Nintendo's CEO, Satoru Iwata, has passed away. Photo: Getty Images
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Satoru Iwata: an innovator and true gamer

Satoru Iwata wasn't your run-of-the-mill CEO: he was an innovator and a true gamer, says Tom Watson MP. He'll be sorely missed.

The very best games makers have curious, playful minds. That's why Nintendo President and CEO Saturo Iwata will be so badly missed. 

Iwata, who led one of the most creative video games manufacturers on the planet, was an enthusiast for video games who had a playful mind and an affinity with gamers that will be hard for his successor to replicate. That’s why he was so often included in lists of the world’s top CEOs. “On my business card, I am a corporate president. In my mind, I am a game developer. But, in my heart, I am a gamer.” he said in 2005.

It took a curious mind like Iwata’s to understand that the video games market could expand only by extending its reach into new sectors by crossing generations. The industry’s inability to appeal to consumers beyond the youthful demographic it had always appealed to was a problem waiting to be solved. Iwata cracked it.

Satoru bought intergenerational joy to Christmas days in 2006 and 2007 with Nintendo’s Wii console. You need to have witnessed a grandparent waving a Wii remote wildly through the confined space of a living room stuffed with half opened presents and half drunk glasses of sherry to truly appreciate his genius. For a grandchild to bond with a grandparent over a video game was revolutionary - and extremely commercially successful for Nintendo. The company has sold over 100 million consoles since the Wii hit the market less than ten years ago. It’s little wonder it had the working title “Revolution” before it’s launch.

Sarturo was a games maker from childhood - he created games out of calculators for his friends at school. So he was destined for a career in the video games industry from an early age. As a graduate of the Tokyo Institute of Technology, he understood the minds of developers better than most executives. It was a quality that set him apart from his peers and it served him well when he took over as Nintendo President in 2002 from Hiroshi Yamauchi – a man who had been at the helm of the company for over half a century. Iwata quickly softened Nintendo’s corporate by making it less hierarchical, spending time on the shop floor and enjoying the company of designers and developers. 

Before he was elevated to executive level he worked as a developer on a raft of successful games, including the Legend of Zelda series that occupied far too much of my time in the late 1990s. Zelda was rich in playful ideas, even introducing night and day game time in Zelda: Ocarina of Time in 1998. "Video games are meant to be just one thing. Fun. Fun for everyone”, he once said. To him, games did not have to be complex to be enjoyable. In 2006 he joked that if Tetris had been launched back then it would have needed better graphics and a film spin-off in order to be deemed commercially feasible. Iwata understood that simplicity has its own beauty.

Tetris was the game everyone played on the Nintendo Game Boy, the handheld device that belong to a previous generation. But Iwata pioneered a new approach to gaming with the introduction of the Nintendo DS. Almost overnight, the strange-looking device with two screens and a plastic stylus fascinated people who weren’t supposed to play video games. Doctor Kawashima’s Brain Training became a huge hit amongst the over 40s, selling gaming to older generations whose only previous experience of gaming was limited to changing the batteries in the consoles that belonged to their children or grandchildren. It was a typically far-sighted move from a man who can accurately be described as a game-changer. Iwata was once asked what it is like to be a corporate leader.

He replied: “Time passes very quickly, and if you are complacent, you'll be too late.” 

Iwata Sarturo was never complacent but time passed too quickly for this titan of the video games industry. 

 

Tom Watson is the MP for West Bromwich East, and Deputy Chair of the Labour Party. He is also an avid gamer and campaigner for media integrity.
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Let's turn RBS into a bank for the public interest

A tarnished symbol of global finance could be remade as a network of local banks. 

The Royal Bank of Scotland has now been losing money for nine consecutive years. Today’s announcement of a further £7bn yearly loss at the publicly-owned bank is just the latest evidence that RBS is essentially unsellable. The difference this time is that the Government seems finally to have accepted that fact.

Up until now, the government had been reluctant to intervene in the running of the business, instead insisting that it will be sold back to the private sector when the time is right. But these losses come just a week after the government announced that it is abandoning plans to sell Williams & Glynn – an RBS subsidiary which has over 300 branches and £22bn of customer deposits.

After a series of expensive delays and a lack of buyer interest, the government now plans to retain Williams & Glynn within the RBS group and instead attempt to boost competition in the business lending market by granting smaller "challenger banks" access to RBS’s branch infrastructure. It also plans to provide funding to encourage small businesses to switch their accounts away from RBS.

As a major public asset, RBS should be used to help achieve wider objectives. Improving how the banking sector serves small businesses should be the top priority, and it is good to see the government start to move in this direction. But to make the most of RBS, they should be going much further.

The public stake in RBS gives us a unique opportunity to create new banking institutions that will genuinely put the interests of the UK’s small businesses first. The New Economics Foundation has proposed turning RBS into a network of local banks with a public interest mandate to serve their local area, lend to small businesses and provide universal access to banking services. If the government is serious about rebalancing the economy and meeting the needs of those who feel left behind, this is the path they should take with RBS.

Small and medium sized enterprises are the lifeblood of the UK economy, and they depend on banking services to fund investment and provide a safe place to store money. For centuries a healthy relationship between businesses and banks has been a cornerstone of UK prosperity.

However, in recent decades this relationship has broken down. Small businesses have repeatedly fallen victim to exploitative practice by the big banks, including the the mis-selling of loans and instances of deliberate asset stripping. Affected business owners have not only lost their livelihoods due to the stress of their treatment at the hands of these banks, but have also experienced family break-ups and deteriorating physical and mental health. Others have been made homeless or bankrupt.

Meanwhile, many businesses struggle to get access to the finance they need to grow and expand. Small firms have always had trouble accessing finance, but in recent decades this problem has intensified as the UK banking sector has come to be dominated by a handful of large, universal, shareholder-owned banks.

Without a focus on specific geographical areas or social objectives, these banks choose to lend to the most profitable activities, and lending to local businesses tends to be less profitable than other activities such as mortgage lending and lending to other financial institutions.

The result is that since the mid-1980s the share of lending going to non-financial businesses has been falling rapidly. Today, lending to small and medium sized businesses accounts for just 4 per cent of bank lending.

Of the relatively small amount of business lending that does occur in the UK, most is heavily concentrated in London and surrounding areas. The UK’s homogenous and highly concentrated banking sector is therefore hampering economic development, starving communities of investment and making regional imbalances worse.

The government’s plans to encourage business customers to switch away from RBS to another bank will not do much to solve this problem. With the market dominated by a small number of large shareholder-owned banks who all behave in similar ways (and who have been hit by repeated scandals), businesses do not have any real choice.

If the government were to go further and turn RBS into a network of local banks, it would be a vital first step in regenerating disenfranchised communities, rebalancing the UK’s economy and staving off any economic downturn that may be on the horizon. Evidence shows that geographically limited stakeholder banks direct a much greater proportion of their capital towards lending in the real economy. By only investing in their local area, these banks help create and retain wealth regionally rather than making existing geographic imbalances worce.

Big, deep challenges require big, deep solutions. It’s time for the government to make banking work for small businesses once again.

Laurie Macfarlane is an economist at the New Economics Foundation