Electronic Games, History of

Many Fathers

The first interactive computer game, Space War, was developed by Steve Russell, a student at the Massachusetts Institute of Technology, in 1961. Russell never filed for a copyright or a patent for his game. The next important step in the development of electronic entertainment was made by Ralph Baer. He worked for Sanders Association in New York, a military contractor. Between 1967 and 1972, Baer developed the first gaming machine, Odyssey, which was brought out by Magnavox. Odyssey had several games, including one that simulated ping-pong. Russell and Baer are known as the forgotten fathers of the electronic gaming business because their innovations brought them no economic success. At the time, computers were too expensive to be used as a gaming platform for Space War, and Magnavox did not have the marketing power to make Odyssey popular.

The first well-known figure in the electronic gaming business is Nolan Bushnell. His first exposure to electronic games was Space War, which he played in college. He developed a version of this game for coin-operated machines and gave it the name Computer Space, but it had no real success. He then founded Atari, which developed many legendary electronic games, such as Pong, the first big success on the market. Atari had to pay Magnavox for the licenses to Pong and Space War. Until 1974, Pong machines were in nearly every bar in the United States. A third of the machines were made by Atari and the rest by other companies through a license. In 1975, Atari released a consumer version of Pong, which sold 150,000 copies in the first year. This was the beginning of electronic home entertainment.

Competition and Technical Development

In the following years, a number of new companies, games, and machines entered and left the market. A major innovation in these years was the data cartridge. After the advent of the cartridge, the game was no longer stored in the read-only memory of the gaming machine, which made it possible to buy new games for gaming machines. This changed the distribution structures of the industry; companies now had the ability to develop new games for the existing hardware and to work as developers and publishers of gaming software.

[Page 276]The next important steps in the development of the industry were, first, the start of handheld gaming in 1977, when Mattel brought LED-based games to the market, and second, Japan's entrance onto the electronic gaming scene when Nintendo released its first game in 1978. The industry grew considerably during the late 1970s and early 1980s. In the 1980s, the increasing costs of development in hardware and software ushered in a phase of consolidation. As a result, the structure of the market changed; now, there were companies specializing in software, like Midway, and others specializing in the publishing process, like Electronic Arts, founded in 1982. The third group of companies, including General Consumer Electronics, which brought out the Vectrex in 1982, specialized in the development of hardware. Only a few companies, such as Atari and Nintendo, worked in more than one market. In 1989, Nintendo released the first Game Boy, which is the most successful gaming platform to date. Nintendo also sold more than 120 million consoles. The company was clearly a leader in the video game business, both in the handheld and home console markets. Popular consoles from Nintendo were the family computer Famicom, which was released in 1984 in Japan, and its American version, the Nintendo Entertainment System (NES). Up to the mid-1990s, many companies brought out new platforms, but most of them were unsuccessful. With the growing number of PCs in households, the PC also became more and more important as a gaming platform. In 1993, Sega's Genesis System and Nintendo's Super NES dominated the console market.

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