The True Causes of the Video Game Crash of 1983: Had Nothing to Do with E.T. |Retro Game Living Room

Somehow it has become ingrained in popular gaming culture that the calls for the great crash had to do it just to bad games that
Were released for the Atari 2600 Pac-Man and et
the extra-Terrestrial
other rumors blame the number of Consoles on the Market the number of
third-Party Developers and even the PC industry as we review the real reasons for the crash each of these popular myths will be dispelled the
great crash refers to a period of time when the North American video game industry fell from
3.2 billion dollars in annual sales to only a hundred million
That’s a drop of 97 percent now
Ask yourself does it stand to reason that just too bad video games could crash the entire industry of course not
For the entire market to have crashed
The more than just two games for only one console would have had to be involved there were lots of factors at play
What’s contributed to the crash as we examine the core causes? We’ll find that none of them had anything to do with
Anything that’s remotely
To picture the industry in 1982 Atari was the fastest growing company in America its flagship console the video computer system
Or VCS, which today?
We popularly called the atari 2600 was released in 1977 and was really beginning to show its age in
Fact it was originally intended to have been phased out in 1980 Ataris Primary competitor had been mattel electronics
With their intellivision console which was soft release in
1979 and marketed Nationwide the following year in 1980 though there were other consoles on the market at the time
Magnavox Odyssey –
Fairchild channel f and bally astor cade they were either relegated to the backseat or were already past their time
Let’s take a brief look
Fairchild semiconductor sold channel after tool
Manufacturer zircon which by this time had made it a mail order only item astor kade was also mail-order only at this point having been
Sold by Bally to Astra Vision only the Magnavox Odyssey 2 remained on store Shelves
Alongside the Atari and television consoles and even then it only sold 1 million units in the fall of
1982 a new console race was beginning along with a new generation in August Coleco Beat Atari to the market with colecovision a
Next-gen console with greatly enhanced capabilities through the use of an add-on it even had backwards compatibility with Atari 2600
Massive library of games it would be like today if Nintendo came out with Wii 3 and announced compatibility with PS4 and Xbox one games
2600 compatible cartridges and with all of colecovision cartridges that means you can play more games than any other video game system four months later
Atari responded with its own next-gen console the 5200 super system the war was on the popular
colecovision with its Packin game in 10 days donkey Kong would go on to Outsell the
5200 by a Margin of more than 2 To 1
Phillips Magnavox still not wanting to be left out was completing R&D on odyssey 3 so no there was no consumer confusion
over the number of consoles
From 1980 to 1982 only Atari in television and on Oc – even advertised on television
No one had ever even heard of a channel f or an astor kade and consumers didn’t walk in this year
And have a choice between five consoles there was for the most part either atari or in television with odyssey two
Having just some market presence think about it. It would be like in the 90s if consumers were confused between the Super Nintendo
Genesis Neo Geo Jaguar CdI laser active CD32 Commodore 64 gs
the Turbo Duel and Vis
No, they weren’t there was just sega and Nintendo and everyone else watched from the bleachers
But most of you who grew up in the 90s never even heard of some of those yeah
consumers in the 1980s never even heard of the Arcadia 2001 either
Beginning in 1979 with activision which was the first independent video game publisher and developer
more and more third-party companies began cropping up and releasing games
Originally the console makers published and developed their own games for their own systems now new companies could sell games for existing consoles
Overnight there were dozens of third parties
The only real problem for Atari is they weren’t seeing any of the profits off these games that were being sold of course the quality
of these games
especially for the 2600 range from quality to crap
Though third parties had a role to play in the crash the volume of quote bad games
They produced is not a factor in fact popular games games that are considered to be
Classics like centipede in Atlantis caused more than financial damage for their publishers than the bad games that almost no one bought
Am I saying that successful games contributed to the crash? Yes?
I am it sounds counterintuitive, but I’ll explain why in just a little bit. It’s important to understand the retail distribution system
That was in place at the time there was an or game stop if a small developer for the AtAri
2600 wants to get their game on store shelves then he needed to make an arrangement with a national department store like JCPenney
Sears or Montgomery ward this wasn’t easy to do and in fact very few third parties gain access to national retailers teams were sold in
local computer stores toy stores comic book shops
And largely Via mail order catalog the very small developer who was trying to release a very bad game do not have a wide distribution
Network for instance I’ve seen it specifically sited at
2600 games like Chase the Chuck wagon a purina dog food game and Pepsi invaders a code
Promotional tool caused the crash because they were brand based cash ins that no one asked for that almost sounds logical
until any actual thought is applied these games weren’t even sold in stores cheese the Chuck wagon was a promotional video game and
Pepsi invaders was only given out as a promotion at a coca-cola sales convention
It was kind of like how there was a series of burking games on Xbox
and yo annoyed on nes cool spot on Genesis and
dozens and dozens of other brand tie-in games that have been released in the years since
Even recently the only difference is is those actually went to a retail and these ones that are being blamed for the crash never did?
There’s a reason why so many of these quote bad games are very rare and valuable today
Sales and low production they weren’t in stores few people ever played them let alone heard of them
So no, they did not cause the crash nor did they contribute to it in any way?
We kicked off the whole Fiasco
It actually happened in 1982 it was the 41st anniversary of a day which lives in infamy the imperial Japanese
Attack on Pearl Harbor it was a Tuesday, December 7th 1982 Warner communications
Atari inks parent company made its earnings
Announcement the Atari executives revealed a projection of a 10 to 15% profit increase well that sounds pretty good right a profit increase of 10
To 15% well, no it was a total disaster
Which seems like a positive?
Forecast actually was below the 50% increase that wall street was
Expecting the next day winner sauce share prices fall from 51 dollars a share to 35 dollars a share a drop of over
31 percent that’s a pretty freakin big stock drop it sent shockwaves to the industry and cost the world’s second-largest
third-Party Developer the Magic to hold off on a planned initial public offering that being said few if any contemporary observers
Interpreted this to mean that the end of video games was coming other arcade and console manufacturers as well as third-party
Publishers saw it as an opening as a sign of their success they were hurting the Atari Jagger not
but Atari
Which was already in disarray due to interference from Warner’s New York offices began to implode their arcade?
Computer and console divisions didn’t even talk to each other though atari had an offer from Nintendo to distribute the nes in America
This was apparently lost in the Chaos and forgotten about
After a year of declines in 1984 Atari did a soft launch of its third generation
Console the 1700 Pro system an 8-bit console comparable to the nes in terms of graphical and audio capabilities
this was part of a company-wide effort to reinvent Atari as a
Profitable lean an innovative company their coming-out party was going to be during the 1984 Olympics of which
They were a sponsor however in july of that year warner sold Atari off to tremmel technology
This was done behind the backs of Atari Ceo and senior leadership
Atari Inc came to an end and the Atari corporation was born and was under the leadership of Drac tremmel who had founded Commodore international
The new Atari would focus on personal computers not video game consoles and the 7800 was shelved due to a financial dispute
As the new clique of vision succeeded in Atari 5200 games steam after the 1982 Holiday season it spelled bad news for Mattel electronics
and their recently launched in television – which was nothing more than a
cosmetic redesign of their seen last gen hardware on June 10 1983
mattel announced a deficit of twenty point four million dollars
sales fell seventy seven and a half percent from over ninety Seven million dollars
To just twenty million, and I’m quoting the severe
Competitive environment within the home video game in personal computer market was the primary cause of the drop in
Reality in television was less than an attractive system to consumers for a modern comparison
It would be like if microsoft tried to market the original Xbox against the PS3
It doesn’t make any sense so instead of developing a next-gen console mattel left the market and sold off their in television business by 1984
Colecovision continued to perform well almost through 1984 had the company been more
Single-Minded they might have rescued the market all on their own by continuing to support the colecovision and developing a third gen console instead
They ramped down their colecovision production and promotions in order to devote resources
To their new project the coleco atom atom was a family computer that came with a printer and a keyboard it also played
colecovision games there was even a version released as an expansion module for the existing colecovision console that would upgrade it to be a
Full-fledged atom computer in reality the amount of overlap between the computer market and the console market was very little and cliquot found that out
The hard way atom which had severe technical issues sucked up most of the company’s revenue like some kind of a money sucking hoover
Gleeko even burn through the money again from its popular cabbage patch kids toy line after spending 35 million dollars in returns on defective
Atom computers Kalika left the Electronics market completely in 1985 three years later the company filed for bankruptcy
In the meantime retailers were ordering games like crazy this so-called retailer glut is the primary cause of the crash
Distributors and stores massively over ordered games and the publishers were required to accept the returns for example
This was killing a magic at the time which was known for making great games
Activision is one of the few third parties to have survived this, era. This is also our et often gets brought up
Here’s the rumor Atari manufactured more Et cards, then there were 2600 consoles at home
That’s just a farthest thing from the truth
it’s like a bad email chain letter that gets brought up every year like that the Earth will be so close to mars that the
Red Planet will actually appear larger in the sky than the moon let’s do the math first
Millions of Atari 2600 consoles have been sold since it was introduced in 1977 over 8 million were sold in 1982 alone in
Contrast only 2.5 million copies of et. Were produced
Second et was released in December
1982 it had absolutely zero impact on warner’s December staff of the shareholder meeting as his sales hadn’t yet been assessed in
Fact the Notorious game sold over 1.5
Million units making it one of the fastest selling video games in history to that point
It was second only to 1980 once Pac-man which swiftly cleared over 2 million units
speaking of Pac-Man
That game somehow gets to blame for the crash as well even though it was released in 1981 and it was an unmitigated
Commercial success believe it or not most people enjoy the only home version of Pac-man that they had access to
Pacman’s bad rep comes not from its own
Era but from the late 1990s when emulators became possible you see the atari 2600 version of Pac-man
Uses kind of a flicker trick to make it appear that the character and all four ghosts are all on screen at once
Despite the 2600 hardware limitation that prevents it from displaying more than two sprites on screen at one time really it was a technical achievement
However emulators can’t properly reproduce this trick which makes Pac-man seem like an unplayable flickery mess. Here’s Pac-man emulators
Now here it is again on a real atari 2600
There’s quite the difference
The other beef of Pac-man is that doesn’t look like the arcade well no duh no games on 2600 look like the arcade
This is super common check out the difference between zaxon on the arcades versus the 2600 version
Consumers weren’t being tricked
They weren’t fooled they knew what they were getting however kids with emulators in
1997 didn’t understand that thus the Atari Pac-man myth. Begins now that we’ve covered Pac-man
Let’s get back to et to be perfectly honest et. Really doesn’t deserve the worst game ever title that it gets
I can think of games that are far worse like Pac-Man et
Also earned its poor reputation in the mid to late 90s as technology allowed for emulators and roms to become prevalent ut
Has an entirely different problem than Pac-man did though you see unlike for example?
Defender or asteroids, how do play et?
Isn’t at all self-explanatory the player really needs to have the instructions to know how to play the game otherwise
There is literally
No way to know what to do kids in the late 90s who were playing et for the first time on their atari 2600?
emulators didn’t have the instruction book and had no idea how to play it so they fell on holes over and over wondering what to
Do therefore the game sucked well the game is not amazing. It’s not horrible either
It’s pretty mediocre and can be completed in just a few minutes
It’s an average example of an adventure game during the 2600 Era though
They were great sellers atari did lose money on both Pac-man an et
And here’s how retailers put in orders for 2.5 million copies of et
Atari sold 1.5 million in record time the remaining 1 million had to be eaten by Atari as the unsold carts were returned
If the games in a cell then the retailers could return them whereas if that happened today the retailer would be
Responsible for the cost it wasn’t just et in Pac-man that this happened to it was the same story with every single popular video game
The more popular the game the more that retailers over ordered it the more financial damage. It caused the publisher
It’s true that there was a total lack of control over third parties anyone who could shovel games onto a console did?
Especially for the 2600, but as the returns from retailers increased most third-party developers went on a business like Data age in u.s.
games eventually
Rito’s didn’t even have a place to send the games back to that’s why so many games ended up in the discount bin
That’s what led to the perception by some that the market was over flooded with bad games in reality retailers ordered too many therefore
Retort Glut is the primary cause of the crash
Home computers appeared to have a renaissance just as the console market was crashing, but that was out of pure coincidence
There was already a crash of sorts in the computer industry at the same time that atari was bleeding money
Texas instruments creator of the Popular Ti 99 for a computer lost a hundred million dollars
the famous Atari 8-bit line of computers which began in
1979 with the Atari 400 and 800
was failing even with the new excel series the same goes for the Commodore ViC-20 the Tandy color computer and the original Apple 2 so
Why is it that if these computers were failing at the computer market in Dort?
Simple answer because unlike the console manufacturers most companies in the home computer market released new hardware
simple concept right the aging ViC-20 was replaced by the Commodore 64
Apple introduced the 2e
And the failed Atari 1200 XL was replaced by the much more
Successful 800 Xl and other computers in the same line when the console market dried up what developers were left turned to making computer games
It was their only option
Gaming on computers thrived because there was almost no console market left in America at all people still wanted to play video games
But they had to get them on more expensive computers the crash could have been avoided at several terms
First the giant in the industry Tari could have released a 7800 and began to innovate new games an Atari his absence
Coleco mattel or both could have held in and come out with a third generation console if anyone would have released a third generation
Console in 1984 the Market would have rebounded it. Just turned out that no one came until 1985 and that company was Nintendo
That’s how the crash was ended Nintendo entered the North American market. They dropped their original plans to release a
Computer console hybrid which was called the advanced entertainment system or aes and they made it
inexpensive and more like a toy Nintendo
then implemented a quality program in licensed developers
Gamers United States were just waiting for someone to make a serious push for the market in tendo did and Gamers fell in love
Mario and Zelda are household names today an Atari saw a nintendo success and realized at the market which they had once dominated was
Valuable they finally released a 1700 pro system, but it was way too late nintendo was established
Ironically the console that was ready to be the first of the third generation
Ended up being a distant third to the nes and sega master system
either bad games nor third-party developers nor pressure from the personal computer market caused the downfall of consoles in
1983 it is Ridiculous for anyone to say that one or two bad video games are able to crash an entire industry the et
Myth is just an internet rumor that gets retold in creative and interesting ways as time goes on it continually gets told by credible people
It’s an interesting tale and Hubris, but it’s simply not true. I genuinely hope the next time someone tells you that et
Caused the crash or bad games are responsible you’ll reply to them that it was really a retailer glut and many many other factors

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