How Nintendo Makes Money Beyond Video Games

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0:08These characters like Mario and Pikachu, they're obviously Nintendo's

0:12main IP franchises, because they are so recognizable, they have a mass appeal.

0:18Nintendo has been able to um foster that Disney feel through this really

0:23powerful harnessing of nostalgia and also I think accessibility.

0:27The fact that you can go in and immediately engage with these characters without prior knowledge.

0:33In 2017, the the company really transformed itself

0:37internally. And I think it was around that time when the idea was born that,

0:42you know, hey, we need to create more touch points. We need to create more

0:45um revenue with our IPs and we need to get out there and get into the minds and hearts of people.

0:50Nintendo's edge extends beyond hardware. It's in its characters,

0:55worlds, and franchises they've nurtured for decades that span generations.

1:08I'm Arjun Kharpal. In this episode of Built for Billions, I'm exploring the gaming giant's next

1:14frontier. How it's turning nostalgia into an engine for growth by expanding its characters

1:20beyond consoles and building a universe that stretches across screens, parks, and toys.

1:26"Pikachu, I choose you."

1:29Nintendo's characters have been woven into popular culture for nearly half a

1:33century. And because they're family-friendly and instantly recognizable, they provide the company

1:38with a unique and highly profitable advantage. Intellectual property that spans generations.

1:45The first Nintendo game that I played was Duck Hunt that you could play on the NES. Um,

1:50and uh I think uh around that time I also had a Game Boy with

1:55Tetris and I was one of the cool kids in school because I had it.

1:59I first engaged with um Nintendo with the original Game Boy. My mom

2:05was a little bit obsessed with Tetris and uh Super Mario. It's always that

2:09first interaction with a game or a or or a franchise that you cherish and remember.

2:14It's a safe space. It feels like it's always going to be there for you.

2:18When I was a child, my parents didn't play games. That wasn't the thing they did. And

2:22so now we've got into this situation where the kids today have been brought up with

2:25gamer parents who at least understand games if not necessarily play games.

2:29First thing I got when I got a Switch 2 um is I showed it to my son. The joy on his face,

2:34I wish I'd filmed it. It was just he was just so happy.

2:37For me, the N64 was the height of nostalgia. It wasn't just about the games. It was the

2:43controller. It was weird. It was bulky. It was like nothing else on the market. And

2:47it was the perfect symbol of Nintendo's fun over fidelity ethos. A strategy that

2:53prioritizes engaging experiences over realistic high-end gameplay.

2:59But for Nintendo, nostalgia isn't just sentiment. It's a business engine. Characters that first

3:04appeared on a pixelated Game Boy screen in the '90s are now the stars of billion-dollar

3:09theme parks and global movie franchises. But this universe wasn't built overnight.

3:16"Yo Yo. It's the Mario Brothers."

3:17Nintendo first tested the waters beyond gaming in the late 80s, licensing its

3:22icons for the Super Mario Bros Super Show. But a jump to the big screen in 1993 backfired.

3:28"They're brothers. They're plumbers."

3:31By trading the bright Mushroom Kingdom for a gritty dystopian setting,

3:35the live-action Super Mario Bros. movie alienated its core audience and flopped hard.

3:40The failed experiment made the company notoriously

3:43cautious about Hollywood for the next three decades.

3:46Through the late '9s and early 2000s, Pokémon evolved from a sleeper hit

3:51into a global phenomenon. It became the blueprint for a new kind of business model.

3:56Pokémon was probably one of the first sort of biggest transmedial

4:01franchises to come out of Japan and sort of take over globally.

4:04It started as a video game, became a manga,

4:07then became an anime, and now its pretty much everywhere.

4:11Even so, for years, Nintendo remained primarily focused on its own consoles. That changed in

4:17the mid-2010s when the failure of the Wii U combined with the rapid rise of smartphone

4:22gaming led to three consecutive years of financial losses, forcing a dramatic shift in strategy.

4:30By 2016, the expansion was in full swing. Nintendo launched its first mobile games

4:36and finalized a landmark theme park deal with Universal. The goal was simple but massive.

4:42move beyond the screen and let fans step into these iconic worlds in real life.

4:47Nintendo developed them themselves. You get wristband and you're supposed to complete a

4:50series of tasks throughout the theme park and then you get to fight the boss at the end and

4:53it's like a video game and that's how Nintendo approached these things. It connects to what

4:57they do. It's authentic with what they create. Fans love it and it keeps that touch point going.

5:02Super Nintendo World opened in Japan in 2021,

5:05sparking a global expansion that has since landed in Hollywood and Orlando.

5:10But Nintendo doesn't own the parks. Instead, they license their creative

5:14world to Universal while maintaining creative control over the experience.

5:18It's a Marvel style playbook that protects their

5:21icons while letting the rest of the world build around them.

5:24You get all of these recognizable features from the games in real life

5:28and sort of fostering both nostalgia and that first sort of sense of wonder

5:32that young children get with seeing these things on the screen at the first time.

5:36So I think Nintendo very much can foster that element of of being social together,

5:41having a playful experience into a theme park which is immediately recognizable but

5:46so big and has all of these immersive elements that I think particularly children and sort of

5:51more nostalgic adults um can really find themselves in and sort of interact with.

5:56Other moves include the 2022 acquisition of Dynamo Pictures, now rebranded as Nintendo Pictures.

6:03This gives the company direct in-house control over its animation pipeline,

6:07ensuring their cinematic worlds match the quality of their games.

6:11The 2023 Super Mario Bros. movie proved the power of this strategy. It wasn't

6:16just a box office smash. It was a massive revenue driver for the games themselves.

6:21Now, the stage is set for even bigger projects,

6:24including the highly anticipated live-action Legend of Zelda film.

6:28Beyond the screen, Nintendo is reinventing

6:31how we play in the physical world. Their collaboration with LEGO is a good example.

6:36Instead of a standard plastic set, they built an

6:38interactive experience that bridges the gap between digital and physical play.

6:43So, when they decided to work with Lego, they didn't just go, "Let's make me a Mario

6:47um Lego set." They they made a game where Mario is a character and and you you move him around

6:52the Lego set and he has a screen in his belly which you know you've got a coin and all this,

6:57they didn't just make a Lego set they completely made something unique.

7:00And in September 2025 Nintendo went further still,

7:04launching its first dedicated Southeast Asian subsidiary in Singapore.

7:08For decades Nintendo relied on third party distributors to operate in the region. But

7:13this move changed that. It was the first major step in Nintendo taking direct control of its

7:19destiny and its data in one of the world's fastest growing entertainment markets.

7:24Nintendo's characters are everywhere now. Games, films, theme parks, toys,

7:29and that's a big win for the brand, but it comes with risks. The more you build a universe,

7:34the harder it is to keep that initial magic alive. Push too far and fans might feel their favorite

7:41worlds are being defined for them rather than being a playground for their own imaginations.

7:46It's not always necessarily the best idea to

7:50um use those elements to tell new stories that already set in these worlds.

7:55Trying to sort of over-canonize might be a problem for Nintendo where giving

7:59too much backstory to certain characters might actually draw audiences away from being able to

8:05identify them with on on a more personal level.

8:07The the Super Mario movie did did this very well in the sense that the film very much focused on

8:13all of the elements that we know from the games. The story wasn't necessarily anything new. Like it

8:18was still Super Mario trying to save Princess Peach. We get these sort of good voice actors

8:24that we know, Chris Pratt and Jack Black, which attracts audiences, but the story it

8:29was telling wasn't necessarily new or expanding on anything that we weren't already aware of.

8:34Nintendo's next chapter depends on more than just parks or films. They are now

8:38playing to a global audience of over 3.5 billion people,

8:42a demographic that is nearly half female and where the average gamer is now 36 years old.

8:48Fans still expect innovation, new gameplay,

8:51fresh worlds, and the surprises the company has long been known for.

8:54But don't expect Nintendo to hand over the creative reigns to Generative AI.

8:59The company's president, Shuntaro Furukawa, and legendary designer,

9:02Shigeru Miyamoto, have taken a hard stance against the trend.

9:07"There's always, always going to be a human touch and a human

9:10engagement in how we develop and build our games."

9:13Instead, Nintendo is focusing its tech on machine learning,

9:17using it behind the scenes to boost graphics and frame rates for a new generation of hardware.

9:22I think that Nintendo's um approach of of innovating good things that exist has

9:28really benefited them over um over their history.

9:32Nintendo at its core will always be a video game company,

9:35but I think that their IP monetization strategy has probably just started.

9:40I think you will see more theme parks, you will see more movies.

9:44From its beginnings as a card company in 1889 to the global Nintendo world of 2026, the company

9:50has proven that nostalgia, creativity, and iconic characters can power growth for over a century.

9:58If Nintendo could come up with a new IP, with a new character,

10:01I think that would serve them very well.

10:03At some point in time, people could grow tired of the same IPs that Nintendo produces games around.

10:12So Nintendo is sitting on a treasure trove of IPs,

10:15but the top three are Zelda, Mario, and Pokémon. So right now, everybody is happy

10:21with these IPs. But what about 10 years in the future or 20 years in the future?