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.
History of Nintendo
Nintendo had also begun development on a CD-ROM attachment for the SNES/Super Famicom. Their first partner in this project was Sony, whom Nintendo had worked with before to provide the SNES with its SPC sound chip. Development on the "Nintendo PlayStation" CD-ROM add-on and SNES/SFC standalone hybrid console began. However, at the last minute Nintendo decided to pull out of the partnership and instead go with Philips, and while no CD-ROM add-on was produced, several Nintendo properties (namely The Legend of Zelda) appeared on the Philips CD-i media console. Upon learning this, Sony decided to continue developing the technology they had into the PlayStation. The exact reason Nintendo left its partnership with Sony has been the subject of speculation over the years, but the most common theory is that Sony either wanted too much of the profits for the machine or the rights to the CD-ROM attachment itself.