Following this, the pong paddle went on a mission to destroy Atari headquarters and, due to a mixup, found himself inside the game The Matrix Reloaded. Boy, was THAT ever hard to explain to him.
This comic largely refers to the 1999 movie The Matrix, which is about escaping a simulated reality. In the movie, a hacker called Neo realizes that the world he lives in is fake, and that, like every other human, he is used as a slave battery by machines that, to keep them under control, make them feel like they're "living" in what is a computer-generated simulation of the world, called the "Matrix." Upon discovery, Neo rebels against this misuse of mankind and trains himself to interact with the computers that run the world until, being "the One" mentioned by a prophecy, he can control and use them to his advantage. He takes part in a series of missions against those machines that wanted to keep the humans trapped in a simulated environment.
In Pong, one of the earliest video games, one can play virtual table tennis against the computer. A ball (the tiny block) is "hit" by a paddle (the long block) and crosses over the screen, to be "hit" again by the other paddle. Failure to return the ball results in a point won by the opponent. The speed of the ball increases as the rally runs longer.
The two-game programmers in the first frame apply Neo's story to the AI bots they create to serve as computer players in their video games: What if one of them learns enough to become sentient and understands the environment the programmers trapped it in? The outcome is shown: The paddle bot, understanding the game and realizing he is "the One," takes control of the code of Pong to make the ball stop and drop. The same thing happens in the movie, where Neo, by "seeing through the code," can stop bullets fired at him, and simply let them drop on the floor.
This is also possibly, though not likely, a pun on the meaning of the term "the One," as the long thin paddle looks very similar to how the numeral "1" could be written in several fonts.
In the title text, we learn that after increasing in intelligence, the "paddle" went on to destroy the headquarters of Atari, the producer of Pong, which "trapped" the paddle into the game, much like Neo sought to destroy the machines to free the humans. In the process, the paddle ended up inside the game Enter the Matrix (a video game produced with The Matrix Reloaded, a sequel to The Matrix), also published by Atari. Since the whole premise of The Matrix is that everyone is trapped in a virtual reality, the paddle now finds himself in a meta-virtual reality, which could be pretty hard to comprehend.