Video Game Industry: A History


March 25, 2014Game BasedNo comments

Most baby boomer children grew up in the age of the video game, or grew up to gift their children a Super Nintendo or Dreamcast. As the video game industry continues its upward climb, so are games becoming more complex and cinematic. But let’s not forget the humble beginnings of the industry. 

Video Game Industry Video Game Industry: A HistoryThe 70s

The first videogame was released in 1971 with the arcade game release of Computer Space. However, the following year the company Atari released a cult classic—Pong. Pong was the first home console system released by Magnavox. However from 1972 until 1978 the entire home console and arcade game industry was dominated by Pong clones. With over 19,000 arcade cabinets sold during this period it was a launch of an entirely new computer dominated industry, well before the common availability of home computers in the mid-1980s. The videogame crash of 1977 largely had to do with the over saturation of Pong clones. Yet in 1978 the first major release of a new game, Space Invaders, hit the shelves. The massive worldwide hit led to over 350,000 arcade games being sold producing income by 1982 of over $2 billion (1982 money). These games created a new hobby culture that was never before available, and during the late 1970s would be considered the Golden age of video arcade games.

The 80s

The decade of the 80s would see the peak and virtual death of arcade video games as the rise of the home console would overtake arcades by 1985. Arcade video games saw massive increases in both arcade video cabinet revenues and game revenues up until 1982 where they plateaued until 1985. In 1982 the video arcade game industry reached a whopping $8 billion USD in quarters. This was more than the Hollywood Film and Pop Music revenues combined. It was also twice as much as home console revenues. With the development of arcade games such as Namco’s Pac-Man and other wildly popular titles, video arcade games drew in large crowds to arcades, convenience stores and malls where arcade machines were put. Pac-Man itself would sell over 350,000 games and earn over $2.5 billion USD during its reign. Home consoles from 1983 started to rise in popularity, while the arcade video game industry started to fall. Yet both saw a massive crash in 1983 due to poorly produced games and consoles that would make purchasers defect from the industry for a period of time. During this time period gamers would focus on fan-favourites. Gaming Journalism also got its start during this time period as fans required more news on developments from their favourite developers. Home consoles saw a major revival with the release of the Nintendo Entertainment System in 1985 and the GameBoy handheld gaming system in 1987.

The 90s

The decade of the 90s saw major technological advances in home consoles, video game developments and hand held gaming devices, creating 4th, 5th, and 6th generations of the gaming devices. During this time period a major movement into 3D graphics enhanced the user experience of gamers and those systems that produced ‘better graphics’ on-screen were often seen as clear winners in the battle for gamer’s hearts. Arcades during this time period—although only 1/3rd of the revenue of the entire industry—still enjoyed over $7 billion in revenue annually, yet with a large tapering in revenues after 1995. The industry on a whole grew from $19 billion to over $30 billion annually throughout the decade of the 90s.

The New Millennium

Arcade games and home consoles still continue to thrive throughout the new century as large arcades with 3D virtual games and super graphics have come back into popularity. Gamers are also known to be prevalent in almost every home in America. To highlight the popularity and revenue generation of this segment in America, Call of Duty’s Black Ops generated $650 Million in its first 5 days of release, which set a global record for any book, movie or game in history, much more than Spiderman 3’s opening weekend.

To think that arcade pinball machines are seen as the grandfather to the modern gaming legacy; gaming has developed along amazing technological advancements and will continue to do so as gamers demand more from their gaming experiences.

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