The History of Gaming Consoles

Video games might have once been considered as a part of the “geek” or “nerd” cultures but such stereotypes have all but vanished. The history of gaming consoles may not be well-known to the younger generation but its effects are visible everywhere.

Today, the video gaming industry is valued at almost $2 trillion. In 2013, an estimated 1.2 billion people played video games regularly. Two years later, the Entertainment Software Association revealed that four out of five households in America had some kind of a video game console.

A brief history of gaming consoles

To describe the entire history of gaming in detail, a book would be a far more appropriate medium than a brief webpage. This article will simply focus on providing a brief – and hopefully accurate – description of the history of video gaming consoles from the early days until today.

However, this means that there will be several omissions. If there is anything about the history of video gaming that you consider interesting or noteworthy, please feel free to leave a comment down below and share your thoughts with us and your fellow readers.

The early days

The most common way to describe the timeline of home video gaming consoles is to refer to generations. With that in mind, the first generation has its roots in the 1950s. Before that, the only known example of a video game was demonstrated in New York World’s Fair in 1940 by Dr. Eduward U. Condon.

Ralph H. Baer, known as the “father of video games”, proposed the idea of playing games on television screens while working for electronics company Loral. Though his idea was rejected at the time, he initiated a project that would see eight different prototypes for video gaming consoles while working for Sanders Associates.

One of those, the famous “Brown Box”, could play six different titles, including ping-pong and a light-gun based game which was quite technologically advanced for the time. Even so, no company seemed to have an interest in such a thing, at least for the first couple of years.

By 1971, however, demonstrations of the console resulted in an agreement between Sanders Associates and Magnavox, culminating in the release of the Magnavox Odyssey, the first home video game console in the world in 1972.

Atari’s contributions

Atari was not the first company to release a home video gaming console, despite the common misconception. Even so, it was indeed the first highly successful company to do so and its contributions to the history of gaming consoles cannot be denied.

When the Magnavox Odyssey was released, it sold around 300,000 units. Seeing as how video gaming was an entirely new concept at the time, such sales are certainly quite successful. Nolan Bushnell, however, who co-founded Atari in 1972, had much bigger goals in mind.

In 1973, Atari started selling Pong, the immensely successful game which has been cloned innumerable times since. Arcade machines began to appear in commercial and social settings, including shopping malls and bars.

Video gaming was entering the mainstream and more and more companies took notice. Atari itself started selling a home version of its Pong game in 1975 which saw more than $40 million in sales during the 1975 Christmas period alone.

The turbulent second generation

By 1977, Atari knew that gaming consoles had to diversify in order to create a successful market because Pong was not going to cut it forever. Towards that end, the company released the Atari 2600 (originally known as Atari VCS) which at first failed to meet sales expectations.

What would save the console and propel the industry forward was its ability to play additional video games other than the ones included with the original bundle. The release of Space Invaders in 1980 was enough to solidify the console’s popularity and surge sales forward.

During the same time, several new competitors entered the field. In 1976, Fairchild released the Channel F, the first programmable home console. Though its ideas were great, the market was headed elsewhere at the time and the system did not see much success and was discontinued in 1978.

Magnavox continued to release new iterations of its console with various small improvements. The Odyssey2 was moderately successful, particularly in Europe, but Atari still dominated the market in the US.

Mattel’s Intellivision introduced 16-bit systems in 1980. Even though it could have faced tremendous success, its focus on sports games and lack of third-party support placed it below the Atari 2600.

Though everything looked great for the industry, a host of low-quality titles, clones, and copycats made consumers lose interest in the market. In 1983, the industry experienced its first crash and revenues fell by a staggering 97 percent. The future of video gaming consoles, particularly in the US, seemed doubtful at best.

Nintendo and the third generation

In 1983, Nintendo released the Famicom in its native Japan. The console was an incredible step up from previous systems but the company was unsure of how to market it in the US, particularly since the industry had just experienced a major crash.

Thankfully, the Famicom was released as the Nintendo Entertainment System (NES). The console saw tremendous success, became the high-selling console ever, and video gaming characters slowly became a thing.

Mario was now iconic and smart business practices from Nintendo, including limiting developers and carefully curating titles, made it a market leader. Albeit smart, these practices were also later deemed illegal, but not before Nintendo had already solidified its dominance.

In 1985, Sega released the Master System as a direct competitor to the NES. Though it sold an impressive 13 million units, NES continued to dominate as it would go on to sell more than 60 million. Since it could not dominate the US market, Sega turned to Europe and South America where it fared much better.

Atari, the only company left (barely) standing after the crash, released a couple of consoles which failed to move too many units. The Atari 7800 basically saved the company from bankruptcy but could not displace the NES or the Master System from their places.

Though we will not concern ourselves with handheld consoles in this article – as a focused one will arrive in the near future – it is worth noting that the first major handheld console, the Game Boy, was released in the latter part of the third-generation in 1989.

The fourth generation – Sega and Nintendo fight it out

The first company to introduce a fourth-generation console was NEC with the PC Engine, also known as TurboGrafx16 in the US. This was the first console to be advertised as 16-bit, a name that would become synonymous with the entire generation.

Sega and Nintendo continued their rivalry with two systems that would compete at the highest level. Sega decided to capitalize on the massive success of arcade video games with the Mega Drive, known as Genesis in North America.

The company made its rivalry clear with effective anti-Nintendo ads and a huge array of titles, many of which were faithful recreations of popular arcade games or at least approximations of them.

Nintendo’s answer came with the Super Famicom, or Super NES (SNES). The console was a huge success and sales of other consoles almost grinded to a halt. Sega’s release of Sonic the Hedgehog would prove its saving grace and the Genesis continued to enjoy massive sales. The SNES came out on top, but only at the very end.

The fifth generation – The PlayStation changes the world

The 3DO and the Atari Jaguar marked the beginning of the new generation but neither console was successful, particularly because of some bad internal decisions. The Atari Jaguar was, in fact, one of the reasons why the company would soon be gone from the radar.

Sega, while poised perfectly in the beginning of the generation, made some terrible decisions with the release of Saturn. Poor communication with developers, a difficult development cycle, and poor releases in the West made the Saturn an unpopular choice.

Meanwhile, however, a new company was entering the industry. Sony release the PlayStation in 1994 and it became the high-selling console in history by a huge margin, selling more than 100 million units. Sony’s CD technology was revelation and its close relationship with developers proved highly influential.

Two years later, Nintendo released the Nintendo 64. With a series of highly acclaimed first-party titles, the N64 did manage to move quite a lot of units but not nearly as many as the PS1. This approach to first-party titles which drive its consoles forward has stayed with Nintendo until today.

The sixth generation  – Microsoft enters the fray

Video games were now established as a mainstream past-time with recognizable developers, characters, and video game franchises. Sega’s Dreamcast, released in 1999, was very well-received and was even the first console with built-in internet connectivity.

In 2000, however, Sony changed everything with the release of the PS2 which remains, to this day, the best-selling console of all-time with 155 million units sold. The first console able to play DVDs, PS2 moved from a simple gaming console to an entertainment center.

Meanwhile, Nintendo released the GameCube but once again decided to focus on first-party titles and exclusivity without support for DVDs. Even so, the GC did sell more than 21 million units so it can certainly be considered successful.

In 2001, Microsoft also entered the industry with the release of the original Xbox. Though the console was awkward in places, it ended up with the title of the second most successful console of the sixth-generation with video game franchises such as Halo becoming a hallmark for Microsoft.

The seventh generation – Gaming consoles sell hundreds of millions

By now, video gaming consoles were not only a multi-billion-dollar industry but also a huge part of technological infrastructures. While clones of smaller and older consoles continue to persist in some developing countries, only three companies remained as actual competitors.

Microsoft’s Xbox 360, Sony’s PlayStation 3, and Nintendo’s Wii were almost equally popular though the latter did sell ~100 million units whereas the first two sold ~85 million. Even so, the three consoles marked their place in history and tried to bring about several new trends such as Microsoft’s Kinect and Sony’s Move.

The eighth generation – The current market

The current generation of video games, affectionately known as “next-gen”, is comprised of Nintendo’s Wii U, Microsoft’s Xbox One, and Sony’s PS4, the most successful of the three. Though Nintendo is set to release a new system in 2017, Microsoft and Sony have invested considerably into the long-term viability of their own consoles, making a new generation unlikely for the next couple of years at least.


Though this article certainly did not cover every aspect of the history of gaming consoles, I do hope that many of you have learnt something new today. Explaining what a NES is to people is always interesting, particularly because our conceptions about video games have changed so much over the years.

As someone who has had the pleasure of experiencing many of these systems while growing up, I would be happy to answer any questions you have to the best of my ability so please feel free to start a discussion below!

By Adam Pothitos

Adam has been keenly interested in the mobile and marketing industries for as long as he can remember. He believes that the mobile and digital evolutions have completely transformed our world and wants to be a close part of that ever-shifting landscape. Towards that end, he has written for a number of online publications on matters of the mobile market, the computer industry, and all kinds of technology. When he’s not dealing with technology, he’s always interested in some good discussions on psychology.

8 replies on “The History of Gaming Consoles”

It was Ralph H. BAER, not Bauer, who is known as the father of the home videogame console. And Nolan Bushnell CO-Founded Atari, not founded. I couldn’t read any more after that.

Leonard Herman
Author of Phoenix IV: The History of the Videogame Industry

Seeing the fact that video game consoles have come a long way in
advancement, the innovative proposal of Ralph H. Bauer with respect to
designing a game to be played on television has to be well acclaimed in
making this dream become a reality.

PC Engine is third gen. It’s 8 bit and was meant to kill the NES. It did. The NES has to obey to the PC Engine. The 4th generation sucks.

This article is wrong in many respects, including the name of the man who invented the home videogame console. See my comment at the bottom.

Hi Leonard,

I apologize for those errors and have amended them in the post. Thank you for the input.

Admittedly, I am far from an expert on the matter, merely a gaming enthusiast who decided to do some research on the topic.

There are certainly several omissions in the article, because its scope is somewhat limited. If there is anything else you would like to add, please feel free!

It is fascinating to perceive how the gaming business has taken care of business from its humble beginnings in the past to the current propelled era including PS4, Xbox One and Wii.

Gaming is now more successful sector for the people. Today there are lot of people are engaged with this gaming industry. We also like to play more games in our computer, mobile etc. So today we are happy that we can know its history.

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