What Was The Best-Selling U.S. Arcade Video Game Prior to Space Invaders?

Taito's Space Invaders absolutely revolutionized the world of coin-op video games when it was released in 1978. It was the best-selling coin-op video game to that point in time by a huge margin. Estimates for the number Bally/Midway (who licensed the game from Taito) produced in the U.S. vary, but 65,000 is the number I've seen most.

But what game held the record before Space Invaders?

One of the challenges of writing a book about coin-op video game history is finding a good source for production numbers. Such figures are few and far between and what scant information is out there is of such questionable reliability that an author (or blogger) would have to be a fool to write on the subject.

So here I go.

One of the few seemingly reliable sources out there is an internal document listing Atari production runs for several of their games (unfortunately, Pong isn't one of them).

Another source that I just discovered is Ralph Baer's excellent account Videogames: In the Beginning. On pages 10-13 he presents a hand-written spreadsheet created in April of 1976 that listed estimated production runs for several coin-op games produced since 1972. Unfortunately, I am not entirely clear on the source of the information (I am still reading the book). It says that he got them from Play Meter magazine, but I've never seen production runs in Play Meter or Replay (though I've only got a few issues of the former). The numbers also appear to be rounded off to the nearest 50.
Perhaps he got the names and years of release from Play Meter and estimated the production numbers using an unspecified method (I'm hoping that he really did get them from Play Meter and that I will be able to find a trove of numbers therein, but I doubt it)

Anyway, on to the contenders (I list all games with 5,000+ produced):
NOTE that the following should be taken with a very large grain of salt.
NOTE 2 - this includes only U.S. production numbers.

Super Soccer (1973, Allied Leisure) - 5,000
As per Baer.

Tennis Tourney (1973, Allied Leisure) - 5,000
As per Baer - a figure supported by Allied's Troy Livingston who remembered a figure of "4 or 5 thousand".

TV Tennis (1973, Chicago Coin) - 5,000
As per Baer - who for some reason omits TV Ping Pong, the company's first game.

Formula K (1974, Kee/Atari) - 6,000
As per Baer.

Pro Tennis (1973, Williams) - 7,500
Surprised? I was. The number here is from Baer. It's surprising to me because Williams got out of the video game field after releasing 3 games in 1973. Then they produced Road Champion in 1977 (which may have been licensed from the Italian company Fox). Then exited again until Defender in 1980.
I'd always guessed that it was because their games didn't sell well, but 7,500 (assuming it's roughly accurate) isn't bad at all.

Of course Baer does not include the company's first game Paddle Ball, which may have sold even better (though I doubt it).

Wheels (1975, Midway) - 7,000+
As per Baer, however, Baer does not list individual titles for Midway in 1976, merely noting that the produced 8,000 units overall that year.

Gun Fight (1975, Midway) - 8,000

Sprint 2 (1976, Kee/Atari) - 8,200

Winner (1973, Midway) - 7,000-10,000
Baer supports the lower figure.

Seawolf (1976, Midway) 10,000

Pong (1972, Atari) - 8,000-12,000
This is probably the natural first choice. I've seen figures for the game ranging anywhere from 8,000 (a number supported by Baer) to 12,000 with a number of sources saying "around 10,000". One figure I've seen claimed there were 100,000 ball-and-paddle games created with Atari making about 10% (Baer lists a total of 80,000 ball-and-paddle games but omits a lot of them, including what was probably the biggest of them all).

Atari Football (1978, Atari) 11,351
According to the Atari document, a total of 11,351 were produced (10,405 or the original and 901of the 4-player variant).

Flim Flam (1974, Meadows Games) 12,000?
I'd have to double-check but I'm pretty sure this number came from an issue of Replay. Baer lists only 6,200 but stops in April of 1976 and the game was still selling (it sold 200 in the portion of 1976 included). One of Meadows' problems is that they became so closely associated with the game.
Still, the discrepancy between Baer and Replay is huge. Replay may be including Flim Flam II (or Baer may be incomplete or inaccurate.

Breakout (1976, Atari) 11,000-15,000
The internal document lists 11,000 uprights produced but does not have figures for the cocktail version. I have seen estimates as high as 15,000.

Tank (1974, Kee/Atari) 15,000+
Baer lists 10,000 sold in 1974 and 5,000 in 1975 but also appears to list Tank again in 1975 with 1,000 sold. I'm guessing that the second entry is for Tank II.
Other sources give a figure of "over 15,000", leading me to believe that the exact number is somewhere between 15,000 and 16,000 and probably much closer to 15,000.

Space Wars (1977, Cinematronics) 10,000 (-30,000??)
The 30,000 figure is from Tim Skelly's recollections. Other sources give a figure of 10,000 and I tend to believe the lower figure much more

Paddle Battle (1973, Allied Leisure) - 17,000-22,000
This is the game that gets my vote. Troy Livingston remembers that they sold 17,000 (plus another 4 or 5 thousand of the follow-up Tennis Tourney). Jack Pearson (another Allied engineer) remembers selling 22,000 units (could he be mentally combining the figures for Paddle Battle and Tennis Tourney?). Oddly enough, Baer doesn't list it at all (which is surprising since the main point of the spreadsheet was to account for all the tennis games out there)

So, if the above numbers are accurate, why did Allied sell so many more than the competition?

With Atari, it actually isn't that surprising. Atari was a newcomer to the field and lacked the experience, production capacity, and capital that the coin-op veterans had.
Note that Williams, Chicago Coin, and Midway all did very well with their Pong clones (Midway reportedly licensed the game from Atari). Baer lists figures for dozens of others from new companies like PMC and Ramtek and none came remotely close to the figures put up by the heavyweights.

OK, so beating Atari makes some sense. But what about those heavyweights?
How did Allied, which had only been formed in 1968, beat out the venerable Williams, Midway, and Chicago Coin.

It could be that they beat them to market. My figures (which could be off) indicate that Paddle Battle was released in March, Winner and ChiCoin's TV Ping Pong followed in April and Paddle Ball in May.
Given that Baer does not list TV Ping Pong or Paddle Ball, they may have outsold their follow-ups, but if so, I've never heard it.

Jack  Pearson recalls that when Midway came out with Winner, Paddle Battle was selling for around $995. In an effort to undersell them, Midway introduced Winner at a price about $50 lower. In response, Allied lowered its price, forcing Midway to do the same and this went on until the games were selling for around $795 at which point Midway found it difficult to turn a profit (Allied, who had already made most of their profit, could afford such tactics).

BONUS:
Here are the rest of the Atari/Kee estimates given in Baer's book (if you want to see the rest, buy the book - Baer's that is, not mine).

NOTE that for Atari, Baer does not list individual titles for 1976, but mere lists that they sold 3,000 total (remember, the list was created in April)

Crash N Score - 500
Elimination - 500
Gotcha - 3,000
Gran Trak 20 - 4,500
Indy 800 - 200 (may have sold more in 1976. Given its size, however, I doubt it)
Jet Fighter - 500
Pin Pong - 250
Pong Doubles - 500
Qwak - 250(Shark) Jaws - 500
Space Race - 1,500
Steeplechase - 500

Replay Magazine #1s

Replay magazine used to publish monthly Player's Choice charts. The chart was based on surveys mailed to operators, who were asked to rate games from 1-10 based on performance/earnings.

The monthly charts started in April of 1980. Prior to that, they did year-end surveys for 1976-1979 (the year-end charts mixed video and pinball games. I have stripped out the pinball games to create a list of video games only for these 4 charts).

Note that some issues are missing. Replay sent me copies of the charts several years ago (which I lost after transcribing the info I wanted) and I think they told me that there were some months when they didn't publish a chart, but I'd have to check the issues for the missing months to be sure.
Missing Issues/Chart Not Published: May 1980, September 1980, November 1980, September 1981, June 1984, August 1984, October 1984, December 1984.
(if you have any of these issues and can verify if they have charts or not, please let me know)

Below is a chronology of the #1 game through the end of 1984.

Upright Video Games Chart (for licensed games I only list the company that released the game in the US):
·         10/76 and 11/77: Sea Wolf (Midway)
·         11/78: Space Wars (Cinematronics)
·         11/79: Space Invaders (Midway)
·         4/80-3/81: Asteroids (Atari)
·         4/81-5/81: Defender (Williams)
·         6/81: Scramble (Stern)
·         7/81: Pac-Man (Midway)
·         8/81-11/81: Defender
·         12/81-3/82: Pac-Man
·         4/82-5/82: Ms. Pac-Man (Midway)
·         6/82: Zaxxon (Sega/Gremlin)
·         7/82-9/82: Ms. Pac-Man
·         10/82: Jungle King (Taito)
·         11/82-12/82: Ms. Pac-Man
·         1/83-2/83: Joust (Williams)
·         3/83-8/83: Pole Position (Atari)
·         9/83-11/83: Dragon's Lair (Cinematronics)
·         12/83: Pole Position
·         1/84: MACH 3 (Gottlieb/Mylstar)
·         2/84: Track & Field (Centuri)
·         3/84-4/84: Spy Hunter (Bally/Midway)
·         5/84: Track & Field
·         7/84: Punch Out (Nintendo)
·         9/84,11/4: Spy Hunter

Software Charts: Replay started a separate chart for conversion kits/kit games in May of 1983.

·         5/83: Black Widow (Atari)
·         6/83: Mr. Do! (Universal)
·         7/83: Super Zaxxon (Sega/Gremlin)
·         8/83-11/83: Mr. Do!
·         12/83-5/84: Pole Position II (Atari)
·         7/84: Vs. Tennis (Nintendo)
·         9/84-11/84: Vs. Baseball (Nintendo)
 

 

 

 

The Story of Journey - the Video Game

Today I'm going to do a post where I actualy include an excerpt from my book.
The topic is the coin-op video game Journey, released by Bally/Midway around April of 1983 and designed at Marvin Glass Associates.

First,  a little background.
By the mid-1980s, Bally/Midway had a number of teams designing games for them.
They had an internal team and at least three external ones: Dave Nutting Associates, Arcade Engineering (in Florida), and Marvin Glass Associates.

Marvin Glass was a legendary toy design firm that created such toys as Rock 'Em Sock 'Em Robots, Ants in Your Pants, Lite Brite, Mousetrap, Operation, Toss Across and Mystery Date. They even created the original chattery teeth novelty. In the 1980s, Marvin Glass established a video game design team and began creating games for Bally/Midway.

On to the game (the rest of the post is excerpted from my book All in Color For a Quarter. Note that the book is in rough draft form):

Journey

 

            In late 1982, Bally approached the Marvin Glass team with another proposal. They wanted to create a video game starring the popular rock group Journey. At the time, the group was at the height of its popularity. Its last five albums had made the top 40 and in 1981, they had two hit albums. First was Captured which went to # 9 then came their biggest hit, Escape which went all the way to #1, eventually sold over 9 million copies, and produced the top-ten hits “Who’s Crying Now”, “Don’t Stop Believin’” and “Open Arms”. They were about to go on tour to promote their new album Frontiers and thought that a video-game starring the band might be a good idea and could perhaps even be incorporated into their stage show. The group had become video game fans after bassist Ros Valory and drummer Steve Smith discovered a Defender game while touring Japan. For the next two years, a Defender game accompanied the band on its tours. One member who didn't like the idea was frontman Steve Perry, who thought it was silly and felt the band didn't need to promote itself with a video game. The band quickly arranged to have both a home video game (Data Age’s Journey, released for the Atari 2600 in Christmas 1982) and a coin-op video game based on the band. There was a catch, however,

[Scott Morrison] Midway came to us and told us they had a deal with Journey to do a video game based on the band. They wanted it done in less than three months, to coincide with the release of Journey’s new album and their American tour. Midway came to us because their own design group said it was impossible to do. Of course, we had to prove them wrong, so we brainstormed and came up with a game that we thought we could do in that time frame.

With the impetus of the new challenge, the Marvin Glass team began work on the game around October of 1982.

The game was the work of programmers Richard and Elaine Ditton (who also created the game’s sounds) and artist Scott Morrison. It also featured work by another video game veteran (and I do mean veteran). Journey made use of digitized photos of the band members using a digitizing camera that had been developed by none other than Ralph Baer, the “father of video games” who’d created the Odyssey back in 1966. Baer had come to Marvin Glass in the mid-1970s and his early projects there included a record changing device for phonographs and Milton Bradley’s Simon . The game also featured actual Journey music supplied via cassette tape.

Baer had developed his digitizing camera for use in video games before coming to Marvin Glass. When he demonstrated the unit for chief engineer John Pasierb, Midway was very interested and immediately contracted with Baer who went to work with the Marvin Glass group. The first game to try the new technology was a prototype called Clone. In Clone, rather than just including pre-generated digitized graphics in the game, each machine would contain a digitizing camera that allowed players to take their own pictures so that they could become part of the game. The player would then fly his or her animated face around the screen and replicate themselves into empty pods. A prototype was built and play tested but when (predictably to anyone who knows a thing about teenage boys) some players took pictures of body parts other than their faces, plans for the game were scrapped.

[Stan Jarocki] Kids were dropping their pants and girls were baring their breasts and all that kind of stuff. We had it out on test at Aladdin’s Castle for a while and all of a sudden you see a butt on the shoulders of this character and think “This ain’t gonna fly” but it was a great idea.

 When the idea for Journey came around, Marvin Glass saw another opportunity to put Baer’s digitizing technology to use. Initially, Morrison created some storyboards and traveled to San Francisco to meet with Jim Welch who’d created the band’s album covers and stage visuals. After Welch approved the game concept, Morrison returned to Chicago where work on the game began in earnest. At first, the team tried to digitize existing photos of the band but it just didn’t work, so they hired a professional photographer and, carting along Baer’s digitizing camera, made their way to a Journey concert in Salt Lake City to snap some backstage photos. After prying groupies off of a reluctant Steve Perry, the photos were taken and made their way into the game (they were black and white and seemed a bit large for the character’s computer-generated bodies). The game's attract mode describes it as follows:

 

"Wild alien groupoids have seized Journey's electro supercharged instruments. Your mission is to help Journey retrieve their instruments from the dangers of the five galaxies. Trek through hazardous obstacles in quest of each instrument and then battle your way back to the scarab vehicle. When all five missions are completed Journey begins a spectacular concert at the Galactic Stadium."

Journey was a multi-stage game with each band member having their own unique mini-game. Lead singer Steve Perry, for instance, had to navigate a series of swinging gates to reach his microphone then blast his way back to the top of the screen to the awaiting spaceship (a video representation of the scarab-like ship that had appeared on many of the band’s album covers). In Steve Smith’s segment, the drummer bounced off a series of drums trying to turn them all the same color then leaped behind the wheel of a laserbeam-equipped drum set to fight his way through a horde of enemies. Other segments included guitarist Neal Schoen fighting through a cavern with a rocket-powered backpack to retrieve a guitar/laser rifle, keyboardist Jonathan Cain leaping over conveyor-belts strewn with hurdles to reach his piano, and bassist Ros Valory hopping on a series of telescoping blocks. After all five band members made it to the awaiting ship, action switched to a scene of Journey in concert where manager Herbie Herbert had to prevent legions of half-crazed groupies from running backstage while Journey music played in the background. The Marvin Glass team finished the game by February of 1983, managing to do what the Bally team had called impossible and while the resulting game looks somewhat rushed (and with good reason), it was an admirable job given the constraints and remains a rare example of actual celebrities appearing in a video game[1].

---

[1] Bally/Midway also produced another rock-themed video game: Pink Floyd’s The Wall That never went past the prototype stage.

What was the oldest company to release a coin-op video game?

What was the oldest company to release a coin-op video game? Note that I am not asking what was the FIRST company to release a coin-op video game or (equivalently) what was the first coin-op video game. I mean what is the oldest company that eventually released a coin-op video game.
Hint - it's almost certainly not the company you're thinking of.

Let's do a top 10, starting with the youngest of the oldest (obligatory note: I am discovering  new information all the time and haven't tracked down founding dates for many of the companies who made video games so this list, like everything else on this blog, it tentative).

 

 

 

#10 Renee Pierre (founded 1952) - Renee Pierre was a French company that started in 1952 manufacturing table soccer (foosball) games. They went on to release several video games. Most of them seem to have been licensed versions of other company's games.
There were a lot of close contenders for the #10 spot. At #11 was Taito (1953) followed by Namco (1955).

 

 

 

 

#9 SEGA (1951?) - The founding date for SEGA depends on what you consider to be SEGA.  SEGA was a combination of two companies. Service Games was founded by Raymond Lemaire, Richard Stewart, and Marty Bromley in 1951 (Kent's The First Quarter gives a date of March 1952, but other sources say 1951). Rosen Enterprises was founded by David Rosen in 1954.Rosen Enterprises initially was an import/export company that also made small souvenir items but they soon added a line of two-minute Photomat booths. They got into the arcade game business in 1956.  In 1965 the two companies merged to form SEGA Ltd.

 

 

 

 

#8 Williams Electronics (1943) - Harry Williams was a coin-op legend. He started in the industry in 1929 and went on to an illustrious career that included inventing the first tilt device. In 1942 he and Lyn Durant left Exhibit Supply to form their own company, United Manufacturing.  After a dispute (according to legend over a girl) Williams left and formed Williams Manufacturing the next year.

 

 

 

 

#6 Bally Manufacturing (1931/32) - Bally was founded by Raymond Moloney in 1931 or 32. It had its roots in Lion Manufacturing and the Midwest Novelty Company (no room for that story here). In 1931, when Moloney was unable to find a company to supply him with enough copies of the latest Gottlieb hit pinball game Baffle Ball, he created a machine of his own and named it Ballyhoo after a humor magazine of the period. He also named his new company Bally. Ballyhoo lived up to its name, selling 50,000 copies.

 

 

#7 Chicago Coin (1931) - Chicago Coin started in 1931 when Sam Gensberg, Lou Koren, and Sam Wolberg founded the Chicago Coin Machine Exchange. In the ensuing decades they made just about every type of coin-op game under the sun and made a good number of video games before they went bankrupt and their assets were acquired by Stern.

 

 

 

#5 Gottlieb (1927) - Gottlieb was founded by David Gottlieb in 1927. Their first product was Husky Grip Gauge but what really put them on the map was 1931's Baffle Ball, which some consider the first modern pinball game. Like its successor Ballyhoo, Baffle Ball sold 50,000 copies.

 

 

 

#4 Rock-Ola (1926) - David Rockola moved to Chicago from Canada in 1920 to start a career in the slot machine industry. In 1926, he formed his own company called the Rockola Scale Company. Rockola entered the pinball market in 1932 with Juggle Ball but they were best known for their jukeboxes.

 

 

 

 

#3 Seeburg (1907) - You may be thinking that Seeburg doesn't really belong on the list and they're just here because they owned Williams in the 1970s. Not true. Seeburg actually did release at least one video game under its own name, Deluxe Baseball in 1973 or 74 (though it was licensed from Ramtek).  Seeburg was founded way back in 1907. Like Rock-Ola they were mostly known for jukeboxes, but they did make coin-op games (including the 1949 classic Shoot the Bear).

 

 

 

 

 

 

#2 Nintendo (1889) - THIS is the company you were thinking was #1, right? Well, so was I until I actually looked into it. Most know today that Nintendo was founded in 1889 to make hanafadu cards (or "flower" cards) and later became Japan's leading maker of playing cards.

 

 

 

 

#1 Brunswick (1845) - Surprised? Brunswick was founded way back in 1845 by Swiss immigrant John Moses Brunswick to make carriages. Almost immediately, however, Brunswick turned instead to the one of the two product lines they'd become most associated with: billiards tables and equipment (the other line is, of course, bowling equipment). Over the years Brunswick made a wide variety of products, including one known video game: 1973's Astro Hockey (though TAFA has it being released in 1974).

Reiner Forerst's Nurburgring - The Original(?) First-Person Driving Game

Not so many years ago, Atari's 1976 arcade game Night Driver was commonly credited as the first first-person driving game. In some places, it still is, though even Wikipedia now notes that a German game called Nurburgring came out first. But what was the story of Nurburgring and how did Atari find out about it?

Flyers courtesy of The Arcade Flyer Archive

 

In truth, there was reason to doubt Night Driver's claim to the first first-person driving game title from the start. Night Driver debuted at the 1976 AMOA show in October. That very same show, however, witnessed the appearance of two other nearly identical games - Bally/Midway's Midnite Racer and Micronetics' Night Racer.

So what's the story? How did all three games show up at once and what is their connection to the German original?


Night Racer

Well, it starts (at least part of it does) with Ted Michon. Michon later formed a company called Technical Magic who designed Star Fire,Fire One!, and Kreepy Krawlers for Exidy and the unreleased The Last Starfighter for Atari.
In 1976, however, Michon was working for Digital Games of Covina, California, who had entered the coin-op field in 1974 with Knock Out (actually, I don't know if that was their first game or not).
 
Digital's latest game was Air Combat (which had a number of interesting problems I won't go into here). They had sold 50 of them to an operator in West Germany. The only problem was that they forgot to include a PC board in them. Michon was dispatched to Dusseldorf where he found that all of the games had also been damaged in shipment. I'll save the details for another time (or the book) but during his two-week stay, Michon paid a visit to a nearby bowling alley where he saw a one-of-a-kind driving game called Nurburgring (named for the German race track). Michon even met the game's designer, Reiner Foerst.

Foerst was working with American companies to license his game. There was a problem, however. The game design was very complex (it included a rack with 28 pc boards). Michon tried to explain to Forest that his company might be interested in the game but the design was not economically feasible. Forest, however, was convinced he would be able to sell it as is.

The rack with 28 PCBs inside Nurburgring

After Michon returned state-side, he set to work on a more practical all-digital version of the game called Night Racer. When Digital's Bill Prast saw the game, he was so impressed he showed it to Midway cofounder Hank Ross and the two struck a deal in which both would produce a version of the game with Midway paying royalties to Digital.

But wasn't Night Racer released by Micronetics you ask? Yes, it was. At the time, Digital was experiencing financial difficulties. In June of 1976 it shut its doors. A company named US Medical Industries bought its inventory at auction and the following Monday Digital reopened its doors as Micronetics.

Micronetics didn't last long, but they did show Night Racer at the AMOA show (reportedly because, if they didn't, Midway wouldn't have to pay them royalties).

Midnite Racer/280 Zzzap

Meanwhile, over at Dave Nutting Associates, Jay Fenton was at work creating their version of the game Midnite Racer for Midway. Michon even helped out a bit by explaining how he had used logarithms and antilogarithms to perform multiplications by addition (since the hardware he used could not handle the multiplications and divisions needed to draw objects in the proper perspective).
 

 

But wasn't Midway's game called 280 Zzzap, you ask?
Yes it was. While it was shown under the tile Midnite Racerat the AMOA, a short time later Midway cooked up a promotion where they gave away a Datsun 280Z. Realizing that their driving game would make a perfect tie-in, they renamed it 280 Zzzap.

 
But what about Night Driver? Designer Dave Sheppard recalls being shown a photocopied flyer of a similar game in a foreign language, which he thinks was German. Surely, this was Nurburgring.
 

Screenshots from Nurburgring (on left) and Night Driver (on right)

And what about the original and Reiner Foerst?

Nurburgring was Foerst's first video game. He had earlier created other coin-op games, like the Bingo game Ring-O-Bang(NOTE - a "bingo" game was a pinball variant in which the player tried to line up five balls in a row in a grid of holes).

Ted Michon actually wrote Foerst a letter telling him what was happening with his game. Foerst, however, apparently formed his own company to release the game. Nurburgring 1 was released by Dr. -ing Reiner Foerst GmbH. He followed with at least two more versions: Nurburgring 2 (which had handlebars instead of a steering wheel) and Nurburgring 3 (with much improved graphics, including a road with a center line). Replay reported that he showed a version called Nurburgring Power Slide at a European show in September of 1979 so the game apparently saw some success.
And today, Foerst runs Foerst Driving Simulators, which makes driving simulators for cars, trucks, and buses.

 

PMC's Aztec - First Game With a Microprocessor?

Ask anyone with a nodding acquaintance with arcade video game history what they first game with a microprocessor was and they'll likely name Midway's Gun Fight.  And they may be right.
But there is another game that may have beaten them to the punch - PMC Electronics' Aztec.

Gun Fight

Gun Fight was the U.S. version of Taito's Western Gun (designed by Tomohiro Nishikado, who later designed Space Invaders), but with a major change. The Japanese version did not use a microprocessor. Gun Fight did.

It was not, however, the first time Bally tried using a microprocessor in a coin-op game.
In August of 1974, Bally sent two Flicker pinball games to Dave Nutting and Jeff Frederiksen at Dave Nutting Associates (a group that designed games under contract for Midway). Nutting and Frederiksen redesigned the game using an Intel 4004 microprocessor. Bally chose not to purchase Nutting's patents and instead would try to design their own microprocessor pins. Nutting, meanwhile, took their idea to Mirco Games, where they created the first commercially available microprocessor-based pinball game, Spirit of '76.
Before long, Bally changed its mind about Nuttings' patents and put them to work putting a microprocessor in a video game. They started with a baseball game (probably Ball Park) then switched to Western Gun. I'll skip the rest of the story, but the resulting game, Gun Fight, debuted in November of 1975.

Aztec
(UPDATE - It appears that Aztec did not, in fact, use a microprocessor - see comments for details)

PMC's Aztec was a cocktail-table Pong clone released around March of 1975.

Flyer from http://flyers.arcade-museum.com/

 I know next to nothing about PMC. Located in Southampton PA, it appears to have been established in 1965 and began making video games in 1973. In 1976 they were sued by Electromotion in nearby Bethlehem for copying one of their games (both companies were gone by the end of the year).

Allegedly, Aztec used a microprocessor. If so, that could make it the first microprocessor game, as it was released before Gun Fight.
For this to be true, however, we'd need to confirm a few things:

1. When was Aztec released?
2. When was Gun Fight released?
3. Were there any other prior games that used a microprocessor?
4. Did Aztec use a microprocessor?

Let's start with #4. The flyer doesn't mention that they game used a microprocessor. In fact, I'm not sure where I first heard the claim (possibly in Vending Times). I don't have the game itself, nor do I know anyone who does and could confirm its use of a microprocessor.
The manual, however, has been posted online. The manual contains a written parts list and a typed one (the latter with part #s). The latter doesn't list anything that is clearly a microprocessor (it does list an IC but when I Googled the part #, it didn't seem to be a 4004 or 4040.

However, the written parts list includes the following:

 

That second line sure looks like an Intel 4040/4004, but I'd have to see the board to confirm (actually, someone besides me would probably need to look at it).

There's another problem, however.
The manual cover is actually labeled "Aztec Princess"

While Aztec appears on the cover, everything inside refers only to Princess.
The Arcade Flyer Archive has flyers for both Aztec and Princess.
Vending Times announced the release of Aztec in the March 1975 issue.
The May 1975 issue had a flyer/ad for "Aztec Princess".
Were these all the same game?

Aztec and Princess look very similar but there are differences.
Maybe the differences were in the cabinets?
Whatever the relationship, it looks like all the games were released by spring of 1975.

Gun Fight debuted in October1975 at the MOA show. The Mame history file lists a November release, but the source is unkown. It may be that it was introduced at the MOA and released a month later (there was generally a 1-3 month lag between when a game showed at the MOA and when it was released to distributors) or it may be that the announcement of its debut appeared in a magazine with a November cover date (I know that it was announced in the November 1975 Vending Times).

So it looks like there is a good case to be made for Aztec being the first game with a microprocessor.

But hold the phone.
There's actually another candidate.

Demolition Derby




Jerry Lawson (photo from http://newblackman.blogspot.com/)

In 1975, Fairchild Semiconductor released its first microprocessor, the F8. One of their new "field application engineers" - Jerry Lawson (who later created the Channel F and was also the only African American member of the Homebrew Computer Club), was convinced the F8 could be used in a video game. He added it to a game he created called Demolition Derby, which he sold to Major Manufacturing. Major supposedly tested it in a pizza parlor in Campbell California but went out of business a short time later.

NOTE - some sources claim this game was tested "shortly after Pong debuted".  (http://www.joystiq.com/2011/04/11/game-console-pioneer-jerry-lawson-dies-at-70/)
If it used an F8, this seems to be clearly inaccurate (though I suppose that depends on what they mean by "shortly") Lawson himself says in an interview that he create the game in his garage in 1972 or 1973 then goes on to talk about using an F8 in it. My guess is that he started it in 1972 without a microprocessor and later added the F8.

Even if all of this is true, however, was Demolition Derby tested before or after the release or testing of Aztec or Gun Fight? If Aztec did have a microprocessor and if it was released in March, it seems unlikely that Demolition Derby beat them to the punch (the F8 was released in the first quarter of 1975, but I'm not sure exactly when). The game was also never really released.

UPDATE - PT-109
Another candidate for the first microprocessor video game is discussed in the following post, which also has more info on Demolition Derby (though both that post and this one are out of date as I've since come across more information on both games):
http://allincolorforaquarter.blogspot.com/2013/11/video-game-firsts.html

The Bishop of Battle/No Quarter

"Greetings Earthling!
I am the Bishop of Battle
Master of all I survey.
I have 13 progressively harder levels.
Try me if you dare!"

The golden age  of arcade video games saw the release of a number of video-game-related movies. Everyone remembers War Games and Tron and most people reading this probably remember The Last Starfighter. Unfortunately, many of us also remember Joysticks (though we wish we could forget it).

 

One of my favorites was the 1983 horror anthology Nightmares, which featured a segment called The Bishop of Battle. Emilio Estevez stars as J.J. Cooney  - a disaffected youth/troubled teen who listens to hardcore punk bands like Fear on his Walkman as he plays coin-op video games at a master level. As the epsiode opens, J.J. and his geeky sidekick Zock hustle a group of street toughs out of $25 on, get this, Pleiades. After barely escaping with their lives, the two head to the mall where J.J. wants to play his latest obsession, The Bishop of Battle. Zock gets ticked and leaves ("You know what J.J.? You're nuts. That machine's made you into ...some kinda fiend!""

J.J. draws crowds of cheering fans as he plays the game. When the place closes, the owner has to physically kick J.J. out, drawing J.J.' ire  ("I'm gonna get back at you! I promise you that, man, I'm gonna get back at you! I mean it, man!")

Back home, dad lowers the boom. J.J. is grounded - no more video games until his grades improve. J.J. has his own proposal - once he beats the Bishop, he'll swear off games forever, but dad isn't having it and J.J. storms off ("You sit there in that chair, and you make judgments on me. You don't know anything about me! Goodnight, go to hell! I hate the both of you!")

J.J. sneaks out late at night, breaks into the arcade and finally reaches the 13th level , where….

I don't want to spoil it for you (the episode is available on YouTube).

A vaguely similar plot was used in No Quarter, an episode of the CBC radio anthology Night Fall.  No Quarter aired on March 4, 1983. It tells the story of Paul Weaver, a poor shlub who becomes obsessed with video games after playing Donkey Kong while waiting for a delayed flight at the Vancouver Airport.  On a drive home from dinner, he and his wife get into an argument over the time he's spending on the games. She is concerned that the games promote anti-social behavior in violence. He replies that the games are educational ("The Defense Department uses Armor Attack as a simulator for tank training.").

After he misses an important meeting because he's busy playing Defender ("It you want to beat Defender, don't use the smart bomb in hyperspace." The arcade owner dubiously tells him), his wife launches a public crusade against video games.

One day, Paul gets a mysterious package containing a talking arcade game called Death Ship (it even says "coin detected in pocket" ala Berzerk).

So what happens when he plays it? Listen to the episode to find out.

 An interesting episode with lots of 1980s video-game references (At one point, the arcade owner tells Paul "Some computer science student in Buffalo blew the brains out of a Pac-Man. You know it only stores six figures. Well, he turned it over 3 times and the screen split the maze on one side and this electronic gibberish on the other.")

You can listen to it at http://www.blogtalkradio.com/scarefm/2012/07/31/nightfall-series--no-quarter