What happened?

[tz101]

...to Mattel and Intellivision in the official "crash" of 1983?

 

Though they released four Intellivoice games late in the life of the system in an attempt to top Atari's 2600 console, how could Mattel have not seen Colecovision and 5200 coming? Once those two were on the gaming scene, Intellivision sales must have suffered greatly. Was Aquarius really Mattel's answer to 5200 and CV? Get real...

[+MattelAquarius]

Mattel's history is pretty well documented on the net.

 

It's the classic battle between marketing/engineering/programmers/execs. They had an updated system in the works, but it kept getting delayed, because the plan/designs kept changing. "One more feature...one more change."

 

The Aquarius was never intended as an answer to any gaming system. It was Mattel's answer to Mattel's own quest to market a computer system, which was a residual obsession left over from the failed Inty Keyboard project.

 

It was the wrong answer at wrong time.

[IntellivisionDude]

Not sure if this is what your looking for. But this is taken from the IntellivisionLives website.

There's more of it here. http://www.intellivisiongames.com/history.php

 

 

 

1982

 

Video game industry valued at $1.5 billion. Mattel Electronics announces profits of over $100 million, with Intellivisions in over 2 million homes. Most popular Intellivision games sell over a million cartridges each. Companies publishing Atari 2600 cartridges, including Activision and Imagic, start releasing games for the Intellivision system, too. Total Intellivision titles available climbs to over 50. Mattel Electronics releases Intellivoice module and three voice games; raises ad budget for year to over $20 million. Computer keyboard released in limited test markets at $600; general release is repeatedly delayed. Mattel game development staff hits 100. TV Guide magazine, in an article about Intellivision, dubs the developers "The Blue Sky Rangers." The name sticks. Higher-resolution ColecoVision video game system hits market with popular arcade game titles, taking sales away from Intellivision and Atari. While Christmas season for industry is strong overall, there are not enough sales to go around for all of the companies now in the market.

 

 

1983

Classic brown-and-woodgrain Intellivision console is replaced by cheaper ($150) light gray Intellivision II. Computer keyboard component is officially cancelled in favor of cheaper, less powerful Entertainment Computer System (ECS). System Changer module is released, allowing Atari 2600 cartridges to be played on an Intellivision II console. Marketing campaign now pushes Intellivision as the system that plays the most games. New systems are released by other companies, including the Atari 5200 and the Vectrex. Games for all systems flood the market, many rushed and of poor quality. Titles available for Intellivision alone approaches 100. By midyear, glut of video game hardware and software creates huge losses and panic within the industry. Mattel Electronics cuts price of Intellivision II console to $69, cancels all new hardware development, and lays off hundreds of employees, including two-thirds of programming staff. Mattel Electronics ends year with over $300 million loss.

 

 

1984

Mattel Inc. closes Mattel Electronics, laying off remaining programmers. Sells rights to Intellivision system and games to new company headed by former Mattel Electronics marketing exec. The company (INTV Corp.) continues selling Intellivision in major toy and department store chains, and through mail order. Other companies close or get out of the business, leaving Intellivision the only video game system still sold in the USA that Christmas. Experts proclaim video game industry dead.

 

 

1985

When leftover Mattel inventory of Intellivision II consoles runs out, INTV Corp. starts manufacturing the INTV System III console based on the design of the original Intellivision. Starts reprinting most popular games as inventory is exhausted. INTV has U.S. market to itself until Japan's popular Nintendo Entertainment System (NES) is test marketed in America during Christmas season.

 

 

1986

INTV introduces games that were completed at Mattel Electronics but never released. Success of the new games spurs INTV to contract with former Mattel Electronics programmers to complete unfinished Intellivision games, update old ones, and create new ones. Although sales of cartridges are only in the 10,000 to 20,000 range, by running a bare-bones operation INTV Corp. is profitable. Nintendo releases NES nationally, quickly followed by new consoles from Sega and Atari (the 7800). The video game industry starts comeback.

 

 

1987

Popularity of NES temporarily boosts Intellivision sales: stores that had dropped video games in 1984 now stock them again, including some Intellivision titles. But Christmas clearly belongs to Nintendo.

 

 

1988

Stores stop carrying Intellivision console and games. Sales are strictly through mail order.

[Rev]

funny thing about the big video game crash. i never knew about it until maybe 5 years ago?

 

i was a kid when it happenned. but i do remember the games in the value bin! i just didnt know why.

[BigO]

funny thing about the big video game crash. i never knew about it until maybe 5 years ago?

 

i was a kid when it happenned. but i do remember the games in the value bin! i just didnt know why.

Yeah, I hear ya. I moved about 1000 miles away from home to attend college in 1983. My next meal, studying and rent were so very far above video games in priority that I didn't even have any interest in video games again until a few years ago.

[IntellivisionDude]

funny thing about the big video game crash. i never knew about it until maybe 5 years ago?

 

i was a kid when it happenned. but i do remember the games in the value bin! i just didnt know why.

 

 

Same here. I didn't know about the crash until years later. That could explain why my Mother bought me an Intellivision. Maybe it was only $69. lol

Edited October 26, 2010 by rgw825

[icbrkr]

funny thing about the big video game crash. i never knew about it until maybe 5 years ago?

 

i was a kid when it happenned. but i do remember the games in the value bin! i just didnt know why.

 

 

Same here. I didn't know about the crash until years later. That could explain why my Mother bought me an Intellivision. Maybe it was only $69. lol

 

I think for those who lived through it, we didn't know it happened either. All I knew is I could get INTV games for cheap, and mom kept buying them for me for gifts, etc.

 

In 1984, I saw my first C64 and realized I didn't need to use my INTV as much anymore... here was a system I could get free games on (ermm.. yeah) and I could program! I think a lot of us just shifted to home computing.

[catsfolly]

Well, hindsight is a wonderful thing I guess.

 

Imagine that for two years, every product your company made sold out, and your biggest problem was figuring out how to increase production fast enough to meet demand. This was the situation at Mattel Electronics (and probably Atari and other companies as well) from mid 1980 to mid 1982. (I went to toy stores in early 1982 to see what games were selling, and even "Poker and Blackjack" was sold out. And that was the pack-in game! Why would anyone buy it?)

 

In such a situation, the company leaders will tend to come to one of two conclusions:

 

A. We are the luckiest people in the world to be at the right place at the right time with the products people want. Or

B. We are product development geniuses who instinctively know exactly what the public wants.

 

Unfortunately, many industry leaders went with "B" and buoyed by their fantastic past successes, believed that they knew what they were doing even as the business was crumbling around them.

 

As far as the Colecovision goes, it looked like vaporware until it actually shipped. At the 1982 Winter CES, Coleco showed nothing - only arcade game logos and empty cartridge shells. At the summer show, they had a closed booth. On the outside of the booth they had monitors supposedly showing "coming soon" "Colecovision" games, but in some cases these were just video tapes of someone playing the arcade game (this was obvious in the case of Zaxxon, where the Zaxxon joystick blocked part of the screen...) Most importantly, they didn't show any finished game. Everyone in the industry knew that it took 2-3 months for a game to go from completed code to mass-producible masked roms, so if the games weren't finished by summer, they couldn't ship in time for Christmas. So it looked like Coleco couldn't deliver on their promises.

 

But, to everyone's surprise, Coleco did ship. The early games shipped on EPROM cartridges, which were usually only used for engineering prototypes. Donkey Kong versions changed weekly. Meanwhile, Mattel's next generation system was stuck in the labs, a victim of creeping feature-itus...

 

Because of the runaway success of video games in 1981, in 1982 everyone and his brother started up a video game company. Since everything made in 1981 sold out, regardless of quality, these companies did worry so much about game quality (in general...) So, the market was flooded with mediocre games, and every time someone bought a mediocre game, they thought about other, better uses for their entertainment dollars ...

 

Mattel and Atari and Coleco had operated on the principle that the console makers would be the only ones to make games for their systems - protected by keeping the internal details of the systems secret.

 

When demand exceeded supply, the third party game companies sprang up - but with no controls on quality. Meanwhile, in Japan, Nintendo had invented "licensing" - they protected their system from unauthorized 3rd party games with lockout chips involving patents and copyrights, and then sold licenses to companies that wanted to make games for it. This meant a great supply of games for the players, and quality control (and profits from each game) for Nintendo. In hindsight, the biggest mistake the old game companies made was not inventing licensing or something similar.

[OldAtarian]

funny thing about the big video game crash. i never knew about it until maybe 5 years ago?

 

i was a kid when it happenned. but i do remember the games in the value bin! i just didnt know why.

 

I remember the Sterns store in the mall near me having NIB Atari carts for 25c liquidation when the crash happened. I bought a lot of carts then. Mostly they were the generic white boxes with black lettering and no picture on them but there were still some of the older color boxes.

[marcfrick2112]

I remember seeing bins of 2600 carts. at KB Toys for .50 to $1.00 , but mostly odd 3rd-party carts.

 

funny thing about the big video game crash. i never knew about it until maybe 5 years ago?

 

i was a kid when it happenned. but i do remember the games in the value bin! i just didnt know why.

 

I remember the Sterns store in the mall near me having NIB Atari carts for 25c liquidation when the crash happened. I bought a lot of carts then. Mostly they were the generic white boxes with black lettering and no picture on them but there were still some of the older color boxes.

[roberto]

When demand exceeded supply, the third party game companies sprang up - but with no controls on quality. Meanwhile, in Japan, Nintendo had invented "licensing" - they protected their system from unauthorized 3rd party games with lockout chips involving patents and copyrights, and then sold licenses to companies that wanted to make games for it. This meant a great supply of games for the players, and quality control (and profits from each game) for Nintendo. In hindsight, the biggest mistake the old game companies made was not inventing licensing or something similar.

 

Actually I think the Intellivision II was the first system to have a mechanism to prevent unauthorized third party cartridges to run... but right now I don't remember where I read it (I guess I'm getting old! ). Maybe someone can confirm this?

 

Anyway, when this happened I guess that it was too late to save the market and to early to restore it...

Edited October 29, 2010 by roberto

[catsfolly]

 

Actually I think the Intellivision II was the first system to have a mechanism to prevent unauthorized third party cartridges to run... but right now I don't remember where I read it (I guess I'm getting old! ). Maybe someone can confirm this?

 

 

Actually some changes were made to the exec ROM for the Intellivision II, and these changes (accidentally or on purpose?) caused some Coleco games not to run. So it was actually a continuation of the "protection by keeping the programming details secret" technique.

 

At the time, company lawyers weren't sure about the legal implications of having copyright protection for cartridges (for example - having the exec look for the string "Copyright Mattel" inside the cartridge and not run the game if it didn't find it). So they just tried to keep everything secret.

 

(A few years later, one of the early versions of the IBM PC had a bios program that looked for the string "copyright IBM" in the graphics card bios and would only run the bios if it found that string. So graphics card clone makers put a message like "we're not associated with IBM, but we need to put the letters "copyright IBM" here so the code will work" ...)

 

In hindsight, what they should have done was what Nintendo did - make it easier and more profitable for third parties to work with the console maker that to go it alone (by reverse engineering the system and hoping it wouldn't change underneath them...)

[chrisbid]

intellivision was test marketed in 79 and released in 1980. before the video game explosion driven by pac man. the intellivision was designed to take on the atari vcs and its pre-1980 lineup.

 

the arcade explosion and the colecovision weren't in the minds of hardware desingers or the business people at mattel yet. the intellivision was designed as an in-between system between the VCS and early home computers

Edited October 29, 2010 by chrisbid

[OldAtarian]

 

Actually I think the Intellivision II was the first system to have a mechanism to prevent unauthorized third party cartridges to run... but right now I don't remember where I read it (I guess I'm getting old! ). Maybe someone can confirm this?

 

 

Actually some changes were made to the exec ROM for the Intellivision II, and these changes (accidentally or on purpose?) caused some Coleco games not to run. So it was actually a continuation of the "protection by keeping the programming details secret" technique.

 

At the time, company lawyers weren't sure about the legal implications of having copyright protection for cartridges (for example - having the exec look for the string "Copyright Mattel" inside the cartridge and not run the game if it didn't find it). So they just tried to keep everything secret.

 

(A few years later, one of the early versions of the IBM PC had a bios program that looked for the string "copyright IBM" in the graphics card bios and would only run the bios if it found that string. So graphics card clone makers put a message like "we're not associated with IBM, but we need to put the letters "copyright IBM" here so the code will work" ...)

 

In hindsight, what they should have done was what Nintendo did - make it easier and more profitable for third parties to work with the console maker that to go it alone (by reverse engineering the system and hoping it wouldn't change underneath them...)

 

 

How is it more profitable to have the console maker restrict the number of games you can produce and to lock you into exclusive contracts so you can't sell games for the other consoles?

[OldAtarian]

intellivision was test marketed in 79 and released in 1980. before the video game explosion driven by pac man. the intellivision was designed to take on the atari vcs and its pre-1980 lineup.

 

the arcade explosion and the colecovision weren't in the minds of hardware desingers or the business people at mattel yet. the intellivision was designed as an in-between system between the VCS and early home computers

 

Apparently it wasn't in the minds of INTV when they bought the Intellivision, either, and it had already happened by that time. They were still selling the same Intellivision system after the Sega Genesis was on the market. Talk about missing the boat.

[Nukey Shay]

How is it more profitable to have the console maker restrict the number of games you can produce and to lock you into exclusive contracts so you can't sell games for the other consoles?

 

It's not. You guys are mixing up eras of console gaming, which rarely works regardless of what the product is. A very big part of what helped Nintendo capture the US market is because of the drought that existed because of console producers' bad marketing practices until that time (i.e. catering to distributors' forecasts, priority #1) which eventually thinned the market...and part of what went into the NES design was based on what current 1st-party producers were doing wrong (i.e. not creating a component that prevented unauthorized programs from running). Even the concept of 1st-party licensing would not have worked for the 2600 - there wasn't much regulation of reverse-engineering back when it was created. Programs "borrowed" from other programs all the time. Atari even tried to go after 3rd-party clones as soon as they appeared, but this failed because it was decided that the console consisted only of "off the shelf" components...and therefore, anybody could build one.

You need to keep in mind that the system was never intended for long-term sales...so anticipating it's success by creating such a "lock out" component would just erase dollars from the bottom line. 3rd parties at the time would just have turned to some other console that had no restriction.

[chrisbid]

Apparently it wasn't in the minds of INTV when they bought the Intellivision, either, and it had already happened by that time. They were still selling the same Intellivision system after the Sega Genesis was on the market. Talk about missing the boat.

 

 

apples to oranges

 

INTV was a company founded by a former Mattel Electronics employee. He purchased the rights to the Intellivision line for pennies on the dollar and setup a bare bones, yet profitable company that could take advantage of the 2 million Intellivisions sitting in living rooms across the country. World domination was never in the cards for INTV corp.

 

In the end, they attempted to make the switch to produce NES games, the effort failed.

[chrisbid]

How is it more profitable to have the console maker restrict the number of games you can produce and to lock you into exclusive contracts so you can't sell games for the other consoles?

 

 

If you do not earn any royalties or licensing fees from third party software sales, then these sales simply eat into first party software sales. In a razor/razor blade buisness plan, software sales are where profits are earned.

 

The attempt to block third party software, didnt work for very long. Third parties found a way around the lock out almost immediately. and frankly, the intellivision is a better platform WITHOUT colecos port of Donkey Kong in the library.