Rehashing the Crash

[kisrael]

Just finished Howard Scott Warshaw's book "Once Upon Atari".

Obviously he spends time talking over (and more or less debunking) the idea that ET single handedly killed the industry. And he points to the glut of supbar games once Activision (and probably I'd say Imagic) showed the way...

 

Is that it? I feel like I'm just a little too young (and maybe with a family a bit too poor at that point) to really FEEL the rise and fall: instead, I got blessed with a giant Atari collection - but now I can see that was in the wake of the crash, it was all the retailers liquidating stock that made that possible for me personally.

So for people (probably in their mid-50s now) who really felt the rise and fall... did anyone here feel they saw it coming? Was it really frustration with bad (full priced) game after game? 

 

The numbers are pretty staggering: from Wikipedia: " Home video game revenue peaked at around $3.2 billion in 1983 ($9.79 billion in 2023), then fell to around $100 million by 1985 ($283 million in 2023) (a drop of almost 97 percent)."

 

To the extent the Atari 2600 was ground zero for it-- maybe it was also growing disenchanted with the limits of that specific hardware? 

Heh, the Wikipedia article calls out a few titles -  "Titles such as the Kaboom!-like Lost Luggage, rock band tie-in Journey Escape, and plate-spinning game Dishaster, were examples of games made in the hopes of taking advantage of the video-game boom, but later proved unsuccessful with retailers and potential customers."  -- Lost Luggage I thought was ok at least  (actually being able to use the joystick vs paddle was kind of nice, and the bra showing up was funny in a pre-adolescent way"

So I think retailers were having a harder time w/ the floorspace needed maybe for all the games and all the systems, and also home computers started to look better? (For a certain part of the youth market, piracy where you could get a BUNCH of games at only the cost of a floppy disk IF you knew the right people...)
 

[CapitanClassic]

26 minutes ago, kisrael said:

The numbers are pretty staggering: from Wikipedia: " Home video game revenue peaked at around $3.2 billion in 1983 ($9.79 billion in 2023), then fell to around $100 million by 1985 ($283 million in 2023) (a drop of almost 97 percent)."

If you inflation adjust that $3.2 billion in 1983 $US, you get $9.9 billion. Which is interesting, because some people have predicted another crash is coming. I don’t think it will be nearly as large a crash (maybe 50%-66%).

 

31 minutes ago, kisrael said:

So for people (probably in their mid-50s now) who really felt the rise and fall... did anyone here feel they saw it coming? Was it really frustration with bad (full priced) game after game?

I don’t think anyone saw it coming. Supposedly there were people predicting it a year in advance who were in the industry, but I think most people were caught off guard until Warner made the $500 million losses in Q4. Atari had a huge market share percentage (in NA), so if it was losing millions, everyone was feeling the squeeze. I don’t think there was a lot of frustration with bad full priced games, but there was just too many to chose from, so lots of losers who would never sell. 
 

46 minutes ago, kisrael said:

To the extent the Atari 2600 was ground zero for it-- maybe it was also growing disenchanted with the limits of that specific hardware? …

and also home computers started to look better? 

Yes the 2600 was approaching its technical limits, and the cost of home PCs was getting much cheaper (in June 1983, the C64 hit $300, about $960 in inflation adjusted dollars). I don’t know if the PC and home console market had that much overlap for customer dollars though. I would expect it was more of a case that there were lots of competitors, Atari 5200, Bally Astrocade, Magnavox Odyssey 2, Colecovision, and Vectrex. There is a larger group of people who arent early adopters, and they like to wait until it is clear what system will be the dominant console, and have the most and best games made for it. The same thing happened in 1994-1996, where consumers were choosing between Sega 32x, Saturn, PlayStation, N64, 3DO, Jaguar, CDi, Neo-Geo, Virtual Boy, and the aging SNES, Genesis (Sega CD), Turbo Graphics (CD), and Sega Master System (if your in Brazil).

[Ricardo Cividanes da Silva]

Crash just because of ET is a legend.

 

A set of factors caused the market to fall.

 

Two were very important, in my humble opinion:

- The rise of PCs with rapidly falling costs, especially those from Commodore.

- Many bad games and in the "more of the same" style.

 

Video games missed the point. Atari had executives who just wanted to make money and forgot that good games were needed (make no mistake, we are seeing something similar happen right now). Arcades advanced, as did computer games and this caused the console market to shrink. Warsaw keeps making this mea culpa, but you're far from to blame.

[+pboland]

I was only about 10 years old when the crash happened. To me I just saw cheap games until about 1984-85 and I realized there was nothing new.

 

I personally didn't see a lot of overlap between Computers and Game consoles before the crash. Most kids I knew at the time didn't even get a computer until around 1984 if they got one at all. And it wasn't nearly the number of consoles vs computers. I knew maybe 10 kids that had a consoles before the crash (mostly Atari 2600 and a couple O2's). Out of those kids only about three ended up getting a home computer of some kind. My house ended up with a PCjr. (which was never used for gaming, it was for my dad to work on stuff at home. which btw, never really worked out), one kid's house got an Atari 800XL and I knew one other kid that got a C64. Those two kids did switch to gaming on computer.

 

At the time it was still a big jump to go from console to Computer money wise. Most consoles sold for $199.00 or lower around 1982/83 time frame (which is when I remember most kids getting a game console. We got our O2 in '79). Computers were $399.00 and up at the time. That's a big price jump and the average family wasn't going to just plop the money out for a computer just for gaming. I'm sorry but (at the time) Computers just were not as ubiquitous as game consoles.

 

Heck From what I've read PC's never got better than 30% penetration into the home before smartphone became a thing (2008 to 2009). I personally didn't have a PC (outside of the PCjr) at my home until 1998 when I bought one for myself (finally out of college and had the money to buy one).

[Maztr_0n]

honestly as someone who was TOO YOUNG to know anything at all, going off what everything looked like in 1983, my best guess for most of it is:
 

1. Saturation in the console market: This on its own isn't terrible, and for the most part i think it was alright, but Fairchild vs Atari 2600 vs Intellivision vs Colecovision vs Atari 5200 vs Odyssey 2 vs... just seemed a bit too crowded, especially compared to the home computers around the corner.
    
2. Saturation in the games market: What REALLY didn't help was the oversaturation in the games market, even if i personally think its alright if a third party makes their own unlicensed game for a system, the issue was Atari or basically any of the console companies at the time had any kind of "seal of quality" and if they were to have one, they were so Anti-Third Party that it would probably be for ONLY ATARI games or ONLY COLECO games and there wouldn't be a standard for third parties so any of them could copy eachothers stamps and still release shovelware onto the general public, not to mention the fact that not only did a few rivals to atari make 2600 adapters for their consoles THEY ALSO PUBLISHED GAMES ON 2600, and at best (and honestly, the most likely case) they wouldn't be intentionally bad but moreso the bar was set low for their rival systems ports, ya know marketing and all. But many third parties just threw whatever at the wall to see what stuck, the only form of control that kept some games more restricted was the most Adults Only type games being sold main in or from the counter with an ID, otherwise it wwas fairgame for what was sold to people, sure you could've gotten pitfall with your paper route money in the early 80's or you could've gotten porky's/tax avoiders, pac-man, ET, and speak of the devil...
    
3. Atari didnt give a shit about their employees: Even if the Tod Frye story about the "unfinished prototype" wasn't true, it seemed like Atari didn't give a turkey about at least giving Frye the help of porting the most anticipated port of the classic arcade game that he likely needed in order to release the game in time, and ET? Well a lot of us know that it's really just a good Adventure title held behind by it's strict deadline, think its bad now when games are released too early in a buggy state? At least you'll at least get a very "minor" post-launch series of patches over time because the studio realized their deadline was horribly short, well, with ET you might never see the fun adventure promised, least not for a handful of decades... i imagine if ET was given even just a couple more months, it might've been seen as a genre-defining title. But they NEEDED that sweet sweet Holiday '82 money! oh jeez oh and more on atari
    
4.  Atari 5200 (mostly the controller): I do not wanna start a war with 5200 fans, i agree the console itself and its games library, while small is very underrated. the issue is how and when it was released. It was essentially the original idea for the 8-bit computers, a very powerful (for the late 70's)   successor to the VCS, but the way they finally executed it was terrible, The controller is the obvious issue, i will defend the fact that it was very much ahead of its time, with an analog stick and 3 menu buttons especially setting it at most 3-4 gens ahead of most others, but the problem was the fact that they tried to put everything in 1 cheap remote, and to itterate, WHY do you need an analog stick for games from the early 80's? Sure theres flight sims like the excellent Rescue on Fractalus but even then, it wasn't even a good one, and the KEYPAD??? i know this started with the Intellivision in 79-80 but just because someone does something stupid doesn't mean you should do it too, now i'm not a "complete airheaded child" i realize the reason for these was likely for more Computer based applications or for very advanced games like strategy/sim/rpg titles, but that makes me wonder why they didnt just... include a joystick and a keyboard/separate keypad in there? Sure probably cost but this was "the Advanced choice" anyway!, if it just had 2/3 action buttons + menu buttons with a standard joystick with an additional keyboard/keypad controller included it would be a VERY different story, but on top of all that, not only was it monstrously huge but it was incompatible with 2600 games without an adapter (which at that point, why not get a competitors system, sure keypad controller but usually those last longer than 5200 pads, are probably smaller and have more games) it would've been outdated by the late 80's! I do not hate the 5200, but i do think it would've been best if Atari either reworked the system or instead made the 7800 for 1984, especially if it came with the POKEY chip.

and TL;DR an oversaturated game market without even the most basic form of quality control combined with the oversaturation of home consoles and home console software combined with the fact that many competitors would release their own games on their competitors and have competitor compatible adapters and without a REAL next-gen system to fully grab consumers or again, quality control. People opted for the cheaper home PCs, which not only were in a price war but also games (especially on tape) were cheaper than console titles, provided more than just games but also had graphics on par with the more high end systems or even somewhat comparable to the eventual next gen systems. sure its not everything, but thats just what i've gathered from what i've heard. maybe i'm missing the straw that broke the camels back, but again i wasnt there so i'm hoping i at least got most of the story down.

 

[YexxenBlaster]

10 minutes ago, Maztr_0n said:

Saturation in the games market: What REALLY didn't help was the oversaturation in the games market, even if i personally think its alright if a third party makes their own unlicensed game for a system, the issue was Atari or basically any of the console companies at the time had any kind of "seal of quality" and if they were to have one, they were so Anti-Third Party that it would probably be for ONLY ATARI games or ONLY COLECO games and there wouldn't be a standard for third parties so any of them could copy eachothers stamps and still release shovelware onto the general public, not to mention the fact that not only did a few rivals to atari make 2600 adapters for their consoles THEY ALSO PUBLISHED GAMES ON 2600, and at best (and honestly, the most likely case) they wouldn't be intentionally bad but moreso the bar was set low for their rival systems ports, ya know marketing and all. But many third parties just threw whatever at the wall to see what stuck, the only form of control that kept some games more restricted was the most Adults Only type games being sold main in or from the counter with an ID, otherwise it wwas fairgame for what was sold to people, sure you could've gotten pitfall with your paper route money in the early 80's or you could've gotten porky's/tax avoiders, pac-man, ET, and speak of the devil...

This is why I loved that era of gaming. Everyone could make a game. It also gave me some ideas for Robot Force stories. (The weirder, the better!)

[Maztr_0n]

1 hour ago, YexxenBlaster said:

This is why I loved that era of gaming. Everyone could make a game. It also gave me some ideas for Robot Force stories. (The weirder, the better!)

kinda agreed, although these days its easier than ever, even for 2600. I mean some of the most popular games of the last decade were usually made by like some rando or some group of randos, but yeah it was fascinating for how wild the old era was, mad!

[YexxenBlaster]

Just now, Maztr_0n said:

kinda agreed, although these days its easier than ever, even for 2600. I mean some of the most popular games of the last decade were usually made by like some rando or some group of randos, but yeah it was fascinating for how wild the old era was, mad!

I especially love Starpath games like Suicide Mission, and licensed games.

[Maztr_0n]

3 minutes ago, YexxenBlaster said:

I especially love Starpath games like Suicide Mission, and licensed games.

i liked Demolition Herby, and even the absurdly TERRIBLE stuff like Porky's/Tax Avoiders just for the ironic factor it also seemed funny to me how basically games were either for all ages or (at the VERY LEAST lets say) M FOR MATURE 17+ PARENTS DISCRETION ADVISED....

[YexxenBlaster]

17 minutes ago, Maztr_0n said:

i liked Demolition Herby, and even the absurdly TERRIBLE stuff like Porky's/Tax Avoiders just for the ironic factor it also seemed funny to me how basically games were either for all ages or (at the VERY LEAST lets say) M FOR MATURE 17+ PARENTS DISCRETION ADVISED....

Even then, the porn games aren't even considered sexy anymore.

[Maztr_0n]

Just now, YexxenBlaster said:

Even then, the porn games aren't even considered sexy anymore.

oh you sweet innocent atariage user, you have yet to know what the internet is attracted to :evil_face:

[YexxenBlaster]

Just now, Maztr_0n said:

oh you sweet innocent atariage user, you have yet to know what the internet is attracted to :evil_face:

I know. I have kinks myself.

 

Although when I was like, 12, I couldn't eat ice cream after seeing Beat 'Em and Eat 'Em because the box showed a woman eating ice cream...

[Maztr_0n]

1 minute ago, YexxenBlaster said:

I know. I have kinks myself.

 

Although when I was like, 12, I couldn't eat ice cream after seeing Beat 'Em and Eat 'Em because the box showed a woman eating ice cream...

oh lmfao, i mean yeah i guess for the general public,

BUT YOU KNOW... YOU KNOW THERES A GROUP OUT THERE THAT IS INTO THE DR SEUESS LOOKIN AHH MFs IN KNIGHT ON THE TOWN!!!

also lol, i can see that, also i meant some of the early Mature Horror titles like Texas Chainsaw Massacre or Halloween. Most M for Mature games wont even dare to mention a dead child whilst Halloween just has decapitated kids for daaaaaays, by god i was spooked by that AVGN episode because of the old guy in it...

[YexxenBlaster]

5 minutes ago, Maztr_0n said:

BUT YOU KNOW... YOU KNOW THERES A GROUP OUT THERE THAT IS INTO THE DR SEUESS LOOKIN AHH MFs IN KNIGHT ON THE TOWN!!!

also lol, i can see that, also i meant some of the early Mature Horror titles like Texas Chainsaw Massacre or Halloween. Most M for Mature games wont even dare to mention a dead child whilst Halloween just has decapitated kids for daaaaaays

Imagine if Mike Myers played Michael Myers, and he killed people in a Cat in the Hat costume.

[+GoldLeader]

If I were to add anything,  well,  maybe 3 more things...First,  I NEVER saw TOO MANY Games!  I think this part is (at least partially) Myth.  Too many bad games per capita?  Maybe.  I still remember days of going to buy a game and not having enough choices,  sometimes even buying a game I wasn't sure about because it was the only thing available (That I wanted).  Also I never saw (off the top of my head) Mythicon games or horror games on shelves, or some of these rarities that must have been available somewhere.  Rare to me at the time probably meant an Apollo game, a U.S. Game, or something by Data Age.  However I will say the Crash happened fast.  For example,  I bought US. Games' Towering Inferno (which I ended up liking) only because I couldn't find anything else at the time.  I paid $24.95 for it;  Let's call it full price, but with a minor discount.  The next U.S. Games game I bought was Space Jockey for $6.99.  At the time I thought it was a budget game or a promotion or something.  I had no idea The Crash had begun.  (Also note:  It's possible there could have been a glut of games for Atari, when I had moved on to mostly collecting for ColecoVision.  The reason I basically discount this is that I also still lightly collected for Atari, even in the Coleco Years...)

 

Second,  Other things were vying for our attention.  Simple as that!  I still spent money on games,  but now there was a car, heavy metal, MTV, Movies, and now movie Rentals, VCRs, Girls, going out...Lots of other things, too,  for those of us at that age.  For example,  If we started with video games at age 12,  we were now in high school.

 

Third,  Retailers believed there was "a Crash" coming or already happening.  They somehow believed video games were "just a fad",  and maybe a sales dip spooked them.  But I believe it is a cycle and a self-fulfilling prophecy.  Games aren't selling as well so don't order so many games.  Less games on the shelves leads to games not selling as well.  And then by discounting the games,  the perceived value of games had now dropped.  And many of us cashing in on the bargains, (because what else would we do?), didn't realize the games were being clearanced, or realized it with a feeling of happiness at the bargains, but dread at the implications...And we knew we couldn't do anything about it...

[+GoldLeader]

One more thing ..Hey let's make it 2!...I certainly had friends who moved onto computers.  Most people bought C64s.  I bought an ADAM (So no game piracy on my end)...

 

Also back to E.T.  I certainly enjoyed it as a movie, and an 80's memory (of the Movie) because it was hyped at the time...But nobody I know thought it would make a good video game.  I'm sure they hyped the game and I'm sure grandmas bought it for their grandkids...Ummm Somewhere.  I never played it back in the day.  None of my friends ever played it back in the day.  Nobody I knew wanted it.  We never talked about it that I can remember.  It just didn't interest us.  This would vary depending on you, your friends, and everybody's interests I guess.  We liked Star Wars.  We liked TRON.  We liked Battlestar Galactica.  We thought Raiders of the Lost Ark might make a good game.  We imagined Shogun Warriors or Micronauts would have been a cool license for video games...

 

For the record E.T., to me, was more like the UFO phenomenon of the time.  It was like Bigfoot, Loch Ness, ghost stories, or the Bermuda Triangle.  It was one of those things where people were fascinated and wanted answers.  People wanted the truth,...Whereas video games were more escapism, sci-fi, and fantasy.  Not saying there's no pop culture overlap,  but as an example;  When I'm playing Star Castle in the Arcade,  it makes a great game because I wanna blow the F*** outa my enemy at the center of the screen!  Take that You Bastard!  Not once did I stop and ponder whether the alien controlling the cannon at the center of the screen (surely it's an evil alien right?  I mean it always is) was eating Reese's Pieces or living in the shed in my backyard...

[JL]

I recall Kaboom! being very popular back then and being a surprise hit...

 

[Shaggy the Atarian]

I've been doing research on this subject for an arcade history book I've been writing and I have a whole chapter dedicated to what likely caused the crash. I guess I shouldn't do this post to save it all as a tease, but I can't help myself  I am sourcing all of my work though, and get into a lot more detail.

 

The problem is that the answer is multi-faceted so it takes more than just a bumper sticker to explain it.

 

It is very clear to me that the crash was in progress before E.T. was even released. Just the fact that Warner's disastrous earnings report was released before consumers even had time to process E.T.'s release should have been evidence of that, and it was absolutely impossible for E.T.'s poor sales to reflect on that report since it was talking about earlier in the year. Atari had laid people off on the arcade side in the summer of '82 because demand was slowing down, and Atari competitors like Cinematronics and Centuri were posting losses for that year too.

 

In my research of old Play Meter Magazines from '82, one thing that was very clear is that thanks to the explosive popularity of video games caused a political backlash. A lot of people have no clue that the city of Mesquite, TX banned video games entirely, and that issue eventually reached the Supreme Court. They weren't the only city to try that, but those that didn't, ended up putting on some severe restrictions or fees on things like arcades.  Some countries outright banned video games in '82 as well - the Philippines, Malaysia, Taiwan.

 

i.e., the sentiment towards video games from parents in '82 was negative, which created some bad headwinds for an industry that was in a bubble. That wouldn't be hard to burst when it came to shovelware in both the arcade and consoles.

 

There's a lot more to it than that, including a very high profile games competition involving Atari and a lot of money that was never paid out which tarnished Atari's reputation on top of 2600 Pac-Man and E.T., but I'll save that all for the book

 

Shortest answer I can come up with is: A poor economy at the end of '82, with persistent inflation burst the video game bubble that had grown out of Pac-Man's success in 1980, with too many inexperienced people jumping into the market for both arcades and consoles; Too many arcade ports that happened too quickly; Political drama that made it tough; things like LaserDisc games providing more shallow hype that turned people off from gaming for a time. 

 

EDIT: I should also add that other threads claiming there was no crash are complete nonsense and ignore historical reality. If you don't believe me, read any Play Meter Magazine from 1984 (particularly their "State of the Industry 1984" issue from the end of the year), and you'll see that a lot of people lost an awful lot of money being involved in video games at the time. It should also be noted that we focus too much on Atari's involvement in the crash - they were huge in the industry for sure, but that ignores what was going on outside of them, too often. The crash also didn't affect places like Japan and Europe like it did here.

Edited May 19 by Shaggy the Atarian
added a line

[+Zeptari]

I'm betting it was a lot of suit and tie decisions that didn't help too. Games being rushed to market and overproduction of carts that the masses didn't buy. Surprisingly I enjoyed the 2600 pac-man and my short time with my Colecovision before moving on. A lot of people I knew back then including myself bought a pc. Console gaming ran its' course and computers were the next big thing. 

[zzip]

On 5/19/2024 at 9:17 AM, kisrael said:

So for people (probably in their mid-50s now) who really felt the rise and fall... did anyone here feel they saw it coming? Was it really frustration with bad (full priced) game after game? 

We didn't see it coming,  and there wasn't really frustration with overpriced or bad games.  Sure parents complained about the price, but they did that for everything.   On the contrary, it was a boon for us kids when we started to be able to get games discounted to $4.99 or so, and we started buying more of them.

 

On 5/19/2024 at 9:17 AM, kisrael said:

To the extent the Atari 2600 was ground zero for it-- maybe it was also growing disenchanted with the limits of that specific hardware? 

The crash happened not long after the 'next gen' Colecovision and Atari 5200 came out which both had impressive graphics for the time..   So if you felt held back by the 2600 there was a path forward.

 

On 5/19/2024 at 9:17 AM, kisrael said:

Heh, the Wikipedia article calls out a few titles -  "Titles such as the Kaboom!-like Lost Luggage, rock band tie-in Journey Escape, and plate-spinning game Dishaster, were examples of games made in the hopes of taking advantage of the video-game boom, but later proved unsuccessful with retailers and potential customers."  -- Lost Luggage I thought was ok at least  (actually being able to use the joystick vs paddle was kind of nice, and the bra showing up was funny in a pre-adolescent way"

So I think retailers were having a harder time w/ the floorspace needed maybe for all the games and all the systems, and also home computers started to look better? (For a certain part of the youth market, piracy where you could get a BUNCH of games at only the cost of a floppy disk IF you knew the right people...)

Almost everything written about the crash tries to find something that the industry did or didn't do to cause it.   I'll explain what I think the causes were:

1. Video Games in the early 80s were a fad.   Some people will argue this, but it behaved just like a fad.    Pac-man comes out and suddenly its a sensation like Beatlemania or something.   Suddenly every kid in school is talking about nothing but videogames,  going to arcades (which are springing up everywhere), eating Pac-man cereal, listening to Pac-man hit songs on the radio,  hanging out after school at the arcade or hanging out at a friend's house playing Atari 2600 or Intellivision,  talking about rumors that Atari is working on a home version of Pac-man, and how awesome that will be when it comes out!

All fads have an expiration date-- 18 to 24 months and that takes us right into 1983 when it all fell apart.  The industry and retailers expected the insane growth to go on forever, and not that the bottom was about to drop out so they weren't prepared.

2. It wasn't so much that we got burned out on a bad game to make us swear off video games,  it was more that other things came along and captured our interest.   We spent more time on the new interest and less time money on video games.   For us teens/pre-teens, the next big thing was MTV.   The 1980's music sound was coming into its own in 1983.   And suddenly artists like Michael Jackson, Duran Duran, Def Leppard, Billy Idol, Van Halen, Motley Crue, Cyndi Lauper, Madonna and others are huge!   Suddenly that's all the kids talked about in school,  they stopped talking about videogames.   After school we'd hang out watching MTV waiting for our favorite videos instead of going to the arcade or playing Atari.    All the arcades that were springing up everywhere started to shut down,  only a few remained usually in high-traffic places like malls

 

For adults, the next big thing was home video.  VCRs were becoming affordable, the VHS/Betamax war was winding down and home video rental places were springing up everywhere

 

Also it's important to keep in mind that the average home had maybe two TVs,  no home computer (yet) and certainly no screens in your pocket.   So if you wanted to play videogames but the other people in the house wanted to watch MTV or a rented movie then you were out of luck.   

 

There were other things too  WWF Wrestling became super popular.my friends started to get into pen and paper D&D around this time.    Yeah we still played games together sometimes, but it wasn't everyday, and it was at one of the friends houses who happened to have a computer,  most people didn't.   For awhile It seemed like the days of gaming consoles were over and not coming back, and videogames would never be cool and mainstream again.

 

[kisrael]

21 hours ago, YexxenBlaster said:

This is why I loved that era of gaming. Everyone could make a game. It also gave me some ideas for Robot Force stories. (The weirder, the better!)

The REALLY amazing scene, I've learned, was the UK - I'm not sure if the wheels were greased by cassettes being sort of cheaper than discs, along with some interesting cheap home computers (ZX Spectrum especially) ) but they had this amazing world of "programmers in the garage" who then made enough money to put a ferrarri in that garage.

Sort of jealous to miss out on that - or similar for the USA even, I think I was just a TAD too young (or maybe too chicken) to gear up and get programs published in magazines like COMPUTE!.

[Flyindrew]

1 hour ago, zzip said:

We didn't see it coming,  and there wasn't really frustration with overpriced or bad games.  Sure parents complained about the price, but they did that for everything.   On the contrary, it was a boon for us kids when we started to be able to get games discounted to $4.99 or so, and we started buying more of them.

 

The crash happened not long after the 'next gen' Colecovision and Atari 5200 came out which both had impressive graphics for the time..   So if you felt held back by the 2600 there was a path forward.

 

Almost everything written about the crash tries to find something that the industry did or didn't do to cause it.   I'll explain what I think the causes were:

1. Video Games in the early 80s were a fad.   Some people will argue this, but it behaved just like a fad.    Pac-man comes out and suddenly its a sensation like Beatlemania or something.   Suddenly every kid in school is talking about nothing but videogames,  going to arcades (which are springing up everywhere), eating Pac-man cereal, listening to Pac-man hit songs on the radio,  hanging out after school at the arcade or hanging out at a friend's house playing Atari 2600 or Intellivision,  talking about rumors that Atari is working on a home version of Pac-man, and how awesome that will be when it comes out!

All fads have an expiration date-- 18 to 24 months and that takes us right into 1983 when it all fell apart.  The industry and retailers expected the insane growth to go on forever, and not that the bottom was about to drop out so they weren't prepared.

2. It wasn't so much that we got burned out on a bad game to make us swear off video games,  it was more that other things came along and captured our interest.   We spent more time on the new interest and less time money on video games.   For us teens/pre-teens, the next big thing was MTV.   The 1980's music sound was coming into its own in 1983.   And suddenly artists like Michael Jackson, Duran Duran, Def Leppard, Billy Idol, Van Halen, Motley Crue, Cyndi Lauper, Madonna and others are huge!   Suddenly that's all the kids talked about in school,  they stopped talking about videogames.   After school we'd hang out watching MTV waiting for our favorite videos instead of going to the arcade or playing Atari.    All the arcades that were springing up everywhere started to shut down,  only a few remained usually in high-traffic places like malls

 

For adults, the next big thing was home video.  VCRs were becoming affordable, the VHS/Betamax war was winding down and home video rental places were springing up everywhere

 

Also it's important to keep in mind that the average home had maybe two TVs,  no home computer (yet) and certainly no screens in your pocket.   So if you wanted to play videogames but the other people in the house wanted to watch MTV or a rented movie then you were out of luck.   

 

There were other things too  WWF Wrestling became super popular.my friends started to get into pen and paper D&D around this time.    Yeah we still played games together sometimes, but it wasn't everyday, and it was at one of the friends houses who happened to have a computer,  most people didn't.   For awhile It seemed like the days of gaming consoles were over and not coming back, and videogames would never be cool and mainstream again.

 

Wow, not for nothing, you sound like my 1980s clone as far as progression of interests go LOL. 

 

My recollection of the time is that the early ‘80s led off with the Atari 2600 but I don’t remember there being a “crash”. I remember a progression from Atari to Coleco to Commodore 64 to WWF wresting. In the late 80s I had an Atari 130 XE and NES but didnt have the same buying craze as I had circa 1983.

[zzip]

On 5/19/2024 at 10:24 AM, CapitanClassic said:

If you inflation adjust that $3.2 billion in 1983 $US, you get $9.9 billion. Which is interesting, because some people have predicted another crash is coming. I don’t think it will be nearly as large a crash (maybe 50%-66%).

Today the industry is more diversified and it seems likely that a segment of the game industry can crash without taking the whole industry down with it like happened back then

 

18 hours ago, GoldLeader said:

If I were to add anything,  well,  maybe 3 more things...First,  I NEVER saw TOO MANY Games!  I think this part is (at least partially) Myth.  Too many bad games per capita?  Maybe.  I still remember days of going to buy a game and not having enough choices,  sometimes even buying a game I wasn't sure about because it was the only thing available (That I wanted).  Also I never saw (off the top of my head) Mythicon games or horror games on shelves, or some of these rarities that must have been available somewhere.  Rare to me at the time probably meant an Apollo game, a U.S. Game, or something by Data Age.  However I will say the Crash happened fast.  For example,  I bought US. Games' Towering Inferno (which I ended up liking) only because I couldn't find anything else at the time.  I paid $24.95 for it;  Let's call it full price, but with a minor discount.  The next U.S. Games game I bought was Space Jockey for $6.99.  At the time I thought it was a budget game or a promotion or something.  I had no idea The Crash had begun.  (Also note:  It's possible there could have been a glut of games for Atari, when I had moved on to mostly collecting for ColecoVision.  The reason I basically discount this is that I also still lightly collected for Atari, even in the Coleco Years...)

Yeah the total number of games on the 2600 isn't particularly high compared to many other consoles.  But there was a spike in game releases around 1982/83 when everybody and their brother wanted to make 2600 games.   Still I never saw many of those games crowding out the store shelves until they started showing up in bargain bins.   Retailers only had so much shelf space,  and they tended to stick to the proven titles/publishers   There's also lots of 2600 games and publishers that I've read about that I've never seen in the stores.

 

Yeah E,T, and "game glut" were 2600-only phenomenon.    So if they were truly the culprit, then why did Mattel and Coleco flee the industry while Atari and the 2600 survived?   There was a bigger issue affecting the industry that just bad 2600 games.   

17 hours ago, Shaggy the Atarian said:

Shortest answer I can come up with is: A poor economy at the end of '82, with persistent inflation burst the video game bubble that had grown out of Pac-Man's success in 1980, with too many inexperienced people jumping into the market for both arcades and consoles; Too many arcade ports that happened too quickly; Political drama that made it tough; things like LaserDisc games providing more shallow hype that turned people off from gaming for a time. 

I don't think this fully explains it either,  high inflation was more a 1970s issue, the Federal Reserve raised interest rates early in the 80s to crush inflation, but this caused a severe recession too, so years 1980-1982 were very weak economic times.   Yet these were the also the boom years for the videogame industry!   The stock market started it's bull run late in 1982, and the economy started recovering in 83 with interest rates easing and inflation now at manageable levels.  So the very point when videogames were crashing the economy was finally getting better.   It might be that videogames are counter-cyclical to the economic cycle since they are relatively cheap compared to other forms of entertainment and as the economy improves pent-up demand for other things takes hold  (people spend more on vacations, movies, sports games, and less on video games.)

 

 

[kisrael]

I'm still thinking more about the progression to the 8bit home computers (still I can't bring myself to call 'em PCs; at that time, IBM was PCs, and Apple Atari 800xl C-64 TI were all 'home computers')...

yeah the first cost of admission of a computer was a lot more than a typical console, but you could possibly swindle your parents for it in terms of "I can program!!!!" (or maybe sell them on  home finance or word processing utility crap, but lets face it systems were pretty under-powered for that)

But then once you got it, and if you weren't morally old enough to have scruples (or maybe not having money makes thieves of us all...) - holy cow piracy was amazing. It tended to be a social connection with other kids, vs store bought games which were more of a "convince the parents thing". and to that end it was empowering; kids get to acquire games w/o the parents involvement despite not having independent financial resources.

So my current musing is that - combined with every home system but especially the Atari - looking a bit old and clunky, was a part of the "crash-y" pivot - and hand in hand with the price wars for the home computers that made the home computers as cheap as the consoles.

That's not incompatible with the MTV idea, though we could bicker about what was more significant.

Skipping ahead 15 years, but keeping on the idea of "other things started coming along" - it reminds me of this quote about the death of arcades:
 

Quote

But the bottom line is that the players and kids stopped showing up. I think this is a weird fact, but every week we looked at earnings around the country, and the day that the Clinton report from the testimony of Monica Lewinsky got published on the Internet, the earnings in the arcades dropped 20%. Unfortunately, [those earnings] never returned! At that moment, I think the Internet became a source of entertainment.
--Mark Turmell, 2002

 

[Shaggy the Atarian]

21 minutes ago, zzip said:

 

I don't think this fully explains it either,  high inflation was more a 1970s issue, the Federal Reserve raised interest rates early in the 80s to crush inflation, but this caused a severe recession too, so years 1980-1982 were very weak economic times.   Yet these were the also the boom years for the videogame industry!   The stock market started it's bull run late in 1982, and the economy started recovering in 83 with interest rates easing and inflation now at manageable levels.  So the very point when videogames were crashing the economy was finally getting better.   It might be that videogames are counter-cyclical to the economic cycle since they are relatively cheap compared to other forms of entertainment and as the economy improves pent-up demand for other things takes hold  (people spend more on vacations, movies, sports games, and less on video games.)

 

 

It doesn't, like I said, I have a complete chapter that delves into all of angles (as best I can) as it really is a complex answer. In terms of inflation, that's what I meant, that inflation triggered high interest rates - although even in '82, inflation was still fairly high, as was the unemployment rate. 

 

As you mention though, there is the seeming contradiction that video games were hauling in the cash when the economy was stumbling bad, then they performed horribly when the economy was roaring in '84. In the same issue where you can find these stats, it starts with an editorial titled "The Rape of an Industry"

 

 

I think that can be explained by two things: 1st - as the economy sucked, consumers needed an affordable escape and gaming 1 quarter at a time was a great way to do that. Games at home weren't that overpriced and in '81, hadn't been saturated with ports and clones. 2nd on why things didn't bounce back - I think consumers became burned out. Atari really tarnished their reputation from several instances, but you did have poor games at home (whether in quality or simply just too derivative of existing games like Space Invaders or Pac-Man), poor games and tons of bootlegs in the arcade, too many arcade ports that came out too quickly(some games were released on console the same day that coin-op versions did),too many console choices, overhyped stuff like LaserDisc games that ended up being all smoke, no fire, then of course, a lot of legal/political headaches and moral panic headwinds that made being in the video game business not very profitable.  Also, notice "games on location" there - that's kind of the same game glut that affected Atari. You had 3,000 less arcade operators only two years later, yet the total population of game machines out there had only dropped by 150k. There was a lot of "dead wood" out there and so ops didn't want to buy brand new dedicated cabinets. Instead, conversion kits became quite popular. Of course, there's also the factor of accumulated and defaulted debt that occurred from many ops that dropped out, then those who survived not wanting to take on more, etc. 

 

But I was trying to give a "short" answer  

 

Here's one thing too that helps back up what I was saying about elements of the crash had already begun before anyone even knew what E.T. was. From April 1981 - from legal battles to pinball bans and more:

 

Edited May 20 by Shaggy the Atarian