By the 80s business was growing at an alarming rate for Nintendo both domestically and internationally. The Color TV Games system was a steady seller as was their coin-op arcade catalog. Business grew to the point where they began opening offices in their second biggest market, the United States, calling it Nintendo of America (NOA).
One of Nintendo's more popular coin-op arcade games in Japan titled Radar Scope, showed quite a bit of promise in the United States based on pre-tests, so an enormous number of units were manufactured for Nintendo of America. When the game fully released it was an enormous flop, forcing an overstock of unwanted units and a potentially disastrous loss in inventory costs.
Desperate to prove his talents for game design, Miyamoto was given the assignment to develop a game using the Radar Scope engine and tech that could easily be converted from the overstock units with little additional cost. With an extremely small budget Miyamoto created Donkey Kong. The units were quickly switched over to Kong and it became an instant historic success. This spun Miyamoto into Nintendo's top game producer and the dominant force in the coin-op arcade market.
As his protégé Miyamoto shot Nintendo into success at the arcades, Gunpei Yokoi was busily reinventing the home video game market. After spotting a business man messing around with a calculator to entertain himself on a commuter train, Yoko was inspired to use that same calculator technology to invent a line of handheld video game which became known as the Nintendo Game & Watch.
These handheld LCD games featured the same display technology as calculators, only with the graphics forming characters and objects instead of numbers. With pre-printed stationary foregrounds and backgrounds, the limited-animated graphics could be moved by the player via controller buttons on opposite sides of the screen. The movement button design would eventually evolve into the Emmy Award winning D-Pad. As they grew in popularity, the Game & Watch designs expand into dual screens, similar to today's Nintendo DS.
The Game & Watch was a hit and soon numerous toy companies were releasing their own LCD handheld games. Even in the Soviet Union clones of the Game & Watch titles popped up, mainly because Nintendo wasn't allow to sell their products within the USSR's borders. Ironically Nintendo's most popular handheld game Tetris, would be created by the Soviet computer engineer Alexey Pajitnov.
After seeing the success and potential of a console system with interchangeable cartridges, Nintendo developed their first multi-cartridge gaming system in 1983, the 8-bit Famicom (translates to Family computer), which delivered near-arcade quality games with far more power and memory than any previous console on the market. At first the system released in Japan with failing results, but quickly caught on when Miyamoto produced a game taking his popular Mario Bros. into to a new style of multi-level adventure: Super Mario Bros. The game was such a huge success that Nintendo quickly bundled it with the Famicom system, which drove sales of the console as consumers bought it just to play the game. This also started Nintendo's long history of packaging their most popular games along with their latest game consoles.