This page explains in detail the interactions between the Dr. Giggles series and the Mario series.
Dr. Giggles[]
The kid reflected into the TV screen while playing Dr. Mario.
October 23, 1992
Dr. Giggles
Mario
In a scene in the movie, a kid is seen playing Dr. Mario on the NES using a joystick controller. The evil titular doctor then menacingly approaches beind him, but looking at his seeminlgy hypnotised face, he just says "terminal" and leaves.
The choice of the game is very likely a play on the movie title and themes.
License[]
The creators of Dr. Giggles held no right over Nintendo's Mario, but they only included a minor appearance of the game.