"Overall" profit of the Classic Era?

[SoulBlazer]

Just was reading some articles about the big gaming companies from the 'Classic Era' of gaming (1977-1984) and it got me wondering....

 

We all know that many companies -- both the large ones like Atari and Coleco and the smaller game making companies -- made huge profits during the good times. These same companies then lost huge ammounts of money when the video game crash hit.

 

I was curious if anyone had sat down and added up some numbers from those years -- as best as we have available -- and determined what the OVERALL profit/loss of the companies were during those years. Did Atari come out ahead when it was all said and done, or did they lose more money during the short time of the crash then they ever made in the years leading up to it? Did Activision keep making a profit by branching into computers? Did Fox overall turn a profit from their video game division? Things like that.

 

It would seem interesting to find out overall of the video game crash here in North America was so devasting that it exceeded any profit the companies had made in the boom years before it.

[fiddlepaddle]

Answering that question accurately, even estimating well, would be much more complicated than it may appear. Even just determining the profitability of one game, say for example, ET the Extra-terrestrial, would be problematic: with bankruptcies, future value of intellectual property, value of write-offs, costs of executive compensation and perks, etc. The effect on profits of stock options alone are virtually impossible to narrow down to a specific figure. I would say that ET was likely very profitable to Atari in the long run, as it's marginal development and manufacturing costs were relatively low compared to the monthly operating costs of Atari, but Atari of course would have used numbers as negative as possible for write-off purposes. That's just one small component of the "profitability" of one company (Atari) at that tumultuous time. It might be interesting to know the answer to your question, but any answer would necessarily be nothing but a very rough guess.

 

By the way, most people, when leaving Las Vegas, will tell you they made a profit on gambling, yet we all know who's actually been consistently making the profits (the casinos).

[Rev. Rob]

While I agree that the question is too complex to answer, you can get a rough idea by pulling the SEC filing of those companies that where publicly traded. Keep in mind that most of them, like Imagic, for example, were privately held.