Development of Nintendo

- May 15, 2019-

Nintendo Co., Ltd. is a Japanese multinational consumer electronics and video game company headquartered in Kyoto. Nintendo is one of the world's largest video game companies by market capitalization, creating some of the best-known and top-selling video game franchises, such as MarioThe Legend of Zelda, and Pokémon.


Founded on 23 September 1889 by Fusajiro Yamauchi, it originally produced handmade hanafuda playing cards. By 1963, the company had tried several small niche businesses, such as cab services and love hotels. Abandoning previous ventures in favor of toys in the 1960s, Nintendo developed into a video game company in the 1970s, ultimately becoming one of the most influential in the industry and one of Japan's most-valuable companies with a market value of over $37 billion in 2018


In 1956, Hiroshi Yamauchi, grandson of Fusajiro Yamauchi, visited the U.S. to talk with the United States Playing Card Company, the dominant playing card manufacturer there. He found that the biggest playing card company in the world was using only a small office. Yamauchi's realization that the playing card business had limited potential was a turning point. He then acquired the license to use Disney characters on playing cards to drive sales.


In 1963, Yamauchi renamed Nintendo Playing Card Co. Ltd. to Nintendo Co., Ltd. The company then began to experiment in other areas of business using newly injected capital during the period of time between 1963 and 1968. Nintendo set up a taxi company called Daiya. This business was initially successful. However, Nintendo was forced to sell it because problems with the labour unions were making it too expensive to run the service. It also set up a love hotel chain, a TV network, a food company (selling instant rice) and several other ventures. All of these ventures eventually failed, and after the 1964 Tokyo Olympics, playing card sales dropped, and Nintendo's stock price plummeted to its lowest recorded level of ¥60.


In 1966, Nintendo moved into the Japanese toy industry with the Ultra Hand, an extendable arm developed by its maintenance engineer Gunpei Yokoi in his free time. Yokoi was moved from maintenance to the new "Nintendo Games" department as a product developer. Nintendo continued to produce popular toys, including the Ultra MachineLove Tester and the Kousenjuu series of light gun games. Despite some successful products, Nintendo struggled to meet the fast development and manufacturing turnaround required in the toy market, and fell behind the well-established companies such as Bandai and Tomy. In 1973, its focus shifted to family entertainment venues with the Laser Clay Shooting System, using the same light gun technology used in Nintendo's Kousenjuu series of toys, and set up in abandoned bowling alleys. Following some success, Nintendo developed several more light gun machines (such as the light gun shooter game Wild Gunman) for the emerging arcade scene. While the Laser Clay Shooting System ranges had to be shut down following excessive costs, Nintendo had found a new market.