The DeanBeat: Wandering the game industry with Reggie Fils-Aimé

Years ago, I used to speak with Reggie Fils-Aimé on a regular basis. He obliterated me once while playing Wii Sports Tennis during a live event. And he retired after 15 years at Nintendo of America, ending his tenure as president and chief operating officer in 2019.

But the Regginator has returned as the author of a new book, Disrupting the Game, and he spoke with Gamertag Radio cofounder Danny Peña at our recent GamesBeat Summit. During the summit, I was able to hang out with Fils-Aimé at a couple of dinners and discuss a lot of topics with him. I read the book, and I highly recommend it as a different kind of memoir and business advice book. After reading it, I lament the fact that we don’t really have a similar figure in gaming leadership today.

Fils-Aimé was an aggressive defender of the Nintendo brand, and he enjoyed the intellectual sparring that comes with press interviews. In contrast, it feels like so many other leaders are afraid to get their real opinions out in the open. So it was a lot of fun to have a long conversation with him again.

He dodged a few tough ones like what happened to the F-Zero franchise. But he addressed head-on a question about Nintendo’s recent use of contractors. And he came out in favor of non-fungible tokens (NFTs) as a business model with a lot of potential in gaming. He also spoke about the Square Enix deal to sell its Western studios to Embracer Group, his views on E3, and his time on the GameStop board.

While reading the book, I appreciated the stories about his background growing up poor in the Bronx, after his parents had to emigrate from Haiti, leaving behind a rich life for the poverty of one of New York’s poorest neighborhoods. It turned out that one of the passions that he picked up — incessantly playing Nintendo games — would later turn out to be so important later in life, giving him credibility with Nintendo CEO Satoru Iwata. And I appreciated that his book covered some mistakes or difficult challenges, like his management of the Bigfoot Pizza brand at Pizza Hut, the pricing for the Nintendo 3DS, and the failure of the Wii U.

Fils-Aimé’s relationship with Iwata was fascinating reading, as Fils-Aimé was an outsider as the only high-ranking black executive at the Japanese company, and Iwata was an outsider who joined Nintendo from a third-party developer. And it was interesting to read how Fils-Aimé decided to make diversity advocacy and mentorship his mission during his retirement. We chatted about that, as well as the “My name is Reggie” speech that put him on the map with gamers.

Here’s an edited transcript of our interview.

GamesBeat: I got through the whole book. I wouldn’t call it a tell-all, but it’s an interesting tell-some.

Reggie Fils-Aimé: It was never meant to be a tell-all. It was more about teaching lessons and sharing principles versus being at every place where decisions were being made.

GamesBeat: It must have felt good to be able to talk about some things that you wouldn’t have been able to while you were still president.

Fils-Aimé: For me, the stories I told were purposeful. Not only in terms of key lessons, but I think it provides a bit of a window as to my role within the company. Some of the key decisions that were driven forward, as well as decisions that weren’t, and maybe their outcomes in the marketplace.

GamesBeat: Did you have to negotiate at all with Nintendo to talk about any of this?

Fils-Aimé: The approach I took with the book–because it was focused on my own journey and conversations that I had, it enabled me to write the book without having to ask for permission.

GamesBeat: One of the most interesting stories was about crossing the line from employee to friend with Satoru Iwata. What was the reason you wanted to make sure those stories were told, about that developing relationship?

Fils-Aimé: There are a few reasons. First, I don’t believe I would have been nearly as successful in the role if Mr. Iwata had not been present, and if he had not had a desire to work with me and to leverage the skills and capabilities that I brought to Nintendo. Said another way, in another situation where he wasn’t in the role, or if he behaved differently, I think my tenure at Nintendo would have been quite different.

That’s why it was important to share how we worked together, the types of conversations we had, and that it wasn’t always leading to positive outcomes. I thought it was important to share that even when you have a situation with a company doing well in the marketplace, not every decision works out perfectly. Just like when you have a company that isn’t performing well, not every decision, or not every situation, is horrible either. Sharing the balance and giving that perspective I thought was important. That’s why I begin the book the way I do in terms of highlighting that relationship, highlighting the importance of his passing and how that then shaped the balance of my tenure at Nintendo.

GamesBeat: It was interesting to have those stories of either mistakes or challenges, like the Bigfoot Pizza story, or the Wii U launch, or pricing the 3DS. It felt more real because those stories were there.

Fils-Aimé: Exactly. As I wrote the book, or as I prepared to write the book, I became a student of business memoirs. I read a number of them. So many only share the positive. Or when they share the negative, it’s in that typical style of, “This didn’t work out, but I did well out of it.” I didn’t want to do that with this. I wanted to be clear that even when someone has a broadly successful career, there are still things that you regret or that you wish would have turned out differently.

GamesBeat: I like how you connected growing up in the Bronx with this post-retirement mission, focusing on diversity and mentorship.

Fils-Aimé: Certainly in my retirement I’m looking to give back in a variety of different ways. But I’m fortunate that some of these opportunities presented themselves, and I was able to take advantage of them. As an example, the fact that Harold [Goldberg] and the team at the New York Video Game Critics Circle–the fact that they reached out was a bit of serendipity. The fact that Cornell University reached out for me to be the first leader in residence for the undergraduate business school was a bit of serendipity. And the fact that I was able to perform that role before COVID impacted universities across the U.S. and the world, that was a bit of serendipity too. I don’t take for granted the fact that while I was ready to help and to be in a position to perform that type of service, the opportunities did have to present themselves.

GamesBeat: You’re still as outspoken as ever. You don’t seem particularly fearful of any response. The example around the story about labor practices at Nintendo of America with contractors–you’ve spoken about this. How do you feel about that, and generally about the fear of speaking out?

Fils-Aimé: Again, I’m in a fortunate situation where even in my time in retirement, I can provide a point of view or make a statement and feel comfortable in making that point. Whether it’s about diversity in the industry or these concerns about labor practices, these are areas where I do have a strong point of view. I’m fortunate to be in a position where people still care what I have to say.

GamesBeat: I felt like you enjoyed giving interviews and the sparring that would happen there. I don’t know if there are some executives out there who would rather avoid the press. How would you counsel someone like that to embrace the opportunity to speak out?

Fils-Aimé: That’s a tough one. For me, I’ve always understood the role of being a spokesperson. Or in the case of today and right now, being in a position where I’m trying to provide some perspective or to share what I’ve been doing with this book and in retirement. It’s important also to respect that the person you’re speaking with has their role to play. They’re looking for insight. They’re looking for information. They’re trying to provide a service. It needs to be understood that–I don’t want to be so crass as to call it a transaction, but there needs to be a fair and even exchange. You can’t go into these either being fearful or believing that the only thing you can do is stick to your corporate track. There needs to be a free-flowing exchange of information and ideas.

GamesBeat: You’ve gotten some criticism for your position on NFTs. How did you come to that position? Has that criticism made you think more about it?

Fils-Aimé: I guess I’m fortunate to have been around this industry long enough to see parallel situations. When free-to-start mobile experiences began – and within that type of game there were microtransactions or other ways to monetize – there was a segment of the population that didn’t like that approach. They felt it took away from the gameplay. They felt it was disruptive. And arguably some of those early experiences were pretty clunky. But today there are experiences, whether you look at Fortnite–you can look at any exceptional, well-monetizing mobile experience and they’re using tactics that, early on, players may not have been excited about.

I believe that with capable developers and monetization schemes that work for the game and provide, overall, a positive experience for the player–I do believe that can be done, whether it’s with blockchain technology or NFTs as a particular device. I believe it can be done. What it will take for the broad gaming audience to be supportive is a positive experience. Just like that very first positive experience with a high-end mobile game that monetized in-game. There needs to be that experience where people realize, in the end, that it was an okay experience.

GamesBeat: What do you think of this most recent transaction, where Square Enix said it’s selling off its western game properties to focus on blockchain games, AI, and the cloud? It seems like a choice between what Embracer wants, those IPs, versus these more futuristic innovations. 

Fils-Aimé: That one is a more difficult one for me to comment on. First, I think that Embracer actually got a really good deal with those studios. These are proven studios, and the IP went along with the transaction. As I look at the deal, it seems like a very good deal for Embracer. The second thing I’d say is that I don’t think it’s an either-or situation. Candidly, I think it will take some trial in order to get a blockchain game to be effective and to perform well, both for the gamer and from a monetization standpoint.

My approach would have been to hold on to, if you will, current types of games, and use that to help fund my experimentation. That’s the way I would have approached it. But obviously I’m not an employee or leader at Square Enix, so my opinion is just an opinion. 

GamesBeat: I feel like we still have some players in the industry that find themselves stuck in the past. E3, for example, or GameStop. How do you think they can try to move forward?

Fils-Aimé: Let me answer the question broadly, because I think the E3 situation is quite different from the GameStop situation. But broadly speaking, I believe you have to be constantly looking at your business model. You have to be constantly thinking about where an opportunity is in the future and guide your organization to get there. In the case of E3, historically E3 has been the first place to play the big new games. It’s become a global event. It’s something that publishers were eager to participate in. They need to figure out how to leverage those equities moving forward in order to stay relevant. If they don’t do it, others will take that position.

Similarly, with GameStop, historically their key advantages have been the passion of the store associates, who love games, play games, and articulate for the consumer walking in the types of games they might be interested in, or the types of consoles they might be interested in. Leveraging the power of their associates moving forward is critically important, as well as furthering out how to participate in software sales as those continue to move digitally. Software is where the industry’s profitability resides. There are details in each case that are different, but fundamentally it’s about understanding the business, understanding where your equities are, and positioning yourself to take advantage of those in the future.

GamesBeat: Is there any technology you see now that could be a big disruptor in the future, like NFTs?

Fils-Aimé: I do believe that as a disruptive piece of technology, blockchain can play that role. Cloud I think is more of an enabler. Cloud is coming. If I were leading a platform, I would be trying to think through how to deliver a complete experience through the cloud. And by that I mean enabling the consumer to play content on the screen of their choice where all they need is the appropriate controller, and not necessarily needing a piece of hardware in order to play that game. I do think that is where we’re headed. The companies that figure that out are going to be in a very good position.

I’ve publicly stated that I’m not as positive on VR. I’m much more positive on AR, specifically for gaming. I think VR could be interesting in more business types of applications. But again, to the example I used earlier with NFTs, I will be much more of a believer in a VR experience when I see a great one that makes use of the technology and delivers something I can’t experience anywhere else. 

GamesBeat: You talked a lot about the “My Name is Reggie” speech. Can you talk more about why Nintendo needed to be more aggressive at that point? Why was that the right speech at the right time?

Fils-Aimé: It was the right speech at the time because the company needed to push more aggressively with its consumers, and within the industry more broadly, given it was under so many threats at the time. Microsoft’s entry into the video game industry, a company that had significant resources to put against this business versus Nintendo.

But the other reason that we took the posture we did is that the company had a number of key innovations and key products it was bringing to bear. We had the real substance to support the position. That was critically important. Without it, it would have just been a series of statements without the real examples to bring it to bear. That year we had strong first- and third-party support for GameCube, including Resident Evil 4, the Star Fox game we highlighted, the second in the Metroid Prime trilogy. We had what would become Zelda Twilight Princess, which made a really emotional impact on participants at the close of that show. And we had the Nintendo DS that we unveiled for the first time. It was the right presentation at the right time for a company that needed to pivot and push more aggressively in its own direction.

GamesBeat: I remember you wiped me out when we were playing Wii Sports Tennis. I thought about how a lot of this book is about you figuring out how to be the right kind of outsider. That ability to play, though, it seemed very important to gaining credibility at Nintendo. Did you feel like maybe you’d trained for that job your whole life?

Fils-Aimé: The fact that I play games, the fact that I knew the franchises so well – not only Nintendo franchises, but franchises that existed on other platforms – that absolutely gave me credibility. It enabled me to speak with confidence about what was going on. But I also needed to work hard playing our content, getting comfortable with our content.

I didn’t share the story of that GDC – I think it was a GDC – where I took on all comers at Wii Sports Tennis. In part it’s because there wasn’t a “So what?” There wasn’t a management principle in telling that story. But I can say that I played a lot of Wii Sports Tennis to be able to perform that well. Just like when we unveiled Wii Fit and I played against Mr. Miyamoto in the Wii Fit soccer experience, where you had to head balls into the net. I can tell you that I practiced for hours during that E3 in order to get up on stage and perform well. I think it’s true that on the big stage at E3, in our presentations, given all of the different product demos that I did, I don’t think I ever lost.

Believe me, we got to a point where people wanted to beat me on the big stage. Bill Trinen wanted to beat me in the three-point shooting contest we had with Wii Sports Resort. But he didn’t.

GamesBeat: You’re promoting diverse perspectives, and one of the interesting things about your story is that you offered Japan this ground truth about the U.S. market. You proved that a diverse perspective was useful to Nintendo, and in hindsight it was a no-brainer. Why do people still oppose diverse perspectives, do you think?

Fils-Aimé: I do believe that until an executive has the personal experience, seeing the benefit of a different opinion put forward by someone who has had different life experiences, who potentially looks different from the executive–until they witness the benefit of that diversity, until they experience the business benefit, while the executive may believe diversity is a positive thing, they don’t truly put their heart and soul into driving diversity within their organization. Until they see the business benefit, they tend to just give it lip service.

GamesBeat: What do you think of where the #MeToo movement and where it’s ended up in the game industry? We’ve heard a lot of stories in the last several years about toxic culture in gaming and how the industry is dealing with that.

Fils-Aimé: Regrettably, our industry has a long way to go to create positive cultures and talk about them within organizations. I do believe that the tone is absolutely set at the top, and that until leaders across our industry fully embrace the need to address their cultures–until that happens, the progress is going to continue to be slow.

You can look at any of the organizations that have had an issue, and fundamentally you can trace it back to the seniormost leaders in the organization: their belief, their approach, how they carry themselves. That’s our unfortunate reality. If those leaders can’t modify their behaviors and change what they value, then the leaders themselves will need to change.

GamesBeat: Why was F-Zero abandoned?

Fils-Aimé: Why was F-Zero abandoned? The insight I would share is that, at least during my tenure, Nintendo developers were always experimenting with different gameplay styles, always thinking about where a unique experience could be applied back, either to an existing franchise or maybe creating a new franchise. My bet is that somewhere in the Kyoto development centers, some developer is playing around with an idea that might be applied to F-Zero. It’s never a situation, at least in my experience, where the company makes a conscious decision not to continue supporting X-Y-Z franchise. Historically it just hasn’t worked that way, not when I was there.

GamesBeat: That was a question from one of our other writers. I didn’t have a Nintendo console when I was growing up. I played in the arcades or on a PC. But I do have these fond memories of playing Mario Kart with my wife and my kids, or Wii Sports with my mother and mother-in-law. Playing these games during the holidays. How do you look at that contrast between people who are die-hard Nintendo people, but also people who Nintendo has been able to touch in other ways?

Fils-Aimé: That’s a unique role that Nintendo plays. That’s because typically Nintendo games are approachable, and so while you have these fantastic and in-depth experiences like Zelda, you also have more accessible experiences like Mario Kart. I have to say, I do think Nintendo is unique in the industry as far as having that broad range of different experiences.

GamesBeat: It feels like Nintendo was always more in a creative arms race, while Microsoft and Sony competed in a technological arms race. Is that still the situation now, do you think, or has that changed?

Fils-Aimé: I do think historically your description is quite accurate. I do believe things are beginning to change as both Sony and Microsoft acquire more developers and have more internal first-party studios. I do believe that it will lead to more unique content coming from both Sony and Microsoft.

I also believe, as these acquisitions happen, that we’ll see the birth of more independent studios. As acquisitions happen, there are going to be great developers, developers with a lot of knowledge and expertise, who decide not to be part of a big organization, part of the Borg, and instead go to do their own projects, which will give birth to a new age of creativity for the industry.

GamesBeat: Is there anything you can say about the SPAC status? I’ve heard you talk about a date before, but I don’t know if there’s anything to update there.

Fils-Aimé: The SPAC went public in December. We were oversubscribed by about $1 billion, which speaks to the quality of the sponsors and individuals involved with the SPAC. Right now we’re in the process of having a number of conversations, not only with gaming companies, but companies in the broader creator space, companies that have fundamental technologies that can be applied in Web3. We’re in a very good position of having positive and detailed conversations with a number of private companies that we can potentially take public. We have a long runway. We have until September of 2023 to find our target and consummate a transaction. For us, right now it’s important to have all these conversations and find the right company to take public.

GamesBeat: With the Wii and the Switch, it was good to see the stories about how things turned out so well. I liked the connection to the Blue Ocean Strategy and the Innovator’s Dilemma books. I’m curious if you see those books as still being applicable in interesting ways to the game industry now. 

Fils-Aimé: The core themes for each of those books can absolutely be applied. The fundamental in Blue Ocean Strategy is to be thoughtful around your point of difference, and how to constantly push into markets or opportunities that can leverage your key capabilities, versus just going head to head against a competitor where the result is, as they say, a blood red ocean. The core concept absolutely holds true, whether you’re looking at brand-new businesses in Web3 or looking at the current issues that, for example, the video streamers are struggling with right now.

Similarly, the thrust of Innovator’s Dilemma is that when you look at how you innovate, you have to be constantly thinking about the cost of that innovation versus what the market is willing to bear. Sometimes pursuing an approach that is innovative, but also low cost, can be potentially the better option. The core themes, then, are appropriate. Certainly today’s examples are fundamentally different than when those books were constructed back in the ‘80s.

GamesBeat: I’ve heard that blockchain game pitches are now 50 to 90 percent of what comes into gaming VCs. That’s starting to sound like a red ocean.

Fils-Aimé: Exactly! And not only a red ocean, but again, where are the concrete ideas, the concrete examples, that give me a reason to believe that these approaches are going to make sense? There needs to be a bit of substance.

GamesBeat: What does your new Reggie pin mean to you?

Fils-Aimé: The background is that as I was retiring from Nintendo–well, actually I should step even further back. In the book I highlight that lapel pins were something that I’ve always enjoyed, whether it was having my Procter and Gamble lapel pin, or the pins from all my past companies. Giving employees pins as a thank-you for hard work was something I instilled at Nintendo.

On my last day I was given a handmade pin by one of my former employees, which was just incredibly touching. But because it was handmade I was fearful that someday I would break it. I tasked my daughter, who’s an illustration graduate from Ringling, to make me a new pin, to make me a new design that I could own and trademark and use as a construct to make a pin, but also to have that little character live on my website. It’s meaningful because of the legacy of pins and the legacy of the inspiration for this pin from my former employee at Nintendo. But it’s also meaningful in that it captures me in a bit of a gaming-inspired format, the 32-bit format. Those are all of the heady meanings in my new Reggie pin.