The Video Game Industry Evolution

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Table of Contents

Origins of Gaming
8- and 16-bit Consoles
3D to Modern Consoles
Handheld and Mobile Gaming
Summary
References

Origins of Gaming

The complex development of video games and their entry into the market for ordinary consumers began in the 1970s. However, even before the 1970s, the first developments of the simplest and most well-known games appeared. The first mention of the creation of such games dates back to the 1940s, but it was in 1952 that Alexander Shafto “Sandy” Douglas officially presented his dissertation at the University of Cambridge. The application to the dissertation was the game OXO or tic-tac-toe, but after a successful defense, the game never got on sale.

Five years later, William “Willy” Higinbotham, in New York, demonstrated his brainchild called Tennis for Two. The explosion was less than ten years away, but in 1962 Steve Russell at the Massachusetts Institute of Technology (MIT) created the first game that multiple computers could play (History.com Editors, 2019). This game was called Spacewar! and was based on the principle of space combat. University workers and students could only play this game since it could only run on the large, complex computers that universities usually purchased.

In the second half of the 1960s, Ralph Baer created a console prototype called the ‘Brown Box,’ which ultimately turned the still barely-born video game industry. For the first time, this prototype made it possible to think that video games could be at home and not require a purposeful trip to the club, bowling, or karaoke from the players. Baer decided to sell the prototype to Magnavox, which sold the system under a different, more resounding name, Odyssey. In 1972, Odyssey became incredibly popular, although it had the most uncomplicated graphics and even required overlays on the TV to play.

In the same year, Atari, led by Nolan Bushnell, created the Pong game, which gained popularity among the players and became the foundation for subsequent successful products. It is how the Atari 2600 system was born in 1977, allowing players to change many cartridges and not worry about monotony. Magnavox Odyssey was compatible with cartridges but did not store any game program on them; the console determined a set of games (28 pieces). In the meantime, things were not rosy, and in parallel with successful creations, some developers had no problem riveting low-quality games (The Gamer, 2021, 06:13-08:29). In addition, the number of consoles offered to customers gradually increased. Cartridges came to consumers in large quantities and obviously contained fragility and limited use.

By the end of the 1970s, the Japanese Pak Man entered the US market and made a splash among the players. Japan introduced the first developments of Nintendo, and the fans learned about the Nintendo Donkey Kong. The arrival of Nintendo in the US market was not easy, as, in 1983, researchers stated total satiety with consoles. There was no standard algorithm by which they could work, which created difficulties in use. A vast number of different consoles complicated the joint games. Often people, without an agreement, bought other consoles and only then realized that the games offered by the program did not fit with those of their friends. In 1985, the world saw the NES: Nintendo Entertainment System (Famicom). The system was assembled to a much higher quality than anything on the market, and the developers used 8-bit graphics, making the games brighter and more colorful (Wirtz, 2020). Subsequently, Nintendo made it their philosophy to produce fewer games but deliver high quality to rival competitors.

Cartridges kept their niche, but for collectors and avid gamers, there was a difficult question about their storage. Nintendo even offered a promotion when buying cartridges as a gift with an empty cardboard box. In 1989, the popularity of cartridges allowed Nintendo to release several essential games: Super Mario Bros, The Legend of Zelda, and Metroid. Considering its popularity and authority, Nintendo began to deal with the low quality of games (Tyson, 202). Low-quality games continued to flood store shelves and became the leading cause of inappropriate cartridge usage.

8- and 16-bit Consoles

Nintendo was one of the most recognized companies that led the 8- and 16-bit era. One of the most popular consoles that impacted the game industry was the Gameboy and Nintendo 64. Players around the world could take their games anywhere and play them to their heart’s content. Game Boy sold over 120 million units around the world. The man who invented the Gameboy was Gunpei Yokoi, which also created the Metroid video game series. He got the idea of a portable gaming system after watching a businessman playing with his calculator. He worked with the Nintendo research and development team to refine his idea. Even though there were electronic handheld games before the game boy, they weren’t as popular due to the rudimentary design and limited choice. The Gameboy was first released in April 1989, in Japan. After three months, it was released in the United States. When the game boy was first introduced, Tetris was added to the Gameboy due to the success that it has in arcades and home computers.

Nintendo later added Tetris as one of the games that were sold with the Game Boy system. Due to this, Tetris became one of the most popular video games ever, which led to 35 million units sold. There were other games that were also popular on the Gameboy, including Legend of Zelda, Kirby Dream Land, and Super Mario Land. Even though Nintendo was very successful, it was surpassed by Sega Consoles. One of the most popular games that was developed by Sega was Sonic. Sea developed the first CD-quality game soundtracks, which changed everything about the gaming industry. The 16-bit era was able to allow developers to tell stories of greater complexity and resonance. Which later led to the creation of the Sega Genesis. Sega Genesis was released in order to compete against the aging 8-bit Nintendo Systems. The Sega Genesis became super popular when Sega Breakthrough hit video game called; Sonic the Hedgehog gained worldwide momentum. Because of this breakthrough, Nintendo saw this as a threat, and later developed a system called Super Nintendo in order to compete against Sega consoles. This Console war between Super Nintendo and Sega Genesis led to the 8- and 16-bit era during the 1990s. Both gaming systems advanced the gaming industry and led to the development 32- and 64-bit consoles later in the 2000s.

3D to Modern Consoles

In the early 90’s, Nintendo and Sony collaborated on a project to produce CD-ROMs for the Super Nintendo Entertainment System. CD-ROMs were an alternative storage type that were cheaper to produce and were capable of holding up to 650 MB of data. This new project that was eventually scrapped would have allowed the SNES to read both cartridges and CD-ROMs that would be used to store games. Following this failure, Sony decided to produce its own console, the Sony PlayStation, also known as the PSone. The Sony PlayStation was released in Japan in December 1994 and released in America in September 1995. The PlayStation was a 32-bit console that used CDs instead of cartridges. 32 bit consoles were able to hold more memory which allowed the consoles to run faster and would allow games to make the jump to full three-dimensional polygon graphics rather than 2.5D polygon graphics that was used prior to allowing games to feel as if they were 3D. Utilizing the larger storage capabilities that CD-ROMs provided, game developers could create more complex games that were longer than games released in the past and could add cinematics to enhance the gaming experience. Some of the most famous games that helped make the PlayStation a success is Square Enix’s “Final Fantasy VII”, Capcom’s “Resident Evil” and Naughty Dog’s “Crash Bandicoot”. Sony’s PlayStation would mark the beginning of what is known as the fifth generation of video game consoles.

Following the release of the Sony PlayStation, the next fifth-generation gaming console would be created by Nintendo, who released their response to the PlayStation in the form of the Nintendo 64, a cartridge-based system in Japan in June 1996 and released in America in September 1996. The Nintendo 64 was the successor to the Super Nintendo Entertainment System, which had a 64-bit CPU capable of new levels of three-dimensional polygon graphics. Nintendo chose to utilize cartridges instead of CDs which were quickly becoming the standard in the industry due to the advantages ROM cartridges had over CDs, which were that ROM cartridges had faster load times when compared to games on CD and because cartridges were more successful in preventing piracy. Both the Nintendo 64 and PlayStation marked the beginning of the shift to analog-style controllers that remains the standard today. Analog-style controllers utilized analog sticks as an input devices for a controller that would allow for more movement capabilities beyond the traditional standard of “up”, “down”, “left”, and “right” that were provided on a directional pad or d-pad. The Nintendo 64 controller was also the first controller to utilize force feedback vibration in the Rumble Pak accessory that was released alongside Star Fox 64 in 1994. Force Feedback Vibration was a feature that caused the control to vibrate in response to actions that occurred in the game if the game supported the feature. This feature would become a built-in feature to controllers that would be released in the future. Some of the bestselling games of Nintendo 64 that are among the most iconic games in history are “Super Mario 64”, and “The Legend of Zelda: Ocarina of Time”.

Prior to the release of the Nintendo 64, another fifth-generation console was released called the Sega Saturn. Released in November 1994 in Japan and May 1995 in North America, the Sega Saturn was the successor to the Sega Genesis. The Sega Saturn was intended to compete with the Sony PlayStation and utilized a newer CPU, Video Display Processor, and CD-ROM drive to handle the requirements of three-dimensional games. Unfortunately, while the Sega Saturn was initially a success in Japan due to the popularity of the “Virtua Fighter” series and Panzer Dragoon series, a surprise release four months early in North America failed to match the sales in Japan. The console was also regarded as a complex system to develop for and as a result, had limited third-party support. This factor and the release of the Nintendo 64 caused the Sega Saturn to be regarded as a failure and was discontinued in 1998.

Four years later, Sega would release another console that would mark the beginning of the sixth generation of video game consoles. The Sega Dreamcast was the successor to the Sega Saturn and was released in November 1998 in Japan and in September 1999 in North America. The console was designed with the intent to reduce production costs and utilized common parts such as the Hitachi SH-4 CPU and the NEC PowerVR2 GPU and was advertised as the first 128-bit console. This decision would lead to the console’s failure as the components were less powerful than the components used by competitors and game developers had little to no experience with the hardware, which made it hard to develop games. After a disappointing release in Japan, hopes of a successful North American release were dashed when Entertainment Arts, the largest third-party game publisher, declared that they would not develop games for the Dreamcast. Sega collaborated with many different companies in order to make the North American release a success and this effort, alongside games like “Sonic Adventure” and “Soulcalibur” would lead to what was known at the time as the largest sales record with 225 thousand units sold in the first 24 hours of release. However, this could not help the Dreamcast overtake the PlayStation and its successor, the PlayStation 2, leading to the Dreamcast to be discontinued in 2001 and for Sega to withdraw as a console developer and restructure as a third-party publisher. Even though Dreamcast was a failure, it did change the gaming industry as it was the first console to include a built-in modem for internet access and online play.

In the year 2000, Sony released their successor to the PlayStation and a sixth-generation console of their own in the form of the PlayStation 2 or PS2. The PlayStation 2 was released in March 2000 in Japan and October 2000 in North America. The 128-bit console utilized a custom-designed CPU created by Sony and Toshiba and a cushion-designed GPU capable of rendering 75 million polygons per second. Games for the PS2 were stored on DVD-ROMs rather than the CD-ROMs games were stored on for the PSone. The PS2 was backwards compatible with PSOne controllers and games and was capable of playing DVDs and CDs. These built-in features allowed the console to be used as more than just a gaming device, expanding the console’s audience to more than just gamers as DVD players at the time were known to cost more than a PS2. Due to these features and the games released on the PS2, the console was a massive success, becoming the best-selling console of all time, a feat that remains in 2022 with over 125 million units sold. Some of the games that contributed to the PS2’s success are “Gran Turismo” and Rockstar Games’ “Grand Theft Auto: San Andreas”.

The next sixth-generation console to be released was the Nintendo GameCube. The Nintendo GameCube was the 128-bit successor to the Nintendo 64 and was released in September 2001 in Japan and in November 2001 in North America. This system was the first Nintendo-released system to use discs rather than cartridges. GameCube games were stored on MiniDV-style discs that were capable of storing up to 1.5 GB of data. Save data was saved onto Memory Cards that could be plugged into the two memory card ports on the console. The system had a mixed reception as while it was praised for its controller and games, it lacked the multimedia features like DVD and CD playback present in its competitors that made its competitors be seen as better options for home entertainment devices. Some of the games found on the GameCube are “Super Mario Sunshine”, “Super Smash Bros. Melee” and “Mario Kart: Double Dash”. The console also had limited support for online gaming and was capable of connecting to a Game Boy Advance through the use of a link cable.

Microsoft would join Nintendo and Sony as First Party console developers with the release of the Xbox. The Xbox was Microsoft’s first console, released in November 2001 in North America and February 2002 in Japan. Witnessing the success of the PS2, Microsoft feared that the PS2 would overtake the personal computer as an entertainment device and so created the Xbox. The Xbox was built around standard computer computers such as a custom Microsoft Windows and DirectX operating system and a 733 MHz Intel Pentium III processor. Like its rival the Sony PS2, the Xbox had the ability to playback CD-ROMs and DVDs. It also was the first console with a built-in hard drive. The Xbox had direct support for broadband with an integrated Ethernet port. Microsoft would change the gaming industry a year after the launch of the Xbox with the release of Xbox Live. Xbox Live was a fee-based service that allowed real time online gaming. Xbox had a massively successful launch in North America with over 1.5 million units sold thanks to its launch title “Halo: Combat Evolved”, one of the most iconic and impactful games in the gaming industry. While the Xbox was a massive success in North America, it did not sell well in Japan and due to its expensive manufacturer costs, Microsoft lost over $4 billion during the console’s lifespan.

The Seventh generation of video game consoles began with the release of Microsoft’s Xbox 360. The Xbox 360 was the successor to the Xbox that was released in November 2005 in North America and December 2005 in Japan. Using the Xbox 360, Microsoft expanded Xbox Live and supported it with constant updates. Xbox Live now has a free and subscription-based service that allows users to play games online with others and download and purchase games, music, videos, free game demos and media streaming services. The Xbox 360 included wireless controllers that were powered by AA batteries and Microsoft would eventually release the Kinect motion-sensing camera, a device that contained RGB cameras, microphones, infrared projectors, and detectors that had real-time gesture recognition that allowed players to control the system and input action with body movements and voice commands. The Xbox 360 was also capable of HD video and had built-in HDMI output. Some top-selling games on the Xbox 360 were “Halo 3” and “Gears of War”.

Following the release of the Xbox 360, Sony would release their successor to the PS2 in the form of the PlayStation 3 or PS3. Released in November 2006 in Japan and North America, the PS3 was the first console to use Blu-Ray discs to hold games and was the first PlayStation system to use the PlayStation Network, Sony’s response to Xbox Live. The system was also the first console to be controllable through remote connectivity with the PlayStation Portable and the PlayStation Vita. Initial consoles came with built-in backward compatibility, though the feature was removed in later models. The PlayStation 3 had built-in Bluetooth 2.0 and Wi-Fi networking and was capable of 1080p HD. Similar to the Xbox Kinect, Sony would release their attempt at motion control with the PlayStation Move. The PlayStation Move was a motion controller shaped like a wand that used inertial sensors to detect motion while the controller’s position was tracked with a PlayStation Camera. Top-selling games on the PS3 were Naughty Dog’s “The Last of Us” and Rockstar’s “Grand Theft Auto V”.

The last seventh-generation system to release was the Nintendo Wii. The Wii was the successor to the Nintendo GameCube and was released in November 2006 in North America and December 2006 in Japan. Nintendo decided to avoid competing with the Xbox and PS3 and chose to focus instead on targeting a broader player base through a unique feature. The Nintendo Wii was the first console to utilize motion controls, with the Nintendo Wii mote as the main control option. With traditional controls and motion sensing, the wireless Wii mote could be pointed at a sensor above or below a television that would track the Wii mote’s movement and gestures and translate those gestures as input. This new control type was a factor in the Wii’s success and would later be an inspiration for Microsoft and Sony to create their motion-sensing technology. The Wii was the first Nintendo Console to have built-in Internet support and a digital marketplace, the Wii Shop Channel, where games and media applications could be purchased and downloaded onto the console or onto a SD card. Thanks to the backward compatibility function, GameCube games and controllers could be played on the Wii. The Wii was the bestselling seventh-generation console and helped Nintendo return to its place as one of the top gaming companies. Some of the bestselling Wii games were “Wii Sports”, “Mario Kart Wii” and “Super Mario Galaxy”.

The Eighth generation of video game consoles began with the release of the Wii U. Released in November 2012 in North America and in December 2012, the Wii U was the successor to the Nintendo Wii. Intended as an update to the Nintendo Wii, the Wii U was the first Nintendo console to support HD graphics and was backward compatible with all Wii games and accessories. Nintendo continued its trend of releasing unique features for their consoles with the primary controller called the Wii U Gamepad. The Wii U Gamepad had a built-in touchscreen, camera, microphone, 6-inch display, and traditional controls and could be used as an alternative display or as a second screen to support certain functions in certain games. The Wii U was not a success and had limited games and third-party support. Some of the top-selling games on the system were “Mario Kart 8” and “Super Smash Bros. for Wii U”.

Sony’s eighth generation console was the PlayStation 4 or the PS4. The PS4 was the successor to the PlayStation 3 and was released in November 2013 in North America and February 2014 in Japan. Using an AMD Accelerated Processing Unit that was a combination of an AMD64 CPU and GPU, the PS4 was capable of supporting HDR10 video and 4K resolution. With its new DualShock 4 controller, featuring an integrated touchscreen that functioned as an additional button, a headphone jack, motion sensors, and upgraded analog sticks and buttons, games were able to be controlled in new ways. The PS4 also featured an improved Remote Play function that could allow PS4 games to be streamed and played on a PlayStation Vita or PC as well as the ability to stream games online to viewers or to a friend who could control the game as if they were sitting beside the player through the use of Share Play. The PS4 was also a given cloud streaming late into its lifespan. Cloud Streaming allows for games to be played from the cloud, a remote server controlled by the console creators, that does not need to be downloaded and can be played on your console. The PS4 was a massive success and is the second bestselling home game console of all time, second only to the PlayStation 2. Some of the top-selling games that helped achieve this are Naughty Dog’s “Uncharted 4” and Insomniac’s “Spider-Man”. In November 2020, Sony released their successor to the PS4, the PlayStation 5. The console features a custom solid-state drive and an AMD GPU capable of 4k resolution at 120 frames per second with real-time ray tracing. Its redesigned controller, called the Dual Sense is more ergonomic than the DualShock 4 and has a haptic feedback feature. The console is backward compatible with the PS4 and its cloud streaming service PSNOW.

Microsoft’s eighth generation console was the Xbox One, released in November 2013. The Xbox One was the successor to the Xbox 360, which similarly to the PS4 uses an AMD Accelerated Processing Unit. The Xbox One was capable of HDR10 and 4K video playback and could play Blu-Ray discs and overlay live television. Its controller was a redesigned Xbox 360 controller with updated controls and directional haptic feedback in the triggers. A few years after release, backward compatibility with Xbox 360 titles was added to the console as well as backward compatibility with the original Xbox. Microsoft also released Xbox Game Pass, a video game subscription service that would allow users to download games from a catalog of hundreds of games or stream those games through cloud streaming. Top-selling games on the Xbox One are “Halo 5: Guardians” and CD Projekt Red’s “The Witcher 3: Wild Hunt”. In November 2020, Microsoft released their currently supported consoles, the Xbox Series X/S. The Series X is capable of up to 8K resolution with real-time ray tracing and features a solid-state drive for the first time in an Xbox console. The Series S was a lower-end model of the Series X, that had a less powerful GPU and did not have a disc drive for physical games. Both consoles are backward compatible with Xbox One and Xbox Game Pass.

Handheld and Mobile Gaming

Mobile gaming is a staple of the modern entertainment industry and currently holds the majority share of global annual revenue in the gaming marketplace. However, the subgenre’s overwhelming success has only occurred relatively recently (within the past decade); mobile gaming has been around in some form for decades.

The first recorded example of a video game being used on a cell phone dates back to 1993, when the tech company Siemens managed to run Tetris on a mobile phone. However, because a patent on mobile phone games already existed at the time, the company did not want to risk a lawsuit and convinced the concept of mobile games as a whole was an unprofitable endeavor, elected not to pursue the concept any further. In the same year, IBM released the IBM Simon phone, which included an app with a puzzle game called “Scramble”. Towards the end of the year, another phone called the Hagenuk MT-2000 would launch with Tetris installed on it.

These early forays into the industry were largely isolated in that it would not be until the early 2000s that advancements in technologies allowed for more sophisticated games and purpose-built devices for mobile gaming to permeate the market. Mobile consoles such as the Gameboy Advance and Nintendo DS were very popular in the early-to-mid-2000s. Cell phone games did exist during this era, but purpose-built mobile gaming consoles dominated the mobile gaming market throughout the course of the early 2000s.

During this time, the gaming industry as a whole was experiencing a period of rapid technological progress. Indeed, the entire genre of mobile gaming is largely a byproduct of the considerable advancements made in computing technologies during the 90s and 2000s. Such advancements allowed for higher-resolution displays, 3d graphics, longer-lasting batteries, and more complex in-game physics engines. Later, such advancements would also allow for onboard storage of game data and, eventually, the storage of entire games without the need for an external cartridge.

Circling back to cell phones, we see in the late 2000s the advent of the Apple iPhone and the release of the iOS operating system in 2007. This represented a major paradigm shift in the cell phone industry and ushered in the modern age of smartphones. With smartphones came thousands of mobile game apps and an explosion of the mobile gaming market prevalence. Touchscreen technology, solid-state drives, and an ever-expanding wireless internet network were at the forefront of these advances.

A consequence of the advent of smartphone mobile gaming was the decline of traditional mobile console gaming, as the popular perception was that such devices were rendered redundant by the versatility afforded by mobile phones.

The earliest smartphone games were diverse and included popular titles such as Angry Birds, Fruit Ninja, and Temple Run. Many were ported directly from older mobile console counterparts, such as the Nintendo DS. Contemporary smartphone games almost always have a multiplayer component and tend to focus on the accumulation of in-game resources. Monetization is a contentious topic in modern mobile gaming, and the subgenre “gacha” game is used to denote titles in which ‘predatory’ business practices are used to entice the player into spending large amounts of money on a particular title.

Summary

The tremendous changes in the digital gaming market in the second half of the 20th century marked the beginning of a new round in the entertainment industry. They gave rise to the development of new and advanced consoles, portable set-top boxes, and other gaming tools. The transition from the simplest tools with primitive games to advanced consoles with a large volume of memory and realistic graphics took several decades, during which technology was continuously being improved. The emergence of the Japanese company Nintendo in the US market can be considered a breakthrough when gaming content began to have a higher resolution and offered users a wider range of games. 8-bit and 16-bit consoles are considered classics of the gaming industry today because, with their help, the world learned about such massive games as Super Mario Land or Legend of Zelda.

In the late 1990s-early 2000s, the gaming market was transformed once again when CDs replaced cartridges. Games received even higher resolution, and new devices for playing digital content appeared. So far, the competition between Sony and Xbox continues, which indicates the great attention of developers to the interests of gamers and significant funds invested in innovation in this area. The constant updating of the game base with new products has led to the fact that movements in support of specific games have appeared, and millions of fans worldwide have become involved. The final round in developing this area was optimizing the world’s favorite games on mobile devices. The adaptation of beloved projects to the iOS operating system has kept the target market’s interest in gaming, and the multiplayer option has expanded the understanding of mobile games, influencing the industry significantly.