They tried Power and Graphics with the N64 and GC. They tried westernized games. Sales went from bad to worse. They still made money but the choosen direction was not going to make them win over Sony.
Rare wanted Conker to be "westernized" and Bad Fur Day features graphic violence, sexual themes, strong language and toilet humour. For a family orientated company this is a sign to withdraw.
A new president has to show initiative: so he cuts of the parts that were not essential, brought everything closer to home (Rare is sold). Then everything seems to go Iwatas way: 2004: release of DS - success, 2006: release of Wii - success. Naturally he draws some conclusion of theese events. I guess what he learns is something like: keep things close and under strict control.
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