The Nintendo History
When Japan cut off its relations with the Western World in 1633 there was a ban on all foreign playing cards as they encouraged illegal gambling. Playing cards were extremely popular at the time (mainly because of the gambling) so it wasn’t long before the Japanese started creating their own home-grown card games. The first of these were designed for a game called Unsun Karuta, but eventually, the game was also used as a form of gambling, so the government banned them as well. A volley of new card games, followed by subsequent government bans, went back and forth over the next century. Finally, in the 19th century a new card game, Hanafuda, was invented. It used images instead of numbers, so it couldn’t be used for gambling. The government relaxed its laws on playing cards and allowed sales of the Hanafuda cards. Unfortunately, the constant bans and the lack of gambling took their toll and the new card game received a lackluster response, until a young entrepreneur, Fusajiro Yamauchi, came on the scene.
When Was Nintendo Founded?
In 1889, a 29-year-old Fusajiro Yamauchi opened the doors to his company Nintendo Koppai, which manufactured Hanafuda cards made up of paintings on cards from the bark of a mulberry tree. Fusajiro sold the cards at two Nintendo Koppai stores. The quality of the art and design brought Hanafuda enormous popularity and establish Nintendo as the top game company in Japan. The same year Fusajiro started Nintendo Koppai, the Japanese government began the first general election for the House of Representatives of Japan and instituted the Constitution of the Empire of Japan, called the Meiji Constitution. These government changes lead to the revision of numerous laws, which included relaxing the ban on countless types of playing cards. As Nintendo was the most popular card company, it was able to expand faster than any of its competitors.
The Evolution of Video Games Takes a Detour
Over the next 40 years, Nintendo Koppai remained the top card company in Japan under Fusajiro Yamauchi’s tutelage. It continued adding the most popular games, as well as inventing several of its own. Fusajiro retired at the age of 70 and his adopted son-in-law, Sekiryo Kaneda (who changed his name to Sekiryo Yamauchi), took over the business in 1929. After continuing to run the company, Sekiryo sought to expand and established a joint venture, renaming the company Yamauchi Nintendo & Company in 1933 and forming a card game distributor called Marufuku Company, Ltd. These two companies continued to grow the business into a corporate giant. After running the company for 20 years, Sekiryo suffered a stroke in 1949, forcing him to retire. Sekiryo called his grandson, Hiroshi Yamauchi, and asked him to take over the family business. Becoming the new president of Yamauchi Nintendo & Company was a tumultuous time for Hiroshi, who had to drop out of law school at the age of 21 to take over the family business. His lack of experience caused resentment among the Nintendo employees, followed by a factory strike. Hiroshi shocked everyone by firing everyone who crossed him and establishing new policies requiring all potential products and ventures to first be cleared by him alone. He changed the name of the company to Nintendo Karuta, then again to Nintendo Company Ltd. Amazingly, Hiroshi’s first several ventures were wildly successful. They included:
Reintroduction of western playing cards, which hadn’t been sold in Japan since they were banned in 1633. Establishing the first game card licensing deal in Japan with the Disney Company. A monumental success, the Disney characters were featured on decks of cards designed for party and family games. Taking the company public on the Japanese stock market.
Eventually, Hiroshi decided to expand the company into non-game-related markets, including a taxi service, hotels, and even the food industry, all of which failed. This combined with a crash in the game card market caused a nosedive for Nintendo profits. Without a major reinvention of the company, Nintendo risked bankruptcy.
The Ultra Hand Makes Nintendo a Toy Company
On a visit to the dying Nintendo card game manufacturing assembly line, Hiroshi noticed a low-level maintenance engineer named Gunpei Yokoi playing with an extending arm he designed and built. Hiroshi was amazed by the extending arm and quickly ordered it into mass production, calling it the Urutora Hando or Ultra Hand. The Ultra Hand was an instant success, and the decision was made to transition Nintendo into a toy manufacturer. Yokoi was moved from maintenance into the head of Games and Setup, which oversaw product development. Yokoi and Hiroshi’s partnership reignited Nintendo, making it once again an industry giant. Hiroshi became the richest man in Japan, but things ended tragically for Yokoi. While the Japanese toy market was already dominated by well-established companies such as Tomy Co. and Bandi, Gunpei Yokoi’s engineering degree steered Nintendo into the emerging world of electronic toys. These electronic toys, all conceived by Yokoi, were extremely popular and allowed Nintendo to carve out their own niche in the toy market. Soon, Nintendo formed a joint venture with the Sony Corporation to develop electronic games, the first of which was called the Nintendo Beam Gun Game, a home version of the popular arcade light gun games.
Nintendo’s Video Game History
In 1972, the U.S. military test project the Brown Box became available to the public as the first home video game console called the Magnavox Odyssey. Seeing the potential for the next steps in electronic games, Nintendo made their first foray into the world of video games in 1975 by acquiring the Odyssey’s distribution rights for Japan. This new and exciting market was growing in popularity and with the moderate success of the Odyssey, Nintendo started developing its own games and consoles with the Color TV-Game systems. The Color TV-Game line of home consoles started in 1977 with the Color TV-Game 6, a dedicated console containing six pre-programmed games designed in the same vein as the mega-hit Pong. Developed with a small limited run, the system showed signs of promise, and in 1978 Nintendo followed it up with the Color TV-Game 15, another dedicated console. This one had a more comfortable design and nine additional games (all variations of Pong). This same year, Nintendo released its first video game designed for arcades called Computer Othello. Although a success, it was never released outside of Japan. Also in 1977, a newly graduated art student, Shigeru Miyamoto, was hired as a staff artist for Nintendo’s planning department thanks to his father’s friendship with Hiroshi Yamauchi. Miyamoto was soon mentored by Gunpei Yokoi and eventually became one of the most important players in the video game industry, creating some of Nintendo’s most popular properties and hailed as “The Father of Modern Video Games.”
The Nintendo Game in the U.S.
By the 1980s, the business was growing at an alarming rate for Nintendo both domestically and internationally. The Color TV Games system was a steady seller, as was the company’s coin-op arcade catalog. The business grew to the point where it began opening offices in its second-biggest market, the United States, calling it Nintendo of America (NOA). One of Nintendo’s more popular coin-op arcade games in Japan, titled Radar Scope, showed quite a bit of promise in the United States based on pre-tests, so an enormous number of units were manufactured for Nintendo of America. When the game fully released, it was an enormous flop, forcing an overstock of unwanted units and a potentially disastrous loss in inventory costs. Desperate to prove his talents for game design, Miyamoto was given the assignment to develop a game using the Radar Scope engine and tech that could easily be converted from the overstock units with little additional cost. With an extremely small budget, Miyamoto created Donkey Kong. The units were quickly switched over to Kong and it became an instant, historic success. This made Miyamoto into Nintendo’s top game producer and the dominant force in the coin-op arcade market.
The First Handheld Nintendo Game
As his protégé Miyamoto shot Nintendo into success at the arcades, Gunpei Yokoi was busily reinventing the home video game market. After spotting a businessman messing around with a calculator to entertain himself on a commuter train, Yokoi was inspired to use that same calculator technology to invent a line of handheld video games that became known as the Nintendo Game & Watch. These handheld LCD games featured the same display technology as calculators, only with the graphics forming characters and objects instead of numbers. With pre-printed stationery foregrounds and backgrounds, the limited animated graphics could be moved by the player via controller buttons on opposite sides of the screen. The movement button design eventually evolved into the Emmy Award-winning D-Pad (which you might know as a game controller). As they grew in popularity, the Game & Watch designs expanded into dual screens, similar to today’s Nintendo DS. The Game & Watch was a hit and soon numerous toy companies were releasing their own LCD handheld games. Even in the Soviet Union, clones of the Game & Watch titles popped up, mainly because Nintendo wasn’t allowed to sell their products within the USSR’s borders. Ironically, Nintendo’s most popular handheld game, Tetris, would be created by the Soviet computer engineer Alexey Pajitnov.
The Super Mario Bros. Games
After seeing the success and potential of a console system with interchangeable cartridges, Nintendo developed its first multi-cartridge gaming system in 1983, the 8-bit Famicom (which translates to Family Computer), which delivered near-arcade quality games with far more power and memory than any previous console on the market. At first, the system released in Japan with failing results, but quickly caught on when Miyamoto produced a game taking his popular Mario Bros. into a new style of multi-level adventure: Super Mario Bros. The game was such a huge success that Nintendo quickly bundled it with the Famicom system, which drove sales of the console as consumers bought it just to play the game. This also started Nintendo’s long history of packaging their most popular games along with their latest consoles. Nintendo was seeing a boom in the video game market in Japan, but the U.S. game market was in disastrous shape. As Atari had no way to prevent unlicensed titles from being designed for its system, the Atari 2600, the U.S. market was literally flooded with poor quality games. That caused the entire industry to suffer from a poor reputation. At first, Nintendo approached Atari to distribute the Famicom in the U.S., but bad blood had formed during their competitive years, so Nintendo turned to Sears, who had originally helped the Atari 2600 establish itself in the market. With video game sales slumping and a stockpile of unsellable Atari 2600 units, Sears also passed. By the end of 1983, the U.S. video game market crashed, causing most of the major players to go out of business.
The Rise of the Nintendo Entertainment System
Convinced that its system could still make a splash in the U.S. market, Nintendo made preparations to release the Famicom itself, taking special care to learn from Atari’s failures. As American consumers were turned off by the connotation of a video game system, thinking of the low-quality titles previously released, Nintendo renamed the Famicom as the Nintendo Entertainment System (NES) and redesigned it to look more like an entertainment center component. To prevent other companies from releasing unauthorized and low-quality games, Nintendo developed the 10NES lockout chip that prevented unlicensed games from working on the system. They also devised the Nintendo Seal of Quality to indicate authorized and officially licensed games. In 1985, Nintendo first test-marketed the NES in New York, then expanded to Los Angeles, Chicago, and San Francisco. These initial launches were a success and Nintendo expanded the release nationally across all of the United States. This move immediately reignited the video game market in the U.S. and instantly established Nintendo as the biggest brand name in the business.
The Next Step: Game Boy
Throughout the ’80s, Nintendo continued its hold on the video game market by not only releasing quality self-published games, including a continual stream of innovative titles created by Shigeru Miyamoto, but also by requiring third-party titles to go through a strict approval process before allowing a release on the NES. This showed the public Nintendo’s commitment to quality over quantity. As its reputation and brand recognition grew, Nintendo became so integrated into the minds of the public it eventually released its own self-published magazine in 1988, Nintendo Power. In 1989, Nintendo released its first and most important portable handheld gaming system. Created by Gunpei Yokoi, the Game Boy took the market by storm. With the Game Boy, people began seeing video games as more than just kids’ toys. Adults started to use the systems to entertain themselves on buses, trains, and subways during long commutes to work.
The Video Game War
Much of the Game Boy’s success was due to Nintendo packaging it with the addictive puzzle game Tetris, plus maintaining a balance of titles for both casual and hardcore gamers, even creating styles of games unique to the system. The Game Boy remains the longest-running line of video game systems, and the latest model, the Game Boy Advance SP, still plays all the original Game Boy classic titles. Part of Nintendo’s consistent success in beating out the competition was due to some questionable deals allowing for price-fixing, third-party exclusives, and retail favoritism. Several lawsuits started flying from consumers (for the price-fixing) and from SEGA (its biggest competition), who accused Nintendo of forcing the SEGA Master System off store shelves via crooked deals with retailers. The courts found Nintendo guilty and required amends to redistribute a large amount back to the consumers and break exclusive deals with third parties and retailers, but Nintendo ended up turning the loss into another victory. It distributed the price-fixing settlement in the form of thousands of $5 rebate checks, so consumers had to buy more Nintendo products. By 1990, the console competition started to rise into a full-blown war with the growing popularity of affordable PC home computers, the introduction of 16-bit consoles, the SEGA Genesis, and the TurboGrafx-16. Nintendo was able to keep the competition at bay with the release of Miyamoto’s Super Mario Bros 3, the best-selling NES title in the system’s history. It sold over 18 million copies and drove additional sales of the NES 8-bit console. Knowing this was only a temporary solution, Nintendo started designing its own 16-bit system, and in the same year, it released the Super Famicom in Japan. The new system was a monster success, selling 300,000 units in just a few hours. A year later, the Super Famicom was released in the United States as the Super Nintendo (SNES), but its debut was long after the competition had already established itself in the market. Eventually, the SNES would finally overtake the industry again with SEGA Genesis landing in the #2 slot.
The Integration of PC Technology
By the mid-’90s, game consoles were starting to integrate PC technology into console development for a new generation of superior game systems, especially the hot new CD-ROM discs. These discs could hold more information, resulting in superior graphics, deeper gameplay, and broader experiences. Soon the competition began releasing disc-based consoles with 64-bit technology. Although Nintendo researched the possibilities of releasing their own disc-based system, they opted out and choose to stick with game cartridges with the release of the Nintendo 64 (N64) in 1996. Although the N64 cartridges were far more costly than CD-ROM discs, the loading times were dramatically reduced, as the cartridges were capable of delivering the information almost instantly. Discs required the system to move the laser reader around to locate and slowly load the game information. The N64 was also the first home console in Nintendo’s line to feature an analog (or thumb) stick on its controller. The N64’s release was a bit of an odd one. While it sold extremely well in North America, with 500,000 units in its first four months, it was the first Nintendo console to get a cold reception in Japan. Although the N64 exceeded SEGA’s disc-based console, the Sega Saturn, Sony, had released its own video game system, the Sony PlayStation. With lower manufacturing costs, a lower price tag, and a larger library of games, the PSOne outsold the N64 by less than 10 million units, making it that console generation’s winner by a nose. For the first time in the company’s history, Nintendo’s console dropped to #2.
3D Nintendo Consoles Before Their Time
The same year the N64 released in Japan, Nintendo suffered another loss with the Virtual Boy. To try and leverage the virtual reality craze, creator Gunpei Yokoi wanted the Virtual Boy to be the first gaming system to deliver a true 3D experience via shutter goggles and a moving mirror system. From its launch, it was plagued with problems. Nintendo forced Yokoi to rush the system’s release, causing many cut corners. While it was marketed as a portable virtual reality experience, it didn’t quite hit the mark and caused many players to get headaches. The failure of the Virtual Boy drove a wedge between Yokoi and Nintendo president Hiroshi Yamauchi, as both blamed the other for the system tanking. Yokoi stayed with Nintendo through 1996 to see the launch of the Game Boy Pocket, a smaller version of Yokoi’s Game Boy system. Once the Game Boy Pocket was completed, the man once considered the Thomas Edison of video games severed his 30-year relationship with Nintendo.
Pokemon: Reigniting Nintendo’s Success
In 1996, the slumping sales of the Game Boy were reignited by an innovative new approach to gameplay. Nintendo game designer Satoshi Tajiri created a new line of games called Pocket Monsters (aka Pokémon). An instant hit, it boosted sales and became a major franchise unto itself, spawning video games, card games, toys, television series, and feature films. Reignited by the success of Pokémon, but threatened by competitive handheld systems on the market, Nintendo released the Game Boy Color (GBC) in 1998. Although many consider the GBC as nothing more than a colorized version of the Game Boy, it was actually an extremely innovative and groundbreaking system. Not only did it allow for superior games in color, but it was the first handheld system to be backward compatible, use wireless connectivity via infrared sensors, and the first to use motion-controlled cartridges, which eventually inspired Nintendo’s next-generation console, the Nintendo Wii. After Nintendo’s ups and downs on both the console and handheld fronts, 2001 served as a major year for the company. It released two new systems that upgraded all of its existing traditions. On March 21, 2001, the Game Boy Advance premiered in Japan, and on September 14, 2001, its first disc console, the Nintendo GameCube, made its debut.
Compatibility With Nintendo Classic Games
Released only two years after the GBC, the Game Boy Advance brought the quality of the SNES console into a handheld. The final system to produce all 2D games in a classic style was also backward compatible with all the classic games from the original Game Boy. The GBA also hosted more ports of classic Nintendo games than any other system. Game ports ranged from the Nintendo Game & Watch and NES titles to SNES and coin-op arcade games. The GBA has outlasted any other game system and is still available today. During a time when Microsoft was launching the Xbox and Sony was releasing the PlayStation 2, both touted as all-inclusive entertainment systems designed to play games, DVDs, and CDs, Nintendo decided to take the opposite approach and release the GameCube as the only “current-gen” gaming console designed specifically for video games and sold it at a lower cost than the competition. Unfortunately, this approach didn’t catch on and the GameCube dropped Nintendo to the number three spot in the console wars, with the PlayStation 2 as #1 and Microsoft’s Xbox coming in #2. Instead of admitting defeat, Nintendo went back to the drawing board and started developing plans for a new and unique “next generation” of home gaming console. In 2001, the Nintendo Revolution was conceived with a new way of interacting with a video game’s full motion control. On May 31, 2002, after 53 years running Nintendo and steering it to the forefront of the gaming industry, Hiroshi Yamauchi retired from his position as president and became chairman of the Nintendo board of directors. His successor, Satoru Iwata, head of Nintendo’s Corporate Planning Division, was named as his successor and became the first Nintendo present outside of the Yamauchi family.
Still Leading Today With NES Classic and Nintendo Switch
Under the new presidency, Nintendo started looking for more out-of-the-box approaches to the market, not just by increasing the quality of the games, but how the games are played. First, it released the Nintendo DS in 2004, the world’s first home gaming system with a touch-sensitive screen, and the first Nintendo handheld to not use the Game Boy moniker since the Nintendo Game & Watch. The Nintendo released the DS in direct competition with Sony’s handheld, the Sony PSP, and the Nokia N-Gage. The new approach to gameplay was a hit and the DS became the #1 selling handheld, even breaking the Game Boy Advance’s sales record in a fraction of the time. After five years of planning, the Nintendo Revolution was renamed the Nintendo Wii and released in North America on November 19, 2006, making it the first Nintendo console to ship in the United States before Japan. The Wii featured numerous innovations like its unique motion controls, backward compatibility with GameCube discs, and the Wii Virtual Console. The Virtual Console included numerous interactive features like the Wii Shop Channel’s Virtual Console, where gamers could purchase and download classic NES, SNES, and N64 titles, as well as games from previous competitors such as the SEGA Master System and Genesis, the TurboGrafx-16, and TurboGrafx-CD, and the Neo Geo and Neo Geo CD. In Europe, many Commodore 64 titles were also available, plus in Japan games from the classic MSX computer system. All of these features were combined in a single system selling at a lower cost than any other console on the market. Maintaining Nintendo’s stance that gameplay is more important than super HD graphics quality, the Wii sold out in just a few hours at its launch. The success of the Nintendo DS and the Wii shot Nintendo back to the top of the console market. The company is currently enjoying success with its limited-run mini console the Nintendo NES Classic Edition, and the release of the wildly popular Nintendo Switch. With its 117-year lineage, Nintendo has seen the entirety of video game history and is the only console manufacturer to consistently release a system for every generation of gaming consoles. It continues to remain on top, now with new ways to deliver classic games to a mass audience.
