waBy Leonard Herman, Jer Horwitz, Steve Kent, and Skyler Miller

In 1949, a young engineer named Ralph Baer was given an assignment to build a television set. He wasn't supposed to build just any television set, but one that would be the absolute best of all televisions. This was not a problem for Baer, but he wanted to go beyond his original assignment and incorporate some kind of game into the set. He didn't know exactly what kind of game he had in mind, but it didn't really matter because his managers nixed the idea. It would take another 18 years for his idea to become a reality, and by that time there would be other people to share in the glory, like Willy Higinbotham, who designed an interactive tennis game played on an oscilloscope, and Steve Russell, who programmed a rudimentary space game on a DEC PDP-1 mainframe computer. And then there was also Nolan Bushnell, who played that space game and dreamed of a time when fairground midways would be filled with games powered by computers.

Today, with interest in classic games gaining steam once again, players of video games are reminded of the rich history of the industry. Crave's Asteroids 64 is a modern version of a game that came out in 1979. And the original Asteroids was merely an updated version of Nolan Bushnell's Computer Space, which was really a jazzed-up copy of Steve Russell's Spacewar. Space Invaders, Centipede, Frogger, and Pong are once again on store shelves, and Pong is but a polished variant of the game Willie Higinbotham displayed on his oscilloscope.

The history of video games is not just about people. It's also about companies and ironies. Atari was an American company with a Japanese name, and the Japanese company Sega was started by an American. Magnavox, the company that started it all, is owned by Phillips, a company that is over a century old, and Nintendo, the company that made video games popular again, is just as old. And who would have ever thought Sony, the company that invented all types of electronics, from transistor radios to video recorders, would release a video game console that would become its top-selling product of all time?

In today's world, where video games are often cited as a source for teenage violence, it's interesting to see that the first home console also had a light rifle as an optional peripheral.

The world of video games continues to evolve. By reading about the past, perhaps you'll also get a glimpse of the future.

Fusajiro Yamauchi establishes the Marufuku Company to manufacture and distribute Hanafuda, Japanese playing cards. In 1907, Marufuku begins manufacturing Western playing cards. The company changes its name to The Nintendo Playing Card Company in 1951. "Nintendo" means "leave luck to heaven."

Gerard Philips establishes a company in the Netherlands to manufacture incandescent lamps and other electrical products.

Konosuke Matsushita establishes the Matsushita Electric Housewares Manufacturing Works. During the next 70 years, the company will establish a multitude of companies, including Panasonic.

The Connecticut Leather Company is established by a Russian immigrant named Maurice Greenberg to distribute leather products to shoemakers. In the early '50s, Maurice's son Leonard creates a leather-cutting machine, and the company, which soon trades under the acronym COLECO (short for Connecticut Leather Company), begins selling leather craft kits. By the end of the decade, Leonard will have built a plastic-forming machine and the company will have jumped into the plastic-wading-pool industry.

From their garage workshop, Harold Matson and Elliot Handler produce picture frames. They come up with the name "Mattel" by combining letters from their names. Elliot uses the scraps from the picture frames to begin a side business making dollhouse furniture.

Akio Morita and Masaru Ibuka set up the Tokyo Telecommunications Engineering Company. After seeing an American-made tape recorder, Morita decides his company should begin making them. In 1952, Ibuka and Morita barely raise the $25,000 fee to become one of the first foreign companies to license the transistor patent from Bell Labs. They then use the transistor to create the world's first pocket-sized battery-powered radio. The transistor radio is a success in Japan, and Ibuka and Morita begin looking at marketing their products in the United States and Europe. Realizing the English translation of their company name is too cumbersome for English-speaking people to remember, they modify the Latin word sonus (sound) and come up with Sony, a word that has no meaning, for their new corporate name.

Ralph Baer, an engineer with Loral, a company that develops and manufactures complex military airborne electronics, is instructed to "build the best TV set in the world." Baer suggests they add some kind of interactive game to the TV set to distinguish it from other companies' TVs, but management ignores the idea.

Former US Korean War veteran David Rosen sees the popularity of mechanical coin-operated games on US military bases in Japan, so he starts Service Games to export these games to Japan. In the 1960s, Rosen decides to make his own coin-operated games, so he purchases a Tokyo jukebox and slot-machine company. The name SEGA, short for "SErvice GAmes," is stamped on the games that Rosen produces, and eventually Rosen adopts it as his company name.

In an effort to keep visitors to the Brookhaven National Laboratories in New York from being bored, physicist Willy Higinbotham invents an interactive table-tennis-like game that is displayed on an oscilloscope. He improves on his invention a year later by displaying it on a 15-inch monitor. Believing that he hasn't invented anything, Higinbotham doesn't patent the device.

Spacewar.

MIT student Steve Russell creates Spacewar, the first interactive computer game, on a Digital PDP-1 (Programmed Data Processor-1) minicomputer. Limited by the computer technology of the time, Spacewar used new teletype terminals with CRT screens to display the graphics.

Nolan Bushnell enrolls in engineering school at the University of Utah, where he is first exposed to Russell's Spacewar.

Nolan Bushnell gets a summer job at a Salt Lake City carnival, where he is in charge of the arcade. Bushnell envisions an arcade filled with computer games but realizes it's only a dream, since computers are much too expensive to make the idea feasible.

Ralph Baer rekindles his idea for a secondary use for television sets. He begins researching interactive television games. The defense contractor he works for, Sanders Associates, is interested and gives him the latitude needed to develop it.

Baer and his team succeed in creating an interactive game that can be played on a television screen. They develop a chase game and follow it up with a video tennis game. They also modify a toy gun so it can distinguish spots of light on the screen.

Baer's interactive TV game is patented.

Magnavox licenses Baer's TV game from Sanders Associates.

With the help of Ted Dabney, Bushnell turns his daughter Britta's bedroom into a workshop so they can build an arcade version of Spacewar. They succeed in putting together a hardwired dedicated machine that can hook up to a television set to play a video version of Spacewar. Bushnell calls his game Computer Space.

Arcade-game manufacturer Nutting Associates purchases Computer Space and hires Bushnell to oversee the building of it.

Computer Space.

Nutting Releases First Arcade Video Game

Nutting manufactures 1,500 Computer Space machines. The components are packaged with a 13-inch black-and-white TV set in a futuristic-looking cabinet. The first arcade video game is released, but the public finds it too difficult to play.

Magnavox begins manufacturing Baer's TV game system, which it calls the Odyssey. Sanders and Magnavox begin showing it to distributors around the country.

Magnavox displays the Odyssey at a convention in Burlingame, California, on May 24. Nutting, believing it's the only company dealing with video games, sends Bushnell to see the machine. Bushnell spends a few hours playing video tennis and other games and later reports back to Nutting that he found the Odyssey uninteresting and in no way any competition for Computer Space.

Computer Space does not sell well, and Bushnell comes to the conclusion that it is too difficult to play. He realizes that if he can design a simple game, it might be a major draw. He informs Nutting, who tells him to go ahead and design a new machine. Bushnell decides that since he is the brains behind video games he should get a larger share of the profits. When he demands a third of Nutting Associates and doesn't get it, he leaves the company.

Bushnell and Dabney decide to start their own company to design video games for other companies to distribute. They originally call their company Syzygy (the straight-line configuration of three celestial bodies), but that name is already being used by a roofing company. They then settle on the name Atari, a term from the Japanese game Go, whose meaning is equivalent to "check" in chess.

Bushnell hires Al Alcorn to program games. Since Alcorn is inexperienced, Bushnell has him program a simple video tennis game as an exercise. They call the game Pong, for two reasons: first, "pong" is the sound the game makes when the ball hits a paddle or the side of the screen, and second, the name Ping-Pong is already copyrighted.

Bushnell tries selling Pong to established arcade manufacturers. After finding Bally disinterested, Bushnell decides to market the game himself. Pong is test-marketed in Andy Capps, a local bar. Within two weeks the test unit breaks down because the coin drop is flooded with quarters. Pong is a success.

Magnavox Releases Home Video Game

Magnavox sells the Odyssey exclusively through its own stores. People are led to believe the console will only work with Magnavox televisions. Still, Magnavox manages to sell 100,000 units. Many people buy it because it is the closest thing they can get to a home version of Pong.

Father of Video Games Saves Connecticut Company

Attracted by Atari's success, several companies release home video game consoles. Because of a rush on circuits, only Coleco receives its full order in time for Father's Day. Coleco fails to receive FCC approval due to a radio-frequency interference problem and hires Ralph Baer to find and fix the problem. Baer solves the problem at the last minute, and Coleco's huge oval Telstar machine debuts.

Fairchild Camera & Instrument releases its Video Entertainment System (later renamed Channel F), the first programmable home game console. You can actually insert large cartridges (which look very much like audio 8-track cartridges) into the console and change the games.

Exidy Games releases Death Race 2000, a driving game based on a 1975 movie of the same name. You earn points by running over stick figures. Public outcry against video game violence gains national attention, and the game is taken off the market.

Nolan Bushnell sells Atari to Warner Communications for $28 million. Bushnell remains with Atari as chairman of the board.

Atari opens the first Pizza Time Theatre, a new arcade-restaurant combination that features moving robotic animals, electronic games, and food. The mascot for the restaurant is a rat named Chuck E. Cheese. Bushnell thought up the concept three years earlier while standing in line at a pizza parlor.

Atari releases its first programmable (cartridge-based) game system, the Video Computer System (VCS--later known as the Atari 2600), in time for Christmas, for $249.

Bally releases a programmable console called the Bally Professional Arcade. With a retail price of $350, the system fails to catch on.

Bushnell leaves Atari and signs a lucrative five-year agreement not to compete with the company he started. He buys the rights to Pizza Time Theatre from Atari and begins franchising it. Ray Kassar becomes the CEO of Atari.

In March, Nintendo of Japan releases Computer Othello, a decidedly simplistic arcade cocktail-table game based on the board game Othello.

Atari releases the arcade game Football. The game features a revolutionary new controller called the trackball.

Midway imports Space Invaders from Taito. Space Invaders gives you a goal by displaying the current high score for you to beat.

Both Football and Space Invaders break all known sales records with almost equal earnings. However, Football's popularity fades with the end of the pro football season. Space Invaders' popularity continues, causing coin shortages in Japan and school truancy in America.

Atari begins selling its line of 400 and 800 computers to compete against Apple. The public, however, associates Atari with games, and the computers are never taken seriously.

Magnavox releases the Odyssey2, a programmable console that has a built-in membrane keyboard.

Cinematronics releases Space Wars, a game similar to Bushnell's Computer Space. The game features vector (line-drawn) graphics. Vector graphics are the earliest form of polygon graphics to appear in video game applications, and they lack the flat shading or textures of later graphics.

Holographic Games

Atari develops the Cosmos, a handheld programmable machine that features holograms within the graphics. Because the holograms are only for aesthetics and don't add to the gameplay, the Cosmos is never released.

Atari releases Lunar Lander, its first vector graphics game. Lunar Lander Begets Asteroids

Despite Lunar Lander's popularity, Atari halts production of the game and begins releasing Asteroids in the Lunar Lander cabinets. Asteroids is a game that was originally designed by Lyle Rains and Ed Logg for the Cosmos system. It goes on to become Atari's all-time best-seller. Asteroids introduces a new feature to arcades: High scorers can enter their three-character initials at the end of the game. Nearly 80,000 units are sold in the United States, but the game is less popular in other countries. Sega releases Monaco GP, a driving game with a top-down perspective, which is followed by the similar Pro Monaco GP in 1980 and the realistic 3D racer Super Monaco GP in 1989.

Milton Bradley Releases Programmable Handheld Video Game

Milton Bradley Electronics releases the Microvision, a handheld programmable unit that includes its own built-in LED screen.

Atari releases its exclusive home version of Space Invaders for the VCS. Sales of the VCS skyrocket.

Mattel Electronics introduces the Intellivision game console. The first serious competition for the VCS, the Intellivision has better graphics and a steeper price--$299. Mattel promises to release an optional peripheral that will upgrade the Intellivision console into a personal computer.

Several VCS programmers leave Atari in a dispute over game credits and form Activision, the first "third -party developer" and now a rival VCS software house. While Atari doesn't give individual programmers credit for their work, Activision recognizes individual game developers by including their names on the game packaging and in the marketing efforts.

Atari coin-op designer Ed Rottberg creates Battlezone, the first three-dimensional first-person game. Rolling around in a tank on a virtual battlefield, you take out targets in a warlike scenario. The US government later commissions an enhanced version of Battlezone for military training purposes.

Namco releases Pac-Man, the most popular arcade game of all time. Over 300,000 units are sold worldwide (counterfeit machines are not included in this figure, but their number nearly matches the number of legitimate Pac-Man machines). More than 100,000 units are sold in the United States alone. Originally named Puck Man, the game is renamed after executives see the potential for vandals to scratch out part of the letter P on the game's marquee, which might discourage parents from letting their children play. Pac-Man becomes the first video game to be popular with both males and females.

Sega obtains the rights to manufacture and release a Japanese version of Atari's Missile Command.

Minoru Arakawa, son-in-law of Nintendo's Japanese chief Hiroshi Yamauchi, opens Nintendo of America in New York City, then moves the company to Seattle, Washington. Unsuccessful at selling a number of mediocre electronic games following Computer Othello, the small American subsidiary has a decidedly uncertain future.

Bally sells its Professional Arcade system to Astrovision, which renames it Astrocade.

Williams, a Chicago-based manufacturer of pinball machines, releases Defender, its first video game. Designed by Eugene Jarvis, Defender is a side-scrolling shooter that features the industry's first virtual world. Because the monitor can only display a portion of the action, a "radar" at the top of the screen shows the overall picture of events that are occurring outside the boundaries of the screen. Defender becomes an immediate hit.

Nintendo Does It Right

Given an opportunity to convert a large number of unsuccessful Nintendo video arcade games into something that will earn money, Nintendo artist Shigeru Miyamoto creates Donkey Kong. The hero, originally called Jumpman, is a squat carpenter racing to save his girlfriend Pauline from a crazed monkey. Jumpman is later named Mario by Nintendo of America's staff, in honor of his resemblance to their landlord Mario Segali.

More Atari programmers defect, along with several Intellivision programmers, to start Imagic, a software company that promises to release games for both the VCS and Intellivision systems.

Atari negotiates the rights to release more hit arcade titles, such as Pac-Man, for the VCS.

Atari releases Tempest, a color-vector arcade game based on still-unstable graphics technology that is prone to early failure. The machine attracts crowds of devoted players.

A man dies of a heart attack while playing Berserk--video gaming's only known fatality.

US arcades reach their highest revenues--$5 billion. Americans spend more than 75,000 man-hours playing video games.

Electronic Games is founded by Arnie Katz and Bill Kunkel and is the first magazine entirely devoted to video games.

Cinematronics releases Rick Dyer's Dragon's Lair (animated by Don Bluth), the first arcade game to feature laser-disc technology.

Commodore releases the Commodore 64, an inexpensive but powerful computer that outperforms any video game console.

Nintendo releases the Family Computer (Famicom) in Japan. Intentionally designed to look like a toy, the Famicom is released with Nintendo arcade hits Donkey Kong, Donkey Kong Junior, and Popeye. Because of Atari's domination of the market, Nintendo doesn't plan to sell the Famicom outside of Japan. The company offers Atari the rights to distribute it everywhere outside of Japan. Atari is keen on the idea, and after meetings throughout April and May, the two companies sign an agreement at the CES in June.

Coleco unveils its Adam computer at the June CES, with Donkey Kong displayed on it. Atari, which has computer rights to Donkey Kong, accuses Nintendo of breach of contract and threatens to halt the Famicom deal and sue. Nintendo threatens to sue Coleco because Coleco only has video gaming rights to Donkey Kong, not computer rights. Coleco says it's all a big misunderstanding because although Adam is a computer, it's also a souped-up Colecovision.

Controversy hits Atari when it is revealed that Ray Kassar sold $250,000 worth of Warner stock on December 6, 1982, the day before Atari made an announcement that caused the stock to fall. Kassar resigns on July 7 and is replaced by James Morgan on September 6. The Famicom deal falls apart during the crisis.

With too many products on the shelves from a multitude of publishers, many third-party companies go out of business. The games from these companies are then discounted heavily. Companies that are still in business cannot compete against the cheap games, so they wind up losing money because of unsold inventory.

After acquiring GCE, Milton Bradley begins distributing the Vectrex. The company quickly lowers the price to make it competitive with the consoles. The price is eventually dropped to $100, forcing Milton Bradley to lose money with each until sold. Milton Bradley finally cancels the Vectrex.

Coleco uses all of its resources to manufacture Adams. This is at the expense of the Colecovision. Sixty percent of all Coleco Adams are returned defective.

Mattel decides to shut down Mattel Electronics after heavy losses. The division is purchased by Terry Valeski, a Mattel vice president, who renames it Intellivision Inc.

As the video game industry begins to crumble, Nintendo announces that it may release its Famicom in the United States.

Atari introduces new products at the summer CES. Among them are the 7800, an advanced gaming console that will also play 2600 games, and the Mindlink, a hands-off controller that attaches to the head.

Faced with rising losses, Warner Communications sells off Atari Incorporated's consumer division to Jack Tramiel, the man who had founded Commodore computers and had been forced out of that company earlier in the year. Warner Communications keeps the arcade division and renames it Atari Games. The Ataritel division is shelved, and Tramiel renames his new company (which includes Atari's video game and computer divisions) Atari Corporation. Tramiel immediately announces that the new company has no intention to sell video game consoles and will be marketing a new line of 16-bit computers. The new products that were shown at CES are shelved indefinitely.

Nintendo Releases the SNES

Nintendo releases the Super Famicom in America and calls the $249 console the Super NES (SNES). Journalists begin to wonder aloud whether Mario will be enough to convince NES-dedicated parents to make the investment in a new machine.

Sega unveils Sonic the Hedgehog, which it hopes is a force that will one day conquer the NES and SNES. Charmed by the character, critics are quick to support it but call the choice between Mario and Sonic a toss-up. Most pick Super Mario World as the better of the two.

Sony and Nintendo announce plans for Sony to develop a $700 CD player to work with the SNES.

Galoob Toys releases the Game Genie, which infuriates Nintendo--the device lets players cheat in NES games and win more easily. Nintendo sees the Game Genie as a tool that reduces the long-term value of its games, and it attempts to prevent Game Genie sales.

Capcom releases Street Fighter II and brings new life to arcades filled with walk-and-punch clones and shooters. Teenagers flock to play Street Fighter II, and arcades purchase multiple machines and similar clones and begin to invest in more sophisticated racing simulations as well.

Atari announces development of the Panther, a new 32-bit game system designed to compete against Sega and Nintendo.

Although they have contracts with Nintendo, Capcom and Konami talk actively with Sega about development for the Genesis. They ultimately release games but never devote their best teams to work on Sega software. Sega hurriedly prepares Sonic the Hedgehog 2 for a holiday release. The game sells like mad, and Sonic becomes a serious challenger to Mario's future success.

Sega releases the Sega CD ($299) but denies developers easy access to development tools that would let them use the system's special graphics abilities (hardware sprite zooming and rotation). Sega of America focuses on developing a number of interactive movies.

JVC introduces the Wondermega in Japan. The Wondermega is a combination Genesis and Sega CD and retails for $620.

Sony and Nintendo abandon their joint CD peripheral, which Sony had reputedly completed in prototype form. Rumors surface indicating that Sony lawyers had skillfully crafted an agreement that allowed Sony to reap publishing profits from SNES/Super Famicom CD-based games, profits Nintendo sought to retain. Nintendo announces plans to work with Philips to create a CD-ROM compatible with the Philips CD-i. Sony, disgusted, finishes work on a number of SNES games, scraps the old "PlayStation" developed for Nintendo, and sets its engineers to work on developing a 32-bit CD-only game machine to unseat Nintendo in Japan and the United States.

3DO, a new company started by Electronic Arts founder Trip Hawkins, announces a new 32-bit gaming console. 3DO receives major backing from Panasonic, Time Warner, and MCA. 3DO does not plan to manufacturer any consoles itself. Hawkins' dream is that the 3DO console will become the standard that will be released by many different manufacturers.

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