Nintendo

#1In 1966, an engineer at Nintendo had been messing around with a strange mechanical arm. Squeeze the handles and the crisscrossing frame stretched forward, letting you grab things from a distance. Nintendo hadn't asked him to make it. Gunpei Yokoi was supposed to be maintaining the machinery used to manufacture playing cards.

#2Then company president Hiroshi Yamauchi noticed it.

#3He could've told Yokoi to get back to work.

#4Instead, he told him to turn the thing into a product.

#5That product became the "Ultra Hand."

#6It sold more than a million units.

#7Which leaves a pretty obvious question. Why was the president of a playing-card company interested in some homemade toy an engineer had built in his spare time?

#8Because Yamauchi had already been looking for whatever came after playing cards.

#9He just kept getting the answer wrong.

#10Nintendo had started in Kyoto in 1889, making hanafuda playing cards. Yamauchi hadn't spent his life preparing to inherit the company. He was studying law when his grandfather became seriously ill, and suddenly the young man was pulled back into the family business.

#11The card business actually did well under him. Nintendo made plastic cards, and in 1959 it started selling cards featuring Disney characters. That helped push cards beyond the traditional adult market and into more homes with children and families.

#12Nintendo became a major name in Japanese playing cards.

#13And that raised an awkward question.

#14How much bigger could a company get if it just kept selling cards?

#15Yamauchi increasingly saw a limit there. In 1963, Nintendo even dropped "Playing Card" from its corporate name.

#16Nintendo Co., Ltd.

#17Now the name could fit almost anything.

#18The trouble was, nobody knew what that "anything" should be.

#19Nintendo got into taxis. It tried instant food too, along with other businesses that had very little to do with cards.

#20Most of them went nowhere.

#21The taxi operation ran into labor and management problems and was eventually sold. Food didn't become the company's new future either.

#22Looking back from the age of Mario, all of this can feel like a weird side trip. Like a video game company somehow wandered into the wrong businesses for a while.

#23Except Nintendo wasn't a video game company yet.

#24There was no master plan pointing toward games.

#25Yamauchi didn't know what the next business was. He only knew that going back to cards and staying there wouldn't solve the problem.

#26Then he saw Yokoi's mechanical arm.

#27Once the "Ultra Hand" became a hit, Yokoi's job changed. He wasn't just the guy keeping Nintendo's card-making machines running anymore. He became a toy developer.

#28More products followed, including the "Ultra Machine" and "Love Tester."

#29And this direction had something the taxi business didn't.

#30Cards were things people bought to play with. So was the "Ultra Hand."

#31The product was completely different, but Nintendo was back to selling play.

#32Still, this wasn't some magical moment where a card company instantly became a video game company.

#33Getting from a mechanical toy to Mario would take more than another decade.

#34And Nintendo would stumble hard along the way.

#35Nintendo started putting electronics into toys. In 1970, it released the "Beam Gun," which used light to let players shoot at targets.

#36Then Yamauchi wanted to make the whole idea much bigger.

#37Japan's bowling boom was fading, leaving large bowling facilities looking for something else to do with all that space. Nintendo came up with the "Laser Clay Shooting System," a huge electronic shooting attraction built around projected targets.

#38At first, it worked. Orders came in, and Nintendo expanded.

#39Then the 1973 oil crisis hit.

#40The economy tightened, expensive leisure projects got canceled, and Nintendo's big new business took a serious blow.

#41Another wrong answer, apparently.

#42But this time, the failure didn't leave nothing behind.

#43Nintendo now had people who'd worked with electronic entertainment. It had experience using light and sensors to make games. It knew more about connecting screens, machines, and players.

#44The giant shooting facilities went away.

#45Electronic play didn't.

#46It just started getting smaller.

#47Nintendo wasn't an electronics company. It couldn't suddenly build everything it needed on its own.

#48So it worked with companies that could.

#49With help from Mitsubishi Electric, Nintendo moved deeper into electronic games. In 1977, it released the "Color TV-Game 6" and "Color TV-Game 15," machines you could plug into a television and play at home.

#50And people bought them.

#51After years of searching for something beyond cards, electronic games were starting to look like an actual business.

#52Yokoi was coming at the same problem from another direction. In 1980, Nintendo released Game & Watch, a handheld game built around a small LCD screen.

#53That became a hit too.

#54By now, Nintendo had collected a pretty unusual group of people. There was Yokoi, the former factory engineer. Masayuki Uemura, an electronics engineer Yokoi had helped bring into the company. And Shigeru Miyamoto, a young industrial designer who knew more about drawing and product design than game programming.

#55Nintendo hadn't assembled them as part of some grand strategy to dominate video games.

#56Soon, though, it desperately needed them.

#57About 2,000 unsold arcade machines were sitting in an American warehouse.

#58Nintendo had sent an arcade game called "Radar Scope" to the United States. Nintendo of America had prepared roughly 3,000 machines.

#59Only about 1,000 sold.

#60That left around 2,000.

#61For a young American operation, that was a serious problem. A lot of the company's money was now sitting in a warehouse as machines nobody wanted.

#62The American side asked Japan for another game. Something that could make use of the hardware already there.

#63One of the young employees who got a shot was Miyamoto.

#64He wasn't a veteran game programmer. He wasn't an electronics engineer either.

#65He was a designer.

#66Yokoi helped guide the project, and Miyamoto first imagined making the game around a famous character.

#67Popeye.

#68The setup Miyamoto had in mind was easy to understand. Popeye rescues Olive Oyl. Bluto gets in the way.

#69But when those characters couldn't be used as planned during the early development, Nintendo needed its own cast.

#70Bluto's role became a giant gorilla. Olive Oyl's became Pauline.

#71And in the place where Popeye might've stood, Nintendo put a little man.

#72He wasn't Mario yet.

#73Jumpman.

#74Miyamoto was still learning how video game screens worked, too. He asked engineers about the display while figuring out how to make a character recognizable with very little visual detail.

#75The game became "Donkey Kong."

#76Nintendo tested it in Washington state, and the response looked nothing like "Radar Scope." People kept putting coins into the new game. At one test location, it earned dramatically more money than the machine it was replacing.

#77Hardware that had been sitting around as a failure could now be used for something people actually wanted.

#78The warehouse problem started turning into a hit.

#79And Jumpman got a new name.

#80Mario.

#81But Mario still needed one more thing before he could become the face of Nintendo.

#82A machine that could bring him home.

#83One evening in November 1981, Uemura was at home when the phone rang.

#84It was Yamauchi.

#85Nintendo already had a major success with "Game & Watch." The obvious move would've been to keep pushing the thing that was already selling.

#86Yamauchi was thinking about the next thing.

#87What comes after Game & Watch?

#88It was the same kind of question he'd asked when the card business was still doing well.

#89This time, he handed the problem to Uemura.

#90Nintendo wanted a machine that could plug into a family television and feel much closer to an arcade machine. It needed to run games like "Donkey Kong."

#91And it couldn't cost too much.

#92Those two requirements didn't naturally fit together.

#93Uemura went to a semiconductor factory run by Ricoh. The plant had plenty of unused capacity.

#94And there, he ran into an engineer he already knew. Someone who'd worked with Nintendo back in the "Color TV-Game" days.

#95Once again, Nintendo needed electronic expertise it didn't have in-house.

#96The goal wasn't vague. Take something like the arcade version of "Donkey Kong" and get it running on a small, affordable machine under a family's television.

#97Nintendo and Ricoh started developing chips to make that possible.

#98In July 1983, the result went on sale in Japan.

#99A little red-and-white machine.

#100The Famicom.

#101After decades of looking for something beyond playing cards, Nintendo finally seemed to have the machine that could take it there.

#102A few months later, Uemura thought the thing might be dead.

#103Problems showed up early. Some of the original controller buttons malfunctioned. Games also developed graphical problems, including images disappearing or displaying incorrectly.

#104And the timing couldn't have been much worse. The year-end shopping season was coming.

#105Nintendo could've kept shipping and dealt with the complaints later.

#106It didn't.

#107The company stopped shipments and pulled affected hardware back so the problems could be fixed.

#108Uemura later remembered thinking the Famicom might die.

#109Nintendo had already watched plenty of supposed next businesses disappear. Taxis. Food. The giant shooting-range project. "Radar Scope."

#110The Famicom could've joined them.

#111But Nintendo fixed the problems and started selling it again.

#112This time, it took off.

#113The Famicom started selling fast. But selling a console and making people feel like they absolutely need that console aren't quite the same thing.

#114In September 1985, Nintendo released "Super Mario Bros.."

#115Mario wasn't just climbing around one construction site anymore. Now he kept moving to the right.

#116Smashing bricks. Clearing pits. Eating mushrooms. Running off one screen and into the next.

#117Players followed.

#118Around that time, Uemura was staying at a hotel in Tokyo for work when the phone rang. Yamauchi was staying at the same hotel and asked him to come up to his room.

#119Not long before, Uemura had thought the Famicom might be finished.

#120Now Yamauchi told him Mario looked like it was going to be a big hit.

#121There was still one place Nintendo had to prove itself.

#122America.

#123The American market in 1985 was nothing like Japan. A few years earlier, the home video game business had collapsed, leaving retailers stuck with products they couldn't sell.

#124So they weren't exactly eager for another game machine from a Japanese company.

#125Nintendo didn't just ship the Famicom over unchanged. It redesigned the machine and gave it another name.

#126The Nintendo Entertainment System. NES.

#127And it didn't launch across the whole country at once.

#128Nintendo started with New York.

#129Nintendo of America's small team went from store to store themselves. They delivered the machines. Set up displays. Tried to convince retailers to give the thing a chance.

#130When stores worried about getting stuck with unsold inventory, Nintendo offered arrangements that put much of that risk back on Nintendo.

#131There was some irony there.

#132A few years earlier, Nintendo itself had misread America and ended up with a warehouse full of "Radar Scope" machines.

#133Now it knew exactly why retailers were scared of another warehouse full of video games.

#134The NES spread beyond New York. "Super Mario Bros." went with it.

#135Nintendo wasn't just a Kyoto playing-card company looking for another business anymore.

#136There wasn't one perfect decision that turned Nintendo from cards into video games.

#137Yamauchi knew the company needed something after playing cards. He didn't know what that something was. Taxis failed. Food went nowhere. The giant electronic shooting-range business collapsed. "Radar Scope" piled up in an American warehouse, and even the Famicom stumbled badly right after launch.

#138But not everything from those attempts disappeared.

#139A strange toy in a factory turned Yokoi into a product developer. Years of electronic toys fed into "Game & Watch." A failed American arcade game created an opening for Miyamoto.

#140And when the character Miyamoto originally wanted wasn't available for the project, a little man called Jumpman appeared instead.

#141Decades earlier, Nintendo had no idea what it should make after playing cards.

#142Decades later, people switching on a Nintendo machine already knew one of the faces they might find inside.

#143The little man in the red cap is still running.