It trades on the pinks because Nintendo doesn't want to incur any expense to make stock available to American shareholders. They can sell as much stock as they need to on the Japanese market, and they don't seem particularly interested in encouraging trading or foreign interest: no official ADRs, no stock splits, 100-share minimum purchase on the Japanese market, & cash hording rather than bigger buybacks and dividends.
The good thing about this situation for you is that you can buy any quantity of pinksheet stocks at any online brokerage, and these shares are backed by legitimate Nintendo shares. It's harder to get intraday price quotes, but there's a ready market for the NTDOY.PK shares. If Nintendo ever starts actually trying to interest investors, you should see a nice pop on the share price. If not, the earnings growth and dividends should continue to be at least decent.
Nintendo talked about spliting shares of 7974 in 2009. If they do or not is anyone's guess. There is an article written in 2007 on seeking alpha that was written by the good doctor that explained about NTDOY. It is a crime that for the third holiday season running there will be not a Wii to be found.