The Indicator from Planet Money

Episode: The Secret to Nintendo's Success (Encore)

Date: December 26, 2025
Hosts: Adrian Ma, Mia Waylon Wong
Guests: Jost von Droinen (NYU professor), Jamal Michel (video game journalist)

Episode Overview

This episode explores how Nintendo, once a small Japanese toy company, became a global powerhouse in gaming and entertainment—not by chasing the latest technology, but by deliberately taking a different approach from rivals. The hosts and their guests unpack Nintendo’s counterintuitive business strategies, its role in rescuing the video game industry from collapse, and the enduring culture that defines Nintendo’s brand.

Key Discussion Points & Insights

1. Nintendo’s History: From Playing Cards to Consoles

• Origin Story:
  • Nintendo started in 1889 by making hanafuda (Japanese playing cards), and decades later, expanded into toys.
    • [03:18] Adrian Ma: “The story of Nintendo begins long before the invention of video games. In 1889… started making these things called hanafuda cards…”
• Transition to Video Games:
  • By the 1970s, Nintendo moved into electronic toys, just as the US gaming industry started to take off with the advent of arcade and then home consoles.

2. The Video Game Crash

• Market Saturation:
  • The early '80s saw a flood of home consoles, with many subpar games eroding consumer trust.
    • [04:31] Jost von Droinen: “You just have a host of manufacturers all creating their own version of what they think is a home console.”
• Collapse:
  • By 1983, the industry crashed. Spending dropped by 90%, dozens of companies exited, and video games were seen as a fad.
    • [05:20] Jost von Droinen: “...this collapse in consumer demand and revenue. And therefore, of course, it cascades throughout the ecosystem.”

3. Nintendo’s Risky Entry & Unique Strategy

• Entering a Burned Market:
  • In 1985, Nintendo entered the US with the NES when others avoided the industry.
    • [06:04] Jost von Droinen: “When Nintendo came to the US people thought they were nuts…Why would you run towards a burning building…?”
• Three-Pronged Approach:
  • Retailers paid only when consoles sold (reducing risk)
  • Strict quality control over games (“high bar” for what was sold)
  • Focused on fun and user-friendly experiences, with support infrastructure (magazines, clubs, hotlines)
    • [06:17] Mia Waylon Wong: “...Nintendo had a plan. It entered the US with a three pronged business strategy...”
    • [06:47] Jost von Droinen: “We're gonna have magazines around this, there's gonna be a Nintendo club around this. There's gonna be a hotline...”
• Product-Market Fit:
  • Unlike its collapsed competitors, Nintendo met actual consumer desires, reviving the industry.
    • [07:31] Adrian Ma: “Yost says Nintendo's NES found product market fit...If Nintendo hadn't succeeded like it did, some argue, the video game industry as we know it today might not exist.”

4. Nintendo’s Philosophy: Not Chasing the Cutting Edge

• Competing Differently:
  • Nintendo avoids competing directly on tech specs. Instead, it innovates using what designer Gunpei Yokoi called “lateral thinking with withered technology.”
    • [08:10] Jost von Droinen: “Nintendo has never been one to compete on technology...It's always really lean into limitations of technology.”
    • [08:22] Mia Waylon Wong: “Gompei Yokoi called this philosophy lateral thinking with withered technology...”
• Iconic Example – The Wii:
  • Released in 2006, the Wii used old infrared technology, yet became a massive hit by making gaming accessible and fun for all ages.
    • [09:13] Jost von Droinen: “I used to get my ass handed to me in Wii Tennis by my mother-in-law. But they managed to take a low tech approach and make it fun for a broad range of players.”
    • Lower costs meant a lower retail price and a broader audience.
      [09:27] Mia Waylon Wong: “...this lower tech approach meant Nintendo could manufacture consoles for less and sell them for a lower price.”

5. A Brand Beyond Hardware—Nintendo as Culture

• The ‘Cheap and Cheerful’ Ethos:
  • Nintendo distinguishes itself through approachability and charm, not specs.
    • [09:49] Jamal Michel: “Without saying it, Nintendo is selling a culture.”
• Aesthetic & Experience:
  • Nintendo is likened to the “Wes Anderson” of gaming: cozy, distinct, and not always about competition or high intensity.
    • [10:01] Jamal Michel: “The best sort of analog or comparison I could draw…for the Xbox. I think of Michael Bay… Nintendo. I think…the most appropriate is definitely Wes Anderson from the aesthetic and the softness.”
    • [10:24] Jamal Michel: “...the cozy vibe Nintendo leans into. I don't want to constantly have to be in a fight. And so Nintendo lets me just chill out.”
• Summary Insight:
  • [10:33] Mia Waylon Wong: “I think this whole episode could be summed up as like the business case for coziness.”
  • [10:37] Adrian Ma: “I love that. And you know what? I hope Chicken Dog is feeling real cozy.”

Notable Quotes & Memorable Moments

• On Entering the US Market Post-Crash:
  • [06:04] Jost von Droinen: “Like this was the most counterintuitive thing to do from a business strategy perspective. Why would you run towards a burning building…?”
• On Community and Support:
  • [06:47] Jost von Droinen: “...There's gonna be a hotline that you can call if you're stuck so that you don't feel like you just spent 30, 40, 60 bucks of your money and you're off on your own...”
• On Product-Market Fit:
  • [07:31] Adrian Ma: “Yost says Nintendo's NES found product market fit...”
• On “Withered Technology”:
  • [08:22] Mia Waylon Wong: “...lateral thinking with withered technology. Which sounds a little funky, but a good example... is the Nintendo Wii.”

Timestamps for Important Segments

• [03:18] – Nintendo’s origin and early years
• [04:20-05:27] – The video game industry crash, causes, and fallout
• [06:04] – Nintendo’s counterintuitive entry to the US market
• [06:17-06:47] – Detailing Nintendo’s three-pronged business strategy
• [07:14] – NES’s success and market impact
• [08:10-08:22] – Nintendo’s technology philosophy (“lateral thinking with withered technology”)
• [09:00-09:27] – The Wii example: family-friendliness and approachable design
• [09:49-10:24] – Nintendo sells a culture and aesthetic, like a “Wes Anderson” film

Conclusion

Nintendo’s rise wasn’t about being the most technologically advanced, but about creating accessible, charming, and enjoyable experiences. Their steadfast commitment to fun, community, and affordability has allowed them to thrive for over a century—transforming not only their fortunes, but reshaping the global video game landscape.

Memorable Episode Tagline:
[10:33] Mia Waylon Wong: “The business case for coziness.”
[10:37] Adrian Ma: “I love that. And you know what? I hope Chicken Dog is feeling real cozy.”