Its really not as simple as that.
First, Key did not technically create the nakige genre. If I had to point to someone, I would say Leaf with To-Heart, which came out in 1997, one year before Tactics created ONE, and two years before Key created Kanon.
That said, it is widely agreed that Key is the one who popularized the genre, due to Kanon’s, and then later AIR’s, huge success.
I won’t argue the nakige-utsuge thing here (we already have a [topic for that][1]), but I will say I disagree with utsuge being born from nakige, as if implying that Key indirectly spawned this “tag” as well.
You’ll also remember from the Tangles podcast that the guy who talked the most said he had never played a VN and that he knew next to nothing about them, and that Aspi said he didn’t remember a lot of the details. Nothing against any of those guys (I loved the podcast), but all of them were kinda making assumptions without doing much research.
The main problem with your statement is that many people wouldn’t consider dating-sims to be VNs. But again, not an argument to have here. Either way, Kanon wasn’t really one of the first. If you’re willing to include “Sound Novels” in the same category as visual novels, then you can go back to Chunsoft’s Otogirisou in 1992. But even if you don’t you’ve got both YUNO from Elf and Shizuku from Leaf both in 1996. And there are certainly other games from before and after that that just aren’t well known at all and thus aren’t worth mentioning.
[1]: Nakige (Crying Game): Opinions and discussion
