To The Press And Enthusiasts: Please, For The Love Of God, Stop Sharing Iwata Anecdotes Whenever Layoffs Hit Gaming

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ZombiePie

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Edited By ZombiePie  Staff

The Gaming Industry Narrative That Will Never Die

Wow, what bravery and goodness that he halved his salary.
Wow, what bravery and goodness that he halved his salary.

For those of you who follow me on social media, you know this is a point I have been belaboring for literal years. The minute a game studio announces a fresh batch of layoffs; I publicly repeat the same bit about not wanting to see people in the video game hobby and press repeat the publicly perceived "sacrifices" Satoru Iwata made when he faced declining company revenue in 2013 and took a pay cut in response. Hundreds of others have joined me on forums, online chats, Discords, and social media platforms to repeat a similar sentiment. I do not wish to take credit for pioneering this "hot take." Nonetheless, no matter what, whenever a big studio or publisher fires even a tiny portion of its staff, a move I in no way support or applaud unless the targeted person or persons are guilty of workplace bullying or harassment, I still can expect to see someone posting a picture of Iwata either holding a device or bowing with a factoid about his pay cut without any context. Some within the press still answer to this public choir by reposting articles from when Iwata took his lumps, further perpetuating what I consider a reasonably nasty, artificially inflated narrative. According to this narrative, Nintendo is this seemingly friendly version of all the corporations we encounter daily, and it presents a far kinder and more humane pallet swap of the flavor of capitalism that seems unassailable in an industry dominated by EA, Embracer, and Activision.

Before I discuss why that's not only a falsehood, but a dangerous one, at that, it's essential to acknowledge Iwata for who he indeed was. He wasn't just a figurehead but a man who genuinely loved the industry and cared deeply about games as an art form. Revisiting some of his E3 presentations from back in the day, it's evident that he deeply admired video games and the people who played and made them. His premature death was a significant loss, and the anecdotes that continue to surface even years after his passing paint a unique picture of an important figurehead and a company whose current leadership loved the man and held him in reverence as much as many of you do. Like many in the gaming hobby, I watched the unpublished 2004 video interview with Satoru Iwata. In it, he shared his initial thoughts about the PSP, Wii, and his predecessor, Hiroshi Yamauchi. It is a genuinely enlightening and humanizing interview I strongly recommend. No matter, this hobby, and its remaining critical press sources have presently accepted that more layoffs are coming in the future. As such, conveying these Iwata anecdotes in conjunction with people losing their livelihoods continues to feel wildly inappropriate. While these stories of Iwata are excellent for dulling the numbing nature of the wonton brutality of capitalism, they also denounce the realities of this incredibly dysfunctional and abusive construct we call the video game industry, and Nintendo is not your friend. It is the system.

Some of these sites absolutely should do better.
Some of these sites absolutely should do better.

Let's not forget there's more to this "person smiles to the camera and makes you feel warm inside" narrative. Iwata might have been brilliant. Iwata might have cared about the games and consoles his company put out. Iwata might have deeply appreciated games as an art form or a source of expression. All that aside, he was a suit, and as a suit, if he could have cut workers and laid people off as freely as large corporations in the United States, Europe, and most of the world can, he would have during Nintendo's darkest periods. It is not just Nintendo that often gets preferential treatment because one CEO or company president made a nominal financial sacrifice ten years ago or benefits from its association with products of our childhoods. People like to paint companies like Nintendo as being extremely "pro-worker," but the reality is just that the law demands that they be "pro-worker." Worse, in the case of Nintendo, their reputation as a titan in their industry allows them to get away with some pretty heinous infractions that seemingly never get the attention they likely should. Those are the reasons I am entirely "done" with seeing Iwata's blessing to his workers crop up as a cudgel to absolve Nintendo of scrutiny in the industry. With MORE layoffs at Microsoft, Sony, Warner Bros, EA, and Embracer imminent, I swear to God, if I see someone else share the Iwata anecdote as a rebuttal, I will go insane. Also, you're a goddamn fool if you think Japanese corporate culture is entirely "kinder" or less brutal or corrupt than the corporate systems you live under.

Credit Workplace Layoff Regulations And NOT Iwata For The Lack Of Layoffs Amid Nintendo's Wii U Failures

A fixture of The Game Awards, but I can't exactly expect Keighley to say no to the biggest name in console gaming.
A fixture of The Game Awards, but I can't exactly expect Keighley to say no to the biggest name in console gaming.

I have made a big deal about this topic on the Giant Bomb Discord and often met criticism for continually bringing this issue up. The "Iwata Myth," as I like to call it, seemingly has permeated the gaming press and community. And it is not just in gaming. The mainstream news media is now attaching itself to the "Iwata Myth" in light of recent events. When the first batch of 2024's mass layoffs hit, CNBC THIS YEAR repeated how Iwata, having "faith in his talent," knew how to weather the storm, abide by long-term thinking, and avoid laying off staff as a knee-jerk reaction. It's "culture," they say! According to this article, Iwata valued the Japanese concept of "hansei" or self-reflection and knew that through failure, the teams that worked on the Wii U could still create something both commercially and critically successful in the industry. Some of that may be true, but do you want to know what none of these social media posts or this CNBC article mentioned? The G Word.Government. At no point do any of these talking heads and clickbait articles or Tweets mention that the post-World War II Japanese constitution guarantees all workers in Japan the right to unionization. I shouldn't be too surprised that CNBC is hesitant to credit government regulation for slowing or stunting what industry likely would have wanted, but HOT DAMN! At no point does this article say that labor laws force Japanese companies to establish in writing they are facing a dire economic situation, offer voluntary early retirement to EVERYONE, and have a pecking order based on seniority to protect most employees from mass layoffs before they can cut a single soul. And to be slightly self-reflective about the state of video game journalism, why is the gaming press utterly incapable of recognizing that Iwata was likely abiding by his country's strict regulations, which starting in 2018, put a strict cap on overtime, rather than his internal humanity? Considering how labor-friendly and socially proactive most of these press sources are, it's shocking how rarely any of that gets mentioned.

We know that Iwata's "selfish act" is mainly due to strong and consistent labor laws that value workers and NOT his internal altruism because you can see evidence of how Nintendo operates outside of Japan. Just this very year, Nintendo of America announced it was restructuring its testing department and laid off hundreds of contractors in their Q&A department in response to the delay of the Switch 2. Much like the cuts by Microsoft, Sony, and Embracer, these cuts were sudden but primarily targeted independent contractors. Worse, Nintendo steadfastly refuses to provide full benefits to these workers because there's no legal requirement for them to do that for non-full-time employees. Kotaku uncovered what life is like for independent contractors at Nintendo of America, and it painted an incredibly bleak picture. Nintendo employs an army of temporary staff that they cycle through on 11 to 12-month contracts with brutal performance reviews to determine future agreements and only a two-month break between work assignments. Those breaks between work reportedly last much longer than the promised two months, and this being the "gig economy," Nintendo doesn't provide health benefits to these workers and instead redirects them to file for unemployment and state insurance programs.

Oh, and then there's the matter of Nintendo of America at one point being the subject of a National Labor Relations Board (NLRB) complaint for union busting and withholding pay. Yes, Nintendo of America, with its staffing agency, settled this matter, and the staffing agency took the blame for the house of Mario. Still, both admitted that the complainant was owed $25,910 in back pay, damages, and interest. Now, there is a point here that what Nintendo is doing in the United States, East Asia, and Europe is the same as what every major tech giant does. Its reliance on 11-month independent contractors is a business model pioneered by Microsoft after it lost a $97 million labor lawsuit after repeatedly refusing to provide temporary workers with any ability to gain company stock options, pensions, and health coverage in compensation for their labor. My point is not that Nintendo and Iwata are, or were, bad actors. Rather, you cannot credit Iwata's altruistic moment entirely to his humanity. We must look at the evidence and admit that sometimes the Forbidden G Word (i.e., government) works and is heavy-handed, with top-down regulation and oversight needed to guarantee society avoids the worst abuses at work. If you want more CEOs to take pay cuts instead of laying off workers, there needs to be a system that forces them to do that. Otherwise, surprise, the land of Mario regresses to the mean.

Even If Your CEO Is Taking A Pay Cut And You Can't be Fired Easily, You Still Don't Want To Be A Japanese Salaryman

So, with strong labor laws in place, life as a Japanese salaryman must be naturally superior to that of an office worker in the United States or Europe. Right? I'm being facetious, but the reality is incredibly murky. Sure, workers have the right to unionize, AND layoffs are more challenging to pull off than in the United States, but that doesn't necessarily mean life is great in a Japanese cubicle. The hours expected of a worker are insane, and the overall compensation for labor is paltry compared to other "developed" nations. Most metrics put the average Japanese worker as working more than the average American worker, and overtime often goes uncompensated, with many salarymen laboring until 6 PM at least twice weekly. While reforms are improving things, and Nintendo even offered its employees a 10% raise last year, in the world of consumer technology and entertainment, the expectation for many continues to be working thirteen hours a day, six days a week, for three straight months. This matter isn't new news and, since the 1980s, has been a known quantity. And to Nintendo's defense, they are neither the only pillar of the entertainment industry working employees to the bone nor the worst offender. A new survey came out from starting employees in the domestic Japanese animation industry, and the results from it are DIRE!A high percentage of female employees cited at least one example of workplace sexual harassment, and across the board, most stated they were expected to work eight hours a day. Furthermore, Japan has a forest and a bridge notoriously known as places where burnt-out business people wander into to kill themselves; I don't think that's a stunning indicator of Japanese corporate culture, even if one CEO tried to save face over ten years ago.

Yeah, gaming isn't the worst of the worst in the world of work in Japan.
Yeah, gaming isn't the worst of the worst in the world of work in Japan.

And it's not as if Nintendo's worldwide track record is pristine. While Nintendo's home base is held in high regard, Nintendo of America is a bit of a different issue, with multiple reports about it being a toxic workplace cropping up throughout the last decade. These reports stem from female contractors struggling to advance in the company and had recurring run-ins with full-time employees who harassed them, and sometimes sexually. This situation includes, in one instance, a full-time employee sending a text message referencing the sexually explicit Vaporeon meme to a female staffer who later indicated in another text to the same female employee that it was okay to be sexually attracted to Paimon, a minor, in Genshin Impact. That came from a report by Kotaku in August of 2022, which was the second article of theirs that year that alleged sexual harassment by full-time Nintendo of America staff on its temporary and independent contractors. Likewise, Japan's #MeToo Movement has been one of the most underreported, at least outside of Japan, extensions of the movement, and that's incredibly unfortunate. Spearheaded by actor Shiori Ito, the movement has made some gains in terms of legislation and workplace oversight and protections. Still, many industries, like technology and filmmaking, continue to resist necessary reform efforts.

Likewise, have you ever noticed how mum Nintendo has sometimes been about crunch? Well, that's because some of its most highly regarded figureheads were subject to it. While not 100% supporters of the practice, they cite it as a vital part of the learning curve to being in the video game industry. Take Sakurai as an example. He could/should be an advocate for abolishing crunch, considering his health has at times greatly suffered as a result of it, but he isn't. Instead, you should not take him seriously regarding his public advice about personal work ethic and should ignore his tips about work/life balance. The guy who has had multiple health issues because of overworking and passed out at a gym from dehydration seemingly thinks you should always take your work home and never stop thinking about self-improvement. He is as connected to game development as the company accountant, and seemingly doesn't see the contradiction in what he's experienced to what he's advising. However, there's a more significant core problem with Sakurai's ideas about work-life balance, which Nintendo willingly presents to the world as an extension of its own, that he constantly lays out in his video blogs that Nintendo is always happy to promote. Unlike what Sakurai might suggest, though, this is a message almost every Japanese corporate monolith wants you to believe: your life is not entirely defined by what you do for work. Likewise, don't take your work home, especially if it is your first significant idea or project. Most people's first passion project is a hot mess. These creative endeavors often try to do too much in one game and require a filter. Telling people never to let go and hone their craft even outside the confines of the workplace is terrible advice. Go home—freaking breath. Live your life for as many hours as possible, disconnected from games, and with the people you love and the social security networks you know will support you.

Also, be aware that these numbers are self-reported.
Also, be aware that these numbers are self-reported.

Now, some credit has to be given to Nintendo for addressing some of these new and recurring issues. Nintendo of America opened an investigation into its workplace following Kotaku's reports, and forced out the accused employee of the worst offenses in that report. Fundamentally, Nintendo compensates full-time staff well above the averages of the gaming industry. The average full-time employee at Nintendo stays with the company for about fourteen years before leaving for new opportunities or retiring. That is unheard of in the video game industry and suggests that its corporate system and meritocracy work for a significant portion of its staff. Just look at their leadership and notice the continuity! The most notable thing you can say about Nintendo is that no one has ever left since you or I first grew up in the gaming hobby. Unlike the rest of the Japanese gaming industry, which has hemorrhaged talent and names over the years, Nintendo has something special that keeps its biggest names there until the very end. The last time we can say someone left the company with bad blood was Shouzou Kaga and before him, Gunpei Yokoi. However, take their impressive retention numbers and average salary with a massive grain of salt. None of those self-reported numbers include the MASSIVE bevy of temporary contractors that Nintendo cannot live without.

Lionizing Iwata Allows Brutal Tech And General Workplace Conditions In Japan And Nintendo Of America To Dodge Scrutiny

Friendly reminder that Nintendo also gloated about sending a person to jail and the ability to garnish their wages for the rest of their life.
Friendly reminder that Nintendo also gloated about sending a person to jail and the ability to garnish their wages for the rest of their life.

Let's quickly return to the NLRB lawsuit that Nintendo settled through its contracting agency. That lawsuit revealed a whopper of a detail about its treatment of its temporary workers. On average, the complainant made $16 per hour and established that that rate was the norm with Nintendo's contractors. I speak for everyone when I say that that number is low. Nintendo of America is in Redmond, Washington, and the state minimum wage was $14.49 when the complaint was filed. Nevertheless, that means Nintendo of America's average third-party contract was well below Washington's annual salary for 2022, which was $84,167.00, with $0 worth of benefits. Well, maybe that was the industry standard. Well, not so fast because Activision-Blizzard was around the same time, in light of a unionization push at Raven Software, transitioning all of its testers into full-time staff with starting wages of $20 per hour PLUS benefits, which set a precedent in the industry. Also important to note is that Washington is one of the most expensive states in the United States to live in and consistently ranks in the lowest echelons regarding housing affordability and cost of living. So, for decades, the supposedly "pro-worker" Nintendo benefited from thousands of hours of labor that were compensated WELL BELOW a livable wage.

While Microsoft, Sony, EA, and Embracer have all faced rightful public scrutiny because their layoffs have been swift and public, Nintendo appears to be blameless in the public's mind regarding employee cuts. That's thanks to its unique Japanese respect for labor unions and its corporate culture centered around a growth mindset and self-reflection, right? Well, again, no.Nintendo has been cleaning house; it has gotten away with it by making temporary contractors redundant or not renewing their contracts, which often do not register as formal layoffs. Frequently, it has moved many of those third-party jobs into a smaller collection of internal ones, which Nintendo frustratingly highlights as evidence that they are one of the lone companies hiring instead of cutting staff. Hundreds of third-party testers and Q&A workers have been left in the lurch about work because Nintendo is transitioning to new hardware. Still, more importantly, it's turning hundreds of third-party jobs into a select few first-party ones. That might not register as the more extensive layoffs plaguing the industry. Still, to those affected, many of whom at no point had employee-provided benefits and healthcare, it stings no differently in one of the most expensive states in the United States of America. Nintendo's treatment of their years of service remains as disrespectful and insulting as those far more public layoffs authored by its competitors.

Finally, the fact remains that the current head of Nintendo of America, Doug Bowser, is likely a union buster and certainly has approval from his higher-ups to maintain that agenda for as long as possible. To this day, Bowser repeats the same lines and defenses we have seen countless times whenever a workplace even tangentially entertains the prospect of unionizing. He points to Nintendo's high employee retention numbers, the impressive average career length, and comparatively high compensation packages as proof that employees are happy and don't require unions. Again, those numbers are not entirely reflective of Nintendo's workforce, at least not reflective of the warm bodies that go into every game they put out, especially the critical darlings. So, when he says, "Our focus has always been on creating a culture that's inclusive, has a work-life balance, and is focused on our singular mission of bringing smiles to faces," that sounds great on paper. Still, it only extends to the tip of his company's iceberg.

People who lose their jobs in the video game industry don't need or benefit from you or me citing a white knight from over ten years ago as a source of hope. They need you to stand by them. They need you to scrounge contacts if you have them to help them through a difficult time. They need your support when they try to bargain collectively or attempt to gain recognition for their labor. They need you to shut up about the one or two good apples you can remember and recognize there's no good way to rationalize what's presently happening in this industry. Iwata was a great game designer who was honest about his love for the games he touched and worked on. However, Iwata is, at best, an aberration and, at worst, nothing more than a sleight-of-hand act for a monolith that has continually gotten away with some egregious workplace practices. Lament the loss of generations of talent in the video game industry this year without falling prey to over-simplistic soundbites or memes. You at least owe those impacted by corporate greed that much.

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sparky_buzzsaw

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The best read I've had on here in years, Zeep. No lie, no exaggeration. I didn't know an ounce of this.

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Glad to see you do a deeper dive over this, especially some of the less fun but necessary stuff that's been bugging me about the labor situation.

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mach_go_go_go

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This is an important read - thankyou ZP

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bludgeonParagon

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Excellent write-up. I'd been broadly aware of most of these over the years but aggregating all these events into one piece has put all this in much starker relief.

If I remember correctly, (unverifiable) scuttlebutt says that internally Nintendo of Japan have a marginally better culture for talent retention compared to other Japanese companies, but at the end of the day if there were no labor laws specifically safeguarding workers against these kinds of corporate layoffs I would bet my right nut that Iwata would have ended up slashing teams after the WiiU slump.

Nintendo answers to shareholders just like all the other major publishers. If we can readily tear down the parasocial good-guy-gamer image of Phil Spencer because he's a suit who answers to the people holding the money, we need to be realistic and stop projecting this sanitized image of Japanese CEOs who simply take pay cuts out of the goodness of their hearts.

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#6  Edited By AV_Gamer

Like the others have said, good detailed write-up about how the work and labor laws are in Japan, and that Iwata took a pay cut, not out of heroics, but because he was following the laws in Japan.

But the bottomline between him and Spencer, is that Nintendo is doing fine with their 1st party support from their games, and their current console sales. Spence and Xbox are struggling, to say the least.

When you're winning, nobody cares about how the sausage is made. They only care when you're losing. That's life. If Nintendo was having the same problems Microsoft is having now, these things might have been more exposed. But, Nintendo, has done such a better job with their PR as well, that it would likely not be as effective, as I mentioned in another thread. In business and politics, perception is reality. And Nintendo has done a great job making themselves look like the family friendly alternative to Disney.

It's similar to Mark Cuban, and how he portrays himself as the cool, down to earth, rich business investor, compared to others like him, when in reality, he is no different and just as cutthroat.

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BladeOfCreation

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This is the type of thing that you'd expect to see at a site like Waypoint or Kotaku, but even the people who write for those sites are not immune to the type of myth-making and hero worship that leads to this perpetual Iwata myth. If there are any gaming sites that are currently accepting freelance pitches, you should pitch this as an article. Might as well get paid for speaking the truth.

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Manburger

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Indeed, terrific write-up! I was broadly aware of some of this, but it is effective and illuminating, seeing it all laid out like this. Important stuff to keep in mind.

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