Gamusutra has a short history of Pong. An excerpt:

The first known precursor of Pong debuted in 1958 on a visitors’ day at the Brookhaven National Laboratory in Upton, New York. It was there that William Higinbotham and Robert Dvorak demonstrated Tennis for Two, a small analog computer game that used an oscilloscope for its display.

Tennis for Two rendered a moving ball that was affected by gravity (the first known use of physics in a game) in a simplified side view of a tennis court. Each player could rotate a knob to change the angle of the ball, and the press of a button sent the ball toward the opposite side of the court.

As with OXO, few people got to experience Tennis for Two, but in many ways it can be considered the first dedicated video game system. Without the benefit of hindsight, this milestone was even lost on the game’s creators, who, after a second visitors’ day one year later, disassembled the machine’s components for use in other projects.