The Video Game Crash of 1983

March 23, 2018 by Gabe | [mmd] |

Some really interesting stuff in this Wikipedia article. It's easy to forget how complex the market is and how unintended consequences lurk behind every decision. For example, how a smaller coin in Japan meant a bigger impact from home game consoles.

The U.S. game industry lobbied in Washington, D.C. for a smaller $1 coin, closer to the size of a quarter, arguing that inflation (which had reduced the quarter's spending power by a third in the early 1980s) was making it difficult to prosper. During the 1970s, the dollar coin in use was the Eisenhower dollar, a large coin impractical for vending machines. The Susan B. Anthony dollar was introduced in 1979, and its size fit the video game manufacturers' demands, but it was a failure with the general public. Ironically, the new coin's similarity to the quarter was one of the most common complaints. In Canada, existing dollar bills were removed from circulation and replaced with coins in 1987.

Arcade machines in Japan had standardized the use of ¥100 coins, worth roughly $1, which industry veteran Mark Cerny proposed as a reason for the stability of the game industry in Japan, where the crash was known as the "Atari shock".

I was a teenager in the 80's and I definitely remember the sudden decline of home consoles between Coleco and Nintendo. It's interesting to think of a world where Nintendo did not prosper.

As a result, while some stores sold new games and machines, most retailers stopped selling video game consoles or reduced their stock significantly, reserving floor or shelf space for other products. This was the most formidable barrier that confronted Nintendo, as it tried to market its Famicom system in the United States. Retailer opposition to video games was directly responsible for causing Nintendo to brand its product an "Entertainment System" rather than a "console", using terms such as "control deck" and "Game Pak", as well as producing a toy robot called R.O.B. to convince toy retailers to allow it in their stores.