Video game crash of 1983 facts for kids
The video game crash of 1983 (known as the Atari shock in Japan) was a large-scale recession in the video game industry that occurred from 1983 to 1985, primarily in the United States.
Lasting about two years, the crash shook a then-booming video game industry and led to the bankruptcy of several companies producing home computers and video game consoles.
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Causes
The crash was attributed to several factors, including market saturation in the number of video game consoles and available games, many of which were of poor quality, as well as waning interest in console games in favor of personal computers.
The release of so many new games in 1982 flooded the market. Most stores had insufficient space to carry new games and consoles. As stores tried to return the surplus games to the new publishers, the publishers had neither new products nor cash to issue refunds to the retailers. Many publishers, including Games by Apollo and U.S. Games, quickly folded. Unable to return the unsold games to defunct publishers, stores marked down the titles and placed them in discount bins and sale tables. Recently released games which initially sold for US$35 (equivalent to $99 in 2021) were in bins for $5 ($14 in 2021).
Result
A massive industry shakeout resulted. Magnavox abandoned the video game business entirely. Imagic withdrew its IPO the day before its stock was to go public; the company later collapsed. Activision had to downsize across 1984 and 1985 due to loss of revenue, and to stay competitive and maintain financial security, began development of games for the personal computer. Within a few years, Activision no longer produced cartridge-based games and focused solely on personal computer games.
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Atari was one of those companies most affected by the crash.
To a lesser extent, the arcade video game market also weakened as the golden age of arcade video games came to an end.
Recovery
The North American video game console industry recovered a few years later, mostly due to the widespread success of Nintendo's Western branding for its Famicom console, the Nintendo Entertainment System (NES), released in 1985. The NES was designed to avoid the missteps that caused the 1983 crash and the stigma associated with video games at that time.
Images for kids
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Atari VCS, also known as the Atari 2600, the most popular console prior to the crash
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The Commodore 64 survived the crash and became one of the best-selling computers of all time.
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Famicom
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See also
In Spanish: Crisis del videojuego de 1983 para niños
