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VanceIX said:

True, but arcade games were introduced in 1966, predating the Magnavox Odyssey by 9 years. The golden age of arcade and the very first introduction of home consoles was hand-in-hand, but the first arcade games predated consoles by almost a decade.

http://en.wikipedia.org/wiki/Arcade_game

Electro-mechanical games aren't video games. But yeah, many of the companies that produced them changed the video game industry because they were experienced with arcades.

 

The biggest improvements were probably microprocessors (you would only have stuff like PONG without them) and exchangeable cartridges.