Yamauchi ran Nintendo for 53 years, and transformed it from a modest card games business into a video game empire. He's credited for bringing Mario into millions of homes, and shaping the video game industry with innovative consoles like the Nintendo Entertainment System.
Nintendo confirmed the news in an emailed statement to the BBC, which said the company was mourning the"loss of the former Nintendo president Mr Hiroshi Yamauchi, who sadly passed away this morning."
The company said Yamauchi fell victim to pneumonia at a hospital in central Japan, and a funeral would happen on Sunday.
Yamauchi was just a 22-year-old student at Tokyo's Waseda University when he took over the family business in 1949, and ran it until he stepped aside in 2002.
During that time Nintendo released a string of highly successful consoles and software titles, and largely led the videogame field in the 80's and 90's.
Yamauchi was ranked 13th on the latest Forbes Japan list released this year, with an estimated net worth of US$2.1 billion.
"The entire Nintendo group will carry on the spirit of Mr. Yamauchi by honoring, in our approach to entertainment, the sense of value he has taught us — that there is merit in doing what is different — and at the same time, by changing Nintendo in accordance with changing times," Nintendo CEO Satoru Iwata said in a statement.
"Hiroshi Yamauchi transformed a run-of the-mill trading card company into an entertainment empire in video games,"Ian Livingstone, co-founder of Games Workshop and former chairman of publisher Eidos, told the BBC.
"He understood the social value of play, and economic potential of electronic gaming. Most importantly he steered Nintendo on its own course and was unconcerned by the actions of his competitors. He was a true visionary."