The Video Game Industry Year by Year: 1973-1975

I don't know if this kind of thing will be of much intrest or not.

One thing I plan to include in my book is a couple of chapters offering brief summaries of the coin-op video game industry as a whole. The details of each company will be covered in separate chapters but they somtimes jump forward and back in time and I thought I needed some chapters to sum up what was going on in the industry. Starting around 1978, these chapters will include more extensive statistics from trade magazines, but these weren't available for the early years. This post will cover three years, since there isn't as much info for these years.

1973

            Prior to 1973, only a handful of coin-op video games were released (Computer Space, Galaxy Game, For-Play's Star Trek, and Pong) and Pong was released in November of 1972. The coin-op video game industry really kicked off in 1973, though the games were still new and had yet to take the industry by storm. In a January, 1974 report on the recent MOA convention, Ralph Baer estimated that about 50,000 coin-op video games had been produced[1]. The true number was likely higher since Baer's figures omitted some top selling games (most notably, Allied Leisure's Paddle Battle). 90% of them were ball-and-paddle games. While there were over 50 different coin-op video games released during the year, many of them were from small companies. The coin op industry was still largely dominated by the three Ps - phonographs, pinball, and pool tables.
            Video games, however, did bring changes to the industry. In his MOA report, Baer notes that prior to video games, operators had such a hard time recouping their investment on games and cash flow was so poor that the mafia was not  interested in coin-op games. Video games paid for themselves within 4 or 5 months, as opposed to a year or more for other coin-op games. The general mood at the MOA, Baer reports, was good. But then things changed "Right about the time of show business takes a nose dive - Why? - general panic in industry - little guys starving -Midway Mfg only making about 50 units/week - Atari struggling - I'm told….Best guess as to cause - everybody copies each other's game…creative engineering practically non-existent - public suddenly fed-up with 23x same damn thing![2]"   In a 1979 interview, Michael Green of England's Alca echoed Baer's observations.

 

[Michael Green] At one time the [coin-op] market was looking a little stale, with few new ideas. Then in 1972-73, video games provided a major breakthrough which rejuvenated the entire industry. In those early days it looked as though the video game would provide a serious challenge to the position of pinball as the world's leading amusement device. But, for a time, the game was a dismal failure, mainly because most of the U.S. manufacturers just copied Nolan Bushnell's original game, and world markets became flooded with what was essentially the same game. When it became obvious to everyone what was happening-in the fall of 1973-and that video games were not what they were made out to be, many factories pulled out. Some even went into liquidation[3].

Video games weren't the only new thing. Foosball had been around (in the U.S.) since the 1950s but was undergoing its greatest period of popularity. At the 1972 MOA show, Brunswick introduced a new game called Air Hockey and scored an immediate hit (they eventually sold 33,000 copies).

Statistics[4]
# of Different Video Games Released[5]: ca 50

Significant Games
Pong (Atari, released 1972), Gotcha (Atari), Space Race (Atari), Paddle Battle (Allied Leisure), Winner (Midway), Paddle Ball (Williams)

Entering Video Game Industry
Allied Leisure, Amutronics, BAC Electronics, Bally/Midway, Brunswick, Chicago Coin, Competitive Video, Computer Games, Mirco Games, PMC, Ramtek, Seeburg, See-Fun, Sega, Taito, U.S. Billiards, Williams

Exiting Industry
BAC Electronics (?), Brunswick, For-Play Manufacturing (?) , Seeburg, See-Fun (?),

Top machine types, average weekly earningsCashBox: Jukeboxes (tavern locations) $40, TV Ping Pong Games $38, Hockey Tables $35, Pool Tables $34, Pingames $24

Most Popular Machine Types by Location Type (CashBox)
Taverns: 1. Pool Tables (by far), 2. Pingames, 3. Shuffle Alleys, 4. TV Ping Pong Games
Restaurants: 1. Pingames (by far), 2. TV Ping Pong, 3. Target (gun)
Off-Street Locations: same as Restaurants

When did the term "video game" come into use? I have yet to thoroughly investigate this, but the conensus seems to be that it started in 1973. But when, exactly? The above article from the March 17, 1973 issue of Cash Box uses the term "video game" to describe For-Play's Rally. Or does it? It seems pretty clear from the title but when you read the article, it isn't so obvious. The body uses terms like "video skill game" and "television control game", which were more common at the time. So does the title count as a use of "video game" as a phrase or is it just an example of a "headline-ese" shortening of a term like "video skill game"? 





The UPI article above appeared in the Febuary 15, 1973 edition of the Boston Herald. No, it doesn't use the term "video game" (in fact it calls them "pinball machines").
This article is actually about Atari.
The reason I posted it is that it still refers to the company as "Syzygy" despite the fact that they had incorporated as "Atari, Inc." over 6 months earlier.
Interesting - to me, at least, if no one else.

1974

            The video game market in general, continued to expand in 1974. An April, 1974 issue of Time magazine estimated that video games were pulling in $900 million annually (though much of that was likely due to home games). 1974 also saw the industry's first shakeout (as noted by Baer in his MOA report). In 1973 and '74 dozens of companies entered the video game arena with little or no knowledge of the technology and even less knowledge of the coin-op industry and by the end of 1974, the glut of uninspired Pong clones led to the industry's first decline. Midway, for instance, saw revenues drop almost $2 million in 1974. Operators, meanwhile, found themselves saddled with Pong games that no one wanted to play and even fewer wanted to buy. Even worse, some had bought the games on credit when the industry was flying high and the games could seemingly do no wrong

In an interview in the January, 1975 issue of Play Meter, operator John Trucano expressed surprise that at the 1974 MOA show, "..the number of video game manufacturers was so greatly reduced over the previous year" (the interviewer indicated that this was "as it should be" since the weaker manufacturers were being weeded out). Many in the coin-op industry still viewed video games as nothing more than a passing fad that had already passed. The debut issue of Play Meter (December, 1974) included an article titled "TV Games: Really That Bad?". The article opined that "…the video game market is suffering from the "post TV-game-rush-blues" and that  "The very nature of the video market, it seems, is one of pure novelty." The article goes on to note that "the video gear became 'obsolete' at a breath-taking pace, as new innovations on the video theme replaced the original lines quickly". and " With the resale value of the games very low because of the lack of demand for them, warehouses became what some operators thought may prove to be burying grounds for their investments." According to Ralph Baer's 1976 figures, 87% of video games released in 1973 were ball-and-paddle games versus 38% in 1974 and 21% in 1975. Baer's figures, however, are incomplete and omit a number of popular Pong clones. A rough count of the number of titles released each year shows that 90% were ball-and-paddle games in 1973 versus 70% in 1974. In terms of percentage of total sales, the 1974 figures were probably somewhat lower due to the sales of Tank and Gran Trak, perhaps the first major hits outside of the ball-and-paddle genre.

On the other hand, a number of operators saw video games as more than a nine-day wonder. The same Play Meter article cited above notes that "…the overall market for video games is still on the upswing in most major markets." The following month, Play Meter editor Ralph Lally  opined "…what a change video games have brought to this industry. Less than three years ago, the first video game appeared on the market. The public's initial response to the new type of game was so fantastic that the video market grew tremendously in an incredibly short period of time." Cocktail table games also hit it big in 1974, with a number of new companies appearing on the scene to produce them. The games, however, had something of an unsavory reputation in the industry as they were often sold by fly-by-night companies. The most unscrupulous were the "blue sky" operators, who would place want ads offering package deals on hot games and even promising to help new operators find a location only to disappear once they had the money. On the other hand, the games opened up the market to many types of locations that normally shunned coin-op games, such as high-end restaurants and cocktail lounges.  More significantly, games like Tank and Gran Trak showed that there was a video game market beyond Pong clones (something that many in the industry doubted)
     The coin-op industry continued to fight to improve its image in 1974. In an interview with Play Meter at the 1974 MOA convention, MOA Executive VP Fred Granger commented "….people tend to think of an arcade as a place down in the bad part of town, with peep shows and all that kind of stuff" and further noted that "If you call an arcade an 'amusement center' or a 'family fun center', it is received much easier..." Changing terminology, however, would not solve the industry's image problems, which would continue to be an issue throughout the golden age. On the home front the major news was the introduction of Atari's home Pong.
     
Statistics:

# of Different Video Games Released: ca 70

Significant Games
Tank (Atari/Kee), Gran Trak 10/20 (Atari), Leader (Midway), Pace Car Pro (Electra), Flim Flam (Meadows)

Entering Video Game IndustryBristol Industries, Digital Games, Electra Games, Electromotion, Elcon Industries (?), Exidy, Konami (?), Meadows Games, NSM, Renee Pierre, United States Marketing, Venture Line, Volly, Zaccaria (?)

Exiting IndustryAmutronics (?), Computer Games (?), NSM, United States Marketing, Volly

1975

The cocktail craze of 1974 continued into 1975 as did the industry shakeout. While cocktail table games brought new operators into the industry who were often enthusiastic about the future of video games, many older operators were reluctant to purchase games after having been burned by the oversaturated Pong clone market. An article in the June-July issue of Play Meter explained "A well-established operator, thinking about his old two-player tennis games that are gathering dust, told me 'to buy a new video game is throwing good money after bad. Look, I've been in this business some 15 years and have never had so many machines collecting dust." One attempt to address the issue was conversion kits offered by companies like Edcoe, Elcon, JRW, and RDM Associates that converted existing games to new ones (or to cocktail cabinets). Unfortunately, the converted games were generally just ball-and-paddle games with a few new features. An economic decline triggered by the oil crisis, also affected the industry.
     Nonetheless, overall coin-op amusement sales increased in 1975, even if only modestly. Replay's premiere issue (cover dated October, 1975)  enthused "Just by looking at the figures in New England. we can readily see that 1974 was the biggest game sales year in over ten years; and yet. 1975 surpasses this mark. The reasons are quite obvious. With the influx of television games. many of us have seen new spirit shine in the old time games operator…" The article goes on to note that coin-op games were more accepted by the public, citing video games and cocktail tables as a major reason. The biggest change of the year, however, was that the ball-and-paddle era finally appeared to be drawing to a close as a number of non-Pong games appeared (though ball-and-paddle games still represented more than half the new titles). Atari's Tank continued to sell well, along with other games like Midway's driving game Wheels. At the MOA convention, the big news was the proliferation of solid-state and microprocessor games. Midway's Gun Fight was the only microprocessor video game there but there were a number of non-video games that used the technology, like Allied Leisure's Dyn-O-Mite pin and Micro's Spirit of 76 (the first released microprocessor pin). Foosball also continued to be popular with a number of improved tables appearing (a dozen foosball manufacturers attended the MOA convention). Play Meter even dubbed 1975 "The Year of the Super Soccer."
     On the home front, Atari's Pong was a major hit of the 1975 Christmas season. Atari sold $40 million worth of home Pong units in 1975. Magnavox released the Odyssey 100.

Statistics:
# of Different Video Games Released: ca 100

Top Games
Replay (March, 1976): 1. Tank I & II (Atari), 2. Wheels I & 2 (Midway), 3. Gun Fight (Midway), 4. Indy 800 (Atari), 5. Gran Trak 10/20 (Atari), 6. Twin Racer (Atari/Kee), 7. BiPlane (Fun Games), 8. Racer (Midway), 9. Demolition Derby (Chicago Coin), 10. Street Burners (Allied Leisure)

Entering Video Game Industry (major manufacturers only)
Cinematronics, Control Sales, Fun Games, JRW Ecdoe, Electronics, Project Support Engineering (PSE), RDM Associates, Technical Design Corp, URL, Video Game Inc, Westlake Systems (plus at least 20-25 others)

Exiting Industry (major manufacturers only)Chicago Coin, Control Sales,  JRW Electronics, PMC, RDM Associates (?), Technical Design Corp (?), Westlake Systems

Top machine types, average weekly earnings:
Replay: Pool Tables $44, Video Games $43, Flipper Pins $36

Most popular game types (Replay)Taverns: 1. Pool Tables, 2. Flipper Games 3. Video Games & Shuffle Alleys (tie) Restaurants: 1. Flipper Games, 2. Video Games, 3. Electronic NoveltiesOff-Street Locations: 1. Flipper Games, 2. Pool Tables, 3. Video Games

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[1] Baer, In the Beginning,  p.95

[2] Baer, p. 96

[3] Play Meter, August, 1979

[4] Two things to bear in mind when looking at industry statistics: 1) many suspected that operators regularly underreported collections to avoid paying taxes on them (though whether or to what extent this was true I can't say), 2) RePlay and Play Meter operator surveys generally appeared around the November issues and covered the period up to late summer

[5] Note that the number of different games released is a somewhat rough approximation, especially for the early years. A simple count of titles in KLOV or my own lists is not straightforward as you have to decide whether to include bootlegs, gambling games, or to count licensed games more than once.. The ball-and-paddle percentage is the percentage of titles, not the percentage of actual units sold.