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Namco: the story on HearLore | HearLore
Namco
On the 1st of June 1955, a man named Masaya Nakamura stood on the roof garden of a Matsuya department store in Yokohama with only 300,000 yen and two hand-cranked rocking horses. He was not a video game designer, nor did he have a background in entertainment. He was the son of a shotgun repair business owner who had failed to find work in shipbuilding during the struggling post-World War II economy. When his father's business found success making pop cork guns, Nakamura decided to pivot. He spent his entire savings on the two rocking horses, installed them on the roof, and watched as children flocked to ride them. The venture turned a decent profit, proving that simple mechanical entertainment could thrive even in a devastated economy. This small start would eventually evolve into a global entertainment empire, but it began with a simple idea: put something fun on a roof where people could see it.
The Atari Rescue Mission
In 1974, the American game company Atari was establishing divisions across Asia, but its Japanese branch, Atari Japan, was a financial disaster. The company was nearly collapsing due to employee theft and a lack of market viability. Kenichi Takumi, the president of Atari Japan, approached Nakamura, who was already planning global expansion, to become the distributor of Atari games across Japan. The deal was struck for 296 million yen, but Nakamura informed Atari co-founder Nolan Bushnell that his company could not pay the full amount by the deadline. Bushnell, whose company was struggling in America, allowed Nakamura to pay 550,000 dollars initially and then 250,000 dollars a year for three years. This acquisition allowed Nakamura Seisakusho to distribute Atari games across Japan, including the hit Breakout, which led to rampant piracy in the industry. By the end of 1976, Nakamura Seisakusho was one of Japan's leading video game companies, having saved a struggling American giant and positioning itself as a major player in the arcade market.
The Birth of Pac-Man
Toru Iwatani, a new hire at Namco, began work on a maze video game that was targeted primarily towards women, a demographic largely ignored by the industry at the time. The game, originally named Puck Man, featured a character that had to eat dots in an enclosed maze while avoiding four ghosts that pursued them. Iwatani based the gameplay off eating and designed its characters with soft colors and simplistic facial features. The game was test-marketed in Japan on the 22nd of May 1980, and given a wide-scale release in July. It was only a modest success initially, as players were more accustomed to the shooting gameplay of Galaxian. However, in North America, it was released as Pac-Man in November 1980. The game's simplicity and abstract characters made it a fixture in popular culture, spawning a multi-million-selling media franchise. Pac-Man became Namco's mascot and is considered one of the most important video games ever made, having helped encourage originality and creative thinking within the industry. By 2005, Pac-Man had sold over 300,000 arcade units and grossed over 1 billion dollars in quarters globally.
Masaya Nakamura founded the company on the 1st of June 1955. He started the business with 300,000 yen and two hand-cranked rocking horses on the roof garden of a Matsuya department store in Yokohama.
What year did Namco acquire Atari Japan and for how much?
Namco acquired Atari Japan in 1974 for 296 million yen. The deal allowed Nakamura Seisakusho to distribute Atari games across Japan after paying 550,000 dollars initially and 250,000 dollars annually for three years.
When was Pac-Man released in North America and how many units did it sell by 2005?
Pac-Man was released in North America in November 1980. By 2005, the game had sold over 300,000 arcade units and grossed over 1 billion dollars in quarters globally.
When did Namco file for bankruptcy and what caused the decline?
Namco Cybertainment filed for Chapter 11 bankruptcy protection on the 29th of January 1998. The decline was caused by the Japanese recession, reduced mall traffic, and low consumer spending which led to a 26.3% drop in net sales.
When did Namco merge with Bandai and what was the acquisition price?
Bandai acquired Namco for 175.3 billion dollars on the 29th of September 2005. The merger was finalized after Bandai accepted the offer on the 2nd of May 2005, to create Namco Bandai Holdings.
In 1993, Namco unveiled the System 22 arcade board, capable of displaying polygonal 3D models with fully-textured graphics. The board powered Ridge Racer, a racing game that used 3D textured polygons and drifting to become one of Namco's most successful releases. The game was labeled a milestone in 3D computer graphics and helped Namco dominate the Japanese dedicated arcade cabinet charts. The company followed its success with Tekken, a 3D fighting game 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, launching a multi-million-selling franchise. Namco's arcade division also began work on a new 3D arcade board named System 21, which was one of the earliest arcade boards to utilize true 3D polygonal graphics. The board was demonstrated through the Formula One racer Winning Run, which was seen as a breakthrough product in terms of programming technique and garnered significant attention from the press.
The PlayStation Alliance
In early 1994, Sony announced that it was developing its own video game console, the 32-bit PlayStation. The console began as a collaboration between Nintendo and Sony to create a CD-based peripheral for the Super Nintendo Entertainment System in 1988, but Nintendo silently scrapped the add-on. Sony chose to refocus its efforts in designing the PlayStation in-house as its own console. As it lacked the resources to produce its own games, Sony called for the support of third-party companies to develop PlayStation software. Namco, frustrated with Nintendo and Sega's licensing conditions for its consoles, agreed to support the PlayStation and became its first third-party developer. The company began work on a conversion of Ridge Racer, its most popular arcade game at the time. The PlayStation was released in Japan on the 3rd of December 1994, with Ridge Racer as one of its first games. Sony moved 100,000 units on launch day alone, and publications attributed Ridge Racer to the PlayStation's early success, giving it an edge over its competitor, the Sega Saturn. Namco was also given the rights to produce controllers, such as the NeGcon, which it designed with the knowledge it gained through developing its cancelled console.
The Financial Crisis and Restructuring
By 1998, Namco began experiencing decline in its consumer software sales as a result of the Japanese recession, which affected the demand for video games as consumers had less time to play them. 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. In its 1998 annual report, Namco reported a 26.3% drop in net sales, which it partly blamed on low consumer spending. A further 55% drop was reported in November 1999 when its home console game output decreased. The company closed its Wonder Eggs park on the 31st of December 2000, which by that point saw an attendance number of six million visitors, in addition to shuttering many of its video arcades that returned substandard profits. In February 2001, Namco updated its projections and reported it now expected a 6.5 billion dollar net loss and a drop in revenue by 95% for the fiscal year ending March 2001. 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.
The Bandai Merger
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 and 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. 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 dollars, was finalized on September 29. An entertainment conglomerate named Namco Bandai Holdings was established the same day, and while their executive departments merged, Bandai and Namco became independently-operating subsidiaries of the new umbrella holding company. The combined revenues of the new company were estimated to be 458 billion dollars, making Namco Bandai the third-largest Japanese game company after Nintendo and Sega Sammy Holdings.
The Enduring Legacy
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. The company'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. The writer believed that Namco's success lay in its forward-thinking and firmness on quality, which they argued made it stand out from other developers. 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. 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, and its influence on the video game industry remains profound.