The modern video game industry was brought to life by a former Marine in a makeshift workshop in his daughter’s bedroom in the 1970s.

Samuel F. Dabney, co-founder of the home video game console, Atari, and co-creator of the prototypical arcade game, Pong, died of esophageal cancer on May 26 at the age of 81. He is now being credited as a founder of the video game industry and a leading engineer of his time.

Dabney, who went by the nickname, Ted, was born in San Francisco in 1937 and served in the Marines from 1955 to 1959. He attended the Navy’s electronics school on Treasure Island in the San Francisco Bay and quickly began applying his talents as an electrical engineer.

In 1971, Dabney teamed up with Nolan Bushnell, a charismatic engineer and a colleague of Dabney’s at the time, to create the company, Atari. With just a few early employees and a bare-bones workspace, Dabney soon made a breakthrough innovation that laid the groundwork for the arcade machines still seen in bars and game rooms today.

Using pieces of plywood and fake mahogany paneling, Dabney created the first Atari console in his daughter’s bedroom.

At the time, most programmers were building games on computers, which cost hundreds of thousands of dollars. Dabney, however, discovered a way to cut out computers altogether, using cheap television components to create a revolutionary new video circuitry system.

“Ted came up with the breakthrough idea that got rid of the computer so you didn’t have to have a computer to make the game work,” Allan Alcorn, an early Atari employee, told the New York Times. “It created the industry.”

Dabney’s circuitry system made it possible for Atari to house the world’s first commercial video game, Computer Space, in a relatively small cabinet that could fit next to arcade machines in bars. Those cabinets are still the industry standard today.

When Computer Space failed, Alcorn picked up Dabney’s circuitry the next year and created a game that wound up finding major success: Pong.

“It’s the simplest game ever made,” Mr. Alcorn told the Times. “One moving spot, two score digits, and two paddles. There’s never been a simpler game.”

The first Pong console was installed in Andy Capp’s Tavern in Sunnyvale, California.

It is considered the first commercially successful video game and inspired many copy-cat games from other companies, as well as continued innovation from Atari.

Pong is now part of the permanent collection at the Smithsonian Institution and has appeared over the years in television series like “That ’70s Show,” “King of the Hill” and “Saturday Night Live.”

Dabney died in his home in Clearlake, California, and is survived by his wife and two daughters.

In his later years, he focused on more recreational work, creating practical-use computer programs for his wife and running a small grocery store and deli in the Sierra Nevada Mountains.