By now you have heard me mention the Video Game Crash of
1983 in almost all of my blogs. It just occurred to me that I really never
explained what it was. So here we go, an expedition into the past.
Imagine, if you will, that you have 3 tv channels. Duran
Duran was on the radio, Michael J. Fox became Alex P. Keaton. Ronald Reagan was in
the White House, Nancy was leaping around the country telling kids to JUST SAY
NO, and video games were in their golden age.
Only, by this time, the golden age had tarnished (YES, I
know gold doesn’t tarnish but just go with the analogy.) The industry dominant
Atari 2600 was 6 years old, and 30 million people had one. Arcades were the
place to be and everyone was jumping on the home video game bandwagon, hoping
to score some quick bucks.
This led to a massive oversaturation of the market. At the
time, if you were in the market for a new video game system you could choose
between the Atari 2600, the new Atari 5200, the ColecoVision, the Arcadia, Fairchild
Channel F, Magnavox Odyssey, Mattel Intellivision, and a handful of others,
not to mention the clones of those systems released by big box stores like
Sears and RadioShack. Some of these systems were awesome and are worthy of
buying even 30 years later, others just outright sucked.
Of course when you have such a glut of video game systems
you get a glut of video game cartridges. Back then there were no controls on
third party software development and EVERYONE jumped on the bandwagon trying to
make a quick buck with hastily released, unplayable games. Even Purina and
General Mills were making games. There were so many sucky games out there, that
a lot of people were starting to dread buying a new one, not knowing if they
would like it. Some extremely high profile games, including Pac-Man and E.T.
The Extraterrestrial both for the Atari 2600, were such horrible titles that
more copies were either unsold or returned than were actually retained by
customers.
In fact, there is a conspiracy theory rumor about E.T. for
the Atari 2600. As rumor has it, MILLIONS of unsold copies of E.T. were removed
from Atari’s El Paso warehouse and taken to Alamogordo, New Mexico where they
were quietly crushed and buried. This attempt to rid Atari of it’s huge
embarrassing failure was picked up on by the local paper, and a few days later
by the New York Times. The next day, concrete was poured over the site.
These public failures led to a drop in consumer confidence
in the entire industry. Retailers were just as sick of their customers
returning sucky games as the video game companies were of receiving tons of
unsold copies back from the retailers. So what did the retailers do? Well the
principals of capitalism took over and they simply stopped stocking their
shelves with things that were more of a headache than a source of income. Sales
industry wide fell from about $3 billion in 1982 to around $100 million in
1985.
So, without anyone to sell their junk games and glut of
systems, the system and game manufacturers began hemorrhaging faster than one
of Jason’s machete slashed victims.
The software giant Activision took a HUGE hit and switched over to
developing games for personal computers. Game developers such as Games by
Apollo and US Games quickly went out of business.
On the hardware side, Magnavox gave up on video games and
went back to making TVs and VCRs. Coleco also got out of the business, but
wouldn’t be as lucky as Magnavox. They filed for bankruptcy in 1988 and their
assets were bought by Mattel the following year. Even the almighty Atari was
not immune to the huge downturn in the market. After booking massive losses,
Warner Communications sold Atari to Jack Tramiel in 1984.
So why do we have video games at all anymore? One word:
Nintendo. First off, Nintendo knew that it would be hard just to get on toy
store shelves. So what did they do? They made their system look more like a VCR
than a video game system. They also initially packaged their deluxe system with
R.O.B. (Robotic Operating Buddy), a robot that played a total of two games.
Once the Nintendo took off, ROB was discontinued. Nintendo also kept strict
control on it’s software, with an innovative lock-out chip that would only play
Nintendo approved games.
The Nintendo flew off the shelves. Video games were back
with a vengeance. Atari jumped back into the fray, re-releasing 1984’s Atari
7800. But it was to to little to late. Atari didn’t give the 7800 any financial
backing, advertising or attention. The 7800 did have the advantage of near
100% backward compatibility with the 2600. Of course, all this meant was that
you could play games that, at the time, were between 3 and 10 years old. The
7800’s own library of games was rather good, but extremely limited, mainly due
to exclusivity agreements between game developers and the great Nintendo. Atari
kept making game systems until the Jaguar in the mid-90’s, but without much
commercial success.
This spelled the end of American dominance in the video game
market, and the rise of Japanese companies with such everyday names as
Nindendo, Sega and Sony. The United States would not produce another successful
game system until the 2001 introduction of the Microsoft Xbox, and even that is
made in China.
ON A DIFFERENT NOTE: Don’t forget to vote for your favorite game system on the poll located on the top of the column on the right! A lot of people have voted for the SNES, which is probably my least favorite vintage system and I really don’t think it did much to further the video game industry, but one man’s trash is another’s treasure. Anyway, VOTE! PLEASE VOTE!
