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The Birth of The Video Arcade

Most people hear the term arcade or coin-op and think of video arcades but both terms started well before video games were invented. An arcade game is a coin operated entertainment machine but not necessarily video game related. To clear up the misconception between arcade games, coin-ops and video arcade games we have to take a look back in history to identify were it all began and what influenced the video game industry in the arcade market.

The first documented coin operated machine dates back almost 2000 years in Alexandria, Egypt around 50 AD. Hero of Alexandria, an ancient Greek mathematician created a vending machine which would dispense holy water. This machine was included in his book, “Mechanics and Optics”. When a coin was inserted into the machine it would fall onto a pan attached to a lever which would open up a valve to let some water flow out of the machine. The pan would continue to tilt with the weight of the coin until it fell off which would active a counter weight that would snap the lever back in place and turn off the open valve, stopping the water from dispensing.

There are even tales that coin-operated games go back even further. One tale states at the court of Alexander the Great around 350 BC, a game that functioned by inserting a coin would allow players the ability to move some balls up and down which would disappear in several holes that were controlled by the player. If the player was lucky enough to win they would double the amount of money they placed into the machine.

The majority of games found in an arcade prior to video games were pinball machines. A British inventor named Montague Redgrave manufactured bagatelle tables and in 1871 was granted a US Patent for his “Improvements in Bagatelles” which replaced the cue at the end of the table with a coiled spring and plunger which is still used today in pinball. These improvements made the game friendlier to players as well as reduced the size of the bagatelle table so that is would fit on counters and bar tops. The balls became marbles and the wickets became small pins, these improvements are acknowledged as the birth of pinball in its modern form even though the term pinball was not used until 1936.

In the early 1930’s pinball machines were countertop machines until 1932 when manufacturers began adding legs to their games. The tilt mechanism was invented in 1934 to avoid players from physically lifting and shaking the games. Bumpers were added in 1937 and flippers followed in 1947. There were a number of other advancements in pinball machines but it wasn’t until 1966 that companies started adding digital scoring to their machines which was an important step to the success of arcades in the days before video arcade machines. Solid State electronics were not introduced until 1976 in an effort to compete with the new success of the video arcade machines.

Patent for Improvements in Bagatelles
1871 Patent for “Improvements in Bagatelles”

The first popular arcade games were early amusement park games. These games ranged from shooting galleries to ball toss to fortune telling machines. The old amusement park games of the 1920’s provided the inspiration and atmosphere of later arcade games. By the 1930’s manufacturers were producing coin-operated versions of bagatelles and the first overnight success came in 1931 with David Gottlieb’s Baffle Ball. The machine sold for $17.50 and it dispensed five to seven balls for a penny which gained a lot of attention from the general public who were looking for cheap forms of entertainment at the time due to the economy during the great depression. Baffle Ball sold over 50,000 units to drugstores and taverns across America.

Even light gun games were appearing in the 1930’s with Seeburg’s “Ray-O-Lite” in 1936 being the first. This was the first game to utilize light-sensing vacuum tubes and it was not long before the technology began appearing in numerous arcade games in the late 1930’s. These early light gun games used a light-sensing tube mounted to a moving target and the player would use a gun that emitted a beam of light when the trigger was pulled, if the beam struck the target, a “hit” was scored.

Ray-O-Lite
Electro Mechanical Arcade Game

Seeburg’s “Ray-O-Lite” was the first game to use light gun technology in it 1936 electro-mechanical arcade game

The technology in the early light gun games evolved over the decades and in 1968 Sega released “Periscope”, its first successful game which happened to utilize this technology. The game was a submarine simulator and light gun shooter, which used lights and plastic waves to simulate sinking ships from a submarine. Sega’s “Periscope” was the first arcade machine to cost a quarter, which would remain the standard price for arcade games for decades.

Sega released another electro-mechanical game called “Missile” in 1969. “Missile” was a shooter and combat flight simulator which featured a moving film strip to represent the targets on a projection screen. “Missile” is also the earliest known arcade game to feature a joystick which would become standard on thousands of video arcade games. Throughout the 1970’s, electronic video games gradually replaced rows of pinball machines and electro-mechanical arcade games in arcades around the world. As you can see these early electro-mechanical arcade games heavily influenced the video arcade industry, setting a standard for developers to match and surpass.

Periscope
Missile Arcade Cabinet

Sega’s 1968 “Periscope” game was the first arcade game to cost a quarter and their 1969 game “Missile” was the first arcade game to use a joystick

In late 1970, Digital Equipment Corporation released their PDP-11 minicomputer. This opened the doors for developers to make computer gaming affordable and gave them the ability to move away from the extremely expensive mainframe computers used in the 1960’s.

“Spacewar!” was available at various academic and technical institutions running on DEC PDP-1 computers and was somewhat of a hit among the students. “Spacewar!” also became popular at most Artificial Intelligence (AI) research centers including Stanford’s former AI laboratory. In June of 1971 Bill Pitts a recent Stanford graduate and AI alumni teamed up with his high school friend Hugh Tuck to form Computer Recreations, Inc. with the goal to build a coin operated “Spacewar!” machine.

Bill Pitts did the programming and electrical work for the system while Hugh Tuck designed the enclosures. It took them three and a half months to complete the project which cost approximately $20,000 in equipment when finished. Their game was a port of “Spacewar!” which they renamed to “Galaxy Game” to avoid controversy with the term war.

Their “Galaxy Game” became the first coin-operated video game and made its first appearance in Tresidder Memorial Union at Stanford University in September 1971 a mere two months before the release of Nolan Bushnell’s “Computer Space” another clone of “Spacewar!”. The first version of the “Galaxy Game” was housed in a walnut veneered enclosure which contained a PDP-11/20 computer and a Hewlett Packard 1300A electrostatic display. The total equipment cost of the finished unit was approximately $20,000 which would be just over $110,000 in today’s market. The “Galaxy Game” cost 10 cents per game or 25 cents for 3 games and also if you happened to finish the game you would be awarded a free game.

Galaxy Game
Original “Galaxy Game” at Stanford in 1971

A second version of “Galaxy Game” was created with an advanced display interface enabling the PDP-11 computer to control four to eight consoles. This allowed the computer hardware the ability to control several consoles and reduced the overall equipment cost of making multiple units. This version of the game was setup in the coffee house at Tresidder Union at Stanford University in June 1972 and remained there until May 1979. The “Galaxy Game” was donated to the Computer History Museum where it was on display but has since been lent out to Google and is currently located at the Googleplex.

2nd version Galaxy Game
2nd version “Galaxy Game” located at the Computer History Museum

Well Bill Pitts and Hugh Tuck’s “Galaxy Game” can be considered the first coin-operated video game it wasn’t a true video arcade game as it ran on computer hardware distributing software to various remote terminals. Nolan Bushnell’s “Computer Space” established the basic form that all arcade games after would follow as it used a dedicated computing device built to play only that one game. This reduced the cost of manufacturing multiple units as the machine would not require an expensive computer to run only one game.

In 1971, Bushnell and colleague Ted Dabney formed an engineering company named Syzygy with the idea to create a “Spacewar!” clone known as Computer Space which would not use a computer to function thus giving it the ability to be profitable . In August of 1971 Nutting Associates a manufacturer of electro-mechanical coin-operated games hired Syzygy to create “Computer Space”. Production began immediately and by the end of the year they constructed over 1,000 units. Bushnell’s creation became the first commercially sold coin-operated video game as well as the first commercially sold video game of any kind, predating the Magnavox Odyssey by six months.

Even though “Computer Space” was the first widely available video arcade game it was a commercial failure as fewer than 1,000 units were sold. The gameplay was too complicated for the general public to grasp and Bushnell felt that Nutting Associates did not market the game very well. “Computer Space” was an engineering breakthrough as the entire system used solid-state components making it cost efficient to produce which opened up the video arcade market to new possibilities.

Computer Space Cabinet
Computer Space – 1st commercial video arcade game

In 1972, Nolan Bushnell and Ted Dabney decided to end the partnership they had with Nutting Associates in hopes to make it on their own. Bushnell found out that the name “Syzygy” was already in use by another company and incorporated under the name Atari, named after a strategic move in the Japanese board game “Go” which was Bushnell favorite game. Atari rented their first office space in Sunnyvale, California and secured a contract to create a driving game for Bally Manufacturing.

Atari soon hired Al Alcorn as their first design engineer to create the driving game they had contracted with Bally Manufacturing to create. Bushnell wanted Alcorn to create a simple ping pong style game as a test of his abilities before working on the driving game for Bally. This simple test resulted in the creation of “Pong” the game that revolutionized the video arcade industry and one of the most well-known games of all time. Bushnell and Dabney were so impressed by the prototype of this training assignment that they gave to Alcorn that they felt it could be a profitable product and decided to test its marketability.

A few days prior to asking Alcorn to create a ping pong style game, Bushnell attended a demonstration of the Magnavox Odyssey where they had on display a similar ping pong game among many other games. The difference was the Odyssey used screen overlays for most of the graphics were Bushnell’s “Pong” would not require the use of screen overlays. Alcorn incorporated many of his own improvements into the game design such as score keeping and sound. The similarity between “Pong” and the ping pong game that Bushnell seen on display by Magnavox Odyssey led to a long lasting lawsuit.

In September 1972 Atari installed the “Pong” prototype at a local bar named Andy’s Capp’s Tavern. “Pong” was well received and its popularity grew throughout the week. Bushnell demonstrated “Pong” to executives at Bally as he intended to use Pong to fulfill his contract with Bally rather than the driving game originally agreed upon. Before Bally made a decision to move forward with licensing “Pong” an issue with the prototype was reported by the local bar. Alcorn inspected the machine to discover the issue with the machine was the coin mechanism was jammed due to an overflow of quarters.

Once Bushnell learnt how successful the “Pong” prototype was he decided that they would be more profitable to manufacture the game rather than license it out to Bally. Bushnell was able to get out of the deal with Bally since they did not come to a final decision yet. Atari initially had difficulty finding financial backing for “Pong” but eventually obtained a line of credit with Wells Fargo that they used to expand their facilities to house an assembly line. Being strapped for cash Atari recruited their assembly workers at local unemployment offices. At first the arcade cabinets were produced very slowly roughly 10 day, many of which failed quality testing. Atari was able to streamline the process quickly and began producing systems in greater quantities.

When pong was released in 1972 it became the first video game to reach mainstream popularity which led to the start of the commercial video game industry. By 1973 Atari shipped 2,500 orders of Pong and sold the machines at three times the cost of production which provided them with a steady source of income to ramp up production. By the end of 1974 Atari sold more than 8,000 units going on to sale more than 35,000 units worldwide during it lifespan. Soon after its release, several companies seeing the success of Pong started producing clones. At the time Atari couldn’t do much about the competitors as they did not have patents on the solid state technology used in the game. Atari did however file for patents but due to complications around the timing on when they were submitted delayed the process. Bushnell’s solution to competing against the company’s producing clones was to produce more innovative games and concepts.

Pong Cabinet
Pong

Atari’s 1972 Pong the first video game to reach mainstream popularity

The companies that were producing clones of “Pong” kept Atari from dominating the video arcade game market. “Pong” and the clone versions became so successful that video arcade games started appearing in shopping malls, restaurants, grocery stores, bars, movie theaters and bowling allies among other places. Soon video arcade systems would start replacing rows of pinball machines in the local arcades.

The success of “Pong” drew the attention of Ralph Baer and Sanders Associates. Sanders Associates had an agreement with Magnavox who purchased the licensing rights to Ralph Baer’s “Brown Box” for their Odyssey system with Magnavox to handle sublicensing, which included dealing with infringement on their exclusive rights. Magnavox initially did not pursue legal action against Atari or any of the companies that produced “Pong” clones but Sanders Associates continued to pressure Magnavox for three years and in 1975 Magnavox filed suit against Atari as well as a few of the companies that produced “Pong” clones. Magnavox argued that Atari had infringed on Baer’s patents as well as the concept of electronic Ping-Pong based on detailed records that Sanders Associates kept on the design process of the “Brown Box” dating back to 1966. Magnavox also provided a signed guest book that was signed by Nolan Bushnell from when he attended a demonstration of the Odyssey were they had their table tennis game on display.

Bushnell estimated the legal costs in the millions and decided to settle with Magnavox out of court. Atari agreed to become a licensee for $700,000 and the companies producing “Pong” clones would have to pay royalties, in addition to the agreement Magnavox would obtain the rights to Atari products developed over the next year. Atari decided to delay the release of their products for a year to avoid Magnavox obtaining rights to their products and withheld information from Magnavox’s attorneys during visits to their facilities.

In 1973 over half of the ping pong style games on the market were “Pong” clones and Atari continued to come up with innovated ways to expand the company. In order to obtain as much market share as possible Bushnell approached his friend and neighbor Joseph Keenan with the idea to create Kee Games which would allow Atari to sign exclusive contracts with distributors in each geographic area to buy only Atari games. Since most geographic areas had two distributions, Bushnell and secretly created Kee Games, which was named after Joseph Keenan, who Bushnell hired to be president of the company. This allowed Kee Games to sign exclusive contracts with the second distributor in the geographic area. Keenan obtained a few employees from Atari to get started and began advertising Kee Games as a competitor of Atari but in reality it was subsidiary of Atari. Kee Games originally released clone versions of Atari games with unique names and some minor cosmetic differences giving Atari the ability to sell exclusive deals with two distributors at once since the distributors were unaware of the relationship between Kee Games and Atari.

Atari continued to lead the industry in innovation and in 1974 they released “Gran Trak 10” the first racing video game controlled by a steering wheel, gear shift, gas pedal and brake pedal attached to the arcade cabinet. The purpose of the game was to race against the clock on a single track with the player’s car being the only car on the track. Oil slicks on the track made the player’s car spin-out and the side of the track had to be avoided at all costs. “Gran Trak 10” was the first game to use ROM memory and Atari took an inventive approach to combat piracy. When Atari was assigning part numbers for their custom designed ROM chip for “Gran Trak 10” they decided to use the same part number as a Texas Instruments Arithmetic Logic Unit so that when pirates tried to create their own version they’d end up ordering the wrong part and their clones would not work.

Even though “Gran Trak 10″ was innovative and original it still almost single handedly bankrupt Atari due to engineering flaws and accounting errors. The original design had engineering flaws were Al Alcorn had to step in and fix before the game could go into production. The fix created costly rework and delays but Alcorn was able to resolve the issues. There was also an unfortunate accounting error that had “Gran Trak 10” selling for $100 less than it cost to manufacture. These issues ended up costing Atari $500,000 and later in 1974 they repackaged the game into a smaller cabinet and renamed the game to “Trak 10”. The new design allowed the cabinet to fit into smaller spaces that bars, grocery stores and Laundromats could set aside for games.

In November 1974 Kee Games introduce “Tank!” their first original title which was so successful that it saved Atari from bankruptcy in 1974. “Tank!” is a two player tank combat game where players would move their tanks through a maze having to avoid mines while shooting at each other. Each player controlled their tank on the screen with two joysticks with a button mounted on top of the right joystick to shoot. “Tank!” became an instant hit for Kee Games and it was so popular that by the end of the year distributors no longer demanded exclusive rights from companies.

Tank Arcade Cabinet
1974 Tank! The game that saved Atari from bankruptcy

Atari was having cash flow problems due to the issues they had with “Gran Trak 10” as well as an unsuccessful attempt to venture into the Japanese market. Kee Games on the other hand wasn’t having any cash flow issues and with the success of “Tank!” they were doing amazingly. In December of 1974 Atari made it public knowledge that Kee Games was a wholly owned subsidiary of Atari and by the end of the year the two companies merged together. Atari then started producing “Tank!” under the Atari label and promoted Joseph Keenan to president of Atari allowing him to run the business side of thing thus giving Bushnell the ability to focus on engineering and innovation. Atari continued to use the Kee Games label to release some of their games up until 1978 but from the merger on, the games were clearly labeled “a wholly owned subsidiary of Atari, Inc.”.

By 1975 the game industry was rapidly growing and gaining popularity around the world. Japanese game developer Taito who were manufacturing pinball machines and electro-mechanical arcade games were looking to get into the video arcade game market. They released their first video arcade game in 1973 but didn’t make a name for themselves in the video arcade market until 1975 with the release of “Western Gun”. The game was designed by Tomohiro Nishikado who would go on to create Space Invaders one of the most popular video games of all time.

The game places two old west cowboys against each other in a duel. Each cowboy is armed with a revolver and whoever shoots the other cowboy wins the duel. “Western Gun” was the first video game to feature game characters, depict a gun on screen and introduce dual-stick controls. One joystick controlled the movement of the character while the other controlled shooting direction, unlike most games “Western Gun” placed the main joystick for the character movement on the right instead of the left.

Taito wanted to release “Western Gun” in North America and already had a relationship with Midway as the previous year they licensed “Speed Race” to Midway for release in North America. They licensed Western Gun to Midway for release in North America but before its release Midway made some internal changes and renamed the game to “Gun Fight”. Midway converted the system to use the Intel 8080 microprocessor making “Gun Fight” the first video arcade game to use a microprocessor. The main difference between “Western Gun” and “Gun Fight” was that “Gun Fight” had smoother animation and improved graphics, made possible with the use of a microprocessor.

Atari continued to create innovative games intriguing new customers to play video arcade games. In 1975 they released their new racing game “Hi-way” which they incorporated a unique sit down cockpit into the arcade cabinet. This was the first time that a player would be able to sit down to play a racing game just like in a real car. Even though “Hi-way” placed the player in the driver’s seat it had one small problem the game was still viewed from a third person viewpoint as you were driving the car but watching from overhead. Atari addressed this issue when they released “Night Driver” in 1976. In “Night Driver” it placed the player in the car with a first-person viewpoint as the view was like looking through the windshield of the car.

Hi-Way
“Hi-way” first sit down racing game - 1975

Atari continued to lead the way in video arcade gaming in 1976 with more innovated ideas. Nolan Bushnell and Steve Bristow had an idea to turn Pong into a single player game, where the player would use a ball to destroy a wall of bricks without missing the ball on its rebounds. Bushnell was certain the game would be popular and assigned Al Alcorn to the project as the project manager. Bushnell advertised within Atari that he would pay a bonus to anyone that could reduce the number of integrated circuits that was needed to build the game.

Steve Jobs a technician at Atari was intrigued at the idea of designing the prototype. Steve Jobs was offered $750, with an extra $100 bonus each time an integrated circuit was eliminated from the prospected design. Jobs promised to complete a prototype within four days and Alcorn assigned him to the project. It wasn’t long before Jobs realized he was in way over his head. Jobs approached his friend Steve Wozniak who at the time was working for Hewlett-Packard to assist him with the creation of the prototype and in return Jobs would split the money for the design with Wozniak. Both Wozniak and Jobs worked on the game for the next four days with Wozniak working on the game at nights as he had to work during the day at Hewlett-Packard. Wozniak was able to reduce the design by 50 integrated circuits and Jobs received a $5,000 bonus for the design. Jobs did not inform Wozniak of the bonus and only split the base $750 for the prototype with Wozniak.

Wozniak design was ingenious but the engineers at Atari were not able to figure it out so production could not begin. The design had so few chips that it was too compact and complicated to manufacture with Atari’s manufacturing methods. Al Alcorn assigned another engineer to redesign the game so that it was more easily replicated. The final game had about 100 integrated circuits where Wozniak’s only had 42.

The game was named “Breakout” and was released in April 1976. Steve Jobs and Steve Wozniak would go on to found Apple computer, Inc. right after they completed the “Breakout” game for Atari. “Breakout” directly influenced Steve Wozniak’s design of the Apple II computer as well as his design of Integer BASIC, a programming language. “Breakout” was the first proof of concept application running on the prototype of Apple II which led to the addition of a paddle interface and a cassette tape containing the code for “Breakout” for the Apple II’s commercial release.

Over the years “Breakout” has been cloned, additional features added and the game rebranded for use on other platforms. To this day you will find variations of “Breakout” clones built into iPods and Blackberrys under the name “BrickBreaker”.