VIDEO GAME 'CRASH' OF 1983
Guest writer Tom Sherlock.
Here it is in all it's glory, Tom's blurb on an incident I think we're all glad didn't stick.
The video game crash of 1983. It's a good thing the industry recovered, I'd be bumbed without my video games. Links are included. Tom really did his research here, and I think you'll all enjoy.
The video game crash of 1983 refers to the sudden bankruptcy of a number of companies marketing home computers and video game consoles in late 1983. The term "shakeout" would be a more accurate description of what happened, but because of its sudden and unexpected nature the term crash has stuck.
The crash has been attributed to a weak economy, poor quality of games (particularly the Atari 2600 versions of Pac-Man and E.T.), and to very aggressive marketing of inexpensive home computers such as the Commodore VIC 20, Atari 800XL, Commodore 64, Tandy Color Computer and Texas Instruments TI-99/4A, the crash was probably caused by a combination of three factors.
Up until the early 1980's, personal computers had primarily been sold in specialty computer stores and at a cost of more than $1,000. The early 1980's saw the introduction of inexpensive computers that could connect to a television set and offered color graphics and sound. Since they generally had more memory available than a console, they permitted more sophisticated games and could also be used for tasks such as word processing and home accounting.
Commodore International went so far as to target video game consoles in its advertising, offer trade-ins towards the purchase of a Commodore 64, and unlike most other computer manufacturers, it also sold the machines in the same outlets as video game consoles: discount, department and toy stores.
Commodore's veritcal integration allowed it to engage in some predatory pricing; it's margins were much higher than that of Texas Instruments, Coleco and Atari, and, making matters worse, Commodore's MOS Technologies subsidiary actually manufactured many of the chips used in Atari computers and video game machines. The situation was similar to the calculator market in the early 1970's, when companies found themselves buying chips from Texas Instruments but having to compete with TI's calculators.
The result was a massive shakeout of the industry. Mattel, Magnavox, and Coleco all abandoned the video game business. Computer sales were also affected, as the Coleco Adam, TI-99/4A, and the line of Timex-Sinclair computers were withdrawn from the U.S. market, along with a number of other smaller players. Atari nearly went bankrupt and was sold off by its parent company Warner Communications (now part of Time Warner).
The longest-lasting result of the crash was the shift of dominance in the home console market from the United States to Japan. When the video game market recovered in 1985, the leading player was Nintendo's NES, with a resurgent Atari battling Sega, also of Japan, for the #2 spot. Atari never truly recovered, and eventually exited the hardwar business in 1996. It wouldn't be until Microsoft entered the arena with the Xbox nearly 10 years later that the United States would have another contender in the console market.
Ironically, 1983 is by some considered a peak time in the history of arcade games, the home video game consoles' bigger stand-alone brethren located in diners, malls and, yes, arcades. For example, the first real-time 3D arcade game was created that year (called I, Robot).
There ya go brother... what I've been work on putting together.
Take care,
Tom
So there you have it. A little run down on what could have been a dark time for all of us geeks, particularly those who like video games. Fortunantly it didn't last, and Nintendo saved us.
Thanks for the post Tom.
And for the rest of you, I'll see you later next week here on FRANKS GEEKDOM SATURDAY!
posted by F.G. Shaw @ 1:40 PM
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