North American Computer market crash?

[bradhig1]

This video about the history of Jack Tarmiel claims the home computer market in the US crashed in 1984. That is insane claiming Americans didn't buy home computers the way Europeans did?

 

 

[JamesD]

The videogame market had a lul, but I thought that was because people were buying computers.
Any of the numbers I've seen show continued growth in computer sales at that time.
There may have been a shift towards the PC or away from older or less popular machines.
I know there were a bunch of flops around that time, but that was more "too little too late" than something to do with the market.

[carlsson]

Without watching the video, I would assume there was greater diversity on the home computer market in Europe than on the US market or even Japan. Many of the smaller brands that had failed to attract enough buyers were eliminated one way or another, but that is not really the same thing as the market crashing if the major players still were around issuing new models and selling in big numbers. Of course if you factor in that PC's (IBM, Compaq etc) seem to have taken a big share of the upper end home business computing quite early on, it would be something of a home computer "crash" as those were a lot of possibly calculated high end sales that never happened to particularly Commodore, Atari and perhaps Tandy Radio Shack. Apple with their strong ecosystem may have thrived on that part of the market still, having one foot in the rich households which could afford an Apple as a gaming computer, and one foot in the more business oriented world which perhaps would play a game of chess now and then.

[empsolo]

I think Kim Justice points out that Tramiel’s slash and burn strategy when dealing with his competitors was harmful to the overall home market. All it did was create a glut of cheap computers on retail shelves that nobody was going to take seriously. Why buy a cheap c64 or Atari 8 bit from Sears when you can buy an IBM or an Apple from your local specialty shop that’s much more compatible with the computers being used in the work place or school and has the hardware to do serious things like word processing and spreadsheets and accounting?

 

 

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[MarkO]

<< BIG SNIP >>

 

Apple with their strong ecosystem may have thrived on that part of the market still, having one foot in the rich households which could afford an Apple as a gaming computer, and one foot in the more business oriented world which perhaps would play a game of chess now and then.

Apple was also strong in the Educational Market in the U.S., Canada and Australia.. Especially in the Pre-College Market..

 

MarkO

[Bill Loguidice]

I've always maintained that although the Crash affected videogame consoles the most, there were also effects throughout the related home computer industry. Whether it was more about Commodore's aggressive price war or a similar glut of product and badly-funded companies like in the videogame segment is open for debate, but it's undeniable that aggressive market shakeouts in North America happened on both sides of the aisle between 1983 - 1985.

[carlsson]

Are you suggesting that if Jack had maintained high prices and perhaps include a bunch of extra software and manuals that not too many would be interested in, the market as a whole had been better off? I've read that kind of reasoning several times before but I can't quite follow the logic how higher prices, fewer sold units and less price difference from personal computers would be beneficial to Commodore, Atari and the others. It is not like Lotus or Microsoft had put extra effort into porting their business software to run on the C64 if it was expensive enough so not that many kids had access to it.

 

Possibly it would have helped Texas Instruments to live on a bit longer in the computer market, plus a few of the minor brands that only existed because they were cheaper than the popular brands.

 

Also it wasn't entirely Jack Tramiel's "fault". Over here in Europe, Sir Clive Sinclair was not foreign to push prices as far as possible, quite obviously on behalf of build quality but since people in Europe tend to not be willing to spend as much money as Americans or Japanese, it was Sinclair's chance to combat both the US and Japanese brands.

[empsolo]

Are you suggesting that if Jack had maintained high prices and perhaps include a bunch of extra software and manuals that not too many would be interested in, the market as a whole had been better off? I've read that kind of reasoning several times before but I can't quite follow the logic how higher prices, fewer sold units and less price difference from personal computers would be beneficial to Commodore, Atari and the others. It is not like Lotus or Microsoft had put extra effort into porting their business software to run on the C64 if it was expensive enough so not that many kids had access to it.

 

Possibly it would have helped Texas Instruments to live on a bit longer in the computer market, plus a few of the minor brands that only existed because they were cheaper than the popular brands.

 

Also it wasn't entirely Jack Tramiel's "fault". Over here in Europe, Sir Clive Sinclair was not foreign to push prices as far as possible, quite obviously on behalf of build quality but since people in Europe tend to not be willing to spend as much money as Americans or Japanese, it was Sinclair's chance to combat both the US and Japanese brands.

Except my point wasn’t that Jack needed the C64 to be a high price computer but rather it’s low cost enabled Jack to put a low cost and low quality computer for the masses. In other words the home computers of this era were nothing short of trash. They offered nothing to the home consumers here in the US in terms of real office and educational work other than vague and empty promises about how these computers would change home life and businesses avoided them like the plague due to the fact they were viewed as nothing more than higher end games machines.

 

By 1985, the Home Computer market was practically dead because the American public did not see a need for a computer of the ilk of Atari or Commodore. It’s why both the ST and Amiga both ended with a combined market share of roughly 3% by the time the PC clones hit the market.

 

 

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[bradhig1]

We bought a Commodore 64 because we used them at school. We did our book reports on it and dad did some compuserve stuff on it. Of course we played games with it as well.

 

 

Did Jack Tamiel make this commerical? Is that a Commodore 64 on the right? I remember seeing another version comparing the atari 8 bit with a commodore 64 in which the kid was playing games on the c64.

[pacman000]

Early home computers had more than games.

 

Here's a list of C64 spreadsheet programs: https://www.c64-wiki.com/wiki/Spreadsheet

 

And here's Atari Write, for Atari's 8-bit computers:

https://en.m.wikipedia.org/wiki/AtariWriter

[empsolo]

Early home computers had more than games.

 

Here's a list of C64 spreadsheet programs: https://www.c64-wiki.com/wiki/Spreadsheet

 

And here's Atari Write, for Atari's 8-bit computers:

https://en.m.wikipedia.org/wiki/AtariWriter

That may be so but we know that businesses didn’t use them. Tremiel tried to get his Commodores and later Atari computers into businesses and nobody bit. Why buy a computer that acts more like a console when a business can buy a computer that caters specifically to their needs.

 

Hell, Kim’s subsequent video points out there was a company that had lucrative contracts with business and State and Federal Government to get their hardware into those places: IBM.

 

 

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Edited November 18, 2017 by empsolo

[MrMaddog]

As I mentioned in other threads... while Europeans primary bought home computers for gaming, North Americans got them for more serious purposes. Parents bought them for "educational" purposes but kids wanted to play the games anyway. Then there's running business applications but home computers just don't have the same abilities as PC's, even if you can use a word processor on a C-64 you can't get more than 40 columns of text and w/o GUI's the programs were awful to use. So that leaves programming but that's geared more toward computer geeks.

 

And even if kids in America did get computers for gaming to replace the Atari 2600's, it wasn't long before they got replaced by the NES when that came out. But home computers were still home to more complex stratedgy[sic] oriented games that couldn't by done on a Nintendo system. In fact computer games were different from video games till the Xbox came out.

 

For the record, I prefer gaming on home computers (made by Atari) in the 80's & early 90's but had a Nintendo system for rentals...

[shoestring]

 

 

Then there's running business applications but home computers just don't have the same abilities as PC's, even if you can use a word processor on a C-64 you can't get more than 40 columns of text and w/o GUI's the programs were awful to use.

 

You could get 80 columns in most home computers, including the c64. Just needed extra hardware into the back of it. The BI-80 used it's own built in 6545 CRTC display chip, so it gave very good results.

[Bill Loguidice]

It's kind of silly to say early home computers were used just for gaming. Sure, just like today, games are a big focus - and almost certainly moreso back then - but there would likely be very few instances where a home computer was not used for some type of non-game activity. Besides programming, word processing

 

Also, 80 columns or lack of a GUI were hardly a deterrent for anything. And to say something like GEOS was not up to snuff on the Commodore 64, as one example of a GUI-based 8-bit OS, means you probably never used it. The built-in WYSIWYG word processing and graphics program alone were capable of some impressive stuff.

 

Anyway, I've long accepted the idea that consoles having a dip in popularity (leading to the Crash, etc.) because of home computers was a contemporary misread of the situation by the day's publications. It's clear that if that was a factor, it was an incredibly minor one, and the home computer market had its own issues at the same time. It was a generalized market correction/shakeup due to a variety of factors.

[Mayhem]

There wasn't really any sort of computer industry crash in Europe, but post 1985, an awful lot of the competition had been removed, liquidated, gone out of business, or close to being (Dragon, Oric, Jupiter Ace etc). Only the Spectrum and Commodore truly survived, and Amstrad bought Sinclair's computing branch in 1986.

[high voltage]

There wasn't really any sort of computer industry crash in Europe, but post 1985, an awful lot of the competition had been removed, liquidated, gone out of business, or close to being (Dragon, Oric, Jupiter Ace etc). Only the Spectrum and Commodore truly survived, and Amstrad bought Sinclair's computing branch in 1986.

Of course, A8 always hung in there too (second best foreign computer in UK (after C64)). XEGS was fairly successful (at that time C64 was like.....nothing much anymore)

Edited November 20, 2017 by high voltage

[JamesD]

It's kind of silly to say early home computers were used just for gaming. Sure, just like today, games are a big focus - and almost certainly moreso back then - but there would likely be very few instances where a home computer was not used for some type of non-game activity. Besides programming, word processing

 

Also, 80 columns or lack of a GUI were hardly a deterrent for anything. And to say something like GEOS was not up to snuff on the Commodore 64, as one example of a GUI-based 8-bit OS, means you probably never used it. The built-in WYSIWYG word processing and graphics program alone were capable of some impressive stuff.

 

Anyway, I've long accepted the idea that consoles having a dip in popularity (leading to the Crash, etc.) because of home computers was a contemporary misread of the situation by the day's publications. It's clear that if that was a factor, it was an incredibly minor one, and the home computer market had its own issues at the same time. It was a generalized market correction/shakeup due to a variety of factors.

Early home computers were not used just for gaming. On that we agree.

 

Lack of 80 columns wasn't a deterrent? Yeah, you can have software that does the same things without 80 column support, but would you want to if you spent most of your time using spreadsheets or word processing? On machines with hi-res graphics, you can use graphics to display characters. But only a couple applications actually did that on most machines. That approach was probably most common on the CoCo, where Flex used it early in the machine's life, and then multiple articles soon published how to do it. But even then you are talking about just over 10 applications + anything running under Flex. Honestly, if you ran a business you'd want at least 64 columns with upper and lower case characters in hardware.

 

I partially disagree with your last statement. I think there was a combination of factors. There was a recession in the early 80s, and when the stock market tumbled in 1984, I think people were worried, and sales of big ticket items that might be considered frivolous took a hit. It was easier for parents to justify buying a computer than a videogame once prices of computers fell enough, and the C64 was supposedly selling for around $220 that year. Plus the old game consoles were looking a bit dated, games on computers could look better, computer games could be more complex, you could write your own, etc... I think console sale rebounded with consumer confidence, with the intro of more expensive 16/32 bit computers, and the intro of more powerful game consoles that were cost competitive.

 

[Bill Loguidice]

I partially disagree with your last statement. I think there was a combination of factors. There was a recession in the early 80s, and when the stock market tumbled in 1984, I think people were worried, and sales of big ticket items that might be considered frivolous took a hit. It was easier for parents to justify buying a computer than a videogame once prices of computers fell enough, and the C64 was supposedly selling for around $220 that year. Plus the old game consoles were looking a bit dated, games on computers could look better, computer games could be more complex, you could write your own, etc... I think console sale rebounded with consumer confidence, with the intro of more expensive 16/32 bit computers, and the intro of more powerful game consoles that were cost competitive.

 

 

And I partially disagree with your last statement. It's hard to argue that the ColecoVision and Atari 5200 were looking dated in comparison to the 8-bit computers available at the time, when they were at least on par. And, particularly in the ColecoVision's case and its second generation of game releases, they were also becoming a match in terms of ambition. Sure, the Atari 2600 was looking a bit creaky, but then you have to consider that both the Atari 2600 and Intellivision continued to sell in big box stores through to the end of the decade, so that probably wasn't a huge factor.

 

Anyway, yes, I do agree that there were a range of factors affecting the console, arcade, and home computer markets. 1982 - 1985 were wild times, full of amazing ups and catastrophic downs. I just don't think a significant number of people were buying a computer instead of a console, particularly if you compare buying patterns - and consoles living side-by-side with computers - right through to today.

[zzip]

I partially disagree with your last statement. I think there was a combination of factors. There was a recession in the early 80s, and when the stock market tumbled in 1984, I think people were worried, and sales of big ticket items that might be considered frivolous took a hit. It was easier for parents to justify buying a computer than a videogame once prices of computers fell enough, and the C64 was supposedly selling for around $220 that year. Plus the old game consoles were looking a bit dated, games on computers could look better, computer games could be more complex, you could write your own, etc... I think console sale rebounded with consumer confidence, with the intro of more expensive 16/32 bit computers, and the intro of more powerful game consoles that were cost competitive.

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.

[high voltage]

According to CGW, C64 was coming out strong 1984 in USA, and A8 was doing well

 

Edited November 20, 2017 by high voltage

[empsolo]

According to CGW, C64 was coming out strong 1984 in USA, and A8 was doing well

 

A computer scientist by the name of Sebastian Biallas ended up crunching some numbers and ended up finding out that Commodore apparently had cooked their books with regards to inflating c64 sales in the US. It would explain heavily why IBM and not Commodore eventually became the market leader even though supposedly Commodore was a heavy front runner in their vaunted "30 million commodores sold"

 

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

Edited November 20, 2017 by empsolo

[Mayhem]

Of course, A8 always hung in there too (second best foreign computer in UK (after C64)). XEGS was fairly successful (at that time C64 was like.....nothing much anymore)

 

Indeed, I was mostly going through what happened to the UK produced computers (bar the C64 of course). I know the A8 was about in the UK but I didn't know a single person back in the day who actually owned one, whereas I did actually know a kid who had a Dragon, and someone else had an Oric. By 1986, it was pretty much just the Speccy and C64, and then the 16-bit computer slowly crept in...

[JamesD]

A computer scientist by the name of Sebastian Biallas ended up crunching some numbers and ended up finding out that Commodore apparently had cooked their books with regards to inflating c64 sales in the US. It would explain heavily why IBM and not Commodore eventually became the market leader even though supposedly Commodore was a heavy front runner in their vaunted "30 million commodores sold"

 

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

I've always thought the larger numbers were BS... at best they were computers shipped and refurbs ended up getting counted again.

12.5 million sounds much more believable.

 

[high voltage]

 

Indeed, I was mostly going through what happened to the UK produced computers (bar the C64 of course). I know the A8 was about in the UK but I didn't know a single person back in the day who actually owned one, whereas I did actually know a kid who had a Dragon, and someone else had an Oric. By 1986, it was pretty much just the Speccy and C64, and then the 16-bit computer slowly crept in...

That's kinda weird, I knew loads of people in UK with A8 computers, even after 1986, WH Smith/Woolies had A8 games on their shelves, Computer Shops stocked A8 titles, Atari had yearly Atari User shows at Alexandra Palace (example Nov 1988), The Atari (8-bit) Games Centres were all over the UK, incl. London (also during 1988), the UK Atari fanzine 8 /16 listed many A8 users in the whole of UK/Scotland/Wales.

Of course, most of A8 users were disc users, C64 and Spectrum users only had tape recorders, that made Atari better than the others, especially with many disk games from USA.

[Major Havoc 2049]

I think Kim Justice points out that Tramiel’s slash and burn strategy when dealing with his competitors was harmful to the overall home market. All it did was create a glut of cheap computers on retail shelves that nobody was going to take seriously. Why buy a cheap c64 or Atari 8 bit from Sears when you can buy an IBM or an Apple from your local specialty shop that’s much more compatible with the computers being used in the work place or school and has the hardware to do serious things like word processing and spreadsheets and accounting?

 

 

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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. 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.