Category Archives: Game History

Why Are Today’s Video Games So INexpensive?

The other day I overheard someone complain, “Why are video games so expensive? $60 for new games! Consoles are hundreds of dollars1 Plus you have accessories and controllers ($60 each). If you want to play online these days most consoles charge a subscription fee1 Why is it all so damn expensive?”

Kids these days. They don’t know how good they have it!

Back in 1977, the Atari 2600 game console was released at a price of $199. In today’s dollars, that would be close to $800.

Today, console systems are sold at close to their manufacturing cost. The reason that the console manufacturers are able to sell their hardware so cheaply is that they make their money from a percentage of the sales for each video game made for their system.

In 1993, Doom, one of the most popular titles of its time, was sold at a retail price of $49.99. That would be $85.00 in 2017 dollars, which is more expensive than what the average AAA game costs today.

So, again, the question is how can game publishers sell their video games today so cheaply? In the 1990’s, the average video game budget was around $100 thousand, and today the average budget for a AAA game is about $60 million. That’s 600 times more expensive to make, yet the retail price is essential the same.

The answer is: volume. Because so many people buy and play video games now, game publishers manufacture more games and can sell them at a much cheaper price, adjusted for inflation, than they did 25 years ago.

That’s why video games today are so cheap.  Now, excuse me while I go to Starbucks to get my $5 cup of coffee.

 

 

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A Console Carol

The Christmas shopping season has always been very important to the game industry, and many video game developers target their release dates so that their games hit the store shelves in October or November. Video games have long been a popular gift for good little boys and girls, and nothing can make a child happier than seeing a new console system under the tree on Christmas morning. However, many of the young folks who play video games today on their Xbox’s, PlayStation’s, and Wii’s are unaware of the history behind this holiday tradition, and so I will use this week’s blog post to tell the story of the first console systems.

Our story starts just after the end of World War II, when the earliest known interactive arcade electronic game, the prosaically named Cathode Ray Tube Amusement Device, patented in 1947 by Thomas T. Goldsmith and Estle Ray Mann. It was a missile simulator using analog circuitry to control the CTR beam and position a dot on the video screen. However, this invention was apparently never built.

The first video game ever actually made was Tennis For Two, created by physicist William Higginbotham on a Donner Model 30 analog computer in 1958. Higgenbotham (love that name!) was actually developing missile technology, but he created the game to entertain visitors to his lab. Tennis For Two was actually more a diversion than an entertainment because the first video game that people were actually eager to play was SpaceWar, programmed by a group of MIT students on a PDP-1 computer in 1961. It is considered by many to be the first influential video game.

The first coin-operated video game was a version of SpaceWar developed by students at Stanford University in 1971. The console incorporated a DC PDP-11/20 with vector displays. A few months later came the first commercially sold arcade video game, Computer Space, created by Nolan Bushnell and Ted Dabney of Nutting Associates. The display was rendered on a specially modified General Electric 15″ black-and-white portable television vacuum tube set. Unfortunately, the reaction from distributors was mixed; while some were excited by the game, others felt it to be confusing and part of a passing video game fad. By spring 1972 the game had sold over 1,000 unit. While this was a commercial success, making over US$1,000,000, it was a disappointment to Nutting.

The following year, 1972, Bushnell and Dabney formed a new company, Atari. They hired engineer Allan Alcorn as its first employee, and he created a coin-op version of the Magnavox tennis game and named it “Pong”. Pong was so successful in bringing video games to the masses that Atari is credited with starting the coin-op video game industry.

Of course, these video games all played on specially modified television sets, and to learn about how they appeared on screens in the home, we have to turn the clock back to 1951, when an engineer name Ralph Baer was making television sets at the electronics company Loral. As he was making adjustment to the electronics, Baer realized that by giving audience the ability to control what was projected on their television set, their role changes from passive observing to interactive manipulation. He excitedly explained this revolutionary idea to his manager, who replied, “Bah, humbug! Get back to work or you’ll be losing your position! We’re behind schedule, and I have no time for such frivolous notions!”

Fifteen years passed by, and the undaunted Baer was working at a more forward-thinking electronics company named Sanders Associates. He and his co-worker, Bill Harrison were given permission to work on a secret project with the codename Game Unit 1. It was the circuitry to make spots on a television screen chase each other. Chase would go on to become the first video game displayed on a standard home television set. It used the first video game peripheral — not a joystick, but a light gun developed by Harrison. But Baer and Harrison didn’t stop there! They had grander plans in mind! The duo went on to develop the first video game console system, which Baer called “The Brown Box”. It could play several different games such as table tennis and target shooting. By 1969, Sanders Associates was showing the prototype to various television manufacturers.

Magnavox signed a deal with Sanders to sell Baer’s “Brown Box” console system under the name Magnavox Odyssey. Released in September 1972, just in time for the holidays, it sold 330,000 units over its lifetime, including one unit that wound up under the Mullich family’s Christmas tree. The Odyssey came with 27 games — including Simon Says, Volleyball, Shooting Gallery, and Table Tennis. However, to make the system affordable to manufacture, Magnavox used electronics for displaying black & white images. The only color in the game was from plastic overlays that players put on their screen to represent each game’s playing field.

1n 1975, Atari created a home version of Pong that was sold through the big retailer Sears. Called the Atari/Sears Tele-Games Home Pong, it became Sears most successful product during that Christmas shopping season and sold 150,000 units over its entire lifetime.

Soon it seemed that every electronics manufacturer was making console systems. Pong “clones” had flooded the market and manufacturers sold older, obsolete clones at a loss. Many manufacturers abandoned their console game business, leaving only Atari and Magnavox. The crash came to an end with the success of Taito’s Space Invaders in 1978. By 1981, the game grossed over $1 billion (more than Star Wars, The Empire Strikes Back, and Return of the Jedi made in their initial theatrical runs combined), making the video game the best-selling entertainment product of its time. Space Invaders is considered to have started what is now called The Golden Age of Arcade Games, which included the release of Asteroids, Pac-Man, and Donkey Kong.

Then came the Video Game Crash of 1983, a cataclysmic whose thought still sends a shiver down game developers’ spines, when revenues that had peaked at $3.2 billion that year fell to $100 million by 1985, almost destroying the industry. The crash blamed on a glut of low-quality video games (such as the infamous E.T. game), a flooded console market, and competition from home computers like the Apple II, Commodore PET and TRS-80.

Thing looked dire for the nascent video game industry… until a shiny new star rose in the East — The Nintendo Entertainment System. Initially released in Japan as the Famicom (Family Computer) in 1983, it was the first console of the 8-bit era, with tile and sprite-based graphics and introducing the gamepad controller. The system was released in North America and Europe as the NES in 1985, where it was an instant hit, and a long-lasting one at that. The NES had the longest production run of any console in history (1983-2003 and sold 61.91 million units worldwide. It is still considered to be the greatest video game console of all time, for it ended the Video Game Crash of 1983 and saved the video game industry from an early grave. Mario bless us, everyone!

And with that, allow me to exclaim as I scroll off with a grin, happy gaming to all, and to all an epic win.