Super Mario - Jeff Ryan [104]
Part of Nintendo’s reluctance to talk about manufacturing is because no industrial company wants to discuss the real engine behind its low-cost quality goods. That engine is China. The conundrum of the China Price is one where Nintendo has gone along with the herd. Workers in Shenzhen costs a lot less than those in Kyoto or Redmond, and can assemble the same products with the same precision. And Chinese subcontractors have perfected the cutting-their-own-throat negotiation tactic, slashing their costs however they can to offer better and better deals for Europe, the Americas, and Japan. Like a union in reverse, they offer more and ask for less.
But there’s a price for the Price. Many of the world’s Wiis, and much of world’s tech products, are made at a single Foxconn plant in Shenzhen. The plant’s size is about a hundred times larger than you can imagine: 350,000 workers. Imagine if all of Cincinnati or Pittsburgh were twenty-five-year-old men, and worked for just one company, a company run like a boot camp that encouraged long hours, low pay, and no complaints. That’s Foxconn, where no one can afford anything they manufacture. Santa’s village, run by Mr. Burns.
Foxconn does offer a few benefits: company housing and life insurance. But the life insurance is worth much more, about ten years’ worth of salary, than the pittance its employees make. The Chinese workers are so uniformly desperate to support their rural families that a shocking number of them “fall” off the top of their dorms, suicides for the life insurance. That some of these workers made Mario games, about a jumping hero, is ugly to the point of disgust.
The factory has pledged to increase salaries by 20 percent. And Foxconn’s other big clients—Hewlett-Packard, Dell, and Nintendo rival Sony—are in the same boat. Everyone wants this to go away. “This,” unfortunately, is the attention, not the process of cutting a small check and receiving a large pallet of goods from someplace far away.
Another Foxconn client, Apple, is shaping up to be a heavyweight Nintendo contender. After decades of “Apple gaming” being a joke among the PC community, Apple is making a killing selling touchbased games on its portable media devices. Apple and Nintendo are quite similar; both are famously closed-system, both have devoted fan bases across many ages and both genders, both emphasize style and fun. The main difference between the 3DS and the iPod, philosophically, is that only one has an off switch.
Apple, like Microsoft and Sony, is at heart an electronics company. It charges a lot more for the quality of its products. And then it comes up with subtle ways to make you unable to break the iHabit. If you have an iPod, why not use QuickTime, since Apple keeps asking to reinstall it alongside iTunes every two weeks? Why not keep iTunes running 24-7, since your podcasts won’t download otherwise? Why not throw away your six-month-old iPod because Apple’s new OS for some reason won’t communicate with it? On the other hand, Iwata had considered installing governors into the 3DS, so no child could play it too long. Don’t look for that as an app anytime soon.
Another new competitor is Wall Street, or rather Kabutocho, Japan’s financial district. Nintendo’s shares in the Tokyo Stock Exchange have been traditionally safe bets. But in early 2009, due to the cratering economy, Nintendo posted its first drop in profits since the handheld DS revitalized the company. This is bad if you play bridge—and the stock market is one giant continual round of contract bridge, trying to reward companies not only for high earnings but for correctly guessing in advance how well they thought they’d do. Nintendo’s stock crisis halved its $78 high down to $35. But Microsoft and Sony’s stocks lost billions more, and their new-normal trading figures were about $16.
These are Nintendo’s new rivals: Apple, Greenpeace, Foxconn, Wall Street. And of course, social media and its addictive casual games. Not to mention Microsoft and Sony. Biggest of all is the specter that’s haunted Nintendo for two