Nintendo: From Playing Cards to Video Games

This article was written by Samuel Phineas Upham

When you think about Japanese companies, Nintendo is probably among the handful of names that come to mind. Its flagship characters, Mario and his brother Luigi, have been a centerpiece on all of its consoles since the early 80s. Yet, Nintendo did not always sell video games.

In the later part of 1889, a company called Nintendo Koppai began selling a card game called Hanafuda. Hanafuda is not really an official game, so there are no rules that are set in stone to play it. Some variations have a set number of rounds to be played, while others score based on who has the most points when the game ends.

The cards sold by Nintendo Koppai were all handmade, and the card game became immensely popular within a matter of years. The founder, Fusajiro Yamauchi, soon needed additional help to satisfy demand and hired workers in response. This led to Nintendo funding its own card tournament, then called “The Nintendo Cup.”

Yamauchi’s son took a trip to the US to meet with executives from the top playing card manufacturer in the US. He was stunned to find that with all their sales and saturation, they still occupied a small office. This was the first cue that cards had a limited shelf life. Nintendo immediately went to secure rights from Disney to put its characters on the cards it was making.

The 60s brought some intriguing shifts to their business model in search of new capital. Nintendo began a taxi cab company, and opened a series of love hotels. The shift to video games occurred in 1979, as Nintendo gave birth to the Game & Watch.

About the Author: Samuel Phineas Upham is an investor at a family office/hedgefund, where he focuses on special situation illiquid investing. Before this position, Samuel Phineas Upham was working at Morgan Stanley in the Media & Technology group. You may contact Samuel Phineas Upham on his Facebook page.