Scale Economy - The Number One Source of Power

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It's a good question. The reason scale economies jump to mind is we just keep talking about it on this episode without naming it. And when we talk about things like Nintendo produced the most desirable console, which all the consumers bought, then meant that Nintendo had power over its developers. A game was worth way more on Nintendo for the NES's distribution than it was worth anywhere else. It almost doesn't matter how bad the terms are with Nintendo, you have to build for Nintendo because there's more money there.

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!

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