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Back in the early 1970s, Magnavox was an innovator in the home video game industry. They succeeded in bringing the first home video game the market, the Odyssey, which was quickly followed by a number of later models, each with a few technological improvements. In 1978 Magnavox, now a subsidiary of North American Philips, released a new Video_game_consolefor the home market: The Odyssey^2.

The original Odyssey had a number of removable circuit cards that altered the 'pong'-like gameplay in order to increase the gameplay options, but the Odyssey^2 took a great leap forward by being designed to play programmable 2K ROM (read-only memory) game cartridges ; With this innovation, each game could be a completely unique experience, with its own background graphics, foreground graphics, gameplay, scoring and music. The potential was enormous, as an unlimited number of games could be individually purchased; a game player could purchase a library of videogames tailored to his or her own interest. Unlike any other system at that time, the Odyssey^2 included a full alpha-numeric touchpad keyboard, which was to be used for educational games, selecting options or programming. In Europe, this system was sold as the Philips G7000 Videopac computer.

The Odyssey^2 was the first home Video_game_console to introduce what was to become the standard joystick design of the 1970s and 80s: A moderately sized black Joystick, held in the left hand, with an eight way joystick that was manipulated with the right hand. In the upper corner of the joystick was an 'Action' button.

The Odyssey 2 sold moderately well in the US, and in Europe (under the name Philips G7000) in did very well. Even without third party support, eventually (by 1983) over a million Odyssey^2 units were sold in the US alone. For quite some time, Odyssey^2 fans griped that there was no third party support, thus keeping the number of new games very limited. Unbeknownst to American gamers, the success of the Philips G7000 Videopac overseas led to two other companies producing games for it: Parker Brothers released Popeye, Frogger, Q*Bert and Super Cobra, while Imagic released outstanding versions of their hit games Demon Attack and Atlantic. Finally, in 1983 the two Imagic games were brought to the states; these became strong sellers.

One of the strongest points of the system was its excellent speech synthesis unit, which was released as an add-on for speech, music, and sound-effects enhancement. The area that the Odyssey^2 may well be best remembered for was its pioneering fusion of board and video-games: The Master Strategy Series. The first game released was the instant classic "The Quest for the Rings!", with gameplay somewhat similar to Dungeons and Dragons, and a storyline reminiscent of J.R.R. Tolkien's "The Lord of the Rings".