From the Archives: Satoru Iwata’s game plan: Learn from Hollywood

Nintendo President Satoru Iwata, who died Saturday at 55, wrote the following piece for The Times’ editorial pages. It was orginally published May 9, 2006.

Do you know someone who’s never read a book? Watched a TV show? Seen a movie? It’s unlikely, because these are true forms of mass entertainment.

But on the other hand, do you know someone who’s never played a video game? Probably you do. We like to talk in our industry about mass appeal, but I wonder if we will ever achieve it.

We frequently compare ourselves to the motion picture business. We are fascinated with the movies. Hollywood is like an older brother who’s already succeeded; we race to measure our success against his.

Our method of content creation is modeled on the studio system. We measure the popularity of our virtual stars against Hollywood’s real ones. Over the years, we have frequently created games based on the movies’ biggest names -- and we now take pride when a movie occasionally develops a script based on one of ours. Angelina Jolie starred in two “Lara Croft: Tomb Raider” movies, which were based on the video game adventurer.

But in terms of reaching a mass audience, we are not quite ready for our close-up. Although video game sales and movie box-office receipts are similar in the U.S., movie sales, rentals and pay-per-view keep them far ahead of us.

We may even be headed in the wrong direction. A recent survey of U.S. high school students shows a trend: Young people who used to say they played games weekly now report they play only monthly. Sales have been declining for several months.

When we gather for the Electronic Entertainment Expo at the L.A. Convention Center this week, we may want to blame outside factors. But I fear we are doing much of the damage to ourselves. Most of us who create, publish, sell and consume video games see ourselves more as a tribe than representatives of society as a whole. We adopt our own beliefs and behaviors, and we often disregard those who don’t conform -- not a prescription for market health.

Throughout recorded history, playing games has been a natural form of entertainment, practiced by all ages, all cultures and both genders. Our challenge is to bring more people to our modern version. In this sense, Hollywood can be a role model. The film industry welcomes all consumers, creating content with a wide appeal.

On the other hand, there are two significant ways in which we perhaps would be wise not to emulate the movies. First, video games have decisively adopted the high-risk business model of the blockbuster. For some new game machines, development budgets will reach $20 million, perhaps even $30 million -- plus marketing costs. Even if retail prices rise, it will be increasingly difficult to recover costs if the audience is not growing.

Second, we would do well to consider what Clayton Christensen, a professor at Harvard Business School, describes as “the innovator’s dilemma.” We are an industry that has spent many years “improving” our product along a single performance vector -- in our case, graphical realism. But we are reaching a point of diminishing returns. Like Hollywood, which in the past has focused too heavily on special effects, we need to find other ways to improve.

Through the years, motion pictures have benefited from several significant technical advances. They added sound, then color ... and air conditioning inside theaters. Only one of these -- color -- had to do with what was actually seen on screen. The other two enhanced the nature of how movies were enjoyed by stimulating other senses.

The challenge for our industry is to also find ways that improve the experience by means other than what is seen. That shouldn’t be too hard because we operate interactively, rather than within the restraints of passive storytelling.

Logically, we should expect video games’ growth to be driven by two areas: the physical and emotional ways people interact with our games. These hold the greatest potential for causing dramatic changes to the industry.

Our customers, in effect, control their own story lines by directing their action. If we can improve that method of control, the experience is more enjoyable. Our latest portable and home devices are based on these strategies.

Game developers have also struggled for a long time with how to bring more of Hollywood’s emotional impact to their work. Most often, this has meant trying to depict more realistic facial expressions. Success has been limited.

Alternately, last year we introduced a title called Nintendogs. The emotional appeal, even to non-gamers, was apparent from the instant the puppy stood and pressed his paws against the other side of the screen. In movie terms, this game has already “grossed” well over $200 million worldwide, essentially by expanding our audience.

A final comparison to motion pictures should be reassuring. With only a couple of decades of history, in relative terms, we are still in our “silent movie” period. And because of interactivity, we have talents that even our “older brother” doesn’t possess.