History of video game consoles (third generation)

In the history of computer and video games, the third generation (sometimes referred to as the 8-bit era) began on July 15, 1983, with the Japanese release of both the Family Computer (referred to in Japan in the abbreviated form "Famicom", and later known as the Nintendo Entertainment System, or NES, in the rest of the world) and SG-1000. This generation marked the end of the North American video game crash, a shift in the dominance of home video games from the United States to Japan, and the transition from block-based graphics to smooth hardware scrolling tile and sprite based graphics, which was a pivotal leap in game design.

The best-selling console of this generation was the NES/Famicom, followed by the Master System and then the Atari 7800. Although the previous generation of consoles had also used 8-bit processors, it was at the end of this generation that home consoles were first labeled by their "bits". This also came into fashion as 16-bit systems like the Mega Drive/Genesis were marketed to differentiate between the generations of consoles. In Japan and North America, this generation of gaming was primarily dominated by the Famicom/NES, while the Master System dominated the European and Brazilian markets. The end of the 3rd generation of video games comes as 8-bit consoles become obsolete in graphics and processing power compared to 16-bit consoles.

Some features that distinguished third generation consoles from most second generation consoles include:

The Family Computer (commonly abbreviated the Famicom) became very popular in Japan during this era, crowding out the other consoles in this generation. The Famicom's Western counterpart, the Nintendo Entertainment System, dominated the gaming market in North America, thanks in part to its restrictive licensing agreements with developers. This marked a shift in the dominance of home video games from the United States to Japan, to the point that Computer Gaming World described the "Nintendo craze" as a "non-event" for American video game designers as "virtually all the work to date has been done in Japan." The company had an estimated 65% of 1987 hardware sales in the console market; Atari Corporation had 24%, Sega had 8%, and other companies had 3%.

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