Not so long ago, playing Nintendo was a lot closer to "Go Fish" than to Triple Play 2000 or to simulated race-car driving. The company that is partially responsible for the decreasing number of American children who play outside after school (and perhaps their increasing girth as well) started out making Japanese playing cards. Fusajiro Yamauchi launched the entertainment system manufacturing company in Kyoto in 1889. His playing cards, called "Hanafuda," were a big hit both at home and abroad. In 1950, Hiroshi Yamauchi took the helm, and the following year renamed the company Nintendo Playing Card Co. Ltd. By the 1950s, Nintendo was the first successful Japanese company to mass-produce playing cards. In 1959, the manufacturer created a new market for children's games when it began using the images of Walt Disney characters on its playing cards. In 1963, the company changed its name to Nintendo Co. Ltd., and began manufacturing games.

Video killed the playing cards star

The 1970s at Nintendo were marked by significant innovation in the realm of electronic games. The company created the first electronic toys in Japan in 1970. Four years later Nintendo developed an image projection system for amusement arcades, which it exported to Europe and the United States. Through a joint project with Mitsubishi Electric, Nintendo developed video games using an electronic video recording (EVR) player. And in 1976, the company began using microprocessors in its video game systems. Soon after the introduction of video game systems for home use, Nintendo created coin-operated video games powered by microcomputers.

Think Donkey Kong

The company's first American subsidiary, Nintendo of America, Inc., was established in New York in 1980. That division was later consolidated into a Seattle, Washington outpost. The following year it introduced Donkey Kong, an arcade game that left an indelible mark on a generation of arcade fanatics. Kong went on to become the hottest-selling arcade game in the business.

Movin' on up

Famicom, Nintendo's first advanced home video game system, was released in Japan in 1983. At this point in America, good old Atari and the rest of the home game market were being stomped into the ground. In 1985, Nintendo boldly took over the scene with its Family Computer Nintendo Entertainment System (NES). With games like Super Mario Bros. and Duck Hunt, the company convinced America's youth to forgo outdoor after-school activities and to spend endless hours in their basements toggling their joysticks. Two years later, Nintendo had earned a citation as the No. 1 selling toymaker in America. Meanwhile, its Legend of Zelda became the first "new generation" home video game to sell more than 1 million units. Hungry, pallid Nintendo fans had more than 65 titles to choose from, and the company was looking to expand not only its offerings, but also its market. Nintendo hoped to move beyond the junior set by attracting adults. Soon, kids everywhere would be fighting their parents for the controllers, and grown men would be playing late-night games of NBA Live.

Anti-piracy

In order to discourage reproduction of its products, Nintendo maintains stringent licensing policies on software development. In addition to paying royalties to create games for Nintendo, programmers licensed to develop Nintendo games must get approval of every game design, agree never to work for Nintendo's competitors, and purchase blank game cartridges directly from the company. This strategy not only protects Nintendo from piracy, it also allows the company to minimize development costs.

Introducing Game Boy

Game Boy, born in 1989, was the first portable hand-held game system with interchangeable game cartridges. It was the first in a series of new products introduced to stave off Nintendo's rampant competition. The company's next development was the Super FX Chip, introduced in 1993. In 1994 it developed Advanced Computer Modeling (ACM) graphics, a proprietary technology that applied to the Donkey Kong Country and Killer Instinct titles. Nintendo also loosened its licensing deals, and began designing software in conjunction with companies like Silicon Graphics. In 1998, the company introduced its color Game Boy, the Game Boy Camera, and the Game Boy Printer. The company also attempted to ameliorate the couch-potato problem with its new Pokemon (pocket monster) Pikachu, a virtual pet whose owner has to exercise to generate "food" for its survival. And in 2000 the company announced it would sell an adapter that links the Game Boy to the Internet through a cell phone.

Back on top

Now ranked No. 2 in the industry, Nintendo's rivals in the $15 billion retail video game industry are Sony, with its top-selling PlayStation, and Sega, which ranks third. But like the indomitable Super Mario Bros., Nintendo plans to reclaim the throne. Its strategy of late has been to find innovative ways to "expand the brand." In some cases, Nintendo has been able to do this while contributing to the community. In 1992, in conjunction with a group called the Starlight Foundation, Nintendo developed portable "Fun Centers" for use in the children's wards of hospitals. Similarly, Nintendo of America donates equipment and space to DigiPen, a video game design school in Redmond, Washington. In return the company gets first crack at the school's graduates.

Hilfiger's everywhere

In April 1998, Nintendo realized an opportunity to exploit the link between what customers do and what consumers wear. The company immediately struck a deal with baggy-jeans-pushin' clothing designer Tommy Hilfiger. Through an exclusive agreement, Nintendo agreed to install 64 interactive kiosks in the designer's retail stores in the top 100 U.S. markets. In return, Hilfiger designed a limited edition line of snowboarding jackets, sweatshirts, and T-shirts to promote Nintendo's "1080 Snowboarding" video game.

Dolphin on the horizon

In 1999 Sega came out with the 128-bit Dreamcast console. The Dreamcast's breathtaking graphics and e-mail and Web capabilities made it an instant hit. Sony soon announced plans to counter with its DVD-playing PlayStation 2 console due out at the end of 2000. Moreover, Microsoft has plans to release its own console in 2001, the X-Box. With all the competition, Nintendo's N64 console is quickly becoming obsolete, making the need for Nintendo to come out with its own 128-bit system all the more pressing. But Nintendo fans fear not: the company has announced that its next generation video game console (code name: Dolphin) will be out in 2001. The console will feature a 400 Mhz central processor from IBM, a custom designed 200 Mhz graphics chip and a DVD drive from Matsushita. NEC has announced plans for a $761 million factory to produce microchips for Dolphin. Nintendo also has plans for a new Game Boy called GameBoy Advance due out in 2001.

Won't you be my partner?

Just as Mario couldn't have made it without Luigi, Nintendo believes it won't make it without some partners of its own to strengthen its position in the industry. In July 1999 the company signed agreements with Applied Microsystems, Metrowerks, and Factor 5 - all game developers. The following September, the company set up a joint venture with software developer Konami. In March 2000 the company partnered with Lawson to utilise Lawson's e-commerce platform to sell video games. That same month, Nintendo linked up with advertising giant Dentsu to develop games software for portable machines and mobile phones. In May of that year, Nintendo announced a strategic investment in game developer Silicon Knights. Thanks to some of the deals, Mario is popping up in a few unexpected places - from McDonals's to the back seat of your car. The company has partnered with McDonald's of Canada to place N64 Fun Zones in select McDonald's restaurants in Canada. And it also signed a deal to co-market and promote Visteon's new Rear Seat Entertainment System.

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