How Nintendo Went From Yakuza Supplier to Video Game Giant

Nintendo started out in 1889 as a small family-run business producing handmade playing cards in Japan. Over 130 years later, Nintendo has become one of the most iconic video game companies in the world, responsible for characters like Mario, Zelda, and Pokemon that are recognizable across generations.

This article will explore Nintendo’s fascinating history, from its humble origins crafting playing cards for the Japanese mafia, to revolutionizing the arcade and home gaming industries, surviving video game crashes, and innovating time and time again with consoles like the Nintendo Entertainment System, Game Boy, and Wii. We’ll also look at Nintendo’s missteps, controversies, and comebacks across the decades as this historic company grew from a playing card supplier to a multi-billion dollar video game giant.

Humble Playing Card Origins (1889-1963)

In 1889, founder Fusajiro Yamauchi opened Nintendo Koppai in Kyoto to produce handmade hanafuda playing cards. These evaded Japan’s ban on regular playing cards and soon became popular with gamblers and the Yakuza

Fusajiro skillfully handcrafted the cards, using clay, tree bark and natural inks. The quality was far superior to alternatives, and the Yakuza became Nintendo’s biggest customer. Fusajiro maximized production by hiring workers, allowing rapid expansion across Japan.

In 1907, playing card bans loosened, allowing Nintendo to also produce Western card decks. By this time, Nintendo dominated Japan’s playing card industry. But Fusajiro still dreamed of making Nintendo an international household name.

Fusajiro retired in 1929, passing the business to his son-in-law Sekiryo Kaneda who continued growth. But with no male heirs, Sekiryo turned to his grandson Hiroshi Yamauchi in 1949, who took over aged just 21.

Hiroshi fired his family members to assert his leadership. He then saw the potential of expanding into toys and games after a visit to America, and negotiated Nintendo’s first Disney licensing deal on playing cards in 1959. This expanded Nintendo’s audience beyond gambling.

The Search for a Hit Product (1963-1980)

Despite initial success with Disney cards, Hiroshi struggled to find other winning products. He tried distributing instant rice, managing love hotels, and even taxi services, almost leading Nintendo to bankruptcy.

But in the late 1960s, an employee’s extendable toy dubbed the Ultra Hand became a huge hit. This convinced Hiroshi to focus on toys and games.

Gunpei Yokoi, inventor of the Ultra Hand, went on to make 1970s toys like the Love Tester. But Hiroshi wanted something bigger. He decided to break into the booming arcade gaming industry, copying Taito’s Space Invaders to release Radar Scope in 1979. But it flopped in America, leaving Nintendo with a warehouse of unsold arcade cabinets.

A contest was held to redesign these as a new game, won by Shigeru Miyamoto. His game Donkey Kong, released in 1981, became a smash hit across America. This game introduced Mario and spawned the lucrative Mario franchise.

Revolutionizing Home Gaming (1980-1989)

Buoyed by Donkey Kong’s success, Hiroshi gambled by shutting down Nintendo’s profitable arcade division to focus entirely on a new home console – the Famicom – first launched in Japan in 1983.

As America’s gaming industry collapsed in 1983, Hiroshi felt it was the perfect time to launch the redesigned Nintendo Entertainment System (NES) and Super Mario Bros in 1985. Against all odds, it became a phenomenal success, saving the US gaming industry.

The NES dominated the market with iconic first party games like Super Mario, Zelda, Metroid and Final Fantasy. Nintendo also launched its Power magazine, game helplines and television shows, building a sense of community.

In 1989, Gunpei Yokoi’s Game Boy introduced portable gaming. Again, Nintendo bundled in a killer app – Tetris. The revolutionary Game Boy became a worldwide phenomenon.

Battling Rivals in the Console Wars (1989-2006)

By the late 80s, Nintendo controlled up to 90% of the gaming market. But Sega emerged as a feisty rival, marketing its Genesis console as edgier and more mature than Nintendo’s family-friendly image.

Nintendo fought back with the Super Nintendo, but Sega undercut on price and bundled Sonic. However, Sega’s later Saturn and Dreamcast consoles failed, leaving Nintendo dominant.

In 1991, Sony announced a CD add-on for the SNES, but Nintendo unexpectedly ditched them for Philips. Furious Sony entered the market directly with the PlayStation in 1994. The rift marked the start of an intense battle between these former partners.

Sony’s PlayStation and PlayStation 2 eroded Nintendo’s market share throughout the 90s and early 2000s. Microsoft’s 2001 Xbox launch added to the pressure. Nintendo’s Gamecube console struggled against this fierce competition.

In 2002, Hiroshi Yamauchi retired after leading Nintendo for 53 years, leaving the company in crisis against Sony and Microsoft. His successor Satoru Iwata had the monumental task of turning fortunes around.

Innovation and Comebacks (2006-Present)

Satoru Iwata realized Nintendo had to innovate and create new markets. He tasked Shigeru Miyamoto with developing the 2006 Wii console, focused on motion controls and family fun rather than power or graphics. The unique Wii sold over 100 million units.

Nintendo continued innovating with the dual portable/home Switch console, and expanded into mobile gaming through titles like Pokémon Go. Recent successes like the Super Mario movie prove the enduring appeal of Nintendo’s characters.

However, Nintendo also faces ongoing issues around creator relations and poor environmental practices. But after 130 years, the company keeps adapting and survives any crisis – a testament to the brand power built under visionary leaders like Yamauchi, Iwata and Miyamoto.


Nintendo has come incredibly far from its origins producing handmade hanafuda cards in 1889. Through groundbreaking arcs, video game crashes and fierce competition, Nintendo has shown impressive resilience to recover from every crisis and stay relevant through constant innovation and mass appeal.

Key figures like Hiroshi Yamauchi, Gunpei Yokoi, Shigeru Miyamoto and Satoru Iwata deserve immense credit for transforming this playing card company into one of the most impactful video game developers ever. After 130 years, Nintendo continues to win over new generations through delightful worlds, loveable characters and pure gaming magic.