In the Spring of 1971, while still working for Ampex, Bushnell along with fellow engineer Ted Dabney, started crafting their own version of Spacewar! named Computer Space. They worked out of Bushnell’s daughter Britt’s bedroom, turning it into a computer lab in which they could engineer their masterpiece. All sort of ideas crossed their minds, including using a minicomputer like Galaxy Game, and using a series of terminals for a multiplayer experience, but these ideas were far too expensive for this bedroom outfit.
Instead, it hit them one day to go in the opposite direction and simplify their design to cut costs as much as possible. The pair decided that they did not need thousands of dollars in hardware to make their dream come to life, instead choosing a much simpler solution. They crafted a working game using TTL (Transistor To Transistor Logic)vii to create a computer whose sole purpose was to play Computer Space. While this might have seemed like a step-back technology wise, it was a huge leap forward for creating a commercial game. With a black and white G.E. TV and $100 worth of electronic parts, they created the first viable, commercial video game.
“I worked it out and the economics were overwhelming."viii - Nolan Bushnell
However, before a video game revolution could be started, it would need a game that people wanted to play. Unfortunately, Computer Space was not that game. Bushnell and Dabney sold their idea to Nutting Associates in late 1971. It landed in the coin-op industry with a resounding “thud”. Amusement operators who were used to buying jukeboxes and pinball machines had no idea what to do with it. The controls were too complicated, and the game too confusing for the average barroom (read: drunk) player.
"Nobody wants to read an encyclopedia to play a game"x - Bushnell on Computer Space
In the spring on 1972, while still working with Nutting to sell Computer Space, Bushnell visited Magnavox to take a look at the TV video game system that Ralph Baer had developed for the company. Bushnell left unimpressed. The analog computer used in the game (a computer used for applications that require a continuous change of one or more variables) was only useful for very simple games, and the graphics looked fuzzy. However, a simple tennis contest on display stuck with him, and the idea for a ping pong-type game was born.