Arcade game

• 1. Introduction

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  Arcade games began as coin-operated machines tucked into restaurants, bars, and amusement arcades, built to earn their keep one coin at a time. At the heart of almost every arcade game is a deceptively simple premise: that skill, not luck, determines the outcome. That premise has been tested in courtrooms, debated by legislators, and challenged by generations of players feeding quarters into machines they could barely understand.

  How did a penny arcade become the proving ground for billion-dollar industries? Who decided that pinball was a tool of the devil, and what finally changed their minds? And why did a single submarine simulator from 1965 set the price standard for American arcades for more than two decades? Those are the questions worth following.

• 2. Penny Arcades and the First Games

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  Coin-operated vending machines had already existed in the 19th century when entrepreneurs began filling shared spaces with coin-operated amusement machines: fortune tellers, strength testers, and mutoscopes, installed alongside other attractions at fairs, carnivals, and resorts. The facilities that housed them required minimal oversight, and since a single penny commonly operated the machines, they became known as penny arcades.

  The penny arcade's early reputation was not flattering. The most popular attractions were mutoscopes showing risque imagery, and their main audience was young men. When the film industry grew through the 1910s and 1920s, it pulled those same audiences away. Arcade operators needed something new.

  Pin-based games became one answer. They descended from bagatelle, a 19th century game, and one of the earliest was Baffle Ball: players received a limited number of balls and used only a plunger to hit targets. Skee-Ball found its audience at an Atlantic City boardwalk arcade. The Great Depression of the 1930s gave these games an unexpected boost, since they offered inexpensive entertainment at a moment when people were looking for exactly that.

  Britain, not the United States, was the main manufacturer of arcade games in the early 20th century. The London-based Automatic Sports Company made abstract games tied to British sports: Yacht Racer in 1900 based on yacht racing, and The Cricket Match in 1903, which had players knock a pitch into one of several holes. By 1925, the Full Team Football Company in London had produced a mechanical tabletop football game with eleven static players per side, controlled by levers.

  Shooting gallery games traced back to the late 19th century as well. The first successful cinematic shooting gallery game was Life Targets, released in the United Kingdom in 1912. Players shot at a cinema screen showing footage of targets; a hit paused the film and registered a point. These games often used footage of safari animals shot in British imperial colonies. They enjoyed a short-lived run through the 1910s before fading.

• 3. Pinball and the Game of Chance Question

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  Coin-operated pinball machines that included electric lights and features were developed in 1933. They lacked the player-controlled flipper at that point; that mechanism would not arrive until 1947. Without the flipper, players launched the ball and had no way to influence what happened next, which gave governments an easy argument: pinball was a game of chance, and games of chance were gambling.

  New York City placed its ban in 1942. The fears attached to pinball went beyond gambling. Some elders considered the machines to be tools of the devil, and the machines became a symbol of the generation gap running through American life at the time.

  Manufacturers fought back carefully. After the electric flipper arrived in 1947 and gave players meaningful control over the ball, they pushed to reclassify pinball as a game of skill. They added "For Amusement Only" labeling to their machines, stripped out any redemption features, and made the skill argument at every opportunity.

  Bans began lifting in the 1960s and 1970s. The New York City ban fell in 1976 when Roger Sharpe, a journalist, appeared before the city council and called a shot to a specific lane to demonstrate that pinball required skill. Chicago's ban lasted until 1977.

  Once pinball was legal in more places, technology transformed what the machines could do. Earlier machines ran on discrete electro-mechanical and electronic components. Newer machines moved to solid-state electronics with microprocessors, which made them more versatile and allowed for complex mechanical actions and detailed backplate graphics.

• 4. The Electro-Mechanical Golden Age

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  Nimatron, built in 1940, was not made for commercial arcades. Bertie the Brain in 1950 was similar: designed to show off the state of technology at public expositions, not to earn quarters. These were demonstrations, not businesses. The real commercial EM era developed alongside and after World War II.

  In 1941, the International Mutoscope Reel Company released Drive Mobile, an electro-mechanical driving game with an upright cabinet that anticipated the design arcade video games would later use. A steering wheel controlled a model car over a road painted on a metal drum; the goal was to keep the car centered as the road shifted. Kasco, short for Kansai Seisakusho Co., brought this format to Japan in 1958 with Mini Drive, which used a longer cabinet and a longer road.

  By 1961, the American arcade industry had stagnated. That hurt Japanese distributors like Sega, which had been depending on US imports. Sega co-founder David Rosen responded by directing Sega to develop original games.

  Periscope, a submarine simulator built by Nakamura Manufacturing Company (later Namco) in 1965 and then by Sega in 1966, changed the economics of the entire industry. It used lights and plastic waves to simulate sinking ships, and had players look through a periscope to fire torpedoes represented by colored lights and sound effects. Sega's version became a worldwide success. It was the first arcade game to charge a quarter per play, and that pricing model held as the US standard for more than two decades.

  Kasco's 1968 racing game Indy 500 pushed EM technology further. Licensed by Chicago Coin for North American release as Speedway in 1969, it featured rival cars painted on rotating discs illuminated by a lamp, with the images projected through mirrors to create a pseudo-3D first-person perspective on a screen. It had collision detection and electronic sound. Indy 500 sold over 2,000 cabinets in Japan; Speedway sold over 10,000 in North America, making it the biggest arcade hit in years. A college student named Nolan Bushnell, the future founder of Atari, worked at an arcade where he watched customers play Speedway and maintained the machinery, learning how the game business worked.

  Sega's Duck Hunt, a gun game using rear image projection to show moving animations on a screen, began location testing in 1968 and released in January 1969. Missile, released by Sega in 1969, may have been the first arcade game to use a joystick with a fire button, which established joysticks as the standard control for arcade games that followed.

  This period was called the electro-mechanical golden age in Japan and the novelty renaissance or technological renaissance in North America. Those audio-visual games were selling in quantities that most arcade machines had not approached in years, and that commercial foundation made it possible for video games to flourish when they arrived in the 1970s.

• 5. The Video Game Decades

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  Galaxy Game and Computer Space both attempted to package mainframe computers into coin-operated cabinets in 1971. Neither succeeded commercially. Atari's Pong in 1972 was the one that worked, and the arcade video game was born.

  The companies that had built EM games - Midway, Bally, Williams, Sega, and Taito - moved into the new medium. As the underlying technology shifted from transistor-transistor logic integrated circuits to microprocessors, a new wave of games became possible. Taito's Space Invaders in 1978 opened what became the golden age: Pac-Man from Namco in 1980, Missile Command from Atari in 1980, Donkey Kong from Nintendo in 1981.

  The golden age waned in 1983. Too many arcade games saturated the market, home consoles and computers drew players away, and a moral panic about arcades' influence on young people added social pressure. The video game crash of 1983 hit the industry too.

  Recovery arrived by 1986 through software conversion kits, beat 'em up games like Kung-Fu Master and Renegade, and Sega's motion simulator games, a group the company called taikan games: Hang-On, Space Harrier, and Out Run. The Nintendo Entertainment System then pulled players homeward again at the end of the 1980s.

  Fighting games reversed that slide in the early 1990s. Street Fighter II in 1991 and Mortal Kombat in 1992 drew crowds back to arcades. Sega's Virtua Racing and Virtua Fighter popularized 3D graphics in arcades during those same years, and later systems like the Sega Model 3 remained considerably more advanced than home consoles through the late 1990s.

  Arcade video games held their position as the largest sector of the global video game industry until around 1996. By 1997-1998, the console market surpassed arcades for the first time. In the Western world, arcade locations narrowed through the 2000s toward highly specialized experiences: motion simulators, Dance Dance Revolution with its floor-pad equipment, virtual reality, or hybrid venues pairing games with food and drink.

  In Japan, arcades held on longer. There were around 26,000 arcades in Japan in 1986. By 2019, that number had fallen to about 4,000. The COVID-19 pandemic in 2020 and 2021 forced many of the large long-standing Japanese arcades to close.

• 6. Redemption, Chance, and the Law

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  Crane games sit in a legal grey zone that courts and regulators have struggled to resolve. There is some skill in positioning the claw over a prize, but the claw's strength and condition, and the way prizes are stacked, introduce enough uncertainty that success often comes down to luck. The Dominant Factor Test is the standard tool for deciding whether an arcade game qualifies as a game of chance subject to gambling laws, but for many redemption games its application remains genuinely unclear.

  Medal games, popular in Japan and Southeast Asia, were designed to navigate exactly this tension. Players convert money into special medal coins to play, and winning returns more coins that can be redeemed for prizes. The design deliberately stops short of direct cash payouts to stay within Japan's strict gambling laws. Medal games grew popular starting in the mid-1970s, with Sega's Harness Racing in 1974, Nintendo's EVR Race in 1975, and Aruze's The Derby in 1975 among the early examples.

  Pachinko occupies a comparable niche. Originating in Japan, it functions as both a recreational arcade game and, far more commonly, a gambling device filling a role in Japanese culture similar to slot machines in the West. Skee-Ball operates as a redemption game as well; the number of tickets a player wins is proportional to their score, keeping it closer to the skill end of the spectrum.

  Arcade video games that replicate gambling concepts, such as video poker machines, emerged in the 1980s. These are generally treated as games of chance and remained confined to jurisdictions with favorable gambling laws, a separate track from mainstream arcade video games.

• 7. Ongoing Lives of Classic Formats

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  Air hockey was created between 1969 and 1972 by a group of Brunswick Billiards employees. Its predecessor arrived at Sega a year before, when Sega released MotoPolo in 1968: two players moved motorbikes across a surface to knock balls into the opponent's goal, and the game used an 8-track player to play back the sound of the motorbikes. Air hockey itself outlasted that prototype by decades and has never left arcades.

  Whac-A-Mole followed a similar path from Japan to North America. The original game, Mogura Taiji or Mole Buster, was released by TOGO in 1975. Japanese arcade centers were soon flooded with mole buster games. Mogura Taiji reached North America in 1976, which led Bob's Space Racers to produce their own version called Whac-A-Mole in 1977.

  Purikura, a format of selfie photo sticker machines, was introduced by Atlus and Sega in 1995. The name is a shortened form of a registered trademark. These machines combine elements of a passport photo booth with an arcade video game, allowing users to manipulate their digital images. They are primarily found in Asian arcades.

  In 2026, a researcher identified as Dr. Valverde published an analysis of thousands of arcade games as a process of cultural evolution, examining how different genres emerge, diversify, and disappear. The study found that innovation and collaboration among developers support the survival of genres, while imitation without innovation pushes genres into decline and eventually collapse. That framing, applied to a medium that stretches from Baffle Ball to virtual reality, suggests the forces that shaped arcade games from their earliest days have never stopped working.