Post by solidbatman on May 1, 2010 21:10:05 GMT -5
1983-4
The Crash of 1983
Simple economic lesson here. As supply rises, prices drop. By 1983, there were a very high number of consoles on the market and even more games. Companies saw an easy way to make money so many poorly financed developers set up shop. Many of these games were poorly designed and flopped in the crowded market. Atari, which was the king of the industry released two very high profile flops; a port of Pac- Man and ET: The Extra Terrestrial. The ET game sold so bad, Atari had to bury all of it's extra copies in a land fill in Arizona.
Stores only have so much space for games. Developers flooded the market in 1982 and retailers had no space for the sheer amount of games. They tried returning the games to the developers but due to the poor set ups of the devs, they were unable to receive refunds for the surplus games. Many developers closed their doors. Low budget, low quality games were everywhere, and low consumer confidence meant these games were not selling very well. Facing massive losses, Coleco and Intellivision abandoned the video game market. Atari was sold and Activison barley stayed open by producing computer games instead of console games. Other third party developers couldn't stay open. Surplus games were sold for a loss in discount bins and clearance racks all over the country.
The gaming industry had been dominated by North America before the crash. Now the focus shifted to Japan, where the market took off. Nintendo saw what happened in North America and put in several new features to insure that third party developers would have to get Nintendo's approval to produce games. This would keep poorly run development companies from producing low quality games and from over- saturating the market.
The crash did have one good effect. It cleaned up the market, making room for higher quality games and consoles. Though at the time it seemed the industry was dead, it was revived a mere two years later with the release of the NES in America. Japanese companies emeged nearly unscathed from the crash and began there domination of the video game market. Atari came back strong but never to it's pre- 1983 levels. The stage was set for Sega and Nintendo to battle it out.
The Crash of 1983
Simple economic lesson here. As supply rises, prices drop. By 1983, there were a very high number of consoles on the market and even more games. Companies saw an easy way to make money so many poorly financed developers set up shop. Many of these games were poorly designed and flopped in the crowded market. Atari, which was the king of the industry released two very high profile flops; a port of Pac- Man and ET: The Extra Terrestrial. The ET game sold so bad, Atari had to bury all of it's extra copies in a land fill in Arizona.
Stores only have so much space for games. Developers flooded the market in 1982 and retailers had no space for the sheer amount of games. They tried returning the games to the developers but due to the poor set ups of the devs, they were unable to receive refunds for the surplus games. Many developers closed their doors. Low budget, low quality games were everywhere, and low consumer confidence meant these games were not selling very well. Facing massive losses, Coleco and Intellivision abandoned the video game market. Atari was sold and Activison barley stayed open by producing computer games instead of console games. Other third party developers couldn't stay open. Surplus games were sold for a loss in discount bins and clearance racks all over the country.
The gaming industry had been dominated by North America before the crash. Now the focus shifted to Japan, where the market took off. Nintendo saw what happened in North America and put in several new features to insure that third party developers would have to get Nintendo's approval to produce games. This would keep poorly run development companies from producing low quality games and from over- saturating the market.
The crash did have one good effect. It cleaned up the market, making room for higher quality games and consoles. Though at the time it seemed the industry was dead, it was revived a mere two years later with the release of the NES in America. Japanese companies emeged nearly unscathed from the crash and began there domination of the video game market. Atari came back strong but never to it's pre- 1983 levels. The stage was set for Sega and Nintendo to battle it out.