The 1980s opened with popular holdovers like the Atari 2600, alongside newer machines chasing “arcade-at-home” fidelity such as ColecoVision (launched mid-1982 with Donkey Kong as a pack-in) and the self-contained, vector-display Vectrex. [6]
In Japan, Nintendo’s Family Computer (Famicom) arrived in 1983, setting the stage for the company’s U.S. push two years later with the Nintendo Entertainment System. However it wasn't an easy transition to the United States as the market had just crashed the same year as Nintendo launched their own system, the Famicom, in Japan. Thus the American debut began in New York City on Oct. 18, 1985, marketed as a toy (with R.O.B.the Robot and the ZapperGun) to win back skeptical retailers after the market crash—an approach that helped spark a broader recovery. [7]
Through the second half of the decade, Nintendo consolidated its lead in North America while refining a stricter publishing model: the 10NES lockout chip and licensing rules that shaped third-party game releases and distribution.
Sega mounted the most persistent challenge with the Master System (sold as Mark III in Japan). While it lagged in the U.S., it carved out lasting strength in places like Brazil, where local partner TecToy kept variants on store shelves for decades—an unusual longevity for an ’80s console. [8]
Atari returned with the 7800, emphasizing affordability and backward compatibility with 2600 cartridges—an early nod to preserving players’ libraries. (Modern reissues even highlight that cross-compatibility today.) [9]
By the late 1980s, the conversation shifted toward higher performance: NEC and Hudson’s PC Engine (1987, Japan) and Sega’s Mega Drive/Genesis (1988 Japan; 1989 U.S.) ushered in faster scrolling, bigger sprites, and more elaborate sound, signaling the next wave of competition that would define the early 1990s. [10]
Behind the scenes, the decade also standardized features we now take for granted—battery-backed saves and rewritable media (e.g., Nintendo’s Disk Writer service for the Famicom Disk System)—and elevated hardware engineers like Masayuki Uemura to quiet renown for the designs that reshaped living-room entertainment. [11]
In the early-1980s, arcade games were a vibrant industry. The arcade video game industry in the US alone was generating $5billion of revenue annually in 1981[12] and the number of arcades doubled between 1980 and 1982.[13] The effect video games had on society expanded to other mediums as well such as major films and music. In 1982, "Pac-Man Fever" charted on the Billboard Hot 100 charts[14] and Tron became a cult classic.[15]
Third-party development and an oversaturated market
Following a dispute over recognition and royalties, several of Atari's key programmers split and founded their own company Activision in late 1979.[16] Activision was the first third-party developer for the Atari 2600.[17] Atari sued Activision for copyright infringement and theft of trade secrets in 1980,[18] but the two parties settled on fixed royalty rates and a legitimizing process for third parties to develop games on hardware.[19]
In the aftermath of the lawsuit, an oversaturated market resulted in companies that had never had an interest in video games before beginning to work on their own promotional games; brands like Purina Dog Food.[20] The market was also flooded with too many consoles and too many poor quality games,[21] elements that would contribute to the collapse of the entire video game industry in 1983.
By 1983, the video game bubble created during the golden age had burst and several major companies that produced computers and consoles had gone into bankruptcy.[22] Atari reported a $536 million loss in 1983.[23] Some entertainment experts and investors lost confidence in the medium and believed it was a passing fad.[24] A game often given poster child status to this era, E.T. the Extra-Terrestrial had such bad sale figures that the remaining unsold cartridges were buried in the deserts of New Mexico.[25][26]
Rise of computer gaming
The brunt of the crash was felt mainly across the home console market. Home computer gaming continued to thrive in this time period, especially with lower-cost machines such as the Commodore 64, ZX Spectrum and IBM Personal Computer. Some computer companies adopted aggressive advertising strategies to compete with gaming consoles and to promote their educational appeal to parents as well.[27][28] Home computers also allowed motivated users to develop their own games, and many notable titles were created this way, such as Jordan Mechner's Karateka, which he wrote on an Apple II while in college.[29]
In the late 1980s, IBM PC compatibles became popular as gaming devices, with more memory and higher resolutions than consoles, but lacking in the custom hardware that allowed the slower console systems to create smooth visuals.[30]
Rejuvenation
By 1985, the home market console in North America had been dormant for nearly two years. Elsewhere, video games continued to be a staple of innovation and development. After seeing impressive numbers from its Famicom system in Japan, Nintendo decided to jump into the North American market by releasing the Nintendo Entertainment System, or NES for short. After release it took several years to build up momentum, but despite the pessimism of critics it became a success. Nintendo is credited with reviving the home console market.[3]
One innovation that led to Nintendo's success was its ability to tell stories on an inexpensive home console; something that was more common for home computer games, but had only been seen on consoles in a limited fashion. Nintendo also took measures to prevent another crash by requiring third-party developers to adhere to regulations and standards, something that has existed on major consoles since then. One requirement was a "lock and key" system to prevent reverse engineering. It also forced third parties to pay in full for their cartridges before release, so that in case of a flop, the liability will be on the developer and not the provider.[31]
Notable video-game franchises established in the 1980s
The following table lists the top 20 best-selling home video games of the 1980s. Note that video game sales numbers were not as widely reported during the 1980s, with the exception of titles published by Nintendo and Atari, Inc.
Best-selling home video games of the 1980s (as of 2015)
↑ Game & Watch version sold 8 million.[61] ColecoVision version sold 2 million.[62] Atari VCS version sold 4 million in 1982,[63] and 180,523 between 1987 and 1990.[64]Famicom version sold 840,000.[65] Atari 8-bit computer version sold 25,502.[64]
Atari 5200 version – 35,011 cartridges (between 1986 and 1988)[64]
Atari XE computer version – 42,359 copies (between 1986 and 1990)[64]
Thunder Mountain's home computer budget release (1986) – 500,000+ copies[70]
↑ 1,318,655 in 1980. 2,964,137 in 1981. 1,373,033 in 1982. 435,353 in 1983.
↑ The Atari VCS version by Parker Brothers sold 4 million cartridges in 1982.[77] Sierra's home computer version sold more than 100,000 copies in the United States by 1985.[78]
↑ 3.575 million up until 1984.[91]1.4 million in 1985.[92]1.229 million in 1988.[93] 748,600+ in 1989.[94]
↑ "Game Machine's Best Hit Games 25: '86 下半期"[Game Machine's Best Hit Games 25: Second Half '86](PDF). Game Machine (in Japanese). No.300. [musement Press, Inc. 15 January 1987. p.16.
1 2 Cartridge Sales Since 1980. Atari Corp. Via "The Agony & The Ecstasy". Once Upon Atari. Episode 4. Scott West Productions. August 10, 2003. 23 minutes in.
↑ "Coleco Mini-Arcades Go Gold"(PDF). Arcade Express. 1 (1): 4. August 15, 1982. Archived(PDF) from the original on November 8, 2012. Retrieved February 3, 2012.
↑ Director/Producer: Magnus Temple; Executive Producer: Nick Southgate (2004). "Tetris: From Russia With Love". BBC Four. Event occurs at 51:23. BBC. BBC Four. The real winners were Nintendo. To date, Nintendo dealers across the world have sold 8 million Tetris cartridges on the Nintendo Entertainment system.
↑ "March 25, 2004". The Magic Box. March 25, 2004. Archived from the original on November 26, 2005. Retrieved April 1, 2007.
1 2 3 小川 (Ogawa), 純生 (Sumio) (2010-12-14). "テレビゲーム機の変遷 —ファミコン、スーパーファミコン、プレステ、プレステ2、Wiiまで—"[Recent Developments in Video Game Technology in Japan — Famicom, Super Famicom, Play Station, Play Station 2 and Wii —](PDF). 経営論集 (Keiei Ronshū) (in Japanese) (77) (published March 2011): 1-17 (2). ISSN0286-6439. Archived from the original(PDF) on 2015-07-25. Retrieved 2021-12-06– via Toyo University Academic Information Repository (Toyo University).
↑ "昔(1970年代）のテレビゲームは何台売れた？"[How many old (1970s) video games sold?]. Classic Videogame Station Odyssey (in Japanese). Archived from the original on 2014-01-09. Retrieved 16 April 2021.
↑ Japan Company Handbook. Toyo Keizai. 1982. p.729. In Aug. '82 term, sales of "Game & Watch" will increase from 4.6 million to 7 million units
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