TOKYO: Hiroshi Yamauchi, credited with transforming Nintendo from a family-owned Japanese business into a global byword for video games, died Thursday from pneumonia. He was 85.

Yamauchi was just 22 when he took over the family business from his ailing grandfather and he went on to head the firm for over half a century.

It was during his tenure, in 1983, that Nintendo released a games console called the “Family Computer”, which laid the foundations for the modern video-game industry.

Known abroad as the “Nintendo Entertainment System”, the early console became an international phenomenon, with the company's global success skyrocketing on the back of the legendary Super Mario series.

A string of successful game software titles followed while the popular Game Boy hand-held console was released to popular acclaim in 1989.

Yamauchi was born in the ancient capital of Kyoto into a family that operated a maker of Japanese and Western playing cards.

He was a 22-year-old student at Tokyo's Waseda University when he took over the family business in 1949.

Yamauchi started Japan's first mass production of plastic playing cards and took the company public.

After running Nintendo for 53 years, Yamauchi stepped aside in 2002 as he brought in current chief Satoru Iwata.

Yamauchi's death comes at a time of uncertainty for the company, which faces stiff competition from smartphone games.

“Mr Yamauchi has taught us that there is value in being different,” said Iwata in a statement.

“We will continue to flexibly change the shape of Nintendo from one era to another, as Mr Yamauchi has done, and Nintendo, as a whole company, will keep his soul alive.”