TL;DR: Ask any gamer what the first video game was, and many will say Pong without hesitation. While Atari's Pong did move video games into the mainstream starting in 1972, an earlier version dates back to 1958 with a game called Tennis For Two.
As Kotaku points out, Tennis For Two was created by William Higinbotham. William was a physicist and a member of the Manhattan Project. As you may know, the Manhattan Project was responsible for creating the nuclear bomb near the end of World War II. Higinbotham led the team that created the weapon's ignition system.
After the war, Higinbotham went to work for the Brookhaven National Laboratory as the head of its instrumentation division in 1947. During his tenure, he worked with a computer called the Donner Model 30. The DM30 simulated trajectories and wind resistance on bouncing objects on an oscilloscope. Higinbotham thought that with the proper programming, it could make a fun game. He enlisted the help of colleague Robert Dvorak and developed a simple tennis game.
The crude Pong precursor was a smash hit during the 1958 Brookhaven Expo, so Higinbotham improved on the game to show at the following year's exposition. The second iteration allowed players to change the gravity to simulate playing on the moon or Jupiter. Higinbotham never bothered to patent either version of Tennis For Two, leaving the door wide open for Atari to create its own fourteen years later.
Higinbotham went on to co-found the nuclear nonproliferation group called the Federation of American Scientists. He served as the groups first chairman and executive secretary. Higinbotham also served as the technical editor of the Journal of Nuclear Materials Management from 1974 until his death in 1994.
It's worth noting that there were other computer games before Tennis For Two. They were primarily games with elementary rules like tic-tac-toe and chess. However, Tennis For Two was undoubtedly the first computer game with an actual physics model.