The history of video games, despite the opinion of some people, is long and complex. This page is focused on the early years, though; a time when things were simpler.
In the beginning, there was Spacewar. Or Pong. The two were developed around the same time, and have equal claims to "first video game", depending on the definition.
Pong was first conceived on an oscilloscope in 1958; Spacewar was made on a Digital PDP-1 in 1961. Spacewar hit the arcades first as Computer Space in 1971, followed by several nameless games on Magnavox's Odyssey in 1972, but Pong was popular enough that machines broke down from overstuffing of quarters. And so on.
The 70s saw an explosion in the video game market; numerous companies created their own home video game systems and arcade games, and the "Golden Age" of gaming began. This is the point at which video history begins to spread out of control; a more competent page about gaming history can be found at GameSpot's History of Video Games.
Therefore, all that remains to be shown on this page is a shiny simulation of that infamous video game, Pong.