The golden age of arcade video games was the period of rapid growth, technological development, and cultural influence of arcade video games from the late 1970s to the early 1980s. The release of Space Invaders in 1978 led to a wave of shoot-'em-up games such as Galaxian and the vector graphics-based Asteroids in 1979, made possible by new computing technology that had greater power and lower costs. Arcade video games switched from black-and-white to color, with titles such as Frogger and Centipede taking advantage of the visual opportunities of bright palettes.
Video game arcades became a part of popular culture and a primary channel for new games. Video game genres were still being established, but included space-themed shooter games such as Defender and Galaga, maze chase games that followed the design established by Pac-Man, driving and racing games which more frequently used 3D perspectives such as Turbo and Pole Position, character action games such as Pac-Man and Frogger, and the beginning of what would later be called platform games touched off by Donkey Kong. Games began starring named player characters, such as Pac-Man, Mario, and Q*bert, and some of these characters crossed over into other media including songs, cartoons, and movies. The 1982 film Tron was closely tied to an arcade game of the same name.
The golden age of arcade games began to wane in 1983 due to a plethora of clones of popular titles that saturated arcades, and the rise of home video game consoles, both coupled with a moral panic on the influence of arcades and video games on children. This fall occurred during the same time as the video game crash of 1983 but for different reasons, though both marred revenues within the North American video game industry for several years. The arcade game sector revitalized later during the early 1990s particularly with the mainstream success of fighting games.
Time period Although the exact years differ, most sources agree the period lasted from about the late 1970s to early 1980s.
Technology journalist Jason Whittaker, in The Cyberspace Handbook, places the beginning of the golden age in 1978, with the release of Space Invaders. Video game journalist Steven L. Kent argues in his book The Ultimate History of Video Games that it began the following year, when Space Invaders gained popularity in the United States and when vector display technology, first seen in arcades in 1977's Space Wars, rose to prominence via Atari's Asteroids. Kent says the period ended in 1983, which saw "a fairly steady decline" in the coin-operated video game business and arcades.
RePlay magazine in 1985 dated the arcade industry's "video boom" years from 1979 to 1982. The golden age of arcade games largely coincided with, and partly fueled, the second generation of game consoles and the microcomputer revolution.
Business The golden age was a time of great technical and design creativity in arcade games. The era saw the rapid spread of not only video arcades across North America, Europe, and Asia. The number of video game arcades in North America was doubled between 1980 and 1982; reaching a peak of 10,000 video game arcades across the region (compared to 4,000 as of 1998). Beginning with Space Invaders, video arcade games also started to appear in supermarkets, restaurants, liquor stores, gas stations, and many other retail establishments looking for extra income. Video game arcades at the time became as common as convenience stores, while arcade games like Pac-Man and Space Invaders appeared in most locations across the United States, including even funeral homes. The sales of arcade video game machines increased during this period from $50 million in 1978 to $900 million in 1981, with 500,000 arcade machines sold in the United States at prices ranging as high as $3,000 in 1982 alone. By 1982, there were 24,000 full arcades, 400,000 arcade street locations and 1.5 million arcade machines active in North America. The market was very competitive; the average life span of an arcade game was four to six months. Some games like Robby Roto failed because they were too complex to learn quickly. Qix was briefly very popular but, Taito's Keith Egging later said, "too mystifying for gamers...impossible to master and when the novelty wore off, the game faded". Around this time, the home video game industry (second-generation video game consoles and early home computer games) emerged as "an outgrowth of the widespread success of video arcades".
In 1980, the U.S. arcade video game industry's revenue generated from quarters tripled to $2.8 billion. By 1981, the arcade video game industry in the United States was generating more than $5 billion a year with some estimates as high as $10.5 billion for all video games (arcade and home) in the U.S. that year, which was three times the amount spent on movie tickets in 1981. The total revenue for the U.S. arcade video game industry in 1981 was estimated at more than $7 billion though some analysts estimated the real amount may have been much higher. By 1982, video games accounted for 87% of the $8.9 billion in commercial games sales in the United States. In 1982, the arcade video game industry's revenue in quarters was estimated at $8 billion surpassing the annual gross revenue of both pop music ($4 billion) and Hollywood films ($3 billion) combined that year. It also exceeded the revenues of all major sports combined at the time, earning three times the combined ticket and television revenues of Major League Baseball, basketball, and American football, as well as earning twice as much as all the casinos in Nevada combined. This was also more than twice as much revenue as the $3.8 billion generated by the home video game industry (during the second generation of consoles) that same year; both the arcade and home markets combined added up to a total revenue between $11.8 billion and $12.8 billion for the U.S. video game industry in 1982. In comparison, the U.S. video game industry in 2011 generated total revenues between $16.3 billion and $16.6 billion.
Prior to the golden age, pinball machines were more popular than video games. The pinball industry reached a peak of 200,000 machine sales and $2.3 billion revenue in 1979, which had declined to 33,000 machines and $464 million in 1982. In comparison, the best-selling arcade games of the golden age, Space Invaders and Pac-Man, had each sold over 360,000 and 400,000 cabinets, respectively, with each machine costing between $2000 and $3000 (specifically $2400 in Pac-Man's case). In addition, Space Invaders had grossed $2 billion in quarters by 1982, while Pac-Man had grossed over $1 billion by 1981 and $2.5 billion by the late 1990s. In 1982, Space Invaders was considered the highest-grossing entertainment product of its time, with comparisons made to the then highest-grossing film Star Wars, which had grossed $486 million, while Pac-Man is today considered the highest-grossing arcade game of all time. Many other arcade games during the golden age also had hardware unit sales at least in the tens of thousands, including Ms. Pac-Man with over 115,000 units, Asteroids with 70,000, Donkey Kong with over 60,000, Defender with 55,000, Galaxian with 40,000, Donkey Kong Junior with 35,000, Mr. Do! with 30,000, and Tempest with 29,000 units. A number of arcade games also generated revenues (from quarters) in the hundreds of millions, including Defender with more than $100 million in addition to many more with revenues in the tens of millions, including Dragon's Lair with $48 million and Space Ace with $13 million.
The most successful arcade game companies of this era included Taito (who ushered in the golden age with the shooter game Space Invaders and produced other successful arcade action games such as Gun Fight and Jungle King), Namco (the Japanese company that created Galaxian, Pac-Man, Pole Position and Dig Dug) and Atari, Inc. (who introduced video games into arcades with Computer Space and Pong, and later produced Asteroids). Other companies such as Sega (who later entered the home console market against its former arch rival, Nintendo), Nintendo (whose mascot, Mario, was introduced in 1981's Donkey Kong as "Jumpman"), Bally Midway Manufacturing Company (which was later purchased by Williams), Cinematronics, Konami, Centuri, Williams and SNK also gained popularity around this era.
During this period, Japanese video game manufacturers became increasingly influential in North America. By 1980, they had become very influential through licensing their games to American manufacturers. Japanese companies eventually moved beyond licensing their games to American companies such as Midway, and by 1981 instead began directly importing machines to the North American market as well as building manufacturing facilities in the United States. By 1982–1983, Japanese manufacturers had more directly captured a large share of the North American arcade market, which Gene Lipkin of Data East USA partly attributed to Japanese companies having more finances to invest in new ideas.
Technology Arcades catering to video games began to gain momentum in the late 1970s, with Space Invaders (1978) followed by games such as Asteroids (1979) and Galaxian (1979). Arcades became more widespread in 1980 with Pac-Man, Missile Command and Berzerk, and in 1981 with Defender, Donkey Kong, Frogger and others. The central processing unit (CPU) microprocessors in these games allowed for more complexity than earlier transistor-transistor logic (TTL) discrete circuitry games such as Atari's Pong (1972). The arcade boom that began in the late 1970s is credited with establishing the basic techniques of interactive entertainment and for driving down hardware prices to the extent of allowing the personal computer (PC) to become a technological and economic reality.
While color monitors had been used by several racing video games before (such as Indy 800 and Speed Race Twin), it was during this period that RGB color graphics became widespread, following the release of Galaxian in 1979. Galaxian introduced a tile-based video game graphics system, which reduced processing and memory requirements by up to 64 times compared to the previous framebuffer system used by Space Invaders. This allowed Galaxian to render multi-color sprites, which were animated atop a scrolling starfield backdrop, providing the basis for the hardware developed by Nintendo for arcade games such as Radar Scope (1980) and Donkey Kong followed by the Nintendo Entertainment System console.
The golden age also saw developers experimenting with vector displays, which produce crisp lines that can't be duplicated by raster displays. A few of these vector games became great hits, such as 1979's Asteroids, 1980's Battlezone, 1981's Tempest and 1983's Star Wars from Atari. However, vector technology fell out of favor with arcade game companies due to the high cost of repairing vector displays.