Enter a young electrical engineer named Nolan Bushnell, who was partly responsible for the first coin-operated arcade machine: Computer Space. Bushnell attended a demonstration of the Magnavox Odyssey and was intrigued by the simplicity of its tennis game. In 1972, he cofounded a company called Atari and set about improving on Magnavox's tennis game. The result: The coin-operated, Atari-branded PONG arcade machine, which went on to become a smash hit.
Magnavox soon sued Atari, claiming infringement of Ralph Baer's patents; eventually Atari wound up licensing the concept. After PONG's success at the arcades, a home-console version was unveiled at the 1975 Consumer Electronics Show (CES), complete with sound and on-screen scoring.
Over the 1975 Christmas buying season, customers waited for hours to pay $100 for a Sears Tele-Games PONG machine. Following this success, Bushnell sold Atari to Warner Communications in 1976 for an estimated $30 million. This gave Atari the infusion of cash it needed to release its own PONG C-100 console and become a household name.
Throughout the 1970s, a plethora of Pong-playing clones (in a multitude of variations, shapes, and sizes) appeared on store shelves around the world.
1976: Fairchild Channel F
Gamers were tiring of PONG consoles, and Fairchild Instrument and Camera's Channel F console offered a fresh new alternative. It featured programmable "videocarts" containing ROM chips and code, as opposed to the dedicated circuits that the Magnavox Odyssey's plug-in cards used. The cartridge concept emerged as an industry standard, and is still used in handheld gaming devices today.
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The Channel F featured a 1.78-MHz Fairchild F8 CPU, invented by Fairchild cofounder Robert Noyce, who later left the company to start a little outfit called Intel. The $170 Channel F came with two built-in games (Pro Hockey and Tennis Champ), and some 20 different videocarts were available at $20 a pop.
1977: Atari VCS/2600As sales of its PONG console waned, Atari began work on the "Stella" project--a CPU-equipped, cartridge-based console intended to compete with Fairchild's Channel F. After acquiring Atari, Warner had high hopes for the project and reportedly invested $100 million in its development.
The end result was 1977's Atari Video Computer System (VCS). It was renamed the Atari 2600 (from its CX2600 part number) when succeeded by the Atari 5200 in 1982.
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The VCS featured an 8-bit, 1.19-MHz MOS Technology 6507 CPU, coupled with 128 bytes of RAM. A single chip engineered by Jay Miner (who would later be critical to the development of Commodore Amiga computers) delivered four-channel sound and 16 on-screen colors.
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The Atari VCS initially sold for $200, bundled with two joysticks, a joined pair of paddle controllers, and a cartridge game. In the first few years of its existence, it competed with the graphically inferior Fairchild Channel F; but both units generated mediocre sales despite several price drops. By 1980, Fairchild had discontinued the Channel F, and the Atari VCS had become a hit after licensing the arcade game Space Invaders. Retailers continued to sell the Atari VCS/2600 through 1990.
The late, great comedian Phil Hartman (of Saturday Night Live, The Simpsons, and NewsRadio fame) freaks out for Atari 2600 Ice Hockey:
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In 2005, PC World named the Atari VCS the seventh-greatest gadget of the past 50 years.
1978-1981: Magnavox Odyssey 2, Mattel Intellivision
The four-year stretch from 1978 to 1981 saw the emergence of two significant game consoles: Magnavox's Odyssey 2 and Mattel's Intellivision.