Video game console
Console unit

Early console hardware was designed as customized printed circuit boards (PCB)s, selecting existing integrated circuit chips that performed known functions, or programmable chips like erasable programmable read-only memory (EPROM) chips that could perform certain functions. Persistent computer memory was expensive, so dedicated consoles were generally limited to the use of processor registers for storage of the state of a game, thus limiting the complexities of such titles. Pong in both its arcade and home format, had a handful of logic and calculation chips that used the current input of the players' paddles and resisters storing the ball's position to update the game's state and send it to the display device. Even with more advanced integrated circuits (IC)s of the time, designers were limited to what could be done through the electrical process rather than through programming as normally associated with video game development.

Improvements in console hardware followed with improvements in microprocessor technology and semiconductor device fabrication. Manufacturing processes have been able to reduce the feature size on chips (typically measured in nanometers), allowing more transistors and other components to fit on a chip, and at the same time increasing the circuit speeds and the potential frequency the chip can run at, as well as reducing thermal dissipation. Chips were able to be made on larger dies, further increasing the number of features and effective processing power. Random-access memory became more practical with the higher density of transistors per chip, but to address the correct blocks of memory, processors needed to be updated to use larger word sizes and allot for larger bandwidth in chip communications. All these improvements did increase the cost of manufacturing, but at a rate far less than the gains in overall processing power, which helped to make home computers and consoles inexpensive for the consumer, all related to Moore's law of technological improvements.

For the consoles of the 1980s to 1990s, these improvements were evident in the marketing in the late 1980s to 1990s during the "bit wars", where console manufacturers had focused on their console's processor's word size as a selling point. Consoles since the 2000s are more similar to personal computers, building in memory, storage features, and networking capabilities to avoid the limitations of the past. The confluence with personal computers eased software development for both computer and console games, allowing developers to target both platforms. However, consoles differ from computers as most of the hardware components are preselected and customized between the console manufacturer and hardware component provider to assure a consistent performance target for developers. Whereas personal computer motherboards are designed with the needs for allowing consumers to add their desired selection of hardware components, the fixed set of hardware for consoles enables console manufacturers to optimize the size and design of the motherboard and hardware, often integrating key hardware components into the motherboard circuitry itself. Often, multiple components, such as the central processing unit and graphics processing unit, can be combined into a single chip, otherwise known as a system on a chip (SoC), which is a further reduction in size and cost. In addition, consoles tend to focus on components that give the unit high game performance, such as the CPU and GPU, and as a tradeoff to keep their prices in expected ranges, use less memory and storage space compared to typical personal computers.

In comparison to the early years of the industry, where most consoles were made directly by the company selling the console, many consoles of today are generally constructed through a value chain that includes component suppliers, such as AMD and NVidia for CPU and GPU functions, and contract manufacturers including electronics manufacturing services, factories which assemble those components into the final consoles such as Foxconn and Flextronics. Completed consoles are then usually tested, distributed, and repaired by the company itself. Microsoft and Nintendo both use this approach to their consoles, while Sony maintains all production in-house with the exception of their component suppliers.

Some of the commons elements that can be found within console hardware include:
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