The North American Video Game Crash of 1983

I love history. I love learning about what happened in the past, how people lived, what people did and how events unfolded and are interrelated. Being a gamer, that means I especially love learning about video game history. In my column I am going to be giving you all a brief look into the past, to see where the awesome video games we have today came from. I will begin with the infamous, North American video game crash of 1983.

 Most of you probably know that the first majorly successful home video game console was the Atari 2600. The console was released in 1977 and quickly became a huge hit in households across the world, especially in America. Video games hadn’t been around very long, with arcades only starting to really pick up steam in the culture, and the introduction of replaceable cartridges to allow for more than one game to be played on a system was revolutionary.

For these, and many other, reasons the Atari 2600 became a huge success in the late 1970s and early 1980s. Atari had taken a stranglehold over the American video game market and its competitors were left in the dust as the console and company grew in popularity and wealth.

Everything seemed to be going very well for both Atari and the early video game industry, but that didn’t stay the case for very long. Like any new entertainment medium, video games were bound to go through some kind of trial and in 1983 the medium got that trial in the form of what people call the video game crash of 1983.

There were many reasons why the video game crash of 1983 happened and many of them were the first things that the industry fixed once it got back on track. It should be noted that this crash really only affected the American market, with gaming in other markets (namely Japan) still booming throughout the mid-1980s. Anyway, here are the main reasons for the video game crash.

Atari’s “Open Market”

We take for granted nowadays the fact that not just anyone can distribute a game that runs on a major video game system. The companies manufacturing the gaming consoles have controls (some more strict than others) over who and what gets on their systems. Seeing as gaming was a totally new thing, the industry hadn’t really figured this out. Atari didn’t have any kind of system in place to stop just anyone from making a game on its system.

The result of this was a flood of poorly-designed third-party games. Even though many games came out and were stellar (Pitfall comes to mind) many games were released and didn’t represent the medium well (Custer’s Revenge comes to mind).

The precedent for this was set by Activision and its formation in 1979. Former Atari programmers formed Activision because they felt they deserved royalties for their games, similar to how artists receive royalties for record sales. Atari tried to stop Activision from publishing games but Activision won the law suit in 1982, leading to a flood of third-party development.

This lack of quality control made video games look extremely childish as a whole and something that just wasn’t “the future.” People stopped getting behind video games as an entertainment medium and they thought that the sea of bad games were what video games were all about.

The Home Computer

PC gaming seems to be something that is removed from many console  players but in when home computers began to gain steam in the early 1980s, people saw that as a way to do more than just video games with one system. Not only could people play video games, but they could do work, save files and send e-mails (not like now, but it was possible).

In addition to all of that, the games could be more sophisticated on the computers and the storage on the computers allowed for a save feature (something console games didn’t have at that point in history). Kids convinced their parents to buy them computers like the Commodore 64 because they could pawn it off as a “homework” tool. The rising popularity of home computers seemed to make video game consoles seem obsolete. Why would you pay the same price for a device that does less and doesn’t even do what it does do as well? Consumers saw this as a pretty cut and dry decision.

Big-Name Catastrophes

It is never a good thing when a game fails, but when a growing medium is plagued by horrible third-party games, the last thing it needs is high-profile failures. This is exactly what happened, namely with Pac-Man and E.T. Both of these games were heavily hyped for the Atari 2600 and both represented something that console games needed to stand for. Their failure to do so hurt the cause quite a bit.

So what do I mean by “something that console games needed to stand for?” Well, let me explain one at a time. Pac-Man was (and still is) one of the biggest arcade success of all time. Atari wanted to cash in on that by releasing a version for the Atari 2600. The development of the game was rushed to get it out on time for the holiday season in 1981 and the quality suffered; big time.  The Pac-Man game on Atari 2600 is often regarded as one of the worst games of all time but the real failure came in a more symbolic gesture.

 Home consoles were in direct competition with arcades, they needed to prove that video games could be successful outside of the arcade setting and by taking an arcade classic like Pac-Man and then butchering it; they weren’t making a strong case. The growing industry needed to be able to branch out and prove success in homes and this made consoles look like a cheap replica of arcades.

The second colossal failure was the E.T game for the Atari 2600. E.T was a runaway hit at the box office and a video game adaptation of the movie seemed like a logical step. The game was hyped up as a big deal but, just like the Pac-Man game, its development was rushed. The game came out in 1982 and is widely regarded as the absolute worst game of all time.

 But, just like Pac-Man, this failure held a deeper significance for the growing entertainment medium. Just like taking an arcade classic and creating a terrible version on consoles made them look bad, so did taking a hit movie and making a terrible game based off of it. Video games were (and still are) nowhere near films in terms of maturity as entertainment and the industry really needed to show that it could be categorized up there with films as entertainment: E.T on the Atari 2600 did just the opposite of that.

So, after all of that video games had a damaged reputation and a seriously saturated market in North America. The result was a panic that saw companies like Coleco and Magnavox leaving the industry all together and stores being unable to stock all of the games and systems that were available. These retailers tried to sell back the extra stock but the companies didn’t have the cash to buy them back and companies began folding left and right.

Eventually, Atari was sold off and the North American video game crash had completed its ugly course. The crash left the North American market dead to video game developers and consumer electronic shows wouldn’t seriously consider video game consoles. To both the public in North America and, more importantly, to investors and store owners, video games were a fad that had run its course. Home computers were the future and any gaming would be relegated to an extra feature on them.

The North American video game crash of 1983 had two very long-lasting effects on the industry. The first was game console companies beginning to restrict content on their consoles by a variety of means. Publishing control stayed in the hands of the console manufacturer and this relegated unlicensed games to bootlegs.

The second lasting impact of the crash was a shift in power from North America to Japan. The crash in North America left the market so dead to the idea of video games that it took the exploits of an extraordinary Japanese gaming company to break it out of its funk. But we will leave that story for next week. 

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