While the VCR was staking out a substantial claim for itself on the home entertainment landscape, another home video technology also was establishing itself: the videogame.

The first idea for an interactive game that could be played on a TV screen came from Brookhaven National Lab researcher Willy Higinbotham. In 1958, Higinbotham built the first game using a computer and CRT screen display. The game was a tennis-like ball-and-paddle game and was available for public view at Brookhaven's Long Island, N.Y., labs for two years.

But there was little commercial interest in what was, at the time, a frivolous experiment.

In February 1962, the same month John Glenn became the first American to orbit the Earth, 25-year-old Steve Russell and a group of MIT researchers programmed Spacewar, an interactive computer game designed to be played on huge mainframe computers. Like Higinbotham, Russell and his MIT programmers created the game as an academic experiment and neither patented nor copyrighted the game. The concept of spacecraft firing missiles at each other was soon to become enormously popular in programming circles. Spacewar spawned two hugely popular games, Space Invaders and Asteroids, but more importantly, it may have inspired the programmers and engineers who began the development of the personal computer.

In 1966, Loral researcher Ralph Baer patented a ball-and-paddle game designed to be played on a home television. After shopping around the concept, it was licensed to Philips' Magnavox. In 1972, Magnavox introduced the first home videogame console, the Odyssey. The original Odyssey came with six video game cartridges, including Baer's original Tennis game.

Nolan Bushnell, inspired by Spacewar, saw a demo of the Odyssey and Baer's Tennis game and was impressed enough to quit his job at Ampex. Bushnell created a coin-operated arcade version of the paddle-and-ball game he called Pong. He manufactured the consoles through his new company, Atari, a term from the Japanese board game Go, which means "check" – the chess term – in Japanese. Bushnell later would have to pay Magnavox royalties for Pong. In 1975, Atari launched a home version of Pong that featured on-screen digital scoring. The system first was sold in Sears stores that Christmas under the retailer's Tele-Games label.

With the success of Pong, Atari began to market other games, such as video pinball and a racecar game called Speedway.

Videogame chip technology developed rapidly, and offerings for both Atari and Magnavox's Odyssey became increasingly more sophisticated in a short period of time. The two makers soon were joined by a third competitor, Coleco and its Telstar system in 1976. That same year, Bushnell hired two programmers named Steve Jobs and Steve Wozniak to design a game called Breakout. But Bushnell was over-extended and needed cash to keep Atari's momentum going. In October 1976, Bushnell sold Atari to Warner Communications (now AOL-TimeWarner) for $28 million.

In 1977, Atari unveiled the Atari VCS (Video Computer System), better known as the Atari 2600, which, at $200, became an instant success and the prototype for all videogame systems to follow. In the succeeding years, the Atari 2600 and its increasingly sophisticated successors were fed by home versions of popular arcade games such as Pac-Man, Asteroids, Donkey Kong and Space Invaders. By the end of 1980, Atari accounted for more than a third of Warner Communications’ income and was the fastest growing company in the history of the U.S.

That same year, Activision, formed by disgruntled Atari game programmers, became the first third-party videogame developer and soon was followed by dozens of others. New videogame hardware platforms, such as Mattel's Microvision (1979), Intellivision (1980) and Coleco's ColecoVision (1982), were launched.

By the mid-1980s, the video game was one of the biggest boom industries in history. By 1983, sales had risen to $3.2 billion and a quarter of all U.S. households had a videogame system; Atari alone had sold 12 million 2600 systems. But the euphoria didn't last long. Too much product, too much competition and too many bad games caused the collapse of Atari's leadership. Like dominoes, the other manufacturers suffered as well. At the end of 1982, Atari plowed unsold cartridges that filled 14 tractor-trailer trucks under concrete in an Alamogordo, New Mexico landfill. On December 7, 1982, Atari announced sales of its systems did not meet expectations and Warner Communications’ stock lost a third of its value.

In 1984 the entire videogame industry fell apart. Coleco released the doomed Adam personal computer, practically bankrupting the company. Mattel discontinued the Intellivision. Atari was bought by former Commodore founder Jack Tramiel, who steered Atari into the personal computer industry with disastrous results. With the coming of games such as Zork for the more powerful personal computer and increasing competition for the TV in the form of the VCR in the early 1980s, the videogame boom crashed.

A new boom began in 1985 with the introduction of the Nintendo Family Computer (or FamiCom), better known as the Nintendo Entertainment System (NES). Nintendo was a 100-year-old Japanese company founded as a playing card manufacturer but by the early 1980s was a leading coin-op arcade console maker. The eight-bit NES, spurred by the popularity of the Super Mario Brothers game and its sequels, raised the stakes for all game system makers. The NES soon was out-selling all its competitors ten-to-one.

The introduction of the NES initiated a series of one-upmanship. Each game system manufacturer attempted to create systems and games more graphically spectacular than the one preceding it, creating a cascade of competing innovation that resulted in geometric advancements in game play technology seemingly minute-by-minute. Like championship basketball, videogame leadership changed hands almost annually with every new system release.

The NES was followed by the first consumer game console from a company called Sega, the Sega Master System (SMS). Sega originally was an American company that moved to Japan after World War II. In 1965, the original coin-operated manufacturer company merged with a jukebox firm and was re-named Sega, a contraction of "service games."

But Nintendo had superior distribution and NES game developers were restricted from creating games for Sega, dooming Sega's first entry into the consumer hardware market. By 1987, thanks to Super Mario Brothers and new games, the Legend of Zelda and Tetris, the NES was the most popular game system in the world. In 1988, Coleco threw in the video towel and declared Chapter 11.

Nintendo capitalized on its firm grip on the market with the introduction of the first handheld game, the Game Boy, in 1989. GameBoy was followed the next year by other handhelds: Atari’s Lynx, NEC's Turbo Express and Sega's Game Gear.

In 1989, NEC unveiled the first 16-bit system, the TurboGrafx-16. Sega bounced back four months later with its own 16-bit system, a version of its popular arcade game, the Genesis. The Genesis featured more colors and sophisticated games than previous 8-bit systems, even the TurboGrafx-16.

By the time Nintendo countered with its advanced 16-bit Super NES in 1991, Sega, thanks to hit games such as Sonic the Hedgehog and some hip advertising, had grabbed a significant share of the market. In 1992, Sega added a CD component. Within a year, Sega had recaptured leadership from Nintendo, controlling more than half the market.

The mid-1990s saw a second crash in the videogame market. In 1993, the violence in such videogames as Mortal Kombat and Night Trip came under government scrutiny. Congress attempted to force a rating system on the industry, but the industry developed one on its own and continued to release even more violent games.

Two advanced but ultimately doomed 32-bit systems appeared in late 1993. First came the Atari Jaguar in August. That fall came the long-awaited 3DO, which promised effects never seen from a videogame system. But, at around $700, 3DO was two-to-three times as expensive as competing platforms and games were scarce. It proved to be an expensive flop.

In 1996, Atari as a hardware company closed its doors after Time Warner sold it. As Atari, 3DO and Coleco sank from view, Nintendo and Sega battled for supremacy. Thanks to Nintendo's Super Game Boy, an adapter that allowed Nintendo's 32-bit Super NES to play Game Boy cartridges, and the release of a new game, Donkey Kong, Nintendo started to catch Sega. Sega responded with its own 32-bit Saturn in May 1995.

But a few weeks after Saturn was unveiled, Sony made it a three way competition with the introduction of its superior 32-bit PlayStation (PS). The PS originally was intended as a PC/CD add-on to the Super NES but then was spun off as its own platform. Nintendo trumped Sony and Sega and reclaimed its street cred in September 1996 with its Nintendo 64 system. More than 350,000 units were sold in three days, 1.7 million units in three months. The N64 was followed by the color Game Boy in 1998 and a portable version of its popular playing card fad, Pokémon. Sega reacted with the first 128-bit console, the Dreamcast, in 1999, which also included the SegaNet online component.

But by then it was too late for both Nintendo and Sega. By the end of 1999, Sony's superior market reach and its ability to wait out a devastating price war had given it more than half the hardware market. The PS outsold the N64 two-to-one and the fading Dreamcast ten-to-one. Nearly two-thirds of all game software sold was for the PlayStation. Sony trumped Sega again and gained control of the industry with the first DVD system, the PlayStation 2 in 2000. Sega left the videogame hardware business in March 2001.

Sony's current hegemony over the videogame market, however, is threatened by next-generation consoles more powerful and sophisticated than many PCs. Microsoft's first foray into the videogame arena, the 64-bit Xbox, and Nintendo's GameCube were both introduced in the fall of 2001 amid much publicity, in an effort to capture a dominant slice of the videogame market.

Microsoft unveiled its next-generation box, the Xbox 360 in late 2005. Sony is due to counter the Xbox 360 with its PS3 system, which will include a Blu-ray high-definition DVD player and TV tuner, in the fall of 2006.