History of Nintendo

Nintendo is a multinational video game and consumer electronics company headquartered in Kyoto, Japan.

The history of Nintendo goes back centuries. In 1633, Japan cut off relations with the West and banned all foreign playing cards because they encouraged illegal gambling. Successive games were introduced and then banned as Japanese card makers sought to establish their own home-grown card games.

One game worth mentioning is Hanafuda, which replaced numbers with months of the year and pictures to get around the ban. Although it too was eventually made illegal, Japanese citizens loved Hanafuda and continued to play it in secret. 

In the late 1800s, the government relaxed its laws on certain playing cards. One citizen who welcomed this news was 29-year-old Fusajiro Yamauchi, an avid Hanafuda player. He saw the potential in monetizing Hanafuda and founded a company called Nintendo Koppai in 1889.

Early days of Nintendo

Initially, Yamauchi sold hand-made pictorial Hanafuda cards made from the bark of a mulberry tree. Nintendo quickly experienced immense popularity in Japan as consumers appreciated the art and quality construction of each card.

Yamauchi ran the business for 40 years before retiring in 1929. The company was run for another 20 years by his son-in-law Sekiryo Kaneda before he too was forced to retire after suffering a stroke. 

This opened the door for Kaneda’s grandson, Hiroshi Yamauchi, who took the helm at the tender age of 21.

A new direction

When Yamauchi took the reins in 1949, his lack of experience was met with resentment by employees. He was also a ruthless leader, firing anyone who disagreed with him and having the final say on any new product idea.

However, Yamauchi did many things to advance the company during this tenure. He started selling western playing cards, the first Japanese company to do so in over 300 years. Nintendo also established the first such licensing deal with Disney to have its characters appear in card decks for party and family games.

When card game sales started to drop after the Tokyo Olympics in 1964, Yamauchi realized he had to pivot quickly. While inspecting the languishing playing card assembly line, he noticed an employee playing with a mechanized, extendable hand. Later dubbed the Ultra Hand, Yamauchi was so taken with the invention that he immediately ordered it into production. Nintendo would later sell 1.2 million Ultra Hands, announcing its presence on the toy market as a serious contender.

Electronic toys

The inventor of the Ultra Hand, Gunpei Yokoi, was also completing an engineering degree at the time.

Ultimately, his interests would steer Nintendo into the emerging electronic toy industry. Nintendo partnered with Sony to develop a home electronic version of popular arcade light gun games. In 1972, the company acquired the Japanese distribution rights to the Magnavox Odyssey – the first video game console. Five years later, Nintendo released its own video console called the Color TV-Game featuring six pre-programmed games.

By 1980, business was booming for Nintendo. It entered the North American market with Donkey Kong following soon after for the coin-operated arcade market. The highly successful Super Mario Bros. franchise was released in 1983 and continues to be updated to this day. 

The company has continued to innovate since the explosion in popularity of electronic games. Consoles including the Game Boy, Nintendo DS, Wii, and Nintendo Switch have all enjoyed prolonged success with gamers around the world.

Key takeaways:

  • Nintendo is a Japanese multinational consumer electronics and video company founded in 1889. Initially, the company sold hand-made pictorial playing cards for the popular game Hanafuda.
  • Nintendo pivoted into toy manufacturing after playing card popularity declined in 1964. Then-CEO Hiroshi Yamauchi noticed an assembly line worker playing with a mechanized extendable hand which he immediately put into mass production. The Ultra Hand would sell 1.2 million units.
  • The Ultra Hand inventor Gunpei Yokoi provided the impetus for Nintendo moving into electronic games. The company partnered with Sony to offer arcade games at home and also acquired the distribution rights to the first home video game console.
nintendo-business-model
Nintendo is a Japanese consumer electronics and video company founded in 1889 as Nintendo Karuta – a manufacturer of decorated, hand-made playing cards. By the 1980s, the company made significant investments in a rising technology: video games. It then produced popular titles like Donkey Kong and, later on, Super Mario Bros. Today Nintendo generates revenues through video game franchise sales, e-commerce, and the Unfold System.

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Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which reached over a million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get The FourWeekMBA Flagship Book "100+ Business Models"