Why you should care
From Nintendo to Namco, the Japanese mob had its fingers in the video game industry from the very start.
One November night in 1990, in Kyoto, a convoy of trucks was loaded under cover of darkness with cargo so precious it would go on to influence an entire generation. The trucks were carefully dispatched one by one throughout the night in an elaborate effort code-named Operation Midnight Shipping. The cargo’s manufacturer had to operate in secrecy: He had caught wind of Japanese mob members planning to hijack the trucks and sell the cargo to favored customers.
The coveted product? Thousands of boxes of the hotly anticipated Super Nintendo.
Nintendo would not exist, period, without gambling parlors.
Jeff Ryan, author of Super Mario: How Nintendo Conquered America
The packages all reached their appointed destinations. But the Japanese mob, or yakuza, had been deeply connected with the country’s gaming industry since before video games even existed.
Card games were all the rage in Japan’s Meiji era after the government began relaxing laws prohibiting them. In 1889, Fusajiro Yamauchi, founder of Nintendo Koppai, began his humble business manufacturing hanafuda: tiny playing cards handcrafted from mulberry tree bark and painted with intricate designs. Hanafuda remained the company’s core business until the 1960s, when Nintendo pivoted toward other ventures, including taxis and love hotels. Eventually, toys and electronics became the company’s dominant focus, leading to its current role as a video game powerhouse.
Yakuza became frequent Nintendo Koppai customers due to the high turnover of hanafuda cards in casinos. “Nintendo would not exist, period, without gambling parlors,” says Jeff Ryan, author of Super Mario: How Nintendo Conquered America. “Casinos might destroy a deck of cards after every hand played, to ensure fairness, so there was always a market [for them].”
In the 1970s, arcade machines exploded in American culture and soon became a lucrative worldwide business, as then juggernaut Atari had huge success with arcade hits like Pong and Breakout. To grow its business in an increasingly tech-driven market, Atari entered a distribution agreement with Namco to ship Breakout cabinets to Japan. But Namco’s founder, Masaya Nakamura, soon noticed an influx of counterfeit machines flooding the market. Namco’s deal with Atari meant the Japanese company had to wait extended periods between shipments from the U.S., and thus was able to keep a close eye on merchandise. So where were these counterfeit cabinets coming from?
The yakuza, widely known for setting its sights on popular forms of entertainment to turn a profit, had managed to seize and reverse-engineer some of the machines. Much like today, tech-savvy tinkerers could replicate hardware with know-how, the right components and a soldering iron. Those skills were valuable to organized crime groups hoping to profit off the new technology.
“It’s not like you had tattoo-covered men with permed hair, missing fingers and dark glasses fitting the boards together and sliding the screens into place,” says Steven Kent, author of The Ultimate History of Video Games. “You had normal factory workers doing the building, but just as it is with fake Rolex watches, the product is actually illegal.”
Nakamura, frustrated his company couldn’t legally manufacture its own Breakout cabinets, instructed his staff to monitor factories pumping out the counterfeit machines. Eventually, Nakamura made contact with the leader of the racket and requested he cease production. Instead, the yakuza leader made a counteroffer: The criminal gang manufacturing counterfeits would put the squeeze on Namco’s competitors. Fearing that accepting the deal would lead to a takeover of his company and potentially the whole Japanese industry, Nakamura refused the offer and backed down. His tangle with the Japanese mafia eventually inspired Namco to manufacture its own arcade hits, such as the iconic Pac-Man.
Namco wasn’t the only company to run into the yakuza; various publications and interviews allude to the influence of criminal gangs — but, as with all mafia narratives, such encounters are spoken of mostly in whispers.
And Japan wasn’t the only country to have issues with gangs and entertainment industries. In the U.S., the coin-op business had its own legal troubles. Regarded as an excuse for gambling, pinball was effectively outlawed in New York in 1942. Chicago and Los Angeles followed suit — Chicago in particular was struggling to shake a mafioso image, and pinball machines weren’t helping. It took 30 years and the inclusion of the flipper (the mechanical arms that propel the ball when buttons are pressed) to demonstrate that pinball is a game of skill, not luck, unlike typical gambling machines. In 1974, the California Supreme Court ruled in favor of pinball being classified as a game of skill, ending its prohibition; other outlawed districts followed suit.
“The big movement in the U.S., at least the accusation, was that the mob operated arcades because they were a sensational way to launder money,” says Kent. “Think about it. They were all-cash operations in which customers never asked for receipts.”
Without the yakuza muscling in on innovative markets and taking advantage of gambling trends, it would be impossible to have the video game industry that exists today, in some cases existentially: One of Sega’s longest-running and best-selling series, Yakuza, is itself a story of the mafia — though the characters mostly just wander Tokyo and beat up dishonorable thugs rather than strong-arming the gaming industry. Perhaps that’ll be in the sequel.