Software
MARIO FACTORY
The hardware can have different software, but the flagship software is MARIO FACTORY.
MARIO FACTORY is Nintendo's attempt at an easy to use game making tool to teach how to make games, using a base game model and modifying based on it. There would be different base game models for different genres, like Action, RPG, Adventure, Shoot 'em up, and so on.
You can either start by editing the assets directly, or by starting the game, and then pause the gameplay to make changes, and then unpause and see how it works in real-time.
Game Editor Mockup
Graphics Editor Mockup
Music Editor Mockup
Using the SNES Mouse, you can edit graphics for either the background, or the sprites, or use a scanner, and then setup the tiles for levels as needed. It also includes an animation tool just like Mario Paint's where you can decide the movement with the mouse.
It also offers a music and sound effect editor akin to Mario Paint's editor with more choice. It offers a default set of instrument sound samples, and includes the ability to record more samples using a microphone. The music data would be compiled in a format used by most Nintendo games (Kankichi / N-SPC).
You can manage objects and their states (such as standing, walking, jumping, and so on...), and do some visual programming on how to go between states, and what button, sound effect and animation to use, and of course select between a set of processes from the base game, or program completely new ones using the keyboard using a game language close to BASIC.
A known base game model sample is an adaptation of the 1983 arcade game MARIO BROS.
Some of the assets from this version would be used for the Game Boy Advance adaptation called Mario Bros. Classic,
included in the Super Mario Advance series of games and Mario & Luigi: Superstar Saga.
Satellaview Development
It is suspected that Satellaview Magazines and some Satellaview games like BS Zelda no Densetsu and BS Shin Onigashima heavily used the Mario Factory music editor, because of the use of identical instruments in the exact same order, as well as the inclusion of the MARIO BROS. sample game's sound effects & jingles all throughout the digital magazines that make use of custom music.
Suspected jingles from MARIO BROS. sample game, taken from Satellaview digital magazines leftover audio data:
The Satellaview audio program Sound Journal for Lovers Vol. 1 contains an unused audio engine with its own music and sound effects, it contains the largest amount of sound effects compared to other Satellaview magazines, and they sound like Super NES adaptations of the classic Mario Bros. arcade game. The music is also very simple, and could possibly be example music for users to get familiar with the process, but it could also be tests by Nintendo for internal use.
Suspected collection of sound effects from MARIO BROS. sample game, taken from Sound Journal for Lovers Vol. 1 leftover audio data:
Some of those sound effects were heard in some of the games made by students seen on Satellaview service, putting further evidence to this.
Inspirations
Mario Factory is clearly continuing from what Family Basic & Mario Paint started. Family Basic offered a way to program games in a custom BASIC language fitted for the Famicom, it also contained a music editor, and the graphics, while they cannot be modified, are made in mind for general usage. They tried to have editors that seemed to be aiming to be easy to use, closer to Mario Paint's style. You can define animation paths, called "Auto Programmer" which is lifted straight from Mario Paint's Animation Path.
Painting
Animation Path
Music Editor
Wario Ware: D.I.Y. has a lot of similarities with Mario Factory, but none of the developers have ever talked about Mario Factory, but rather Mario Paint instead. Considering how Mario Factory is a fairly unknown thing, it's not impossible that the developers are simply unaware of it, despite working at the same company that made the hardware. The music editor is very similar in a few ways though, as well as how the programming works.
Background Editor
AI Editor
Music Editor