion. Last year, he was in the third place.

71 year old Akira Mori is the chief executive of Mori Trust Company. His current net worth is $7.7 billion. One interesting thing about Japan’s top rich people is that most of them are either at their 60s 70s or 80s. This also shows Japan’s growing old population. There is only one exception; 32 year old Kenji Kasahra, founder, Mixi Inc. (TYO3:2121).

Here is the list of the top 10 richest people of 2008 in Japan:

1. Hiroshi Yamauchi: $7.8 billion

2. Akira Mori: $7.7 billion

3. Kunio Busujima: $5.4 billion

4. Nobutada Saji: $5.3 billion

5. Masayoshi Son: $5.1 billion

6. Tadashi Yanai: $4.7 billion

7. Eitaro Itoyama: $4.5 billion

8. Hiroshi Mikitani: $3.8 billion

9. Takemitsu Takizaki: $3.2 billion

10. Hiroko Takei: $3.1 billion

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