Today, video games make up a $100 billion global industry, and nearly two-thirds of American homes have household members who play video games regularly. And it’s really no wonder: Video games have been around for decades and span the gamut of platforms, from arcade systems, to home consoles, to handheld consoles and mobile devices. They’re also often at the forefront of computer technology.
The Early Days
Though video games are found today in homes worldwide, they actually got their start in the research labs of scientists.
In 1952, for instance, British professor A.S. Douglas created OXO, also known as noughts and crosses or a tic-tac-toe, as part of his doctoral dissertation at the University of Cambridge. And in 1958, William Higinbotham created Tennis for Two on a large analog computer and connected oscilloscope screen for the annual visitor’s day at the Brookhaven National Laboratory in Upton, New York.
In 1962, Steve Russell at the Massachusetts Institute of Technology invented Spacewar!, a computer-based space combat video game for the PDP-1 (Programmed Data Processor-1), then a cutting-edge computer mostly found at universities. It was the first video game that could be played on multiple computer installations.
Dawn of the Home Console
In 1967, developers at Sanders Associates, Inc., led by Ralph Baer, invented a prototype multiplayer, multi-program video game system that could be played on a television. It was known as “The Brown Box.”
Baer, who’s sometimes referred to as Father of Video Games, licensed his device to Magnavox, which sold the system to consumers as the Odyssey, the first video game home console, in 1972. Over the next few years, the primitive Odyssey console would commercially fizzle and die out.
Yet, one of the Odyssey’s 28 games was the inspiration for Atari’s Pong, the first arcade video game, which the company released in 1972. In 1975, Atari released a home version of Pong, which was as successful as its arcade counterpart.
Magnavox, along with Sanders Associates, would eventually sue Atari for copyright infringement. Atari settled and became an Odyssey licensee; over the next 20 years, Magnavox went on to win more than $100 million in copyright lawsuits related to the Odyssey and its video game patents.
In 1977, Atari released the Atari 2600 (also known as the Video Computer System), a home console that featured joysticks and interchangeable game cartridges that played multi-colored games, effectively kicking off the second generation of the video game consoles.
The video game industry had a few notable milestones in the late 1970s and early 1980s, including:
- The release of the Space Invaders arcade game in 1978
- The launch of Activision, the first third-party game developer (which develops software without making consoles or arcade cabinets), in 1979
- The introduction to the United States of Japan’s hugely popular Pac-Man
- Nintendo’s creation of Donkey Kong, which introduced the world to the character Mario
- Microsoft’s release of its first Flight Simulator game
The Video Game Crash
In 1983, the North American video game industry experienced a major “crash” due to a number of factors, including an oversaturated game console market, competition from computer gaming, and a surplus of over-hyped, low-quality games, such as the infamous E.T., an Atari game based on the eponymous movie and often considered the worst game ever created.
Lasting a couple of years, the crash led to the bankruptcy of several home computer and video game console companies.
The video game home industry began to recover in 1985 when the Nintendo Entertainment System (NES), called Famicom in Japan, came to the United States. The NES had improved 8-bit graphics, colors, sound and gameplay over previous consoles.
Nintendo, a Japanese company that began as a playing card manufacturer in 1889, released a number of important video game franchises still around today, such as Super Mario Bros., The Legend of Zelda, and Metroid.
Additionally, Nintendo imposed various regulations on third-party games developed for its system, helping to combat rushed, low-quality software. Third-party developers released many other long-lasting franchises, such as Capcom’s Mega Man, Konami’s Castlevania, Square’s Final Fantasy, and Enix’s Dragon Quest (Square and Enix would later merge to form Square Enix in 2003).
In 1989, Nintendo made waves again by popularizing handheld gaming with the release of its 8-bit Game Boy video game device and the often-bundled game Tetris. Over the next 25 years, Nintendo would release a number of successful successors to the Game Boy, including the Game Boy color in 1998, Nintendo DS in 2004, and Nintendo 3DS in 2011.
The First Console War
Also in 1989, Sega released its 16-bit Genesis console in North America as a successor to its 1986 Sega Master System, which failed to adequately compete against the NES.
With its technological superiority to the NES, clever marketing, and the 1991 release of the Sonic the Hedgehog game, the Genesis made significant headway against its older rival. In 1991, Nintendo released its 16-bit Super NES console in North America, launching the first real “console war.”
The early- to mid-1990s saw the release of a wealth of popular games on both consoles, including new franchises such as Street Fighter II and Mortal Kombat, a fighting game that depicted blood and gore on the Genesis version of the game.
In response to the violent game (as well as congressional hearings about violent video games), Sega created the Videogame Rating Council in 1993 to provide descriptive labeling for every game sold on a Sega home console. The council later gives rise to the industry-wide Entertainment Software Rating Board, which is still used today to rate video games based on content.
In the mid-1990s, video games leaped to the Big Screen with the release of the Super Mario Bros. live-action movie in 1993, followed by Street Fighter and Mortal Kombat over the next two years. Numerous movies based on video games have been released since.
With a much larger library of games, lower price point, and successful marketing, the Genesis had leapfrogged ahead of the SNES in North America by this time. But Sega was unable to find similar success in Japan.
The Rise of 3D Gaming
With a leap in computer technology, the fifth generation of video games ushered in the three-dimensional era of gaming.
In 1995, Sega released in North America its Saturn system, the first 32-bit console that played games on CDs rather than cartridges, five months ahead of schedule. This move was to beat Sony’s first foray into video games, the Playstation, which sold for $100 less than the Saturn when it launched later that year. The following year, Nintendo released its cartridge-based 64-bit system, the Nintendo 64.
Though Sega and Nintendo each released their fair share of highly-rated, on-brand 3D titles, such as Virtua Fighter on the Saturn and Super Mario 64 on the Nintendo 64, the established video game companies couldn’t compete with Sony’s strong third-party support, which helped the Playstation secure numerous exclusive titles.
Simply put: Sony dominated the video game market and would continue to do so into the next generation. In fact, the Playstation 2, released in 2000 and able to play original Playstation games, would become the best-selling game console of all time.
The Playstation 2, which was the first console that used DVDs, went up against the Sega Dreamcast (released in 1999), the Nintendo Gamecube (2001), and Microsoft’s Xbox (2001).
The Dreamcast—considered by many to be ahead of its time and one of the greatest consoles ever made for several reasons, including its capability for online gaming—was a commercial flop that ended Sega’s console efforts. Sega pulled the plug on the system in 2001, becoming a third-party software company henceforth.
Modern Age of Gaming
In 2005 and 2006, Microsoft’s Xbox 360, Sony’s Playstation 3, and Nintendo’s Wii kicked off the modern age of high-definition gaming. Though the Playstation 3—the only system at the time to play Blu-rays—was successful in its own right, Sony, for the first time, faced stiff competition from its rivals.
The Xbox 360, which had similar graphics capabilities to the Playstation 3, was lauded for its online gaming ecosystem and won far more Game Critics Awards than the other platforms in 2007; it also featured the Microsoft Kinect, a state-of-the-art motion capture system that offered a different way to play video games (though the Kinect never caught on with core gamers or game developers).
And despite being technologically inferior to the other two systems, the Wii trounced its competition in sales. Its motion-sensitive remotes made gaming more active than ever before, helping it appeal to a much larger slice of the general public, including people in retirement homes.
Towards the end of the decade and beginning of the next, video games spread to social media platforms like Facebook and mobile devices like the iPhone, reaching a more casual gaming audience. Rovio, the company behind the Angry Birds mobile device game (and, later Angry Birds animated movie), reportedly made a whopping $200 million in 2012.
In 2011, Skylanders: Spyro’s Adventure brought video games into the physical world. The game required players to place plastic toy figures (sold separately) onto an accessory, which reads the toys’ NFC tags to bring the characters into the game. The next few years would see several sequels and other toy-video game hybrids, such as Disney Infinity, which features Disney characters.
The 8th generation of video games began with the release of Nintendo’s Wii U in 2012, followed by the Playstation 4 and Xbox One in 2013. Despite featuring a touch screen remote control that allowed off-TV gaming and being able to play Wii games, the Wii U was a commercial failure—the opposite of its competition—and was discontinued in 2017.
In early 2017, Nintendo released its Wii U successor, the Nintendo Switch, the only system to allow both television-based and handheld gaming. Microsoft released its 4K-ready console, the Xbox One X, in late 2017, and followed up in 2020 with the Xbox Series X and Series S. In 2020, Sony released the Playstation 5, a successor to Playstation 4.
With their new revamped consoles, both Sony and Microsoft currently have their sights set on virtual reality gaming, a technology that has the potential to change the way players experience video games.
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