"What if you are on a crowded street," asks Sigeru Miyamoto, "and you look up and you see something appear that should not, given what we know, be there? You either shake your head and dismiss it, or you accept that there is much more to the world than we think. Perhaps it is a doorway to another place. If you choose to go inside, you might find many unexpected things." Miyamoto, walking down a crowded street in Kyoto, looks ready to open that doorway, one that may lead him once more into the secret world of Super Mario Bros.

Mannerly, obeisant and unassuming, Miyamoto designs the most popular video games in the world. His creations for Nintendo Entertainment Systems – from Donkey Kong to the new Super Mario World – are fanciful, challenging and lucrative. The money earned from the games Miyamoto has created, and the machines that play them, has transformed Nintendo into one of the most successful and influential companies in the world.

In 1991, according to a leading Japanese business journal, Nihon Keisai Shimbun, Nintendo supplanted Toyota as Japan's No. 1 company, based on factors like profitability, indebtedness, stock performance, growth potential and penetration of foreign and domestic markets. In fact, Nintendo has made more money for its shareholders during the past three years than any other company traded on the Tokyo Stock Exchange, and in its last fiscal year Nintendo netted a cool billion dollars – far more than either Japan's largest consumer-electronics company (Sony) or America's largest computer-software company (Microsoft).

None of it would have happened without Sigeru Miyamoto, who was working as an apprentice artist for the company in 1984 when Nintendo's chairman, Hiroshi Yamauchi, gave him the chance to design a game. Miyamoto decided to base it on the legend of the Beauty and the Beast, one of his favorite stories. The game metamorphosed into the tale of a stubby character named Mario, who climbs ramps and ladders and dodges barrels and tubs of cement to rescue his girlfriend from an unhappy gorilla.

When the game was completed, Miyamoto named it Donkey Kong – donkeyfor stubborn and wily, kong after the famous Hollywood ape – and a sample of the game was sent to the sales managers at Nintendo of America. They thought the designers at their Japanese parent had flipped. Donkey Kong? It made no sense. The Americans were used to selling games with titles that contained words such as mutilation, destroy, assassinate and annihilate. When they played the game, they were even more horrified. One of them hated Donkey Kong so much that he began looking for a new job.

They were wrong. Donkey Kong became such a big hit it put Nintendo on the map in America and brought the company $200 million. One of the sequels to Donkey Kong – Super Mario Bros. 3 – made more than $445 million. If it were a movie, Super Mario Bros. 3 would have outgrossed every movie in history except E.T.

The money is, of course, only part of the story. The rest of the world may devour Japanese hardware – from Honda Civics to Sony Walkmans – but Japanese software, such as books, movies and recordings, has had little impact outside Japan. The exception is video games. One Japanese writer, Hiroyuki Nakata, has noted that Nintendo is Japan's largest cultural export, "bigger than [Akira] Kurosawa." After all, more than a third of all American homes have a Nintendo system. Mario and other Nintendo characters are seen on one Saturday-morning and two daily television shows. American homes are infiltrated by Nintendo books, magazines, videos, board games, drinking mugs, T-shirts, action figures and bedsheets. Now a feature film is in the works.

Children are influenced as much or more by Nintendo than by television, which defined their parents' generation. The signs of this first Nintendo generation are everywhere. Doctors, who have been treating a growing number of children with severe muscle cramps in their hands caused by playing video games, have named the condition Nintendoitis. Others, from child psychologists to Oprah Winfrey, have begun to ask questions. What, they wonder, are the long-term effects of so much game playing on children's self-images, relationships and social skills? How does Nintendo affect learning? Do the games encourage violence or passivity (the Oprah segment was called "My Kid's a Video Game Zombie")? Overall, what defines the post-TV generation, the Nintendo generation?

The children who grew up revering Mickey Mouse were imbued with his message: "We play fair, and we work hard, and we're in harmony," as the Mousketeers put it. Mario imparts other values to his flock. Kill or be killed. Time is running out. Ultimately, you are alone.

Sigeru Miyamoto remembers the maze of rooms in the paper-and-cedar home of his childhood. Sliding shoji screens opened up onto hallways and what seemed to be a castleful of hidden rooms. The house was in the countryside outside Kyoto, in the town of Sonebe, where his parents and grandparents had also been born. He spent much of his youth fishing in a nearby river, walking on the banks of a sodden rice field, rolling down hillsides. There was no television in his home. Miyamoto drew and painted, and he made elaborate puppets, with which he presented his own fanciful shows. After school he explored hillsides and creek beds and small canyons. The first time he discovered a cave, he was too frightened to venture inside. He returned several times before he found the courage to explore it. Then, lugging a homemade lantern, he progressed deeper and deeper inside it until he came to a small hole that led to another cave. Breathing deeply, his heart pounding, he climbed through it.

Miyamoto first captured these sensations of wonder and fear in The Legend of Zelda. "The spirit of the state of mind when one kid enters a cave alone must be realized in the game," he says. "Going in, he must feel the cold air around him. He must discover a branch off to one side and decide whether to explore it or not.Sometimes he loses his way."

Since he created Donkey Kong, the forty-year-old Miyamoto has become the head of a Nintendo research-and-development group called Jyoho Kaihatubu, the Entertainment Analysis and Development Division. His thirty-person team is independent, free to do what its leader chooses. And what Miyamoto has decided to do is work with Mario and his little brother, Luigi.

The sequels to Donkey Kong – Super Mario Bros. and its sequels – are the most popular video games ever. There are many reasons. Children love Mario and the villains and the silliness, and they respond to the carefully timed action. The games can be addictive – indeed, critics consider them insidious – but the worlds Miyamoto creates are wondrous and fanciful. At their best, his games require simple skills: perseverance, wit, luck and practice. Children find that the games give them a kind of power that adults cannot match, although more and more grown-ups are trying to catch up (forty percent of Nintendo's players are over eighteen).

Interestingly, older, smarter, tougher players may miss some of the hidden magical moments in Miyamoto's games. Young children, or those who explore at a leisurely pace, have a better chance of finding them than do kids or grown-ups who blast through a game, charging toward the goal, trying for the highest score and best time. "The players must be thinking, 'Well, there must not be anything here,' but it can be," says Miyamoto. "Then the player is curious enough to visit that place. When he finds something he never expected, he feels, 'Ah, I did it. I made it.' It's a great satisfaction.''

As the popularity of Miyamoto's games has grown – an astounding 60 million copies of his eight Mario games have been sold since 1985 – Miyamoto has become well known in Japan and beyond. Westerners who have made the pilgrimage to Kyoto to meet him have included Paul McCartney, who said he wanted to see Miyamoto, not Mount Fuji, during a Japanese tour. Yet despite his success, Miyamoto seems to have changed little in the fifteen years since he first came to Nintendo. His hair may be shorter, but he still bikes to work. He dresses in oxford shirts and wool vests; one red tie is dotted with tiny Mickeys.

After being the director of his first games, Miyamoto is now a producer. It means a great deal to him; he has the same title as his idol, George Lucas (Lucas's Raiders of the Lost Ark is Miyamoto's favorite movie). Instead of working on one game at a time, Miyamoto oversees the production of several. Budgets are more than $1 million apiece. The more complex games take longer to complete, up to eighteen months, compared to eight months to a year for simpler games. Between six and twenty people work concurrently on each game, but Miyamoto writes the script and paints the main characters for most of the games before passing them on to his artists, editors, programmers and musical composers.

When a game is nearly completed, Miyamoto spreads out its blue-print on a roomful of tables. Then, for days, Miyamoto lives with it, hovering over the blueprint with its rooms, corridors, trapdoors, path-ways, secret worlds and myriad surprises. As he travels through the game, he determines which points may be too frustrating or too easy. He adds empowering mushrooms or turtles whose shells work like Frisbees. He finds the moments that give the greatest delight – a hidden dinosaur, a feather that contains the gift of flight – and makes certain they come at frequent enough intervals.

Some of Miyamoto's ideas have proved difficult to achieve, given the limitations of the technology. "There is some agony in creating something within limitations," says Miyamoto, "but if I can do whatever I can imagine, there would be no limits, and that might be even greater agony." His dream is to make games that create worlds in which players' companions actually "live" – people or animals, seemingly independent from us and from game-playing machines. "Perhaps they can even be ourselves at other times in our lives," he explains obliquely.

Miyamoto's latest game is Super Mario World, which Nintendo is using to sell its new system, the Super Nintendo Entertainment System. There has been speculation about how many of Nintendo's 30 million American households will cough up the $200 for the new system in a recession year, especially when there have been signs that interest in video games is lessening. But 2.2 million of the systems, packed with Miyamoto's games, were sold in America in the last six months of 1991, and another 4 million were sold in Japan.

One of his colleagues suggests that Miyamoto's magic is luck. "Or maybe," the man says, "it is because he is left-handed." Miyamoto shrugs. "I think it is not a choice to think this way," he says. "It is difficult for my mind not to wander to other worlds. It is only destiny."