Codex Gamicus

Early video game industry (1971-1976)[]

The first commercially viable video game was Computer Space in 1971, which laid the foundation for a new entertainment industry in the late 1970s within the United States, Japan, and Europe.

Video game crash of 1977[]

The first major crash in 1977 occurred when companies were forced to sell their older obsolete systems flooding the market.

In 1977, manufacturers of older, obsolete consoles and Pong clones sold their systems at a loss to clear stock, creating a glut in the market.[1] Atari and Magnavox remained in the home console market, despite suffering losses in 1977 and 1978.[2] Many manufacturers were negatively affected by the market collapse, with Allied Leisure going bankrupt, Fairchild Semiconductor and National Semiconductor leaving console development, and Magnavox cancelling their next console. Coleco remained after making a $30 million loss in 1977, while Atari remained with the help of funding from Warner Communications.[3]

In North America this drove most smaller game companies out of business, but in Europe it had a different impact. The reduction in demand for the chips that powered first-generation consoles caused the price of those chips to drop dramatically. European manufacturers such as Hanimex, Secam, and Soundic released cartridge-based game consoles that contained no CPU. Cartridges for these consoles would contain the same chips that power later Pong consoles.[4]

The crash was largely caused by the significant number of Pong clones that flooded the market. The crash eventually came to an end with the success of Taito's Space Invaders, released in 1978, sparking a renaissance for the video game industry and paving the way for the golden age of arcade video games.[1] Soon after, Space Invaders was licensed for the Atari VCS (later known as Atari 2600), becoming its first big hit and quadrupling the console's sales.[5] This helped Atari recover from their earlier losses.[2] The success of the Atari 2600 in turn revived the home video game market, up until the North American video game crash of 1983.[6]

Golden age of arcade video games (1978-1983)[]

In 1978, the video game industry was revived with the golden age of arcade video games, which established video gaming as a mainstream entertainment industry.

The arcade game industry entered its golden age in 1978 with the release of Space Invaders by Taito, a success that inspired dozens of manufacturers to enter the market.[1][7]


  1. 1.0 1.1 1.2 Jason Whittaker (2004). The cyberspace handbook. Routledge. p. 122. ISBN 0-415-16835-X. 
  2. 2.0 2.1 Nick Montfort & Ian Bogost (2009). Racing the beam: the Atari Video computer system. MIT Press. p. 66. ISBN 0-262-01257-X. Retrieved 2011-05-01. 
  4. Hanimex SD 070 Colour (November 21, 2014). Retrieved on November 21, 2014
  5. "The Definitive Space Invaders". Retro Gamer (Imagine Publishing) (41): 24–33. September 2007. Retrieved 2011-04-20. 
  6. Jason Whittaker (2004). The cyberspace handbook. Routledge. pp. 122–3. ISBN 0-415-16835-X. 
  7. Kent, Steven L. (2001). The Ultimate History of Video Games: From Pong to Pokémon. Three Rivers Press. p. 500. ISBN 0-7615-3643-4.