In 1982 arcade quarters out-earned pop music and Hollywood combined
At the peak of the arcade craze, Americans fed $8 billion in coins into video game cabinets in a single year, more than pop music and Hollywood films earned put together. Then came a crash. The industry that survived it now rivals cinema, music and television, and it quietly shaped the computer on your desk.
Before the 1970s there was no real business, only curiosities. Westinghouse built a relay-driven Nim machine called the Nimatron for the 1940 New York World's Fair, Bertie the Brain played tic-tac-toe at the 1950 Canadian National Exhibition, and a 1947 patent filing by Goldsmith and Mann described a target-shooting game drawn on a cathode-ray tube. University staff and students later wrote games for mainframe terminals, including Spacewar!.
Commerce began in 1971 with Computer Space, the first commercial arcade video game. The next year Atari's Pong became the first hit, selling 19,000 cabinets, and the Magnavox Odyssey brought games into homes. A flood of Pong clones caused a crash in 1977, ended by Taito's Space Invaders in 1978, which sold over 360,000 cabinets and, licensed for the Atari 2600, quadrupled that console's sales. Namco's Pac-Man, released in 1980, sold more than 350,000 cabinets and swallowed over $1 billion in quarters within a year.
Another collapse hit North America in 1983, caused by too many poorly made games. Nintendo's Entertainment System revived the market and left Japanese firms dominant in consoles, while Europe's home computer scene, built on machines like the ZX Spectrum and Commodore 64, spawned studios such as Ocean Software. Nintendo launched the Game Boy in 1989.
Games also pushed hardware forward: sound cards were invented for them before musicians adopted them, and graphics cards, 3D accelerators and processors were improved to meet gamers' demands. Global sales reached $134.9 billion a year by July 2018, and Ampere Analysis found the sector grew 26% between 2019 and 2021 to a record $191 billion. In 2017 the United States, roughly a third of the market, had over 2,300 developers and nearly 66,000 direct employees.
Source: Video game industry
