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Article - 'History of Videogames (part 1)' by GaZZwa

An item about Miscellanious posted on Aug 8, 2003


The early days of home videogames featuring Pong, Atari and Magnavox. A detailed look inside the birth of the videogaming world and how it became so popular.


Video games: The early years

I’m sure we’re all familiar with videogames (if not, get the hell of this site). But where did they originate? Many of you may also be familiar with names such as Atari, Pong and Space Invaders, but what about Ralph Baer, Magnavox and – what has the Pentagon got to do with all this? Read on in the first episode of “The history of videogames”.

Ralph Baer has been called "the Tom Edison of video games," and for good reason. It was under his supervision that a team of 500 engineers and technicians built the first video game console in 1966. What is not commonly known is how and why this came to be.

There was not a demand for the product. Only a handful of persons in the world had played previous computer games. Those games were usually variations of a game called "Spacewar" and could only be played on $40,000 computer terminals. Thus the question must be asked, who would have funded such a project? The answer is: The Pentagon.

Baer worked for a military electronics consulting firm innocently named Sanders Associates. In the past, Sanders Associates had been employed by the United States military to design weapon circuitry, wire missiles, and generally develop classified military equipment. In 1965 military strategists came to Sanders with a project. They desired computer simulations to help refine their soldier's military prowess by teaching strategy and magnifying reflex skills. They wanted the system to be compact enough to be portable (portable in those days meaning "luggable" or lighter than eighty or so pounds) and to use relatively inexpensive equipment, namely an ordinary television screen. The project was given high security precautions, as most projects were during the height of the Cold War, and Baer was chosen to head it.

After struggling for months on the project by himself, Baer finally succeeded in getting two white dots to chase each other around a black and white screen. This impressed the military representatives enough to warrant a dramatic increase in funding, which lead to the hiring of more assistants. Originally, Baer hired two engineers, Bill Harrison and Bill Rusch, to work full-time on the secretive "TV Game" project. Together, they worked in a ten-by-fifteen foot windowless office affectionately referred to as "the game room." The office was always locked, and the only people with keys were Baer, Harrison, and Rusch.

As time went by, more and more were employed in the project. Within a year the team had a working ball-and-paddle game. Over the next six months this would evolve into a moderately sophisticated hockey game. By the end of 1966, Baer and his team had a working prototype of a video game console ready to show members of a Pentagon review board.

The project leaders beamed with pride as they switched on the device for those present. The television hummed and slowly blocks of light came into focus. The members of the Pentagon review board were not impressed. They felt that insufficient progress had been made on the project, but acknowledged there was enough reason to continue research.

It was at this meeting that Baer first expressed his personal theory that a device such as this could be a very profitable form of entertainment. The review board, however, felt that the military could benefit from such a technology more than a consumer, and decided that the project was to continue under it's "top secret" classification. It would be four years before a non-military company would be approached with a similar system.
After the military rejected his idea, Baer would spend several years covertly trying to obtain the legal rights to commercially reproduce the game machine he helped design at Sanders Associates in 1966.

Eventually the Pentagon became disinterested in the "TV Game" project, and Baer was allowed to pursue the prospect openly. He approached Teleprompter, RCA, Zenith, General Electric, and Magnavox. A deal was struck with RCA, but later fell through because it involved the purchasing of Sanders Associates by RCA.5

Then in 1970 Bill Enders, who had been a part of the RCA negotiating team, joined Magnavox and persuaded the Magnavox executives to give Baer's system a chance. The result of this was the production of the Magnavox Odyssey, the first home video game system available to non-military personnel.

First generation systems (1972-1977)

The Odyssey had over three hundred separate parts. It came with hand controls, dice, playing cards, and play money. Plastic overlays which were placed onto the screen by the consumer, provided colour playing fields for the various games. The system came pre-programmed with twelve games that utilized all of the aforementioned equipment.

While it could not compete with the Pong units that would be released soon after, the Odyssey did have a very impressive first year, selling over 100,000 units at $100 each.
The real cause for the popularity of the Pong units over the Odyssey was not because of the marketing prowess of competing companies, but rather the creation of low cost LSI (Large Scale Integrated) circuits. These circuits were designed primarily for tennis, hockey, and other Pong-esque game mechanics. The low cost LSI's would allow the market to be flooded by Pong knock-offs.

Nolan Bushnell's first exposure to video games was a game called "Spacewar." Programmed by an MIT student named Steve Russell in the early sixties, this game had circulated computer labs across the country by the time Bushnell would play it in a lab at the University of Utah in 1962. He would spend the next seven years of his life trying to reproduce that game on a smaller, less expensive computer. When it was completed, Bushnell's Spacewar variation (known as "Computer Space") did not sell. Frustrated by this, Bushnell changed his entire perspective on computer game design.

In an interview, Bushnell later said, "You had to read the instructions before you could play, people didn't want to read instructions. To be successful, I had to come up with a game people already knew how to play; something so simple that any drunk in any bar could play."

In 1972, Bushnell quit his job at Ampex in Sunnyvale, California, and with two other former Ampex engineers started his company. Bushnell enjoyed playing the Japanese game "go" and his next suggestion was "atari" which means "check." This name was accepted by the California Secretary of State, and on June 27, 1972, Atari was officially established.

Al Alcorn, one of Atari's first employees, was the engineer who constructed the first Pong arcade game. The game was named after the desired sound that Bushnell wanted incorporated in the game. The dictionary defines "pong" as a hollow, ringing sound, and this was the sound Bushnell felt was necessary in the game.

The first Pong arcade machine was placed in a local bar in Sunnyvale called Andy Capp's. It was more of a trial than anything else, as the unit did not even have a fully constructed case. The following is an account of the first night Pong was in this bar (slightly abridged):
"One of the regulars approached the Pong game inquisitively and studied the ball bouncing silently around the screen as if in a vacuum. A friend joined him. The instructions said: 'Avoid missing ball for high score.' One of [them] inserted a quarter. There was a beep. The game had begun. They watched dumbfoundedly as the ball appeared alternately on one side of the screen and then disappeared on the other. Each time it did the score changed. The score was tied at 3-3 when one player tried the knob controlling the paddle at his end of the screen. The score was 5-4, his favour, when his paddle made contact with the ball. There was a beautifully resonant "pong" sound, and the ball bounced back to the other side of the screen. 6-4. At 8-4 the second player figured out how to use his paddle. They had their first brief volley just before the score was 11-5 and the game was over.
"Seven quarters later they were having extended volleys, and the constant pong noise was attracting the curiosity of others at the bar. Before closing, everybody in the bar had played the game. The next day people were lined up outside Andy Capp's at 10 A.M. to play Pong. Around ten o'clock that night, the game suddenly died."

The reason for this was that the milk carton coin container inside the machine was overflowing into the electronics. After it was emptied, the game continued its usual operation.

Pong would become a huge hit in the arcades, spawning numerous imitations and several official sequels. Its popularity would not die down, until it was replaced by more advanced systems that used microprocessors instead of LSI (Large Scale Integrated) circuits.

America was introduced to the first home video game system on a Sunday night television broadcast hosted by Frank Sinatra. Released by Magnavox and named "Odyssey" this system was little more than a few logic switches, and not considered a microcomputer by the industry. The Odyssey was the result of years of negotiations between Ralph Baer and various players in the television manufacturing industry.

This was not, however, the first time that Americans had seen a videogame. Pong, created by Nolan Bushnell and Al Alcorn (founder and first employee of Atari), had been around for nearly a year in the arcades. Thus videogames were not new. However, a system to play video games in the privacy of your own home had never been seen before.

Nolan Bushnell was not to be outdone, and with simplicity as his motto, he reproduced his popular arcade Pong for home use. Atari Pong, the home version, consisted of one simple unit. It had built in paddles, a built in speaker, and pre-programmed with Pong. Unlike Baer's Odyssey, which had twelve games built in, separate controllers, and graphic overlays, Atari Pong was considered concise by the video game consumer. At this time, consumers did not feel a need to spend more on a system simply because it had more games. It was a common complaint among consumers that systems with multiple games only had one or two desirable games. Thus, Atari Pong and the over sixty Pong knock-offs, would dominate the market until 1977 when it would be replaced by the VCS, another Atari system.

While Atari's profits had been high in the arcade arena, they were not quite financially equipped to permeate the home console market. At the time, the video game companies were either arcade only (such as Baily) or home console only (such as Magnavox). The two markets were dramatically different requiring separate technologies, and distribution networks. Atari's success in the arcade was sufficient to fund the facilities to produce the alternative technologies, but they required the assistance of Sears, Roebuck to gain access to distribution. This would pave the way for the next generation of video games headed by the Atari VCS/2600.

The key occurrance leading to the establishment of a video game specific infrastructure was the deal between Sears and Atari. In 1975, Nolan Bushnell first introduced Atari's Home Pong at a toy industry show. At this show, Tom Quinn, the sporting goods buyer for Sears- not the toy buyer- approached Bushnell and offered to buy every Home Pong game Atari could produce. Bushnell told him that they could produce only 75,000 units. Quinn told Bushnell to double production and he would arrange financing. In exchange, Sears wanted exclusive rights to sell Home Pong through its 900 outlets. Sears would even pay for the advertising and distribution of the units. Had Quinn given the same deal to Magnavox, Atari would have probably gone out of business. Instead, Atari's sales in 1975 were nearly $40 million.

This deal between Atari and Sears would last until relationships between the two soured in 1979 when Sears would produce its "Tele-Games" line, which was a system based heavily on Atari's VCS/2600 architecture. By this time, however, Atari was well established, and with Warner Communication funding it, the video game industry barely felt a jolt.

Second generation systems (1977-1981)

In the Second Generation we see a dramatic change in the desires of the video game consumer. Previously, systems with only a few games pre-programmed were all that was necessary to surfeit the consumer's cravings. The industry wide implementation of the microprocessor first invented at Fairchild paved the way for more complicated systems. These systems produced graphical and auditory effects unlike any that had ever been experience before. While this would be repeated again and again signalling the move from one generation to another, it has been speculated that this first change had the most dramatic effect on the consumer.

The success of Atari in the late seventies would pave the way for Atari's domination of the home market during the Second Generation. Because of a deal between Atari and Sears, Atari had an infrastructure sufficient to flood the new gaming market with their products. Nolan Bushnell, acknowledging the significant improvements over Pong made by RCA and Fairchild, pressed his engineers to create a new system. The Atari VCS/2600 was the result.

The only barrier in Atari's path was money. The production facilities would have to be updated to allow for the manufacture of cartridges, and Atari, despite its dramatic growth in the previous years, lacked adequate resources to accomplish this on their own.

In 1976, people were ready for another form of entertainment. Record sales had plummeted since the late sixties and early seventies, and many music companies were struggling with this lack of interest. One such company was Warner Communications. Steve Ross, the president of Warner, had been vacationing with his children in Disneyland, when he discovered an eight player arcade game. Upon learning that the unit sold for $4,500 and earned $250,000 a year for Atari, Ross contacted Emanuel Gerard, whose job was to acquire properties for Warner. Shortly thereafter, a contract was struck that seemed beneficial to all parties involved. In reference to the deal, Cohen wrote, "Cash-rich Warner was desperate for a hot new product, and product-rich Atari was desperate for cash."

Nolan Bushnell started Atari when he was twenty-nine years old with $250 of his own money, and had sold the company for $28 million in four years. While no longer the president of Atari, Bushnell would remain on the Board of Directors for several years to come.

Funded by Warner Communication and distributed through Sears the VCS/2600 seemed destined for success. Selling for $200, the unit's profit margins were small, but the cartridges were being sold for $20-$40 yet only cost a fraction of that to make.

Sole licensing of Taito's arcade smash Space Invaders and the graphic refinements of an overnight success called Activision would propel the system's sales beyond any previous limits. Atari would even strike unprecedented deals with Paramount for exclusive rights for two of the biggest blockbuster movies of all time, E.T. and Raiders of the Lost Ark.

Atari's success with the 2600 would continue for five more years during which time five billion dollars worth of Atari VCS/2600 systems and products would be sold.

Third generation systems (1981-1984)

Everything was looking up for Atari, but alas it was not to be. Atari's "concern" for the customer backfired on them. In the previous years, there had been a very fine line separating arcade game quality from home game quality. With arcades utilizing storage capacities ten to forty-five times larger than home systems, that fine line became a chasm. Arcade games seemed to be evolving exponentially, while home systems seemed "stuck in a time warp."

The public quickly became uninterested in video game specific consoles, and sales plummeted.
This would mark the end of Atari's reign of the video game market. To this day, Atari has not produced any significantly popular systems apart from their original Pong and the VCS/2600. Since 1985, they have slowly been picked apart by the industry. Splinter companies can be seen everywhere. One of which, known as Tengen, would play a crucial role in the Fourth Generation during some heated legal actions involving Nintendo of America.

Other systems:

The first microchip was created at Fairchild Camera and Instrument by Robert Noyce. This small wafer of silicon would play the most important role in the evolution of video games.3 Because of it, video games would no longer be limited by the number of TTL switches. One of the first systems to contain this technology was the Fairchild Channel F. A small library of titles were produced for the Channel F, but the system never achieved the kind of popularity experienced by the other systems at the time. The Channel F originally sold for $170 with its game cartridges averaging around $20 a piece.

RCA executives had been kicking themselves ever since they let Ralph Baer's system slip through their fingers and into the hands of Magnavox. Because of this, RCA was busy trying to catch up with the video game console explosion of the late seventies.

The RCA Studio II was styled very much after the Pong units of the time, with one glaring exception; it had a cartridge port similar to the Fairchild Channel F. Another less important difference was that the Studio II had numeric keypads for controllers instead of the paddles that were standard among the Pong games of the era.

Both the RCA Studio II and Fairchild Channel F were doomed to failure because of the looming presence of the Second Generation Atari VCS/2600 on the horizon.

Special thanks to The History of Videogames Museum, "A brief history of Home Video Games", Videotopia and "Supercode: A Visual History of the Videogame Age, 1971-1984".

-- GaZZwa