Genesis: How the Home Video Games Industry Began
by Ralph Baer

Where do novel ideas come from? Sometimes they come from left field, when you least expect them.

In 1966, I was the manager of the Equipment Design Division at Sanders Associates Inc., a Defense Industry company and at the time the largest employer in the State of New Hampshire.  At the time, my division had grown to nearly five hundred engineers, technicians and support people and I was a busy man. While we were involved in some  display programs, none of the work in my division, or in the rest of the Company for that matter, involved development of broadcast television technology. As for me, ever since my early days of television broadcast studio equipment and TV receiver design work at Loral back in 1951, my TV-engineering training and experience had occasionally surfaced to think about ways of using a TV set for something other than watching standard broadcasts.

There were about 40 million TV sets in the US homes alone in 1966, to say nothing of many more millions of TV sets in the rest of the world. They were literally begging to be used for something other than watching commercial television broadcasts!

In 1966, thoughts about playing games using an ordinary TV set began to percolate in my mind. When I designed and built a TV set at Loral in 1955, I had proposed doing just that: Build in a game to differentiate our TV set from the competition. Management said No and that was that. During a business trip to New York City on the last day of August in 1966, while waiting at a bus terminal for another Sanders engineer to come into town for a meeting with a client, I jotted down some notes on the subject of using ordinary home TV set to play games. I distinctly recall sitting there on a sunny day and writing on a small spiral note book perched on one knee...those notes have disappeared. Not so the pages of the Disclosure Document that I wrote the following morning. They survived to this day and are at the Smithsonian along with all of the game hardware we built off and on over the next three years.

It was a Eureka moment.

When I got back to my office in New Hampshire on September 1, 1966, I transcribed those notes into a 4-page paper, a Disclosure Document which dscribed the idea of playing television games on a home TV set. It lists various types of games that might be playable using the TV set as a display, such as Action Games, Board Games, Sports Games, Chase Games and many others. What I had in mind at the time was to develop a small “game box” that would do neat things and cost, perhaps, twenty-five dollars at retail. (Note that the term "video games" did not appear until the mid-seventies).

I asked one of the engineers in my Division to read, date and sign the document - standard procedure to establish a legal record. He did that. Some of the phraseology of that 4-page paper reflects the fact that I was working in a military electronics company. But it’s clear enough what it proposed: “Let’s Play Television Games!”

Page 1 of 4 Disclosure Document    

Page 1 of the 4-page Disclosure Document

Little did I know that I had started the ball rolling on something much bigger and more significant than anyone could have imagined at the time:  The start of what was to become a very large Home Video Game industry within 10 years! I also could not possibly have visualized that the pages of the Disclosure Document would surface again after 1974 in Federal Courts in Chicago, San Francisco, New York, Ottowa and many other places in pursuit of patent infringers. …and that a lot of money would change hands as a result of the process started by the concepts described that papr, a hundred million dollars, roughly.

Even thinking about Video Games had absolutely nothing to do with the normal business of developing complex military electronic systems in my Division at Sanders Associates. But I was running a pretty large operation then, so I could afford to put a technician on the bench and have him do some experimental  work without even rippling my division’s overhead. So I just did it! It wasn’t long before the project became official; a few convincing demonstrations to our Corporate Director of R&D put the project on a legitimate track that would eventually pay off handsomely.

TV game development activity continued thorough 1968 and 1969. Most of the work was done by Bill Harrison, then an Engineering Associate; and by Bill Rusch, an engineer who both made important contributions to game concepts. I supervised the activity, stopping by a few times during the day in the special room where we were doing the actual hardware development work. That room was tucked away in a remote place of Sanders Canal Street building in Nashua, New Hampshire, far from anyplace where  the “real” work was going at Sanders Associates; the farther, the better management liked it.  It was a lot more than once over the next couple of years that management asked me whether I was still “screwing around with this stuff”. That attitude changed rapidly years later when money from patent licenses and from successful litigation started pouring in.

First TVG chassis Second TV Game chassis

Everything has to start somewhere: First and second TV Game chassis

Several progressively more complex game systems were developed during 1967 and in 1968. We could now play all manner of sports games: Ping-pong, volleyball, handball, soccer, hockey and several others. We also had a light-gun with which we could “shoot” at “targets” on the screen of the TV set.

By 1968 we had finished building our final demonstration game system, the “Brown Box”. It was switch-programmable and played a large number of sports, maze and quiz-type games.

In addition, we had several games based on the  light gun so we could shoot at stationary or moving “targets”. It all worked very well and it was obvious to one and all that playing “TV Games” was fun.

Brown box multigame

                 The "Brown Box" multi-game unit with its Target Shooting "rifle"

Handball
Screen Shots:  Handball
Guys playing
Guys playing
PingPong
…and PingPong 

As far as neat games and producible technology was concerned, we were done! The marketing effort was another story. It remained a major problem for two years. We tried to introduce video games into the Cable TV industry in 1968 without lasting success.

Finally we turned to US television set manufacturers for possible interest in this brand new product category. Throughout 1979 we demonstrated the Brown Box to representatives of various TV set producers. At our invitation, representatives of RCA, Sylvania, GE, Motorola, Magnavox came to Nashua; we demonstrated the Brown Box to all of them and the reactions were overwhelmingly favorable...but did anyone move off a dime? No such luck!

Magnavox finally took a license in 1971 and their 1972 Odyssey Home Video Game, a production-engineered version of our Brown Box, was the result. It started the Home TV Game market.

Magnavox Odyssey
The Magnavox Odyssey  TV Game System
 Odyssey games
12 Games that came with Odyssey

According to the Agreement between us, Magnavox had the responsibility, as our sole licensee, to handle all sublicensing activities for video games. It took three more  years of cajoling and pressure from our Director of Patents and from me to effect a sea-change of attitude at Magnavox. They finally  committed to dropping notices of infringement on a group of arcade game manufacturers. Sanders and Magnavox went after the first set of infringers, the lawsuits began and would go on for the better part of fifteen years.

In the beginning, it was Atari  which was joined with Chicago Dynamics and Bally-Midway in a suit laid on them by Sanders/Magnavox. Court proceedings started in June of 1976 at the Federal District Court in Chicago, Judge John Grady presiding. I had the dubious pleasure of being on the stand from the second to the tenth of June, day after day, acting as a fact witness. Spread out before me were all of the game hardware units we had built at Sanders between 1966 and 1969. Also in the courtroom was a 5-foot stack of documents: Mostly Harrison’s, Rusch’s and my daily logs and assorted technical loose notes. Our Brown Box, the 1968 game unit, was there, hooked up to a TV set and used to demonstrate technical particulars to Judge Grady.

That lawsuit and others that followed it were largely about the interaction between manually-controlled and machine-controlled symbols on screen, like the paddles and the ball in a ping-pong game. Atari’s PONG game – which in any event came about because Atari’s President, Nolan Bushnell, had played an Odyssey ping-pong game at a Magnavox dealership  demo in May of 1972 -  infringed that technology and so did all of  Atari’s competitors who copied the Pong game within months of it  first appearance.

Judge Grady was very interested in the subject. He was very sharp and amazed all of us with the amount technical detail he absorbed and digested during the trial.  He was friendly and often turned to me from the bench while I was on the witness stand, asking for explanations of some technical detail that had escaped him. I was impressed.

One day the opposition brought an arcade PONG-type game into the courtroom.  When the judge asked that the back be removed so that he could see what’s inside, there was a modified Admiral TV set. Its r.f. front-end (the tuner and video IF amplifiers) had been bypassed to make it effectively into a TV monitor. I had described the use of monitors in my ‘480 patent. Judge Grady took one look at what he saw inside the arcade game and what he saw on the screen and drew the proper conclusions: Namely, that this arcade game had all the elements described in our patents - which had long since issued, having  been filed many years earlier.

After weeks of intensive proceedings in Judge Grady’s Chicago courtroom, the trial ended with his decision in favor of Sanders/Magnavox on all counts. The judge read this decision from the bench on January 10th of 1977.  If we had written the decision ourselves, it could not have been more supportive of our position. We had won a clear-cut victory. Naturally, I was pleased to hear Judge Grady state unequivocally that my ‘480 patent was the “pioneer patent” of the nascent video game industry. The public, printed record of the decision in 201 USPQ, page 26 also contains that statement. US Patent 3,728,480 entitled “Television Gaming and Training Apparatus” is the pioneering patent of the video game art.

Atari, the pioneer arcade video game manufacturer of the period was joined in that first lawsuit with Seeburg and some others. Once the trial began, Nolan Bushnell, Atari’s president, was having second thoughts and settled with us out-of-court.... our first licensee! Atari got a relatively low-cost paid-up license which acovered past infringement for US-sold products, but not foreign rights. Those were negotiated five years later. That initial Agreement was dated June 6, 1976. It was the first of two Agreements with Atari. The second one was signed in 1981. By then, Atari dominated the video game world.

That Chicago lawsuit was just the first one in a series of legal actions against infringers of our patents. We later litigated against Mattel, Activision, Nintendo and Sega and won all of those lawsuits over the period of the next ten-plus years. They ran longer than any Broadway play ever did. Much money changed hands as a result and went into the coffers of Sanders (now a Lockheed company) and Magnavox’; of course the lawyers colleted their share.

The Magnavox Odyssey TV Game system jump-started the industry which we now know as the video game industry and did so in fair style. Close to 100,000 Odyssey games were sold in 1972. By the time newer models made their appearance in 1974, Odyssey had racked total sales of about 350,000. This happened despite the fact that the Odyssey system was a mid-1960's design using discrete components, like those of the TV sets of that era. By the mid-nineteen-seventies, integrated circuits and single-chip game designs were coming into use, reducing the cost and increasing the performance of games so that the industry took off like a big bird. By some calculations, its gross receipts now exceed that of the movie industry.

Not too shabby for an idea that took off from a few notes scribbled in New York in August of 1966.

Finally: For anyone really interested in the details of this story, please get a copy of my book “Videogames: In the Beginning” . See the Home page for details.

 

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Copyright 1998 Ralph H. Baer