The History of Nintendo

Podcast Transcript

Nintendo is one of the most legendary video game companies in the world.

Many of you have probably owned a Nintendo system to play video games. If you are old enough, you might have even played some of their games in a video arcade.

Even if you have never played a video game, through cultural osmosis, you are probably still aware of many of its popular characters, like Mario and Donkey Kong.

Learn about the history of Nintendo and how a 19th-century company wound up making video games on this episode of Everything Everywhere Daily.

Nintendo is one of the most popular and well-known video game companies in the world. What most people don’t know is that the company actually dates back well before the advent of computers.

The company’s origins date back to 1889 in Kyoto, Japan. Founder Fusajiro Yamauchi started the business to make playing cards, known in Japan as karuta. These cards are much like Western playing cards but feature plants and animals instead of suits.

Yamauchi named his business ‘Yamauchi Nintendo.’ This was later shortened to ‘Nintendo.’

The word “Nintendo” comes from three Japanese characters. ? Nin, meaning “responsibility,” “duty,” or “to entrust”; ? ten, meaning “heaven” or “the heavens”; and ? d?, meaning “hall” or “temple.”

Although exact corporate name meanings are rarely official, the conventional and widely accepted reading is “leave luck to heaven” or “entrusted to heaven,” reflecting both the company’s early identity as a maker of playing cards and the broader cultural association between games of chance and fate.

However, there is no set definition as to the meaning of the word and it isn’t known why it was chosen.

You may be thinking that investing in a playing card business was a weird choice, but there was high demand within Japan. This is because Japan had banned most forms of gambling, so any cards that were tolerated by the government were desirable.

Many of Yamauchi’s potential competitors left the card industry, not wanting to risk anything illegal. Yamauchi’s decision to remain in the market ultimately led the business to become one of the primary playing card producers in Japan.

As demand increased, so did Yamauchi’s business. He brought in assistants to help mass-produce cards. Despite support, the company struggled financially because the cards were expensive and time-consuming to make.

This caused Yamauchi to make a difficult choice. If he wanted Nintendo to stay afloat, sacrifices needed to be made. Ultimately, the choice was made to develop cheaper, lower-quality cards. This decision proved correct, as it allowed the business to expand into other Japanese cities, where demand for playing cards was also high.

In 1902, Nintendo branched out into the Western playing card market, aiming to export its cards abroad. Many decks were sent from Japan, but they were also sold at home. This made Nintendo’s cards popular worldwide.

While expanding its product line, Nintendo and the Japanese playing card industry faced turmoil.

Between 1904 and 1905, Japan went to war with Russia. During the Russo-Japanese War, Japan imposed new taxes, including one on playing cards.

The Zaruta Zei, or “Playing Card Tax,” made cards more expensive to produce. This, combined with the recovery from the Russo-Japanese War, put the business in danger.

Once again, Nintendo was forced to make strategic manoeuvres to stay in business. The most notable decision they made was partnering with Nihon Senbai, now known as Japan Tobacco.

This partnership was more valuable than it first appeared. Nihon Senbai was owned by the Japanese Government and held a monopoly over Japan’s tobacco industry. By working with Japan Tobacco, Nintendo ensured its cards were in stores across the country. This move made Nintendo the largest playing card company in Japan.

Yamauchi retired from Nintendo in 1929. Japanese law stated that the business had to be passed down to someone in Yamauchi’s family. Ultimately, his son-in-law, Sekiryo Kaneda, who changed his last name to Yamauchi, became the next head of the business.

Sekiryo, as the new head of Nintendo, went to work establishing the business as a general partnership and renaming it Yamauchi Nintendo & Co., Ltd. He also invested in a new corporate headquarters, building it next to the previous one.

With Sekiryo leading Nintendo, the company soon confronted a major test: World War II.

During the war, Japanese society shifted its focus to the war effort. There was less attention on leisure activities like playing cards. Additionally, foreign card games were banned. This impacted companies like Nintendo.

While Nintendo survived these difficult years, its wartime records are limited, leaving its operations sparse in detail. Still, a few facts are known.

Nintendo was involved in creating propaganda during the war. They built games to promote Japanese morale. One example was Backgammon Boards.

The backgammon boards were for kids, but painted with war imagery. They often showed animals dressed as soldiers. Sometimes animals held Japanese flags; other times, they stood atop torn Allied flags.

Following the end of World War II, Sekiryo founded a distribution company to sell and market Nintendo’s products. This distribution company later became the modern-day Nintendo Company.

Sekiryo retired in 1950, leaving the company to his grandson, Hiroshi Yamauchi.

When Hiroshi Yamauchi took control, he also made changes. First, he renamed the company Nintendo Playing Card Co., Ltd. He also decentralised the manufacturing sites. This let the company expand its offices and mass-produce cards.

In 1959, Nintendo made the strategic decision to partner with Walt Disney Productions. This partnership enabled Nintendo to include Disney characters on its cards, helping the company expand into the children’s market.

After partnering with Disney, Nintendo grew further. They ran television ads to draw more attention to the brand. They expanded their product line, adding more games and cards. The company also went public, listing on the Kyoto and Osaka stock exchanges. Its name changed for the last time to Nintendo & Co., Ltd.

Despite this growth, Nintendo realised a problem. They depended too much on the children’s market. This was worsened as adults picked up other hobbies, and Disney cards lost popularity. Their company was stuck. To stay afloat, they needed a quick new solution.

Yamauchi invested in a research and development department. At first, it was meant to mass-manufacture classic tabletop games. It also notably developed Nintendo’s first electronic toy, the Beam Gun in 1970.

The Beam Gun accidentally started the company’s shift towards video games. They used the guns in a partnership with Magnavox. Magnavox made the Magnavox Odyssey, the first at-home video game console. The Beam Gun was used in one of its games.

Nintendo continued to introduce new, exciting toys, driving up demand for its products. Specifically, the company invested in technologically advanced toys similar to the Beam Gun.

Nintendo created arcade games using similar light gun technology, but they faced competition. They produced products more slowly and at higher prices than competitors, leading to the discontinuation of some light-gun products.

Seeing the success of home video game systems, Hiroshi Yamauchi chose to invest more in video game development. His first move was to get the rights to distribute the Magnavox Odyssey in Japan. He also took steps to start developing a Nintendo system.

Despite making these changes, the company remained at risk of insolvency until the late 1970s. Then, two major decisions changed everything.

They opened a US subsidiary in New York City.
They opened a new department dedicated solely to developing arcade games.

As a result of these decisions, Nintendo went on to release one of the first handheld video game systems, the Game and Watch, in 1980.

The ‘Game and Watch’ quickly became one of Nintendo’s most successful products and prompted the company to shift development to more electronics.

Although Nintendo had released arcade products before, its first original video games appeared in 1979 and 1980. The games, Radar Scope and Sheriff, did well in Japan. Overseas, they struggled, causing financial difficulties for Nintendo. Their next game had to succeed.

The company found success with 1981’s Donkey Kong, which not only became a smash hit in Japan but also broke through in the United States, right when the American arcade market was booming.

This era introduced the famed game developed Shigeru Miyamoto, whose creative approach to game design helped distinguish Nintendo’s titles from competitors.

Simultaneously, Nintendo began building a library of Game & Watch handhelds, establishing the company’s reputation for simple, elegant, and highly marketable electronic entertainment.

These successes gave Nintendo the financial strength and confidence to pursue a dedicated home-console product.

This culminated in the release of the Family Computer also known as Famicom in Japan in 1983. The system was more powerful than most contemporaries and was designed to be expandable with a long product life.

Its launch, however, was rocky: early units experienced hardware instability that forced a recall. Once corrected, the Famicom became a massive hit in Japan, but the American market posed a challenge after the devastating 1983 video-game crash, which was caused by overproduction and poor quality games.

To overcome retailer skepticism, Nintendo redesigned the Famicom aesthetically and strategically for North America, presenting it as an “Entertainment System” rather than a traditional console.

Bundled with Super Mario Bros. and innovative peripherals like the Robot Operating Buddy, the system was introduced regionally in 1985 and rolled out nationally in 1986 as the Nintendo Entertainment System or NES.

This marked Nintendo’s full emergence as the home console leader of the era.

The NES gave birth to some of the most famous games in history, such as Super Mario Bros. and The Legend of Zelda.

Following the release of the NES, Nintendo continued to develop new and modern video game systems. These systems proved incredibly popular with the public and contributed to the company’s growth. Fully describing how each Nintendo system came into being honestly could make an episode on its own.

Suffice it to say, some of the most notable systems developed include the Game Boy in 1989, the Super NES in 1991, the Nintendo 64 in 1996, the GameCube in 2001, the Nintendo DS in 2004, the Wii in 2006, and the Nintendo Switch in 2017.

It would be remiss not to end this episode discussing Nintendo’s most beloved character and mascot, Mario.

Mario was born as a secondary character in Donkey Kong, where he was trying to save his girlfriend from the giant, barrel-throwing gorilla. He was initially just known as Jumpman in Japanese.

Mario was seen again in the game Donkey Kong Jr. In this game, Mario served as the villain, with Donkey Kong Jr. trying to rescue Donkey Kong after Mario kidnapped him.

In 1983, Mario returned to his heroic status and became a main character in the new arcade game, Mario Bros. This game saw Mario and his brother, Luigi, trying to defeat the creatures that were breaking into their city.

Shortly after, the game was released for the Famicon. The game was so successful on this system that Nintendo opted to create a second version, Super Mario Bros.

Mario and Super Mario became so successful that Nintendo dominated American Console sales, mainly because of the strategic decision to include Super Mario on its new systems.

However, the love of Mario wasn’t necessarily natural. Nintendo pushed Mario by putting him in almost every video game they released. He was in every game, every genre, making him a star and a symbol of the company.

Since his debut, Mario has appeared in over 200 games. Super Mario Bros games have sold over 240 million units. As a result, Mario has become one of the best-selling and most famous characters of all time.

As of this recording, the Nintendo corporation is valued at over 98 billion dollars.

It has become a powerhouse in the entertainment world, creating systems and characters that people have enjoyed for decades. Its success has led to the creation of amusement parks, movies, stores, and tournaments, all designed for people who love its products.

….which is not too shabby for a 19th-century Japanese company that made playing cards.