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Sim racing is generally acknowledged to have really taken off in 1989 with the introduction of Papyrus Design Group's Indianapolis 500: The Simulation, designed by David Kaemmer and Omar Khudari on 16-bit computer hardware.
The game is often generally regarded as the personal computer's first true auto racing simulation.
The first racing game with simulation pretensions on a home system is believed to have been Chequered Flag, released by Psion on the 8-bit ZX Spectrum in 1983. REVS was a Formula 3 sim that delivered a semi-realistic driving experience by Geoff Crammond that ran on the Commodore 64 and BBC.
Papyrus later released more tracks and a final expansion included the Indy 500 track plus a paintkit. In SVGA (640×480) it pushed the PCs of the time to the limit.
Suddenly a resolution of 320×200 seemed a poor option and NASCAR was the race sim of choice for anyone with a capable PC, particularly in North America.
It also pioneered the third-person rear-view perspective used in most racing games since then, with the track's vanishing point swaying side to side as the player approaches corners, accurately simulating forward movement into the distance.
TX-1, however, placed a greater emphasis on realism, with details such as forcing players to brake or downshift the gear during corners to avoid the risk of losing control, and let go of the accelerator when going into a skid in order to regain control of the steering.