Behold! The gaming history tale is about to begin...
I will highlight some more of the important points, and write this in quite informative way.
Believe it or not, we've been gaming for more than fifty years. Man, how it's grown, prospered, and evolved. Anyhow, back to the start!
In 1952, A.S. Douglas wrote his PhD degree at the University of Cambridge on Human-Computer interaction Douglas created the first graphical computer game - a version of Tic-Tac-Toe. The game was programmed on a EDSAC vaccuum-tube computer, which had a cathode ray tube display. I wouldn't consider it just a game yet, but it was where it all started.
Then few years after that, in 1958 Dr. William Higinbotham came up with "Tennis for Two". The game was created and played on Brookhaven Laboratory oscollioscope. His invention was mainly to cure boredom of visitors at his work place. Higinbotham learned that one of Brookhaven's computers could calculate ballistic missle trajectories (A trajectory is the path that a moving object follows through space as a function of time.) and he used this ability to form the game's foundation.
Users could interact with the ball using an analog aluminum controller to click a button to hit the ball and use a knob to control the angle. Hitting the ball also emitted the sound. It only took 2 hours to design the device, which is pretty cool, but it was using basic calculations so this is why it took so little, on other side putting it all together took about three weeks! (And another two days to fix bugs.)The game was a huge hit, as they introduced a new form of entertainment during the first show on October 18th in 1958. What I find interesting is that, Dr. W Higinbotham's son mentions that his father did not want to be recognised for his game invention, but for his work on nuclear nonproliferation. I mean, the hell, why would he take his time and invest it in making a game at all? Who knows, scientist are crazy.

In 1962, Steve Russell invented Spacewar!. Spacewar! was the first game intended for computer use. Russell used a MIT PDP-1 mainframe computer to design his game.

In 1966, Ralph Baer (Forever stuck in my head as Bear), a short, bespectacled man with deep, radio-quality voice and a sharp wit, had been a successful engineer for thirty years. A lot of Baer's work revolved around airborne radar and antisubmarine warfare electronics. Then one summer day while he was waiting for the bus, some wild video game spirit haunted him and he began to furiously write notes in his little yellow pad. He came up with this idea of "game box" he initially called Channel Let's Play! In that detailed outline, he described Action Games, Board Skill Games, Artistic, Sport and Card Games, all of which could be played on any of the 40 million cathode-raytube TV sets that were ubiquitous in America at the time. He was given the money to develop his idea, as he later would calling it Brown Box, which then he sold his project to Magnavox, which was renamed to Magnavox Odyssey. But how did it work? The Odyssey uses a type of removable printed circuit board card that inserts into a slot similar to a cartridge slot; these do not contain any components but have a series of jumpers between pins of the card connector. These jumpers interconnect different logic and signal generators to produce the desired game logic and screen output components respectively. The system was sold with translucent plastic overlays that gamers could put on their TV screen to simulate colour graphics.
Now for the next story
Alright. Enough of crazy goth pong dances. Back to 60s.
Nolan Bunshell was a dreamer who dreamed big dreams. In his dreams, he imagined the finest things that money could buy: expensive cars, massive homes and the prettiest girls. But his biggest dream surrounded a game so simple, so utterly straight-forward, so easy to leant that even a drunk in the bar could learn to play. The testing ground for PONG, the very first arcade game, was a newly opened bar in the Silicon Valley, sweet name.
The designer Allan Alcorn made Pong's circuitry and Ted Dabney crafted its case, pretty much a plastic milk jug that was placed inside beneath the coin slot, to collect quarters.
Nolan Bunshell was a dreamer who dreamed big dreams. In his dreams, he imagined the finest things that money could buy: expensive cars, massive homes and the prettiest girls. But his biggest dream surrounded a game so simple, so utterly straight-forward, so easy to leant that even a drunk in the bar could learn to play. The testing ground for PONG, the very first arcade game, was a newly opened bar in the Silicon Valley, sweet name.
The designer Allan Alcorn made Pong's circuitry and Ted Dabney crafted its case, pretty much a plastic milk jug that was placed inside beneath the coin slot, to collect quarters.

Source: http://en.wikipedia.org/wiki/Ralph_H._Baer
http://inventors.about.com/library/inventors/blcomputer_videogames.htm
"All your base are belong to us" by Harold Goldberg

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