This is how a primitive arcade game helped to build a $100 billion industry

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pongThe $100 billion video game industry is witnessing a fierce fight for the minds and wallets of millennials, the generation of digital natives who grew up with video games.

But it all began well before their time, in the summer of 1972, when an arcade in California installed a new game called "Pong." 

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The birth of the video game

"Pong" is a game similar to ping pong, where a blip on the screen gets bounced back and forth by two paddle-like lines. It was born from an idea seen at a trade show by Nolan Bushnell, the founder of Atari. 

By today’s standards, it’s something that looks incredibly primitive. But when that original Pong machine became so clogged with quarters it broke,  Atari had the first sign it was onto something. Before long, the company would discover that where a normal arcade machine might take in $10 a day, the Pong machine made $40.

Simplicity is key

Bushnell quickly grasped the key to its breakthrough success.

“’Pong’ worked because it was amazingly simple. No rules, really, and people could figure out how to do it almost immediately,” he said.

Bushnell understood that to bring video games to the masses, he had to get games out of the arcades and beer parlors and into American homes. Strange as it seems in hindsight, when he sought to take Pong into production, investors were hard to find. But he succeeded in launching the Atari home console in 1975 in a deal with Sears. Its first cartridge system was introduced a couple of years later, and it created an entire market.

In a business governed by the phrase “what’s next?” Atari must have known it wouldn’t last — the console wars were about to begin.

In “Trailblazers,” former CNN chairman Walter Isaacson explores the history of the video game and the evolution of the incredibly competitive industry it helped to create.

 

This post is sponsored by Dell Technologies and Intel®. Intel and the Intel logo are trademarks of Intel Corporation in the U.S. and/or other countries.

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