Doing some research on the video-game crash of 1983/84

[per]

I have been asking this question in another forum, but I feel some of you may be able to answer some of my questions too.

 

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I'm doing a school project (history) about "The North-American video-game crash of 1983" (as most peope like to call it). Since I wasn't born before '92 and have grown up in Europe, I have no knowledge about what actually happened through personal experience. Because of this, I'll try to read all documents I can find about it.

 

After reading quite a lot on the internet, I seem to have gotten the following facts:

 

1970's:

• The birth of console games, home computers, and the general 4th generation computers.
  
• TI throwing Commodore out of the calculator market, and Commodore almost goes bankrupt.
  
• The market for console games is quite small.
  
• Arcade machines gets quite common and popular.
  

 

1980-81:

• The market for video-games is getting bigger.
  
• Most games released are ports of popular Arcade games (like "Space Invaders").
  
• Atari is gaining popularity with their "Atari 2600".
  
• Atari is the leading company in the market.
  

 

1982:

• Atari anounces that they'll release an Atari-2600 port of the popular game "pac-man".
  
• There is an ongoing boom-time in the console-market, and demands for consoles goes up because of popularity.
  
• There is a similar boom-time for the Arcade-market and home-computer market.
  
• Atari steps in the salad by over-estimating the sales of "Pac-man"; making 12 million of cartridges with only a proptotype (even only 10 million Atari 2600's were sold at that time). Some million people buys the game and many of them gets dissapointed and tries to return it.
  
• Numbers of different consoles appears from companies created overnigth.
  
• Numbers of games appears from even more companies created overnigth.
  
• The market is flooded with games and consoles.
  
• Atari buys the rigths to make a game based on the popular movie "E.T.", and they want it done untill the Christ-mass sale (giving the development team just a few weeks to complete the game). The game gets ready in time, and Atari estimates high sales and makes quite a lot of cartridges. The game actually sells quite well in the start, but not as much as people expected.
  

 

1983:

• Lower-than-expected sales of the Christ-mass made the Atari-executives dump their stock on their Parent-company; Warner Communication.
  
• Stores are having problems selling games, and they reduces the price by sometimes more than 98%.
  
• The discounted games prevents expensive games to sell well, and as time goes by, most games arriving are rushed and of very poor quality.
  
• Commodore attacks the console and home-computer market. "Why buy just a videogame?", and they offered a $100 discount if trading in another home-computer/console on purchase. Stores offered Sinclair 1000's for as little as $10 along a purchase of a Commodore 64.
  
• TI responds to Commodore's aggresive marketing tactics, and a price-war starts. Most other home-computer manufacters follows, but not Apple. This price war spread quicly into the struggeling console market, and more or less wipes it out. In the end, Commodore won, and dominaded the home-computer market for years. Jack Tramiel of Commodore migth have done this personally to get a revenge on TI after their actions in the 1970's (see above), but this is not confirmed yet.
  
• Some of the biggest video-game makers instantly quitted the market.
  
• The console-market is dead, nothing new is being produced and shops are struggeling selling what they have since many people tend to buy Commodore 64s instead. Most stores reffer to consoles as a "fad" that had passed.
  

 

1984:

• Companies that went to sell games for the C64 is doing good, as Commodore had a boom-time after winning the price-war.
  
• Console-stuff was still at sale in the stores, but almost nothing new was released. At this time customers could actually start to realize something was wrong in the console-market.
  

 

---The crash itself ends here---

 

1985:

• Nintendo tries in late 1985 to carefully occupy the abadonned market by releasing a console without defining it a "console". "console" was renamed to "entertainement system", "cartridge" was renamed to "control deck", you mounted the cartridges in a different way, and they shipped a toy-robot with it in the start. This made it seem more like a toy or an "utility" than a game console. All games developed for it had to be approved, and one company could not make more than 5 games per year.
  

 

1986:

• Nintendo proves that there still is a market and gains popularity, more stores starts to trust them, and the industry is reborn with Nintendo as the leading company.
  

 

It is to note that the crash only happened in North America. In Europe, console games wasn't common before the NES came around. Pong-clones were known and sold quite some units, but as of I understand, most people went directly to home-computers like the Commodore PET or later VIC-20 / C64.

 

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As you see, the major cause of the crash was a market flooded with games, often crappy games. In addition, there was this price-war started by Commodore. Wenether this price war had too much infuence on the crash or not, I'm not sure. Many sites I have seen doesn't state the price-war at all, and the section about it has been removed from the Wikipedia article about the crash. That's why I am quite unsure aobut how big factor the price-war actuslly had on the crash.

 

However, my main questions for those of you that was born before the crash, and lived in North-America at that time; are:

1. In what degree have I gotten this rigth?
   
2. Is there anything I have missed, or is there anything I have gotten wrong?
   
3. What document/book/article would you suggest that gives a clear, preferable complete, and factual explanation of this?
   

[Seob]

Right age, wrong continent, i'm from europe. Think it is pretty right, i never heard of a console crash until i started to collect video games, and browsed the internet. The atari 2600 did sell well in europe, but when the c64 hit the market and more and more home computers got cheaper, people in europe shifted sooner to home computers instead buying consoles.

When nintendo entered the market in north-america it released first only in new york to see if there still was a market for consoles. They tried to team up with atari, to let the american distribution of the console done by atari.

[vrocko]

Looks pretty good to me. I will tell you Wikipedia has a pretty good summary of the Crash. Being from Ohio and being born in '65 I walked right into the Crash in '83. It was great to go to Kay Bee Hobby or Childrens Palace and get Atari 2600 games for $0.50 or $1.00 but it obviously didn't help the industry at all. I remember stacks of 2600 games on tables in the center of Kay Bee marked way down. You could go in with $5.00 and come out with 5, 6 or 7 games. The market was saturated, any company who had a programmer and an idea made games for the 2600. Some of them came from companies with no business being in the video game market. Purina, Kool Aide, Quaker Oats, all made at least one video game for the 2600. There was really no quality control at that time. Write the game, test it, package it, ship it. I think that's why Nintendo came up with the Nintendo Seal of Quality. It was sort of an assurance to consumers that the game was reviewed by Nintendo and was of good quality, although that was debatable on some of the games that came out for the NES.

 

Personally I thought video games were dead after the Crash until Nintendo showed up. I still had my 2600 and all my games and hoped for more but figured it was over. It was fun while it lasted. Nothing new showed up for the 2600 and eventually the stock of new 2600 games I didn't have yet started to dry up. Seob is right about Nintendo. They came to Atari to try and get them to distribute the NES through their distribution channels they already established selling the 2600. Atari was into computers at that time and after Pac-Man, ET and the Crash they turned them down. They had already lost a lot to the video game industry and in no way wanted to jump back in. To Atari at that time, video games were a fad that had ended and computers were the wave of the future.

 

ET has been a kind the symbol for the Crash of '83 due to it's hurried production and low quality, but ET wasn't not the only thing that killed the video game industry but I think you did a good job covering that. I think you've got a lot of good info there and I'm sure everyone else here will lend a hand. Let us know how you do!

 

Rich

[CARTRIDGE STEALER]

no mention of coleco?

[zylon]

Or the 5200?

[+Random Terrain]

Atari buys the rigths to make a game based on the popular movie "E.T.", and they want it done untill the Christ-mass sale . . .

That sentence sounds a bit off. Maybe it should be "Atari buys the rights to make a game based on the popular movie "E.T.", and they want it done in time for Christmas . . ."

 

Have you read these pages yet:

 

http://www.randomterrain.com/atari-2600-memories-history.html

 

http://web.archive.org/web/20060110140558/http://www.icwhen.com/book/index.shtml

 

 

 

ET has been a kind the symbol for the Crash of '83 due to it's hurried production and low quality . . .

It was rushed and it was too hard for nose-picking kiddies who didn't read manuals, but the quality wasn't low if you compare it to all of the other Atari 2600 games that were available in December of 1982:

 

http://www.randomterrain.com/atari-2600-memories-et.html#great_graphics_and_sound

[Rev. Rob]

You're missing the biggest cause of the crash, which is long forgotten because Internet lore trumps newspaper articles and interviews from the period: retailer glut.

 

Retailers were ordering stock from companies that they had no hope of ever selling. The game companies were happy to fill the large orders, and investors were happy to invest because the companies were selling huge amounts of product. Once the retailers realized that they ordered too much, then they dropped prices. That's the cause.

 

The price drop isn't the entirety of the symptom either. Retailers essentially wrote of video games as a result, as did Wall Street, which led to the sell off of Atari and the shuttering if Imagic and others.

 

Atari and Mattel no longer had the heart to stay in it, Coleco's Adam debacle ensured that they could never be a big player again. Until 1985 there was no big player in the US game market. Had just one big company stayed in, i.e. had Atari released the 7800, then the market would've been fine.

[Tara]

When you get into 1982/83/84 you might need to delve a little deeper on a month-by month basis. I have a feeling that the game market and prices were very different in the beginning of 82 then they were in the end of 82, or maybe only by mid 83 they were dropping??

 

 

 

 

I've been doing a little research into the crash myself, in an effort to date some photographs from the Christmas when I first got my Atari.

 

My original Atari a woodgrain 4-switcher VCS and only came with Comabat. Pac-man was bought additionally at the same time, and the original box for Pac-Man has a price of $32.99 marked down to $24.99 (from a store called "Benny's")

 

To the best of my research, I'm guessing it has to be Christmas 1982. I don't think my family was enough with the times to have gotten me an Atari for Christmas 1981 or any earlier than that. Plus I also remember that I friend of mine got ColecoVision the same X-mas that I got Atari.

 

Back then we didn't have a lot of money, so I can imagine that I survived on just Combat and Pacman until around April 1983, when I got Pitfall! for my birthday (April 28th). It came from Sears and it's priced at $27.99 marked down to 21.99 (I have the original box as well). Later on with my paper route money, I bought River Raid, which seems to be priced at $27.99, and not discounted at all (though it.

 

Since Pitfall! came out in September 82, the only possible April where it still sold for $21.99-$27.99 would have been April 83, since I'm guessing that by April 84 everything was likely in the $15 and below range (?). If I can dig up the manuals to some of the games I distinctly remember filling in the dates for high scores. Back then a game could keep me occupied for months and it took years to amass even like 10 games, but when the crash was in full swing I was overjoyed!

 

The only other box I have with a price tag still intact (that I know I bought in the mid-80's), was Keystone Kapers, from Kay-Bee, originally priced at $23.99 and marked down to $7.99. I can't find a release month for Keystone Kapers other than somewhere in '83. I'm guessing the $7.99 price is probably well into the crash in late '83 or even '84.

 

I'd love to hear other people's dated evidence of what prices were at various times during the crash. I remember by like '84 and '85 there were games in the $5 and lower range, with E.T. and Apollo titles commonly being at the $1 or $2.99 range. I wish I picked up more of them back then, even the crappy titles!

 

It would also be great if someone somewhere could dig up an old K-Mart circular from '83 and see what they advertised Atari titles for. This would all be great evidence since the retail landscape of the crash really changed over a matter of months.

 

-Tara

Edited January 21, 2010 by Tara

[Rev. Rob]

Retailers didn't start shedding stock until much after On December 7, 1982. That was the first sign of major problems.

[vrocko]

....The only other box I have with a price tag still intact (that I know I bought in the mid-80's), was Keystone Kapers, from Kay-Bee, originally priced at $23.99 and marked down to $7.99. I can't find a release month for Keystone Kapers other than somewhere in '83. I'm guessing the $7.99 price is probably well into the crash in late '83 or even '84.

 

I'd love to hear other people's dated evidence of what prices were at various times during the crash. I remember by like '84 and '85 there were games in the $5 and lower range, with E.T. and Apollo titles commonly being at the $1 or $2.99 range. I wish I picked up more of them back then, even the crappy titles!

 

It would also be great if someone somewhere could dig up an old K-Mart circular from '83 and see what they advertised Atari titles for. This would all be great evidence since the retail landscape of the crash really changed over a matter of months.

 

-Tara

 

I do remember the Apollo games and a few others, Panda, Spectravision, 20th Century Fox I think, that were really cheap. I also remember seeing some of the games in the dollar stores in the area too. As a kid when you can go to a dollar store and buy a couple of video games for a couple of bucks you just can't beat it. Problem was a lot of them were utter crap. Exocet I thought would be fun but it wasn't the best. Seems to me there was another game that used the same ship and buildings as Exocet, or Exocet used the same buildings and ship as the other game, that I bought and I thought it was rip off. Don't remember the other game though. Quailty was not at a high during this time and stores were just selling off what they had to get rid of it.

 

You know you're right. Now that I think of it ET was selling for real cheap too but when you overproduce a game that isn't that good you are bound to have many extra's, it does have a rarity rating of 1. After going back and playing it recently I guess it wasn't unplayable but I know a lot of people were disappointed in it and hated the pits you fell into all the time to find parts for the phone.

 

I don't remember going to Kmart but I know Hills had a lot of 2600 games for sale and when they went out of business they were selling off all they could at low prices. I think I bought my Star Raiders at a Hills store. Wish I had bought more of the games at those low prices too. I should have never gotten rid of my original 2600 and the games. I did not realize I had so many rares. Oh well live and learn.

 

Rich

Edited January 22, 2010 by vrocko