Atari, an American company formed in 1972 by Nolan Bushnell, a University of California engineering graduate, became the first major company to dominate the computer and video-game market. Building on popular games like Pong, Asteroids and Breakout, Atari became the leading name in consoles for televisions, video-arcade games and personal computers. This lasted until 1984 when Atari unsuccessfully began to stress computer over console production at a time when the personal computer market was undergoing great change with considerable competition between the Apple Macintosh and IBM clones, partly because the console market itself had reached saturation point from over-production.

Into the vacuum moved Japanese companies like Nintendo, Sega and Sony who now dominate the American computer-game and arcade market. Nintendo markets popular games for its consoles and “game boys,” while Sega’s Genesis machine and Sony’s PlayStation have grabbed a large share of the American market. Depicting street combat, wrestling or Kung Fu, the level of violence associated with these games has intensified, while the graphics have improved, sparking widespread fears that children are being desensitized to killing. The increased sophistication of personal computers, with the added possibility of downloading popular games like a new Pokémon craze, makes this a volatile marketplace, economically and culturally.