The arcade era
Atari's Pong (1972) wasn't the first video game, but it was the one that turned "video game" into a real business — first in arcades, then as a home console version sold through Sears. Arcades boomed through the late 1970s and early 80s. Then came the North American video game crash of 1983: a flood of low-quality games (famously, an Atari E.T. tie-in) and market oversaturation crashed consumer confidence and briefly convinced much of the US industry that home video games were a fad.
The console wars begin
Nintendo's NES (1985 in the US) is widely credited with reviving the home console market after the crash, backed by quality control standards for third-party games and a killer lineup (Super Mario Bros., The Legend of Zelda). That set up the first real "console war": Sega's Genesis versus Nintendo's Super NES in the early 1990s, fought partly on hardware and partly on marketing ("Genesis does what Nintendon't").
3D and the CD era
Sony entered the market with the original PlayStation (1994), using CDs instead of cartridges — cheaper to produce, more storage for full 3D games and video. Nintendo's 64 stuck with cartridges (faster loading, more expensive); Sega's Dreamcast (1999) was technically ahead of its time but couldn't survive PlayStation 2's dominance and Sega exited the console hardware business afterward.
Modern console generations
Microsoft entered with the original Xbox (2001), turning it into a three-way fight with Sony and Nintendo that's continued through PS2/Xbox/GameCube, Xbox 360/PS3/Wii (where the Wii's motion controls briefly pulled in a huge non-gamer audience), PS4/Xbox One, and the current PS5/Xbox Series generation. Online multiplayer and digital downloads became standard along the way, changing consoles from offline boxes into always-connected platforms.
Handhelds
Nintendo's Game Boy (1989) proved portable gaming could be a mass-market business on its own, not just a novelty, and its successors (Game Boy Advance, DS, 3DS) kept that line going for decades. The Nintendo Switch (2017) blurred the line entirely — one device that's both a home console and a handheld. Valve's Steam Deck (2022) pushed the idea further: a handheld that plays a large existing PC game library, not just a closed set of console-specific titles.