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Beals 1 Wesley Beals English 101 Professor Kaylee Baucom 21 February 2022 Game Over: The Video Game Crash of 1983 Video games are becoming a huge part of our modern world and pop culture. In the early days of gaming, that was not the case and for a time in the early 1980’s, people of the time considered video games a fad, destined to fade and be over taken by the personal computer market (Kleinfield). This public sentiment developed because of a recession of the video game market that would be dubbed later as The Video Game Crash of 1983. This crash was a giant, 2 year recession in the gaming industry that led to the bankruptcy and dramatic reduction of many American video game companies and gaming as a whole in America. It has been estimated that the gaming market shrank by 97% from its peak of $3.2 billion (LLC). While many quickly point to the video game adaptation of the movie ET: The Extraterrestrial as the main cause of the whole crash, there are many other more important factors that ran even deeper in the gaming market at the time that led to the crash. All these factors were personified in ET. The main causes behind this crash can be summarized as: too much competition inside and outside the video game market, a lack of quality in products, and the lack of consumer trust and confidence. There was too much competition inside and outside the video game market that led to the crash. In the early 1980’s inside the video game market, there were a significant number of video game consoles that were trying to vie for the consumer’s attention; each console had its own separate games and features (LLC). With the staggering amount of choices, there was consumer confusion and a fractured gaming market (LLC). Attari was the biggest and most popular, but Beals 2 many others tried to get a slice of the profits that the gaming market was producing (LLC). Consoles were not the only part of the gaming market that was facing a glut of competition; games themselves were also facing the same problem. With the company Activision splitting off of Atari during the early part of the crash and developing its own games independent of Atari, it established a pattern and led to the explosion of third-developers or game companies not associated with the console’s company (Farquhar). Each of these developer made lots of games for each of the consoles in an attempt to cash in on the boom that the market had experienced in the late 1970’s (Farquhar). This led to an oversaturation of games and with not enough demand, this caused a lack of sales. Due to the lack of sales for both consoles and games, stores that were trying to move merchandise slashed prices to the absolute lowest which caused different video games companies to lose money (Oxford). Outside the gaming market, personal computers were becoming cheaper and more available to the public and thus, creating another competitor with video game companies (LLC). The New York Times at the time said, “Many industry observers foresee a pronounced movement from game machines to home computers, which can figure a family's budget as well as transport the player into outer space (Kleinfield).” Computer also had a massive edge that the gaming consoles did not, the ability to educate and provide more features (LLC). With gaming consoles, they were created and advertised for entertainment. Whereas computers had and were advertised for both entertainment and education purposes. Parents saw this and preferred to get a computer rather than a console as an investment into their children’s future (Oxford). The overabundance of competition inside and outside the gaming market led to a lack of quality in the products that were made. The lack of quality in the products sold was another major factor in the crash. As a result of the increase competition, companies tried to differentiate from one another in the department Beals 3 of games for their consoles. While there were companies that developed hits like Centipede, Adventure, and many more, many other companies preferred to develop knock-off games and games of lesser quality in a rush to meet the demand for video games (Gailloreto). Also, many non-video game companies jumped in and made games as interactive commercials in an attempt to advertise such as Koolaid, Quaker Oats, and Purina Dog Food (Oxford; LLC). With companies that either did not have the technical knowledge or rushed games, it led to games that were attempting to be big hits and yet failed in sales and quality (Gailloreto). The video game adaptation of ET is an example of this development philosophy. It was only developed in a 5 to 6 week period, in an attempt to get it to the markets in time for the Christmas season and most of the money spent on it was for securing the licensing rights to the movie (LLC). This game sold rather poorly and 2 million copies of the game to end up in a landfill in New Mexico (Gailloreto). The lead developer had said this about the development of E.T., “We had literally six weeks to produce a brand new game, manufacture it, package it, and market it. It was a disaster. I mean, the programmers hated it. Nobody liked the game (LLC).” Lack of quality is another cause of the crash and along with too much competition led to the lack of consumer confidence. The lack of consumer confidence was another cause for the crash. The video game market was being flooded with games and few were good to play. Because of the fact that both good games and bad games were put together on store shelves, there was a developing hesitancy to buy games out of fear that one would get a poor quality game also dubbed “Shovelware” (Oxford). With the lack of the internet or gaming magazines at the time, information traveled only by word-of-mouth, sustaining the hesitancy (Farquhar). Even when there were attempts by companies like Atari to remedy those fears of poor quality products, those fears persisted Beals 4 strongly and were often considered too little, too late (Oxford). Also, there were controversies among parents because certain games that contained adult content and fearing that games were too addictive. With the flood of games on the market, some companies tried to use sex appeal to sell games and made games with pornographic content in it (Kersley). This idea of using sex appeal led to rise in games being made with adult content (Kersley). As parents found out about this, they were furious and blamed video game developers for this and this controversy added to the distrust of video games. Parents were also worried that their kids were becoming addicted to gaming and that their kids were wasting their time (Kleinfield). Different cities across America in response to this imposed limits on when kids could play games and limited what games kids could buy (Kleinfield). Parents saw gaming as a waste of time and preferred things that trained the future generation for future careers and education (Kleinfield). Lastly, kids themselves just got bored with games and eventually moved to other forms of entertainment (Kleinfield). With hesitancy for buying games, controversies among parents, and boredom among children, consumer confidence reached a low and made the gaming crash imminent. The Video Game Crash of 1983 was caused by too much competition, too little quality products, and too little confidence in the gaming market. The causes of the crash would be the gaming markets undoing but after the crash, the causes would be major things to learn from as the video game market rebuilt itself. Nintendo, before it brought the Nintendo Entertainment System (NES) to the western market, scouted the causes of the crash and went out of their way to avoid the causes of crash (LLC). This caused Nintendo and other Japanese video game developers to dominate the western gaming market in the late 1980s and that continues to this day (Gailloreto). These causes are factor that companies consider today in order to avoid another gaming crash. The Video Games Crash of 1983 was something that would shape the Beals 5 landscape of American gaming and even continues to shape it to this day. Video games did not fade as fad because of the crash; it only proceed to evolve and change from it. As people look at the video game market today, they could always remember that it was not always a stable and smooth growth.