Nintendo's Satoru Iwata Dies at 55

[Originally published at Sub Cultured as Nintendo's Satoru Iwata Dies at 55]

Nintendo Co., Ltd. deeply regrets to announce that President Satoru Iwata passed away on July 11, 2015 due to a bile duct growth.

The gaming flag flies at half mast today, as that was the long and the short of it in an official press release from Nintendo yesterday marking the death of President Satoru Iwata, one of the titans of the game industry in recent history. Due to his medical condition he had to skip this year's E3 under direction of his physician and shortly after underwent surgery to try and remove the growth as he revealed in a letter to shareholders on June 24.

The loss of Iwata isn't isolated just to Nintendo but rather to the entire gaming industry. This was the man who took the reins from Hiroshi Yamauchi, the revolutionary that took Nintendo from a playing card company to a household name in video games. During his tenure as President of the company (and the first person to be so outside of the Yamauchi family), Iwata continued the legacy and oversaw the development and overwhelming success of the Nintendo DS line of handheld consoles as well as the Nintendo Wii. That's not to say that during his time we didn't also see the underperforming GameCube and Wii U, but through all of the company's ups and downs, Iwata was still an icon and loved by the industry and fans.

Part of this can probably be attributed to his start as a developer, working on games like EarthBound and the Kirby games while at HAL Laboratory and ending up creating Super Smash Bros for Nintendo. It was that technical background that helped him to jump Nintendo from the Game Boy to the DS line of handheld devices, as well as the Wii on the home console side. For those keeping score, the Wii was one of the first consoles to offer games played using motion control as opposed to a traditional controller or gamepad, beating (and/or inspiring) Xbox's Kinect and PlayStation's PS Move by 3-4 years. It's not overly common to see someone who started as a programmer end up as a CEO, but for Iwata it was one of the drivers for his success.

He always strived to keep the spirit and original core of Nintendo alive - to make games for everyone from children to adults. Something we could easily see by games like Brain Age for the DS that target folks outside of the stereotypical gamer demographic. He also unabashedly was a developer and kid that loved games at heart, and loved the fans that loved him back. We saw that in things like Iwata Asks, where he gave gamers and fans behind the scenes looks at games by interviewing developers himself on franchises like Zelda, Mario and other games across Nintendo platforms. And here's another bit from his 2005 keynote at GDC that speaks to the kind of leader he was:

If you don't mind, I will finish today with memories from one more franchise in my development career - Super Smash Bros. At the time it was being developed for Nintendo GameCube, I was already working full time for Nintendo. But my heart told me I was still a developer. So, as president, I assigned myself to HAL to rejoin the team finishing the game. Once again, I was living on the developer's diet of chips, pizza and rice balls, and working through the night.

For all he's done for Nintendo, for all he's done for the gaming industry, and for all he's done for the fans - Thank You, Mr. Iwata.

Death, Taxes, and Diablo III

As I have spent the majority of my 30 years in the Philadelphia area, it’s only appropriate that I start with some words from the greatest Philadelphian in history, Benjamin Franklin.  He did a lot of great things, mainly illustrating his well-versedness in badassery, but it was something he said that was relevant to today’s topic.  While speaking of the Constitution in a letter to Jean-Baptiste Leroy (not of Jenkins lineage), he said: “in this world nothing can be said to be certain, except death and taxes.”  It became a commonly used phrase over the next 200+ years, as the validity of the statement really has withstood the test of time.  And now, in 2012, it can also be applied in our digital age. Surprisingly not even Blizzard’s Diablo universe can escape.

Anyone who plays Diablo III, or actually any player that has played any game in the Diablo series can attest to the first half of ol’ Ben’s epithet.  Death is certain.  That’s become more true with every iteration of the game.  With always-on single player mode, even more so.  In Hardcore mode, even more.  But what they may not realize is that the other half of the saying also holds in the realm of Sanctuary.  Yes that’s right, taxes.

Let me jump back to World of Warcraft for a second before I continue for those of you that aren’t familiar.  In that game, Blizzard had implemented an auction house system to buy and sell items in game between users on the same server.  Someone selling an item could do so by holding an auction or setting an outright buyout price.  This concept spilled over into the world of Diablo III, where the same kind of auction house has been put in place.  The difference is that in WoW all of the transactions (well, legal ones) were strictly based on gold, the in-game currency.  Diablo 3 has a somewhat evolved version of that concept with two auction houses – one for in-game gold transactions, and one for real money.  Yes that’s right, you can buy and sell in-game items with other players for real cash monies – cold hard American greenbacks.   And it’s really changed how the game works.

So this may be a method to cut illegal real money trade for digital goods, but let’s be real, there’s plenty of money to be made in making illegal trade both legal and regulated.  It works as a continuous revenue stream for Blizzard too, since Diablo III’s not subscription based like WoW. Oh yes, they get their cut.

The real money auction house wasn’t available to players until June 12^th, but when it did launch it kind of got my gears turning.  The cost structure is pretty basic – the seller sells, the buyer buys, and Blizzard gets up to 15% of the transaction fee for brokering the deal.  So if one was so inclined, they could turn the game into a personal revenue stream to make a little extra money on the side, after Blizzard takes their fee.  Doing it enough and doing it well could in theory fetch a player some good dough, as players with disposable income clamor for shortcuts to legendary loots.  So once you get to that place, where you’re making some profit from the game, you might have to start thinking about taxes.  No, not the 15% Blizzard cut or the 6% most of you paid when you purchased the game.  I’m talking about income tax that you could owe to the IRS off of your Diablo III profits.

Taxes are a tricky thing, especially in the digital age.  What you owe doesn’t just come from a W-2 or a 1099 anymore.  A lot of stuff people buy is online, untaxed, meaning in most places you have to declare those purchases on your tax returns and pay what’s called a “use tax.”  And sometimes people make money off of other things like hobbies and side businesses.  There have been a lot of arguments on the battle.net and Blizzard forums about this exact topic with respect to the real money auction house – so  yes or no, are your real money auction house earnings taxable?

Tushar’s short answer: YES.

Tushar’s long answer: Anecdotally, yes.  I’m not a tax professional and for any concerns you should contact one should you be living real money auction house fabulous.  Then again I don’t think I really need to be a tax pro for this, because as it turns out, I can read English.

You see unfortunately, reading the terms of use and other end-user agreements isn’t something the average user feels it’s necessary to do, even when there’s money concerned.  So first some advice – if you are one of those people, start reading these things.  Second, it’s laid out plain as day in section 10 of the Diablo III Auction House Terms of Use (that all of you have already agreed to if you’re using it):

10. TAXES. You are responsible for taxes incurred when you use the Auction Houses. All auctions are deemed to occur in the United States of America and are subject to all applicable state and federal tax laws and regulations. Proceeds from auction sales may be considered income for tax purposes. You should consult with a tax specialist to determine your tax liability for these transactions.

There you go kids.  “Proceeds from auction sales may be considered income for tax purposes.”  But now here’s the fun part – you’re the one that has to report it, as folks that make money off of services like eBay do.  Blizzard's not your employer in this scenario.  You made money selling your digital wares to another player, and they were just the agent.  I’m pretty sure you’re not going to be getting a W-2 in the mail from them before tax time.  Chances are if you’re not the type of person that reports online purchases for use tax, you’re not going to be reporting this either, and you’ll probably be ok because you don’t make a lot of money from it.  If you are in fact making a few grand on it, kudos to you and your keen understanding of game economics.

But it gets even more interesting.  Let's consider for a second the stock market.  I buy a $100 issue and tomorrow it increases in value to $110.  Technically I made $10, but I never realized the profit.  It's not real cash in my pocket.  So I don't pay tax on that $10 I made until I sell the stock to realize the profit, and it becomes real cash in my pocket.  Blizzard has a digital wallet system that seems to kind of work the same way and in my opinion a parallel could be drawn.  Technically what's in your Blizzard wallet isn't "real" cash, and may be exempt from taxation.  If you're working through PayPal on the other hand, I believe they're now required by the IRS to report your PayPal income as a third party settlement organization. 

Bottom Line?  If you make income - any income, it's reportable to the IRS.  Not always taxable, but reportable.  There's no explicitly listed  minimum value that makes income reportable.  In this particular case, in my opinion, I would say anything below the cost of the game wouldn't be considered income.  So if you made a few bucks on the real money auction house, just report it.  It'll make your head hurt far less, minimize your tax risk, however little it may be, and you still come out in the black.

Just keep your receipts, kids.

93. Remembering Steve Jobs (1955-2011)

[Article first published as Remembering Steve Jobs, 1955-2011 on Blogcritics.]

In my scribblings over the years, I’ve occasionally taken the pen to Apple on certain topics, namely mobile wars and the iPhone.  Make no mistake, though I do from time to time disagree with Apple’s tactics and philosophies, you’ll notice that I never once said that they made devices that were ever less than excellent.  And that’s no accident.

Yesterday Steve Jobs, one of the founders and former CEO of Apple passed away after a long battle with pancreatic cancer.  With his notorious micromanaging and perfectionist personality, his name was synonymous with “Apple,” as people were unable to see the iconic fruit logo without seeing him.  It was after all his vision and strategies that put the company on the map as one of the leaders in technology and innovation, and changed the way we live our lives.

Throughout his life, Mr. Jobs’ philosophy was one of achieving one’s dreams – regardless of how ridiculous or far-reaching they seemed at the time.  The kind of ambitions that would invite accusations of insanity if it were any one of us.  But fortunately for him, and us, he had the tenacity, need for perfection, outright skill and passion for tech and design to make them all happen.  Even as a youth growing up in Cupertino, California, this held true.  As a teenager, he had the nerve to call William Hewlett (yes, of Hewlett-Packard) and ask him for computer chips and parts he wanted to use for a school project.  Hewlett was convinced, and ended up delivering with the parts Jobs needed, and was impressed enough to offer him a summer job along with them.

That summer job at HP led to a job at Atari in its formative stages, as well as a membership in the Homebrew Computer Club in the late 1970’s.  This was a collection of computer hobbyists, engineers and other folks who saw infinite promise in the realm of personal computing.  This club had members the likes of George Morrow, Jerry Lawson, and of course, Steve Wozniak.  The Woz designed a few computer systems just for fun, but Jobs was the one that recognized the potential of his projects – not only for business, but for something that could be used by the masses, not just nerds tinkering with chips.  After calling all of Wozniak’s family and friends to help, shall we say, he was guided to the right decision, Wozniak ended up leaving HP even though his tinkering was originally just for fun, and Apple Computer was born.  Par for the course – Jobs had gotten his way, as he always did, and always would.

Even back then he had a near-supernatural ability to see not only what was coming next, but more specifically what was important.  Shown again later in his career in an interview with Playboy magazine in 1985, he said that “The most compelling reason for most people to buy a computer for the home will be to link it to a nationwide communications network.  We're just in the beginning stages of what will be a truly remarkable breakthrough for most people--as remarkable as the telephone.”  1985.  Back when a gigabyte was a thing unheard of, the internet didn’t exactly exist, and modem speeds were measured in baud and heard in decibels.

Then came the Apple II, and eventually development of the Lisa, where his time at Xerox PARC would help him drive a system using graphical windows, “files” and “folders,” and a mouse-controlled interface.  As he found the Lisa project team wasn’t ready for that or his demanding management style, he moved over to the Macintosh team.  Energized by his passion and style, they took those technology principles and ran with them.  As Jobs told Steven Levy in 1983, while the Lisa team did want to make something great, “the Mac people want to do something insanely great.”  So came the Mac personal computer in 1984, heralded, ironically, by their “1984” Super Bowl Ad.  But it didn’t sell as well as they anticipated, and Jobs brought in Pepsi’s John Sculley to run the show.  Sculley almost immediately fired Jobs from his own company.

In retrospect, getting fired might have been the best thing that could happen to Jobs.  It allowed him to begin working with George Lucas at a small computer graphics studio called Pixar, leading them to develop successful animated films, ultimately selling to Disney for a shade over $7 billion.  Returning to Apple after Pixar was sold, Jobs took the helm at Apple again with a slightly different philosophy.  Jobs believed in the merging of art and science to create products that stood out from the rest that consumers craved.  With this philosophy he started what would be over a decade of innovative design for consumer goods for Apple, starting with the iPod in 2001, the iPhone in 2007, and finally the iPad in 2010.  Of course that is to say nothing of the iTunes service and their massive App Store.  Apple has since been one of the top companies in personal computing, and has the same influence, if not more, than IBM and Microsoft on the way we live and do business today.

His fans regard him as nothing short of a God – as a central figure in their lives whom they’ve never even met.  As irritating as it can get sometimes as I hang out in the Android camp, it’s a testament to the mark Jobs has left on the world – creating products that people – not just tech nerds but civilians – wanted, no matter what… even if they might not have known they wanted it to begin with.  He created the market for modern portable music devices.  He created the smartphone market.  And most recently, the American tablet craze is all thanks to him.  His works not only affected his fans, but fostered fierce competition and helped spur innovation from other companies, in the hopes of matching or beating his product offerings.  Touch technology might not have been as ubiquitous as it is today without Apple’s iPhone fueling competition in mobile communications. 

No one was really trying to make ultra light notebooks until Apple’s MacBook Pro and MacBook Air.  Countless technologies exist that may not have been invented by Apple, but have the hand of Jobs somewhere in the initial inspiration for those designs.  And that’s not even getting into entertainment and everything that evolved from Pixar and movies like Toy Story.  He helped build the computing industry and would be a face on the Mt. Rushmore of technology if such a thing ever existed, along with faces like Bill Gates and Tim Berners-Lee.  As personal computing evolved, so did business and enterprise IT.  And on a personal level, the industry he helped create along with other tech giants gave me a hobby as well as a career.  And all along the way we were all inspired, even if only from time to time, to “think different.”

So for everything, thanks Steve.