How The Video Game Industry Was Launched 40 Years Ago… Thanks To Infringement

from the well-look-at-that dept

Chris Stokel-Walker, over at Buzzfeed, has an absolutely fantastic feature article all about the creation of the video game Pong by Atari. 40 years ago, this week, Atari delivered the first 12 Pong machines (outside of a prototype at a local bar that proved how addictive the game was). The full article is wonderful, with tons of well-researched details. You should absolutely go read it. But one bit that might be interesting to folks around here: this game, which nearly everyone agrees launched the entire video game industry (now pushing $80 billion per year), was based on infringement. Actually, it looks like Atari’s founding was basically based on copying games. Before Pong, it had a different video game console, called Computer Space, which was basically a copy of Spacewar!, a game created by MIT student Steve Russell in 1962.

However, it was Pong that set the world on fire. And… it was almost entirely based on Nolan Bushnell copying someone else’s idea:

Meanwhile, the first TV-based home console, the Magnavox Odyssey, designed by gaming-industry forefather Ralph Baer, was being released. The Odyssey was demonstrated in Burlingame, California, on May 24, 1972. “It turned out that Al started at Atari almost exactly the same day I went up to see the Magnavox game,” says Bushnell. Around the same time, Baer was at Tavern on the Green in Central Park, sitting amongst the 30 or so East Coast retailers to whom his employers were trying to sell his creation. Beaming with pride, Baer could barely sit still. “The entire Magnavox product line for 1972 was displayed there,” he explains. “That included the Odyssey game, which was the hit of the show.” One of the games on the Magnavox console was a version of tennis.

“I thought the game was kind of crappy,” Bushnell says. Yet people were lining up to play it, “and they were kind of having some fun. I thought, If they can have fun with this shite” — Bushnell breaks off into a hearty laugh — “if it can be turned into a real game, that’d be great.” On the drive back from the demonstration, “I got thinking of ways it could be improved.”

Boom. Bushnell had someone on his team: re-create that basic tennis-like game for arcade machines. And that’s what they did. But, they made some improvements. This is, of course, the nature of how innovation works. Two key steps: build on the idea that you see elsewhere… and figure out a way to make people love it. And that’s what happened. This, once again, highlights the difference between invention and innovation in a fairly striking manner. And, while the creator of the Magnavox tennis game, Baer, wasn’t thrilled about it, the article makes it clear he grudgingly admires Bushnell’s ability to take that silly game and turn it into a giant industry.

Baer, the inventor of the Odyssey, is to this day ambivalent about his competitor. “Mr. B. didn’t ‘invent’ anything,” Baer, now 90, told me via e-mail, “but he started a whole industry, the arcade video game industry. Give the man credit for that achievement. He just simply didn’t invent anything.”

So here’s the quick question: which action here was more valuable? Baer’s or Bushnell’s? This is one of the issues that we’ve tried to make for a while. For all the talk of how infringement “harms” the inventor, if someone else can build a massive market where the originator failed, isn’t that better for society and the economy?

Oh, and part of the reason that the industry itself became so big, was because tons of others jumped into the market as well, often copying Atari (and, eventually, figuring out how to do it better — which is why consoles today are from Nintendo, Microsoft and Sony… rather than Atari).

Other developers, big and small, saw the runaway success of the game and brought out their own clones to take a slice of Pong’s pie. Allied Leisure released around 20,000 cabinets of Paddle Battle in March 1973. Nutting Associates, the company Bushnell and Dabney had worked with to release Computer Space, ended up releasing Computer Space Ball, which was strikingly similar to Pong. There was Paddle-Ball from Williams Electronics, and Rally from For-Play. Midway Manufacturing, then a pinball machine company, dipped their toe into the waters of arcade games with Winner in 1973.

In fact, as various studies have shown, with a developing market, it actually helps quite a bit to have lots of copying going on, because it basically cuts the marketing costs of developing that market a ton. That was clearly true with the video game market:

These manufacturers doubled down on their advantage: Not only could they piggyback on Pong’s PR success, they did not have to take into account the cost of developing the game: They could simply lift its internal machinery wholesale.

Yes, the article highlights that eventually Bushnell had to pay off Magnavox, after they pulled out a broad patent “regarding interaction between machine-controlled and player-controlled elements on the screen,” but Bushnell insists that he only paid out because the settlement costs were half of what it would have cost to have won in court (sound familiar?). Once again, the article quotes Baer admitting that even if he invented the game, credit has to go to Atari:

“That’s the business,” he says. “Most inventions are based on some prior history. Al Alcorn knew absolutely nothing about the existence of the Odyssey game — he deserves the major credit for getting Atari started successfully.”

The thing is, this isn’t a unique story by any stretch of the imagination. Look into the histories of lots of developing industries and you see the same basic thing. Lots and lots of copying and building off of each other… and quite frequently it’s that very fact that leads to those industries being so successful. Yet, we look to shut off that possibility due to an over-reliance on things like intellectual property, which hinders that kind of market development.

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Comments on “How The Video Game Industry Was Launched 40 Years Ago… Thanks To Infringement”

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Anonymous Coward says:

But what about all the potential lost sales...

Where would Magnavox and the Odyssey be today, if it hadn’t lost all those sales due to infringement?

There may not be any Sony, Nintendo, or Microsoft today if Magnavox had been able to successfully eliminate all competition via ‘broadly worded patents’ as today’s ‘IP’ holders (I won’t consider them inventors or innovators, only holders) are able to do with current technology.

I mean Magnavox could be as big today as Atari is… oh wait, Atari isn’t even in the game anymore (other than as a throwback joystick with 30 games that hooks up to your TV).

I know there was a point…. I’m just not sure what it is anymore

DannyB (profile) says:

Re: But what about all the potential lost sales...

> Where would Magnavox and the Odyssey be today, if it
> hadn’t lost all those sales due to infringement?

That is an interesting question that a critic could ask.

What would happen is that the one gatekeeper would get rich, but the ongoing innovation would be stifled, making the world worse for everyone else.

If Altair with their 8800 in Jan 1975 could have had an exclusive monopoly on microcomputers, then in the next few years there would have not been the explosion in Microcomputers — even before the IBM PC. Well before the IBM PC there was a thriving marketplace bazaar of different products, both hardware and software.

Similarly, if smartphones were God’s exclusive gift to Apple, and by divine right only Apple can build and sell smartphones, and nobody else, then where would we be? We would all have either dumb phones, or overpriced smartphones are are all exactly alike. No variation in size, shape, color, style, feature combinations or price. No large variety of OEMs making phone hardware. No open software marketplace. (hint: there are more sources of Android apps than just Google Play store and Amazon Apps store.)

Or imagine if back in the 1960s, 1970s, there was only one telephone provider or long distance carrier. Oh, wait. Nevermind. Look at the explosion that happened when AT&T got competition in the long distance arena. Sprint and MCI ate their lunch. Or look at what happened when Bell could no longer require you to only connect their own equipment to their lines. We got a gigantic innovative explosion of telephone equipment in every color, size, shape, etc imaginable.

I hope that says something about what would have happened if Magnavox had exclusive control of the very early video game business.

Gryzor (profile) says:

Re: But what about all the potential lost sales...

Nope, Baer created a very primitive console that was designed in a sneaky way (the console had all the games inside; cartridges merely unlocked them) and marketed in a very stupid way (punters thought the console only worked with Magnavox TV sets).

Atari took it to the arcades. Believed in it, bet big, and won.

Rekrul says:

Re: Re: But what about all the potential lost sales...

Nope, Baer created a very primitive console that was designed in a sneaky way (the console had all the games inside; cartridges merely unlocked them) and marketed in a very stupid way (punters thought the console only worked with Magnavox TV sets).

That’s not an entirely accurate description of the Odyssey console. Plugging in a cartridge didn’t really “unlock” the different games. It made connections that changed the logic the console used for the games.

The Odyssey was actually quite primitive and was only able to render a couple paddle shapes and a ball on the screen. All the games used some variation of this and plugging in a cartridge just changed some of the logic. It didn’t even keep score, you had to do that yourself.

Anonymous Coward says:

Re: Ain't it funny...

They do realize this, which is why they want to prevent anyone else from being able to do what they did in the first place.

It’s the Do as I say, not as I Do mentality. For some reason they think that they are above having to follow the rules…

It’s almost like they think they are the 1% who don’t have to follow the same rules as the rest of us 99%’rs… If only there was some support for this concept and a way to push for change…

Machin Shin (profile) says:

Re: Ain't it funny...

What is really funny is when you realize what a pathetic inventor Edison was. He held a ton of patents, most of them for ideas he took from other inventors and then patented. So much like most patent holders today.

It makes me sick when I see Edison held up as this wonderful inventor. The guy was a business man and he was quite good at that. He pales in comparison with guys such as Tesla. Yet because Tesla was an inventor and not a business man we only hear about Edison.

jupiterkansas (profile) says:

Re: Re: Ain't it funny...

I hear a lot more about Tesla these days than Edison, but then again, I’m on the internet.

But it’s easy to say Edison invented the light bulb, and he wouldn’t have had to invent anything else. That’s a huge thing.

What’s the biggest thing Tesla actually did? Alternating current? That’s hard to impress with. Radio perhaps, but his contribution there is disputable. Needless to say he was a genius with electricity.

John Fenderson (profile) says:

Re: Re: Re: Ain't it funny...

Edison didn’t invent the light bulb. Light bulbs existed before him. He dramatically improved the light bulb.

Tesla invented a whole lot more than AC and (maybe) radio. Both Tesla and Edison contributed tons of things that we use and take for granted every single day. Tesla was better at inventing stuff, Edison was better at the business end.

Crediting Edison as a one of the Greatest Inventor is an overstatement, but his business acumen made up for that. In that sense, he’s a bit like Bill Gates.

out_of_the_blue says:

"based on infringement"? -- Okay...

a) Copying — on hardware chips that simply weren’t available in ’62 — isn’t infringement. b) You’re using “infringement” contrary to your usual to try and put over that copying is good, but in doing so you admit that “infringement” is real.

Besides, both those are just instantions of prior art: “table tennis”.

Sum: there was no valid copyright, no significant copying, and no infringement, BUT Masnick tries to puff it up as support for… wait for it, it’s where all of his posts lead even if not stated… Megaupload should be able to grift off someone else’s $100M movies!

Every click for Mike “Streisand Effect” Masnick is a click for him!
His fame now depends totally on you! He’s done all he can!

Rikuo (profile) says:

Re: "based on infringement"? -- Okay...

Where did Mike mention Megaupload in this article?

And no significant copying…in an article talking about how everyone COPIED each other?

Lastly, what’s up with you linking to Streisand Effect all the time? Seriously, I want to know. What does it have to do with anything. Or are you going to run away and not answer questions?

Anonymous Coward says:

Re: Re: "based on infringement"? -- Okay...

Let’s not forget, he still owes Dark_Helmet an apology for using an ad hom to refer to him. Something Dark_Helmet has asked for, and which he constantly blast Mike about, namely not responding to questions/statements directly specifically at him.

So what’s it gonna be OotB? Care to answer Rikuo’s questions or apologize to Dark_Helmet? Or are you full of sh*t, a douchebag and a hypocrite? (That last one is rhetorical, we know the answer is a most affirmative “yes.”

Some Other AC (profile) says:

Re: "based on infringement"? -- Okay...

You are such an ignorant and willfully stupid individual that clicked report and the signed and clicked report just to speed up the process of hiding your drivel.
At no time was there any mention of copyright, but you would have known that had you actually read and understood the article.
IP was mentioned as a patent, but nothing about copyright. Please, please do us and the world a favor. Stay in your basement, rely on grocery delivery services so that your mind disease does not propagate to the remainder of the world.
Persons like yourself bring nothing productive to this discussion, this site or this world.

end of rant…

Anonymous Coward says:

Re: "based on infringement"? -- Okay...

Bullshit. Copying = infringement has been your party line for a long time now, and you know it.

What the fuck is it with you and $100M movies? Do you masturbate to them or something? (I’m pretty certain that any movie you masturbate to definitely didn’t cost anyone $100M…)

Gwiz (profile) says:

Re: "based on infringement"? -- Okay...

Besides, both those are just instantions of prior art: “table tennis”.

Excerpt from page 127 of Trolling for Dummies:

… and don’t worry if you can’t think of the proper word needed to make your assertions sound like they are based on actual facts and real world knowledge. When in doubt, just make up your own word instead. Just be sure that it sounds intelligent enough or is close to a real word, since everyone has access to online dictionaries nowadays, you do run the risk of being called out on it and looking silly…

G Thompson (profile) says:

Re: Re: "based on infringement"? -- Okay...

He loses any credibility as soon as you read the FROM name Wally.. the guy isn’t just trolling anymore (a troll will tr to goad people by actually replying) he’s just doing this becasue he can.

He’s trying to cause dissent, animosity and harm to the community and it is to me a major concern. I’ve been the admin of enough major online communities – bianca, Well, The Park, TheReef – to see what this personality type can do if left unchecked.

I’m actually in favour of DH’s idea to actually Ban in this instance, though a limited ban. Though we need to understand any limited bann can still be misused by Ip changing via proxy etc. Though if proven this could be used to perma bann and even take action against on unauthorised access laws even.. Though that is an extreme situation (been there and done it before though)

Tex Arcana says:

Re: "based on infringement"? -- Okay...

Ootb, you are now officially an “instantion” of a moron. I have come to the conclusion that you are a MAFIAA shill, probably a junior lawyer, trying to suck his owners’ cocks all the way to the top, dropping his jc penny suit pants and spreading his :goatse: so the senior partners can drop their “wisdom” into the only cognitive part of your rotting diseased body. Your idiocy knows no bounds; your obsession with masnick borders on the maniacal (watch out, Mike! He’s probably stalking your house RIGHT NOW! !!)

Please do the world and Darwinism a favor, and go die in a fire. Make sure you douse yourself with a fee gallons of gasoline–to be sure you burn to a crisp.

Anonymous Coward says:

i dont believe it! a ‘bona fide’ industry stemming from the copying of someone else idea. how could that be? are you trying to say that this multi billion dollar industry was started by ‘dirty pirates’? whoever would have thought it! more to the point, however did they get away with it? there must have been politicians palms that had to be greased 4 decades ago, just as there are today, in order to get anything done!

John Fenderson (profile) says:

Something I learned as a young sprout

Ideas are a dime a dozen. If that much. What counts is execution. This is the heart of why there exist truisms like “pioneers get all the arrows” — being first isn’t as important as being best.

Perhaps in every industry, but particularly in the software industry, people get fixated about “protecting their ideas” from the stolen. That’s just a big waste of time, energy and money.

Worse, it’s corrosive. If you think that the idea is the valuable thing, then you might also begin to think that the idea will ensure your success and you can live off that idea for a long time. That’s almost never true. For success, you need to execute on a constant stream of new ideas, you need to constantly come out with new excellence.

Anonymous Coward says:

Re: Something I learned as a young sprout

being first isn’t as important as being best.

What we’ve created with all of our intellectual protectionism laws is a system that puts ideas on a pedestal. We reward the first person to do a specific thing, to the detriment of all who would come along and do it better, and ultimately of the public as well (since, predictably, under this system, innovation stagnates).

TimothyAWiseman (profile) says:

Wrong Question

“So here’s the quick question: which action here was more valuable? Baer’s or Bushnell’s?”

No, I do not think that is the right question. That is like asking “Who is more important, the person who lays the foundation for the house, or the electrician that does the wiring?”

For a modern acceptable house, both are important. Here, both men were needed and both contributed substantially, but in different ways.

Wally (profile) says:

So you’re telling us that there is no difference between analog equipment such as the oscillator scope combined with a myocardiogram and several dials for adjustment circuited just right to make Ralph Behr’s tennis box, and the Microchip powered digitally stored and programmed machine that is Pong???

Lets look at some of the key design elements here. Pong was a tennis game arcade machine where the ball was restricted to bounce off the paddles and top and bottom walls. Ralph Behr’s home system of tennis was made so that the paddles represented a charge and the ball’s polarity changed when hit by a paddle because of the analogous IC design.

Ralph Beher’s design had allowed for you to put English to the ball while Pong bounced the ball off the walls and paddles based on the trajectory and angle in which it hit.

My point is, do not confuse similar game concepts as infringement when the differences between two games are astronomically different in gameplay and design.

Wally (profile) says:

Re: Re: Re:

Excuse me while I lift up that rock you live under and let me explain it to you.

The quick and dirty answer is “No. Just stop because all you’re doing is comparing 2 completely different platforms of chips and machinery”. Steve Jobs, while working at Xerox PARC, came up with the programming to keep a mouse cursor on screen because that was something Xerox PARC’s default GUI programming could not do if you want a GUI look-alike of Xerox PARC from Apple, look at the GUI on the Lisa…

Don’t forget that Steve Jobs also worked at Atari and programmed the arcade version of “Breakout” for them.

You are mixing platforms in a sad attempt to troll or ferret something out of me that doesn’t exist. Seriously btrussle, why do you even attempt to try? I’m allowed to like whom I like for reasons I like. Apple has fucked up a lot in the past an present, but my loyalty to some of their products is not based on fanboyism. My family’s VERY FIRST COMPUTER was a Macintosh Plus. I learned how to type and do desktop publishing on a Macintosh Quadra 605 and up until my 9th year in school, we used Macintoshes who seemingly handled a lot of the edutainment titles (i.e. Oregon Trail Delux, KidPix, Super Solvers: Gizmos and Gadgets, Mavis Beacon Teaches Typing…). So yes, I love classic Macintosh software. That’s not being a fanboy. If you’re going to sit there accusing me of being a fanboy for no reason based on that, you need to step back and just f**k off…nobody else cares if I am or not.

btrussell (profile) says:

Re: Re: Re: Re:

“If you’re going to sit there accusing me of being a fanboy for no reason based on that, you need to step back and just f**k off…nobody else cares if I am or not.”

Scathing! You sure told me!

You have some serious issues wilma.

“I thought Apple came up with the idea of keeping things limited to the screen, rather than being allowed to go off the edge(or is that rounded corner?)?”

Please show us on the doll where this statement hurt you?

Wally (profile) says:

Re: Re: Re:2 Re:

You haven’t. You’re just trolling and are trying to derail the topic of the post. You’re acting like OOTB and AJ do towards Mike Mansick, and you expected to get a rise out of me. You haven’t really done anything to upset me. You just simply filled your comment so full of derp that I had to respond to your unfortunate misguided views. If you had tried to prove to me what exactly you were saying I’d have responded differently. But since you keep dogging me like you’re OOTB or Another Joe, you got no respect from me.

Also, it’s hard for me to tell if you’re trying to troll by calling me “wilma”. Was that the name of someone who traumatized you as a child? If so, I advise you to get that checked out along with the rest of your psychopathy. If not, you’re failing miserably by trolling.

“”I thought Apple came up with the idea of keeping things limited to the screen, rather than being allowed to go off the edge(or is that rounded corner?)?”

Also, to clarify, Steve Jobs (the guy who programmed/hacked his Xerox PARC machine) came up with the code to prevent his work station’s mouse cursor from moving beyond the edge of the screen. He was not working at Apple at that time, but he did in fact create that code and used it regularly.

I mean seriously, I’m almost the only person responding to you because I believe you have a chance to redeem yourself in the community. The more you dog at me for any of my opinions without properly and respectfully correcting me on topic with the article, without any rational or reasonable thought in the world, the less you show yourself to be credible. Most people in this community have enough respect for me to at least try it.

So in short…Steve Jobs worked at Xerox PARC and not just Apple. You’re dogging me on something without any regard or thought to how people are thinking of you. You’re not getting a rise out of me and I’m actually not mad at you. What do you expect from me?

Wally (profile) says:

Re: Re: Re:3 Re:

Also, I don’t yell using all caps. When I use caps, it’s an emphasis. Not sure of you caught that btrussle, so at least I can say sorry for not informing you of that earlier.

Also, when I write lengthy responses, it means one of three things.
1. I’m not upset or angry and am either writing in detail or in insult.
A) Insult can be combined with any misinformation you convey when hounding me about an off handed subject to the articles written here at Techdirt. The phrase (in context as I’m too lazy as my wife and I are watching Casablanka on my Windows PC which is hooked up to the stereo equipment and playing through iTunes…said all that to show you “proof” that I am a “fanboy” for using 1 Apple product outsude my iPod), “I thought you said Apple was the first company that’s prevented objects from going off screen,” was not only blatantly obviously directed at me, but an even more painfully obvious trolling behavior conveyed that not even OOTB or Anothet_Joe seemingly convey…come to think of it, those two aren’t even intent on trolling….With you acting like that, you only compound your problem with trying to figure out the logic involved in actual thought…you’re just a troll.

2. I have no more time to argue with you as the wife is giving me “the look”…so have fun trying to crack my shell when there’s really no resentment in there.

Wally says:

Re: Magnavox Odyssey...

The games varried as the “cartridges” you put in were nothing more than on/off set of transistors telling the circuitry of the Magnavox what to do with the circuitry inside the unit.

I’m not sure on this, but Atari was either the first to use EEPROM storage in thier cartridges for the Atari 2600 (VCS outside the US), or the first to be a successful platform that uses it.

Graham J (profile) says:

“For all the talk of how infringement “harms” the inventor, if someone else can build a massive market where the originator failed, isn’t that better for society and the economy?”

You switched subjects there. In this case it would have been better for the inventor if Atari hadn’t ripped him off.

I’m as anti-copyright as you are but I don’t have any illusions about inventors being “helped” by having their ideas copied.

Erbnie Bridge (profile) says:

Atari invention

Yes Ralph did indeed create the fundamental technology for Atari and every other video game of the time and for many years after, and his then employer collected royalties from his invention for years and years, but their Phillips Pong sold for around $300 in the mid ’70’s. Nolan’s mass market Atari sold for $50 only three or four years later. Cost effective manufacturing as his contribution.

martyg (profile) says:

What the infringement was...

While the impetus for PONG was Baer’s Odyssey Tennis game (As Al Alcon has even stated, “And Nolan got the idea from that, but it’s like the movie The Producers, because he figured we’d rip off the idea for a game, but so what? It’s no good, we’re not going to sell it, we’ll throw it away, so what harm is there, right?” That’s not in any way what the settlement was about. The settlement (which was between Atari and Maganvox and not Ralph and Nolan, and was actually for a large amount of money at the time for Atari) was in regards to licensing video display technology. What was claimed in the article as “broad patent” is actually anything but: It’s specifically related to VIDEO technology. I.E. moving and interacting with objects on a television set via a video signal. That last part is important, because (besides being where the video in video game came from) it’s also why Spacewar and tennis for two were thrown out multiple times from being demonstrations of previous technology. CRT != video. There is no video signal present in a vector driven oscilloscope or related display device. Ralph was the first to tap in to a standard TV set (a video driven raster display) for the purpose of generating objects and interacting with them for a game. Which is why his and his team’s patents were called the landmark patents of the industry. In all fairness, the spot-motion tech that was in PONG and Computer Space was developed completely independently of Ralph’s work – by Nolan’s partner Ted Dabney in 1969-1970 while at Ampex. But it was still well after Ralph’s efforts and initial patent filings (in fact by that time Sanders was already well in to trying to find someone to manufacture the full console that became the Magnavox Odyssey). And before people cast aspersions towards Ralph and his patents, know that Nolan is on record in multiple interviews in the early 1970s for wanting to do the exact same thing via Atari: go after competitors and force them to license Atari’s spot-motion patent.

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