While being a relatively new development, the history of video games is already rich and interesting. From MIT students challenging the limitations of computers in the early 1960s to the near-collapse of the industry in the early-mid 1980s to major modern titles such as Halo, Call of Duty, and Star Wars, the industry has grown so much and continues to grow in the modern world.
The first video game was not what many would think of as a video game today. Many associate video games with teenagers and kids sitting close to the TV with a remote control in their hands. The first video game, however, was nothing like that. In the early 1960s, there were no computers that were small enough, or cheap enough, to have at home. The only places that had computers were big businesses and universities. At MIT, Steve Russell and his friends were granted access to the school's new PDP-1 computer on the expectation that they would create a interactive program that taxed the computer and its resources to the limits. The program they came up with was called Space War! and it quickly spread across the country as the first video game.
As the industry quickly developed from there, releasing arcade games and even in-home consoles within 10-15 years of the creation of Space War!, many people began creating games for different purposes and of different qualities. By 1983-84, the market was so full of games that were of low quality that, with no way for the major companies to just pull them from shelves, people stopped buying games and consoles. This crash in popularity nearly destroyed the industry, but in 1985, one company managed to bring the industry back. That company was Nintendo, one of what I would call today's big three of Video Games beside Microsoft with Xbox and Sony with PlayStation, and the product they released that saved the industry was the Nintendo Entertainment System (NES). What was different about the NES though, that managed to bring the industry back from near death, was how it was marketed. It was not shown as a game console but as a toy, which made parents view it as a potential holiday or birthday gift and eventually led to games being considered as being "for children" for a handful of years.
Now, we are starting to see video games less and less as being for children, but as potentially viable career fields or as forms of sports to watch. The industry produces more quality titles and continues to grow as the quality of technology that can be put into consoles and computers and even into TVs continues to expand and develop.