Before Mario and Donkey Kong, there was the Game & Watch, Nintendo's first series of dedicated handheld game consoles. These games had simple premises and likewise had very simple names, such as Octopus, Fire, and Chef, just to name a few. The Game & Watch games re-released on later handhelds Game & Watch Gallery series, which primarily featured Super Mario characters.
In Smash Bros., Mr. Game & Watch's appearance is a compilation of the nameless characters featured in the Game & Watch games. All of Mr. Game & Watch's attacks are based on the original Game & Watch games. For example, his Up Special, Fire, is based on the game Fire, in which the player must use a support beam to bounce characters jumping out of a burning building into a vehicle.
Text by jet the hawk and Smashedpotatoes