The first documented 3D first person game appears to be Spasim, a program written by Jim Bowery for the University of Illinois Urbana-Champaign’s PLATO network (Bowery). Bowery describes Spasim as follows:
Spasim was a 32-player 3D networked game involving 4 planetary systems with up to 8 players per planetary system, flying around a space in which the players appeared to each other as wire-frame space ships and updated their positions about every second.
Bowery recalls that Spasim, short for Space Simulation, was originally released in March of 1974, but locating documentation of the exact dates for the release of many PLATO games is very difficult since little conclusive documentation exists, probably because these games were not seen as terribly serious endeavors so little effort was made to record their creation and evolution. Users of the PLATO network probably had little idea that these games would prove to be the genesis of entire genres of games.
Bowery claims that Spasim is, at the very least, the “intellectual genesis” for a number of other 3D computer games, such as Silas Warner’s PLATO game Airace.
Airace later evolved into another PLATO game, Airfight, the creator of which is either Kevin Gorey or Brad Fortner. Bowery further asserts that Airfight eventually led to the development of a tank simulator for the US army.
ZA A History and Analysis of Level Design in 3D Computer Games Sam Shahrani