The second generation of computer and video games began in 1976 with the release of the Fairchild Channel F and Radofin Electronics' 1292 Advanced Programmable Video System. It coincided with and was partly fuelled by the golden age of arcade video games, a peak era of popularity and innovation for the medium.
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The early period saw the launch of several consoles as various companies decided to enter the market; later releases were in direct response to the earlier consoles. The Atari 2600 was the dominant console for much of the second generation, with other consoles such as Intellivision, the Odyssey², and ColecoVision also enjoying market share.
The second generation had a mixed legacy affected by the video game crash of 1983. The Atari 2600 was discontinued on January 1, 1992, ending the second generation. The duration between the start of the 2nd generation in 1976 and the start of the 3rd generation in 1983 was seven years. Due to the long lifespan of the Atari 2600, which was available from 1977 to 1992, the second generation is the longest generation so far.
Some features that distinguished second generation consoles from first generation consoles include:
Early 8-bit home consoles (1976-1988)
The earliest console, the Magnavox Odyssey, uses removable cartridges that are merely jumpers housed in cartridges, that activate the games already wired into the console. This method was soon replaced during the move to Pong consoles, where the logic for one or more games was hard-coded into microchips using discrete logic, and no additional games could be added. By the mid-1970s, cartridges returned with the move to CPU-based consoles. With games now consisting of microprocessor-based code, these games were burned onto ROM chips mounted inside plastic cartridge casings that could be plugged into slots on the console. When the cartridges were plugged in, the general-purpose microprocessors in the consoles read the cartridge memory and ran whatever program was stored there. Rather than being confined to a small selection of games included in the box, consumers could now amass libraries of game cartridges.
The Fairchild VES was the world's first CPU-based video game console, introducing the cartridge-based game code storage format. It was released by Fairchild Semiconductor in November 1976. When Atari released their VCS the next year, Fairchild quickly renamed it to the Fairchild Channel F.
The RCA Studio II is a video game console made by RCA that debuted in January 1977. The graphics of Studio II games were black and white and resembled those of earlier Pong consoles and their clones. The Studio II also did not have joysticks or similar game controllers but instead used two ten button keypads that were built into the console itself. The console was capable of making simple beep sounds with slight variations in tone and length.
In 1977, Atari released its CPU-based console called the Video Computer System (VCS), later called the Atari 2600. Nine games were designed and released for the holiday season. It would quickly become—by far—the most popular of the early consoles.
The Bally Astrocade was originally referred to as the Bally Home Library Computer, and was released in 1977, but was available only through mail order. Delays in the production meant that none of the units actually shipped until 1978; by this time, the machine had been renamed the Bally Professional Arcade. In this form, it sold mostly at computer stores and had little retail exposure (unlike the Atari VCS). In 1979, Bally grew less interested in the arcade market and decided to sell off their Consumer Products Division, including development and production of the game console. In 1980, they re-released the unit with the BASIC cartridge included for free; this system was known as the Bally Computer System, but was changed to Astrocade in 1982. It sold under this name until the video game crash of 1983, and then disappeared around 1984.
In 1978, Magnavox released its microprocessor based console, the Odyssey², in the United States and Canada. Philips Electronics released this same game console as the Philips G7000 for the European market. Although the Odyssey 2 never became as popular as the Atari consoles, it managed to sell several million units through 1983. Philips had also designed the more powerful Interton VC 4000 console family (e.g. 1292 Advanced Programmable Video System) before this.
In 1979, Activision was created by disgruntled former Atari programmers. It was the first third-party developer of video games. In succeeding years, many new developers would follow their lead.
The next major entry was Intellivision, which was introduced by Mattel in 1980. Though chronologically coming long before the "16-bit era", the Intellivision console contains a unique processor with instructions that were 10 bits wide (allowing more instruction variety and potential speed), and registers 16 bits wide. It also features an advanced sound chip which can deliver output through three distinct sound channels. The system's initial production run sold out shortly after its national launch in 1980.
Intellivision was the first system to pose a serious threat to Atari's dominance. A series of TV advertisements featuring George Plimpton demonstrated the superiority of Intellivision's graphics and sound to those of the Atari 2600 using side-by-side game comparisons. Nevertheless, Atari held exclusive rights to most of the popular arcade game conversions of the day, and used this key segment to support their older hardware in the market. This game advantage and the difference in price between the machines meant that each year, Atari sold more units than Intellivision, lengthening its lead despite inferior graphics. This need for price parity has influenced every console war since.
1982 saw the introduction of four new consoles: the Emerson Arcadia 2001, the Vectrex, ColecoVision, and the Atari 5200. The Vectrex was unique among home systems of the time in featuring vector graphics and its own self-contained display. The Arcadia and ColecoVision were even more powerful machines.
The popularity of early consoles was strongly influenced by the ports of arcade games. The Atari 2600 was the first, with Space Invaders, and ColecoVision bundled in Nintendo's Donkey Kong.
Early cartridges were 2 KB ROMs for the Atari 2600 and 4 KB for Intellivision. This upper limit grew steadily from 1978 to 1983: up to 16 KB for Atari 5200 and Intellivision, 32 KB for ColecoVision. Bank switching, a technique that allowed two different parts of the program to use the same memory addresses, was required for the larger cartridges to work. Atari 2600 carts got as large as 32k (Final Run) through bank switching. In contrast, some Arcadia family members (e.g. Palladium Video-Computer-Game) supported up to 31 KB without any need for bank switching. In the game consoles, high RAM prices, especially during the early period of the second generation, limited the RAM (memory) capacity of the systems to a tiny amount, often less than 1 KB. Although the cartridge ROM size limit grew steadily, the RAM limit was part of the console itself, and all games had to work within its constraints. In the case of the especially constrained Atari 2600, which had only 128 Bytes of RAM available in the console, a few late game cartridges contained a special combined RAM/ROM chip, thus adding another 256 bytes of RAM inside the cartridge itself.
By 1982, a glut of consoles, over-hyped game releases, and low-quality games from new third-party developers less well-prepared than Activision began to appear, overflowing the shelf capacity of toy stores. Partly due to this surplus, the video game industry crashed, beginning in December 1982 and stretching through all of 1984. Almost no new games were released in 1984.
Handheld systems
The first handheld game console with interchangeable cartridges was the Microvision designed by Smith Engineering, and distributed and sold by Milton-Bradley in 1979. Crippled by a small, fragile LCD display and a very narrow selection of games, it was discontinued two years later.
The Epoch Game Pocket Computer was released in Japan in 1984. The Game Pocket Computer featured an LCD screen with 75 X 64 resolution, and could produce graphics at about the same level as early Atari 2600 games. The system sold poorly, and as a result only 5 games were made for it.
Nintendo's Game & Watch series of dedicated game systems proved more successful. It helped to establish handheld gaming as popular and lasted until 1991. Many Game & Watch games would later be re-released on Nintendo's subsequent handheld systems.
Sales
The best-selling console of the second generation is by far the Atari 2600 at 30 million units. As of 1990, the Intellivision had sold 3 million units, a number around 1 million higher than the Odyssey2 sales, and the ColecoVision's total sales at 2 million units by April 1984, eight times the number of purchases for the Fairchild Channel F within one year, which was 250,000 units.