The years between 1978 and 1982 saw unprecedented growth across the entire video game industry. A January 1982 cover story in Time magazine noted that the most popular machines were pulling in $400 a week in quarters and the number of dedicated arcades in the United States reached its peak with around 13,000. Video game cabinets also appeared in grocery stores, drug stores, doctor’s offices, and even in school recreation centers. The arcade chain Tilt began opening locations in the growing number of shopping malls across America. Beginning with Space Invaders in 1978, a string of now legendary games (see graphic above) were released in rapid succession. Simultaneously, the home console business blossomed: from the primitive Magnavox Odyssey in 1972, the concept of home gaming erupted with the Atari 2600 and the Apple II in 1977, the Intellivision in 1980, the Commodore 64 and ColecoVision in 1982, and the NES and Sega Master System in 1985.

It was 1980’s Pac-Man, the most successful video arcade game of all time, released by Midway in the United States, which had the most lasting effects on the industry and the American psyche. The colorful, pizza-inspired Pac-Man and the ghosts who chased him inspired enough branded products to rival Hello Kitty, including lunch boxes, clothing, a Saturday morning cartoon and a 1982 Billboard hit, "Pac-Man Fever," which sold more than a million copies (for reference, the top-selling single of 1982, Survivor’s "Eye of the Tiger," was certified platinum with sales of two million copies that year). Unlike previous video games, which seemed to appeal primarily to male players, Pac-Man appealed to everyone, allowing the hardcore player to mingle with casual gamers. The idea of professional gaming also took root, and shows like Starcade pitted opponents against one another to play the newest games on prime time television. Walter Day, owner of the Twin Galaxies arcade, proclaimed Ottumwa the "Video Game Capital of the World," and both the Mayor of the city and Iowa Senator Chuck Grassley recognized it as such. In July of 1983, Day established the US National Video Game Team, made up of what were then the country’s six best players.