There is some debate regarding the answer to this question, because it depends on how you define "video game." However, it is generally accepted that Willy Higinbotham created the first video game in 1958 . The game was similar to table tennis and it was played on an oscilloscope. The game was called "Tennis for Two." In 1961, the first interactive computer game was invented by Steve Russell. It was entitled "Spacewar."
The first coin operated arcade game was built in 1971 and called the "Galaxy Game" . It cost $20,000 to make and players could enjoy one game for ten cents or three games for a quarter.