An arcade video game is an arcade game where the player's inputs from the game's controllers are processed through electronic or computerized components and displayed to a video device, typically a monitor, all contained within an enclosed arcade cabinet. Arcade video games are often installed alongside other arcade games such as pinball and redemption games at amusement arcades. Up until the late 1990s, arcade video games were the largest and most technologically advanced sector of the video game industry.
The first arcade game, Computer Space, was created by Nolan Bushnell and Ted Dabney, the founders of Atari, Inc., and released in 1971; the company followed on its success the next year with Pong. The industry grew modestly until the release of Taito's Space Invaders in 1978 and Namco's Pac-Man in 1980, creating a golden age of arcade video games that lasted through about 1983. At this point, saturation of the market with arcade games led to a rapid decline in both the arcade game market and arcades to support them. The arcade market began recovering in the mid-1980s, with the help of software conversion kits, new genres such as beat 'em ups, and advanced motion simulator cabinets. There was a resurgence in the early 1990s, with the birth of the fighting game genre with Capcom's Street Fighter II in 1991 and the emergence of 3D graphics, before arcades began declining in the West during the late 1990s. After several traditional companies closed or migrated to other fields (especially in the West), arcades lost much of their relevance in the West, but have continued to remained popular in Eastern and Southeastern Asia.
Early arcade games
Since the early 20th century, skee ball and other pin-based games had been a popular arcade game. The first pinball machines had been introduced in the 1930s but gained a reputation as games of chance and had been banned from many venues from the 1940s through the 1960s. Instead, newer coin-operated electro-mechanical games (EM games), classified as games of skill took their place in amusement arcades by the 1960s.
Following the arrival of Sega's EM game Periscope (1966), the arcade industry was experiencing a "technological renaissance" driven by "audio-visual" EM novelty games, establishing the arcades as a healthy environment for the introduction of commercial video games in the early 1970s. In the late 1960s, a college student Nolan Bushnell had a part-time job at an arcade where he became familiar with EM games through watching customers play and helping to maintain the machinery, while learning how it worked and developing his understanding of how the game business operates.
Arrival of arcade video games (1971−1977)
While early video games running on computers had been developed as far back as 1950, the first video game to spread beyond a single computer installation, Spacewar!, was developed by students and staff at MIT on a PDP-1 mainframe computer in 1962. As the group that developed it migrated across the country to other schools, they took Spacewar!s source code to run on other mainframe machines at those schools. It inspired two different groups to attempt to develop a coin-operated version of the game.
Around 1970, Nolan Bushnell was invited by a colleague to see Spacewar! running on Stanford University's PDP-6 computer. Bushnell got the idea of recreating the game on a smaller computer, a Data General Nova, connected to multiple coin-operated terminals. He and fellow Ampex employee Ted Dabney, under the company name Syzygy, worked with Nutting Associates to create Computer Space, the first commercial arcade game, with location tests in August 1971 and production starting in November. More than 1300 units of the game were sold, and while not as large of a hit game as hoped, it proved the potential for the coin-operated computer game. At Stanford University, students Bill Pitts and Hugh Tuck used a PDP-11 mainframe to build two prototypes of Galaxy Game, which they demonstrated at the university starting in November 1971, but were unable to turn into a commercial game.
Bushnell got the idea for his next game after seeing a demonstration of a table tennis game on the Magnavox Odyssey, the first home video game console that was based on the designs of Ralph H. Baer. Deciding to go on their own, Bushnell and Dabney left Nutting and reformed their company as Atari Inc., and brought on Allan Alcorn to help design an arcade game based on the Odyssey game. After a well-received trial run of a demo unit at Andy Capp's Tavern in San Jose, California in August 1972, Pong was first released in limited numbers in November 1972 with a wider release by March 1973. Pong was highly successful, with each machine earning over a day, far greater than most other coin-operated machine at the time.
With Pong success, numerous other coin-operated manufacturers, most who were making electro-mechanical games and pinball machines, attempted to capitalize on the success of arcade games; such companies included Bally Manufacturing, Midway Manufacturing, and Williams Electronics, as well as Japanese companies Taito and Sega. Most took to trying to copy the games that Atari had already made with small alterations, leading to a wave of clones. Bushnell, having failed to patent on the idea, considered these competitors "jackals" but rather than seeking legal action, continued to have Atari devise new games. Separately, Magnavox and Sanders Associates, through which Baer had developed the basics of the Odyssey, sued Atari, among the other manufacturers, for patent violations of the basic patents behind the electronic game concepts. Bushnell opted to settle out of court, negotiating for perpetual licensing rights to Baer's patents for Atari as part of the settlement fee, which allowed Atari to pursue the development of additional arcade games and bringing Pong in a home console form, while Magnavox continued legal against the other manufacturers. It is estimated that Magnavox collected over in awards and settlements from these suits over the Baer patents.
By the end of 1974, more than fifteen companies, both in the United States and Japan, were in the development of arcade games. A key milestone was the introduction of microprocessor technology to arcade games with Midway's Gun Fight (an adaptation of Taito's Western Gun as released in Japan), which could be programmed more directly rather than relying on the complex interaction of integrated circuitry (IC) chips.
Video games were still considered to be adult entertainment at this point, and treated as with pinball machines as games of skill, "For Amusement Only", and placed in locations that children would likely not be at such as bar and lounges. However, the same stigma that pinball machines had seen in the prior decades became to appear for video games. Notably, the release of Death Race in 1976, which involved driving over gremlins on screen, drew criticism in the United States for being too violent, and created the first major debate on violence and video games.
After the "paddle game" trend came to an end around 1975, the arcade video game industry entered a period of stagnation in the "post paddle game era" over the next several years up until 1977.
Golden age of arcade games (1978–1983)
In 1978, Taito released Space Invaders, first in Japan, followed by its North American release. Among its novel gameplay features that drove its popularity, the game was the first to maintain a persistent high score. and though simplistic, used an interactive audio system that increased with the pace of the game. The game was extremely popular in both regions. In Japan, specialty arcades were established that featured only Space Invaders machines, and Taito estimated that they had sold over 100,000 machines in the country alone by the end of 1978, while in the United States, over 60,000 machines had been sold by 1980. The game was considered the best-selling video game and highest-grossing "entertainment product" of its time. Many arcade games since then have been based on "the multiple life, progressively difficult level paradigm" established by Space Invaders.
Space Invaders led to a string of popular arcade games over the next five years that are considered the "Golden Years" for arcade games. Among these titles include:
Asteroids (Atari, 1979) Galaxian (Namco, 1979) Berzerk (Stern Electronics, 1980) Missile Command (Atari, 1980) Battle Zone (Atari, 1980) Pac-Man (Namco, 1980) Rally-X (Namco, 1980) Centipede (Atari, 1980) Defender (Williams Electronics, 1981) Donkey Kong (Nintendo, 1981) Frogger (Konami, 1981) Galaga (Namco, 1981) Scramble (Konami, 1981) Tempest (Atari, 1981) Zaxxon (Sega, 1981)
Of these, Pac-Man had an even larger impact on popular culture when it arrived in 1980; the game itself was popular but people took to Pac-Man as a mascot, leading to merchandise and an animated series of the same name in 1982. The game also inspired the Gold-certified song "Pac-Man Fever" by Buckner & Garcia. Pac-Man sold about 400,000 cabinets overall by 1982. Donkey Kong was also significant as not only being the first recognized platform game but also bringing a cute, more fantastical concept that was well-founded in Japanese culture but new to Western regions, compared to prior arcade games. Western audiences became accustomed to this level of abstraction, making later Japanese-made arcade games and titles for the Nintendo Entertainment System easily accepted by these players.
These games, along with numerous others, created video game arcades around the world. The construction boom of shopping malls in the United States during the 1970s and 1980s gave rise to dedicated arcade storefronts such as Craig Singer's Tilt Arcades. Other arcades were featured in bowling alleys and skating rinks, as well as standalone facilities, such as Bushnell's chain of Chuck E. Cheese pizzerias and arcades. Time reported in January 1982 that there were over 13,000 arcades in the United States, with the most popular machines bringing in over $400 in profit each day. Twin Galaxies, an arcade opened by Walter Day in Ottumwa, Iowa, became known for tracking the high scores of many these top video games, and in 1982, Life featured the arcade, Day, and several of the top players at the time in a cover story, bringing the idea of a professional video game player to public consciousness. The formation of video game tournaments around arcade games in the 1980s was the predecessor of modern esports.
Arcade machines also found their way into any area where they could be placed and would be able to draw children or young adults, such as supermarkets and drug stores. The Golden Age was also buoyed by the growing home console market which had just entered the second generation with the introduction of game cartridges. Atari had been able to license Space Invaders for the Atari 2600 which became the system's killer application. Similarly, Coleco beat Atari in licensing Donkey Kong from Nintendo, and among other ports, included their conversion of the game as a pack-in for the ColecoVision, which helped to boost sales of the console and compete against the Atari 2600. Licensing of arcade hits became a major business for the home markets, which in turn spurred further growth in the arcade field. By 1981, the US arcade game market had an estimated value of .
Jonathan Greenberg of Forbes predicted in early 1981 that Japanese companies would eventually dominate the North American video game industry, as American video game companies were increasingly licensing products from Japanese companies, who in turn were opening up North American branches. By 1982–1983, Japanese manufacturers had captured a large share of the North American arcade market, which Gene Lipkin of Data East USA partly attributed to Japanese companies having more finances to invest in new ideas.
End of the golden age (1984)