Nintendo was founded as a card company in late 1889, originally named 'Nintendo Koppai'. Based in Kyoto, Japan, the business produced and marketed a playing card game called Hanafuda. The handmade cards soon became popular, and Yamauchi hired assistants to mass produce cards to satisfy demand. Nintendo continues to manufacture playing cards in Japan and organizes its own contract bridge tournament called the 'Nintendo Cup'.
In 1956, Hiroshi Yamauchi (the grandson of Fusajiro Yamauchi) visited the U.S. to talk with the United States Playing Card Company, the dominant playing card manufacturer in that country. He found that the world's biggest company in his business was only using a small office. This was a turning point, where Yamauchi realized the limitations of the playing card business. He then gained access to Disney's characters and put them on the playing cards to drive sales.
In 1963, Yamauchi renamed Nintendo Playing Card Company Limited to Nintendo Company, Limited. The company then began to experiment in other areas of business using the newly injected capital. During this period of time between 1963 and 1968, Nintendo set up a taxi company, a 'love hotel' chain, a TV network and a food company (trying to sell instant rice, similar to instant noodles). All these ventures eventually failed, and after the 1964 Tokyo Olympics, playing card sales dropped, leaving Nintendo with 60 yen in stocks.
In 1966, Nintendo moved into the Japanese toy industry with the Ultra Hand, an extending arm developed by its maintenance engineer Gunpei Yokoi in his free time. Yokoi was moved from maintenance to the new 'Nintendo Games' department as a product developer. Nintendo continued to produce popular toys, including the Ultra Machine, Love Tester and the Kousenjuu series of light gun games. Despite some successful products, Nintendo struggled to meet the fast development and manufacturing turnaround required of the toy market, and fell behind the well-established companies such as Bandai and Tomy.
In 1973, the focus shifted to family entertainment venues with the Laser Clay Shooting System, using the same light gun technology used in Nintendo's Kousenjuu series of toys, and set up in abandoned bowling alleys. Following some success, Nintendo developed several more light gun machines for the emerging arcade scene. While the Laser Clay Shooting System ranges had to be shut down following excessive costs, Nintendo had found a new market.