Early history of video games
Throughout the rest of the 1960s, digital computer games were created by increasingly numerous programmers and sometimes sold commercially in catalogs. As the audience for video games expanded to more than a few dozen research institutions with the falling cost of computers, and programming languages that would run on multiple types of computers were created, a wider variety of games began to be developed. Video games transitioned into a new era in the early 1970s with the launch of the commercial video game industry in 1971 with the display of the coin-operated arcade game "Galaxy Game" and the release of the first arcade video game "Computer Space", and then in 1972 with the release of the immensely successful arcade game "Pong" and the first home video game console, the Magnavox Odyssey, which launched the first generation of video game consoles.
Magnavox Odyssey
In May 1972, Nutting Associates chief engineer Nolan Bushnell, designer of the first commercial arcade video game, "Computer Space", saw a demonstration of the Odyssey at a dealership. Inspired, when he quit Nutting to start his own company, Atari, he assigned Allan Alcorn to create a cheap ping pong arcade game as a training exercise, though he did not tell Alcorn that it was for training nor that the idea was based on the Odyssey "Table Tennis" game. Alcorn soon developed "Pong", which Bushnell recognized as a potential hit, and it became the company's first game. "Pong" was very successful, and in turn helped drive sales of the Odyssey; Baer once noted that customers bought the console because of "Table Tennis", in turn because of "Pong", and joked that they may as well have stopped designing games after that game card. In 1974, however, Magnavox sued Atari along with several competitors including Nutting, Allied Leisure, Bally Midway, and Williams Electronics for infringing on Baer's patents for video games played on a television screen. Baer has stated that the lawsuits were not filed right away because Magnavox and Sanders needed to wait until they could expect to be awarded more money than it would cost to pursue the suits. The root of the conflict was a pair of patents by Baer—one which described how the Odyssey showed player-controlled objects, or dots, on a video monitor and described a number of games that could be played with the system, and an earlier one that went into detail about how the Odyssey used that system to have two dots collide with each other and have one bounce off, specifically using a game of ping pong as an example.