History of Nintendo
Their first video arcade game was 1975's "EVR Race"; a handful of others followed in the next several years, "Radar Scope" and "Donkey Kong" being among the most famous of these. The early 1980s saw Nintendo's video game division (led by Yokoi) creating some of its most famous arcade titles. The massively popular "Donkey Kong" was created in 1981, with Shigeru Miyamoto as its mastermind, and released in the arcades and on the Atari 2600, Intellivision, and ColecoVision video game systems (although Nintendo themselves generally had no involvement with these early console ports). This release method would be used on several later Nintendo arcade games of this same period, including the original "Mario Bros." (not to be confused with the later "Super Mario Bros.") In addition to this arcade and dedicated console game activity, Nintendo was testing the consumer handheld video game waters with the Game & Watch.
Zelda's Adventure
In 1989, Nintendo signed a deal with Sony to begin development of a CD-ROM-based system known as the "Nintendo PlayStation" or the SNES CD to be an add-on to the Super Nintendo Entertainment System that would allow for FMV and larger games. However, Nintendo broke the agreement and instead signed with Philips to make the add-on, which caused Sony to spin off their add-on into its own console called the PlayStation. Witnessing the poor reception of the Sega Mega-CD, Nintendo scrapped the idea of making an add-on entirely. As part of dissolving the agreement with Philips, Nintendo gave them the license to use five of their characters, including Link, Princess Zelda, and Ganon, for games on Philips's console called the CD-i, after the partnership's dissolution. Contracting out to independent studios, Philips subsequently used the characters to create three games for the CD-i, with Nintendo taking no part in their development except to give input on the look of the characters based on the artwork from Nintendo's original two titles and that of their respective instruction booklets. Philips insisted that the development studios utilize all aspects of the CD-i's capabilities including FMV, high-resolution graphics, and CD-quality music. Because the system had not been designed as a dedicated video game console, there were several technical limitations, such as laggy controls (especially for the standard infrared controller), and numerous problems in streaming-audio, memory, disc access, and graphics.