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Video Game History – A Tasteful Reading

video game history, 0, pong - arcade games

video game history, from pong the first game and arcade games

Video Game History

After a long Video Game History, today, the business of Game Design is a multi-million dollar industry, and it is continuing to grow. As new technologies being developed new ways of game design come out and change the industry. Now, let’s look at the some important and interesting milestones in video game history together:

The video game industry started quite different than what it is today. Game Design took quite a long time to become a well-accepted business and it changed in many ways. During the historical development of the Game Design industry, there were many vital moments that some times shook the whole business even though they seemed small at the time.

The History of Video Games

Many people like to play video games and enjoy. Most of us know current games, we remember the names of some of the old games, but we don’t have a collective view of video games history. When we remember the names of the old games, we feel a sense of nostalgia. How about a chronological look at the history of the games that make us feel this nostalgic feeling?

We tried to summarize the significant events in the history of the video game industry, for you. Of course, many highly important events are missing in this list, it is hard to fit them all in. But, hopefully, we covered the most important parts.

Let’s go back in the video game history together;



Beginning of the video game history: “Tennis for Two”

Up until this point in video game history, there were some examples of computers. They were not like the computers you know today but they were technically computer nevertheless. However, nobody had created a game, using computers until the year 1952.

An American physicist named “William Higinbotham” decided to create the first ever video game in the history. “Willy”, as his friends called him, was a member of the team that made the first nuclear bomb. Yet, the game he created wasn’t about anything violent, it was a simple tennis game.

After he learned that government-owned “Donner Model 30” analog computer can simulate could simulate trajectories, Higinbotham came up with the idea of a tennis game that 2 players can play. With the help of technician Robert V. Dvorak, they built the game over three weeks.

Higinbotham named the game “Tennis for Two”, it is also known as “Computer Tennis”. The game was basically some lights, resembling the side view of a tennis court on an oscilloscope screen. The game never sold to consumers, but nevertheless, it was the first video game ever made and beginning of the video game history.


“Spacewars! in the video game history”

A decade after the first development of “Tennis for Two”, an MIT student created the first interactive game. His name was “Steve Russell”. Steve and two of his friends, “Bob Saunders” and “Steve Piner”, programmed the game the school’s new computer “DEC PDP-1” which was a mainframe computer.

The game was a space-themed dog fight game that has many mechanics such as frictionless space movements, different ship types, limited fuel and torpedoes, and gravitational pull of stars. They named the game as “Spacewars!”.

The game became famous among other students and employees of universities in the area in a short time. This fame made “Spacewars!” the first game that played at multiple computer installations in the video game history. It was installed on a few dozen, mostly academically owned, PDP-1 computers.


The first arcade video game of the video game history”

“Computer Space”

Two partners named “Nolan Bushnell” and “Ted Dabney”, under the partnership named “Syzygy Engineering”, created the first arcade video game of the video game history. Bushnell designed the futuristic looking fiberglass cabinet to encase the game machine. The game they developed for the machine, “Computer Space” was again a space game where the player controls a rocket and fight against flying saucers using missiles. The coin-operated machine had a time limit, and the players could achieve a certain score to be rewarded with a free round of gameplay.


The first home video gaming system: “Odyssey”, Atari and “Pong”

Shortly after “Syzygy Engineering” released “Computer Space”, another company called “Magnavox” noticed the interest in the market and released the first home video gaming system called “Odyssey”.

Developers of “Computer Space” of the last year, Bushnell&Dabney duo founded a game-focused company called “Atari”. They released their first game under the Atari name not long after. The game, named “Pong”, was a huge success and made Atari be considered as the leader in the video game industry for a long time. Pong also became available as a home version soon. These games took place in a relatively important part of the “video game history“.


First idea of a “personal computer” from Atari

A technician (and later a circuit board) who works for Atari, came up with an idea for personal computers. He presented his idea to the founders of the company. But because of the company funds were focused on other projects, one of the founders, Bushnell redirected the technician to a venture capitalist he knows.

The name of the technician who came up with this idea was “Steve Jobs”, who would later found a computer company named “Apple” with “Steve Wozniak” and “Ronald Wayne” in 1976.


The first video game with “human-to-human combat” and “microprocessor”

Japanese video game developer “Tomohiro Nishikado” who designed multiple video games in the same year, designed the first video game to depict human-to-human combat. The game was released as an arcade cabinet game with the name “Western Gun” in Japan and Europe the game company “Taito”.

The game was about two cowboys with revolvers and in a duel. Two players were trying to shot each other in a field featuring some obstacles such as cacti and wagons. This game was perhaps the first step in the introduction of weapons into the history of video games.

The same game released in North America with the made “Gun Fight” by the company “Midway” which is the more known version of the game. This version of the game was adapted by “Dave Nutting”.

His company, “Dave Nutting Associates” had the license for Intel 8080 microprocessor already paid for another project (the first arcade pinball machine with a microprocessor). So, he remade the game based on the Intel 8080 instead of the hardwired logic circuits like other video games at the time. This made “Gun Fight” the first video game to use a microprocessor. Midway’s version had improved graphics and smoother animation thanks to the microprocessor.


“Space Invaders” and “Asteroids”

Creator of the game “Gun Fight”, “Tomohiro Nishikado”, designed and programmed another game, (he also engineered the game’s arcade hardware) completely by himself.

This time it was a space themed game called “Space Invaders”. The gameplay was about shooting down a group of enemies that were slowly descending towards the player’s spaceship. The publisher, Taito had moral concerns regarding killing human enemies about Nishikado’s previous games like “Gun Fight” and “Interceptor” (a jet fighter combat flight game). So, Nishikado created alien creatures enemies, inspired by The War of the Worlds novel.

The game was a huge success, it changed the game industry for many people. From a commercial point of view, it became an important milestone in the video game history. It sold more than 360 thousand units, in just 3 years it made more than $1 billion (equivalent to almost $3 billion today). Many clones of the gameplay got released in following years, such as “Galaxian” and “Galaga”.

The success of “Space Invaders” might be because it was the first game that did many things. It brought a lot of “firsts” to the history of the video game. The game is considered the first the template for the shoot ’em up genre which later grows so popular that includes most shooting games of the present days. “Space Invaders” the first game that features “lives” for the player. It was the first game that uses a constant soundtrack. And, it was the first video game that becomes more difficult as you progress. Actually, this feature was a bug that causes aliens descent faster as player shoot some of them and lower their numbers, but Nishikado liked the idea and kept it. “Space Invaders” was also the first game that records player scores, hence it made “high scores” concept popular.

Soon after “Space Invader”, Atari published their space game “Asteroids” which was a tribute to “Spacewar!” and “Computer Space” with its style and gameplay. “Asteroids” took the high score concept a step further and became the first game that players can save their high scores with their signatures (made out of three letters). “Asteroids” was also a hit with more than 70000 arcade cabinets and later even more home computer ports being sold.


First Easter Egg of the Video Game History:


Until the ends of the 1970s, adventure games were still typically text-based video games that you don’t see your surroundings. You needed to read descriptions about what your character see and select options or type commands for moving or interacting with the surrounding, then read new descriptions about the consequences. Then an adventure game published by Atari, called simply enough “Adventure”, changed this standard.

At the time, the game developers who work for the company Atari were usually free about their game projects and in full control. Although this sounds nice, game designers needed to spread their focus on planning their next games when they were close to complete their current projects.

“Warren Robinett” was one of these game designers. During the time he was about to finish developing his Atari 2600 game “Slot Racers”, he visited his flatmate “Julius Smith” at Stanford University. There he had a chance to play a text adventure game called “Colossal Cave Adventure” on a PDP-10 mainframe computer, and he decided to make a visual version of the story for Atari 2600 game console. There were many technical limitations for visual this goal.

Released in 1977, Atari 2600 game console had only 128 bytes system memory and the game cartridges for it had only 4 KB capacity. Since even the text-based “Colossal Cave Adventure” needed hundreds of kilobytes of memory to run on the PDP-10 mainframe computer, this was quite challenging. Also, Atari 2600 hardware allowed a limited number of memory registers, a limited number of moving objects, almost no offscreen memory and forcefully mirrored maps per screen. Still, Robinett found many technical workarounds for these limitations.

During the development, Robinett also had problems with Atari management. First his supervisor, “George Simcock” didn’t support the project with the knowledge of the memory amount such game needs. But after Robinett presents a prototype the president and the CEO of the company at the time, “Ray Kassar” was impressed and allowed him to work on the project against Simcock’s supervision. But then the company told Robinett to make a Superman game using this prototype’s code because of a movie released at the time. Robinett wanted to stay focused on his adventure game project. The situation ended up with another game designer “John Dunn” using the prototype source code to make the Superman game Atari wants. By June 1979, Robinett finished his work on the game. He worked with “Steve Harding”, game manuals author to create a plot. Then he submitted the complete project to Atari.

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At around these times, Atari had been removing the names of developers from their games and wasn’t crediting them, mostly for preventing other companies from hiring their developers. However, this act of the company angered many developers such as Robinett and made them leave the company. Robinett too left Atari shortly after he finished “Adventure”.

Atari released the game after his leave, and it sold incredibly. The company made more than 25 million dollars from the “Adventure” release while they paid Robinett only 22000 per year. And they didn’t even credit Robinett as the designer.

However, after a while, a fifteen-year-old player, named “Adam Clayton” found a “secret room” in the game. The news spread fast and the secret room was known by every single video game enthusiast. If the player follows a certain order of action they could walk through a wall and find a room that contains a text that reads “Created by Warren Robinett” written in large flashing letters. Between all those technical limitations, Robinett somehow managed to hide a huge chunk of code that occupies 5% of the game cartridge storage.

The cost of pulling the game from shelves and making a new memory chip for future releases for the game was quite costly. Also, the programmer who managed to find the responsible code in the game wanted to be credited as changed the same text “Fixed by Brad Stewart” as well.

Ultimately, the director of software development in Atari, Steve Wright, claimed that the secret room made more players buy and play the game and that it simulates the feeling of finding easter eggs. Hence the name “easter egg” originated. So, they left the secret room untouched in the future released. Moreover, Wright created a company policy to include an easter egg in all future Atari games. Thus, the “Easter Egg” element was added to the video game history.


“Pac-Man”, and the first video game with 3D graphics “Battlezone”

In May 1980, Namco released an arcade game designed by “Toru Iwatani” named “PUCKMAN”. The game was about a yellow circular player figure, moving through a top-view maze and try to collect (eat) all “dots” while AI controlled ghosts were chasing the figure. While Midway Games were distributing the game in the United States, they noticed the “P” letter in the game’s name was looking too similar to letter “F” on the game cabinets. So, to avoid the vulgar misreads they changed the name into the way Japanese people reads. With this name, “PAC-MAN” became an instant hit. In a time, space-themed arcade games dominate the market Pac-man made a difference. Also, Pac-man appealed a wider range of people as while usually 90% of the players of space-themed arcade games were males, 60% percent of PAC-MAN players appeared to be females. The game became so popular, it started “maze chase” genre of games. There were even songs and TV shows based on the game. Different versions of the game were released following the first Pac-man. It is estimated that all versions of Pac-Man made over $12 billion in total revenue in today’s value.

By November 1980, Atari released a new arcade game cabinet that does something completely new, playing a game with three-dimensional models. The game was tank warfare themed and had single color vector graphics to render tanks on a plane with mountains at the horizon. The player could hide behind the objects on the plane and seek enemies with a top-view radar. The enemies were sometimes slow tanks, and sometimes fast super-tanks that will fire back at players controlled tank. The player could also hunt non-aggressive UFOs and bonus missiles for scores.

“Battlezone” was such a significant immersion for people at the time that, the US government ordered a modified version of the game for military training. This version of the game was named “The Bradley Trainer”, aka “Military Battlezone” or “Army Battlezone”. During this time, some Atari developers, including the original programmer of the game “Ed Rotberg” started refusing to work on the game because of its relation with the Army. Rotberg returned to the project only after Atari promised him that they wouldn’t make him work with the army in the future, to make him finish the project.

The arrival of 3D graphics and more powerful hardware brought more complex concepts in games and led the careers of a “Game designer” and a “game programmer” to be considered as distinct, separate professions. Game developers and designers started to work in larger teams to create comprehensive projects. Thus, it had a significant impact on the game industry and video game history.


Two bad years of the video game history

“Video Game Crash”

Between the years 1983 and 1985, the video game industry experienced a crash. There were multiple factors that caused this. First, the increase in the number of game consoles and available games hurt the revenues of video game companies individually. Compared to the previous year, the estimated demand in the market had increased by about 100%, but companies increased manufacturing by about 175%. However, the most notable reason for the crash was the development in the personal computers market. People lost interest in home video game consoles as they could play games on their computers as well as doing other things.

During the two years time period, revenues of the video game companies dropped almost 97 percent. Many personal computers and home video game consoles companies bankrupted. Hundreds of people left unemployed. Although the crash hit North America the worst, it shook the whole world. People called it the “Atari shock” in Japan.

Today, “Video game crash of 1983” is considered as the end of the second generation of console video gaming that includes popular consoles like Atari 2600, and Magnavox Odyssey.



Brilliance in simplicity, “Tetris”

A Soviet Russian artificial intelligence researcher “Alexey Pajitnov”, was working for the Soviet Academy of Sciences at Computer Center in Moscow. In his job, Pajitnov was tasked with testing the capabilities of new hardware. He would do this test by writing and running simple games for them.

During the testing period for an “Electronika 60” computer, Pajitnov created a game where the player needed the stuck up shapes neatly. To prevent the screen from filling up quickly, he made full lines remove themselves and make space for new lines. He derived a name for the game from the Greek numerical prefix “tetra-” as all shapes in the game contain four blocks/letters (since “Electronika 60” was only a text-display computer), and as a combination of tetromino and tennis, he called it “Tetris”.

Pajitnov’s colleagues loved this game. His friends “Dmitry Pavlovsky” and “Vadim Gerasimov” created a version of the game for IBM PC. From here the game spread across the world and created a huge brand over time. Tetris had so many ports on different platforms that it is one of the most available games in the video game history. Today, although there are many clones of the game, licensed copies of the game and revised version for new game styles are still making millions of dollars every year.


The savior of the industry, “NES” and “Super Mario Bros”

In the early 1980s, Atari 2600 had become quite popular as a home video game console. Especially when Atari ported “Space Invaders” to 2600 in 1980, the sales multiplied by four. This made many other manufacturers want to get into the same market. Nintendo was one of them.

In previous years, some popular arcade games of the company such as “Donkey Kong” (1982) and the first, non-super, “Mario Bros” (1983) got ported to popular game consoles in the market, including Atari 2600, Intellivision, and ColecoVision, and they received quite a positive response.

After a few experiments of “Color TV Game” console with built-in games, in 1983, Nintendo released their first cartridge operated home video game console “Famicom” (Family Computer) only in Japan. They sold over 500,000 units within two months. However, after a few months, turned out that some Famicom consoles had malfunctioning chips and Nintendo decided to recall all Famicom units from shelves with a cost worth of half a million US dollars. The sales continued but this problem held the company from moving to the US market for a while.

During the time, “Video game crash of 1983” occurred and brought down the majority of the video game industry in American, including the market leader Atari. The market focus shifted to Japan and two Japanese company, Nintendo and Sega became the market leaders.

Nintendo took its lesson from this crash. Before it almost died, the old market leader Atari had made many mistakes like publishing games with terrible qualities just to saturate the market even more, and Nintendo was determined to do better. In order to protect the level of quality, they created a system named “Seal of Quality” which authorized third-party developers to produce and distribute games for Nintendo consoles but only if their games ensured a certain level of quality. This business model later became a standard. Konami was the first company that received this approval.

Nintendo remodeled the Famicom consoles they sell in Japan and gave it with a new look and a new name “Nintendo Entertainment System” (NES) for the American market. Finally, in 1985, the NES was released in America. It received incredibly well and people loved the console.

Meanwhile, “Super Mario Bros.” got released first in Japan and then the US. The game became a huge success and helped the console sales even more.

By the end of 1986, NES consoles were available nationwide in the US along with 15 games and many add-on devices. Many high-quality NES games released in the same year. With the help of critically acclaimed game releases such as “Metroid” and “Super Mario Bros. 2”, and “The Legend of Zelda” as well as the commercials and a monthly gaming magazine “Nintendo Power”.

Today, the NES console is considered as it recovered the gaming industry in the US from its crash. Ultimately, Nintendo sold near 62 million NES units and made. And this number doesn’t even include the potential sales in most of Europe and Asia as in those areas majority of NES consoles were knock-off clones.

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Following this success, Nintendo would release new game consoles in every upcoming video game console generation, starting with the “Super Nintendo Entertainment System” (SNES) in 1990 which had the name “Super Famicom” in Japan.


Entering the era of Handheld games with “Game Boy”

After the success of NES home game consoles, The Japanese manufacturer “Nintendo”, released a portable gaming device called “Game Boy”. This wasn’t actually the first handheld video game device ever in the video game history. Many portable games were made in the past. Nintendo itself had simple portable video games called “Game & Watch” in the market since 1980. Moreover, the company’s competitors were already producing technically superior handheld gaming devices such as Sega’s Game Gear, Atari’s Lynx, and NEC’s TurboExpress.

However, Nintendo saw “Game Boy” as a device between a handheld version of the NES (Nintendo Entertainment System) consoles and a “Game & Watch” (Handheld electronic game device Nintendo produced 10 years ago). So they made it accessible and durable as possible. It worked perfectly. Thanks to its long battery life and built quality, “Game Boy” outsell others and sold a million units in the United States just in a few weeks.

The first Game Boy model with a matrix-dot screen became an essential gaming device for the children and even the adults of the time. Together including the later models of the device with colorful displays, stronger, and even 3D capacities GameBoy product line would be one of the best selling gaming devices as a family.


The first MMORPG with graphics “Neverwinter Nights”

Earlier in the video game history, there were some examples that can be technically considered as “online games”. However, they were not online games as we know it. These “games” usually were chat-focussed virtual worlds or MUD (Multi-User Dungeon, text-based roleplay) games with online functions such as CompuServe’s “Island of Kesmai” or Lucasfilm’s “Habitat”.

The first online graphical roleplay game in the way we know today was released by Strategic Simulations in 1991. The name of the game “Neverwinter Nights” and it was based on Dungeons&Dragons Universe. The game that developed by using Gold Box Engine, initially designed to run on the popular computers of the time “Commodore 64” and the online function were possible through “AoL” which was one of the early pioneers of the Internet. Later the game got ported into PC platform. From 1992 to 1997, the game made between US$5 million and US$7 million annually for its publisher.

In the game, players were to create a character and enter the world represented with simple graphics. They could interact with the world and the other characters via a text menu next to world view.

The first game MMORPG that resembles the modern gameplay of the genre would be “Meridian 59” which would be released in 1996 by 3DO, featuring first-person 3D graphics. However “Neverwinter Nights” became a precursor of the genre by far defined the genre of the biggest MMORPG titles of their time such as Ultima Online (1997), EverQuest (1999) and much later “World of Warcraft” (2004).


First person corridors plus guns, “Wolfenstein 3D”

After their first game release, “Commander Keen”, in 1990, Id Software was ready to try new things. Programmer “John Carmack” started experimenting with a self-made 3D game engine in 1991. He created “Hovertank 3D” and “Catacomb 3-D” in the process. Later in a meeting, the company decided to make a less family-friendly game than “Commander Keen”. With the suggestion of programmer “John Romero”, they chose to make a remake of the 1981 stealth shooter “Castle Wolfenstein”. Romero and designer “Tom Hall” designed a unique, fast and violent game on Carmack’s engine and named it “Wolfenstein 3D”. The player was an escaped prisoner in a castle controlled by WWII Fascist soldiers. And the fast-paced game featured guns, attack dogs, blood, swastikas.

They released the game in May 1992 as two sets of three episodes with a shareware form that you can play the first episode for free and buy the full game for the rest. It was a remarkable instant success in video game history. Despite the games violent and political content, the market loved the game. Wolfenstein 3D got ported to almost every computer system in a short time and sold incredibly. Even though it is technically not the first “First person shooter” game, Wolfenstein 3D undoubtedly started the trend of the genre as we know it.


The Legend, The Slayer, “DOOM”

Shortly after the Wolfenstein 3D release, “John Carmack”, “John Romero” the rest of Id Software team began working on a similar 3D first-person shooter game. This time it was an original sci-fi plot, with demons on Mars. They named the game “DooM”.

Doom featured 3D graphics that was unprecedented on personal computers or even video game consoles. Thanks to Carmack’s modified engine the game could run almost every personal computer of the time. The game was also one of the earliest examples of both local network cooperative and competitive gameplay capabilities.

Id Software wrote its name history thanks to the Doom’s shareware model that gives you an episode to play for free. Almost everybody tried the game. Most loved it, the rest appreciated the technical achievement. Even the founder of Microsoft “Bill Gates” starred in a commercial for Doom’s Windows port.

Doom shook the industry so hard, almost every other video game company released first-person-shooter games in the following years, these games were simply known as “Doom clones”. Doom also had its own follow-up in this time period, “Doom II” released in 1994 and other expansions and versions of the two games such Master Levels for Doom II (1995) and Final Doom (1996). Doom became such a significant cultural phenomenon in society, its violent style eventually started a new wave of complaint about the dangers of violence in video games.

Just like Wolfenstein 3D, Doom too got ported to many computer platforms and video game consoles. Thanks to the official release of the game’s source code in 1997, even after better game engines dominated the video game market, Doom fans continue to create modifications for the game. And, people ported Doom to an insane number of devices. ATMs, calculators, printers, automobile media players, or vending machines are just some examples. Today, through modern ports, the game still has active players around the world.


Compact Disks of Gaming, “PlayStation”

As the technologies evolve, read-only memory storages on game cartridges began to struggle on containing games with their ever-increasing file sizes. Producing game cartridges with larger capacities was too expensive to be profitable. So, companies in the video game industry started to tinker with alternative larger media storage formats. Widely popularized technology of Compact Disk or CD was one of the cheaper and practical alternatives. So, leader video game companies like Nintendo and Sega started to develop their new ways to use CD drives instead of ROM cartridges.

In 1988, Nintendo established a partnership with Sony to develop a CD-Rom extension for their vastly popular Super NES (Super Famicom, in Japan) Game consoles. The add-on was to expend the power of SNES units with more capacity and processing power.

Two companies worked on the technology over the years and completed the development of the add-on device, as well as a separate standalone, hybrid console. This standalone device was dubbed as “Nintendo PlayStation”. But before the prototype testings completed and the product reached the consumers, Nintendo announced another partnership with Philips regarding SNES based CD technologies and offered Sony to work on non-gaming related projects. This move created a rift between the two company, resulting in the termination of the contract. Nintendo started to develop a new CD add-on with Philips, but the end product never succeeded. Meanwhile, Sony directives decided to use the “PlayStation” technology and developed their own game console to enter the video game industry.

In 1995, Sony released its first game console “PlayStation”, without changing the prototype name. And PlayStation was the starter of a new generation video game consoles. This generation was called Fifth generation, and it was all about 3D capable consoles such as PlayStation, Nintendo’s Nintendo 64 (used cartridges), and Sega Saturn.

The CDs as game storages allowed game designers to be more free about their content. And Sony as a company supported the game designer for PlayStation title. Therefore PlayStation started to offer games on a unique level of quality.

In a short time, Sony became a massive name in the video game industry by selling 20 million units of PlayStation in just two years. This sales success has been a major milestone in the history of video game.


The genre-defining “Diablo”

In 1995, during the development of another game for Sega Genesis, video game designer “David Brevik” came up with the idea of a roleplaying game called “Diablo” for PC. The genre wasn’t new, and his project got rejected by multiple game publishers with the claim of that “RPGs are dead”. However one of the publishers in the business, “Blizzard” which recently succeeded with its RTS game named “Warcraft”, took an interest in the game. During the development of Diablo, Brevik’s game studio “Condor Games” changed its name and became “Blizzard North”.

Initially, Diablo designed with turn-based mechanics, but later in development, Blizzard wanted it to be real-time similar to their previous game Warcraft. Also, the original art style for the game was claymation which then changed into 3D isometric style instead.

The gameplay was uniquely fluid for the RPG games at the time. Player moved the character with the mouse and used the keyboard for other actions (In the later PlayStation version, the movement was controlled directly with the controller).

Diablo featured multiple classes for playable characters, non-player characters (NPCs), sixteen different randomly generated dungeons, and four-player multiplayer which allowed players both play co-operatively or aggressively against each other.

When it was released in 1996, Diablo has received critical acclaim by receiving near full scores in reviews. The game’s graphics, random dungeons, rich content, and multiplayer aspect made the game stay in the top lists for a long time. Ultimately, the game sold over 2.5 million units. During the following years, many Diablo clones were released, and all got compared to Diablo and its sequels. Basically, Diablo has shaped the future of the “Action-RPG” genre as a template in the video game history.


The last console from Sega, “Dreamcast”

After Sega achieved over 30 million unit sales with their last generation console “Genesis”, which was their highest selling console ever, the company tried to continue the success with the next generation.

Sega was the first video game company that released a game console considered in the sixth/next generation era. Released in 1998, their new console was named “Dreamcast”, and in many ways, it was quite capable. However, it left short compared to the other game consoles in the same generation and eventually it didn’t sell as well the company hoped. Facing the wide gap that occurred between Sega, and other leaders companies in the video game console business. Dreamcast would be the last home video game console Sega manufactured.

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Best-selling video game console ever, “PlayStation 2”

After the success of the first PlayStation, Sony kept the development of their new video game console relatively as a secret. When they announced “PlayStation 2” in 1999, with a DVD player, Internet capabilities, and backward compatibility with the original PlayStation games, it attracted quite an interest. When Sony released the console in 2000, they positioned “PlayStation 2” as a competitor to Sega’s Dreamcast. However, Dreamcast left short on the sales among other consoles in the generation. After a while, PlayStation 2 past the sales of all other consoles and made Sony the leader in the video game console business.

Although the backward compatibility of the console was quite limited and removed in later versions of PlayStation 2, it started an interest in the concept of backward compatibility in consoles. As Sony did with their previous game console, they supported the game developers and accessories manufacturer. They also managed to attract more customers with exclusive game titles. Ultimately, other video game consoles in the same generation, Xbox (24 million), GameCube (22 million), and Dreamcast (9.13 million) didn’t sell as good as PlayStation 2. PlayStation 2 sold over 155 million units and became the best-selling video game console ever in the video game history (including present day).


A new platform, “Smartphones”

Starting with the early 2000s, major communication manufacturers began to release cellphones so capable that they could do many things much better than the previous generations, including multimedia functions such as browsing internet, music, video, cameras, and gaming. This generation of cellphones got the name “Smartphones”.

Most cellphones from the previous generation had games on them too, however, they were usually small gimmicks that manufacturers put in and generally it wasn’t possible to change them. Smartphones allowed users to install new application including games. This capability created a whole new platform for game designers. Undoubtedly, the game industry has come to a new era of video game history. Many video game companies started to release games on different smartphone operating systems like JavaOS, BlackBerryOS, Nokia’s Symbian, and Windows Mobile OS.


The game console of Microsoft, “Xbox”

The early years of the 2000s became the years of “Next Generation” gaming systems. These video game system considered as the Sixth generation of video game consoles. Following Dreamcast and PlayStation 2 releases, Nintendo released GameCube in 2002. In the same year, Microsoft released its first video game console.
Microsoft was losing its fuel in the video game industry as PlayStation 2 started to attract video game customers from Microsoft Windows platform.

The project was started with four DirectX 3D API engineers disassembling some Dell laptop computers to convert them into prototype Windows-based video game consoles. They ended up building a DirectX based video game console. They called the project “DirectX Box”. During development, this name shortened to just “Xbox”.

With its Windows ties, Xbox was an easier platform to develop games for designers. Microsoft also acquired Bungie game studio for making quality self-made Xbox titles. So, many popular games released for Xbox in a short time. Although the console couldn’t surpass PlayStation 2 it sold better than all other major video game consoles. Therefore Microsoft became a major video game company on top of being the biggest software company. They would release new Xbox consoles and compete with PlayStation in every future game console generation.


Handheld again: “Nintendo DS”, and “PSP”

During the hype of next-generation video game consoles, handheld video game device started losing the popularity. Although some companies released competent devices during this period, like SNK’s Neo Geo Pocket and Nokia’s N-Gage, they didn’t do well in the market.

Nintendo changed this by releasing “Nintendo DS” in late 2004. Short for “Dual Screen”, DS had two screens built in a clamshell form factor (the bottom screen featured touchscreen functions). Thanks to it device-to-device multiplayer capabilities and impressive backward compatibility that allows players to use older Gameboy cartridges, DS revived the handheld video game market.

In 2005, Sony answered Nintendo with releasing a handheld member in PlayStation family, “PlayStation Portable” or just “PSP”. The device was the most powerful handheld game console when it was introduced. PSP used optical disc format (Universal Media Disc, UMD) as storage similar to other PlayStation devices. With its internet and connectivity capabilities, PSP became quite popular as a portable media device. Although it couldn’t catch up with the sales of Nintendo DS (154 million), PSP managed to sell 82 million units and made Sony continue releasing more PSP model in the future.


Motion controlled “Wii “, and sophisticated “PlayStation 3”

Nintendo released a new video game console named “Wii” that players can interact with by moving its controllers in the air. This technology impressed the video game market and Wii received quite well in sales. Sports games like tennis or bowling became quite popular on this console since the controller allowed players with gestures just like the real life.

Later in the same year, Sony released its most expensive video game console ever, “PlayStation 3”. Although the hardware was more capable than previous consoles, the game development was difficult for this console because of the chipset Sony used. Although Sony even tried to release a movement based controller that worked like Wii Controllers, there weren’t many games that could implement the mechanics. Since the cost of production for the console was expensive PlayStation 3 was more expensive than all of its competitors. Sony tried to cut prices but ended up losing money in the process. Eventually, Playstation 3 sold about 80 million units but Sony only managed to make profits from the console after 2008.


The birth of smartphones as we know it, “iPhone”

In 2007, Computer manufacturer Apple released its touchscreen-only smartphone “iPhone”. At the time iPhone was far more capable than other smartphones in the market. The phone was using the companies new operation system “iOS”. This operating system allowed video game developers to create and publish games even easier than other smartphones.

Next year they would introduce web-based “The App Store” service which allowed video game developers to publish their games directly to iPhone users. Mobile game design market would explode after this point.

Other current smartphone operating systems like Symbian continued to develop for a while but game designers would focus on iOS since they could make money with that platform much easier.


A new challenger, “Android”

In 2005 internet giant Google acquired a software company called “Android Inc.” which was working on a new Linux-based smartphone operating system.

After Apple released iOS in 2007, Google announced that it will release “Android” on the first Android-operated smartphones made by HTC. They became a companion for iOS in no time, since Android offered almost the same functionality with an open-source code while iOS wasn’t.

Also, Google provided Android with its own application market similar to Apple’s AppStore. Since this market was taking smaller commissions from the application sales, Android attracted many mobile game designer.

Due to Android’s open-source and free nature, within the next few years, almost all smartphone manufacturers started to release new smartphone models running on Android. Although it didn’t eliminate the Apple in the Smartphone business, Android devices dominated the market.

Within the next few years, Apple’s iOS and Google’s Android would become almost the only two operating systems on smartphones. Eventually, new video game companies that only release games on these platforms started to develop. And the market for smartphone games would reach millions of dollars in worth.


Start of the Virtual Reality Era

Virtual reality (VR) was an idea that video game companies wanted to achieve for a long time.

In the past, many pioneer companies designed VR headsets. Sega announced “Sega VR” in 1991 but never released it. Forte Technologies released “Forte VFX1” in 1995 but due to the limited content and its high price prevented it never became a popular device. Sony released “Glasstron” in 1996 but again they sold a limited number of units. All these devices had common technical limitations because the technology wasn’t there yet. It was never an immersive experience. In time most companies lost their interests in VR.

Later in 2012, a company called “Oculus VR” which was led by many well-known video game developers including John Carmack from ID Software started a crowdfunding campaign for a VR headset named “Oculus Rift”. This Google like head-mounted-display (HMD) device was to connect Windows PCs as a side-by-side 3D display and the viewers would be able to turn their head to look around in 3D video games. The project became famous in a short time. In 2014, the giant internet social media company Facebook acquired the VR company for $2 billion and funded the project further. In 2016 consumer version of Oculus Rift was released. Thanks to the developer devices they sold prior to the consumer edition, Oculus Rift had many indie games to play on release.

After the initial announcement of the Oculus Rift and the positive response from consumers, many other technology companies started to develop their own VR headsets. So, following the first Oculus Rift release, multiple different VR headset models were released. Most notably, Smartphone manufacturer HTC partnered with the video game publisher and released “HTC Vive”, a VR headset that was compatible with the Valve’s leading online video game market ecosystem Steam. HTC Vive became the first competition for Oculus Rift. Other companies followed them, including the multiple headsets made by different computer brands that used “Windows Mixed Reality” (WMR) ecosystem developed by Microsoft (which was announced in 2015). Almost all of these companies released improved versions of their HMDs as the technology develops and the market grew.

Without a long time passed after the first major branded HMDs, many major video game companies started to develop VR game projects.

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