How I Built This with Guy Raz - The Tetris Company: Henk Rogers

Episode Date: July 31, 2023

Tetris is one of the most popular video games of all time, and Henk Rogers helped make it happen. He first discovered the game at a convention in 1988, and immediately saw how elegant and addictive it was. As a software developer based in Japan, Henk set out to obtain selected publishing rights, but waded into a tangle of red tape that stretched from Japan to the U.S. to the Soviet Union. He eventually ventured behind the Iron Curtain to bluster his way into the obscure government office that managed Tetris. While in Moscow, Henk also met the game’s inventor, Alexey Pajitnov, and the two of them hit it off. After much legal wrangling across many time zones, Henk and Alexey won the worldwide rights to the game; and today, Tetris has sold over 500 million copies.This episode was produced by Sam Paulson, with music by Ramtin Arablouei and Sam Paulson.Edited by Neva Grant, with research help from Katherine Sypher.You can follow HIBT on Twitter & Instagram, and email us at [e-mail] Privacy Policy at https://art19.com/privacy and California Privacy Notice at https://art19.com/privacy#do-not-sell-my-info.

This show is in partnership with Airbnb. This past summer I took my family to Vienna, and it was incredible. We spent our days wandering the old streets, stopping for coffee and pastries, visiting museums, and just soaking up the history of one of the most beautiful cities in the world. And one of the things that made the trip so special was the home we booked on Airbnb. It had tall windows, beautiful old details, and plenty of space for all of us. And being in that home on Airbnb, right in the middle of Vienna, walking distance from so much of the city made it feel less like a visit and more like we were actually living there. Plus, taking a trip is the perfect time to host your space on Airbnb.

Your place, with all of its personal touches and its amazing location, could make someone else's vacation even better. Your home might be worth more than you think. Find out how much at Airbnb.ca.com slash host. Hey, you know, we hear a lot of stories on how I built this about facing hurdles and overcoming obstacles. I recently talked about this with actor Billy Porter. He's won an Emmy, a Tony, and a Grammy, and is a red carpet icon. But he shared some pretty candid insights about spending nearly a decade in obscurity because he refused to be typecast and pigeonholed into the same roles again and again.

You should definitely check out my interview with Billy Porter on my other podcast. It's called The Great Creators. Just search for The Great Creators with Guy Raz wherever you listen to podcasts or go to the great creators.com. And now on to today's show. Come January, it wasn't moving. Tetris wasn't moving. And what happens when they have a product in January, like after Christmas, the distributors start dumping the rest of their inventory. They have to get rid of it because if it's not seen,

selling. It's never going to sell. Which means cut price, cut rate price. Yeah. And, oh, my goodness, I had my sales guys call every distributor to hang on to your inventory. This is not like other games. It is going to take off much more slowly than other games. But once it takes off, it's going to be, you know, it's going to be a hit. Welcome to How I Built This, a show about innovators, entrepreneurs, ideal.

and the stories behind the movements they built. I'm Guy Raz, and on the show today, how Hank Rogers got hooked on Tetris and risk time, money, and a trip behind the iron curtain to spread the game around the world. You can learn a lot by playing Tetris, things like patience or strategy, even risk-taking and perseverance.

You can also learn a lot by listening to how Tetris came to be, because this is a story very much about patience, strategy, risk-taking, and perseverance. When Hank Rogers first encountered this obscure Russian video game at a convention back in 1988, he was instantly hooked, and he believed that others would be hooked as well. But a lot of obstacles stood in Hank's way. There were Soviet bureaucrats, for starters. There were powerful companies like Atari claiming rights to the game. game and executives at Nintendo who weren't convinced that Tetris was a gamble worth taking.

This story is so full of intrigue, rivalries, and backstabbing that Hollywood made a fictionalized film based on Hank's life. That movie, by the way, is a lot of fun, but also partly made up. This version of the story that you're about to hear is not. It's the story of how Hank Rogers made Tetris one of the most popular video games of all time, and how he and its original creator, Alexei Pajitnov, came to own it. Hank was born in the Netherlands, but his family moved to the U.S. when he was a kid, first to New York and eventually to Hawaii.

Hank's dad worked in the jewelry business and went on to move the family to Japan, but Hank stayed back in Hawaii to go to college. I always say that I majored in computer science and I minored in Dungeons and Dragons. We had a gaming club, and so what I did on the computer when I wasn't doing homework assignments

is make little routines that would be like aids to the dungeon master so we didn't have to roll all those dice all the time because rolling dice is something a computer is really good at. And I had to store my programs on paper tape. And to be clear, these were text-based games. These were not, there were no graphics games. Well, so the computer didn't have any graphics.

So the information that I would give to the dungeon master is just reams of paper. Yeah. And basically I took all the computer classes I could take. And at the end of, you know, like my third year, they called me in and said, Mr. Rogers. So what's going on? And I said, what do you mean? He says, well, you haven't taken any of your core requirements.

And I said, well, I've already been to high school. So this is my New York attitude coming through. And they said, well, if you're not going to take your core requirements, you're not going to graduate. And I said, there must be some mistake. I'm not here to graduate. I'm here to get an education. And I think I already got it. Thank you.

So you don't finish university, but you end up moving to Japan to, if you're, if you're, followed a girl who became your wife. And she was, is Japanese? Yes. And I guess when you got there, you ended up joining your dad, working with your dad in the gem trade. For six years.

I was mostly on the, I wasn't so much on the sales or any of that. I was on the figuring out new techniques for cutting new kinds of gem material. You know, that's sort of I'm on the technical, the mechanical side. of that business.

How did his business do in Japan at the time? You know, like he went rags to riches so many times. So, yeah, he was good at it. But he never did business properly. In other words, he never had an accountant. He never paid taxes. It was all just in his head. He would always just hand out money when he had money

and not when he didn't. Yeah. He always did things by the seat of his pants, so he didn't understand how to have a, you know, how can I say, a company with people that actually do the things that you need to get done without you. Yeah. That's, you know, that's, okay, it's a first difference between my father and myself.

I've got companies running all over the place. Even my first business, I had other people doing stuff so that the business would run even though I wasn't there. at that moment. So you work with your dad for around six years. And I guess around 1982, you decide to leave and to start your own business. And it's related to the personal computer boom that's starting to happen, particularly in developed countries like the U.S. and Japan.

It's the early 80s. You've got the PCs coming to market, and it's going to change everything. you decide to start essentially a software company that would make, would create like role-playing games for PCs? The Japanese version of a PC, yes. Now, I didn't have a publishing company, and I didn't know how to publish or how to do any of that or how to do business in Japan.

I never studied business. And so I went to SoftBank. That was the, you know, SoftBank is this huge multi-trial. billion dollar company today but at that time all they were was a little company doing distribution for computer software to computer shops that's it anyway I said can you introduce me to a publisher and they said you know what you really don't need a publisher you know just get your wife to answer the phone and you can publish yourself you know we'll introduce you to a company they can actually do the duplication of the cassettes and

the discs whatever And you can pay them after we pay you. I said, wow, that sounds great. Okay. Sounds so simple. But, of course, it wasn't so simple. And I didn't speak read or write Japanese at the time. So, yeah, that was pretty interesting experience,

starting a company without knowing anything. Yeah. So you, I guess, the first sort of role-playing game that you guys launched was called the Black Onyx. Yeah. So the Black Onyx was the first role-playing game in Japan. And this is in the days when

one person could write a game all by themselves. Do all the graphics. Do everything. And you weren't moving around a person. You were typing text into the computer. No, no, no, no, no, no, no. No, I actually had a pseudo 3D that you walked through. Oh, okay, all right.

So you had like a controller, used like a, was there a mouse? No, you used the 10 key. Use the 10 key. There was no mice yet. It's before mice. No, you use the 10 key to forward, turn left, turn right, move forward, one square at a time. I mean, the game became quite successful, but what do that mean for your small business, Bulletproof Software? I mean, I know it became like a big game in Japan, but did that mean that you guys were like rolling in cash or not quite?

Well, let me backtrack, because this is an interesting part of the story. So I went, SoftBank had said they would buy 3,000 copies for Christmas. And when it came close to Christmas, they realized that nobody understood what a role-playing game was. And so, and the little advertising that I did was just completely ineffective. So they rolled back their initial order to 600, and I thought, oh, we're dead in the water. Come January, I call my guys together. By this time, I had some testers. and some office people say,

like, how do people in Japan find out about computer games? And so, well, they read about them in the magazine. So what I did was I got one of my guys to call all the magazines and make appointments, and we actually went to visit them, and I would show them how to play Black Onyx and leave them with the game. And every single magazine that we visited had rave reviews like a month later,

and then saw it. Offbank came back and we had for April we had 10,000 units and May 10,000 units. So we were like killing it. We were a number one game in Japan in 1984. Yeah. I guess writing your own game is one thing, but really basically you want to be a game publisher. And so you start to look for other existing games that you could license or bring to Japan. I had to make a decision at the end of year two, whether I was going to make another game.

or whether I was going to focus on running the company. And, you know, my wife had been a computer widow for two years, meaning I was, like, on the computer day and night for two years, pretty much. And I said, you know, this isn't something that I can do for the rest of my life. So I started traveling around the world looking for games to bring to Japan. Because at the time, movies were coming from other countries, and music was coming from other countries. So I can see that all this culture was being imported from a lot of from the U.S.

And, well, games shouldn't be any different. And I guess one of the games that you played was Go, the ancient Chinese game of logic, I guess you could describe it. And I read that you thought that this was a game that you could maybe publish in Japan. And I guess you had this idea of maybe working with Nintendo. Tell me about how that came about. why you decided to take it to Nintendo. Yeah, so my wife had read an article in a magazine saying that Mr. Yamauichi plays Go. And this was the guy who was the head of Nintendo.

The head of Nintendo. So I sent him a fax. Mr. Yamuchi, my name is Hank Rogers. I can make a Go game for your Nintendo machine. I'm leaving on Saturday. I would like to see you before I leave. I didn't tell him the part about I live in Japan. Yeah.

That was going to be back next week. On Tuesday, I sent the facts. Wednesday, his assistant sends me a fax. Mr. Yamichi will meet you tomorrow. Wow. So he's a captain of industry in Japan. I mean, he's the Ayatola of the computer game business. I mean, this guy is iron fist.

Yeah. You know, nobody gets to see him. And I get to see him in two days. It's like, wow, that's amazing. So I come into the office. and he's sitting across from me, and Yamuichi says, I can't give you any programmers.

I said, I don't need programmers. I just need money. And he says, how much? And I said, gosh, I mean, I'm thinking of what's the biggest number I can think of right now. And I said, $300,000. And he said, he reached across the table and said, deal. That was it.

It's like, wow, holy smokes. That was so fast. And you didn't need a license because Go was not owned by anybody. It was an ancient game. Yeah. So you were essentially going to program, code the game for a fee, for $300,000, and then Nintendo would turn it into a game, and that was it. That was the deal.

That was the deal. I contacted the programmer in England, made a deal with him, convince him to come to Japan. We spent next nine months, you know, creating all the graphics, and we had little ninjas jumping around. The stones were floating, and when the stone landed, it would fall down on its shadow so that you... Oh, it was just great graphically. And it was a great game.

Yeah. So, nine months later, I'm back in the room with Yamauchi, and he wants to play. And so he's got the machine set up, and he's fumbling with the controller. And I realize this guy's never played... any of the games on his machine. Yeah. He hasn't, he just run the company. He hasn't, like, played any of those games. So, okay, fine.

And he hands a controller over to the guy sitting next to him, and he points to where he wants to play. I want to go there, I want to go there, I want to go there. After one game, after one game, Mr. Yamichi says, it's too weak for Nintendo. I'm like, flabbergasted. I mean, it's a miracle that this thing can play go at all. And I'm fumbling for words.

I said, Mr. Yamuchi, it's an 8-bit computer. There's never going to be a stronger co-algo-agrador than this. He said, it's too weak for Nintendo. Like, which part didn't you understand? So, again, I had to think fast. I said, okay, Mr. Yamuchi, maybe it's not strong enough for Nintendo, but it's strong enough for my company. Let me publish it.

And he goes, what about my money? That's $300,000. I said, okay, I'll pay you a dollar per unit until you get your money back. Deal. And so that's how it became an Nintendo publisher. So essentially, Mr. Yamaiuchi from Nintendo is like, hey, we don't want this game. We don't want to make it. But if you want to make it on your own and sell it to people and they can use it on the Nintendo system, that's fine.

That's your decision. Yeah, he just didn't want to put Nintendo. name on the game. Yeah, I got you. So basically, you do this deal where you're going to pay him back a dollar for every cartridge you sell until they get their $300,000 back and had to do. We sold $150,000 copies. All right, so not bad. Not bad. He didn't get his money back. But it's all right. But you got your fee? You got your fee, right? And I got my fingers dirty in the Nintendo business. And I guess more important. Importantly, you established a relationship with Nintendo.

I mean, you had now an in to the top dog in Nintendo. Oh, yeah. And then whenever I met him after that, I always set up the meeting on a day when I'm the last meeting, his last meeting. And then we'd play Go for the rest of the day. I had all this one-on-one time with Yama Ochi, which nobody had. That's what I'm wondering. Why would he give you some unknown 30-year-old the time of day? and the guy's running Nintendo.

I was a go player. I'm surprised that his underlings didn't intervene and prevent you from, because you'd probably have to go through a secretary and make an appointment. And I'm surprised they weren't like, no, this guy cannot meet Mr. Yamuchi. Well, they did not have any say in what Mr. Yamuchi did or didn't do. That's a good contact, man. If he ever found out that one of his underlings had canceled a meeting, that person would be fired.

Yeah. So this is going to be a repression because eventually Nintendo is going to come back into this story. But you continue to pursue. You've got you're running this company and you are running a publishing company. You're trying to, you know, you're trying to find a hit. And from a revenue standpoint, how is your business doing overall? Was it very successful, moderately successful, not successful? No, it was.

it was successful enough. You know, I was publishing, I published Star Wars. I published Electronic Arts two of their first four games. I was licensing games from all over the planet and publishing them in Japan. And probably, I mean, because the video game industry was so new, there was probably, probably a lot of these companies were eager to get it to the Japanese market. And you, right, I mean, you sort of had one foot in Japan, one foot in the U.S., you could go back and forth.

Yeah, so the nice thing about me and publishing is that I got to make the decision. So I could go to a consumer electronic show, look at a game, I'll really like this game, okay, let's make a deal. I didn't have to send it back to Japan and have a bunch of managers sign off. Yes, I agree. Yes, I agree. Yes, I agree. I could make a decision. So I was always faster than everybody else.

And you were going to these trade shows in the U.S. constantly looking for new games to bring back to Japan to license. And so you go to the Consumer Electronics Show, which still happens in Las Vegas every year. You're there in 1988. And you come across Tetris, which you'd never seen before. Exactly. I mean, there was. And it just seemed out of place.

You know, every other game was like graphics with little characters running around and bullets and God knows what. what. And here was a game that was just totally puzzle. Just shapes. Just geometric shapes. And that was very interesting to me. You know, like if you look at Go, it's just black and white stones. Yeah. It's the simplest looking game, and yet it's the deepest, most interesting game. So the fact that this game was like little squares didn't turn me off.

I was just interested in, I just got hooked on it right there on the spot. It's interesting because I'm thinking back in 1988 and I was probably playing, I don't know, like Super Mario Brothers and Mike Tyson's punchout and, you know, Zelda, the legend of Zelda. Yeah. There were some pretty sophisticated games and you come across Tetris and you're like, wow, this is amazing. I mean, it's great because it seems like counterintuitive that you would go to the flashy cool games with characters. Yeah, you would think. But no, that's not how my mind works, obviously. I got hooked on the game and I said, well, this is a great game.

And then I took it back to Japan, you know, samples. And sure enough, everybody else in the company got hooked on it too. So it wasn't just me. When we come back in just a moment, Hank brings Tetris to Japan, gets a $2 million loan to keep production going, and then discovers that even though he thinks he has, the rights to the game, he really doesn't. Stay with us. I'm Guy Raz and you're listening to How I Built This. One more thing before we get back to the show, please make sure to click the

follow button on your podcast app so you never miss a new episode of the show. It's usually just at the top of the app. And it's totally free. Hey, welcome back to How I Built This. I'm Guy Raz. So it's 1988 and Hank is hooked on Tetris and trying to find out everything he can about it. Who owns it? Who created it? And it turns out the inventor is this Russian computer guy at the Academy of Sciences in what was then the Soviet Union. Yeah, so Alexei Pajetnov is his name. And he's a mathematician working mostly on voice recognition. And he needed to move to a new machine and he was assigned to learn how do you program on that new machine. And And he decided to make the pentamino puzzle.

You get a little rectangle and you have to put the pieces into the rectangle and the last piece never fits. That's the pentamino puzzle. And he realized that it was so slow that he started thinking about, like, how can I make this faster? And then one of the things that he made is the routine to make the piece rotate. And the rotation was so fast that it started making him think, that he should make a real-time game.

Huh. And, well, he just took one of the blocks off the pentomino puzzle and made them into tetraminos. And, you know, well, that's basically Tetris, you know, the falling blocks. And this game, I guess, kind of was like wildfire in the Soviet Union. Like office workers across the Soviet Union were, like, copying this game, like from floppy disk to floppy disk and playing it. Yes.

Basically, they made the PC version. And that's what went viral. And it went viral to the point where they were losing productivity. I mean, it's like... Everybody in the offices would play with playing Tetris. Everywhere. Everywhere. And it's like, yeah, you could say this could have been an insidious thing done by the West

to stop people working in the Soviet Union. Ah, it was like a Western conspiracy to get people to separate. It could easily have been. Right. But, you know. And I guess even like already in the mid-80s, people from outside the Soviet Union, Westerners, somehow discovered this game. It spread behind the iron curtain. Hmm.

All right. So meanwhile, I guess you had learned that there were two different companies that sort of seemed to have the rights to Tetris. One was in England. It was called MirroSoft. And the other was in the U.S. called Spectrum Holobite. But I guess you thought that maybe you could get the license for Japan. Is that what you were thinking? Yeah, I was thinking, well, first of all, I said, well, I know Mirrosoft because I've been to England also looking for games, so I knew them.

Then I got in contact with Mirrosoft, and they said, you know, Gilman Louie's coming to Japan. He's going to deal the rights to Tetris. So talk to him. Fine. I knew Gilman Louie. So this guy was a representative from? He was running Spectrum Holobite. and they were a sister company with Mirrosoft.

So he was coming to Japan to peddle this offer, to see who would be the highest bidder. Yes. And I basically made him an offer for personal computers, for console and for arcade. Those are all the platforms I could think of in Japan. Yeah. For the rights to get Tetris.

Yes. So, yeah, we had a deal. And two weeks later, he calls me, and he says, I'm really sorry. but the deal that we did couldn't have been made because meanwhile Mirrosoft has given all those rights to Atari games. It's like, what? And, you know, it was ridiculous.

It was this, like, they didn't need the Japanese rights for anything because they didn't have any business in Japan. And, boy, are you kidding me, I was livid. We had made a deal. You know, when you shake a deal, you know, it's like, this is a lawsuit. I didn't threaten him with the lawsuit. I said, we made a deal, Gilman.

And he, you know, sheepishly came back. He says, okay, I'll see what I can do. And what he could do was he could get me the personal computer rights back. So I had personal computers. You'd only have the rights to make a game in Japan for personal computers. So floppy disk, basically. Yes. But you wouldn't have the console rights or the arcade game rights.

Right. Okay, so that was a consolation prize. Were you happy with that? No. I won a Nintendo. You wanted the rights to put this on Nintendo because at that point Nintendo was really kind of a dominant console. Yes. It was the way to make money.

Right. It's, you know, like personal computers, you can copy that stuff. Right. So there's only so much you can sell. But cartridges, you can't copy them. Yeah. If somebody wants to play a Nintendo. game, they have to buy a Nintendo game.

But you did not have those rights. You only have the PC rights. Right. All right. All right. So I guess you decided to reach out to Atari because you've been told that they had the rights for Tetris on the console and you want to buy those rights from, presumably from them, right?

I mean, to publish the game in Japan. Oh, yeah. Then I started communicating directly with Atari games and said, look, I want to license Tetris for the Japanese market. And I said to my team in Japan I'm going to the States I'm not coming back until I have the Tetris rights

And so I went to San Jose I met with Nakajima The president of Atari Games And made my pitch Why we should be the one To publish Tetris in Japan And then It went radio silent

I was there for 10 days And then I had my second meeting I had dinner with, we had sushi, and he agreed. He agreed to give you the rights to publish Tetris for consoles in Japan. For Nintendo. So it was very, very interesting. I think he must have needed money at this point. I think I made the deal for $300,000.

It was a regular deal. And the deal enabled you to have the license to sell the cartridges for the Nintendo system. Okay. Yes. And that was in like 88. Yeah, well, it was like probably September-ish. It takes two months to create the cartridges. So, you know, I was trying to make it in time for Christmas.

How did you finance making the cartridges? Because you had to pay Nintendo to manufacture them. In the beginning, the orders weren't that big. The original order was 40,000 units, which is not enough. You need 200,000 units in order to get a second order. So that 40,000 years, and that was another reason for me to meet Yamoichi, the head of Nintendo. So I miss Mr. Yamoichi. I don't know whether it's my sales or my marketing that sucks,

but I think I may have one of the greatest computer games of all time, and my salespeople could only get 40,000 units. And then he calls in Miyamoto, the creator of Mario, and says, Miyamoto, is this a great game? And Miyamoto says, yes. and Yamauchi is how do you know? This is because your accountants, your secretaries, all of your people are playing this game at lunch and after work

when they don't have to play games. And so Yamauchi calls in Imaniishi, who's the number two at Nintendo's. I want you to pull distribution and make them order more. That's like, wow, that's some serious action there. Wow. And that was simply because of his trusted lieutenant, approved the game, liked the game. Well, there's that, and he liked me, I guess.

I mean, why would he do something like that? You were his go-buddy. Yeah, it was his go-buddy. Anyway, they called around and we got another $30,000, so it was like $70,000. It wasn't enough. Still wasn't enough. But anyway, we published that Christmas, $70,000 copies of TetraZan Nintendo. All right, so how did it do?

At first, it was miserable because you can't look at the box and understand what Tetris is. The only way that you can know what Tetris is is by playing it. No amount of advertising helps Tetris. You have to just play it. And so come January, it wasn't moving. Tetris wasn't moving.

And what happens when they have product in January, like after Christmas, the distributors start dumping the rest of their inventory. They have to get rid of. it because if it's not selling, it's never going to sell. Which means cut price, cut rate price. Yeah. And my goodness, I had my sales guys call every distributor to hang on to your inventory.

This is not like other games. It is going to take off much more slowly than other games. But once it takes off, it's going to be a hit. And some distributors actually listen to us. Well, by the end of January, Tetris was sold out everywhere. And based on what? How? Well, people started playing it. They just started to discover it.

Yeah, it went viral. But at the end of January, the orders started coming from distribution. They wanted more. And this time they wanted 200,000 copies of Tetris. And it's like, wow, where am I going to get the money to? That was more money than we could muster. You had to finance printing or manufacturing 200,000 more cartridges. Yeah, that's $2 million.

So I convinced my wife to convince her parents to put up all of their real estate as collateral for a loan. Seems like a pretty good gamble given that you had sold it out and people were kind of going crazy over it. Yeah, yeah. It seemed like a slam dunk, right? I mean, like the game had taken off. they were clamoring for it so we just had to rush to get this stuff into production and

yeah I saw no reason not to make that gamble so to speak all right so Tetris is starting to take off on the Nintendo consoles in Japan and by the way were they available on consoles in the U.S.? That would be later

okay that would be later So right now this is just licensed in Japan, it's on the console, Nintendo console. And meantime, you catch wind of a new product that Nintendo is working on. And this is going to be a handheld game system, which we now know and love is the Game Boy. But how did you find out about that product? You know, we are in the business. So everybody in the business knew that Nintendo was going to come out with this new machine. It wasn't like a big secret.

Everybody in Japan knew about it. So when it was like going to come out and I saw the specs, I said, oh my God, this, first of all, the screen is tiny. Second of all, it's black and white, and it doesn't have many dots on the screen. So most games, you know, that are on console are colorful and have a lot of detail. All that detail would be lost on the same. tiny screen, but Tetris would work just perfectly. Yeah. So the first thing I imagine is you go to Nintendo to pitch them on this idea.

Yeah, I did go to Redmond and pitch it to Aracawa. President of Nintendo America. Yes. Why did you have to go to Nintendo U.S.? Why don't pitch it to Nintendo in Japan? Because Nintendo U.S. has a policy to include a game with every new hardware platform that they sell. I see. So you thought, wait, if we can get this included with every Game Boy, slam dunk. It's like when you two released that record on every iPod, right? Everybody would have Tetris.

Yep. It would be an explosion. And it kind of was. So I went to Redmond and talked to Aracawa, and I said, Mr. Arakewa, you should include Tetris with the Game Boy. And he said, why should I include Tetris? I have Mario. The greatest probably brand that they had at that point. Yeah, and I said, if you want little boys to buy your Game Boy, then include Mario. But if you want everyone to buy your Game Boy, include Tetris. And then he calls in his experts, and they all came and said, yep, you know, Tetris is being played by everybody. It's completely genderless. You know, it's the first game that was being played by women.

Yeah. Just by that alone, it could, you know, double the sale. And then I said, you know, and then you can still sell Mario afterwards because every kid's going to want to have Mario. And that convinced him. And that convinced him. So they agree to sell this with every Game Boy. But then you still had more work to do, right? Well, of course, I didn't have the rights for handheld.

And did they know that? And Nintendo? Did they say, well, did you have to say them, look, I don't have the rights for me to get them. So let's just, you know. Yeah, I mean, you know, I, it's part of my business. strategy is, I never lie to anybody. I never say I have something that I don't have. You know, I, you know, I would say I can get you the rights. And by that time, by the way, I had already hired Robert Stein to get me the handheld rights. And I guess I, we haven't mentioned

him. Maybe he's, Robert Stein is kind of a key player in the story because he was this, this guy who early on negotiated with the Soviets to get the license for Tetris for, you know, for other companies overseas. And so I guess he presumably he knew the right people in Russia, like he knew where to go. Right. Okay. So you had hired him to be your agent in Moscow to get you the handheld rights to the game. That's right. That's right.

Okay. I got you. So you were fairly confident this is going to be a pretty straightforward transaction. Yeah. Yeah. And I'd been faxing him. This is still the days of facts. I've been faxing him, you know, every week, like, what's going on?

When are you going to get me the rights and so on and so forth? And he just like, yeah, I'm going to do it soon. I'm going to do it soon. I'm going to do it soon. And so that's kind of the situation I was in when it became February of 1989. So what happened was Araqaba made me a deal. I made him an offer. And he shook my hand.

It was like a million dollar up front, which was like, yeah, right on. Great deal. You would, he would pay you a million dollars up front? A million dollars up front. Okay. There's a dollar a unit for a million units. That was his minimum guarantee. Right.

We shook hands on that. And then I'm back in Japan, and I'm like, now I'm really on Stein. Come on, we've got to get this deal done. Let's go, let's go. it turns out that Stein had to clear up the original contracts that he had because they were crap. They were really bad, badly written contracts. And, you know, it was like taking candy from a baby kind of stuff. Yeah.

The Soviets just didn't have any experience with intellectual property. And here they were, you know, they were getting a percentage of a percentage of a percentage. The Russians weren't getting anything. They weren't getting anything. But you were not getting enough communication or feedback from him, and it was making you nervous. And so you decided to take drastic action, I guess. Yeah, I took drastic action.

I got a tourist visa and went to Moscow myself. In February of 89, you fly to Moscow. This is like at the height of Glasnost, right? Yeah, well, Perestroika and Glasnost were just starting to happen. So it wasn't the like going to North Korea today. Right. You know, it was already, people were already feeling a little bit of freedom. Right.

The Berlin Wall would come down several months later, but still, it was a time of liberalization. Yes. But you decided that you had to go there to figure out what was going on because you had no insight. Well, I needed to get there before Stein licensed it to Mirrosoft or. somebody else. Right. Because then you would lose the opportunity to have Tetris on every Game Boy. I would, yeah, I would be losing out on the million-dollar deal.

Come on. Right. Right. So you get to Moscow in February of 1989. And, of course, that's where Tetris was invented by Alexi, by Alexei Pajedanov. Right. And he was like a software guy who worked for the government. Like he didn't have the rights to the game, right?

But there was this one Soviet organization that I guess you could maybe talk to about the rights. And it was called like Elorg or Elorg? Yes. Electronorg technica. Okay. And it was the Soviet organization that oversaw software and hardware exports, I guess. Yeah. Export imports.

I don't exactly know what, but they were definitely the ones that had the power to speak to people outside. So what happened when you went to Moscow and showed up there at Elor? You walk into the lobby and you say, what? Well, it's before this, okay? I'm outside the door, and my interpreter says, you can't go in there. I said, what do you mean? I can't go in there. You have a tourist visa. You can't go in there. I said, look, I didn't come all this way to stand in front of a door and go back to Japan, get a visa,

come back. No, that's not how it works. I'm going in. Are you coming with me? No, I can't. It's like, okay, fine, I'm going in. And I went in. And it's a, it's a lobby of, you know, office building kind of place. And there's a, the window off to the side. You could see, that's the window where you're supposed to present your credentials. Yeah. Well, obviously, I didn't have any credentials, so I didn't go to that window. I just stood there in the, in the lobby and waited for somebody to speak to me. Yeah. So. So it took a while, but maybe like, I don't know, 10 minutes. Finally, somebody came and talked to me, and she said, what are you looking for?

In English, she asked you. In English, yes, in English. And so I showed her. I'm the publisher of this game. I'm Tetris, and I'm looking for someone to talk to me about the Game Boy Rights. And she said, okay, wait here. And she disappeared. and a little while later comes down the stairs,

come this old man, and that was Mr. Belikoff. And who is Mr. Belikoff? Well, I didn't know who he was at the time. I had no idea who anybody was. But Mr. Belikoff would be the one that I would negotiate this whole deal with. So he comes down, was he mad?

Was he puzzled? Was he warm? He was puzzled. You know, hello. And, you know, who are you? What do you want? And I said, I'm the publisher of this game in Japan. And he took the Tetris cartridge box into his hand.

And he looked at it and looked at it. And he looked at me and he said, we never licensed console rights to anyone. You showed him a Nintendo cartridge of Tetris. And he said, you don't have the rights to this. Nobody has the rights to this. Did he even know what it was? Did he know what a Nintendo system was?

Kind of. I think he figured it out pretty quickly. I don't know if I described it. He knew it wasn't for a PC. That's right. And so did he say come into my office? Like let's talk. No, no, no, no, no. That's, no. I did not know who he was. And I did not want to just talk to an underling. I wanted to talk to somebody who could make a decision. And so I said, I will come back tomorrow. I would like to meet someone to talk about the, the, the, the Game Boy rights. But you missed the point just now. I'm standing there, and he's just told me that I don't have the right to publish the 200,000 cartridges. And by the way, to be clear, you thought you already had those rights. They were for the console, which you would leverage the $2 million for.

Yes. So I'm in the middle of that. They're already in manufacture. I'm not going to get my money back. If somebody else swoops in and gets those rights, I am totally screwed. Yeah. And so I... You have to destroy those games.

Yeah, exactly. And so I decided I'm going to focus on the Game Boy deal. Let me do that, one thing which is absolutely clear. And it says, I'll come back tomorrow. So he said, yes, come back tomorrow at 1 o'clock, whatever. And the reason I wanted it to be the next day is because I wanted them to have the right people. in the room. Right.

And the next day, in the room, eight people and me, I was being interrogated. Who are you? What are you doing? And, you know, I'm a Dutchman who sounds like an American who has a publishing company in Japan, publishing, you know, game that he claims to have licensed from. Did they seem hostile? Like, hey, like, like sort of looking at it. of you like you were a thief, like you had stolen this, the rights to this?

Yeah, it was very strange. Yeah, they were very suspicious. Yeah. I mean, who the hell am I? When we come back in just a moment, a secret shot of vodka to celebrate a deal, and Hank starts a new company with the one guy who hasn't made a dime of Tetris. It's inventor. Stay with us. I'm Guy Raz, and you're listening to how I built this. Hey, welcome back to how I built this. So it's early 1989, and Hank Rogers is in Moscow, hoping to get the rights to publish Tetris on the Game Boy. And he's sitting in the one Soviet office where he might be able to negotiate that, Illorg, which oversees the export of computer software. Trouble is, the meeting feels more like an interrogation.

And then, Hank learns that one of the people in the room is Alexei Pachetnov. the inventor of Tetris. He had to be in the room because he's the only one in the room who knew anything about computer games besides me. Those guys, the lot of them, had no clue. All they understood was money, license, you know, that kind of stuff. They didn't understand what a game was.

So when you met Alexi was, where you like, such an honor to meet you, I love your game? Do you remember what you said to it? Oh, yeah. Oh, yeah. Yeah, absolutely. I'm in love with your game. You've created something amazing. And, you know, it's very interesting because Alexi, you know, and I talked to him about the game. And Alexi, that was the thing that flipped him because he'd never met a game designer before.

That was the first game designer that he met. He'd met other people like Robert Stein who, you know, were wheeler dealers and trying to license, but they weren't a game designer. I was a game designer. So you had to untangle. So this conversation really had to begin by untangling the facts, figuring out what happened. Because as far as you were concerned, you had the legitimate rights to this, but they probably wanted to understand what happened. And you had to start to say, well, there's this guy Stein and they probably knew Stein. And so this must have been a very complicated conversation.

Well, okay, so I had to explain to them how the whole business works. I basically taught them everything they needed to know about what the computer game, what's the difference between console and personal computer and arcade and how each of these things made money and how would it? I basically explained everything to them. And there was somebody in the room translating everything you were saying? They were, for those that didn't speak English, yeah, they would stop everyone. once in a while and go into Russian

whatever discussion. And it's funny because when they get into a discussion, sometimes it sounds like they're fighting. Right. It's like, are they talking, like trying to decide which gulag they're going to send me to? Is that what they're...

It was kind of creepy, you know, because they're arguing with each other and then they would come back and start speaking English to me again. So you start to explain all this to them And at the end of the, it was a couple hours, presumably, at the end of it, were they like, oh, okay, we get it now. Thank you so much for explaining this. Well, they visibly relaxed. And they said, okay, make us an offer for what? Yeah. First of all, they asked me, so, Mr. Rogers, when do you plan to come back to Moscow? And it's what do you mean come back to Moscow?

They said, well, you know, we have to think about this and make our decision. And I said, this is not how it works. When I leave here, I either leave here with the Game Boy Rights or I leave here without the Game Boy Rights, but I'm not coming back. I started realizing that I have to be forceful with them because they're forceful with each other. You know what I'm saying?

Like, there's not a warm and fuzzy, nice conversation. No, it's all kind of adversarial. They were that way with each other. So then I started reeling, I have to be that way too. And so they said, well, make us an offer. I said, okay, I went back to my hotel, and I made a little one-page legalese document, and I presented them the next day.

And I gave them a week, and we managed to hammer out an agreement within that week. And the offer that I'd made them was I would pay them 25 cents for every Game Boy Tetris that was sold. And I, you know, we'd sort of like, on the back of the envelope, how many units will Nintendo sell that include Tetris? And that number was something like 30 million. So 30 million times 25 cents is a big number. So if you sold 10 million units, they'd get $2.5 million, basically. Exactly.

Okay. And I mean, in today's terms, it doesn't sound like a lot of money, but that was a lot of money back then. That was an impossibly huge amount of money for them. Right. I got you. Okay. So you were taking a gamble, but you knew that this game was already taking off in Japan, and that you already had the agreement from Nintendo USA to put it with every Game Boy.

sold as a bundled game, those included. Yep. Yep. So they agreed, and you were there and took you about a week to make this deal? Yeah. Next Friday, we signed a deal. We broke Gorbachev rule, which has no alcohol in the office, and we broke out a bottle of vodka and all had a shot. And they posted people by the doors and the windows to make sure nobody was watching.

And so after I signed the contract, lockdown handheld, Mr. Belikoff asks me, Mr. Rogers, how would you like to license the console rights? And like, wow, that sounds, yes, of course. And of course, he could offer you that because, as he already told you, nobody owned the console rights at the time, right? Not you or Atari or Nintendo, no one. Nobody. Okay.

And at this point, this all gets a little complicated and sort of tied up in legal red tape. But I guess eventually when all was said and done, you made out pretty well. You secured the rights for Nintendo in Japan. And then you also had the rights, the worldwide rights to Tetris on the Game Boy, right? Yeah, absolutely. And what happened when Tetris was shipped off with the Game Boys? Oh, and they end up doing 30 million. 30 million.

30 million packed in and another 5 million as just sold as a box product. Wow. And meanwhile, I mean, in the early 1990s, the Soviet Union dissolves, right? That's right. And so a lot of these kind of government organizations get privatized and ALORG becomes a private company. And Alexi, the inventor of the game, he actually had to make a deal with them, I guess, that in 1995 he would finally get the rights, well, the rights would revert back to him, right? Yes. Because he had not made a dime off Tetris at this point, the guy, right, he had not made a cent.

Not a cent. All the money was going to the Soviet agency. And who knows who was skimming off the top, right? Right. Exactly. So all the people who ended up like, how did Belikoff go from being an administrator of a government organization to owning it? Right. How did that happen? Yeah.

I remember there was a very interesting moment in time when it was just the transition when it became a private company. And it was Mr. Belikoff called me up in a panic and said, you know the money that you cabled me? Can you, like, get it back and then send it to this new bank account? Yes, to the attention of M. Belikov. Yeah. So Alexei had anticipated this all, and they were going to put up a fight because there's some real money to be made. Yep. And how did you manage to prevent that from happening?

Which is why Alexei asked me to help him. And it's 93, and he said, look, I'm going to make you. an offer, you're going to represent me, you're going to take care of me, and you and me are going to be partners. And basically made me offer, and we shook ends in 93. That handshake is still alive today. Okay. He said, you get a cut, I'll get a cut, but I want you to be in charge of resting the

rights away from these. Well, I'm not resting the right. I want you to make sure that I get my rights back. Right. But anyway, during 95, the Lorg came, we had the meeting in Redmond, and I was ready to, I mean, I was representing Alexi, I was ready to give them 20%, and they were ready to give me 20%.

You know, so we were very far apart. You were far away. Yeah, okay. Very far apart. And I remember being in a room, and as all Nintendo lawyers, and then there's Mr. Belikoff and his lawyer. And I said, well, I'm not a lawyer, but I kind of feel that at some point there's going to be a jury of Americans that are going to decide who owns the rights to Tetris,

whether it's the former Soviet ministry of import and export of software or the creator of the game. So what happened? So basically I start hammering out the deal with Belikov. And we end up making a making the Tetris company and it's 50-50. That's, you know, because they had the copyright and trademark in 60 countries. And that was just too much for me to try to fight. So they would own half of the rights and you and Alexi would own the other half, essentially. That was the degree that you made.

That's how we divide the money. So basically we just decided to, I don't know, call it a truth. Yeah. So now you have an incentive. to expand the brand because you own 50% of it. Like if you were just a licensee, you have no incentive to make it better because you're essentially they own the IP.

And so you're like, well, why are we going to make it better? You understand it exactly. And I said, look, before we split the money, I'm going to need the money to brand manage this game. And so I want a percentage off the top to do all of the licensing and to do all of the brand management. The problem was that up till then, everybody who licensed Tetris from a Lorg basically had no guide about how to build Tetris. And so the versions of Tetris that came out of different publishers were very different.

Give you an example. A Game Boy player in Japan could not play the arcade because it's like the brakes and the gas pedal were reversed. Yeah. So it was my job to standardize Tetris across all platforms. And we've done that. But seven years into it, Belikov team got greedy. And they said, well, we don't actually want you to do brand management. We just want to find somebody to license Tetris.

Because we don't want to pay you to doing brand management. Without understanding that brand management is really, really important. Yeah. They wanted to stop paying you the fee to manage it. And that presumably created another conflict. Yeah, that created a conflict. And in all of the deals up till then, the way it worked is I get one vote. Belikoff gets one vote.

If it's yes, yes, then it's a deal. If it's yes, no, then it's no deal. So basically at that point, for the next three years, no deals went through. Because every deal that I brought to the table, he said no. And every deal that he brought to the table, I said no. Which was impossible and untenable. So you had to figure out either to buy them out or for them to buy you out. And they were probably not going to buy you out.

Yeah. So during those three years, I had gotten a license to Tetris for mobile phones in the U.S. And I hit it out of the park in the U.S. I made a company called Blue Lava Wireless. Right. And I basically published Tetris and other games. And I read that you guys are doing like more than $20 million in sales. Right, exactly.

And that's, I don't know, 50% profit. But at the end of three years, my license ran out. And during that three years, we were, Belikoff and me were duking it out. We are in court. I'm on the way to proving that he has no rights at all in New York. And so we were on that, we were on the way. And meanwhile, there's a. this company jammed at that comes along and offers to buy Blue Lava Wireless and obtain a license

to Tetris. But what was their incentive to buy it if your license for mobile was about to expire? Yeah. So what I had to do is I had to collect the worldwide rights to Tetris Mobile into Blue Lava Wireless. And in order to do that, I had to get rid of Belikoff. So I raised the money to buy out Belikoff. You raised the money to buy out the former Elorg guys. Or they were still called Elorg, I think, but that was a private company.

Yep. I ended up buying them. I own Elorg now. So now with them out of the picture, with the Allureg guys out of the picture, you and Alexi owned 100% of this company. Yes. And the company that I sold, Blue Lava Wireless, what I did was I gave that company a 15-year license to Tetris from the Tetris company. So we never lost ownership of Tetris. And they bought you guys out for like $130 million. They paid a lot of money.

Yeah, they paid a lot of money. It's good. So, all right, so this happens. 2005, you're free and clear. You get, you sell blue lava. You've finally, you own, you know, you guys own Tetris. And like a month later, you get a mass part attack. You're playing golf and you like near death. Like you were just on the edge of death. Yeah, it was actually tennis. The ambulance driver said that he didn't think I was going to make it. Wow. When I got to the hospital, they rolled me straight into the OR.

I was still conscious. I signed the paper saying, yes, you can operate, which is nice, because if I couldn't sign, my wife would have had to sign, she didn't know where I was. Yeah. So I would have died. Wow. I have two stents.

I have two cents. But in that ambulance on the way to the hospital, the first thing I thought was, you've got to be kidding me. I haven't spent any of the money yet. I made all this money and I'm about to die. You're going to take me out? The second thing I said,

no, I'm not going. I still have stuff to do. And so, you know, in the recovery room, I started thinking about what did I mean by that? Before you, you tell me about that, were you, I mean, I've talked to you, you seem like a pretty healthy guy. I mean, was it just a story?

stress and the lifestyle of just grinding for all those years that led you to that point, were you not living a healthy life? Or were you just genetically predisposed to it or what? The doctor said, don't change a thing. Don't change your exercise. Don't change your diet. You're fine. This is an anomaly. So, you mean, you could say that it was stress and all this kind of stuff, but I just generally don't take stress. Maybe I do. I just don't realize it, but I'm pretty relaxed about things. Wow. All right.

So this happens. And you've achieved success, financial success, and yet, like, you were near death. You must have had some big thoughts. I would imagine, Hank. Yeah. Well, I kind of worked it back from the end of my life. You know, I thought about what is it that's going to upset me if I didn't do something by the end of my real life? the next time.

And I found my bucket list. I searched for and found my missions in life. Tell me what you start to think. Well, the first one came to me in the back of the newspaper. It said, oh, by the way, we're going to kill all the coral in the world by the end of the century. And what's causing that is ocean acidification. What's causing that? It's carbon dioxide.

What's causing that, we are. So mission number one is to end the use of carbon-based fuel. And I started a foundation in Hawaii called the Blue Planet Fund. Foundation, and we work to end the use of carbon-based fuel in Hawaii. So you decide that you're going to devote your life to environmental causes, that it was, you were moving away from video game? I mean, you still own the license of Tetris, but you were going to shift your focus on climate change causes, issues? Well, it's not just climate change. I have four missions, but yeah. Please, tell me what they are. Yeah.

First mission is to end the use of carbon-based fuel. Second one is to end war, which goes back. to when I was a student in high school. It's ambitious, but okay, I like it. And number three is to make a backup of life by going to other planets and bringing life to other planets. I like it. And number four is to find out how the universe ends and do something about it. Hmm.

I think the reason that the last one exists is to make the other ones seem reasonable when they could seem unreasonable. Yeah. Okay, so in the scope of things, compared to the end of the universe, you know, fixing climate change is just a blip. Yeah. And I just like this blip to happen faster. And to me, people ask me if I have hope. I say, no, I don't have hope. I have determination.

Because we're going to fix this. There's no doubt in my mind that we're going to fix this. How much damage we do to this planet on the way to fixing it? That's up to us. So, Hank, I mean, when you think about, you know, the journey you took, I mean, you know, from sort of kind of jewelry guys, with your dad and, you know, kind of building this game company and then coming across Tetris and really making a gamble, right, putting a lot of emotional energy and time into the,

into this game and risking a lot and, you know, believing in it to where you are now. I mean, obviously, you know, you made a lot of money off of this and now you can deploy that money for some of the causes you, you are, you know, are committed to. How much of where you are now do you think is because of how hard you worked and your intelligence and how much do you attribute to luck? Oh, it's all because of hard work. I mean, this is not like I rolled a dice and something happened. I like to compare it to surfing. I used to surf.

And basically, you know, someday a giant wave is going to come. And if you haven't surfed the small waves and worked and worked and paddled and paddled and learned all that stuff, then when that big wave comes up, you're just going to get killed. You need to know how to surf before you, you know, and you can't read about it in a book. You've got to get out in the water and try stuff. Yeah. By the way, is Alexi still involved with the company? Is he kind of a passive owner in a sense? Well, he is as involved as I am.

So whenever something comes up, we both have to agree to a license. That's the way it is now. So we look at every deal. We still go to, like we were just in Vegas at the licensing show. So we're merchandising to all kinds of brands that want to use Tetris on, I don't know, shoes, backpacks, cups, who knows. So there's that whole side of the business that we're still involved in. And Alexi lives in the United States now, right? Yes, he does.

And if we're in the same jurisdiction, like if we're both in Seattle or both in New York, every other night, bottle of wine, guaranteed. We worked hard to keep Tetris alive. People ask me if I'm Mr. Tetris. I said, no, I'm Dr. Tetris. Alexi is Mr. Tetris. I'm Dr. Tetris. We're best friends forever. That's the way it is.

That's Hank Rogers, co-founder of the Tetris Company. And by the way, even though he and Alexi are no longer running it, it is still pretty much in the family. My daughter runs it now. So she takes care of the whole thing. My daughter, Maya, when she was 15, she asked me, so I asked her, what do you want to be when you grow up? And she said, I don't know, but I want to make more money than you.

So she's on it. Hey, thanks so much for listening to the show this week. Please make sure to click the follow button on your podcast app so you never miss a new episode of the show, and it's totally free. This episode was produced by Sam Paulson with music composed by Ramtin Arablui and Sam Paulson. It was edited by Neva Grant with research help from Catherine Seifer. Our audio engineer was Gilly Moon. Our production staff also includes J.C. Howard, Casey Herman, Alex Chung,

Carrie Thompson, Elaine Coates, John Isabella, Chris Messini, and Carla Estevez. I'm Guy Raz, and you've been listening to How I Built This.