I'm actually doing something similar for my boyfriend but with Metroid (another classic Nintendo game). The hardest part is sketching the quilt. From there, it's super easy because it's squares. It's a lot of square, sure (mine will be over 2,000 1" squares when done), but it's squares and rectangles.
If you google "mario quilt" they have some of the shapes made into the pixel blocks like you showed, in case you need more or more ideas.
I'm attaching the first block I've made (all the pieces are made, just need to be put together) and the video game cover. It matches pretty well.