the big crash

[broncoman]

when did this happen was it 1984 ? and what really started it was it regan i think back all those years when i was 13 and games seemed to be everywere like sears kay bee etc i asked my dad if he remembers anything he said the morgage sucked any ideas thx for any info !!!!!!!

[joeybastard]

I'm no expert on this but this is what I remember. It started about 1983 and really hit in '84. The major cause was a glut in the market of crappy games. There were so many companies making games that price wars drove down profits which killed off some companies and made the surviving ones unable to put money into development. It didn't help that there were many different game playing machines (console + computer) which further watered down which formats the game companies could produce for. The best evidence is any comic book ad for a Parker Bros game at the time. They were trying to make their games (all licensed properties which drove up cost) for the 2600, 5200, CV, Intellivision, C64, Vic 20, Apple II, Ti99 and sometimes other platforms.

[tillenterprises]

when did this happen was it 1984 ? and what really started it was it regan i think back all those years when i was 13 and games seemed to be everywere like sears kay bee etc i asked my dad if he remembers anything he said the morgage sucked any ideas thx for any info !!!!!!!    

 

"regan?" Do you mean Ronald Reagan? And, if so, what did Reagan have to do with the Video Game Crash? If anything, I remember an article in which Ronald Reagan praised video games for building hand/eye coordination and imagination. The video game crash occured due to a huge number of crappy games that flooded the market to cash in on the video game craze, which led to oversaturation, and caused people to lose interest. Also- I think part of what caused the crash was the "novelty" of video games had started to wear off by 1984, which led to sales leveling off and ultimately declining when nothing new and exciting came out (like a next generation game console), until the NES came out. Now, of course, we realize how much fun those old games were!

[tillenterprises]

when did this happen was it 1984 ? and what really started it was it regan i think back all those years when i was 13 and games seemed to be everywere like sears kay bee etc i asked my dad if he remembers anything he said the morgage sucked any ideas thx for any info !!!!!!!    

 

"regan?" Do you mean Ronald Reagan? And, if so, what did Reagan have to do with the Video Game Crash? If anything, I remember an article in which Ronald Reagan praised video games for building hand/eye coordination and imagination. The video game crash occured due to a huge number of crappy games that flooded the market to cash in on the video game craze, which led to oversaturation, and caused people to lose interest. Also- I think part of what caused the crash was the "novelty" of video games had started to wear off by 1984, which led to sales leveling off and ultimately declining when nothing new and exciting came out (like a next generation game console), until the NES came out. Now, of course, we realize how much fun those old games were!

[z28in82]

I far as I have read it went something like this the Holiday batch of games for 83 were very rushed and not of the greatest quality which lead to alot of poor sales and a whole lot of returns. Which meant a weak end of 83, and there wasn't a killer game to come out in 84 (just alot of mild variations on what was out there) along with the introduction Home computers (games + word processors) left the game only systems hurting.

 

So 2 yrs later Nintendo came out with the NES and an original game or two (dozen) lead to the rebirth of game systems.

 

This is just what I have heard and read ina few places, seeing as how I was only 6 when "the crash" happened I don't know much firsthand.

[Witchfynde]

Yeah, joeybastard (yeesh, what a handle!) summed it all up pretty well, although some jokingly say that Atari E. T. caused the entire crash

[+wavemotion]

I'm no expert on this but this is what I remember.  It started about 1983 and really hit in '84.  The major cause was a glut in the market of crappy games.  

 

That was certianly a big part of it. Overall, from what I've read it was a variety of reasons that the market really dried up for video games. Another factor often mentioned was the various home computers showing up on the market and they were becoming more and more viable. Sure it was more money, but families felt they could get both home entertainment and some more "serious" work done with a computer and felt the added pricetag was justified.

 

Of course the "crash" didn't last that long. A couple years later Nintendo would right the console ship and make it viable again.

[Cupcakus]

"The Crash" also extended to Arcades and Arcade manufacturers.

[ryckster]

Here are some quotes from Steven Kent's book, "The First Quarter":

 

"On December 7, 1982, Atari announced it expected a 10 to 15% increase in sales in the fourth quarter. Until that announcement, Atari executives had been talking about an increase of 50%."

 

"Atari had deeply rooted problems that eventually infected the entire industry...Atari became top-heavy with marketers and other executives...some executives began to think that they could sell anything as long as it came packaged as a video game. "

 

"The first indication of trouble came in May, 1982, but no one seemed to notice. Atari manufactured 12 million copies of Pac-Man even though the company's research showed that less than 10 million people actually owned and used their 2600s..."

 

[The book goes to explain that Steve Ross, head of Warner communications, made a deal with Steven Spielberg offering him $25 million for E.T., wether the cart did well or not. The cart was rushed out for christmas release and when it did it flopped miserably.]

 

"...the majority of E.T. cartridges remained dead in inventory."

 

"Consumers had already begun losing interest in video arcades, and in 1983, they stopped purchasing video games."

 

"Atari was stuck with enourmous inventories of worthless game cartridges...By the end of 1983, Atari racked up $536 million in losses."

[dwh]

It is my belief that three things brought the crash.From "the first quarter", I quote again 'atari executives'--there were too many running around in company cars,limos, and planes.The second was all the lawyers who flocked to the billion dollar industry(remember all those college kids becoming lawyers in the 80's?)And the third is demographics(which I was a part of)--the kids grew up and got cars and jobs and wives,ect.I don't buy the 'crappy game' theory too much, because people saw these bad games and not a whole lot were sold--that's why they ended up in the $1 bin.As for Nintendo doing so well--demographics again--these scarry violent games were not so scarry anymore--just ask the people that had the kids who got Nintendo game systems;the parents are the ones who originally played pong,atari,odyssey.

[rolenta]

After the success of Activision, dozens of companies sprung up with the intention of marketing games for the 2600. Pretty soon there was a glut as hundreds of games vied for limited store shelves. The bigger companies, such as Atari and Parker Brothers spent a lot of money developing games. However many smaller companies released any old junk that they could get. Since all the games couldn't possibly be sold, many of the smaller companies began going out of business. Their inventory was seized by creditors and sold for a fraction of their worth. Pretty soon it was common to see $5 games competing against games from the bigger companies which were selling for $20-30. People bought the cheap games, simply because they were cheap, and the expensive games remained on the shelves. Pretty soon they had to be discounted to compete. But because of this the bigger companies stopped spending money on development. And before long there was no new product.

 

With Coleco it was a little different. The brains at that company figured that their Adam computer was the way of the future. They stopped production of Colecovisions to make room for the Adams which unfortunately did not live up to their expectations. This led to a domino effect which eventually destroyed the company. The release of Cabbage Patch Dolls saved the company for a few years but it eventually couldn't recoup its videogame losses.

[Big Player]

Lots of crappy games were a factor in the crash. Also there were no new video game systems that had any popular success then. The 2600 was still king at the time.

 

But the rise of home computers also contributed to the crash. I got an 800XL in 1984. My parents refused to buy anymore games for the 2600. At the time, my father said, "I'm not buying any games for that obsolete system." I guess he must have heard it from the news.

 

I put my 2600 in the basement and didn't buy another video game until I got an NES in 1989.

[broncoman]

i remember seeing mythicon displays at kay bee toy stores during the crash as a little guy man dad was having a hard time with money and mom was also but he bought me all 3 games man they sucked but i told him they were awsome so he whould be happy but let me tell u they sucked !!!!!!

[ryckster]

So basically companies sprung to the video game boom to make a quick buck and the market was flooded with crappy games. When stores couldn't sell them many people got financially stung.

 

Another quote, this time from David Sheff's "Game Over":

 

"...but there was a consensus that the 'suck factor' was one of the biggest reasons for the industry's crash. The market has been glutted with terrible games. Pac-Man was a blast in arcades, but the home version 'sucked'. 'ET', ridiculously hyped, 'sucked'."

 

Nintendo was so aware of this that they went through enormous efforts to disassociate the NES from Atari. That's why the US NES was designed with as a grey box and had carts inserted inside the unit. It was also one of the reasons why the NES was sold with the R.O.B. robot toy.

[SS]

"regan?"  Do you mean Ronald Reagan?   And, if so, what did Reagan have to do with the Video Game Crash?

 

If you had been a "punk rocker" in the 80s, you'd know that Reagan was pretty much to blame for everything bad that happened in that decade!

[tillenterprises]

If you had been a "punk rocker" in the 80s, you'd know that Reagan was pretty much to blame for everything bad that happened in that decade!

 

Sorry, I wasn't a "punk rocker" in the 80's, but I always thought punk rockers hated everybody! Aside from the video game crash, I thought the 80's were great! I could debate you on Reagan, but this isn't a politics forum.

[Witchfynde]

But the rise of home computers also contributed to the crash.

 

Yeah, and with computers constantly getting more powerful, their adaptions of arcade games started getting better, and computers started getting cheaper too, so the arcade industry started going downhill as well.

[rasty]

Nintendo was so aware of this that they went through enormous efforts to disassociate the NES from Atari. That's why the US NES was designed with as a grey box and had carts inserted inside the unit. It was also one of the reasons why the NES was sold with the R.O.B. robot toy.

 

Humm afaik Nintendo actually offered Atari to market its NES but Atari declined: http://www.atariage.com/trivia_list.html

 

Greets,

Rasty.-

[ryckster]

Humm afaik Nintendo actually offered Atari to market its NES but Atari declined: http://www.atariage.com/trivia_list.html

 

Yes, at first Nintendo was looking for someone in the US to help them sell the NES. Eventually they decided to do it themselves and installed an american division of the company in New York (back then of course).

 

All of this happened while the crash was taking place. Big N's change of mind wouldn't surprise me.

[rolenta]

Yes, at first Nintendo was looking for someone in the US to help them sell the NES. Eventually they decided to do it themselves and installed an american division of the company in New York (back then of course).  

 

All of this happened while the crash was taking place. Big N's change of mind wouldn't surprise me.

 

Not exactly. Nintendo was specifically looking for Atari to distribute the NES outside of Japan, figuring that they could never compete against Atari. Atari stalled, especially after Coleco showed off Donkey Kong (which Atari had the computer rights to) on the Adam at the 1983 Summer CES. By the time Atari was about ready to sign with Nintendo, the crash happened and Nintendo no longer had to fear Atari so they decided to release the NES themselves worldwide.

 

Plug time: All this information can be found in Phoenix: The Fall & Rise of Videogames, which is available from the Atari Age store.

[AtariDude]

The crash happened because there were too many products competing for very little shelf space. A lot of these companies were small companies without a lot of resources to market and distribute their games. When no one would buy them, they ended up on the $5 discount bin. People started buying them rather than the more expensive $30 - $40 games that were on the shelf.

 

So the companies that were selling the $30 - $40 games had to cut their cost as well in order to compete. This resulted in lot of companies going out of business. Soon no one was making any money and those that did survive got out of the video game business.

 

Nintendo avoided all this by creating a lock out chip that printed people from making a lot of crappy games (Remember that quality seal that came with Nintendo games?). Eventually they were sued over the lock out chip because someone mentioned that it prevented companies from making Nintendo compatiable games.

[rolenta]

Eventually they were sued over the lock out chip because someone mentioned that it prevented companies from making Nintendo compatiable games.

 

And that company happened to be Atari (Games)

[ryckster]

Nintendo avoided all this by creating a lock out chip that printed people from making a lot of crappy games (Remember that quality seal that came with Nintendo games?). Eventually they were sued over the lock out chip because someone mentioned that it prevented companies from making Nintendo compatiable games.

 

Yes, thanks for bringing it up. Funny how many games had the infamous "seal of quality" yet they sucked big time (e.g. Deadly Towers, X-Men).

Nintendo sued a lot of companies who tried to publish un-licensed games.

 

So the crash was caused by an overflooded market of bad software

and the complacency of some people in the business.

 

What other reasons you think contributed to the crash?

[broncoman]

i don't want to get jumped or dropped kicked but the more i hear about atari especially with the tramiel's in charge man they sure did some dumb ass stuff

[Rob Mitchell]

I'm sorry to inform all of you .. and I know it will come as a shock to you .. but *I* caused "The Crash." I really didn't mean for it to happen .. and if I had a chance to go back in time and change my ways, then maybe Atari would still be the strong leader in cool fun games and not have declined into oblivion.

 

Back in 1977, my family bought the Sears VA (VCS: aka 2600) .. and we eventually acquired 20 carts (one 3rd party - Activision: Laser Blast) (One return: Canyon Bomber-hated it!). We had all the controllers available at the time: 2 Sticks, 4 paddles, 2 keyboards and the driving controllers. In 1981 I decided that I needed something more powerful so I bought the Atari 800 (for the real keyboard) and a few carts .. and the cassette recorder.

 

Anyway in 1983 I started losing faith .. and realizing that the new IBM computer could do spreadsheet, wordprocessing, and database better than all the money I could throw into the Atari 800. So I gave into the need to sell all this stuff before it depreciated to (thrift store) prices .. So I sold the 2600 w/20 carts and controllers for $300 and I sold the Atari 800 w/cassette recorder and carts for $300 and I didn't touch the stuff .. (except for a brief period during graduate school when my roommate showed up with a 4 switcher).

 

So I lost faith in Atari and my need for videogames .. that laid dormant until 1997 (when I followed up on a swap/shop AM radio station ad for Atari with 50 games for $20.)

 

If only I had kept my faith in Atari .. maybe it would have endured! Oh the Guilt! And the shakedown of the crash! Horrors!

 

Thank you all! I feel better now having gotten that off my chest.

 

Rob Mitchell, Atlanta, GA

(dang .. I'm typing this on an IBM pentium thing when I could be typing this message on an Atari 80,000).