The biggest problem with the "glut" theory is that it assumes two things:
I'd say the biggest problem with your interpretation of the glut theory is you assume the following two interpretations:
1) There were simply too many games out there for the market to support (good or bad games);
Actually no, the problem was the back stock wasn't out there. It was sitting in warehouses because sales were dropping.
2) And this is the key here, very important, central to it all...
That consumers will evenly spread their money out among all games.
Once again, the opposite was being stated. There were to many game choices and platform choices, hence consumers were more cautious on what they spent their money on, which in turn also effected sales negatively.
Even people involved in the industry at the time clearly stated it and saw the problem compounding. Gordon Crawford, who was tight with Warner Communications and had brokered the Warner/Atari deal started selling off his investment firm's stock in WCI as early as January of 1982 and completely unloaded by that August. Why? In his own words:
"At the Winter CES that year, there were thee or four new video game systems and fifty new software companies -all the warning lights went on for me. Then at the June CES show it was worse! There were two hundred software companies. This was a business that a year before had been essentially a monopoly, and now there were literally hundreds of new entrants."
The entire industry had sustained immense and quick growth from 1980 to 1982, which is exactly why places like the Wall Street Journal were questioning the ability to sustain that growth and the possibility of an implosion of the market. In many ways similar to the tech and housing bubble problems of recent years.
And that's where the glut theory falls flat on its face, friends. If it worked that way, then every business in America would have died out decades ago.
Oh yes, because every business in America is in the same market and industry. Makes a lot of sense. Where do you come up with this stuff? This is yet another thread I've seen try and push this way far from the norm theory. And we have had other markets crash, or market bubbles burst as they're called. Both in tech (the .com bust) and the housing bubble are the few more recent ones.
It assumes that we were so stupid, that we didn't know a good game from a bad one. Thus, we spread our disposable income out among all of these games, no matter how bad, and thus, NOBODY made a profit. In other words, Generation X was hopelessly stupid.
A) Parents of Gen-X did the spending. Gen-X was a term applied to us in '91 from the book Generations to describe young adults of the late 80's and early 90's. b) What planet are you from? Almost every industry does the bulk of marketing to sway "individuals" to believe their product is the best over others that might be better, even when said product might not be great. That's how marketing works.
Hell, how many crap songs get on the radio and become "hits" because they get pushed, paid, etc. from the Music industry, which is notorious for that practice? c) The opposite was and is being said of what you're interpreting - people were trying to make more intelligent decisions because there were so many choices also infused with a lot of not good product.
But come on, already. Even in the pre-Internet age, how many bad movies, bad songs, bad television shows, and bad (whatever) were out there? Especially in the 1980s, when the VCR came into its own, did movie theaters go out of business? Did television? Did the music industry crash? No.
Once again, you're running off in a tangent on something that was not being stated. Fact: Sales dropped significantly during that time. Fact: People were more cautious with spending *because* they were trying to make more intelligent purchases. Also related fact: We were just coming out of a recession
Sure, SOME companies, esp. those with crummy games, would go out of business, but that's how a free market is supposed to work, isn't it? It doesn't mean EVERYONE is going down.
They don't call it a crash because "some companies" go out of business. They call it because the market itself crashes, which it did. Sales tanked, that's a fact. Atari was at sales of 1.1 billion in 1981, guess what it was at by the time of its closing and split? Activision went from a 158 million in sales to 16 million by the end of the crash. Every major console manufacturer either left the industry completely, or went out of business completely. Everybody. Atari Inc., closed and split. Mattel - left. Coleco - shut down Colecovision operations and eventually left all together. Magnavox - left. Bally/Astrovision - left. GCE/MB - left. Zircon - left. Emerson - left. A major portion of the game publishers did as well, with the exception of the few that were able to switch over to computers. That very vacancy with publishers is what let Japanese publishers, who had been having to have American publishers put out there games (Konami, SNK, etc.) enter the markets on their own and fill that void.
Luckily, thanks to the homebrewers, those old systems have another shot. Thanks to you all.
That's one area we agree on.
Edited by wgungfu, Fri May 15, 2009 9:36 PM.