Video Game Crash 1983

[PII | 1,884]

So I was reading up a little on the release of the Intellivision II in the Spring of 1983 and feeling just a little surprised that the console is as available as it is considering that it came out in the year of the crash and all.  I immediately began to wonder:

Was there any precise day that the world knew it was the end for the consoles of that era?  Was there perhaps a more general period of time that such a thing became clear - the Christmas season/December, to make an hypothetical example?

I've tried punching the question into a few different search engines so far, only to get the same slew of pages simply stating 1983 as the date.  I also watched a youtube on the topic by "Gaming Historian", in which he says at one point that the industry came to a "sudden halt", but does not specify when that would have been.  He also mentions that at the time, most of the buying public was unaware of the crash as it affected primarily the industry rather than the consumer.  I myself was but a whee whippersnapper at the time and recall little to nothing on the topic.

As a collector of ColecoVision games I've noticed that there are quite few games for the console that came out in 1983 and that those games tend to be pretty rare as one would expect.  This also would seem to imply that there was a significant period of 1983 that was still seeing the release of new material before the crash.  

So far my best evidence has been the discovery of a newspaper headline on the topic of "FADING DEMAND", with a date of Monday October 24th.

Anywayz, I thought I'd sound out any established or aspiring gaming historians we may have among our ranks to see if/what sort of evidence or reasoning anyone is able to produce in favor of a more precise time period than simply, 1983.

 

 

Edited July 30, 2022 by PII

[Tekdrudge | 126]

This happened the year I was born. I've never heard the exact month when things started to go downhill for the business, but I bet you could research old stock prices for the game companies in 1983 and get a better indication. That is where I would start.

It's also my understanding that the home computer business that was just starting to really take off in 1983 had a huge effect on it as well.

[Tekdrudge | 126]

I just googled "Atari stock price 1983" and found this. This might help.

https://www.nytimes.com/1983/09/27/business/2-charged-in-atari-stock-sale.html 

[PII | 1,884]

Excellent Call.  It looks like the beginning of the end goes back at least as far as the holiday season of '82 and the public would have been potentially aware by late September '83.  I'll keep looking into it.  Thanx!

[Tulpa | 3,490]

From sources I saw, December 7th, 1982 was when Atari posted its projected earnings for the quarter. It was 10-15% instead of an expected 50%.

That's when investors dumped Warner stock like a load of bad asphalt.

The rumblings were happening earlier. The poor reception of ET and Pac-Man for the 2600 are often cited, but there was a deluge of mediocre games coming out for several months. Stuff like Mythicon, Games By Apollo, and other companies that were speedily pumping out crap were eroding consumer confidence, and the confusion over the 2600 and 5200 didn't help.

Atari was also betting the farm on huge runs of both ET and Pac-Man. While they both sold, Pac-Man was actually the best selling 2600 game, and ET was in the top ten, they were producing too many. ET had something like 5 million produced but only 1.5 million in sales, Pac-Man had 12 million produced vs 7 million in sales. The 12 million is significant as there were only 10 million 2600s in households at most by 1982, so they were counting on another 2 million in sales of consoles. I have to imagine a ton of those sat on shelves during the hoilday season.

Edited July 4, 2020 by Tulpa

[Dr. Morbis | 2,088]

Don't forget the lag in industries as large as this.  All of the things that happened in late '82 and through '83 at the company/investor/manufacturing level weren't really seen or felt by actual consumers to their fullest extent until 1984.  Check the stats on that year; that's the year that video games were "dead."

[Tulpa | 3,490]

Yeah, the effects were probably most pronounced in 1984-1986. NES didn't start juggernauting until 1987.

[Tekdrudge | 126]

Side note. Back in the 80's kids really didn't read the news or have the internet to look game news/info up. Most of the info you got was word of mouth. I can see that the business side started going down hill in late '82 but it wasn't until around '84 or so that kids noticed something was up in the video games world. Thank goodness Nintendo showed up in '85.

[Bighab | 58]

Well I was 13 in 83. I don't remember there being a specific crash being talked about in the news or among my peers per say.. I only knew of one person in my class in 81 who had an Atari 2600. I got to play on it a few times and wasn't all that impressed(I only liked Berzerk)  In 83 I remember going to Sears and playing on the Intellivision(not impressed) or a local Food market/toy store/sporting goods store and playing a Vectrex(Loved it but way to expensive for my parents to buy). In between sports outside if I wanted to play video games I went to the arcade which for me blew away Atari/Colecovision/Intellivision. In 84 no one I knew at school had or wanted one of those systems. I don't recall going to stores to play them anymore either. From 84 to 88 I'd say the best video games I played were on friends Commodore 64 or the Apple IIe. It was that time I discovered new genres like RPG's(Wizrardy) or strategy games like Archon, M.U.L.E. or Dark Forest. I never heard about the NES till 89 at a house party. Things would be winding down.....a few guys would fire up the Nes to play Super Mario Bros....hmmm...ok..that looks pretty cool! I remember one friend pulled out a Famicom cart on a honeybee adapter that had 150 games on it! In 89 that was mind blowing lol. It wasn't until Super Mario Bros 3 came out that home video games became very popular for me and my peers.

[TrekMD | 1,393]

I lived through this and didn't even realize it was happening.  I just saw games being sold for cheap and thought they were just clearing for new stuff.  Little did I know!  Things went quiet and then Nintendo started to show up.  I didn't even know the Vectrex had launched either.  I learned of it many years later (and now I own one) as I was living in Puerto Rico and I don't believe the system was ever sold on the island.  I never bought an NES back then but my cousins did.  They love Super Mario Bros. 

@ChickenTendas, I think you may be right about Nintendo's Seal of Quality.  After seeing what happened to Atari, they wanted to avoid that at all costs.  I know Pac-Man and ET on the 2600 get mentioned a lot for "causing" the crash but that is not really accurate.  There was tons of garbage coming out at the time and a number of other things going on that contributed to the crash. 

[GPX | 1,369]

The crash most probably was talking about a period in time rather than any precise date. I can’t imagine gamers all decided in the one night to just quit gaming altogether simultaneously!

Also, I wonder if the rise of the arcade machines had anything to do with the decline in interest of home consoles around the 83-84 years? Kung Fu Master, Karate Champ, 1942, Pac Land were some names I’ve just Googled. Absolute classics!

[Tulpa | 3,490]

It was definitely a multi-year stagnation of the console industry. Arcades and computer games kept chugging along.

I think it was the following:

1) Atari was banking on two poorly received games for their posted earnings for the last quarter of 1982, as well as extra 2600 consoles being produced in expectation of people buying them just to play Pac-Man.

2) Atari also put forth the 5200, which suffered from bad analog controllers and not very many games. Plus, a lot of people already had the 2600 and had no interest in a new console that wouldn't play their old 2600 cartridges.

3) Consumers being disillusioned by the tons of mediocre games that were stealing focus from the good games of the era.

4) Developers betting the farm on the 2600's popularity, rather than taking the Activision route of branching into computer games. Activision also optimized games for each platform, while others like Imagic would try to make each game look the same regardless of platform; when the 2600 is your baseline, your games are going to look primitive.

5) Atari's competitors, Intellivision and Colecovision, had a few issues. Intellivision didn't have many hot arcade ports, instead relying on exclusives. Colecovision did have arcade ports, so you'd think they'd weather it, but I guess the biggest name going down also dragged them down.

6) Warner losing confidence in Atari, splitting it into a console and an arcade division, and selling them both off. The upcoming 7800 was put on hold until Nintendo revived the market.

 

At least that's what I've gathered reading about it. I was too young to notice the Crash in any substantial way, and only learned about it in the 90s when I was reading on video games in general.

[Bearcat-Doug | 5,104]

16 minutes ago, GPX said:

The crash most probably was talking about a period in time rather than any precise date. I can’t imagine gamers all decided in the one night to just quit gaming altogether simultaneously!

Also, I wonder if the rise of the arcade machines had anything to do with the decline in interest of home consoles around the 83-84 years? Kung Fu Master, Karate Champ, 1942, Pac Land were some names I’ve just Googled. Absolute classics!

That's a good point. Arcade games were way ahead of home consoles in the '80s. Any money I had as a kid went to the arcades and I rented most of my console games later on, so I wasn't helping the console game sales any.

[11strings | 90]

I was pre-teen at the time, but the arcades crashed in 1983 too.  Many of the small video arcades were closed down by 1984.  The last hurrah was Dragon's Lair, but soon after a bunch of Laserdisc copycats tried to capture the success and failed. 

There's no exact date but all through 1983, a shit ton of crappy games were released for the home consoles (mainly Atari 2600, 5200. Intellivision, and ColecoVision ), and the general public lost interest. Early home computers took their place and freed the TV up.

My mom was able to pick me up a Vectrex on clearance from Video Plus (a video cassette rental store) and games were dirt cheap at the time.

Arcade games started to jump back in the early 90s with Street Fighter II, Mortal Kombat, Simpsons, NBA Jam etc. - but most smaller arcades were long gone so they were mostly at pizza places or movie theaters.  I do remember playing Karate Champ while waiting to go see the Never Ending Story and playing Kung Fu Master at 7-11 lol