North American video game crash of 1983

The Video Game Crash of 1983 was a prolonged economic collapse of the video game industry in the USA. This collapse came the bankruptcy of several American companies manufacturing video game consoles and home computers. Reached a high point this crisis in late 1983 and early 1984. This was also the end of the economic success of the so-called "second generation" of the video games market dar.

In the following two years stagnated the American video game market. This time only ended with the release of the Nintendo Entertainment System ( NES) and the highly successful video game Super Mario Bros. The device was first released in Japan in 1983 under the name Famicom, released in 1985 in the U.S., reaching in 1987 high sales figures.

In some sources, this event is also referred to as video game crash of 1984, because until this year, the extent of the collapse of the consumer was really clear. Hundreds announced games no longer came on the market because of bankruptcies.

Europe and Japan

In Europe began in the years 1981 to 1985, the early days of the home computer, which allowed individuals, for an affordable price for the first time to have your own computer. This development was strongly supported with advertising for such computers, especially for the Commodore 64, the leader was in many European countries.

The parents were given a choice to buy a video game or equal to a computer that could teach the mostly young users something useful. The graphics and sound capabilities of home computers were now comparable to or better than the game consoles, and they offered better options for copying the games. In addition, the games for home computers were priced much more attractive.

So at the time of the North American collapse The European market was clearly dominated by games for home computers and the collapse had little impact here. Similarly, the events in the U.S. led to a growth of the home computer market.

In Japan, the events also had no effect, as this market from the European or American market was independent: Japanese bought most computers and video game consoles from their own country, including the Famicom console from Nintendo, the Sega SG -1000 and MSX computer.

Prehistory and trigger

The collapse of the North American video game market had several causes:

  • A large number of different video game systems gave the buyer too many choices to each other incompatible systems: Atari 2600, Atari 5200, Bally Astrocade, Colecovision, Coleco Gemini, Emerson Arcadia 2001, Fairchild Channel F System II, Magnavox Odyssey2, Mattel Intellivision, Intellivision II, Sears Tele -Games system, Tandyvision and Vectrex. Each of these consoles had their own game library from the actual manufacturers and other suppliers. At the same time some of these console manufacturers announced for 1984, new versions of their game consoles, such as the Odyssey3 or the Atari 7800th
  • Many poor quality games were taken from a wide variety of game providers on the market. Simultaneously published Atari games based on famous movies (ET ) or successful arcade titles (Pac Man) touched down, but were in the implementation of poor quality, which soon realized the buyer.
  • The media, which had been previously reported in the successful years of the video game industry, made ​​in 1982 and 1983 now the weaknesses and problems on the topic. In particular, the destruction of millions of unsold ET games from Atari in the desert of New Mexico even became the deterrent example of the press.
  • At the beginning of the 1980s, inexpensive computers came on the market, which could be connected to home TV as a monitor and were equipped with color graphics and corresponding tone generators. Since all of these home computer more memory, better graphics and sound qualities offered as video game consoles and at the same time the computer could be used not only for games but also for word processing and other applications, were the home computers against video game consoles have the advantage. The games were far easier to copy there.
  • The company Commodore aimed his advertising especially on the difference between home computers and video game consoles - the message was that children would need a home computer rather than a video console. Commodore and other companies offered their computers in department stores, supermarkets and toy stores where game consoles were sold before. Even Commodore could greatly suppress the production costs and the final price by its own production of the chips.


The first step in the crisis was the establishment of the company Activision, which was established in 1979 by former Atari programmers David Crane, Larry Kaplan, Alan Miller and Bob Whitehead. The programmers had left Atari, because the management refused them a mention by name in the developed of them games. Activision developed especially games for Atari's successful home console Atari 2600. Since it was not allowed from the perspective Ataris other providers to develop games for their console, Atari sued the new competitors, lost this method, however, in 1982. The Court's decision allowed therefore games from other manufacturers, so countless companies founded video game departments to jump on the success story of Atari with the Atari 2600.

The company began not to poach the programmers for these games or to get through reverse engineering the necessary know -how. Despite the experience of Atari Mattel continued to try to conceal the names of its developers and asked in an interview with TV Guide magazine from June 19, 1982 even to change the name of Gabriel tree, Don Daglow, Rick Levine, Mike Minkoff, John Sohl intentionally.

Direct effects on the market

The flooding of the market with many low quality games from 1982 had a destabilizing effect. When the dealer tried to return the unsold products to the game manufacturer, showed that these new neither acceptable title still had money. This has led many manufacturers to collapse. The shops were forced after the Christmas season in 1982, the games sell at significantly reduced prices.

All these developments led to a large wave of bankruptcies in the market. Companies such as Magnavox and Coleco closed their video game divisions. Imagic postponed its IPO the day before he was supposed to take place and also went bankrupt later. The largest companies such as Activision had also developed programs for the home computer market and clung to the market, while small providers mostly disappeared.

Long-term effects for the market

The collapse of the American video game market had long-term effects. Thus, the focus of the console market of the United States moved to Japan. As the market recovered in 1987, is the leading manufacturer of video game consoles Nintendo NES was with her, followed by Sega in second place. Also Atari could not really relax and get at the success of the Atari 2600. 1984, the company was split up because of the massive losses and sell the game console and home computer division to Jack Tramiel, who continued the business as part of Atari Corporation. In 1996, the company business after the flop of the Atari Jaguar, however, definitively, the brand name was sold.