Donkey Kong is considered to be the earliest video game with a storyline that visually unfolded on screen. The eponymous Donkey Kong character is the game's de facto villain. Donkey Kong is the pet of a carpenter named Jumpman (later Mario). (The name Jumpman was chosen for its similarity to Walkman and Pac-Man.) The carpenter mistreats the ape, so Donkey Kong escapes and kidnaps Jumpman's girlfriend, originally known as the Lady, but later named Pauline. The player must take the role of Jumpman and rescue the girl. This was the first occurrence of the damsel in distress scenario that would provide the template for countless video games to come.

The game uses graphics and animation as vehicles of characterization. Donkey Kong smirks upon Jumpman's demise. The Lady is instantly recognized as female from her pink dress and long hair, and "HELP!" appears frequently beside her. Jumpman, depicted in red overalls and cap, is an everyman character, a type common in Japan. Graphical limitations forced his design: Drawing a mouth was too difficult, so the character was given a mustache; the programmers could not animate hair, so he got a cap; and to make his arm movements visible, he needed colored overalls. The artwork used for the cabinets and promotional materials make these cartoon-like character designs even more explicit. The Lady, for example, appears as disheveled (like Fay Wray) in a torn dress and stiletto heels.

Donkey Kong is the first example of a complete narrative told in video game form, and it employs cut scenes to advance its plot. The game opens with the gorilla climbing a pair of ladders to the top of a construction site. He sets the Lady down and stomps his feet, causing the steel beams to change shape. He then moves to his final perch and sneers. This brief animation sets the scene and adds background to the gameplay, a first for video games. Upon reaching the end of the stage, another cut scene begins. A heart appears between Jumpman and the Lady, but Donkey Kong grabs the woman and climbs higher, causing the heart to break. The narrative concludes when Jumpman reaches the end of the rivet stage. He and the Lady are reunited, and a short intermission plays. The game then starts over at a higher level of difficulty.

As of the end of 1980 and the beginning of 1981, Nintendo's efforts to sell in the North American video game market had failed, culminating with the flop Radar Scope in 1980. To keep the company afloat, company president Hiroshi Yamauchi decided to convert unsold Radar Scope games into something new. He approached a young industrial designer named Shigeru Miyamoto, who had been working for Nintendo since 1977, to see if Miyamoto thought he could design an arcade game. Miyamoto said he could. Yamauchi appointed Nintendo's head engineer, Gunpei Yokoi, to supervise the project. Nintendo's budget for the development of the game was $100,000. Some sources also claim that Ikegami Tsushinki was involved in some of the development. They played no role in the game's creation or concept, but were hired by Nintendo to provide "mechanical programming assistance to fix the software created by Nintendo."

At the time, Nintendo was pursuing a license to make a game based on the Popeye comic strip. When this fell through, Nintendo decided that it would take the opportunity to create new characters that could then be marketed and used in later games. Miyamoto came up with many characters and plot concepts, but he eventually settled on a gorilla/carpenter/girlfriend love triangle that mirrored the rivalry between Bluto and Popeye for Olive Oyl. Bluto became an ape, which Miyamoto said was "nothing too evil or repulsive". He would be the pet of the main character, "a funny, hang-loose kind of guy." Miyamoto has also named "Beauty and the Beast" and the 1933 film King Kong as influences. Although its origin as a comic strip license played a major part, Donkey Kong marked the first time that the storyline for a video game preceded the game's programming rather than simply being appended as an afterthought. An unrelated Popeye game would eventually be released by Nintendo in 1982.

Yamauchi wanted primarily to target the North American market, so he mandated that the game be given an English title. Miyamoto decided to name the game for the ape, whom he felt to be the strongest character. The story of how Miyamoto came up with the name "Donkey Kong" varies. A false urban myth says that the name was originally meant to be "Monkey Kong", but was misspelled or misinterpreted due to a blurred fax or bad telephone connection. Another, more credible story claims Miyamoto looked in a Japanese-English dictionary for something that would mean "stubborn gorilla," or that "Donkey" was meant to convey "silly" or "stubborn"; "Kong" was common Japanese slang for "gorilla". A rival claim is that he worked with Nintendo's export manager to come up with the title, and that "Donkey" was meant to represent "stupid and goofy". Miyamoto himself stated that he thought the name would convey the sense "stupid ape".

Miyamoto had high hopes for his new project. He lacked the technical skills to program it himself, so instead came up with concepts and consulted technicians to see if they were possible. He wanted to make the characters different sizes, move in different manners and react in various ways. Yokoi thought Miyamoto's original design was too complex. Another idea Yokoi suggested was to use see-saws to catapult the hero across the screen; this was too difficult to program. Miyamoto then thought of using sloped platforms, barrels and ladders. When he specified that the game would have multiple stages, the four-man programming team complained that he was essentially asking them to make the game repeatedly. Nevertheless, they followed Miyamoto's design, creating about 20,000 lines of code. Yukio Kaneoka composed a simplistic soundtrack to serve as background music for the levels and story events.

Hiroshi Yamauchi thought the game was going to sell well and called Minoru Arakawa, head of Nintendo's operations in the US, to tell him. Nintendo's American distributors, Ron Judy and Al Stone, brought Arakawa to a lawyer named Howard Lincoln to secure a trademark.

The game was sent to Nintendo of America for testing. The sales manager hated it for being too different from the maze and shooter games common at the time, and Judy and Lincoln expressed reservations over the strange title. Still, Arakawa swore that it would be big. American staffers asked Yamauchi to change the name, but he refused. Arakawa and the American staff began translating the storyline for the cabinet art and naming the other characters. They chose "Pauline" for the Lady, after Polly James, wife of Nintendo's Redmond, Washington, warehouse manager, Don James. Jumpman was eventually renamed Mario for Mario Segale, the office landlord. These character names were printed on the American cabinet art and used in promotional materials. Donkey Kong was ready for release.

Stone and Judy convinced the managers of two bars in Seattle, Washington, to set up Donkey Kong machines. The managers initially showed reluctance, but when they saw sales of $30 a day—or 120 plays—for a week straight, they requested more units. In their Redmond headquarters, a skeleton crew composed of Arakawa, his wife Yoko, James, Judy, Phillips and Stone set about gutting 2,000 surplus Radar Scope machines and converting them with Donkey Kong motherboards and power supplies from Japan. The game officially went on sale in July 1981.

In his 1982 book Video Invaders, Steve Bloom described Donkey Kong as "another bizarre cartoon game, courtesy of Japan".Donkey Kong was, however, extremely popular in the United States and Canada. The game's initial 2,000 units sold, and more orders were made. Arakawa began manufacturing the electronic components in Redmond because waiting for shipments from Japan was taking too long. By October, Donkey Kong was selling 4,000 units a month, and by late June 1982, Nintendo had sold 60,000 Donkey Kong machines overall and earned $180 million. Judy and Stone, who worked on straight commission, became millionaires. Arakawa used Nintendo's profits to buy 27 acres (11 ha) of land in Redmond in July 1982. The game made another $100 million in its second year of release, totaling $280 million (equivalent to around $650 million in 2011). It remained Nintendo's top seller into summer 1983.Donkey Kong also sold steadily in Japan. In January 1983, the 1982 Arcade Awards gave it the Best Solitaire Videogame award and the Certificate of Merit as runner-up for Coin-Op Game of the Year.

By late June 1982, Donkey Kong's success had prompted more than 50 parties in the U.S. and Japan to license the game's characters. Mario and his simian nemesis appeared on cereal boxes, board games, pajamas, and manga. In 1983, the animation studio Ruby-Spears produced a Donkey Kong cartoon (as well as Donkey Kong Jr) for the Saturday Supercade program on CBS. In the show, mystery crime-solving plots in the mode of Scooby-Doo are framed around the premise of Mario and Pauline chasing Donkey Kong, who has escaped from the circus. The show lasted two seasons.

Makers of video game consoles were also interested. Taito offered a considerable sum to buy all rights to Donkey Kong, but Nintendo turned them down after 3 days of discussion within the company. Rivals Coleco and Atari approached Nintendo in Japan and the United States respectively. In the end, Yamauchi granted Coleco exclusive console and tabletop rights to Donkey Kong because he felt that "It [was] the hungriest company". In addition, Arakawa felt that as a more established company in the US, Coleco could better handle marketing. In return, Nintendo would receive an undisclosed lump sum plus $1.40 per game cartridge sold and $1 per tabletop unit. On December 24, 1981, Howard Lincoln drafted the contract. He included language that Coleco would be held liable for anything on the game cartridge, an unusual clause for a licensing agreement. Arakawa signed the document the next day, and, on February 1, 1982, Yamauchi persuaded the Coleco representative in Japan to sign without running the document by the company's lawyers.

Coleco did not offer the game cartridge stand-alone; instead, they bundled it with their ColecoVision. The units went on sale in July 1982. Coleco's version was a more accurate port than earlier games that had been done. Six months later, Coleco offered Atari 2600 and Intellivision versions, too. Notably, they did not port it to the Atari 5200, a system comparable to their own (as opposed to the less powerful 2600 and Intellivision). Coleco's sales doubled to $500 million and their earnings quadrupled to $40 million. Coleco's console versions of Donkey Kong sold six million cartridges in total, grossing over $153 million, and earning Nintendo over $5 million in royalties. Coleco also released stand-alone Mini-Arcade tabeletop versions of Donkey Kong, which, along with Pac-Man, Galaxian, and Frogger, sold three million units combined. Meanwhile, Atari got the license for computer versions of Donkey Kong and released it for the Atari 400/800. When Coleco unveiled the Adam Computer, running a port of Donkey Kong at the 1983 Consumer Electronics Show in Chicago, Illinois, Atari protested that it was in violation of the licensing agreement. Yamauchi demanded that Arnold Greenberg, Coleco's president, shelve his Adam port. This version of the game was cartridge-based, and thus not a violation of Nintendo's license with Atari; still, Greenberg complied. Ray Kassar of Atari was fired the next month, and the home PC version of Donkey Kong fell through.

In 1983, Atari released several computer versions under the Atarisoft label. All of the computer ports had the cement factory level, while most of the console versions did not. None of the home versions of Donkey Kong had all of the intermissions or animations from the arcade game. Some have Donkey Kong on the left side of the screen in the barrel level (like he is in the arcade game) and others have him on the right side.

Miyamoto created a greatly simplified version for the Game & Watch multiscreen. Other ports include the Amiga 500, Apple II, Atari 7800, Intellivision, Commodore 64, Commodore VIC-20, Famicom Disk System, IBM PC booter, ZX Spectrum, Amstrad CPC, MSX, Atari 8-bit family and Mini-Arcade versions. The game was ported to Nintendo's Family Computer (Famicom) console in 1983 as one of the system's three launch titles; the same version was a launch title for the Famicom's North American version, the Nintendo Entertainment System (NES). However, the cement factory level is not included, nor are most of the cutscenes since Nintendo did not have large enough cartridge ROMs available in the beginning. At the title screen, this port includes a new song composed by Yukio Kaneoka; an arrangement of the tune appears in Donkey Kong Country for the Super Nintendo Entertainment System. Both Donkey Kong and its sequel, Donkey Kong, Jr., are included in the 1988 NES compilation Donkey Kong Classics. The NES version was re-released as an unlockable game in Animal Crossing for the GameCube and as an item for purchase on the Wii's Virtual Console. The original arcade version of the game appears in the Nintendo 64 game Donkey Kong 64. Nintendo released the NES version on the e-Reader and for the Game Boy Advance Classic NES series in 2002 and 2004, respectively. The Famicom version of the game sold 840,000 units in Japan.

Another port named Donkey Kong – Original Edition was also included and pre-installed on 25th Anniversary PAL region red Wii systems in 2010 and was rewarded for the Nintendo 3DS US users who were purchasing and registering the select 3DS titles on the Nintendo eShop until January 6, 2013. This version is based on the NES version and reinstates the cement factory level, as well as some intermission animations that were not included in its original port.

Other companies bypassed Nintendo completely. In 1981, O.R. Rissman, president of Tiger Electronics, obtained a license to use the name King Kong from Universal City Studios. Under this title, Tiger created a handheld game with a scenario and gameplay based directly on Nintendo's creation.Crazy Kong is another example, a clone manufactured by Falcon and licensed for some non-American markets. Nevertheless, Crazy Kong machines found their way into some American arcades during the early 1980s, often installed in cabinets marked as Congorilla. Nintendo was quick to take legal action against those distributing the game in the US.Bootleg copies of Donkey Kong also appeared in both North America and France under the Crazy Kong, Konkey Kong or Donkey King names. In 1983, Sega created a Donkey Kong clone called Congo Bongo. Despite being in isometric perspective, the gameplay is very similar.

As with other popular arcade games at the time, there were also unofficial clones for home systems. Clones on the TRS-80 Color Computer (CoCo) include Donkey King and Monkey Kong. A Color Computer 3 version was created in a 2007 event by programmer John Kowalski, who translated the original Z80 code to the CoCo's 6809 code. This resulted in the actual Donkey Kong game running on a 512K Color Computer 3. Other clones include Cannonball Blitz by Olaf Lubeck and Killer Gorilla (Micro Power), one of the best selling games on the BBC Micro and Acorn Electron.

Nintendo's success with Donkey Kong was not without obstacles. In April 1982, Sid Sheinberg, a seasoned lawyer and president of MCA and Universal City Studios, learned of the game's success and suspected it might be a trademark infringement of Universal's own King Kong. On April 27, 1982, he met with Arnold Greenberg of Coleco and threatened to sue over Coleco's home version of Donkey Kong. Coleco agreed on May 3, 1982 to pay royalties to Universal of 3% of their Donkey Kong's net sale price, worth about $4.6 million. Meanwhile, Sheinberg revoked Tiger's license to make its King Kong game, but O. R. Rissman refused to acknowledge Universal's claim to the trademark. When Universal threatened Nintendo, Howard Lincoln and Nintendo refused to cave. In preparation for the court battle ahead, Universal agreed to allow Tiger to continue producing its King Kong game as long as they distinguished it from Donkey Kong.

Universal sued Nintendo on June 29, 1982 and announced its license with Coleco. The company sent cease and desist letters to Nintendo's licensees, all of which agreed to pay royalties to Universal except Milton Bradley and Ralston Purina.Universal City Studios, Inc. v. Nintendo, Co., Ltd. was heard in the United States District Court for the Southern District of New York by Judge Robert W. Sweet. Over seven days, Universal's counsel, the New York firm Townley & Updike, argued that the names King Kong and Donkey Kong were easily confused and that the plot of the game was an infringement on that of the films. Nintendo's counsel, John Kirby, countered that Universal had themselves argued in a previous case that King Kong's scenario and characters were in the public domain. Judge Sweet ruled in Nintendo's favor, awarding the company Universal's profits from Tiger's game ($56,689.41), damages and attorney's fees.

Universal appealed, trying to prove consumer confusion by presenting the results of a telephone survey and examples from print media where people had allegedly assumed a connection between the two Kongs. On October 4, 1984, however, the court upheld the previous verdict.

Nintendo and its licensees filed counterclaims against Universal. On May 20, 1985, Judge Sweet awarded Nintendo $1.8 million for legal fees, lost revenues, and other expenses. However, he denied Nintendo's claim of damages from those licensees who had paid royalties to both Nintendo and Universal. Both parties appealed this judgment, but the verdict was upheld on July 15, 1986.

Nintendo thanked John Kirby with a $30,000 sailboat named Donkey Kong and "exclusive worldwide rights to use the name for sailboats". The court battle also taught Nintendo they could compete with larger entertainment industry companies.

The Atari 400 port of Donkey Kong contains one of the longest undiscovered Easter eggs in a video game. Landon Dyer, the programmer assigned to create the port added a secret where his initials would appear if the player died under certain conditions then waited for the game to cycle to the title screen. This secret remained undiscovered for 26 years until Dyer revealed on his blog stating "there's an easter egg, but it's totally not worth it, and I don't remember how to bring it up anyway." After this announcement, the steps required to trigger the Easter egg were discovered by Don Hodges who used an emulator and a debugger to trace through the 25,000 lines of the game's code.

Donkey Kong spawned the sequels Donkey Kong Jr. and Donkey Kong 3, as well as the spin-off Mario Bros. A complete re-make of the original arcade game on the Game Boy, named Donkey Kong or Donkey Kong '94 contained levels from both the original Donkey Kong and Donkey Kong Jr arcades. It starts with the same damsel-in-distress premise and four basic locations as the arcade game and then progresses to 97 additional puzzle-based levels. It was the first game to have built-in enhancement for the Super Game Boy accessory. The arcade version makes an appearance in Donkey Kong 64 in the Frantic Factory level. Nintendo revived the Donkey Kong license in the 1990s for a series of platform games and spin-offs developed by Rare, beginning with Donkey Kong Country in 1994. In 2004, Nintendo released Mario vs. Donkey Kong, a sequel to the Game Boy title. In it, Mario must chase Donkey Kong to get back the stolen Mini-Mario toys. In the follow-up Mario vs. Donkey Kong 2: March of the Minis, Donkey Kong once again falls in love with Pauline and kidnaps her, and Mario uses the Mini-Mario toys to help him rescue her. Donkey Kong Racing for GameCube was in development by Rare, but was canceled when Microsoft purchased the company. In 2004, Nintendo released the first of the Donkey Konga games, a rhythm-based game series that uses a special bongo controller. Donkey Kong Jungle Beat (2005) is a unique platform action game that uses the same bongo controller accessory. In 2007, Donkey Kong Barrel Blast was released for the Nintendo Wii. It was originally developed as a GameCube game and would have used the bongo controller, but it was delayed and released exclusively as a Wii title with no support for the bongo accessory. Super Smash Bros. Brawl features music from the game arranged by Hirokazu "Hip" Tanaka and a stage called "75m", an almost exact replica of its Donkey Kong namesake. While the stage contains her items, Pauline is missing from her perch at the top of the stage.Donkey Kong was said to be an inspiration for the platform game, Jumpman according to the game's creator.

Its success entrenched the game in American popular culture. In 1982, Buckner and Garcia and R. Cade and the Video Victims both recorded songs ("Do the Donkey Kong" and "Donkey Kong", respectively) based on the game. Artists like DJ Jazzy Jeff & the Fresh Prince and Trace Adkins referenced the game in songs. Episodes of television series such as The Simpsons, Futurama, Crank Yankers, and Fairly Odd Parents have also contained references to the game. Even today, sound effects from the Atari 2600 version often serve as generic video game sounds in films and television shows. The Killer List of Videogames ranks Donkey Kong the third most popular arcade game of all time and places it at No. 25 on the "Top 100 Videogames" list. in February 2006, Nintendo Power rated it the 148th best game made on a Nintendo System. Today, Donkey Kong is the fifth most popular arcade game among collectors. The phrase "It's on like Donkey Kong" has been used in various works of pop culture. In November 2010, Nintendo applied for a trademark on the phrase with the US Patent and Trademark office.

In 2013, video game developer Mike Mika hacked the game to create a version where Pauline is the main character and rescues Mario. He created this version for his three-year-old daughter who wanted to play as the game's heroine.

The 2007 motion picture documentary The King of Kong: A Fistful of Quarters explores the world of competitive classic arcade gaming and tells the story of Steve Wiebe's quest to break Billy Mitchell's record.

Among celebrity players, actor Will Forte is currently ranked on the Twin Galaxies Donkey Kong scoreboard, and rapper Eminem has Tweeted his Donkey Kong scores on two different occasions. The latter score, if it were eligible for verification by Twin Galaxies, would place him within the top 25 on the scoreboard.

• 1981 in video gaming