Category Archives: Game History

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.

In Celebration of Game Dev Independence

Almost every student entering my game production class as well as just about everyone else who asks me questions about game development has dreams of becoming an “indie developer”.  But very few understand what the term means, because they also have ambitions of creating “AAA games.  So, one this day, when we Americans are celebrating the anniversary of the day that the United States declared its independence from England, I thought I would write about what it means to be an independent developer.

Independent video games (commonly called indie games) are video games created by individual developers or small teams generally without video game publisher financial support.  Now, why would that be attractive to a developer.  Well, nobody gives or lends money without also exercising some level of control to help make sure that they will earn their money back.  And so, by accepting a publisher’s financing, a game developer was giving up control over their game.

For many years game developers had no option other than to make a deal with a publisher like Activision or Electronic Arts, because they had the distribution networks for getting games onto the retail shelves of Electronic Boutique, Game Stop, Best Buy, and WalMart.  Small game developers just didn’t have the sales force and clout to go to the store buyers independently.  Instead,  they approached a game publisher, and it was the publisher what games were worthy of their investment, passing on games that they judged to be too different from what they were used to selling.  Once the deal was signed, the publisher was very careful to safeguard their investment by closely monitoring the game’s development, demanding changes that they thought would make the game more salable, even if those changes conflicted with the developer’s vision.  And if the developer refused, the publisher would withhold the next development payment and even threaten to cancel the project entirely.

How did game developers come to escape such tyranny?   It happened in what I will call The Steam Age.

The Steam to which I am referring is the digital distribution platform developed by Valve Corporation and released in 2003.  Before developing Steam, Valve had experienced problems updating its online games, such as Counter-Strike; providing patches would result in most of the online user base disconnecting for several days. Valve decided to create a platform that would update games automatically and carry out stronger anti-piracy and anti-cheat measures. Valve also recognized that at least 75% of their users had access to high-speed Internet connections, which would only grow with planned Internet expansion in the following years, and recognized that they could deliver game content faster to players than through retail channels.

Valve began negotiating contracts with several publishers and independent developers to release their products through its Steam distribution platform.  Many indie developers saw Steam as an opportunity to reach their players directly without publisher interference, and by early 2011, Forbes reported that Steam sales constituted 50 to 70% of the $4 billion market for downloaded PC games and that Steam offered game producers gross margins of 70% of purchase price, compared with 30% at retail.

Of course, Steam was not the only digital distribution alternative to the big game publishers.  Other digital distribution services that followed. The years after 2004 saw the rise of many digital distribution services on the PC, such as Amazon Digital Services, Desura, GameStop, Games for Windows – Live, Impulse, Steam, Origin, Direct2Drive, GOG.com, and GamersGate.  Other alternatives include game portals like Addicting Games, Kongregate, Mind Jolt, Games2Girls, and many others.  Mobile game developers also found a way to around the game buyers at Verizon, Sprint, and T-Mobile when Apple launched the App Store for its iPhone, soon followed by Google Play for Android phones.

However, distribution was not the only reason game developers went hat-in-hand to publishers.  Games cost money to make, so without a publisher to act as the bank, how can an indie dev get money?  Well, here are some ways to fund projects:

  • žDay Job: Many game developers work a regular job during the day and do game development on nights and weekends.
  • žCredit Cards: Fund your game development through the plastic in your wallet.  Game developer Voldi Way told me that he lived off his credit cards for two years getting his indie game studio, WayForward Technologies, started and now its been successfully in business for over twenty-five years.
  • žFriends, Family & Fools: It seems that most of the potential clients who contact my consulting business want to develop a game based on money they’ve convinced friends and families to invest.  Why “fools”?  Games are a terrible investment, because most games never earn their development money back in revenues.  Hit games are the exception that everyone here’s about, not the rule.
  • žFestivals & Contest Prizes:  There are a number of game events that offer cash prizes for the best game.  The problem is, there are far more entries than winners.
  • žAngel Investors & Venture Capitalists: is an affluent individual who provides capital for a business start-up, usually in exchange ownership equity in your company.  Venture capitalists are similar, except that they are companies that invest other people’s money in start-ups.  The problem with both is that they are less interested in the quality of your game than in the value of your company, which their goal is to sell for a profit.
  • žIncubators & Accelerators: An accelerator works with startups for a short and specific amount of time, usually from 90 days to four months, offering a specific amount of capital, usually somewhere around $20,000. In exchange for capital and guidance, accelerators usually need anywhere from 3 to 8 or more percent ownership of your company.  Incubators focus less on quick growth and have no specific goal in mind for your company other than to become successful at the right pace. In fact, the goal of some incubators may be to prepare your company for an accelerator program. Incubators take little to no equity in your company, and can afford to because they do not give upfront capital like accelerators. Many incubators are funded by grants through universities, allowing them to give their services without taking a cut of your company.
  • žGovernment Programs: There are a number of governments eager to improve their country’s or state’s technological sector and will offer money through grants to software development, including games.  The trick is writing a good grant proposal, which is an art in itself and may require some professional assistance.

Once you get enough funding to start up your company, then there is all the business of actually running a company: renting office space, acquiring business licenses, purchasing equipment, hiring staff, getting insurance, setting up internet and other utilities, paying taxes, and all the other accounting, office management, and human resources tasks.

Developing a game is difficult and expensive.  You need to face the fact that you are not going to be building a AAA game like God of War or Call of Duty: these are the games that have the largest budgets and highest productions values.  Instead, aim for simple and small.  Now, that doesn’t necessarily mean poor quality, and it’s better to offer an hour of great fun than forty hours of mediocre gameplay.

In addition to developing your game, you need to advertise it and build an audience.  Don’t simply think, “If I build it, they will come.”You also need to be ready for the fact that your first game won’t be all that great.  It might take you several tries to develop a decent game, and even longer before you actually have a money-maker.  For example, Rovio developed 51 games and almost called it quits before coming up with Angry Birds.

And that’s why we should celebrate indie game development.  Despite all the difficulties and obstacles, indie developers still manage to create great games like Angry Birds, Super Meat Boy, and Minecraft.  It is thanks to these tireless freedom fighters who give the rest of us something different to play instead of the umpteenth sequel to the same ole, same ole.  Indie devs, I salute you!