MaverickRazor: 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