We know why Mario has a mustache. We know why his uniform is blue and red. These were the most distinctive features Nintendo could render on the character sprite due to the limitations of the Z80 processor, the venerable workhorse of the arcade. And it's the same reason Mario's proportions are a little on the chubby side, too.
"The reason Mario is a plump shape is because gaming devices at that time could only read collisions between square boxes," says his creator, Shigeru Miyamoto, "not because I wanted to make him cute."
Miyamoto, speaking during another freewheeling "Iwata Asks," was expounding on the complexities of hit detection, which persist even today in a game like Steel Diver on the 3DS. He used Mario as an example of one of the original and persevering problems games designers must contend with.
"[Mario's]design turned out like that because I adjusted for the capabilities of the gaming device of the day. For example, resolution was low, so I made his face big. But today's game consoles can handle collisions with round or irregular shapes," Miyamoto said. "Even so, it's difficult with a complicated shape like that of a submarine."
Iwata Asks: Steel Diver [Nintendo]