Early history of video games
That same year saw the release of the Magnavox Odyssey, the first home video game console which could be connected to a television set. The inventor, Ralph H. Baer, had initially had the idea in 1951 to make an interactive game on a television set. Unable to do so with the technological constraints at the time, he began work on a device that would attach to a television set and display games in 1966, and the "Brown Box", the last prototype of seven, was licensed to Magnavox to adapt and produce. They announced the console in May 1972, and it went on sale that September. The console and its games featured numerous innovations beyond being the first video game device for home consumers: it was the first game to use a raster-scan video display, or television set, directly displayed via modification of a video signal; it was also the first video gaming device to be displayed in a television commercial. It sold for US$100 and shipped with several games, including "Table tennis", which Bushnell had seen a demo of and which "Pong" had been based on. The Odyssey sold over 100,000 units in 1972, and more than 350,000 by the end of 1975, buoyed by the popularity of the table tennis game, in turn driven by the success of "Pong". "Pong" and the Odyssey kicked off a new era of video gaming, with numerous other competitors starting up in the video game industry as it grew in popularity.
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.