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From Atari to Xbox 360

A History of Video Games

Video games are a cultural phenomenon that is growing ever more prominent among young and old alike. They have become an integral part of the mass media culture and have been in existence for nearly as long as the television. While the video games of today are growing ever more detailed and lifelike, early video games like Pong, Space Invaders, and Pac-Man were equally impressive and highly entertaining at their time. From their earliest years to the complex video game landscape of the twenty-first century, video games have developed into enchanting, alternate worlds that have captured the hearts of millions of players.

Early Founders

During the golden age of video games in the 1970s, it was a rush to the start to see which company and which programmer could create a video game and platform that could trump the rest. However, most large video game manufacturers can trace their roots far before that decade, reaching back into the early 1900s or even the late 1800s. While some video game companies, such as Nintendo and Sony, would begin their economic pursuits in other fields, companies like Atari and Sega were created with an eye toward producing the ultimate gaming system.

The first major video game company to come into being was Nintendo, which would eventually make video games popular again in the 1980s. Nintendo is a Japanese company that was created in 1889 and was originally named the Marufuku Company. In 1951, this company, which manufactured Western-style playing cards in Japan, would take the name Nintendo, meaning “leave luck to heaven” (Kent 2001). In 1891, the Philips Company, owner of Magnavox and an important frontrunner in the video game production race, was established in the Netherlands. In 1947, another major video game icon was founded under the name Tokyo Telecommunications Engineering Company. After the founders realized this name was too cumbersome to say and remember easily, they modified the Latin word sonus (meaning sound) to form the company name Sony (Kent, 2001). Sega was founded in 1952, under the name Service Games, as a company that provided coin-operated games and jukeboxes to American servicemen in Japan. It would not be until 1972, well into the beginning of video games, that Atari was formed as a cooperative partnership between leading video game programmers Nolan Bushnell and Ted Dabney (Kent 2001).

First Video Games and Platforms

The idea for an interactive video game was first conceived of by Ralph Baer, an engineer with an airborne electronics company, in 1951. Commissioned to design a television for the company, Baer believed the TV could be more marketable to consumers if it contained a type of interactive game (Kent 2001). His idea was shot down by the company, but other engineers and programmers would not let it settle for long. The first official video games, a table-tennis type game and a computer space game, were developed in 1958 and 1961, respectively.

These early video games proved to be the necessary catalyst for game programmers and were the early predecessors of the popular arcade games Pong and Space Invaders. Pong, created by the Atari Company in 1972, turned into an incredible success in arcades and led to the creation of the first home video gaming system, the Magnavox Odyssey. After the moderate success of the Odyssey, several video game companies would follow with their own home gaming systems in 1976 and 1977, including the Atari Video Computer System (VCS).

Video Games Take Off

By 1978, home video game consoles were beginning to sell well, and more competitors had entered the market. Nintendo of Japan released its first video game that year, a simplistic version of the board game Othello that was marketed in arcades. The popular toy makers Mattel and Milton Bradley also entered the video game scene in the following two years with a hand-held video game unit from Milton Bradley and the Intellivision by Mattel, the first video game console to offer true competition to Atari (Kent 2001).

During this golden age of video games in the late 1970s, the two leading contenders, Magnavox and Atari, both tried to add competition to the home computer market. Magnavox released the Odyssey 2, a programmable video game console that included a built-in keyboard, while Atari began selling its own personal computer designed to rival Apple. However, most consumers connected Atari only with video games, and the computer system was widely disregarded. During this time period, Atari also released its first home version of the popular arcade game Space Invaders, leading to a massive increase in sales for the VCS game console (Kent 2001).

As video gaming entered the 1980s, two incredibly popular games that would revolutionize the industry were created. Pac-Man, created by Namco in 1980, became the best-selling arcade game of all time and the first video game that was popular with both males and females (Kent 2001). The later version, Ms. Pac-Man, would also prove to be immensely popular at arcades. The next year, in 1981, Nintendo of America created Donkey Kong for arcades. While the hero of Donkey Kong was originally named Jumpman, this name was later changed to Mario and he would become an icon in years to come as a key video game hero (Kent 2001). Unfortunately, as video games began to take off in the early 1980s, the market quickly became flooded with multiple consoles and games, and the industry experienced a market crash in 1984.

Nintendo Rescues the Industry

As dozens of video game manufacturers experienced dropping sales and near bankruptcy following the 1984 crash, Nintendo of America released the Nintendo Entertainment System (NES) nationwide in 1986. The game console debuted with the video game Super Mario Bros., which quickly became an instant hit among gamers. Recognizing the success of the NES, Sega released its Sega Master System in the same year. As the year progressed, Nintendo began to outsell its competitors 10 to 1, and many third-party video game manufacturers began taking their products away from the previous industry-leader, Atari, and marketing them toward Nintendo (Kent 2001). In order to maintain profits, Atari eventually began producing NES-compatible games under a subsidiary company. This role ended abruptly, however, when Atari brought a lawsuit against Nintendo, claiming the company was illegally cornering the video game market, and won the case.

Handhelds and Improved Graphics Heighten Competition

Building on the incredible popularity of the NES gaming console, the market for home video games continued to expand in the late 1980s and early 1990s. Nintendo, hoping to increase its profits, released a handheld video game, Game Boy, in 1989. The gaming system featured Nintendo’s most newly acquired game, Tetris, and proved to be quite popular despite its small, monochromatic screen (Kent 2001). Not to be outdone by Nintendo, Atari released its own handheld video game in 1989, but its lack of games and its expensive price doomed it from the start.

As Nintendo continued to dominate the market, other major video game producers realized that providing a superior system was necessary in order to compete. Consequently, Sega released the first successful 16-bit gaming system in the U.S., the Sega Genesis, which boasted significantly better graphics than any other system available. In 1991, Nintendo released a 16-bit gaming system, the Super NES, to compete with the Sega Genesis, while Atari announced its intentions to create a 32-bit system. Meanwhile, Sony, a new entry into the video game market, began work on its own 32-bit system, the PlayStation.

Technology Develops Rapidly in the Modern Era

As Sega and Sony worked on creating 32-bit gaming systems in the early 1990s, video game giant Nintendo and the flagging Atari decided to skip the 32-bit generation and began immediate work on 64-bit systems. While Nintendo worked on developing the Nintendo 64, sales for the recently released Sony PlayStation skyrocketed and many gamers proclaimed it the most superior system yet designed (Kent 2001). Sony had proven itself to be a solid competitor in the video gaming industry.

Throughout the next ten years, competition increased as video gaming technology developed rapidly. Atari, unable to provide a commercially successful 32-bit or 64-bit gaming system, was eventually pushed out of the industry by the competition, and Sega, experiencing failures with its Dreamcast system, was left with only a marginal role in the market as a third-party game developer (Kent 2001). Sony and Nintendo, on the other hand, continued to build on their domination with their popular consoles. By the twenty-first century, computer giant Microsoft had also entered the market with its Xbox gaming system and had carved out a solid niche for itself.

Today, Sony and Microsoft dominate the video game market with their popular PlayStation and Xbox series, while Nintendo continues to hold strong with its handheld games and imaginative consoles. With the incredible lifelike reality that now infiltrates this medium, the next entry into the video game market will need to be truly extraordinary in order to compete.

-- Posted May 6, 2007


Kent, Steven L. 2001. The Ultimate History of Video Games: From Pong to Pokemon, the Story Behind the Craze That Touched Our Lives and Changed the World. Prima.