But is the happiness produced by playing Angry Birds (or other modern games) any higher than Pong? I'm sure that people had just as much fun playing cards in the 1800s as they do play video games now. In that sense the overall productivity is far lower, since modern games take more work to produce.
I think so - Pong was only available on the arcade machines at first, and cost a coin for each play, and real estate to hold those machines. Angry birds is available on people's phones, 24 hours a day, and the only real estate it needed was a few offices. I'd argue it produced a lot more amusement value than Pong, compared the real capital it used. Card games could only be played with people, whereas Angry birds can be played solo, on a train. When the value of playing card games is higher, people still play card games.
Yeah, maybe it's just me, but on vacation I would play Pac-Man during the day and cards with my dad at night after the arcade closed, and both were fun--long after the 1800s.