First they come up with the idea and draw the characters, backrounds, ect.. Then either a machine takes those and puts them in to bionary code (a code of 0's and 1's ex: 110100001010011110) or they put it in manually (more likely the first one) then made into disks (the ones you buy). That's the lesser detailed way to put it. Remember, this proccess can take years!
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There were no video games in 1933
Yes, there are video games in Germany.
Video games are fun.
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Well it depends on what kind of video games are the kids playing with and how long you use the video games. Some types of video games are for kids not all.