The making of Spacewar!
Well, this must be the "oldies afternoon" time :-P After Asteroids, I've just finished this one too. PDP-1? What's a PDP-1? Give me a 286 or an XT clone, instead :-P

Holy crap... that is one hulking console.

PDP-1 was the shit, and awesome!

Not to mention where tech would be today if you left them there and got back here, I'm not sure we'd see the same level of improvement, but it'd a pretty ginormous difference nonetheless.

The PDP-1 is a computer, not a console. At the time this game was made consoles did not exist, and all video games were played on computers such as this one; the first arcade machine was released in 1971, while the first console was released a year later in 1972.

Well, they were playing it on the PDP's console, which is a distinct entity from the computer itself - and certainly still a hulking object in its own right.
Arguably, they were playing the first console game :)

Aren't consoles basically a computer with unified software anyway?

Originally, no; while modern consoles have very PC-like hardware and functionality, back when Spacewar! and the like were available this was not the case; computers were "dumb" machines that had advanced functionality (for the time) and ran off programs on punch cards or other early media (there was no OS, just common functionality that programs tapped into); the flexibility of the media meant that software could be written by anyone and also edited to add functionality or fix bugs. Consoles in comparison were very simple devices; while various cartridges were available, each system's games shared much of the same mechanics and lacked many of the features that were taken for granted in the 8-bit era. The Magnavox Odyssey, the very first home console, was so basic that it had no scoring or winning/losing functionality (players had to keep track of these themselves, and scorecards and other aids were included for this purpose), no AI (all games are multiplayer-only), and graphics were represented with plastic overlays (the system itself could only create unrecognisable blobs of the most basic sort).

The PDP-1 didn't normally have a display. It was controlled using a teletype. The "display" for Spacewar was an oscilloscope, which is normally used to do diagnostics on equipment. Quite ingenious really.
"At the time this was made all games were played on computers"? At the time Spacewar was made, there were no other video games. Hence it's title as "first video game". I think it predated Pong by a couple of years. Pong did much better, because spacewar was way too complicated for the general public at the time. Pong was an arcade game, first placed in bars. So the second game after Spacewar, wasn't played on computers.
Funny thing about the Magnovox Odyssey: Even though there were cartridges sold for it that contained "games", actually the cartridges just contained some jumpers that would set a value in the console. All of the games actually shipped inside the machine when it was manufactured, and all people were buying was a setting to enable that particular game. (In today's internet world, there would have been a hack posted in the first week to enable all of the games. :p )

Arkose, are you like the god of IT or something? Everytime someone asks a tech question you swoop in with an incredibly articulate, comprehensive answer and everyone else that was going to help ends up embarrassed, trying to think of something to add.

He probably works with these guys.

Yes, I love him as well. I've proposed yesterday, but I'm still waiting for his answer

Great find, thanks.

I am afraid your timeline is a little out there. Work on Spacewar! began in 1961 and the first completed build was February 1962. While it was never released commercially, Spacewar! found its way onto many a university mainframe and eventually was bundled in with DEC's machines.
Spacewar! technically isn't the first computer game either, it was predated by a few others, most notably Tennis for Two and OXO (Tic-tac-toe).
Pong was first released a full decade later in 1972. As you can imagine technology had moved on quite a bit by then making it much easier to distribute to the wider public. It came out a year after Nolan Bushnell and Ted Dabney released Computer Space which was essentially a clone of the original Spacewar!. Computer Space was largely a failure due to its difficulty.
http://www.dmoz.org/Games/Video_Games/History/
http://www.thedoteaters.com/stage1.php
http://inventors.about.com/library/inventors/blcomputer_videogames.htm
http://www.1up.com/do/feature?cId=3116291