1996 saw many sequels and prequels in video games, such as Super Mario 64, Duke Nukem 3D, Street Fighter Alpha 2, Super Mario RPG, King's Field III, Virtua Fighter 3, along with new titles such as Blazing Heroes, NiGHTS into Dreams..., Crash Bandicoot, Pokémon Red/Green/Blue, Resident Evil, Dead or Alive, Quake and Tomb Raider.

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The year's best-selling video game console worldwide was the PlayStation, while the best-selling consoles in Japan were the Game Boy and Sega Saturn. The year's best-selling home video game worldwide was Super Mario 64, while highest-grossing arcade games in Japan were Street Fighter Zero 2 (Street Fighter Alpha 2) and Virtua Fighter 2.

• March – Swedish video game magazine "Super Power" changes name to Super Play.
• 15 July – Tom Kalinske announces he will leave his position as president for Sega of America on 1 October.^[1]
• May 16–18 – The second annual E3 is held in Los Angeles, California, United States.^[2]
• 7 September - Sega opens SegaWorld London as part of the London Trocadero in England. It is the first Sega World park to open outside of Japan.
• 1 October – Tom Kalinske resigns as president for Sega of America.^[1]
• December 31 – Battle.net Classic is released.

• February 21 – Sega Model 3, an arcade system board considered to have the most technically impressive graphics at the time
• November 23 – Bandai's Tamagotchi virtual pet handheld
• Nintendo's Nintendo 64, the first true 64-bit home console
• Nintendo's Game Boy Pocket (GBP) handheld console (30% smaller version of the previous Game Boy handheld console)
• Sega's Net Link modem for the Sega Saturn home console
• SNK's Neo Geo CDZ (Japan only)
• Namco's Alpine Racer arcade game, including a new type of user interface
• The debut of Apple's Apple Pippin console (their only dedicated gaming console until the Apple Vision Pro)

• February – Blizzard Entertainment acquires a development group known as Condor, renaming it Blizzard North
• April – Eidos Interactive acquires CentreGold plc, which holds Core Design (creator of the Lara Croft character) and U.S. Gold
• May 1 – GameSpot and GameFAQs are launched
• June – Firaxis Games is formed By Jeff Briggs with Sid Meier and Brian Reynolds
• July – GT Interactive purchases Humongous Entertainment
• July 24 – CUC International, Inc purchases Sierra On-Line, Blizzard Entertainment and Davidson & Associates for about $3 billion in a stock swap.
• July 30 - Atari Corporation reverse-merges with JTS, Inc.
• August 6 – AOL buys Sierra's ImagiNation Network from AT&T for a reported $15 million.
• August 24 – Valve is founded.
• September 1 – AOL closes ImagiNation Network, the first online video game with graphics, after 5 years of service.
• September 29 – IGN is founded.
• November 13 – Tom Clancy and Virtus Corp. found Red Storm Entertainment, headed by Doug Littlejohns
• Infogrames Entertainment SA acquires Ocean Software Ltd.
• Midway Games, Inc. (subsidiary of WMS Industries) acquires Atari Games Corporation from Time Warner.
• Technos Japan Corporation, originator of the Nekketsu Kouha Kunio Kun series and Double Dragon series, goes out of business (assets acquired by Atlus)
• Black Isle Studios forms as a division by Interplay; doesn't use Black Isle name until 1998
• Game Park Inc. founded in South Korea
• The company formed by MicroProse and Spectrum HoloByte in 1993 starts branding using only the MicroProse name
• Overworks, Ltd. formed
• Zed Two Limited formed
• Nintendo of America, Inc. v. Computer & Entertainment, Inc.
• The 3DO Company purchases New World Computing

• 1996 in games