The Video Games Crash of 1983 is one of those legendary folktales that we gamers keep alive. You all know the story right? T’was the early 80s and video games were the best thing ever. Then E.T. for the Atari 2600 was released and now video games were bad. We tried to bury it, but it was too late. All hope seemed lost.
Until Nintendo came to the rescue and released the Nintendo Entertainment System featuring Mario “Jumpman” Mario. Video games were great again at long last and would remain so for years to come.
Jokes aside, the video games crash is a fascinating event to study that we often simplify too much. Retellings these days mostly serve to evangelize Nintendo as the savior of all gaming. A particular nuance that I wanted to focus on today is the sheer scope of the crash. Because bad games have always existed, we can still relate to that frustration anno 2023. But imagine if today, for a whole year, there were only a tiny handful of games coming out. Literally none if you were unfortunate enough to own certain systems. Welcome to the Gaming Wasteland of 1985.
A lot of the mythology behind the broader video games crash is very much true. Demand for video games had been on the rise, but fell short of corporate expectations. Too much product was being produced, which then coupled with a downturn in consumer confidence. A turn that was itself influenced by numerous factors, of which a bad movie tie-in game was but one.
This downturn in business came at an inopportune time because the hardware games were being played on was getting old. By 1985, the Atari 2600 was a veritable senior at 8-years-old. Mattel’s Intellivision was also no longer in its prime and Colecovision had other problems that we’ll get back to shortly. Atari had attempted to revitalize its hardware with the Atari 5200, which ended in total disaster. Releasing in 1982, the 5200 was a beast in terms of performance compared to its predecessor, but had no software to back it up. Its graphical capabilities went wasted on simplistic games that lacked innovation, leaving consumers unimpressed. Ultimately causing the machine to be discontinued in May of 1984.
Only 66 games had been made for the 5200 up to that point (3 more followed in 1986) and the system was not natively compatible with Atari 2600 games. Needless to say, a console that retailed at 270 dollars that last 2 years did little to inspire renewed confidence in gaming as a business.
Desperate, Atari was attempting to launch a successor to the 5200; The Atari 7800. It was intended to launch in 1984, but then the consumer division of Atari was sold. All projects were halted and the 7800, despite being finished, was delayed. On top of that, manufacturer GCC was not being paid for the work it had already done. This took so long to resolve that the 7800 was held back until 1986! These delays robbed the console of its innovative potential and then forced it to compete with Nintendo when it finally did come out. Needless to say, that was not a popularity contest Atari stood to win.
While all this was happening, the Atari 2600 received a whole 5 new games throughout all of 1984. It could be worse though! Intellivision owners received 0 new games. Not a single one! And Colecovision… Let’s talk about Colecovision.
Releasing in 1982, Colecovision was a powerful system that quickly intruded upon Atari’s market domination. It had the killer apps to back ups its hardware and was cheaper than the 2600 and 5200 to boot. A system destined for greatness.
However, it’s life would be cut short. The next year, in 1983, Coleco attempted to expand its market into the home computer business. The Coleco Adam was, from its inception, haunted by all manner of issues. While it would gain some enthusiasts, the Adam was a massive flop financially. This was disastrous, because one of its core appeals was that the software and hardware were tied intimately to the Colecovision. I won’t get into the technical details, but it really was quite impressive. The downfall of the Adam was such a blow to Coleco that it withdrew from gaming entirely. 1985 had only just begun and gaming had just lost 1 of its most promising companies.
The Adam and Colecovision were not the only casualties either. Astrocade had gone defunct in 1984, removing yet another console from the playing field. The Halcyon, extensively covered by HBomberguy, failed to launch entirely; resulting in the visionary RDI Video Systems going defunct. The Vic-20, heralded as one of the most successful home computers at the time, also reached the end of its lifespan. Magnavox and Vectrex were out too.
At the same time, it’s important to keep in mind that there was little perspective on new systems coming out. The NES wouldn’t release until October and its few public demonstrations had been unimpressive. The Atari 7800 was stuck in limbo despite already being announced and Sega was just not going to release its console in the West at all.
1984 had been an arduous year with more drama than actual releases. By 1985, the outlook was downright miserable. Systems and games were expensive, yet increasingly short-lived. Promising systems withered away with their potential unfulfilled or didn’t get to release at all. What few companies remained in the competition were so fixated on hardware that their existing systems languished under a lack of new content. It’s no wonder that analysts predicted that Nintendo was making a mistake in trying to come overseas. By every metric and common sense, they were.
It’s a lot of doom & gloom to look back on. However, it is also important to point out that there were upsides. Though the home computer market saw some major shifts, plenty of systems remained popular. Among them my personal darling: the Commodore 64. Both the home computer scene and arcades continued to produce phenomenal games as well. Among them titles like Elite and The Bard’s Tale, which remain relevant to this very day. It wouldn’t be amiss to call the state of gaming at the time apocalyptic. Yet, even in its darkest hour, video games had their champions.