The gaming industry was born in the 1970s. The father of video games is Ralph Baer, who invented the first home console that could be connected to a television, the Magnavox Odyssey. The first system didn't sell all that well and soon Atari was born, releasing Pong into the arcades, and soon after into living room across the United States. It wasn't until 1977 that the Atari VCS (or 2600 as it's more commonly known) was released. This 8-bit console ran at a staggering 1.2 MHz and came with joysticks and paddles for playing a variety of games that could be switched out via cartridges. These cartridges had their own sets of chips so the games could have completely different graphics without the need to reuse art assets.

From 1977 until 1983 Atari 2600 was king of the video game hill. Many competitors entered the market, including Barbie doll maker, Mattel with it's Intellivision. Many of these machines were quite a bit more powerful than Atari's, but they lacked several key ingredients. First up, Atari 2600 was cheaper than the competition. The makers of the games for Atari were masters at releasing games in the arcade first to generate hype and then bringing out home conversions to cash in again a second time. In 1980 Atari secured a deal with Taito to bring out a home version of the arcade smash hit Space Invaders. This, along with Asteroids, propelled the 2600 to sales never before seen in the video game industry.

When it debuted in 1977, the Atari 2600 sold 250,000 systems to a brand new audience of consumers. A year later they had doubled that number to 550,000. In 1979, it was the best selling Christmas gift with 1 million sold. After Atari managed to license Space Invaders and Pac-Man, sales doubled in 1980 with 2 million sold and the company making over $2 billion that year. Sales doubled the next 2 years and at the end of 1982, over 10 million systems had sold. Atari was king of the world and one of the fastest growing companies in U.S. history. But, that was not to last.

In 1983 the video game industry experienced a total crash. This was due to no quality control on the games being sold as well as bullish estimates as to how many copies of certain games would sell. The ill-fated E.T. was the start of a very fast decline for Atari. The game was created in only 3 weeks and was one of the worst games ever created. It was filled with pointless quests and glitches and just was a chore to play. A string of bad games had soured the gaming public from investing any more money and soon retailers were overwhelmed with overstock of game cartridges and systems. Heavy discounting ensued, with many retailers deciding to not carry video games any longer. The bubble had burst and Atari would never again attain the same level of success as it had in the early 80s.