The terms 'n00b', 'nub', and 'newby' are all over gamer culture, but where did they come from? Did someone just decide we need a general word for someone who is unskilled? Is it a corruption of 'new' or some other word?
N00b and nub are corruptions of "noob", itself a corruption of "newb", short for "newbie". "Newbie" was in use at least as far back as the BBS era of the 1980s and early 1990s, where it referred to a user who was new to BBSs. It was less of an insult and more friendly than "noob", which was popularized by Counterstrike players in a context where a poor player can ruin the game for others.
Newbie itself is modern slang, where according to Wikipedia it referred to new soldiers in Vietnam. The word's origin before this is unclear, but it appears to be a word created to turn the adjective "new" into a noun, perhaps as a diminutive (Barbara -> Barbie, for example).
According to the dictionary:
"newcomer, new person to an existing situation," by 1969, from new with diminutive or derogatory suffix
It's also not necessarily restricted to gaming.
From the article Raven linked it is originated from the expression
new boy, as spoken in Newfoundland.
The term came from Ed Boon one of the creators of Mortal Kombat. They created a chacter name Noob Saibot, John Tobias also head of Neatherelm Studios. The two split. But the chacter in the game was over powerful and only people who were beginners were using him due to easy configurations and special moves.
First seen use dates back to playing Counter-Strike 1.1 circa 2001. Definitely meaning Newbie shortened to Newb and Translated into l33t sp34k. N00b.