Hiroshi Yamauchi appointed the task of fixing the game to Shigeru Miyamoto one of Nintendo’s newest game designers. Shigeru Miyamoto determined that it would be best to build a new game from scratch instead of trying to tweak a game that was already not appealing to the North American market. Miyamoto designed Donkey Kong using the Radar Scope hardware and was able to convert the unsold units to be able to play his new game. Nintendo of America rebranded the arcade cabinets and launched Donkey Kong to see if it would rectify their financial issues, it went on to become a huge success and ended up saving Nintendo of America from bankruptcy.

The release of Donkey Kong in 1981 firmly secured Nintendo as a key video game developer in the western market. The team continued to develop and release high quality and popular arcade games such as Donkey Kong Jr., Popeye, Mario Bros and Donkey Kong 3 while developing other new product lines for Nintendo.

In the late 1970s during his daily commute Gunpei Yokoi noticed a bored businessman on the train playing with an LCD calculator to pass time. From observing the man, Yokoi conceived the idea of a device that would act as both a watch and a miniature video game which could be used to pass time. Gunpei Yokoi’s concept would come to fruition with the creation of the Game & Watch, a line of handheld electronic games. The Game & Watch series of devices were a massive success for Nintendo going on to sell a combined total of 43.4 million units worldwide over its lifecycle.

Released in 1980, Game & Watch: Ball was the first release in the Game & Watch Silver series, named after its metallic faceplate. Yokoi continued to evolve and refine the Game & Watch series over the release of 60 different hardware releases between 1980 and 1991. In early 1981 they debuted the Gold series, in mid-1981 a wide screen series and in 1982 introduced the Multi Screen series which would later be reintroduced when the Nintendo DS was released in 2004. While developing a Donkey Kong port for the Game & Watch the development team were investigating ways to simulate the control of Mario as they were unable to use a joystick like in the original arcade game as it would reduce the system’s portability, Yokoi came up with the idea of the direction pad (D-pad). Early Game & Watch systems had a button for each action such as moving left and right or jumping. However, for the new system the team introduced the “cross” directional pad, a flat, four-way directional control with one button on each point.

The D-pad became one of the most important controller innovations and has been incorporated in various forms in every major video game console since in conception in 1982. The D-pad was incorporated into R&D2’s Family Computer home console which released in 1983 in Japan and later redesigned as released in western markets as the Nintendo Entertainment System. R&D1 played a major role in the success of R&D2’s release of the Famicom/Nintendo Entertainment System by developing many early releases for the system.

The first of the releases were ports of their popular arcade titles such as Donkey Kong, Donkey Kong 3, Excitebike, Wild Gunman and Duck Hunt but it wasn’t long before unique titles were developed and released for the new console. Within R&D1 was a small team known as “Team Shikamaru” that was composed of Makoto Kano, Yoshio Sakamoto, and Toru Osawa. The group was responsible for designing characters and coming up with scripts for several games including Metroid and Kid Icarus.

Following the success of the Game & Watch handheld line, the development team started working on its successor. This time the system would be designed around interchangeable cartridges opposed to dedicate built in games. Code named the “Dot Matrix Game” after its dull green dot-matrix screen the system was released in 1989 as the Game Boy. The Game Boy was an 8-bit handheld game console and was the first release in the Game Boy family of systems that would span seven different hardware releases between 1989 and 2005.

Nintendo’s second handheld game console, the Game Boy combines features from both the Nintendo Entertainment System and Game & Watch hardware. The console features a dull green dot-matrix screen with adjustable contrast dial, five control buttons (D-pad, two game buttons, “start” and “select”), a single speaker with adjustable volume dial, and uses cartridges for its games. At launch, it was sold either as a standalone unit, or bundled with one of several games, namely Super Mario Land or Tetris.

Despite being technologically inferior to its fourth-generation competitors (Sega’s Game Gear, Atari’s Lynx, and NEC’s TurboExpress), the Game Boy received praise for its battery life and durability in its construction. It quickly outsold the competition, selling one million units in the United States within a few weeks. The Game Boy and its successor, the Game Boy Color, have sold an estimated 118 million units worldwide. It is one of the most recognizable devices from the 1990s, becoming a cultural icon in the years following its release. Several redesigns were released during the console’s lifetime, including the Game Boy Pocket in 1996 and the Game Boy Light in 1998.

In 1995, R&D1 released the Virtual Boy, a 32-bit table-top portable video game console designed to display stereoscopic 3D graphics using a head-mounted display. Gamers would place their face against the eyepiece to see a red monochrome display while the games used a parallax effect to create the illusion of depth. The Virtual Boy was a commercial failure in a rare miss by Nintendo to gauge market demand. The system only sold 770,000 units and was discontinued in early 1996.

On August 15, 1996 Gunpei Yokoi made the decision to part ways with Nintendo after over 30 years of service to form his own company, Koto Laboratory. After Yokoi’s departure engineer Takehiro Izushi was appointed the new general manager of the department. During the transition the decision was made to separate the department’s hardware team to create a new hardware development department called Nintendo Research & Engineering lead by Satoru Okada. The software development team remained with R&D1 shifting the department’s focus to develop games for other Nintendo developed consoles.

In 2004, the department, along with Nintendo R&D2, was absorbed into the newly created Nintendo Software Planning & Development division. Satoru Iwata created and appointed himself as general manager of the new division to focus on co-producing and supervising second-party development, thus relieving the Entertainment Analysis & Development division (EAD) and its general manager Shigeru Miyamoto to focus on first-party projects.