Namco
On the 1st of June 1955, Japanese businessman Masaya Nakamura founded a company in Ikegami, Tokyo. The son of a shotgun repair business owner, Nakamura proved unable to find work in his chosen profession of ship building in the struggling post-World War II economy. He established his own company after his father's business saw success with producing pop cork guns. Beginning with only ¥300,000 (US$12,000), Nakamura spent the money on two hand-cranked rocking horses that he installed on the roof garden of a Matsuya department store in Yokohama.
The horses were loved by children and turned a decent profit for Nakamura, who began expanding his business to cover other smaller locations. A 1959 business reorganization renamed the company Nakamura Seisakusho Company, Ltd. The Mitsukoshi department store chain noticed his success in 1963, and approached him with the idea of constructing a rooftop amusement space for its store in Nihonbashi, Tokyo. It consisted of horse rides, a picture viewing machine, and a goldfish scooping pond, with the centerpiece being a moving train named Roadaway Race.
The space was a hit and led to Mitsukoshi requesting rooftop amusement parks for all of its stores. Along with Taito, Rosen Enterprises, and Nihon Goraku Bussan, Nakamura Seisakusho became one of Japan's leading amusement companies. As the business grew in size, it used its clout to purchase amusement machines in bulk from other manufacturers at a discount, and then sell them to smaller outlets at full price. While its machines sold well, Nakamura Seisakusho lacked the manufacturing lines and distribution networks of its competitors, which made the production of them longer and more expensive.
In August 1974, American game company Atari began establishing a series of divisions in Asia, one of which was named Atari Japan. Its president, Kenichi Takumi, approached Nakamura in early 1974 to have his business become the distributor of Atari games across Japan. Nakamura agreed to the deal. In part due to employee theft, Atari Japan was a financial disaster and nearly collapsed in its first few years of operation. When Takumi stopped showing up to work, the company was handed to Hideyuki Nakajima, a former employee of the Japan Art Paper Company.
Atari co-founder Nolan Bushnell chose to sell the Japanese division. His fixer, Ron Gordon, was given the task of finding the buyer for Atari Japan. After being turned down by Sega and Taito, Gordon's offer was accepted by Nakamura for 296 million ($1.18M), though Nakamura informed Bushnell his company was unable to pay the money by the deadline. With no other takers for Atari Japan, Bushnell ultimately allowed Nakamura to only pay $550,000 and then $250,000 a year for three years. The acquisition allowed Nakamura Seisakusho to distribute Atari games across Japan, and would make it one of the country's largest arcade game companies.
The name Namco was introduced in 1971 as a brand for several of its machines. The company grew to having ten employees, which included Nakamura himself. It saw continued success with its arcade games, which had become commonplace in bowling alleys and grocery stores. The company also established a robotics division to produce robots for entertainment centers and festivals, such as those that distributed pamphlets, ribbon making machines, and a robot named Putan that solved pre-built mazes.
In July 1983, Nintendo released the Family Computer, a video game console that utilized interchangeable cartridges to play games. The console's launch came with ports of some of Nintendo's popular arcade games, like Donkey Kong, which at the time were considered high quality. Though Namco recognized the system's potential to allow consumers to play accurate versions of its games, the company chose to hold off on the idea after its ports for platforms such as the Sord M5 flopped. Nakamura suggested that his son-in-law, Shigeichi Ishimura, work with a team to reverse-engineer and study the Famicom's hardware in the meantime.
His team created a conversion of Galaxian with their newfound knowledge of the console's capabilities, which exceeded the quality of previous home releases. The port was presented to Nintendo president Hiroshi Yamauchi alongside notification that Namco intended to release it with or without Nintendo's approval. Namco's demonstration was the impetus for Nintendo's decision to create a licensing program for the console. Namco signed a five-year royalties contract that included several preferential terms, such as the ability to produce its own cartridges.
A subsidiary named Namcot was established in 1984 to act as Namco's console game division. According to former Namco video game music composer Toshio Kawagoe, "T" means "Tomorrow" and was capitalised for emphasis. Tomorrow was derived from EPCOT (Experimental Prototype Community of Tomorrow). It released its first four games in September: Galaxian, Pac-Man, Xevious, and Mappy. Xevious sold over 1.5 million copies and became the Famicom's first "killer app".
In early 1989, Namco unveiled its System 21 arcade system, one of the earliest arcade boards to utilize true 3D polygonal graphics. Nicknamed "Polygonizer", the company demonstrated its power through the Formula One racer Winning Run. With an arcade cabinet that shook and swayed the player as they drove, the game was seen as "a breakthrough product in term of programming technique" and garnered significant attention from the press. Winning Run was commercially successful, convincing Namco to continue researching 3D video game hardware.
The System 22 powered Ridge Racer, a racing game, in 1993. Ridge Racer usage of 3D textured polygons and drifting made it a popular game in arcades and one of Namco's most-successful releases, and is labeled a milestone in 3D computer graphics. The company followed its success with Tekken, a 3D fighting game, a year later. Designed by Seiichi Ishii, the co-creator of Sega's landmark fighting game Virtua Fighter, Tekken's wide array of playable characters and consistent framerate helped it outperform Sega's game in popularity, and launched a multi-million-selling franchise as a result.
Namco also developed the helicopter shooter Metal Hawk in 1988, fitted in a motion simulator arcade cabinet. Its high development costs prevented it from being massed-produced. While most of its efforts were commercially unsuccessful, Namco grew interested in motion-based arcade games and began designing those at a larger scale. In 1988, Namco became involved in film production when it distributed the film Mirai Ninja in theaters, with a tie-in video game coinciding with its release.
Namco began experiencing decline in its consumer software sales by 1998 as a result of the Japanese recession, which affected the demand for video games as consumers had less time to play them. Namco's arcade game Tekken 3, launched in March 1997, had been well-received, and the console version of its arcade game Tekken 2 also became a hit selling over three million units. The company's arcade division had similar struggles, having slumped by 21% at the end of its fiscal year ending March 1998. Namco's US subsidiary Namco Cybertainment filed for Chapter 11 bankruptcy protection on the 29th of January 1998, citing reduced mall traffic.
A further 55% drop was reported in November 1999 when its home console game output decreased. As a means to diversify itself from its arcade and consumer game markets, Namco entered the mobile phone game market with the Namco Station, a marketplace for i-Mode cellular devices that featured ports of its arcade games like Pac-Man and Galaxian. In October 1999, the company teamed up with former Square alum Tetsuya Takahashi to establish a development studio called Monolith Soft, which later become an action role-playing game developer best known for creating & developing the Xenosaga series with Namco provided funding for the new franchise and majority-acquired the new development stuio turning it as a subsidiary within Namco.
In February 2001, Namco updated its projections and reported it now expected a 6.5 billion ($56.3M) net loss and a drop in revenue by 95% for the fiscal year ending March 2001, which severely impacted the company's release schedule and corporate structure. The company's earnings forecasts were lowered to accommodate its losses, its development strategy was reorganized to focus largely on established franchises, and 250 of its employees were laid off in what it described as "early retirement".
In early 2005, Namco began merger talks with Bandai, a manufacturing toy and anime production company. The two discussed a year prior about a possible business alliance after Namco collaborated with Bandai subsidiary Banpresto to create and develop an arcade & PS2 game called Mobile Suit Gundam: One Year War based on Mobile Suit Gundam. Bandai showed interest in Namco's game development skills and believed combining this with its wide library of profitable characters and franchises, such as Sailor Moon and Tamagotchi, could increase their competitiveness in the industry.
Nakamura and Namco's content development division advisors pushed against the idea, as they felt Bandai's corporate model would not blend well with Namco's more agricultural work environment. Namco's advisors were also critical of Bandai for focusing on promotion and marketing over quality. As Namco's financial state continued to deteriorate, Ishimura pressured Nakamura into supporting the merger. Bandai's offer was accepted on May 2, with both companies stating in a joint statement their financial difficulties were the reason for the merger.
The business takeover, where Bandai acquired Namco for 175.3 billion ($1.7bn), was finalized on September 29. An entertainment conglomerate named Namco Bandai Holdings was established the same day; while their executive departments merged, Bandai and Namco became independently-operating subsidiaries of the new umbrella holding company. Kyushiro Takagi, Namco's vice chairman, was appointed chairman and director of Namco Bandai Holdings. The combined revenues of the new company were estimated to be 458 billion ($4.34bn), making Namco Bandai the third-largest Japanese game company after Nintendo and Sega Sammy Holdings.
Namco was one of the world's largest producers of arcade games, having published over 300 since 1978. Many are considered some of the greatest games of all time, including Pac-Man, Galaga, Xevious, Ridge Racer, Tekken 3, and Katamari Damacy. Pac-Man is considered one of the most important video games ever made, having helped encourage originality and creative thinking within the industry. Namco was recognized for the game's worldwide success in 2005 by Guinness World Records; by that timeframe, Pac-Man sold over 300,000 arcade units and grossed over $1 billion in quarters globally.
In an obituary for Masaya Nakamura in 2017, Nintendo Lifes Damien McFerran wrote: "without Namco and Pac-Man, the video game arena would be very different today." Namco's corporate philosophy and innovation have received recognition from publications. In a 1994 retrospective on the company, a writer for Edge described Namco as being "among the true pioneers of the coin-op business", a developer with a catalog of well-received and historically significant games.
Staff for IGN in 1997 claimed that Namco represents the industry as a whole, with games like Pac-Man and Galaga associated with and representing video games. They wrote: "Tracing the history of Namco is like tracing the history of the industry itself. From its humble beginnings on the roof of a Yokohama department store, to the impending release of Tekken 3 for the PlayStation, Namco has always stayed ahead of the pack." In 2012, IGN listed Namco among the greatest video game companies of all time, writing that many of its games, including Galaga, Pac-Man, Dig Dug, and Ridge Racer, were of consistent quality and helped define the industry as a whole.
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Common questions
When was Namco founded and by whom?
Masaya Nakamura founded the company on the 1st of June 1955 in Ikegami, Tokyo. The founder established his business after failing to find work as a ship builder in the post-World War II economy.
What year did Atari Japan become part of Namco?
Nakamura acquired Atari Japan in early 1974 following negotiations with co-founder Nolan Bushnell. The acquisition allowed Namco Seisakusho to distribute Atari games across Japan and became one of the country's largest arcade game companies.
Which subsidiary did Namco establish for console games in 1984?
Namcot was established in 1984 to act as Namco's console game division. This subsidiary released its first four games including Galaxian, Pac-Man, Xevious, and Mappy in September of that same year.
When did Bandai acquire Namco and what was the final price?
Bandai acquired Namco for 175.3 billion dollars ($1.7bn) which was finalized on the 29th of September 2005. Both companies stated their financial difficulties were the reason for the merger which created Namco Bandai Holdings.
How many arcade games has Namco published since 1978?
Namco has published over 300 arcade games since 1978 making it one of the world's largest producers of arcade games. Many titles such as Pac-Man, Galaga, and Tekken 3 are considered some of the greatest video games ever made.