I've been noticing that lately quite a few bands are making songs
with video game style sounds.

YCMK comes to mind right away.
http://www.ymck.net/discography/index.html

I would guess the first use would have to be Yellow Magic Orchestra's
self-titled album (1978)

I'm curious about examples in pop songs that came in between YMO and
recent Nintendo/8-bit style tracks. In other words I'm -not- looking
for names of albums *of* game soundtracks (like "Konami Sound
Museum") but artists making songs using game sounds in their songs.

So far I know of Haruomi Hosono's "Video Game Music" (which is more
or less actual game music), his "Super Xevious" EP (which isn't just
game music). I've also been sent info about Makoto Highland Band's
1979 single "Dancin'" (p.s. Makoto Yano was a prolific producer
married to Akiko Yano in the 1970s)

Anyone try anything like this in the 90s? I guess it's a little
tricky because for instance Famicom music was more or less the
quality of "cheaper" regular synthesizers. Then again if someone were
to bother using game sounds they would probably retain some sort of
game-like feeling to the track.

From the 90s all I can think of is former YMO member Yukihiro
Takahashi's productions of "Cine Techno- Love" and "Cine Techo -
Yukihiro" - they are more or less game style cover versions of
classic movie themes, not new songs with game sounds.

Also does anyone know what the first releases of recent bands were?