Pokémon GO: a TIPPING POINT for Japan?

The game shows the innovative resilience of Japanese companies. - by Yoshito Hori

This July something happened that hasn’t happened for a very long time.

A craze that originated, or at least partly originated, in Japan, has swept the world as fast as you can say Sony Walkman!

On July 6 Pokémon GO, the augmented-reality mobile gaming app, launched in the United States. Rolling out in more and more countries as the month went on, it finally reached Japan on July 22, making us only the 37th country in the world to get the game.

The wait was frustrating, but now I’ve got my hands on the game, I’m totally hooked. I’m at Level 22 in 10 days, without buying any items. (The player in the States who got to Level 40 only did so by using bots!)

For a product that is barely one month old, Pokémon GO already has a well-established origin myth.

The game’s creator is John Hanke, a 49-year-old serial entrepreneur from Texas who presided over the creation of Google Earth and Google Maps after Google acquired Keyhole, his third startup, in 2004.

In 2010, Hanke established Niantic Labs within Google and began developing Pokémon GO in summer 2014 after an April Fool’s collaboration between Google Maps and the Pokémon Company showed the appetite for combining location-based gaming with globally popular characters.

Interesting though this origin story is, what really excites me is what Pokémon GO tells us about how Japan’s corporate sector is changing.

I see 3 key takeaways.

1) Open innovation is a GO.

Despite Japanese companies’ reputation for preferring to innovate in-house (NIH = “Not Invented Here syndrome”), Pokémon GO provides a great example of two Japanese firms—Nintendo and the Pokémon Company—leveraging an external partner to extract value from their in-house I.P.

Japanese companies are shifting toward open innovation.

2) Corporate transformation is a GO

Often mocked as stodgy monoliths, in fact Japanese companies have a knack for self-reinvention. Carmaker Toyota started life making looms for the textile industry. And Fanuc, the global leader in industrial robots, was spun out of computer-maker Fujitsu in 1972, which itself was spun out of Fuji Electric in 1935. More recently, a diversified Fujifilm is thriving, while rival Kodak, over-dependent on photographic film, went bankrupt in 2012.

Nintendo, which started out as a playing card maker, is in this sense a typical shape-shifting Japanese company. It finally broke free of the closed platform of proprietary consoles to launch Miitomo, its first smartphone game, this March, with another two releases slated for later this year. Pokémon GO is clearly part of that transformatory trend.

Japanese companies are flexible, pragmatic, always changing.

3) The fun factor is a GO

Back in the 1970s and 1980s, Japan was famous for making products like portable music players, miniature TVs and sexy sports cars that were as fun as they were innovative.

A resurgence in the “national fun factor” is now under way. LINE, the Japanese messaging app which made its stock market debut on July 24, owes its popularity to its playful stickers and emojis.

Pokémon GO, too, is fun for all sorts of reasons—the fact that you play it outdoors and with other people are of course major plusses—but the cute pocket monsters account for at least as much of the game’s appeal as its location-based aspects.

The fun factor has knock-on effects on the rest of the economy. More and more foreign students are coming to Japan to study, in part because of their fondness for manga and anime like Dragon Ball, Naruto, One Piece, and so on.

Japanese companies still know how to deliver fun experiences to the world.

Thanks to Pokémon GO, Nintendo's stock has been on a tear. more than doubling between July 6 and July 19. This is good news for Japan’s beleaguered investors.

In fact, Pokémon GO is good news all around.

In my case, it’s not just providing me with lots of fun, it’s also giving me plenty of reasons to feel optimistic about the future of corporate Japan. Everything is “tipping” in the right direction.

What’s your take on the whole Pokémon GO phenomenon? Let me know your thoughts—if you’re not too busy catching monsters on your smartphone, that is!

(Photo credit: Matthew Corley / Shutterstock.com)

Profile

Mr. Yoshito Hori established GLOBIS Management School in 1992 and GLOBIS Capital Partners in 1996. In 2003, GLOBIS started its original MBA program which, in 2006, received accreditation from the Japanese Ministry of Education and gained “university” status. GLOBIS started a part-time MBA program in English in 2009 and a full-time MBA program in English in 2012.

A Harvard MBA graduate and former Sumitomo Corporation employee, Mr. Hori founded the Entrepreneurs’ Organization (EO) Japan Chapter in 1995 and became the first board member from Asia in charge of Asia Pacific region in 1996. He also served on the World Economic Forum (WEF)’s New Asian Leaders Executive Committee and Global Agenda Council on New Models of Leadership, as well as the Harvard Business School Alumni Board from 2005 to 2008. Currently, Mr. Hori is a board member of the Keizai Doyukai (Japan Association of Corporate Executives), and serves as co-chair of WEF’s Global Growth Companies.

In 2008, he launched the G1 Summit – a Japanese version of the WEF’s annual Davos forum. This led to the foundation of G1 Summit Institute in 2013, which Mr. Hori serves as Representative Director.

Just days after a huge earthquake struck northeast Japan in March 2011, Mr. Hori launched Project KIBOW to support the rebuilding of the disaster-affected areas. The following year Project KIBOW was incorporated as the KIBOW Foundation, which Mr. Hori serves as Representative Director.

An avid enthusiast of the Japanese game Go since age 40, Mr. Hori has been Director of the Nihon Ki-in (Japan Go Association) since June 2013.

Since October 2013, Mr. Hori has hosted a weekly TV program in Japan called Nippon Mirai Kaigi (Japan Future Conference). He has authored several books including Visionary Leaders who Create and Innovate Societies, Six Dimensions of Life, and My Personal Mission Statement.

Mr. Hori received his BS in Engineering from Kyoto University and his MBA from Harvard Business School.

He is an avid swimmer and enjoys spending time with his family, especially his five sons.

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