Youngsters reading this might find it hard to believe, but there once was a world without video games. The first home video games didn't appear until the early 1970s and didn't become widely popular until 1975. That was when Atari adapted its PONG game from the electronic arcade version, and video game mania swept the country.
That was just the beginning, of course. That crude ball-and-paddle game launched several generations of innovative electronic entertainment, culminating in today's ultrarealistic, fast-paced console games.
First Generation: 1972–1977
Like many technological advances, the idea for video games originated with the government; the mid-1960s military wanted some sort of device that would develop the reflexes of military personnel. In 1966, Ralph Baer, an employee of defense contractor Sanders Associates, addressed this demand when he came up with the concept of a "television gaming apparatus." This device included both a chase game and a video tennis game, and could be attached to a normal television set.
It took several years and numerous false starts, but in 1970, Baer showed the game to Magnavox, which signed a licensing agreement the following year. Then, on January 27, 1972, Magnavox launched Baer's "brown box" technology as the Odyssey video game console—the world's first home video game system. Priced at $100, the Odyssey utilized simple black-and-white graphics, enhanced by plastic overlays for the television screen.
This pioneering game system was not a lasting success, however. The Odyssey was extremely clunky and not very challenging; it also suffered from marketing materials that implied it could be used only on Magnavox-brand television sets. (This wasn't true, but Magnavox hoped to drive related TV sales.) As a result, the Odyssey sold only 200,000 units over its three-year life.
Also in 1972, inspired by an early peek at Baer's original video tennis game, Nolan Bushnell and his Atari company released an electronic arcade game called PONG, which became a huge success. This game truly launched the electronic gaming revolution; from 1972 through 1976, you couldn't go to a pub or arcade without finding a long line at the PONG machine.
Unfazed by the Odyssey's short shelf life, Atari decided to port PONG to the home. Unable to obtain financing to release the game on its own, Atari partnered with Sears and in 1975 released a home version of PONG under the Sears Tele-Games label. The $100 game system was Sears' best-selling item during the 1975 Christmas season, with sales of more than $40 million.
Sears had an exclusive for about six months. In 1976, Bushnell sold Atari to Warner Communications, which had enough cash to release an Atari-branded PONG unit later that year. It was a further hit and established the Atari name among the general public.
Following Atari's smashing success, several companies released PONG "clones" using General Instrument's "PONG-on-a-chip" integrated circuit. Chief among these competitors were Coleco's Telstar and Magnavox's Odyssey 100. None achieved the sales levels of the Sears- and Atari-branded games, but all managed to sell a fair number of units during the 1976 Christmas season.
Fairchild Channel F
In August 1976, Fairchild Camera and Instrument leveraged its position as the creator of the microchip to release the first programmable home video game system. Based on Fairchild's own 8-bit F8 microprocessor and displaying 16-color graphics, it was capable of playing a variety of games as programmed by removable ROM cartridges.
The resulting Channel F Video Entertainment System sold for $169 and accepted $20 Videocart game cartridges, which resembled the then-popular 8-track tapes in size and shape. The system was well received by gamers eager for the "next big thing," but, faced with a glut of much-cheaper single-game systems, the Channel F was a major disappointment. Fairchild discontinued the system in early 1978.
RCA Studio III
RCA had been evaluating the video game market for several years; it had been offered a chance to bid on Ralph Baer's original Odyssey technology back in the early 1970s but had passed on the opportunity. Now, seeing Atari's success, RCA decided to enter the video game market on its own with what it hoped would be the first programmable system.
Unfortunately, RCA was a step too slow. RCA's Studio II followed Fairchild to market in January 1977 at a price of $149. Even though the Studio II used the same 8-bit COSMAC 1802 microprocessor that was used in NASA's Voyager and Galileo spacecraft, its chunky black-and-white graphics were notably inferior to those of the Channel F. Interestingly, the Studio II used keypad controllers (built into the main unit) instead of paddles or joysticks, which enabled the playing of some numbers-based games. Too little too late, the Studio II failed in the marketplace and was discontinued in 1979.