North American Computer market crash?

[empsolo]

 

Because in 1984 you could get an Atari XL or Commodore 64, monitor, disk drive and printer for around $500-$600, while an Apple IIe cost like $1500 for the same set-up and a DOS or CP/M computer cost around $2000+.

 

I'm from the US and the majority of the computer specialty shops in the 80's sold Atari and Commodore products as well. If there was a home computer crash in 1984 in the US, it sure didn't feel like it.

If there wasn’t then why did both the ST and Amiga fail to even make a dent in US by 1990? Why had computer sales past 84 sales see a huge slump? It seems that the claims of a shift to Atari or Commodore in terms of hardware coming into the home seems rather fanciful. Considering that Commodore would soon shift their attention to the PAL region as would Atari. The claims simply don’t match the history of the events of the mid 80’s. Events that saw both companies abandon the American market for greener pasture.

 

 

 

 

 

 

While video games and consoles were being liquidated at the time, computer games and productivity software held their retail value. New computers were being introduced and new software and computer games were being made at the time. Companies who made productivity software and game companies like Microprose, Epyx, Electronic Arts, Infocom, SSI and others all seemed to be doing well in the US. Most serious/hobbyist video gamers in the US in the mid-80's seemed to make a shift from consoles to computers and it seemed like a ton of households were getting Commodore, Atari, Apple and MS-DOS computers during that time.

A ton of households? Who and where? The C64 was barely able to move 12 million units into the commercial market world wide in 11 years? How much of that supply reached the US market? Even as Tremiel had gutted his supply chain in the specialty shops during the price war with Texas Instruments. Specialty shops that would abandon both companies out of fear of being priced out in the market of both Commodore and Atari’s newest shiny toys on the market.

 

 

It’s is clear as day, by both the sales numbers I posted in a previous page as well as the failure of both Commodore and Atari to grow their brands in the US, that there is a vacuum in the computer market between 1985-1988/89. A vacuum where there is an overall shrinkage in the computer market as Commodore and Atari Corp both try to hawk their wares in Europe selling computers that had been on the market since 79/82. A Vacuum that would be filled by IBM and its army of clones by the end of the decade. A vacuum filled by IBM based on the sheer strength of its strangle hold on the educational, governmental, and business markets.

 

Your second bit is also a bit puzzling. It seems to be a repeated as if it was gospel for over a decade and yet nobody can present facts to back up the claim. If the gaming market had shifted to computers and people were buying them as you say, then surely the console market was a dead horse. Then where did the enthusiasm for the NES and Sega’s System for that matter come from? It’s a question that has never been satisfactorily answered by those who hold to the silly notion that computers had killed the console market of the pre-crash era. Surely if the market had shifted then we would see steady sales of the C64 and the Atari 8 bit line or the Amiga and ST going into 1986-87. But we don’t.

 

We must conclude that gaming audience that had moved to the computer market must be extremely niche to sustain the sales of 8 but computers in the United States.

 

 

 

 

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Edited November 23, 2017 by empsolo

[mr_me]

According to this site, Commodore 64 sales peaked in 1984 but remained strong and steady throughout the 1980s http://www.pagetable.com/?p=547 . Maybe there was a decline in sales but I don't think it can be described as a crash. And PC sales steadily grew throughout the 1980s. Computer companies failing is not indicative of any crash.

 

I think the 1984 C-64 sales peak suggests that for whatever reason videogamers were turning to computers. The thought at the time was why buy a machine that only plays games when you can buy a computer that plays games. [being able to pirate games was a factor]. And then the NES came. There was no question that you could do your homework on a C-64 but few owners had a printer. Did people really have 80 column text on those things. The number one application by far was games. And GUIs weren't needed to be productive. Wordperfect, Lotus 123, and Harvard Graphics for DOS were all productivity workhorses into the 1990s.

Edited November 23, 2017 by mr_me

[carlsson]

I seem to recall that prices on RAM increased in 1984, which might at least dampen the margins to keep lowering the prices like e.g. Tramiel did and others felt required to follow. It may have been natural if the total sales took a dip as those who were eager to get a (home) computer already may have bought one, and those still hesitating might have waited when prices no longer were in free fall, also with promises of new models around the corner.

 

This discussion can also be put in relation to the sometimes occurring discussion why Commodore didn't release an upgraded C64 around 1984. Instead they released the C128 in 1985, which rather was a sidegrade than a direct upgrade. I'm of the firm belief that a constant flow of new models would just confuse the market, in particular if new functionality was added all the time: should we develop for the old model which already has a million owners, should we develop for the new model that is the future, can we develop software that automatically detects and adjusts itself? How large portion of the Atari 8-bit computer software only runs on the XL models, how much requires an XE, are there significant changes in capacity from the 400/800 that would mean broken backwards compatibility? How much of the Apple ][ library requires an //e, and how much different is it from the ][ and ][+? (No, I'm not looking for lengthy in-depth technical discussions, links to existing threads on AtariAge, Wikipedia or other sites - these questions are partly rhetorical)

 

It is a double headed sword. If your first computer model was not that successful, you have all the reasons to release a new one and hope it gets better received. If you have a big seller on the market, you either would like to retain it until the sales really begin to dwindle, make very small improvements while assuring existing users new software likely will run on their old systems, or make big changes and hope you're not confusing the market. In particular if the US was shifting from $300 home computers to $1000+ personal computers in the mid 80's, the third choice could be fatal if you find yourself with a $500 computer nobody needs.

 

Why the Atari ST and Amiga lines never were big in your part of the world may have something to do with that $1000+ PC's much sooner found their ways into homes than on e.g. the European markets, so over here there really was a market for $600 gaming computers in the late 80's, next to the rebirth of the 8-bit and soon to come 16-bit consoles.

[empsolo]

According to this site, Commodore 64 sales peaked in 1984 but remained strong and steady throughout the 1980s http://www.pagetable.com/?p=547 . Maybe there was a decline in sales but I don't think it can be described as a crash. And PC sales steadily grew throughout the 1980s. Computer companies failing is not indicative of any crash.

 

I think the 1984 C-64 sales peak suggests that for whatever reason videogamers were turning to computers. The thought at the time was why buy a machine that only plays games when you can buy a computer that plays games. [being able to pirate games was a factor]. And then the NES came. There was no question that you could do your homework on a C-64 but few owners had a printer. Did people really have 80 column text on those things. The number one application by far was games. And GUIs weren't needed to be productive. Wordperfect, Lotus 123, and Harvard Graphics for DOS were all productivity workhorses into the 1990s.

C64 sales were steady yes. But don’t forget that those sales are world wide figures. How much of that success was buoyed by its new found popularity in Europe? According to the Wikipedia article on the IBM PC, the PC was released in 1981 and by 1986 had control over 85% of the market. So I am not sold on this notion that the Atari or Commodore computers were ever popular here.

 

 

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[Bill Loguidice]

C64 sales were steady yes. But don’t forget that those sales are world wide figures. How much of that success was buoyed by its new found popularity in Europe? According to the Wikipedia article on the IBM PC, the PC was released in 1981 and by 1986 had control over 85% of the market. So I am not sold on this notion that the Atari or Commodore computers were ever popular here.

 

 

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You're seriously questioning whether the Commodore 64 was ever popular in the US? If you were around at that time, you wouldn't be asking that question.

[empsolo]

 

You're seriously questioning whether the Commodore 64 was ever popular in the US? If you were around at that time, you wouldn't be asking that question.

Sales numbers don’t lie though. By 1986 the IBM PC captured 80%+ of the market. The C64 May have have been popular but it seems to have mythologized. The C64 certainly wasn’t that big.

 

Anecdotally, my family’s first computer was a 286 that my father bought in 1987 in order help start up his small business.

 

 

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Edited November 23, 2017 by empsolo

[carlsson]

85% of the strictly business related market or 85% of the entire desktop computer market, including all kinds of home usage? Even if we forget Commodore and Atari for a while, that leaves at most 15% of the market for Apple Macintosh in 1986. Just like how the sales figures for the C64 may be inflated, what is to say the sales of IBM and compatibles also weren't inflated?

 

Or is that 85% of all brand new computers sold in the USA in 1986 were PC compatibles? It still is a high figure, but not quite as unlikely as total market dominance.

[mr_me]

C64 sales were steady yes. But don’t forget that those sales are world wide figures. How much of that success was buoyed by its new found popularity in Europe?

I'm going to say less than 50%. The C-64 did well in Europe but it also had strong competition.

 

 

According to the Wikipedia article on the IBM PC, the PC was released in 1981 and by 1986 had control over 85% of the market. So I am not sold on this notion that the Atari or Commodore computers were ever popular here.

The percentage of market share says nothing about C-64 sales. It's possible for sales to double and market share to go down at the same time. We all know about the growth of personal computers in the office during the 1980s. Few families could afford an IBM compatible for home however.

 

Neither of these things says anything about whether there was a 1984 home computer market crash in North America.

Edited November 23, 2017 by mr_me

[+save2600]

Full on crash? No way. A shakeout by 1984, sure.

[Major Havoc 2049]

If there wasn’t then why did both the ST and Amiga fail to even make a dent in US by 1990? Why had computer sales past 84 sales see a huge slump? It seems that the claims of a shift to Atari or Commodore in terms of hardware coming into the home seems rather fanciful. Considering that Commodore would soon shift their attention to the PAL region as would Atari. The claims simply don’t match the history of the events of the mid 80’s. Events that saw both companies abandon the American market for greener pasture.

 

 

 

 

 

 

A ton of households? Who and where? The C64 was barely able to move 12 million units into the commercial market world wide in 11 years? How much of that supply reached the US market? Even as Tremiel had gutted his supply chain in the specialty shops during the price war with Texas Instruments. Specialty shops that would abandon both companies out of fear of being priced out in the market of both Commodore and Atari’s newest shiny toys on the market.

 

 

It’s is clear as day, by both the sales numbers I posted in a previous page as well as the failure of both Commodore and Atari to grow their brands in the US, that there is a vacuum in the computer market between 1985-1988/89. A vacuum where there is an overall shrinkage in the computer market as Commodore and Atari Corp both try to hawk their wares in Europe selling computers that had been on the market since 79/82. A Vacuum that would be filled by IBM and its army of clones by the end of the decade. A vacuum filled by IBM based on the sheer strength of its strangle hold on the educational, governmental, and business markets.

 

Your second bit is also a bit puzzling. It seems to be a repeated as if it was gospel for over a decade and yet nobody can present facts to back up the claim. If the gaming market had shifted to computers and people were buying them as you say, then surely the console market was a dead horse. Then where did the enthusiasm for the NES and Sega’s System for that matter come from? It’s a question that has never been satisfactorily answered by those who hold to the silly notion that computers had killed the console market of the pre-crash era. Surely if the market had shifted then we would see steady sales of the C64 and the Atari 8 bit line or the Amiga and ST going into 1986-87. But we don’t.

 

We must conclude that gaming audience that had moved to the computer market must be extremely niche to sustain the sales of 8 but computers in the United States.

 

 

 

 

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The original question was there a computer crash in the U.S. in 1984. My answer was, no. Your expanding your argument into the 90's and we all know how that played out for Atari and Commodore.

 

 

Here is the personal computer sales and market share up until 1984 in the U.S.

Source: https://arstechnica.com/features/2005/12/total-share/4/

 

The NES wasn't released in the U.S. until 1985. The NES didn't hit the million mark in lifetime sales in the US until after the 1986 Christmas season and it didn't really take off until 1987.

Edited November 28, 2017 by Major Havoc 2049

[carlsson]

The problem with that diagram is that the green field is contested, that Commodore inflated their numbers so possibly they didn't get to sell as many units as they either manufactured or claimed they did. I've seen the diagram before, and others similar to it. Of course you can only go by the numbers given by the company, unless you have strong evidence the numbers don't sum up. Actually the fact that the green field origins to early 1981 is a sign that something is wrong, either it includes VIC-20 and PET sales or the numbers are approximated as the Commodore 64 wasn't released until August 1982, by which time the C64 already from the start would have a bigger market share than the Atari 8-bits and Apple ][ combined.

 

What I do know though is that the demand for the IBM PC was much larger than anticipated, so it took IBM some 1.5 - 2 years filling orders in the US before they even launched the computer in Europe, or if they even went directly to the XT model. Some probably direct imported PC's overseas if they could get ahold of them, or went with some other brand, e.g. if some of the software also would run on the Sirius 1 / Victor 9000, businesses might go for that one instead of waiting for IBM. Given that the C64 didn't show up in any significant volumes over here until early 1983, by which time IBM was starting to catch up, it would be silly of me to suggest that Commodore in Europe would gain any market shares from the lack of the PC, not even with the PET/CBM 8032 line. Possibly the Apple though, but it already had its ecosystem and market which IBM would take a bite from.

[mr_me]

A bar graph would have been clearer but the way you read it is like this.

C-64 sales

1981: 0

1982: ~250k

1983: ~2M

1984: ~2.5M

 

This website says those numbers are a little inflated and suggests the following.

http://www.pagetable.com/?p=547

 

The arstechnica graph includes office PC sales and the 1985 dip in c-64 sales was more than made up by office IBM PC sales. However, this topic is about home computer sales not including office PC sales. I thought I once saw numbers for home computer sales only somewhere.

 

Edit:

These numbers are worldwide sales and again this topic is about north american home computer sales. Although the c64 was in europe in 1983, I've read that sales were slow there until later in the 1980s. The numbers do look like c-64 1984 sales picked up some slack from Mattel and Atari exiting the console market in 1984. And took a dip well before the NES went national in 1986. Year 1985 also saw the introduction if the c-128, Amiga, Atari ST, and other low end Atari computers.

Edited November 28, 2017 by mr_me

[carlsson]

One thing for sure, had not the ill-liked Tramiel slashed the prices in the late spring, early summer of 1983, the C64 would've had a much harder time to gain sales, perhaps it would even have died off before it took its market shares. At $595 even with a few software items and books included, it was too expensive for a gaming computer at home and still technically lacking for business purposes. Texas Instruments and others may have survived longer, but generally I think the market of home computers had suffered. Possibly it had opened up the market for the Japanese a bit later, the same Japanese that Tramiel was trying to counter. And yes, here in Europe, Sir Clive would've had almost the entire home market to himself if he kept slashing his prices while barely anyone else did.

[JamesD]

The recession was between 80-82, and in 83 economic growth started to bounce back. The stock market crash wasn't until 87.

 

So ironically, videogames boomed during the technical recession and crashed just around the time the general economy was recovering.

 

Some Economists might say that games are "counter cyclical" meaning they are a cheaper form of entertainment than say going out, and therefore do well when people are tightening their spending.

Actually, I took that from a news article.

 

The stock market had a decline over 1983-1984 of almost 15%. The article I looked at referred to it as a crash, but it wasn't a single day.

A 15% drop in the market starting in 1983 would have an impact on consumer confidence in 1984.

Even though it bottomed out in 1984 and showed signs of recovery, it would take a few months for consumers to start spending more freely.

The is from Wall Street's Best Daily

Specifically, that 1983-1984 decline fell a maximum of just 14.8% over about 11 months, then had a strong up-thrust that caused all sorts of blastoff indicators to flash green. However, instead of surging from there, the S&P 500 meandered sideways for another five months in an even tighter range (about 6% from high to low) before finally exploding higher—the market doubled by late 1987![/size]

1987 was Black Monday.

If you look at a historical graph of the stock market, stocks were lower in 1983-1984 than after Black Monday.

S&P 500 Stock Market Historical Graph