Latest / The CEO Diary with Fexingo: Leadership Lessons, Executive Decisions, and Corner Office Stories / How Shigeru Miyamoto Kept Nintendo Creative Through Every Crisis
Transcript
- Lucas: So June 18, 2026. Nintendo just wrapped its annual shareholder meeting last week, and for the first time in years, there was no new hardware announcement. The Switch is now nine years old and still selling, which is remarkable. But that's actually the puzzle I want to unpack today: how Nintendo keeps surviving — and occasionally thriving — through industry upheavals. And I think the clearest thread runs through one person who's been there for every single one. Luna: Shigeru Miyamoto. The guy who drew Mario on a grid of squares in 1981. Lucas: Exactly. And he's still involved. He's 73 now, and he's not the CEO, hasn't been for a long time. But he's the soul of the company. And what's interesting to me isn't just his game design — it's how he built and protected a culture that lets Nintendo zig when everyone else zags. Let's start with the moment that nearly killed them: the video game crash of 1983. Luna: Right, the Atari 2600 era. The market was flooded with junk, and retailers stopped carrying games entirely. Lucas: Nintendo was a playing card company that had dabbled in arcade machines. They had Donkey Kong, which was a hit. But the US console market was a ghost town. Most companies would have pivoted to something safe. Instead, Miyamoto and then-president Hiroshi Yamauchi doubled down on a crazy idea: they'd launch their own console, the Famicom — the Nintendo Entertainment System in the West — but with strict quality controls. Every third-party game had to be approved by Nintendo. That was unheard of. Luna: And it worked. The 'Nintendo Seal of Quality' actually meant something. But that's more of a corporate policy than a creative one. How did Miyamoto personally shape the culture? Lucas: He insisted on what he calls 'negative prototyping.' Before you build the fun, you build the failure. His team would deliberately make a version of a game that was boring or frustrating, and then they'd ask: what's missing? What makes this not fun? That's a fundamentally different approach from most studios, which start with a feature list and then try to polish it into fun. Miyamoto starts with the absence of fun and works backwards. Luna: That sounds terrifying for a deadline. How do you schedule that? Lucas: You don't, really. And that's the tension. Nintendo has famously delayed games for years — sometimes canceling them outright — because the fun wasn't there. The Legend of Zelda: Breath of the Wild was delayed multiple times. But it shipped as arguably the best game of the last decade. And here's the thing: Miyamoto's influence means that even when Nintendo is in crisis, they don't abandon that philosophy. When the Wii U flopped — selling only about 13 million units versus the Wii's 101 million — the instinct inside most companies would be to fire everyone and pivot to mobile. Luna: And they did go mobile, actually. They released Super Mario Run and Animal Crossing: Pocket Camp. But it wasn't their main play. Lucas: It was a hedge. The real bet came from a different part of the company: a hardware engineer named Genyo Takeda and a younger designer named Yoshiaki Koizumi. They started prototyping what became the Switch — a hybrid console you could take on the go. And Miyamoto's role wasn't to dictate the design. It was to protect the team from internal pressure to just make another Wii. He told them: don't chase the casual audience that bought the Wii. Chase the core player who wants deep, polished games anywhere. Luna: So he acted as a shield for the R&D group. That's a specific kind of leadership — not the visionary who comes up with the idea, but the one who clears the path. Lucas: Exactly. And that's a lesson that applies far beyond gaming. I've seen it in engineering firms and even in some finance shops: the best executives sometimes add value by saying no to the loudest voices in the room. Miyamoto reportedly killed a proposal to make the Switch a high-performance machine with 4K graphics because he knew that chasing power would raise the price and kill the battery life. He said, and I'm paraphrasing, 'We're not competing with Sony on specs. We're competing on fun.' Luna: And Sony's PS4 Pro and Xbox One X were out at the time, pushing 4K. Nintendo went with a custom Tegra chip that was years old. But the Switch became one of the fastest-selling consoles ever. Lucas: It passed 140 million units. That's more than the PS4 and PS5. And the secret wasn't the hardware. It was the software philosophy that Miyamoto had been cultivating since the 80s: make games that are easy to pick up but hard to master, and never prioritize technology over feel. Luna: Alright, but there's a counterargument. Nintendo has also had massive failures — the Virtual Boy, the Wii U, the GameCube underperformed. Critics say Miyamoto's conservatism on graphics and online features held Nintendo back. Lucas: That's fair. The GameCube used mini-discs that couldn't hold enough data, and they were late to online multiplayer. The Wii U's gamepad was a solution in search of a problem. But I'd argue that those were hardware or strategic missteps, not cultural ones. The culture Miyamoto built — the willingness to scrap a project if it isn't delightful — is what let them recover from those failures. Most companies that release a flop like the Wii U double down on the same strategy. Nintendo just said, 'That was wrong,' and moved on. Luna: It's a fascinating case study in long-term thinking. And if these kinds of conversations have given you a new way to think about your own work — even just one small insight — that's exactly why we keep this show ad-free. It's supported entirely by listeners who find value in it. You can find us at buymeacoffee.com/fexingo. Lucas: Yeah, we don't run ads, which means we don't have to tailor the content to any sponsor. It's just the two of us digging into stories we think matter. If that's worth a coffee to you, the link is buy me a coffee dot com slash fexingo. Every bit honestly helps us keep going. Luna: So, back to Miyamoto. One more example I love: when Nintendo was developing the first Super Mario Galaxy, the team wanted realistic physics — Mario would slide on ice, momentum would carry him. Miyamoto played a prototype and said, 'This isn't fun. Make the ice less slippery. The player should feel in control, not realistic.' Lucas: Right. He chose fun over simulation. And that's the thread that runs from 1981 all the way to today. As of this month, Nintendo's market cap is around $70 billion — it's actually worth more than Sony's gaming division. And Miyamoto, despite being in his 70s, still shows up to the office and plays builds. He doesn't run the company, but he runs the culture. And I think that's the most durable legacy any executive can leave. Luna: It's a reminder that a great product isn't just about features — it's about the philosophy behind how you decide what to build and what to kill. Thanks for the deep dive, Lucas.