alternatehistory.com

By the fall of 1971, the RCA Studio was finally introduced to the market. It mildly resembles the Magnavox Odyssey of OTL, but has a woodgrain exterior not unlike the prototypical Brown Box. As it was the first device of its kind, it was hard to market, and the initial pricing of $100 (around $600 in today's money) did not help. The odds were overcome by demand for the Studio, which eventually sold 130,000 units by the end of the year. Later marketing efforts and a price drop to $80 during the holiday season of 1972 (equivalent to around $480 today) brought the total up to 250,000 units sold - almost doubling the amount.

By 1973, Ralph Baer thought it was a good time to advance the Studio even further. In February he proposed to RCA an add-on which allowed the Studio to output sound and play potential additional games. [1] By July, a proof-of concept was demonstrated, and the add-on - dubbed the Studio Enhancer - was set for the market. The Studio Enhancer was released in September of 1973 with an initial price of $35, and demand for both the Studio and the Enhancer brought the final sales figure to 400,000 units by the end of the year.

Meanwhile, in 1972, Nolan Bushnell and Ted Danny had founded Atari after their success with Computer Space. The first engineer they hired, Al Alcorn, was given the task of designing the first game to be released under the Atari label. However, no ideas for the game were seriously considered until Bushnell had seen a demonstration of the RCA Studio in action. As soon as he returned to Atari, he had a task for Alcorn: Make a better version of RCA's table tennis game. And thus, Pong was brought into the world in November 1972.

[1] Something Baer did OTL, but Magnavox shot it down.