Video Game Crash of 1983: What were some of the consequences/catalysts that are not normally addressed about this moment in video game history?

by dall007

Broadly speaking it is my understanding that the video game crash in the US killed the domestic market and set up the near monopoly of Nintendo. Some historians/economists point out that this "fixed" some of the problems in the long run, namely ip quality.

My question is, are there any unintended consequences from this moment in history? Was there a lack of faith in the market following which stifled technological growth? Is there any evidence to suggest that had the crash not happened (for all intents and purposes not inevitable as it was in reality), we could have seen polygon based 3d gaming sooner (for example)?

I want to avoid any what if's and speculations. I'm interesting in seeing tangible historical markers in technological growth to keep within the parameters of this subreddit.

Thanks!

centersolace

A lot of people tend to overstate the impact of the 1983 Video Game Crash. While the video game crash was devastating to the North American console market, video game markets outside of this, namely Japan and Europe, as well as the arcade and then fledgling home computer markets weren't nearly as affected.

That's not to say it didn't affect these markets at all, just that they didn't suffer nearly as much as the console market did.

As for hampering technological growth? Not really. The first game to use polygon based graphics is credited to be I, Robot which was released in 1984, right in the middle of the video game crash. While I, Robot was a financial failure, as it was an arcade game, it's failure had less to do with the video game crash, and more to do with it's poor controls and failure to find an audience. But it's existence shows that it was indeed possible for 3d polygon graphics in the early 80s.

Despite this, polygon gaming wouldn't reach the home console market until the 1990s with the Sega Mega Drive and the Super FX chip for the SNES, which were capable of some very basic 3d rendering, but the first truly successful 3d home console would be the Sony Playstation released in 1994.

The takeaway here is that all three of those companies were from Japan, as already stated the Japanese video game market was largely unaffected by the video game crash, it's unlikely that the crash had a very big effect on technological development.

As for effects that it DID have, the biggest and most obvious was the death of Atari. In the early 80s Atari was a billion dollar company, but by 1984 they were all but bankrupt. They underwent several company restructuring's, and released several products with middling success.

This included the Atari Jaguar in 1993, widely considered one of the worst game consoles ever made, and the Atari Lynx in 1989, the worlds first colour handheld console, beating the Gameboy Colour by almost a decade, and while it was considered greatly superior to the original Gameboy, its high price, and lack of games meant that it too was a commercial failure.

The failures of the Lynx and later the Jaguar were the final nails in the coffin for Atari, and they ended up selling off most of their IPs to Hasbro in 1998, and with that Atari was dead. In fact, the Atari of today isn't actually the real Atari at all, but a re-branded Infogrames using the Atari name.

With Atari dead, so too died the american produced video game console. While there were many attempts, there wouldn't be an american console to reach mainstream success until Microsofts Xbox in 2001, and even then we wouldn't see true commercial viability until the Xbox 360 in 2005.

In addition, ever wonder why there aren't that many 3rd party games available on Nintendo systems? Well, the crash of 1983 is why. Nintendo limited the number of games that developers could release on their systems each year, and implemented the "Nintendo Seal of Quality", as they believed that Atari had given too much freedom to 3rd party developers, filling the market with shovelware.

In the end, the Crash of 1983 had a much larger cultural and financial impact rather than a technological one, as it allowed for Japanese hardware and developers to come to prominence, and tanked one of the largest american corporations in recent history.

AguyinaRPG

My good cohort Alex Smith, very likely one of the best historians in the field today, did a three part podcast on the general causes of the crash across the three major categories.

There's far too much retrospect applied to the crash when the general economic press actually covered it pretty well while it was happening. In 1983, when everything was falling apart, journals like Business Week and trade magazines like Playthings pointed out the exact problem: Too many cartridges. That was the biggest issue by far. It had very little to do with product quality on a widespread scale, especially since the best selling stuff was still just arcade conversions where everybody knew what to expect.

The problem eventually became that because the Atari VCS/2600 was so limiting that it was becoming actually impossible to port some of the more recent arcade games over. There needed to be a shift in technology, but right at that time they had saturated the market for systems so nobody was going to switch over. The Atari console only became really widespread in 1980, so the usual cycle of 5-7 years for new hardware platforms wasn't quite ready to switch over in 1983. People had already put the money into their consoles so recently and weren't ready to pay the extra added price to jump up a level, especially when home computers seemed like a wiser investment for parents.

At the same time though you had Atari and all the third parties making too much software. Everybody made too much. There was 200% of what retailers were able to sell out there because of both Atari's need to grow and all the third parties wanting a piece of the pie. Millions of cartridges that retailers need to ship. Boom, they bargain bin them. No one wants to buy a $40 game when you can get one for $5, especially considering that there were good games in there too. David Crane recalls seeing Pitfall, a hugely successful and highly regarded game, in the bargain bin because they simply made too many of them.

The above claims that it wasn't a big deal are again far too retrospective. Everyone who was making home video games at that time imploded, save for Activision. Every single cartridge maker got out and those who survived, like on home computers, carried the scars with them. Sierra On-Line is one example. They were driven near to bankruptcy. Every major toy company that was in was devastated because of their video game involvement. Parker Bros, Mattel, Milton-Bradley, Fisher-Price (At that time owned by Quaker Oats). All of them suffered huge losses for their involvement.

So really the narrative needs to shift away from "bad games" and more towards the economic factors overall. The arcade and the computer market crash are separate issues, which again Alex covers in some of his other episodes. This one highly lucrative segment of the market blows up and eventually does trickle to other parts of the world, leaving the door open for Nintendo to rebuild and dominate. That's one of the pillars of the history.