Taito

• 1. Introduction

  ›

  Taito began not as a video game company but as a vodka distillery in postwar Tokyo, founded by a Ukrainian refugee with roots in Shanghai. Michael Kogan had fled Soviet repression, worked in a Japanese factory during World War II, then moved to Shanghai to join his father and build a business called Taitung. When the Communist takeover of China shuttered that venture in 1950, Kogan packed up again and headed to Japan. Within a few years, he was running the first vodka producer in the country, importing jukeboxes from American military bases, and laying the groundwork for a company that would one day give the world Space Invaders.

  How does a man importing broken-down jukeboxes from US military bases end up reshaping the global entertainment industry? And what does a Ukrainian Jewish refugee have to do with the golden age of arcade games? Those questions run through the entire story of Taito Corporation.

• 2. Kogan's Unlikely Origin

  ›

  The name Taito carries a hidden autobiography. Written in kanji as 太東, the company's name draws the character 太 from 猶太, the word for "Judea," and pairs it with 東, meaning "East." Together they sketch a portrait of Kogan's self-understanding: a Jew at the far edge of the Eastern world.

  Kogan founded his first company, Taitung, in Shanghai in 1944, dealing in floor coverings, natural hair wigs, and hog bristles. When the Communists took power in China, Kogan liquidated the business in 1950 and relocated to Japan. His second venture there, a clothing distributor named Taito Yoko, struggled badly. Employee carelessness and persistent losses forced him to shut it down.

  On the 24th of August, 1953, Kogan replaced Taito Yoko with the Taito Trading Company, bringing in lawyer and retired newspaperman Akio Nakatani as a partner. The new company launched as a vodka distillery, the first of its kind in Japan, and also imported peanut vending machines and perfume machines. It was an eclectic mix, but Kogan was building on whatever opportunity the recovering Japanese market offered.

• 3. Jukeboxes and the Long Pivot

  ›

  Competition in vodka forced Taito out of the spirits business by 1955. Kogan turned his attention to vending machines and jukeboxes, but there was a problem: Taito had no license to import jukeboxes into Japan. His workaround was creative. The company bought broken machines from United States military bases, then cannibalized defective units to restore working ones.

  The gamble paid off. As Japan's postwar economy recovered, Taito became the official distributor of AMI jukeboxes in the country. Early results were modest, but by 1960, after the company began blending Japanese records with American folk songs into its machine catalogs, over 1,500 units had been sold. A subsequent partnership with the Seeburg Corporation elevated Taito to exclusive agent status in Japan, making it one of the country's leading jukebox companies.

  By the 1960s, Taito had moved into electro-mechanical games. A two-player football simulation called Crown Soccer Special arrived in 1967, using pinball flippers as its core mechanic. The following year, Crown Basketball debuted in the United States and was named the highest-earning arcade game at the 1968 Tampa Fair.

• 4. Nishikado and the Video Game Leap

  ›

  Tomohiro Nishikado joined Taito in 1968 after graduating from Tokyo Denki University with an engineering degree. His bosses spotted something rare in him: he was the company's only employee who understood how to work with integrated circuit technology. In an industry just beginning to grasp that transistor-transistor logic could transform the arcade floor, that made him uniquely valuable.

  Nishikado spent six months taking apart an Atari Pong unit, learning how its IC chips functioned, and then began modifying what he found. The work led directly to two Pong-style sports games, Soccer and Davis Cup, both released in November 1973. Soccer was developed first. He followed those with the sports game TV Basketball in 1974, the racing game Speed Race the same year, and the shooter Western Gun in 1975. Midway Manufacturing picked up all three for North America, releasing them as TV Basketball, Wheels, and Gun Fight respectively.

  Taito's first video game, Elepong, had appeared earlier in 1973, a ping-pong arcade cabinet, but it was Nishikado's string of original titles that established the company's creative identity. His earlier electro-mechanical work on the target shooting games Sky Fighter and Sky Fighter II had already shown what he could do.

• 5. Space Invaders

  ›

  In 1978, Nishikado created Space Invaders. The game became Taito's most popular release and one of the most celebrated titles in the entire history of arcade games. It is credited as a major contributor to the late-1970s surge in video game popularity, a period often called the golden age of arcade video games.

  The alien imagery from the game took on a life far beyond any single product. The figures are widely recognized as emblems of the video game industry as a whole. Taito had already distinguished itself as the first Japanese company to export its games to other countries, but Space Invaders made that distinction concrete on a global scale.

  After Michael Kogan died in February 1984, his son Abraham, known as Abba Kogan, became chairman of Taito. Akio Nakanishi assumed the role of president. The company Kogan had built from a Shanghai trading house and a Tokyo vodka distillery had by then become a foundational name in interactive entertainment.

• 6. Expansion and Corporate Turbulence

  ›

  Taito changed its name from Taito Trading Company to Taito Corporation in August 1972, a year before Elepong. The American subsidiary, Taito America, opened in 1973 in downtown Chicago and later developed its own titles, including Qix.

  In 1988, Taito opened a European division, Taito (Europe) Corporation Limited, based in London. By contrast, Taito America ran for more than twenty years before ceasing operations in July 1996. The year before that closure, Taito had already sold exclusive US publishing rights to Acclaim Entertainment. The European arm was liquidated in February 1998.

  In 1992, Taito announced a CD-ROM-based console called WOWOW, designed to let players download games via satellite transmission from the Japanese television station of the same name. The concept anticipated what later systems would attempt, but the WOWOW was never released.

  In April 1986, just a month after joining the Kyocera corporate group, Taito absorbed two subsidiaries: Pacific Industrial Co., Ltd. and Japan Vending Machine Co., Ltd. Japan Vending Machine had been an independent company before Taito purchased it in July 1971 to reinforce its arcade facility operations. Pacific Industrial had been created by Taito itself in 1963.

• 7. The Square Enix Era

  ›

  In August 2005, Square Enix announced plans to acquire 247,900 Taito shares valued at 45.16 billion yen, roughly 409.1 million US dollars. The stated goals were to improve Taito's profit margin and expand Square Enix's footprint in arcades and other entertainment venues. Kyocera, which had been Taito's parent company, accepted the offer. By the 22nd of September, 2005, Square Enix had secured 93.7% of all Taito shares, and effective ownership transferred by the 28th of September.

  The legal reconstruction that followed was intricate. Square Enix merged Taito into a shell entity called SQEX Corporation. The surviving company kept the Taito name, but it was technically SQEX that survived and Taito that was dissolved. Taito was delisted from the First Section of the Tokyo Stock Exchange and became a wholly owned Square Enix subsidiary by March 2006.

  Further restructuring continued. In July 2008, Square Enix announced it would liquidate two Taito subsidiaries, Taito Art Corporation and Taito Tech Co., Ltd., wrapping up the process by October 2008. On the 1st of February, 2010, a third incarnation of Taito Corporation emerged from the merger of the second company with ES1 Corporation, an arcade facility operator established on the 1st of June, 2009. ES1 is technically the legal ancestor of the Taito that exists today.

  On the 3rd of July, 2018, Taito announced in Famitsu its intention to return to publishing software for home consoles, citing the need to keep its intellectual properties available on current platforms. Among the titles earmarked for revival was Space Invaders, which Taito had already announced for Facebook's Instant Games platform alongside Arkanoid on the 30th of November, 2016.