A Historical Look at Video Games
The Ancestry of the Arcade
The Birth of the Video Game
On the Go and in the Home
Early Arcade Classics
Competition on the Home Front
Video Games: A Cultural Movement
The Downward Spiral
Atari 7800 system joystick
By 1983 the video game industry was headed for trouble. In hindsight the downward spiral has been attributed, in part, to the lack of control within the industry. Without a licensee structure, there were no regulations over the quatity or quality of games released. Consumers were bombarded with a variety of systems that were all from the same mold, as well as games that merely translated between systems and lacked originality. The industry was beginning to stagnate. Sales began to drop off, which started a trend of software discounting a dumping. Cartridges that had once sold for $35 dropped to five dollars or less, and the loses began to take several game manufacturers out of commission. Companies tried to salvage their investments in technology and manufacturing by entering the home computer market. Coleco began developing the Adam home computer, but suffered a huge blow when they failed to deliver it in time to meet Chirstmas orders. Sales dropped to $2 billion for the year. Things were not so gloomy across the ocean in Japan. Nintendo Co., Limited introduced the Family Computer System, better known as the Famicom, in Japan to a warm reception. Also in Japan, a small company by the name of Sega Enterprises released their first consumer video game console, the SG1000. Sega was the resulting company from the 1965 merger of a Japanese game distributor, Service Games Company, and Rosen Enterprises, limited USA, out of America.
1984 saw the continuing decline of the video game phenomenon, taking many manufacturers, retail stores and financial institutions with it. Unable to recover the loses from the Adam computer venture, Coleco ceased manufacturing of the ColecoVision and its software, and filed bankrupty. In a similar move, Mattel halted manufacturing of the Intellivision and closed its electronics division. Atari showed their ltest 8-bit system, the 7800, but held it back from the market. Video game sales fell to $800 million, driving Warber comunications to sell Atari Incorporated at a firesale price. The home computer, game systems divisions were bought by Jack Tramiel, the computer enterprenuer behind Commodore, and became Atari Corporation. The remaining stand-up arcade division became Atari games.
While the exact figure in unclear, US market sales hit an all time low, somewhere between $1 and 5 million, in 1985. The remainder of the first generation video game companies pulled out of the market or began to reorganize. Conversely, as the industry hit rock bottom in the U.S., it began to flourish in other parts of the world. Nintendo sold an estimated 6.5 million Famicom systems in Japan alone. They introduced the Famicom to America at the Winter Consumer Electronics Show and sucessfully test marketed the product in New York that Fall, but Atari declined Nintendo's offer to distibute the Famicom in the United States. Little did American game enthusiasts know that, like the Phoenix, the dying video game industry was about to emerge from the ashes.
To Be Continued...