For best-selling individual video games, see the list of best-selling video games. The sales figures given below also do not include arcade video game sales, which can be found at the list of highest-grossing arcade games. For mobile games that have generated the most revenue, see the list of highest-grossing mobile games.
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The history of video games began in the 1950s and 1960s as computer scientists began designing simple games and simulations on minicomputers and mainframes. Spacewar! was developed by Massachusetts Institute of Technology (MIT) student hobbyists in 1962 as one of the first such games on a video display. The first consumer video game hardware was released in the early 1970s. The first home video game console is the Magnavox Odyssey, and the first arcade video games are Computer Space and Pong. After its home console conversions, numerous companies sprang up to capture Pong's success in both the arcade and the home by cloning the game, causing a series of boom and bust cycles due to oversaturation and lack of innovation.
In the arcade and on home consoles, fast-paced action and real-time gameplay were the norm in genres like racing and target shooting. On the mainframe, however, such games were generally not possible due both to the lack of adequate displays (many computer terminals continued to rely on teletypes rather than monitors well into the 1970s and even most CRT terminals could only render character-based graphics) and insufficient processing power and memory to update game elements in real time. While 1970s mainframes were more powerful than arcade and console hardware of the period, the need to parcel out computing resources to dozens of simultaneous users via time-sharing significantly hampered their abilities. Thus, programmers of mainframe games focused on strategy and puzzle-solving mechanics over pure action. Notable games of the period include the tactical combat game Star Trek (1971) by Mike Mayfield, the hide-and-seek game Hunt the Wumpus (1972) by Gregory Yob, and the strategic war game Empire (1977) by Walter Bright. Perhaps the most significant game of the period was Colossal Cave Adventure (or simply Adventure), created in 1976 by Will Crowther by combining his passion for caving with concepts from the newly released tabletop role-playing game (RPG) Dungeons and Dragons (D&D). Expanded by Don Woods in 1977 with an emphasis on the high fantasy of J.R.R. Tolkien, Adventure established a new genre based around exploration and inventory-based puzzle solving that made the transition to personal computers in the late 1970s.
The arcade video game industry grew out of the pre-existing arcade game industry, which was previously dominated by electro-mechanical games (EM games). Following the arrival of Sega's EM game Periscope (1966), the arcade industry was experiencing a "technological renaissance" driven by "audio-visual" EM novelty games, establishing the arcades as a healthy environment for the introduction of commercial video games in the early 1970s.[5] In the late 1960s, a college student Nolan Bushnell had a part-time job at an arcade where he became familiar with EM games, watching customers play and helping to maintain the machinery while learning how it worked and developing his understanding of how the game business operates.[6]
Arcade video games caught on quickly in Japan due to partnerships between American and Japanese corporations that kept the Japan companies abreast of technology developments within the United States. The Nakamura Amusement Machine Manufacturing Company (Namco) partnered with Atari to import Pong into Japan in late 1973. Within the year, Taito and Sega released Pong clones in Japan by mid-1973. Japanese companies began developing novel games and exporting or licensing them through partners in 1974.[11] Among these included Taito's Gun Fight (originally Western Gun in its Japanese release), which was licensed to Midway. Midway's version, released in 1975, was the first arcade video game to use a microprocessor rather than discrete TLL components.[12] This innovation drastically reduced the complexity and time to design of arcade games and the number of physical components required to achieve more advanced gameplay.[13]
These initial home video game consoles were popular, leading to a large influx of companies releasing Pong and other video game clones to satisfy consumer demand. While there were only seven companies that were releasing home consoles in 1975, there were at least 82 by 1977, with more than 160 different models that year alone that were easily documented. A large number of these consoles were created in East Asia, and it is estimated that over 500 Pong-type home console models were made during this period.[8] As with the prior paddle-and-ball saturation in the arcade game field by 1975 due to consumer weariness, dedicated console sales dropped sharply in 1978, disrupted by the introduction of programmable systems and Handheld electronic games.[8]
After the ball-and-paddle market saturation in 1975, game developers began looking for new ideas for games, buoyed by the ability to use programmable microprocessors rather than analog components. Taito designer Tomohiro Nishikado, who had developed Gun Fight previously, was inspired by Atari's Breakout to create a shooting-based game, Space Invaders, first released in Japan in 1978.[14] Space Invaders introduced or popularized several important concepts in arcade video games, including play regulated by lives instead of a timer or set score, gaining extra lives through accumulating points, and the tracking of the high score achieved on the machine. It was also the first game to confront the player with waves of targets that shot back at the player and the first to include background music during game play, albeit a simple four-note loop.[15] Space Invaders was an immediate success in Japan, with some arcades created solely for Space Invaders machines.[14] While not quite as popular in the United States, Space Invaders became a hit as Midway, serving as the North American manufacturer, moved over 60,000 cabinets in 1979.[16]
Space Invaders led off what is considered to be the golden age of arcade games which lasted from 1978 to 1982. Several influential and best-selling arcade games were released during this period from Atari, Namco, Taito, Williams, and Nintendo, including Asteroids (1979), Galaxian (1979), Defender (1980), Missile Command (1980), Tempest (1981), and Galaga (1981). Pac-Man, released in 1980, became a popular culture icon, and a new wave of games appeared that focused on identifiable characters and alternate mechanics such as navigating a maze or traversing a series of platforms. Aside from Pac-Man and its sequel, Ms. Pac-Man (1982), the most popular games in this vein during the golden age were Donkey Kong (1981) and Q*bert (1982).[14] Games like Pac-Man, Donkey Kong and Q*bert also introduced the concept of narratives and characters to video games, which led companies to adopt these later as mascots for marketing purposes.[17][18]
According to trade publication Vending Times, revenues generated by coin-operated video games on location in the United States jumped from $308 million in 1978 to $968 million in 1979 to $2.8 billion in 1980. As Pac Man ignited an even larger video game craze and attracted more female players to arcades, revenues jumped again to $4.9 billion in 1981. According to trade publication Play Meter, by July 1982, total coin-op collections peaked at $8.9 billion, of which $7.7 billion came from video games.[19] Dedicated video game arcades grew during the golden age, with the number of arcades (locations with at least ten arcade games) more than doubling between July 1981 and July 1983 from over 10,000 to just over 25,000.[14][19] These figures made arcade games the most popular entertainment medium in the country, far surpassing both pop music (at $4 billion in sales per year) and Hollywood films ($3 billion).[19]
Development costs of dedicated game hardware for arcade and home consoles based on discrete component circuitry and application-specific integrated circuits (ASICs) with only limited consumer lifespans drove engineers to find alternatives. Microprocessors had dropped far enough in price by 1975 to make these a viable option for developing programmable consoles that could load in game software from a form of swappable media.[20]
This new line of consoles had its breakthrough moment when Atari obtained a license from Taito to create the Atari VCS version of the arcade hit Space Invaders, which was released in 1980. Space Invaders quadrupled sales of the Atari VCS, making it the first "killer app" in the video game industry, and the first video game to sell over one million copies and eventually sold over 2.5 million by 1981.[22][23] Atari's consumer sales almost doubled from $119 million to nearly $204 million in 1980 and then exploded to over $841 million in 1981, while sales across the entire video game industry in the United States rose from $185.7 million in 1979 to just over $1 billion in 1981. Through a combination of conversions of its own arcade games like Missile Command and Asteroids and licensed conversions like Defender, Atari took a commanding lead in the industry, with an estimated 65% market share of the worldwide industry by dollar volume by 1981. Mattel settled into second place with roughly 15%-20% of the market, while Magnavox ran a distant third, and Fairchild exited the market entirely in 1979.[8]
Atari's dominance of the market was challenged by Coleco's ColecoVision in 1982. As Space Invaders had done for the Atari VCS, Coleco developed a licensed version of Nintendo's arcade hit Donkey Kong as a bundled game with the system. While the Colecovision only had 17% of the hardware market in 1982 compared to the Atari VCS' share of 58%, it outsold Atari's newer console, the Atari 5200.[28][8] 2ff7e9595c
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