This lecture introduces the PONG Project in Digital System Design, where students will develop a custom digital circuit to create a PONG game with a Mandelbrot background. The project is divided into four stages, each adding new features to the design, such as basic graphics, a fixed background, and a Mandelbrot fractal. The project structure includes components like the Mandelbrot Calculator, RGB control, and sprite logic. Students are encouraged to progress at their own pace, reusing previous designs and adding more features as they advance. The final deliverables include an archive of the XILINX project, a functional bit file for the FPGA, and a detailed report documenting design decisions and tradeoffs.