Yeah! when he mentioned making a timer by charging a cap and letting it discharge... that could apply to the ball position registers... it could also explain how they did various angles when there's no obvious multi-bit ALU.... varying dis/charge ratio...
Unfortunately there are no capacitors on the chip and the external capacitors can't fulfill this role. So I suspect they are describing a different chip.
The Magnavox Odyssey game, however, worked as you describe; the ball position was the voltage on two capacitors (X/Y), and they were charged or discharged to make the ball move. (This game system was analog, built from transistors.)
