Video game crash of 1983

The North American video game crash of 1983 (known as the Atari shock in Japan) was a massive recession in the video game industry that occurred from 1983 to 1985. Revenues had peaked at around $3.2 billion in 1983, then fell to around $100 million by 1985 (a drop of almost 97 percent). The crash was a serious event that brought an abrupt end to what is retrospectively considered the second generation of console video gaming in North America.

The crash almost destroyed the then-booming industry, and led to the bankruptcy of several companies producing home computers and video game consoles in the region. It lasted about two years. Analysts of the time expressed doubts about the long-term viability of video game consoles and software. The North American video game console industry recovered a few years later, mostly due to the widespread success of the Nintendo Entertainment System (NES), which was soft launched in New York City in late 1985 and had become extremely popular in North America by 1987.

The crash had several causes, including the saturation of the market. The full effects of the industry crash would not be felt until 1985.

The North American video game console crash of 1983 was caused by a combination of factors.

At the time of the North American crash, there were many consoles on the market, including the Atari 2600, Atari 5200, ColecoVision, Odyssey 2 and the Fairchild II. In addition to this, Mattel and Coleco created devices that allowed them to play 2600 games on their consoles, and others created Atari 2600/Intellivision clones such as the Coleco Gemini, the Sears Tele-Games systems (private-labeled versions of the Atari 2600 and Intellivision), and Tandyvision (an Intellivision clone for Radio Shack).

...
Wikipedia