Video Game Industry Crash

The North American Video Game Industry Crash of 1983

Last summer, my older brother taught me about the North American video game industry crash. After doing my own research, I learned what caused this crash and how it impacted the gaming industry. Most people can agree that the first popular and successful video game was Pong, released in arcades in 1972. In 1976, a company called Atari released a home version of Pong. Atari was the first company to pioneer in home consoles, home game cartridges, and computers. At one point, this company was the fastest growing business in the United States of all time, and was worth over two billion dollars. Atari was extremely successful until 1983, when the video game market crashed, due to crudely made

Pac-Man was released in the United States in 1980 in arcades, and Atari gained a license to convert the game to their console, the Atari 2600. At the time, there were ten million Atari 2600 consoles in America. Due to the popularity of Pac-Man in arcades, Atari decided to manufacture twelve million cartridges of the game, overconfident that people would buy their console just to play Pac-Man. Programmer Tod Frye created a prototype, which was immediately rushed to be published so that Atari would not miss the holiday season of 1981. Tod Frye earned a royalty on every cartridge that was manufactured, not sold, giving him little incentive to create a good game. The final product was a disaster; the Atari version of Pac-Man barely resembled the arcade version that people loved. The arcade version had been known for its color, smooth animations, and sound effects. The Atari 2600 version of the game lacked all of those features. Though seven million cartridges were sold- Atari's best-selling game of all time- they were still left with five million unused copies. Atari repeated their mistake in 1982. ET the Extra Terrestrial was

Back in the 1980's dozens of consoles were competing. Some consoles even had interchangeable software, meaning they could play games built for other consoles. At the time, this was legal, and in consequence, the market was flooded with consoles. The industry also suffered from the loss of publishing control. Because Atari refused to credit game designers, several left and created Activision. Activision was the first third party video game publisher, and created games that could be played on Atari consoles, which was legal. Once other companies realized how successful this was, the market was flooded with games that people created just to grab money. Today, all games for a console are controlled by the console