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The first video games
Compared to the music and movie industries, the video game industry is much younger. At the same time, its revenue today far exceeds the two combined, and the number of players in the world is equal to several billion. Video games have had a huge impact on our society, as well as an outstanding contribution to our cultural heritage. Now they have become an integral part of pop culture, and this is true not only among young people - but among older people video games have also found their grateful players, ready to discover new universes of virtual worlds, sharing this hobby already with their families.

It is impossible to say exactly when the very first games appeared. Even our familiar chess is about a thousand and a half years old, not to mention other, more ancient "analogous" representatives. In our case, when it comes to video games, the moment of appearance of the first video game is considered to be 1947. At that time, Thomas Goldsmith and Estle Ray Mann filed a patent for the registration of an entertainment device with a cathode-ray tube and buttons. The rudimentary input devices allowed you to control the sight and shoot down planes, which were displayed on a small black and white screen. Despite the cutting-edge idea of turning a home television set into something more, Dumont, a company of two employees, was never able to make a commercial product out of a simple electronic circuit. And, since we began with the example of chess. All in the same year, Alan Turing writes a program for playing chess. Computers of that time occupied more than 60m² and cost half a million dollars, but they still weren't capable of running complex games. Turing was able to write an algorithm for the game but was forced to answer every move on his own, calculating the algorithm of the program himself.
Spacewar! on the oscilloscope display
From 1951 to 1961, mostly in the walls of universities in the U.S., students produced such games as Nim, Tennis for Two, Mouse in the Maze, Tic-Tac-Toe and Spacewar! If the first of these can hardly be attributed to the video games in the modern sense (as such a screen was not used in it), the latter is worth looking closely - because Spacewar! was able to become the game that could give rise to mass interest in video games, which has not yet succeeded anyone. In the 1960s, MIT student Steve Russell wrote a simple duel between spaceships as an experiment. The player had control over speed, direction, and the ability to attack his opponent with torpedoes. The PDP-1 computer, costing 120 thousand dollars, was already close to modern computers - any case, despite its impressive size, it already had a screen in the form of an oscilloscope display and a keyboard.

Together with members of the Tech Model Railroad Club, Russell refined the game until 1962. The input device was also optimized - the awkward keyboard was replaced with a controller that was designed specifically for Spacewar! Today you can make a game like this in a day, using, for example, the Construct 2 engine, which lets you assemble logic from blocks instead of writing code but back then the game gained unprecedented popularity - it was distributed to anyone who wanted it and the company DEC, which produced the PDP-1, used it to demonstrate their system, later attaching Spacewar! to the systems they sold.

From this point on, a series of events began to unfold, thanks to which the game industry gradually began to unleash its limitless potential. Nolan Bushnell, the future founder of Atari and practically one of the founding fathers of the game industry itself, along with colleague Ted Dabney, make their own version of this game for arcade machines - their version differs in that one player now shoots at flying saucers. Such a maneuver allows one to finally find a commercial niche and enter the mass market - Nutting Associates implemented the game under the name Computer Space, but it happened only in 1971, marking the beginning of the era of arcade game machines. With their popularity, the idea of playing games from the comfort of your own home was already beginning to fly in the air, but it wasn't until ten years after the Spacewar! release that the first-ever commercially realized device, what we used to call a console or, what was then more in vogue, a set-top box, appeared on the market.
Magnavox Odyssey
The Magnavox Odyssey designed by Ralph Baer appeared on store shelves in 1972, but the prerequisites for its appearance were already in 1951. Baer had been an engineer at Loral at the time, and as early as 1966, when he was Chief Engineer for Equipment Design at Sanders Associates, a company that dealt with military engineering. Along with colleagues Bill Harrison and Bill Rusch, in 1967, Baer introduce a device to his bosses with several games, one of which uses a plastic rifle to shoot targets. Duck Hunt, which will forever be remembered by our 90s generation, almost certainly owes a lot to Baer's design, though it would appear much later. Back then, a device called the Brown Box was almost completed, but Sanders Associates had no way to market the devices itself, attempts to sell the rights were unsuccessful, and the device was shelved indefinitely - just until Baer had the idea to start negotiating with TV manufacturers.
The Downfall of the Western Game Industry
Another turning point for the industry that occurs in the same year as the release of Magnavox Odyssey is the founding of Atari by Nolan Bushnell. It will reach unprecedented heights, Atari's employees will have time to include Apple founder Steve Jobs, it will have time to plunge the industry into one of the worst crises, and then return with the announcement of a new console after a twenty-year break in 2017 (as of 2021 the company still has not abandoned the idea and reports, that all is well with the new Atari VCS, and the company itself is going to focus on releasing PC and console games), but that will all happen to it in the future, but for now, as of 1972, the idea of bringing Magnavox Odyssey interactive ping pong to arcade game machines, while it seems innovative to Bushnell, does not negate his own vision of how to develop game ideas. Atari collaborator Allan Alcorn expanded its functionality by making it possible to bounce the ball off the walls, adding sound effects and a score counter.
Pong - one of the most popular video games of the 70s.
Thus appeared the famous Pong, which captured the attention of bar patrons in all the states, and later entered the world level - one arcade machine with Pong could bring up to 200 dollars a week, which at that time was considered more than an impressive sum. On the wave of success, Atari also made its home counterpart to play at home Atari Home Pong - a kind of compact version of arcade machine for home. It got to the point that Magnavox was going to sue Atari for infringement of its patents, although sales of its own Odyssey grew to 200 thousand copies not without the popularity of Pong. The companies managed to negotiate a one-time payment of $700,000 to Magnavox from Atari. To capture more distributors, Bushnell splits Atari into two supposedly independent companies, Atari and Kee Games. Notably, it was from under the wing of the second company that one of the most popular games of the time, Tank, was released in 1974, overtaking even Gran Track 10, another hit from Atari, released the same year.

On the wave of Pong's popularity, many imitators or, as it is commonly said today "clones," appeared, who paid no royalties to either Magnavox or Atari and produced their own versions of Atari Home Pong. By Christmas 1977, there were already over 60 Pong consoles and 13 million sold in the states alone. They were priced well below the originals, and in addition, other manufacturers, like Bushnell, began making their own games to get ahead in the race. Uncontrolled console production with a home version of Pong greatly overheated the market - even one of the cheapest at the time Coleco Telstar consoles with a price of fifty dollars, which managed to get as many as 14 versions, could not survive the fate of the first crisis of the gaming industry.
The first Easter egg and the second crisis
A year before the crisis, being squeezed from all sides by competitors, among which apart from Magnavox were Fairchild and Mattel, famous all over the world with Barbie dolls with the aim of making a portable version of the console, Atari was able to stay afloat only thanks to a deal with Warner Communications. The company was bought for 28 million dollars by the entertainment conglomerate and after the crisis of 1977, only two consoles were able to survive the storm - Magnavox Odyssey² (stylistically spelled exactly as a power of number) and Atari 2600, which can already be considered the consoles of the second generation. Just a year earlier, another event occurs that becomes a turning point for the industry - microprocessors come into it - consoles now have a cartridge-changing technology, arcade games reach new levels of performance, and the mass market finally gets access to computers. To understand why this was a turning point, one simple fact must be taken into account: the hardware of arcade machines was based on embedded TV and those circuits that were customized for specific tasks. Now even bank terminals are based on full-fledged operating systems but earlier, each arcade machine was actually built for a specific game or several built-in games, as in the case of consoles of that generation.
Tomohiro Nishikado, creator of Space Invaders.
The most popular game at the time was Space Invaders by game designer Tomohiro Nishikado, which was the first game in history to sell over one million copies and earn over three billion dollars, becoming one of the best-selling video games in history. In Japan, it became so popular in 1978 on arcades that the government declared a shortage of 100 yen coins, the kind of coin needed to pay for an arcade game session. It also boosted sales of consoles from Atari by four times and revolutionized the world of arcade machine games. Their number increased by 2 thousand percent in two years.
...Video game industry starts generating $5 billion a year...
"You are not supposed to be here" must have been going around in the heads of many lone developers, who at the time were making a fortune from releasing video games. In fact, it's an Easter egg that famed level-designer Richard Gray (aka The Levelord) would implement in Duke Nukem 3D back in 1996. Many people mistakenly consider it the first Easter egg, ie, a secret from the developers that appeared in video games, however, this is not the case. The most popular version, which paid tribute to the film by Steven Spielberg's Ready Player One - the first Easter egg was hidden in the computer game Adventure. It was released in 1979 by Atari, and since Atari, at the time, like many other game companies, wasn't eager to reveal the names of game developers to avoid competition, programmer Warren Robinett hid a mention of himself inside the game. To get to the room with the name of the developer, it was necessary to find an invisible point in one of the parts of the maze and move it to the other end of the level. A lesser-known Easter egg is found in 1977 in Starship 1, in which, with a certain manipulation, you could see the message "Hi Ron!" and get access to 10 additional games. Since that time, video game Easter eggs have received a legacy of all kinds of hidden rooms, references to other games, movies, works and cultural phenomena, in-game mechanics and cheat codes, which can be found in new titles until today, but back to the era of the early 80s.
Pac-Man creator Toru Iwatani at Barcelona Game World 2017.
The interactive entertainment industry is entering a "golden era of arcade video games." In 1982 Namco's Pac-Man, created by game designer Toru Iwatani, is released, selling seven million copies, and Missile Command is another popular game of its time. In 1982, Activision released the platform game Pitfall!, which was a hit, selling four million copies. By the way, the company was founded by four engineers in 1979, who had also worked for Atari, just like Bushnell, who had to leave the company and according to his contract couldn't work in the game industry for the next five years.

In 1983, the market starts to oversaturate - everyone wants to jump on the "hype train" and steal the coveted prize. Home consoles and games were coming out from a variety of companies, and gaming industry turnover was beginning to approach $12 billion, already exceeding the music and movie industries combined. Back then, the market was not controlled by platforms, and anyone could stamp cartridges and new games for consoles. It is believed that the final nail in the coffin was two video games - a version of Pac-Man for Atari 2600 and E.T. - a game based on the famous Steven Spielberg movie. After buying the 1982 licensing rights to Pac-Man, Atari tried to adapt the game for the home console.
In 2014, a grand dig of E.T. cartridges was organized. Organizers managed to raise $107,000 for 881 copies of the game.
The only programmer, Tod Frye, though he pulled it off, and the game sold seven million copies, it, due to the limited hardware of the Atari 2600, looked much worse than it did on the arcades. In addition, Atari itself produced 20 million cartridges, suffering a big loss as a result. With E.T., the story was even more odious - in pursuit of pre-Christmas sales, the game was made by one man in just six weeks. Spielberg personally approved its release, but at the time of release the game didn't just fall short of expectations - critics trashed it, stores shipped back 3.5 million cartridges, and in a few months, the price of the game dropped from $50 to $1. It got to the point where 700,000 cartridges were simply buried en masse in the New Mexico desert. The mass flooding of the market with low-quality video games and arcade machines led ultimately to a 97% fall in the industry. From three billion, its turnover dropped to a hundred million dollars. The home console and arcade market are in decline, and home computers are increasingly gaining the attention of gamers.