🕹️ Building a $65B Gaming Empire

When I hear someone say 'Nintendo,' a few things come to mind:

1. The first time I played Super Mario on my cousin’s Nintendo DS

2. Beating my brother in Wii tennis

3. Illegal gambling and instant rice

Wait, what? Yeah, you read that right.

Because when Nintendo was founded in 1889, it wasn’t about video games at all…

So how did the Japanese company go from rice to riches?

Here’s what we got for ya:

• 🎴 Nintendo’s Risky Beginnings

• 🎮 Reinventing the Game

• 🌟 Nintendo’s Iconic Comeback

Read Time: 5 min 10 sec

🎴 Nintendo’s Risky Beginnings

 In Japan, back in 1889, Fusajiro Yamauchi started Nintendo Koppai, a company that hand-painted Hanafuda playing cards.

Why Hanafuda? Western-style playing cards were banned in Japan. But these traditional cards were allowed because it was seen as art. Conveniently, the cards could still be used to play illegal card games. 

Nintendo’s biggest customers were illegal gambling groups. 

To expand and sell the cards to the entire Japanese market, Nintendo Koppai made a deal with the Japan Tobacco and Salt Public Corporation, which stocked the cards in all their stores. Soon, they were the most popular card brand in Japan.

By 1907, the ban on Western-style cards was lifted. Because most card manufacturers went out of business during the ban, Nintendo was perfectly positioned to jump into this market. Nintendo became one of Japan’s first manufacturers of American-style playing cards.

Feeling content with his success, Fusajiro decided to retire. His son-in-law, Sekiryo Yamauchi, took over. Then in 1949, Sekiryo's grandson, Hiroshi Yamauchi, dropped out of law school to lead Nintendo.

Hiroshi was ambitious. He wanted to make Nintendo a household name. But the way he did it risked everything…

More on this: 

• The Untold TRUTH of Nintendo: a fascinating mini-movie

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🎮 Reinventing the Game

In the 1950s, Hiroshi partnered with Disney to print their characters on playing cards. This shifted Nintendo’s target audience to families and children.

Then, he decided to try to tap into new markets. Nintendo started selling instant rice, toy vacuums, and taxi cabs.

But it was a failure. Hiroshi needed a breakthrough, and quickly, or he risked being the one to end his family’s legacy.

Then one day in 1966, Hiroshi noticed an employee, Gunpei Yokoi, playing with a plastic extendable hand he’d made. When Gunpei was called to Hiroshi’s office, he thought he was getting fired for playing on the job. 

Little did he know, he was about to become the main inventor for one of the biggest video game empires… 

Hiroshi saw potential in the toy and had the Ultra Hand mass-produced. 

It sold 1.2 million units.

Gunpei’s next invention was inspired by a businessman playing with his calculator on public transport. He created the Game & Watch in 1980. It was a portable game that only needed watch batteries.

Nintendo could barely stock the new game fast enough. They had found their niche.

The next step was arcade games. Nintendo hosted a competition for who could create the best game, and that’s how Donkey Kong was born. The USA loved it, and Nintendo earned $280M in the first two years.

But then, the video game market crashed in 1983. The market became oversaturated, driving prices so low the industry was no longer profitable. While most companies saw this as a setback, Nintendo saw this as an opportunity.

Hiroshi took Nintendo out of the arcade business even though they were earning millions. He focused all his energy on the Famicom (Family Computer), which tested well in Japan. 

He rebranded it as the Nintendo Entertainment System (NES) for the USA. Knowing the market needed a standout game, they introduced Super Mario Bros.

Nintendo’s innovations didn’t stop there. They invented the D-pad, introduced soundtracks that changed with each level, and included new sound effects. 

To convince stores in the USA to stock the NES,  salesmen went door-to-door, offering to buy back unsold consoles.

The NES was a success: 3 million units sold in the first year, and 6 million the next. One in six US households owned one.

🌟 Nintendo’s Iconic Comeback

In the late '80s, Nintendo introduced its own magazine with game updates and hints. This helped the company generate excitement about its new inventions and stay relevant.

Then came the Game Boy…. 

Paired with the classic game Tetris, the Game Boy quickly sold out in the USA. It was so popular, a Russian astronaut even took one to space!

The Game Boy was the best-selling console of its time.

By the 1990s, Nintendo held a 90% share of the video game market. 

But everything changed when new competitors entered the market—Sega with Sonic, Sony with the PlayStation, and Microsoft with the Xbox. Each brought new challenges.

Nintendo kept innovating. 

They tried to compete with the PlayStation and Xbox with the GameCube. But it didn’t catch on. Sony and Microsoft marketed to hard-core gamers that were 18+, showing gore and using guns. 

Just when it seemed like Nintendo was going out of business, they came up with a new idea. They were never meant to compete in the adult-only market. So they created the Wii, a console designed to appeal to everyone. 

It was easy to use and the games were family friendly.

It sold out every month for three years straight, eventually surpassing Xbox and PlayStation sales combined with over 100 million units sold.

Today, the Nintendo Switch continues this legacy. It’s the first console that you can connect to a TV and also use for portable gaming. 

Nintendo’s constant innovation has made it a childhood classic for generations. 

Their adorable characters ensure Nintendo will be relevant for years to come.

 In 2023, the Super Mario movie had the biggest opening for an animated film, surpassing even Frozen and Toy Story.

Nintendo’s journey from hand-painted cards to a $65B video game empire was not easy. It took hard work, risk-taking, and constant innovation.

If you want to play a Nintendo game, you need Nintendo hardware. And with timeless characters like Mario, people will keep coming back.

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