1. Prelude: Video Games Here to Stay Video games are not fads, but activities that people see themselves doing in the future at the same levels or more frequently than they do now. The world now spends $30 billion per year on video games.
2. Brief History of Electronic Games In 1958, a nuclear physicist develops a "tennis" game on an oscilloscope. In the 1960s, a student at M.I.T. creates "Space War," the first electronic game on a computer monitor. Ralph Baer invents a video game using television technology.
3. Ralph Baer: Father of the Video Game In 1966, Ralph Baer invents the first true video game that leads to the "Odyssey" video game system sold by Magnavox in 1972. The next step for the gaming industry would require an inventor and computer geek, who was also part visionary and part hustler.
4. First Video Game Hit: Pong In the 1970s, many people sought escape in a video game called Pong. Inventor Nolan Bushnell marketed the game not as a novelty, but as a new genre. In 1971, he created the first coin-operated video game, "Computer Space." He formed the company Atari.
5. Atari Video Game Successes Within a year of mass producing Pong, Atari made $1 million on Pong sales. Atari brings out more new games like Asteroid and BattleZone, and a game designed by Steve Jobs called Breakout. Jobs leave Atari to start his own company, Apple.
6. Warner Communications Buys Atari To stay ahead of the competition, Atari's Nolan Bushnell invents a game console. Low on funds, he sells Atari to Warner Communications. Atari engineers quit and start their own 3rd party software company, ActiVision.
7. Japanese Video Game Invasion of America Imported from Japan, Space Invaders captures the imagination of American kids, and by 1979, there are 60,000 Space Invaders machines--each making $300-$400 per week. An even bigger blockbuster, PacMan, became a "global epidemic."
8. Video Game Boom and Bust (06:10) Nintendo's Shigeru Miyamoto designs the first video game with a story line, Donkey Kong. The "Golden Age" of video game ends with the appearance of the alien E.T. in 1982. Atari introduces "E.T.," a video game that is a bust, and Warner stock plummets.
9. Nintendo Introduces Home Entertainment System (02:36) By 1985, video games were history. Nintendo introduces the video entertainment system (NES). America falls in love with the game included with the system: Super Mario Brothers.
10. Video Game Market: Nintendo vs. SEGA The "Tetris" game helps Nintendo sell 33 million Game Boys in its first 3 years. SEGA tries to edge Nintendo out of its dominant position with its Genesis game system. SEGA captures 55% of the console market with aggressive advertising and a new icon character, Sonic the Hedgehog.
11. Sony's PlayStation Dominates Market In the 1990s, personal computers become "fun game machines." CD-ROM drives increased computer capability. Sony PlayStation's superior graphics quality launched Sony into first place when it becomes the world's best-selling console in 1995.
12. Sony vs. Microsoft in the Console Market The success of Sony's PlayStation, and the company's plans to bring out PlayStation 2 catches the attention of Microsoft CEO Bill Gates. Microsoft brings out the XBox in 2001. The game Halo accounts for nearly 20 million Xbox sales thereafter.
13. Nintendo Dominates Handheld Video Game Market Nintendo remains the dominant player in the handheld video game market. Its DS system in 2004 and Wii system in 2006 featured a user-friendly interface with the games. New hardware systems enter the video gaming world every few years.
14. Video Games with Hollywood Showmanship Electronic Arts, the world's largest video game publishers, focus on making their fantasies as real as real life. In postproduction, a technician adds real sounds, not electronic sounds, to the video game. Hollywood actors and pro athletes provide game voices.
15. Software Publisher Earns $1 Billion Electronic Arts (EA) is the world's first software publisher to earn $1 billion per year. Software includes John Madden's NFL game. Pressure to make perfect games in a timely manner led to poor working conditions and a lawsuit against EA.
16. Video Game Violence From the start, video games contained "mayhem and destruction." Bloody "Mortal Kombat" got SEGA and Nintendo in legal trouble in 1993. The results are a rating system for video games.
17. Video Violence and Violent Behavior in Children The video game "Doom" raises video gore and violence to new levels. It is the first game to feature "first person shooter" capability. Debate on the influence of video violence on children continues.
18. Minors' Access to Adult-Rated Video Games A survey shows that 7 out of 10 children report playing M-rated games, and 45% have purchased Adult-rated titles despite store policies against it. Entertainment industry leaders fight legislation that would restrict sales of certain videos to minors.
19. Beneficial Video Games: Healthcare Training Tools Game developers and healthcare professionals join forces to create training video "games" for medical situations and services. The Make-A-Wish Foundation helps a boy make a video game for young cancer sufferers. 20. Sim City/The Sims: Virtual Lives Sim City, a huge hit from 1989, spawns makes dozens of spin-off games. Creator Will Wright's spin-off is The Sims in which gamers create virtual human beings and manage their virtual lives.
21. Second Life: Interactive 3-D Digital Community Second Life is an online world that allows gamers to simulate the entire world. Players create digital alter egos called avatars. Though the world is virtual, players use real money to buy things in it--up to $5 million worth per month.
22. Virtual Reality Becomes Reality In virtual reality, an avatar is rescued by another avatar whose "owner" lives in another city. Soon, the players become friends and ultimately marry each other.
23. Product Placements in Video Games Rising costs of creating a video game force developers seek new revenue streams. Real world advertisers place product ads in video games. Now, men ages 18-34 who focus on games and not television, are exposed to product ads.
24. Game Flexibility and Mobile Gaming The real money for game publishers is to create more flexible games for casual players. Cell phones are the ideal platform for solo and interactive gamers. Increasingly, women play integral roles in the video gaming industry.