The Power of a Platform and a Network Effect in the Video Game Console Business

2min Snip

00:00

Play full episode

Summary

Transcript

Episode notes

The terms that he sets up for the initial licensees in Japan, Kei just copies the Atari business model. They pay Nintendo a 20% royalty on their revenues from the games. And indeed, the next set of licensees inJapan, Nintendo ups the cut to 30%. This is the power of a platform and a network effect in the video game console business. All right. So if you make a video game, you should probably figure out a way to go to market on this.

You may think you know the Nintendo story: a plumber named Mario, a princess named Zelda… and didn’t they buy the Seattle Mariners at some point? We thought we knew it too. And then we started researching and were blown away.

The lovable Disney-like Nintendo that we know today is a 130 year-old a playing card company (i.e. gambling), forged in the shadowy world of the Yakuza and shaped by a four-generation cycle of bitter family betrayal. And its unlikely transformation into a global multi-billion dollar media monopoly was led by an iron-fisted patriarch who — amazingly — never played a video game in his life! Get ready for one of our favorite stories Acquired has ever told — we couldn’t make this one up if we tried!

ACQ2 Show: