Although the first videogame was created in 1958 as an interactive display for visitors at Brookhaven National Laboratory, the emergence of a commercial videogame industry didn’t begin until over a decade later. While the electronic paddle game Pong was available for play in many bars in 1971, it wasn’t until the release of Magnavox’s Odyssey home gaming system in 1972 that a niche market began to develop. The following years saw several other companies begin to take notice of the popularity these electronic games were generating and begin development themselves. By 1976 games had proven themselves to be a form of entertainment that was growing in value to entertainment businesses. Only 4 years after the release of his first game, Pong, inventor Nolan Bushnell sold his small company, Atari to Warner Communications for $28 million. The sale of technology that began as a basement hobby to a major company did not go unnoticed by computer enthusiasts and game developers. Almost overnight, the once small market for videogames had been transformed into a lucrative business.
While small developers continued to work on their computer games into the late 70s and early 80s, companies such as Midway, Nintendo, Sega, and Atari emerged as producers of tabletop and standalone upright arcade cabinets for bars. Although home gaming systems were still enjoying sales on a broadening scale, the arcade game is recognized as the form most commonly associated with videogames. In 1980 Namco released Pac-Man, which quickly became the most popular arcade game thus far. Over 300,000 units were sold within the first year, spurning competitors and spawning imitators.
Unsatisfied with the limited credit they had received for their programming efforts on Atari’s home console system, several programmers left Atari in 1980 and began their own “third party� development company, Activision. The break from in house development (which saw the conception, design, programming and marketing of a game all under one roof) signaled a change in the way games could be developed. Small third party development companies sprang up, licensing existing technology and selling publishing rights for their creations to larger distributors. Small teams, usually consisting of three people or less, began creating whole games, doing all the art and programming themselves. The move of development to third party companies allowed for low overhead, larger profits, and increased competition.
By 1981 reports indicated that US arcades had generated $5 billion revenue and that gamers had spent over 75,000 man-hours playing videogames. Buoyed by the success of their arcade and home systems, Atari attempted the first cross promotional marketing of a game with a major movie franchise tie-in. Unfortunately, the E.T. videogame was rushed through production to meet the release date and was received poorly by consumers. With more copies of the game existing than systems to play them on in consumers’ homes, Atari took a major financial hit, with parent company Warner Communications stock dropping 32 percent in one day.
In 1982, Nintendo’s home gaming system, the Famicom was selling well in Japan with supporting games Donkey Kong and Donkey Kong Jr. Although originally planning to enter a distribution deal with Atari to market these popular games in the US, great losses by the top manufacturers of home videogame systems in the states caused Nintendo to rethink their position in the market. With Atari's once promising empire crumbling, Warner Communications sold Atari at a loss in 1984. With no strong competition remaining, Nintendo entered the US home videogame system market in 1985. By 1990, Nintendo had several competitors in the home market including Sega and NEC. Licensing agreements with third party developers guaranteed Nintendo an expanding library of compatible games that dwarfed the competitions’ offerings.
Although Nintendo's was still the most popular videogame system in 1992, Sega’s introduction of their new system and trademark character to the market was causing a split between gamers. In an attempt to control the next generation of technology for home gaming systems, Nintendo teamed with Sony to develop a gaming console that would read games from CD-ROMs, allowing for better sound and graphics possibilities. Although the technology was developed through to completion, a dispute between Sony and Nintendo caused the partnership to end with Sony retaining rights to the CD-ROM game technology. Three years later, in 1995, Sony released the fruit of their spoiled relationship with Nintendo as the Sony Playstation. The low price, wide selection of games, and list of third party developers signed on to produce for the system created record sales, quickly unseating Nintendo’s Super NES as the dominant home videogame system.
By 2000 Sony was still on the top of the home console heap with its newest technology, the Sony Playstation 2, leading the next generation and dominating sales. Recognizing that the home gaming market could not be ignored, Microsoft released its Xbox console during the 2001 holiday season in an attempt to rival Sony’s success. Although Sony is still the leader in the market, with over 74 million PS2 units sold worldwide, Microsoft's Xbox as well as Nintendo’s Game Cube systems are expected to gain ground this holiday season as all three companies reduce the retail price to encourage sales.
With personal computers finally reaching affordability for the average consumer in the mid 80s, the tools for developing games finally reached the hands of the gamers. Many enthusiastic hobbyists began programming games and distributing their code through magazines. The availability of technology coupled with a growing market for computer-based videogames led many talented young programs to start their own design companies. With the revolutionary new sales model afforded by shareware distribution, computer games began to emerge as their own distinct market. The 1990 release of a game called Commander Keen, by leading shareware publisher Apogee Software, revolutionised the computer game industry with its smooth side scrolling of onscreen environments. Similar to the popular console games such as Nintendo’s immensely successful Super Mario Bros. series, the game and its subsequent sequels were an unprecedented success. Based on this success, third party developer of the Keen games, id Software began work on a new technology that would alter the direction of gaming. Id's release of the first ever first person shooter, Wolfenstein 3D changed the way games were played and developed. For the first time, characters were immersed in an environment that they could navigate in real-time, giving them a first person, in game experience of the action.
With many other developers licensing id's technology to create their own first person games, id continued to build on the Wolfenstein technology, improving the graphics and speed of gameplay. The refinements to the technology were released over the course of the 90s in games such as the DOOM series and more recently, Quake. To this day, the first person shooter remains an immensely popular format for computer gaming.
Herman, Leonard (2004) Gamespots's "The History of Videogames". Retrieved 25/10/04.
Web Tech Geeks's "Playstation News and Information". Retrieved 25/10/04
Jeff DeMaria 17:52, 28 Oct 2004 (EST)
