The Great Videogame Crash - 1983 or 1984? The Final Word.

Bill Loguidice's picture

I just wanted to comment quick on “The Great Videogame Crash” (my personal official designation, along with my preferred use of "videogame" over "video game", just like "bodybuilding" over "body building") and sort of vet my thought process for public discussion and potential disagreement. After spending ~3 years writing the other book on American videogame and computer systems, I came to the conclusion that it has to refer to the year 1984 if a single year needs to be chosen. This was based on a combination of research and personal experience. To put it simply, in 1983, consumers had no real concept that there was something going on behind the scenes. All the consumer saw was increasing stock and lowered prices. Behind the scenes was a different story, with retailers having excess of unsold inventory and diminishing or non-existent profit margins for even good publishers in light of cut-price dreck from their competitors. The classic supply outstripping demand. It wasn’t until 1984 that consumers started to realistically notice there was a problem when less and less new product started appearing on store shelves. That’s why to me, 1984 has to be the year.

Obviously videogames never fully went away in retail or sales channels, but there was a definite slowdown 1984 – 1985. It wasn’t until the limited release of the NES in late 1985 and its wide release in 1986 that retailers started to want to get back full force into videogames and lots of different companies again wanted to cash in. So really, The Great Videogame Crash can be considered from 1983 – 1986 if you want to get technical, but the years where it was felt the most by consumers - who to me are the most important part of the equation - would actually be 1985 and 1986. At least that’s my theory and one I plan on sticking with. And obviously this only applies to North America and specifically the US, as market conditions were very different elsewhere. Also, we can't mention The Great Videogame Crash without also mentioning that the thinking in that 1984 - 85 time period was that low cost computers like the Commodore 64 would more than fill the function or need of consoles that "just" played games. Obviously that wasn't the case and both markets peacefully co-existed for some time. So, what do YOU think?

Comments

Matt Barton
Matt Barton's picture
Offline
Joined: 01/16/2006
That's more or less my

That's more or less my thinking, Bill. Instead of a "crash," I see it more as a temporary shift away from dedicated game consoles and a switch to low-end computers (C-64 being the leader). No doubt this was caused by people thinking how miserable the Atari 2600's graphics were compared to what was available on these computers. Once low-cost PC compatibles dominated that were great for productivity but miserable for games, again there was a hole, and Nintendo was able to satisfy that with low-cost consoles that were better for gaming (arguably) than the C-64's. I think that's the era where people began thinking that computers and videogames were an either/or, and PC gaming has steadily moved to the margins as more people relied on PC for work and internet and consoles for fun.

I'm curious why the dedicated internet boxes never went anywhere. My cousin had one and really enjoyed it.

n/a
Bill Loguidice
Bill Loguidice's picture
Offline
Joined: 12/31/1969
Crash and other thoughts
Matt Barton wrote:

That's more or less my thinking, Bill. Instead of a "crash," I see it more as a temporary shift away from dedicated game consoles and a switch to low-end computers (C-64 being the leader). No doubt this was caused by people thinking how miserable the Atari 2600's graphics were compared to what was available on these computers. Once low-cost PC compatibles dominated that were great for productivity but miserable for games, again there was a hole, and Nintendo was able to satisfy that with low-cost consoles that were better for gaming (arguably) than the C-64's. I think that's the era where people began thinking that computers and videogames were an either/or, and PC gaming has steadily moved to the margins as more people relied on PC for work and internet and consoles for fun.

"Crash" is definitely something of a misnomer in the way it's commonly used. It was more of a depression. Still, it's something of a useful term. Technically there was a similar crash (again, actually depression) in the late 1970's.

I disagree that low-end computers had anything to do with the crash on the console side. Obviously the crash hit both sides hard, but was particularly impactful on the console side. I think contemporary thinking that low end computers were what consumers were replacing consoles with was something of a red herring, and I think history has proven as much (like today, they're mostly independent markets with minimal overlap). Really, it was the result of the fledgling videogame market of 1982 and the serious miscalculations by companies like Atari and every Tom, Dick and Harry company that had no business trying to cash in on videogames to make a quick buck (the barrier to entry was much lower than it is today). The result of the 1982 boom was product glut/garbage product glut/low cost product glut and shunning of high quality, but higher priced (in comparison to the crap) product by 1983/early 1984. The market simply wasn't big enough to support it all. Today it's clear that while surely the videogame business will have its ups and down, it's now mass market enough and ingrained in society enough where we'll never see the same type of collapse we saw by late 1984.

Matt Barton wrote:

I'm curious why the dedicated internet boxes never went anywhere. My cousin had one and really enjoyed it.

I think part of it was timing--broadband Internet was not yet pervasive and we didn't have the maturity of standards and Web-enabled applications like we have today. I think another part of it was cost - a lot of these devices weren't as cheap as initially hoped and by that time full-fledged computers had crossed below the $999 threshold and were rapidly approaching the $499 threshold for desktops and $999 threshold for laptops. Thus, there was no justification for a crippled device in comparison to a fully capable, no restrictions device.

With that said, with the relative success of full featured cell phones, Web pads, mini-notebooks like the Asus Eeepc and Internet-enabled videogame consoles and handhelds, the basic point of the "Internet box/Web box" has found its niche, a niche that will continue to grow as non-traditional computing devices continue to grow in power and ubiquity and the online experience continues to improve.



Wii: 1345 2773 2048 1586 | PS3: ArmchairArcade
Bill Loguidice, Managing Director | Armchair Arcade, Inc.

n/a
Matt Barton
Matt Barton's picture
Offline
Joined: 01/16/2006
So you basically see the

So you basically see the "crash" as a case of supply far outstripping demand. I'm sure consumer confidence was involved, too, since there didn't seem to be any reasonable standard of quality they could take seriously.

n/a
Bill Loguidice
Bill Loguidice's picture
Offline
Joined: 12/31/1969
More Crash Stuff
Matt Barton wrote:

So you basically see the "crash" as a case of supply far outstripping demand. I'm sure consumer confidence was involved, too, since there didn't seem to be any reasonable standard of quality they could take seriously.

I think supply outstripping demand was probably the single biggest factor in the "crash", yes, with quality control right behind it (literally any and every company either wanted in or got in and quickly cobbled together a dev/publishing "studio" (usually a few guys)). It was a combination of cheap and poor product dumping and there not being enough consumers to make up the difference. You had $5 garbage games competing with $30 quality games. Which would the average consumer choose? Further, how many times can you buy crappy games before you stop buying games regardless of price?

It's easy to say that people were getting tired of the then dominant videogame platform, the Atari 2600, but the reality is the platform was still in its prime in terms of quality game releases, and developers were getting things out of it that didn't seem possible back in 1977. The fact that Atari could still sell a revised 2600 (the Jr) into the late 1980's (thanks to Nintendo's resuscitation of the market) and the technical merits of the games kept improving, proved that.

Also, there's no need to go into how Atari sabotaged itself (paying exhorbitant licensing fees for and overproducing Pac-Man and ET catridges without concern for quality, releasing the Atari 5200 with dismal controllers and without 2600 compatibility, etc.), but others like Coleco and Mattel played their own roles, particularly with their computer add-ons. Coleco, for instance, was getting huge sales from the ColecoVision and its games, and had a lot of people excited about the Adam, but when that computer was finally released, it disappointed on many levels (particularly from a quality control standpoint - hardware-wise it was actually competitive) and most importantly caused huge losses for the company, forcing them out of the ColecoVision business. In other words, if they had focused exclusively on the ColecoVision, there is a chance they could have weathered the depression and come out on the other side, NES or no NES. Same thing with Mattel - too many resources into both the Aquarius and the ECS - draining the company financially. Again, it took another company (too bad that never happened with the ColecoVision - mail order company TeleGames got most rights) to take over the stock and most rights and continue to market the platform (with some success) into the late 1980's.

Obviously the computer side had its fair share of failures around this same time period. Again, every company wanted to release a low end computer. Commodore crushed them all with the C-64 because Commodore controlled most of the parts and production, unlike their competitors, allowing them to consistently and dramatically lower the prices. It was also plenty of computer to remain competitive with whatever low end systems the competition could come up with (which were often lacking in comparison). Timex, Texas Instruments, Spectravideo, Panasonic, etc., all came and went relatively quickly in this time period of roughly 1982 - 1985. The only one who was able to limp through the end of the decade with their own low end computers were Radio Shack (thanks to their stores and ability to save money on external advertising and stock demands) and of course, Atari.

Ah, I see I'm blathering again. Fun stuff, though...



Wii: 1345 2773 2048 1586 | PS3: ArmchairArcade
Bill Loguidice, Managing Director | Armchair Arcade, Inc.

n/a
Matt Barton
Matt Barton's picture
Offline
Joined: 01/16/2006
Wow...Can you imagine the

Wow...Can you imagine the "What If" scenario--if Commodore and Radio Shack had been partners? Then you'd have married a nice package of manufacturing partners with a lockdown retail distribution network. The C-64 would probably have been $50 instead of $200.

n/a
Bill Loguidice
Bill Loguidice's picture
Offline
Joined: 12/31/1969
Definitely fascinating
Matt Barton wrote:

Wow...Can you imagine the "What If" scenario--if Commodore and Radio Shack had been partners? Then you'd have married a nice package of manufacturing partners with a lockdown retail distribution network. The C-64 would probably have been $50 instead of $200.

Well, relationships were very tenuous in the mid- to late-1970's, so such a scenario would have been distinctly possible. Same thing with Apple and Atari. There were scenarios where Commodore, Atari, Apple and Tandy could have all been partners/distributors with one or the other, went with what became a competitor's computer instead of their own, etc. Wild times.

Up until the industry started to stabilize post-crash, late 1985, pretty much any whacked out scenario could have happened. The industry was making it all up as it went along, be it at the arcade or home videogames or home computers.



Wii: 1345 2773 2048 1586 | PS3: ArmchairArcade
Bill Loguidice, Managing Director | Armchair Arcade, Inc.

n/a
adamantyr
adamantyr's picture
Offline
Joined: 01/28/2007
Video Game Crash '83

The 99'ers have debated the crash for years, of course, since TI was in the thick of it, being the target of Jack Tramiel's pricing wars. Texas Instruments never really did things right. They hamstrung their designed system by using a 16-bit processor that wasn't selling and put it in an 8-bit framework. They actively discouraged 3rd party developers and did little to turn out their own titles beyond arcade clones. (Notable exception being Tunnels of Doom.) They located their hub of software development in Lubbock, Texas, far away from the tech center cities which made getting people difficult, since they were unwilling to relocate. The most success they had, really, was when they brought in a marketing guy (I don't recall his name) who started selling the units at a loss, but making up for it by developing the community. And if the TI-99/8 had ever seen release, who knows?

Interestingly, Chris Crawford saw the crash era (1983-1986) as a far more innovative period of game design and development. The reason was that the investors saw that Atari with their cranked out "shoot-em-up" console games had ultimately failed, and they were disinterested in investing in them again. So a lot of more innovative game development started happening on the PC's of the time, and there was more focus on other areas besides manual dexterity. When you think about it, a lot of the best CRPG's came out of that era, and continued into the early 90's, as Nintendo dominated the market on shoot-em-up and arcade style games.

Mark Vergeer
Mark Vergeer's picture
Offline
Joined: 01/16/2006
the crash era (1983-1986)

From my Dutch perspective C64, ZX Spectrum were thriving and the consoles kept on being sold in toy-stores. There were hardly any if any specialized videogaming stores in the Netherlands back than. The Dutch video gaming market was and to a large extend still is not comparable to the US situation in any way. Almost only the toy stores were selling consoles back then and all Dutch toy stores where either one of three or two franchises that offered the same limited choice. There were Nintendos, Intellivisions, Vectexes, Videopacs on the shelves throughout the crash era.



Editor / Pixelator - Armchair Arcade, Inc.
www.markvergeer.nl

n/a
Matt Barton
Matt Barton's picture
Offline
Joined: 01/16/2006
It's funny how I lived

It's funny how I lived through the "crash" without ever realizing there was one. :) I have to wonder if it's not just a media sensation more than a fact.

n/a
Bill Loguidice
Bill Loguidice's picture
Offline
Joined: 12/31/1969
The Crash (or at least what happened in those years) was real
Matt Barton wrote:

It's funny how I lived through the "crash" without ever realizing there was one. :) I have to wonder if it's not just a media sensation more than a fact.

Well, being a bit older than you and perhaps a bit more in-tune with the goings on at the time owning an Atari 2600, ColecoVision and C-64, I'd say it was pretty much what I said, in that there was still a smattering of product in stores of the videogame (console) variety, but most places were becoming more and more skewed to computers (if anything) until the NES went national in 1986. I also was an avid reader of Electronic Games magazine and remember very distinctly when they suddenly changed their focus to computer gaming (as well as an eventual name change before giving up the ghost). It was actually fairly well documented in the pages of Electronic Games as it was happening from late 1982 forward (they used terms like "shakeup" and what-not, never actually "crash", which didn't come into vogue until several years later). Videogame stuff never went away entirely, though none of the original companies officially remained in the game beyond Atari, and that was more about stock already in retail channels than anything else. There were definitely no gaps and obviously once the NES started having success, Atari got what they had warehoused out of mothballs and gave a somewhat half-hearted challenge to Nintendo with limited new product. Obviously by this time, there was no one left (Mattel, Coleco, etc.) to cash in on the rebirth other than Atari. Sega also obviously got in at this time. With limited competition (Atari and Nintendo), it made sense.



Wii: 1345 2773 2048 1586 | PS3: ArmchairArcade
Bill Loguidice, Managing Director | Armchair Arcade, Inc.

n/a

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.