The Exchanges

Q you decide to leave and to start your own business, and it, it, it, it's related to the personal computer boom that's starting to happen, particularly in developed countries like the US and Japan. It's the early eighties, you got the PCs coming to market, um, and it's gonna change everything. You decide to start, essentially, a software company that would make, like, would create, like, role-playing games for PCs?

A The Japanese version of a PC, yes. Now, I didn't have a publishing company, and I didn't know, uh, how to, how to publish, or how to do any of that, or how to do business in Japan. I never studied business, and so, um, I went to SoftBank. That was the You know, SoftBank is this huge, multi-billion dollar company today, but at that time, all they were was a little company doing, uh, distribution for computer software to computer shops. That's it. Anyway, I said, can you introduce me to a publisher? And they said, you know what, uh, you really don't need a publisher. You know, just get your wife to answer the phone, and you can publish yourself. Um, you know, we'll, um, introduce you To a company, they can actually do the duplication of the cassettes and the discs, whatever, and, uh, you can pay them after we pay you. I said, wow, that sounds great. Ok. Sounds so simple. But, of course, it wasn't so simple. And, uh, I didn't speak, read, or write Japanese at the time. So, yeah, that was a pretty interesting experience, starting a company without knowing anything.

AI assessment note: “The Japanese version of a PC, yes.”

Q Okay, that would be later. So right now, this is just licensed in Japan. It's on the console, Nintendo console. In the meantime, you catch wind of a new product that Nintendo is working on, and this is going to be a handheld game system, which we now know and love as the Game Boy, but how did you find out about that product?

A You know, we're, we're in the business, so everybody in the business knew that Nintendo's gonna come out with this new machine. It wasn't, like, a big secret. Everybody in Japan knew about it. So when, when it was, like, gonna come out and we, and I saw the specs, I said, oh my god, this, this, first of all, the screen is tiny. Second of all, it's all, it's black and white, uh, and it doesn't have many dots on the screen. So, Most games, you know, that are on, that are on console are colorful and have a lot of detail. All that detail would be lost on the, on the tiny screen. But Tetris would work just perfectly.

AI assessment note: “we're in the business, so everybody in the business knew”

Q Yeah. So now you have an incentive to expand the brand because you own 50% of it. Like, if you were just a licensee, you have no incentive to make it better because you're essentially, they own the IP. And so you're like, well, why are we going to make it better?

A You, you understand it exactly. And I said, look, before we split the money, I'm going to need the money to brand manage this game. And so I want a percentage off the top to do all of the licensing and to do all of the, uh, brand management. The problem was that up till then, everybody who licensed Tetris from Elorg basically had no, no guide about how to build Tetris. And so the versions of Tetris that came out of different publishers were very different. Hmm. Um, give you an example. A Game Boy player in Japan could not play the arcade, because the, it's like the brakes and the gas pedal were reversed. Yeah. So it was my job to standardize Tetris across all platforms, and we, we've done that. Um, but, seven years into it, Belikov team got greedy, and they said, well, we don't actually want you to do brand management, we just want to find somebody to license Tetris. Because, because we don't want to pay you for, to doing brand management. Without understanding that, that brand management is really, really important.

AI assessment note: “You, you understand it exactly. And I said, look, before we split the money”

Q I mean, the game became quite successful, but like, what did that mean for, for your, your small business, Bulletproof Software? Was it, I mean, I know it became like a big game in Japan, but did that mean that you guys were like rolling in cash or, or, or not quite?

A Yeah. Well, let me, let me backtrack, because this is an interesting part of the story. Um, so I went, SoftBank had, had said they would buy 3000 copies for Christmas, and when it came close to Christmas, they realized that nobody understood what a role-playing game was, and so, and the little advertising that I did was just completely ineffective. So they, they rolled back their initial order to 600, and I thought, oh, we're dead in the water. Come January, um, I, you know, I call my guys together. By this time, I had, you know, some testers and, and some office people say, like, how do people in Japan find out about computer games? I said, well, they, they read about them in the magazine. So what I did was I got, um, one of my guys to call all the magazines and make appointments, and we actually went to visit them. Uh, and, uh, I would show them how to play Black Onyx and leave them with the game. And every single magazine that we visited had rave reviews, like, a month later. And then SoftBank came back, and we had, for April, we had 10,000 units. And in May, 10,000 units. So we were, like, killing it. We were number one game in, in Japan in 1984.

AI assessment note: “we had, for April, we had 10,000 units. [...] So we were, like, killing it.”

Q How did you finance making the cartridges? Because you had to pay Nintendo to, to, to manufacture them.

A In the beginning, the, the orders weren't that big. The original order was 40,000 units, which is not enough. You need 200,000 units in order to get a second order. That 40,000, that was another reason for me to meet Yamauchi, the head of Nintendo. So I miss Mr. Yamauchi. Um, I don't know whether it's my sales or my marketing that sucks, but I think I may have one of the greatest computer games of all time, and my salespeople could only get 40,000 units. And then he calls in Miyamoto, the creator of Mario, and says, Miyamoto, is this a great game? And, and Miyamoto says, yes. And Yamauchi says, how do you know? This is because your accountants, your secretaries, all of your people are playing this game at lunch and after work when they, when they don't have to play games. And, uh, so Yamauchi calls in Imanishi, who's the number two at Nintendo's. Imanishi, I want you to pull distribution and make them order more. That's like, wow, that's some serious action there.

AI assessment note: “That 40,000, that was another reason for me to meet Yamauchi”