Origins
It's basically impossible to define what the first video game was, for a couple of reasons. The first is that the definition of what a video game actually is depends on who you ask, and that definition can vary even more over 70 to 80 years. Things that we may see as video games today might've not been considered such when they were created, and vice versa. The second reason is that most early video games were programmed on unique, one-of a kind hardware, and were intended for temporary use, like for research or exhibitions. This means that many games of this era, which were dismantled or otherwise discarded after serving their purpose, have been forgotten by history because they were never publicized.
That said, there are still some games we can point to as the founding fathers of the medium.
In 1947, Thomas T. Goldsmith Jr. and Estle Ray Mann filed a patent for a "cathode ray tube amusement device", which is now known as the earliest interactive electronic game. Using a cathode ray tube (CRT) hooked to an oscilloscope display, the game challenged players to shoot plastic targets by adjusting knobs to move a beam spot on the display. While not considered a video game due to being made entirely from analog electronics, as well as never being fully built outside of prototypes, its memorable as the first game concept to incorporate an electronic display. A year later, Alan Turing and David Champernowne created Turochamp, a chess simulator, and the earliest known written computer game. However, the game was never implemented on a computer, as its code was too complex for the machines of the time.
The first publicly demonstrated electronic computer game, and therefore the first functional electronic computer game that we know of, was Bertie the Brain, created by Josef Kates for the 1950 Canadian National Exhibition. The game was a 13 foot tall computer that allowed attendees to play tic-tac-toe against an algorithim, and was built primarily to showcase Kates' addrition tube, a minature version of the vacuum tube. Unfortuntely, Bertie the Brain was dismantled after the two week exhibition, as Kates was too busy at the time to even think to preserve it, despite its historical significance. It was the only computer built with the addrition tube, as the transistor soon overtook its usefulness.
One year later, the Nimrod computer was presented at the 1951 Festival of Britain, as well as the Berlin Industrial Show. It was built by Ferranti, an engineering firm that was just beginning to get into the industry of computer development. Based on the Nimatron, a machine built for the 1940 New York World's Fair, the Nimrod was designed to play, well, Nim. Althrough the Nimrod was primarily meant to display Ferranti's computer design and programming skills, most attendees were much more interested in the game itself rather than any of the engineering behind it.
Around the same time, MIT student Oliver Aberth was developing the first known game to incorporate real time graphics, a bouncing ball simulation for the Whirlwind I computer. In some definitions, this would make it the first true video game. The next major milestone came with Tennis for Two, arguably the first computer game made solely for the purpose of play. The game was designed by physicist William Higinbotham to entertain visitors at the Brookhaven National Labratory.
In the '60s, computer programming was slowly but surely becoming increasingly accessible, including video game programming. In 1962, Havard and MIT employees Steve Russell, Wayne Wiitanen, and Martin Graetz created Spacewar!, which was copied to several minicomputers and spread across the country in the following decade. That same year, The Sumerian Game was created by teacher Mabel Addis. It was the first edutainment game, as well as the first game designed by a woman. In 1964, John Kemeny and Thomas E. Kurtz developed the BASIC programming language, which allowed programs to be written for more than just one specific computer. As the technology grew and improved, the programming community was growing with it, and would soon reach across the globe.
The Rise and Fall of the Arcade
Arcade games have existed since the early 20th century, but games like skee ball and pinball were banned from many venues due to being "games of chance" that promoted gambling. They were replaced by electro-mechanical (EM) games, which were classified as "games of skill". In 1965, Nakamura Manufacturing Co. (which would later become Namco) released Torpedo Launcher in Japan, being one of the first arcade games Masaya Nakamura built. In 1966, Sega also produced one of its first arcade games, a similar, three-player game called Periscope. In 1968, Sega released a smaller, one-player version of the cabinet. This version game saw surprising popularity in American malls and department stores, which didn't commonly house arcade games at the time. However, distributors still struggled to make a profit due to Japan's high export tax, which made the game much more expensive to buy than most other coin-operated games. In response, Sega suggested that they charge a quarter per play, which would be equivalent to 2 dollars today. This eventually led to 25 cents becoming the standard price to play an arcade game.
Periscope didn't just create a cultural shift, but a technological shift as well. The late '60s and early '70s saw the rise of an "technological renaissance" that established the framework for commercial arcade games to thrive. In 1971, Nolan Bushnell and Ted Dabney created Computer Space, an arcade derivative of Spacewar!. With 1300 units sold, the game wasn't as big of a hit as its creators hoped, but it proved to them the viablity of video games as an industry. Bushnell and Dabney went on to form Atari, and brought on Allan Alcorn to design their next game; Pong. Pong was first released in limited numbers in 1972, before having a wide release in early 1973. Pong was a huge success, with each machine earning 40 dollars per day, making it the most profitable game on the market by a long shot.
Atari's success boosted the blooming video game industry considerably. By 1974, over 15 companies in both the U.S and Japan were developing arcade games. The introduction of the microprocessor by Midway's Gun Fight was a key milestone, as it allowed games to be programmed more directly instead of having to rely on complex IC chip interactions.
The golden age of arcade games began in 1978, when Taito released Space Invaders. The game was the first to introduce the concept of a persistant high score and leaderboard. While the term "high score" was first used in Sea Wolf, created by Midway in 1976, Space Invaders reinvented it as a way to encourage competition and motivate players to return to the game over and over again. It also popularized several other class video games mechanics, like multiple lives, and levels that increase in difficulty as the player progresses. Space Invaders was extremely successful in both America and Japan, and many games after it followed its formula.
One of these games was Pac-Man, released in 1980 by Namco. Pac-Man also became incredibly popular, not just due to its gameplay, but also because of its titular character. Pac-Man was the blueprint of a marketable video game mascot, receiving merchandise and even his own cartoon. In 1981, Nintendo released Donkey Kong, its first major international success. Donkey Kong was one of the first platforming games, and was the first game designed by Shigeru Miyamoto. The protagonist of the game, Jumpman, would be the basis of what eventually became a certain italian plumber you might know.
As more and more arcades were popping up across the world, some were beginning to host video game tournaments where players competed for the highest score. These tournaments, largely supported by record keeping gaming organizations like Twin Galaxies, laid down the foundations of modern esports.
After reaching its peak in 1982, American arcades began to slowly stagnate. Moral panic, difficulty creep, new competition from home consoles, a 1983 market crash, and an economic recession all caused the popularity of arcades to suffer. The market recovered in the late '80s, but was largely dominated by Japanese manufacturers. Meanwhile, while consoles were beginning to out compete arcades in America, the opposite was true in the rest of the world, as the global arcade market was still seeing considerable growth. The '90s saw innovations in new genres like fighting, rhythm, and racing games, as well as graphic updates in the form of 3D animation, but it wasn't enough to prevent consoles from taking over the American market. However, while arcades were developing a niche appeal in the west, they continued to thrive in Eastern Asian countries, especially in Japan. Unfortunately, like many industries, the COVID-19 pandemic caused even those arcades to take a major hit, with many long-standing businesses being forced to close. In 2024, Teikoku Databank reported that over 8000 Japanese arcades had closed in the last decade, with large game companies viewing the arcade business as a "sinking ship".
The Console Wars
The history of consoles begins earlier than you might think, with the first commercial video game console, the Magnavox Odessey, releasing in 1972. Since then, many companies have thrown their hat into the business of gaming hardware. Throughout the years, the console industry has been infamous for its particularly competitive nature, with it being common for companies to directly name drop and disparage their rivals in advertising. These conflicts are known as the Console Wars, and to me, they're an especially interesting aspect of history.
The first console war occured during the second generaion of consoles, as many sought to compete against the newly released Atari 2600. Some of these consoles included Mattel's Intellivision, and the Fairchild Channel F. However, the Great Video Game Crash of 1983 caused most of those consoles to be discontinued, with only Atari surviving the fallout.