Nintendo began in Kyoto in 1889 making hanafuda playing cards, then experimented with businesses ranging from taxis to novelty products before maintenance engineer Gunpei Yokoi’s homemade toys helped steer it toward electronic entertainment — and 96 years after its founding, the former card company launched the NES in America and helped revive a home-console market devastated by the 1983 crash.

Nintendo’s oldest product and its most consequential American machine belong to the same history, but not to a tidy master plan. The business that sold hanafuda cards in Kyoto in 1889 did not spend the next 96 years patiently waiting to invent the Nintendo Entertainment System. It changed names, tested markets, built toys, hired unusual talent and survived bets that did not all work.

That distinction matters. The celebrated arc from cards to consoles is less a story of prediction than one of repeatedly finding new ways to package play. Gunpei Yokoi’s work was central to the transition, but so were the engineers, artists and commercial operators who turned a successful Japanese console into a credible American retail product.

The card company came first

In September 1889, Fusajiro Yamauchi began making and selling hanafuda in Shimogyo-ku, Kyoto. Nintendo’s official corporate history traces a gradual expansion rather than a sudden reinvention: western-style cards in 1902, mass-produced plastic cards in 1953 and Disney character cards in 1959.

Hanafuda are compact Japanese playing cards decorated with flowers and other seasonal designs. They were not electronic, but the business around them already involved several capabilities that would remain useful: manufacturing to consistent standards, explaining rules, distributing entertainment products and giving families reasons to play repeatedly.

The company changed its name from Nintendo Playing Card Co., Ltd. to Nintendo Co., Ltd. in 1963. Dropping “Playing Card” did not create a new business model by itself, but it left room for one. Japan’s card market had limits, and president Hiroshi Yamauchi began looking for other products and services that the company might sell.

Diversification was a search, not a straight line

Among those experiments was Daiya, a Kyoto taxi concern associated with Yamauchi. A surviving 1971 photograph and research collected by early-Nintendo historian Erik Voskuil document the unlikely episode, as Nintendo Life reported. Nintendo also sold novelty goods and moved more deliberately into toys.

These ventures are sometimes narrated as a comic list of failures before the inevitable arrival of Mario. That gives hindsight too much power. At the time, Nintendo was a modest manufacturer testing where its production capacity, distribution relationships and familiarity with leisure products might travel.

The experiments also produced organisational learning. Cards had taught Nintendo about rules, families, licensed characters and repeatable manufacture. Toys added mechanisms, shorter development cycles and the need to catch a buyer’s attention quickly. The company did not discover a single adjacent market. It accumulated a vocabulary for making play physical, affordable and easy to grasp.

Gunpei Yokoi found a route from maintenance to toys

Gunpei Yokoi joined Nintendo in 1965 as an electrical engineer working on the maintenance of card-making equipment. During spare time he assembled an extending grabber for his own amusement. Yamauchi noticed it during a factory visit and asked for a saleable version. Released in 1966 as the Ultra Hand, it became an early toy hit.

The anecdote survives partly because it sounds like a corporate fairy tale. The better version preserves the engineering. Yokoi was not an untrained caretaker who wandered into design. He had studied electrical engineering, understood mechanisms and knew how to make inexpensive parts do something immediately legible. The Video Game History Foundation’s discussion with historian Matt Alt is especially useful on that distinction.

Yokoi went on to work on the Ultra Machine, the Love Tester and light-gun products. The path moved from mechanical devices towards electronics, but remained anchored in the player’s action. Pulling, aiming, testing or pressing a control had to create a response that was obvious and satisfying.

His homemade devices did not single-handedly transform Nintendo. The company already had leaders willing to diversify and teams capable of manufacturing and selling the results. But the commercial success of Yokoi’s early products gave Nintendo evidence that an engineer with a playful eye could open a new category. In 1980, his Game & Watch line brought games and portable liquid-crystal displays together in a mass-market object.

Electronic entertainment arrived in stages

Nintendo’s official timeline records the Laser Clay Shooting System in 1973, the Color TV-Game 6 and 15 in 1977, arcade development in 1978, Game & Watch in 1980 and Donkey Kong in 1981. Mechanical toys, optoelectronic attractions, handheld devices and arcade software formed a ladder. The company did not jump directly from paper cards to a home console.

Nor should the console story be reduced to Yokoi. Masayuki Uemura led the hardware group behind the Family Computer, or Famicom. Shigeru Miyamoto and other designers and engineers built the games that gave Nintendo’s machines their character. It was a system of complementary skills, not one inventor’s uninterrupted line of products.

Nintendo launched the red-and-white Famicom in Japan in July 1983. Early hardware faults forced it to recall and repair machines, a reminder that the company’s ascent was not frictionless. Once corrected, the console found a large audience at home and gave Nintendo a platform it could consider taking abroad.

An older Nintendo annual report records the next step plainly: the US version of the Famicom, renamed the Nintendo Entertainment System, began selling in the United States in 1985. That was 96 years after the company’s founding. The arithmetic is clean, although the launch itself was more limited than the shorthand suggests.

The 1983 crash was real, but it was not global

The American opportunity looked distinctly uninviting. The North American home-console business had been damaged by an excess of machines and cartridges, uneven software, retailer losses and competition from home computers. The Smithsonian’s NES collection record describes a market that had become oversaturated with consoles and hastily programmed games.

Calling this a crash of “video games” can make the damage sound universal. Arcades, computer games and Japan’s console market followed different paths. The Famicom was succeeding in Japan while American retailers were still treating another home console as a dangerous proposition. What Nintendo confronted was a crisis of confidence in a particular product category and retail channel.

Nintendo’s answer was both technical and commercial. The American machine looked less like the compact Famicom and more like equipment that could sit beside a television and VCR. It was called an entertainment system, cartridges became Game Paks and the package could include the Zapper light gun and R.O.B. robot.

The choices were not merely cosmetic. Nintendo used a lockout chip and a controlled licensing programme to restrict unapproved cartridges. The policy later drew criticism for the power it gave the platform owner, but its immediate purpose was understandable: Nintendo did not want another flood of incompatible or indifferent software to destroy buyer confidence.

The 1985 launch was a test, not a nationwide conquest

The phrase “launched in America” needs one important footnote. Nintendo marketed and sold the completed NES in October 1985 in a test limited to New York, according to the Video Game History Foundation’s NES Launch Collection. The Foundation’s preserved material includes launch-party items, trade advertising and evidence of how the system was positioned. Los Angeles and other markets followed in 1986 before the national push.

That sequence makes the turnaround more interesting, not less. Nintendo did not place one enormous wager on a supposedly dead market. It adapted the Famicom, presented it as something different, tested the proposition in one difficult city and expanded as the evidence improved.

Super Mario Bros. supplied a persuasive demonstration of what the hardware could do. The controller was simple, the game taught through play and the world felt more coherent than many cartridges sold before the crash. Meanwhile Nintendo’s licensing rules, retailer arrangements and recognisable packaging gave shops and buyers more confidence in the software carrying its name.

The NES did not revive the North American home-console market alone. Sega and Atari also sold machines, home computers remained important and the recovery cannot be assigned to one box. Yet the NES became the central platform in that return, helping to restore the console as a durable mass-market product rather than a spent early-1980s fad.

Corporate histories often sand experimentation into destiny. A more useful reading, including for present-day builders studying the mechanics of corporate innovation, is that Nintendo kept translating an old competence into new forms. The thread was not cards, taxis or processors by themselves. It was the design and controlled delivery of play.

The former card maker reached American living rooms because it learned from products that sold, abandoned ventures that did not and treated a damaged market as a design constraint. The 96-year journey matters precisely because nobody in 1889 could have mapped it.