Arcade Games

The first coin-operated arcade game was modeled on Spacewar! It was called Computer Space, and it fared poorly among the general public because of its difficult controls. In 1972, Pong, the table-tennis simulator that has come to symbolize early computer games, was created by the fledgling company Atari, and it was immediately successful. Pong was initially placed in bars with pinball machines and other games of chance, but as video games grew in popularity, they were placed in any establishment that would take them. By the end of the 1970s, so many video arcades were being built that some towns passed zoning laws limiting them (Kent, 1997).

The end of the 1970s ushered in a new era—what some call the golden age of video games—with the game Space Invaders, an international phenomenon that exceeded all expectations. In Japan, the game was so popular that it caused a national coin shortage. Games like Space Invaders illustrate both the effect of arcade games and their influence on international culture. In two different countries on opposite sides of the globe, Japanese and American teenagers, although they could not speak to one another, were having the same experiences thanks to a video game.

Video Game Consoles

The first video game console for the home began selling in 1972. It was the Magnavox Odyssey, and it was based on prototypes built by Ralph Behr in the late 1960s. This system included a Pong-type game, and when the arcade version of Pong became popular, the Odyssey began to sell well. Atari, which was making arcade games at the time, decided to produce a home version of Pong and released it in 1974. Although this system could only play one game, its graphics and controls were superior to the Odyssey, and it was sold through a major department store, Sears. Because of these advantages, the Atari home version of Pong sold well, and a host of other companies began producing and selling their own versions of Pong (Herman, 2008).

A major step forward in the evolution of video games was the development of game cartridges that stored the games and could be interchanged in the console. With this technology, users were no longer limited to a set number of games, leading many video game console makers to switch their emphasis to producing games. Several groups, such as Magnavox, Coleco, and Fairchild, released versions of cartridge-type consoles, but Atari’s 2600 console had the upper hand because of the company’s work on arcade games. Atari capitalized off of its arcade successes by releasing games that were well known to a public that was frequenting arcades. The popularity of games such as Space Invaders and Pac-Man made the Atari 2600 a successful system. The late 1970s also saw the birth of companies such as Activision, which developed third-party games for the Atari 2600 (Wolf).

Home Computers

The birth of the home computer market in the 1970s paralleled the emergence of video game consoles. The first computer designed and sold for the home consumer was the Altair. It was first sold in 1975, several years after video game consoles had been selling, and it sold mainly to a hobbyist market. During this period, people such as Steve Jobs, the founder of Apple, were building computers by hand and selling them to get their start-up businesses going. In 1977, three important computers—Radio Shack’s TRS-80, the Commodore PET, and the Apple II—were produced and began selling to the home market (Reimer, 2005).

The rise of personal computers allowed for the development of more complex games. Designers of games such as Mystery House, developed in 1979 for the Apple II, and Rogue, developed in 1980 and played on IBM PCs, used the processing power of early home computers to develop video games that had extended plots and story lines. In these games, players moved through landscapes composed of basic graphics, solving problems and working through an involved narrative. The development of video games for the personal computer platform expanded the ability of video games to act as media by allowing complex stories to be told and new forms of interaction to take place between players.

The Rise of Nintendo

Nintendo, a Japanese card and novelty producer that had begun to produce electronic games in the 1970s, was responsible for arcade games such as Donkey Kong in the early 1980s. Its first home console, developed in 1984 for sale in Japan, tried to succeed where Atari had failed. The Nintendo system used newer, better microchips, bought in large quantities, to ensure high-quality graphics at a price consumers could afford. Keeping console prices low meant Nintendo had to rely on games for most of its profits and maintain control of game production. This was something Atari had failed to do, and it led to a glut of low-priced games that caused the crash of 1983. Nintendo got around this problem with proprietary circuits that would not allow unlicensed games to be played on the console. This allowed Nintendo to dominate the home video game market through the end of the decade, when one-third of homes in the United States had a Nintendo system (Cross & Smits, 2005).

Nintendo introduced its Nintendo Entertainment System (NES) in the United States in 1985. The game Super Mario Brothers, released with the system, was also a landmark in video game development. The game employed a narrative in the same manner as more complicated computer games, but its controls were accessible and its objectives simple. The game appealed to a younger demographic, generally boys in the 8–14 range, than the one targeted by Atari (Kline, et. al., 2003). Its designer, Shigeru Miyamoto, tried to mimic the experiences of childhood adventures, creating a fantasy world not based on previous models of science fiction or other literary genres (McLaughlin, 2007). Super Mario Brothers also gave Nintendo an iconic character who has been used in numerous other games, television shows, and even a movie. The development of this type of character and fantasy world became the norm for video game makers. Games such as The Legend of Zelda became franchises with film and television possibilities rather than simply one-off games.

As video games developed as a form of media, the public struggled to come to grips with the kind of messages this medium was passing on to children. These were no longer simple games of reflex that could be compared to similar nonvideo games or sports; these were forms of media that included stories and messages that concerned parents and children’s advocates. Arguments about the larger meaning of the games became common, with some seeing the games as driven by ideas of conquest and gender stereotypes, whereas others saw basic stories about traveling and exploration (Fuller & Jenkins, 1995).

Computer Games Flourish and Innovate

The enormous number of games available for Atari consoles in the early 1980s took its toll on video arcades. In 1983, arcade revenues had fallen to a 3-year low, leading game makers to turn to newer technologies that could not be replicated by home consoles. This included arcade games powered by laser discs, such as Dragon’s Lair and Space Ace, but their novelty soon wore off, and laser-disc games became museum pieces (Harmetz, 1984). In 1989, museums were already putting on exhibitions of early arcade games that included ones from the early 1980s. Although newer games continued to come out on arcade platforms, they could not compete with the home console market and never achieved their previous successes from the early 1980s. Increasingly, arcade gamers chose to stay at home to play games on computers and consoles. Today, dedicated arcades are a dying breed. Most that remain, like the Dave & Buster’s and Chuck E. Cheese’s chains, offer full-service restaurants and other entertainment attractions to draw in business.

Home games fared better than arcades because they could ride the wave of personal computer purchases that occurred in the 1980s. Some important developments in video games occurred in the mid-1980s with the development of online games. Multiuser dungeons, or MUDs, were role-playing games played online by multiple users at once. The games were generally text-based, describing the world of the MUD through text rather than illustrating it through graphics. The games allowed users to create a character and move through different worlds, accomplishing goals that awarded them with new skills. If characters attained a certain level of proficiency, they could then design their own area of the world. Habitat, a game developed in 1986 for the Commodore 64, was a graphic version of this type of game. Users dialed up on modems to a central host server and then controlled characters on screen, interacting with other users (Reimer, 2005).

During the mid-1980s, a demographic shift occurred. Between 1985 and 1987, games designed to run on business computers rose from 15 percent to 40 percent of games sold (Elmer-Dewitt, et. al., 1987). This trend meant that game makers could use the increased processing power of business computers to create more complex games. It also meant adults were interested in computer games and could become a profitable market.

Console Wars

Nintendo’s dominance of the home console market throughout the late 1980s allowed it to build a large library of games for use on the NES. This also proved to be a weakness, however, because Nintendo was reluctant to improve or change its system for fear of making its game library obsolete. Technology had changed in the years since the introduction of the NES, and companies such as NEC and Sega were ready to challenge Nintendo with 16-bit systems (Slaven).

The Sega Master System had failed to challenge the NES, but with the release of its 16-bit system, Sega Genesis, the company pursued a new marketing strategy. Whereas Nintendo targeted 8- to 14-year-olds, Sega’s marketing plan targeted 15- to 17-year olds, making games that were more mature and advertising during programs such as the MTV Video Music Awards. The campaign successfully branded Sega as a cooler version of Nintendo and moved mainstream video games into a more mature arena. Nintendo responded to the Sega Genesis with its own 16-bit system, the Super NES, and began creating more mature games as well. Games such as Sega’s Mortal Kombat and Nintendo’s Street Fighter competed to raise the level of violence possible in a video game. Sega’s advertisements even suggested that its game was better because of its more violent possibilities (Gamespot).

By 1994, companies such as 3DO, with its 32-bit system, and Atari, with its allegedly 64-bit Jaguar, attempted to get in on the home console market but failed to use effective marketing strategies to back up their products. Both systems fell out of production before the end of the decade. Sega, fearing that its system would become obsolete, released the 32-bit Saturn system in 1995. The system was rushed into production and did not have enough games available to ensure its success (Cyberia PC). Sony stepped in with its PlayStation console at a time when Sega’s Saturn was floundering and before Nintendo’s 64-bit system had been released. This system targeted an even older demographic of 14- to 24-year-olds and made a large effect on the market; by March of 2007, Sony had sold 102 million PlayStations (Edge Staff, 2009).

Computer Games Gain Mainstream Acceptance

Computer games had avid players, but they were still a niche market in the early 1990s. An important step in the mainstream acceptance of personal computer games was the development of the first-person shooter genre. First popularized by the 1992 game Wolfenstein 3D, these games put the player in the character’s perspective, making it seem as if the player were firing weapons and being attacked. Doom, released in 1993, and Quake, released in 1996, used the increased processing power of personal computers to create vivid three-dimensional worlds that were impossible to fully replicate on video game consoles of the era. These games pushed realism to new heights and began attracting public attention for their graphic violence.

Another trend was reaching out to audiences outside of the video-game-playing community. Myst, an adventure game where the player walked around an island solving a mystery, drove sales of CD-ROM drives for computers. Myst, its sequel Riven, and other nonviolent games such as SimCity actually outsold Doom and Quake in the 1990s (Miller, 1999). These nonviolent games appealed to people who did not generally play video games, increasing the form’s audience and expanding the types of information that video games put across.

Online Gaming Gains Popularity

A major advance in game technology came with the increase in Internet use by the general public in the 1990s. A major feature of Doom was the ability to use multiplayer gaming through the Internet. Strategy games such as Command and Conquer and Total Annihilation also included options where players could play each other over the Internet. Other fantasy-inspired role-playing games, such as Ultima Online, used the Internet to initiate the massively multiplayer online role-playing game (MMORPG) genre (Reimer). These games used the Internet as their platform, much like the text-based MUDs, creating a space where individuals could play the game while socially interacting with one another.

Portable Game Systems

The development of portable game systems was another important aspect of video games during the 1990s. Handheld games had been in use since the 1970s, and a system with interchangeable cartridges had even been sold in the early 1980s. Nintendo released the Game Boy in 1989, using the same principles that made the NES dominate the handheld market throughout the 1990s. The Game Boy was released with the game Tetris, using the game’s popularity to drive purchases of the unit. The unit’s simple design meant users could get 20 hours of playing time on a set of batteries, and this basic design was left essentially unaltered for most of the decade. More advanced handheld systems, such as the Atari Lynx and Sega Game Gear, could not compete with the Game Boy despite their superior graphics and color displays (Hutsko, 2000).

The decade-long success of the Game Boy belies the conventional wisdom of the console wars that more advanced technology makes for a more popular system. The Game Boy’s static, simple design was readily accessible, and its stability allowed for a large library of games to be developed for it. Despite using technology almost a decade old, the Game Boy accounted for 30 percent of Nintendo of America’s overall revenues at the end of the 1990s (Hutsko, 2000).

The Console Wars Continue

Sega gave its final effort in the console wars with the Sega Dreamcast in 1999. This console could connect to the Internet, emulating the sophisticated computer games of the 1990s. The new features of the Sega Dreamcast were not enough to save the brand, however, and Sega discontinued production in 2001, leaving the console market entirely (Business Week).

A major problem for Sega’s Dreamcast was Sony’s release of the PlayStation 2 (PS2) in 2000. The PS2 could function as a DVD player, expanding the role of the console into an entertainment device that did more than play video games. This console was incredibly successful, enjoying a long production run, with more than 106 million units sold worldwide by the end of the decade (A Brief History of Game Console Warfare).

In 2001, two major consoles were released to compete with the PS2: the Xbox and the Nintendo GameCube. The Xbox was an attempt by Microsoft to enter the market with a console that expanded on the functions of other game consoles. The unit had features similar to a PC, including a hard drive and an Ethernet port for online play through its service, Xbox Live. The popularity of the first-person shooter game Halo, an Xbox exclusive release, boosted sales as well. Nintendo’s GameCube did not offer DVD playback capabilities, choosing instead to focus on gaming functions. Both of these consoles sold millions of units but did not come close to the sales of the PS2.

Computer Gaming Becomes a Niche Market

As consoles developed to rival the capabilities of personal computers, game developers began to focus more on games for consoles. From 2000 to the end of the decade, the popularity of personal computer games has gradually declined. The computer gaming community, while still significant, is focused on game players who are willing to pay a lot of money on personal computers that are designed specifically for gaming, often including multiple monitors and user modifications that allow personal computers to play newer games. This type of market, though profitable, is not large enough to compete with the audience for the much cheaper game consoles (Kalning, 2008).

The Evolution of Portable Gaming

Nintendo continued its control of the handheld game market into the 2000s with the 2001 release of the Game Boy Advance, a redesigned Game Boy that offered 32-bit processing and compatibility with older Game Boy games. In 2004, anticipating Sony’s upcoming handheld console, Nintendo released the Nintendo DS, a handheld console that featured two screens and Wi-Fi capabilities for online gaming. Sony’s PlayStation Portable (PSP) was released the following year and featured Wi-Fi capabilities as well as a flexible platform that could be used to play other media such as MP3s (Patsuris, 2004). These two consoles, along with their newer versions, continue to dominate the handheld market

One interesting innovation in mobile gaming occurred in 2003 with the release of the Nokia N-Gage. The N-Gage was a combination of a game console and mobile phone that, according to consumers, did not fill either role very well. The product line was discontinued in 2005, but the idea of playing games on phones persisted and has been developed on other platforms (Stone, 2007). Apple currently dominates the industry of mobile phone games; in 2008 and 2009 alone, iPhone games generated $615 million in revenue (Farago, 2010). As mobile phone gaming grows in popularity and as the supporting technology becomes increasingly more advanced, traditional portable gaming platforms like the DS and the PSP will need to evolve to compete. Nintendo is already planning a successor to the DS that features 3-D graphics without the use of 3-D glasses that it hopes will help the company retain and grow its share of the portable gaming market.

Home Consoles

The current state of the home console market still involves the three major companies of the past 10 years: Nintendo, Sony, and Microsoft. The release of Microsoft’s Xbox 360 led this generation of consoles in 2005. The Xbox 360 featured expanded media capabilities and integrated access to Xbox Live, an online gaming service. Sony’s PlayStation 3 (PS3) was released in 2006. It also featured enhanced online access as well as expanded multimedia functions, with the additional capacity to play Blu-ray discs. Nintendo released the Wii at the same time. This console featured a motion-sensitive controller that departed from previous controllers and focused on accessible, often family-oriented games. This combination successfully brought in large numbers of new game players, including many older adults. By June 2010, in the United States, the Wii had sold 71.9 million units, the Xbox 360 had sold 40.3 million, and the PS3 trailed at 35.4 million (VGChartz, 2010). In the wake of the Wii’s success, Microsoft and Sony have introduced their own motion-sensitive systems (Mangalindan, 2010).