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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.
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. 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.
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. 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. 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.
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. 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.
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. 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. Space Invaders was an immediate success in Japan, with some arcades created solely for Space Invaders machines. 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.
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