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Before Yokoi revealed his talent as a creator, the company was just like a mixture of a publishing company and a toy importer; they printed a few types of playing cards and sold some tabletop games imported from the US.
The company was founded in 1889 by Fusajiro Yamauchi. It's main product was a traditional Japanese playing cards called Hanafuda, which was very popular then as a gambling tool.
Youtube: It Figures! - Nintendo brand Hanafuda playing cards
His products were renowned for their high quality and he had exclusive access to a nationwide distribution network, thanks to which the company created a virtual monopoly in the market.
It was his famous great-grandson, Hiroshi Yamauchi, who made the company a global player in digital toy industry. After becoming its third president, he concentrated his effort on creating another main product. Although they were selling ordinary playing cards (which is called "Trump" in the country) alongside Hanafuda, it hadn't gained the same popularity. So, he decided to make it more appealing for children by affiliating with the world's most famous animation studio, Disney.
The newly released version of playing cards instantly became a household name and the company more than doubled its sales in just a few years. Thanks to the big sales boost and its increasing profit, which was realized by automation of production processes of playing cards, the company went public in 1962.
It was a great honor for any Japanese corporate manager back then, but he had little time to enjoy the achievement because even though his company held the dominant position in playing cards market in Japan, he knew the market itself had been shrinking as those analog games had been losing their appeal to the young generations. Fortunately the company was not in a critical state yet, but he was under pressure to take actions before it's too late.
So, he sought to diversify into other business areas such as taxi business and food industry; they sold freeze-dried rice and Disney licensed rice seasonings (Furikake). But those businesses were not quite profitable.
What he needed then was a real game changer, who could take the company into uncharted territory.
Of course, the game changer was Yokoi; he transformed Nintendo from a moderate-sized domestic company into the dominant force in the global video game industry. But interestingly, Nintendo didn't hire him as a developer and the company wasn't Yokoi's first choice, either; it was just a coincidence that they found each other.
(continue to part 2)