History of video game consoles

• 1. A Box From 1966

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  The Magnavox Odyssey went on sale in 1972, and it was the first machine that played games on an ordinary television set. The idea behind it was six years older. Ralph H. Baer had conceived it in 1966. The history of video game consoles stretches from that modest box to the machines of today, and it is full of reversals. Why does the business move in cycles of about five years? How did companies that once led the market end up leaving hardware entirely? And why did handheld machines, once a thriving rival to the home console, shrink to a single major maker?

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• 2. Brown Box To Pong

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  In the 1950s, video games lived on mainframe computers, and they were humble affairs. Displays showed only text, or results came out on printouts, and the games were simple ones such as Tic Tac Toe and Nim. Rudimentary vector displays later allowed graphics, which led to titles like Spacewar! in 1962. That game directly influenced Nolan Bushnell and Ted Dabney, who built Computer Space in 1971, the first arcade video game.

  Baer, meanwhile, was working at Sanders Associates. With the company's permission, he built a prototype nicknamed the Brown Box. It could play a small number of games, including a table tennis game and a simple light gun game. Sanders patented the unit and licensed the patents to Magnavox, which manufactured it as the Odyssey.

  Bushnell saw the Odyssey and its table tennis game, and he believed he could make something better. He and Dabney founded Atari, Inc. With Allan Alcorn, they made their second arcade game, Pong. It reached players in 1972 and proved more successful than Computer Space. By 1975, Atari had also put a Pong home console on sale through Sears.

  The Odyssey itself had one odd feature. It shipped with "game cards", but they held no programmed games at all. They simply acted as jumpers that changed the circuit pathways inside the machine.

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• 3. Calculators Become Toys

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  In 1977, Michael Katz, Mattel's new product category marketing director, gave his electronics engineers a simple brief. Build a game the size of a calculator, using LED technology. The result was two games, Auto Race and Football. They sold so well that, in Katz's words, these simple handheld games turned into a "$400 million category." Such devices grew out of the calculator market of the early 1970s, and they could only play the games built into them.

  Ralph Baer, the Odyssey's originator, struck again with Simon, which Milton Bradley published in 1978. Simon endured as a Milton Bradley property, later under Hasbro, and it brought a number of copycats. Coleco, Parker Brothers, Entex and Bandai soon released tabletop and handheld games of their own.

  The leap from electronic games to handheld video games came with LCD screens, which made a wide range of games possible. Milton Bradley's Microvision, released in 1979, had a 16x16 pixel LCD screen. It was the first handheld to take interchangeable game cartridges.

  Nintendo's Game & Watch line began in 1980, designed by Gunpei Yokoi. He had watched a man on a train pass the time with an LCD calculator. Yokoi took advantage of the technology in credit-card-sized calculators and put a digital clock in the corner of each screen, so every game doubled as a watch. The series ran for over a decade and sold more than 40 million units.

  That success led Nintendo to the Game Boy in 1989, again with Yokoi leading the design. Its LCD screen showed four shades of monochrome, it took cartridges, and two units could link up for head-to-head play. Early packages bundled Tetris, which became its best-selling game and helped it dominate handheld sales. The Game Boy also introduced the Kirby franchise to the world. Atari's Lynx arrived the same year with a color screen, yet a small game library and poor battery life kept it from competing.

  Sega and NEC would each answer in 1990, with the Game Gear and the TurboExpress, and both struggled against the Game Boy's staying power.

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• 4. Counting Generations

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  Roughly every five years, console makers have released new machines with broadly similar specifications, and that rhythm gave the industry its generations. The logic echoes Moore's law, in which a rough measure of processing power doubles every 18 months, or grows ten-fold over five years. It also suits the razorblade model. Makers sell the console at a minimal profit margin and earn their revenue from games. Then they move players to a successor around the fifth year, which builds planned obsolescence into the product.

  Because rivals release hardware at about the same time, their machines tend to match in power. That sorted consoles into segments that shared a competitive space. Popular machines can linger well past five years, so generations often have long tails.

  The word generation is surprisingly recent. It came into use after the start of the 21st century and was applied retroactively to older machines. No definition has ever been agreed in the industry or in academic literature. Some schemes draw on market data, including a seminal paper in an IEEE journal in 2002, while others follow shifts in technology. The disagreements make it hard to compare the console market with other consumer markets.

  The scheme used by most games journalism treats the Odyssey and Pong-style consoles as the first generation. A generation starts with the first console that has its features. It ends with the last discontinuation of any console in it, so the years overlap.

  Early generations also earned names from bits, the word length handled by a console's processor. The habit began with the TurboGrafx 16, whose CPU was 8-bit like the one in the NES, but whose graphics processor was 16-bit. Its maker, NEC, advertised it as a "16-bit" system to cast the NES's "8-bit" as inferior. Other advertisers followed, and the "bit wars" lasted through the fifth generation. A few "128 Bit" slogans appeared at the start of the sixth, and then bit counts largely vanished from marketing. They left a legacy anyway. The third generation is still called the 8-bit generation.

  The story of consoles mostly follows North America and Japan. Europe saw little console development of its own, because personal computers were favored there alongside imported consoles.

  That overlap rule is why the third generation is considered to end in 2003, when the NES was formally discontinued.

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• 5. Cartridges And Crash

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  By 1977, so many third-party makers were selling ball-and-paddle games that the market saturated, and the industry suffered its first crash. Magnavox, Atari and Coleco were all competing by 1976, and key chips from General Instruments had become cheaper. Atari tried new dedicated games in its Video Pinball series, and Coleco did the same with the Telstar Arcade. By then the market was already shifting to the next generation, so those units were obsolete almost on release.

  The second generation turned on the game cartridge, which stored a game's code in read-only memory. The Fairchild Video Entertainment System was first to use one, in November 1976. The Atari 2600, called the Video Computer System at launch, followed. So did the Magnavox Odyssey 2, Mattel's Intellivision and the ColecoVision. Newer processors allowed up to 8 colors and 3 channels of audio effects.

  Cartridges demanded a stream of games. Atari kept control of every part of development for the 2600. The golden age of arcade video games opened in 1978-79 with Space Invaders and Asteroids, so home versions were ideal targets. The 2600 version of Space Invaders, released in 1980, is considered the killer app of home consoles. It helped quadruple the console's sales that year. Coleco beat Atari to a licensing deal with Nintendo that made Donkey Kong the pack-in game for the ColecoVision, which drove its sales.

  Atari had been acquired by Warner Communications, and its internal policies led four key programmers to leave. They were David Crane, Larry Kaplan, Alan Miller and Bob Whitehead, and they formed Activision. The new company made games for the 2600 and for other systems. Atari tried legal action but settled out of court, with Activision agreeing to pay royalties and carry on. That made Activision the first third-party game developer. It succeeded quickly, and many other companies rushed in hoping for fast money. Publishing control slipped away, and the market became diluted by the early 1980s.

  The recovery would come from a Japanese company whose Famicom had appeared in the very year of the crash.

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• 6. Nintendo, Sega And Discs

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  Dedicated home consoles reached Japan in 1975 with the TV Tennis Electrotennis from Epoch Co. Rivals followed, mostly from big television makers such as Toshiba and Sharp, and the Japanese called these machines TV geemu. Nintendo had been a business partner of Magnavox since 1971 and had helped design the early light guns for the Odyssey. It became a major player when Mitsubishi lost its manufacturer, Systek, to bankruptcy and asked Nintendo to carry on building the Color TV-Game line. That line sold about 3 million units across four models between 1977 and 1983.

  Two machines launched almost together in Japan in 1983, the Sega SG-1000 and Nintendo's Famicom. After some early technical recalls, the Famicom became the country's best-selling console by the end of 1984. These third-generation machines used 8-bit processors and five audio channels, and they drew with sprites and tiles rather than blocks. The crash had also shifted market dominance from the United States to Japan.

  Nintendo then faced a North America scarred by the crash. It redesigned the console to look less like a game machine and renamed it the Nintendo Entertainment System, to dodge the stigma of the video game label. It also wanted to avoid the loss of publishing control seen in North America and Asia. So every cartridge had to include a special chip made by Nintendo, or the console would refuse to play it. That gave Nintendo direct control over titles, and it rejected those it judged too mature. The NES reached North America in 1985 and helped revive the market there. Sega's Master System in 1986 and Atari's 7800 in 1987 failed to dislodge it.

  NEC's TurboGrafx-16 opened the fourth generation in 1987, and it was known as the PC Engine in Japan. Sega followed with the Genesis in 1988, called the Mega Drive in Japan. Nintendo answered with the Super Nintendo in 1990. SNK also launched the Neo Geo in 1990, a modified arcade system that used shared cartridges and memory cards to bridge arcade and home.

  In North America, this era brought the console wars between Nintendo and Sega. Sega created Sonic the Hedgehog, a mascot with a cool personality meant to appeal to Western youth, in contrast to Nintendo's Mario. It bundled the Genesis with his game. The strategy worked, and Sega led North America until the mid-1990s.

  By then CD-ROMs had become cheap enough to ship software, and they held far more than cartridges and allowed full-motion video. Console makers responded with add-ons. NEC released the TurboGrafx-CD in 1988, Sega released the Sega CD for the Genesis in 1991, and the Neo Geo CD followed in 1994. The add-ons cost nearly as much as the consoles themselves, and disc-based consoles from 1993 left them behind. Philips tried a dedicated CD format with the CD-i, also in 1990, but it never gained traction. Nintendo kept the SNES competitive with coprocessors built into cartridges. The Super FX chip debuted in Star Fox in 1993, generally considered among the first games with real-time polygon 3D rendering on consoles.

  Nintendo had once planned a CD add-on for the SNES with Sony, called the Super NES CD-ROM. Just before its introduction, the business relationship between the two broke down, and Sony took the idea on to create the PlayStation.

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• 7. Sony And Microsoft Arrive

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  The 3DO and the Atari Jaguar, both released in 1993, bet early on CD-ROM. They cost far more than fourth-generation machines and had much smaller game libraries. Two bigger fifth-generation challengers came in 1995, the Sega Saturn and the Sony PlayStation, and both went after the SNES's dominance. The PlayStation used optical media and introduced memory cards for saving a game's state. That allowed much longer games with real narrative, and it fed hit role-playing games such as Final Fantasy VII. By 1996, the PlayStation had become the best-selling console of all time, overtaking the Game Boy.

  Nintendo released the Nintendo 64 in late 1996 and stayed with cartridges. It believed their load-time advantage still mattered, and cartridges also kept its lockout mechanisms in place to protect copyrights. Strong first-party games such as Wave Race 64 and The Legend of Zelda: Ocarina of Time drove its sales. It did not match the PlayStation, but it kept Nintendo a key competitor alongside Sony and Sega.

  By the sixth generation, console technology was catching up with personal computers, and makers sold on the strengths of their game libraries instead of bits. Sega took an early lead with the Dreamcast, released in Japan in 1998. It was the first home console with a modem, which let players go online through the Sega network. Technical problems had to be fixed before its Western launch in 1999. Sony's PlayStation 2, released in 2000, soon outperformed it. It added DVD playback and played games from the original PlayStation library, which pulled in people still using that older machine. Backward compatibility became a major design consideration for later generations. The PlayStation 2 sold 160 million units before its discontinuation in 2013, and it remains the best-selling home console of all time. Sega stopped making the Dreamcast in 2001 and left the hardware market to focus on software.

  Nintendo entered the sixth generation with the GameCube in 2001, its first system to use optical discs, in a miniDVD format. Microsoft also arrived in 2001 with the first Xbox. It saw the PlayStation 2's success as a threat to the personal computer in the living room. The Xbox drew on its PC experience, with an operating system built out of Windows and DirectX, a hard disk for saved games and built-in Ethernet. It also launched Xbox Live, the first console online service. Sales were modest next to the PlayStation 2 and the console was not profitable, but Microsoft judged that it had proved it could compete.

  Microsoft was first into the seventh generation, with the Xbox 360 in 2005. A persistent hardware fault known as the Red Ring of Death plagued it, and Microsoft spent over $1 billion fixing the problem. Sony's PlayStation 3 arrived in 2006 with Blu-ray built in, and it helped make Blu-ray the favored high-definition disc format. It started slowly because of a high price, a complex development environment and a thin early lineup. Price cuts, better marketing, Slim models and critically acclaimed exclusives gradually turned opinion around.

  Nintendo's Wii, also from 2006, skipped the feature race and built everything around the motion controls of the Wii Remote. The company's "blue ocean strategy" meant releasing a product with no direct competition. Many developers had overlooked it at first, and it became a surprising success.

  Microsoft answered with Kinect, which worked as a camera, microphone and motion sensor for the Xbox 360, while Sony built the PlayStation Move around a camera and lit handheld controllers.

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• 8. Phones, Hybrids And Streaming

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  The Nintendo DS arrived in 2004 with two screens, one of them touch-sensitive, plus built-in wireless connectivity. Sony entered handhelds the same year with the PlayStation Portable, which used a new disc format called the Universal Media Disc. Nokia's N-Gage, marketed as both a phone and a game system, had appeared in 2003. Then Apple launched its App Store in 2008, letting developers publish and sell games for iPhones and similar devices. By 2009, phones were powerful enough to run complex graphical games and could distribute them over wireless broadband. That began the rise of mobile gaming.

  The eighth generation brought odd missteps and bold bets. The Wii U arrived in 2012 with the GamePad, a tablet and controller hybrid that acted as a second screen. Many people mistook it for a tablet they could carry away from the console, and it struggled to attract third-party developers. The PlayStation 4 and Xbox One followed in 2013, supporting up to 60 frames per second at 1080p in some games. The Xbox One originally shipped with Kinect, but privacy fears and weak developer support made it controversial, and Microsoft dropped it. Mid-cycle models, the PlayStation 4 Pro and Xbox One X, pushed toward 4K and extended that generation's life.

  Nintendo's Switch, released in 2017, is considered the first hybrid game console. Its processors run at higher clock speeds when it sits in a dock connected to a television, and slower speeds to save battery when it is carried as a handheld. It can also be played as a tablet through its touchscreen, or with its attached Joy-Con controllers. The Switch Lite followed in 2019, a handheld that cannot dock. The Switch became one of Nintendo's fastest-selling consoles after the Wii.

  Smartphones kept applying pressure. Ownership was estimated to reach roughly a quarter of the world's population by the end of 2014. Low-cost games such as Angry Birds, with over 2 billion downloads worldwide, challenged classic game systems. Microconsoles added more choices, many of them spurred by crowdfunding on sites such as Kickstarter. Among them were the GamePop, OUYA and GameStick.

  Microsoft and Sony both released new home consoles in November 2020. Microsoft's Xbox Series X and Series S launched on the 10th of November 2020, and the Series X targets 60 frames per second at 4K, four times the power of the Xbox One X. Both can play games from four generations of Xbox. Sony's PlayStation 5 followed on the 12th of November 2020 with a custom solid-state drive whose speeds come close to those of RAM chips. Both makers also sold lower-cost models without disc drives.

  Handheld gaming now rests mostly with Nintendo, since Sony announced no further handhelds after discontinuing the Vita. Fortnite's popularity in 2018 helped push cross-platform play, so games now run across consoles, computers and mobile devices. Cloud gaming is seen as a possible replacement for handhelds. Services such as PlayStation Now, Xbox Cloud Gaming and Amazon Luna can deliver console-quality play to nearly any device, limited by bandwidth. Google's Stadia was discontinued in 2023.

  The Nintendo Switch 2, released in June 2025, has yet to be placed in any generation. Its computational power is lower than that of the PlayStation 5 or the Xbox Series X/S, and it came several years after them.

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