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The Spinning Wheel: Lessons Learned from the Video Game Crash of ‘83

June 27, 2009
by

If there is something this recession has taught me, it is that life is cyclical. What goes up must come down. You reap what you sow. What goes around comes around. Insert any other clichés you can think of, but the point is, this isn’t the first financial crash we’ve seen, and it probably won’t be the last.

In 1983, the video game industry crashed. Warehouses were full. Stores had shelves and shelves of games they could not sell. Boys and girls did the unthinkable; they went outside to play. The industry had hit rock bottom due to a mixture of haphazard business decisions, poor game development and over saturation of the market. And unlike pinball machines, video games’ untimely demise was not because something better had been developed, but because they were too stupid to see the eventual consequences of their actions. Ok, the rapid development of personal computers as a means of gaming may have been a factor. But, for the most part, these companies had no one but themselves to blame.

Oh, and just to refresh your memory, this catastrophe wasn’t a two week fluke like Katie Holmes career. This depression went on for TWO YEARS. Not only was it solely responsible for the death of Atari and the extinction of the video game arcade, but ’83 saw America thrown from the top of the video game heap. It took a Japanese company and their drugged-out plumber to shock the industry back to life.

So where am I going with this? If life is cyclical, would it not stand to reason that there could be another video game depression in the foreseeable future? As in 1983, the industry is embroiled in a console war. Nintendo, Sony and Microsoft continue to produce a high number of games while simultaneously trying to undermine each other. By comparing the conditions that led to the crash in ’83 with the conditions we are living in now, it might be possible to shed some light on the future of the gaming industry.

Just as the Atari, ColecoVision and Intellivision feuded decades before, so now do Nintendo, Sony and Microsoft wage war on the electronic battlefield. To date, the three companies have sold nearly 100 Million consoles worldwide (with Nintendo outselling the nearest competitor 2 to 1). This doesn’t even account for handheld sales or PC gaming. Meanwhile, work has begun on the next wave of consoles. As far as software, first and third party developers have produced thousands of games for these platforms and show no signs of stopping. As in the 80’s, the market is flooded with products. How long before public interest begins to wane?

Then there is the question of game quality. Games like ET: the Extraterrestrial and Pac Man proved that Atari didn’t care how shoddily the games were produced because they figured the public would buy anything. Modern companies are no less susceptible to this trap. For every good game there are five mediocre ones. Yet, with sales as high as they are, it can be very tempting to churn out ‘just another game’ to make a quick buck. And what about replay value? I could play Mario or Galaga for the rest of my life and they would never get old. How many games do you own now that you have played once and sold back, or that just sit on your shelf collecting dust (i.e. Bioshock)? Is this all sounding scarily familiar?

Now everyone calm down. I’m not suggesting that the end of the video game world is nigh. I’m just providing a kick in the balls to make sure you’re still paying attention. If the Video Game Crash of ’83 has taught us anything, it is that, like the government, there needs to be a system of checks and balances. The companies must continue to push the envelope as to keep consumers from becoming stagnant. On the other hand, the consumer must continue to ensure that the industry sells quality items. As soon as they stop innovating or we stop investigating, the system breaks down. Companies: If a game sucks, don’t sell it! Consumers: If a game sucks, don’t buy it! If we follow these rules, we can ensure that the past will never repeat itself.

-Jared

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6 Comments leave one →
  1. Zebulon Pi permalink
    June 28, 2009 2:31 am

    I don’t think that the Crash of 83 could happen again, for two reasons.

    1) Technology is a LOT more ingrained in our lives, and games are an integral part of that technology. Between consoles, PCs (desktops, laptops, and netbooks), and cel phones, games are EVERYWHERE now, and rather than slowing things down, this influx of games have actually caused whole new gaming sub-cultures to develop (MMORPGs and Casual Gaming, to name just two) that weren’t present before. Games are speeding up, not slowing down!

    2) Gaming is NOT the introverted, male-geek-oriented hobby it once was. Again, games are EVERYWHERE now, and it’s not a stigma to play them. Housewives play World of Warcraft, senior centers by Wiis… the list goes on.

    So, fear not, gamers. While terrible games will continue to be made, the bad game karma will catch up to them, sooner now rather than later. With all the games out there, it’s easier to stay away from the stinkers and still be able to game.

  2. Masonvrocks permalink
    June 28, 2009 4:42 am

    Wow, really well written, I had knowledge of the crash but now that you mention both at the same time, they just kind of connect like puzzle pieces.

    I agree to some degree but don’t know if it could happen now, we have so many more Third Parties now than before, helping to prevent stagnation.

    Although I think it might happen to the Wii, as people find nothing new, just crappy mini game collections they may just forget about the Wii, I know alot of Wii’s collecting dust now. Nintendo might need a new tactic next gen.

  3. Celes Leonhart permalink
    June 28, 2009 2:06 pm

    Congrats guys, this has got a strong amount of “Rates” on GameGrep — it speaks for itself. Great article, well-written, and I can’t wait to see what more this column will bring (because I’m completely clueless.) I’m too young to really appreciate the crash of ’83 in drawing a comparison to today’s market, but your analysis sounds spot-on from face value and it’s a really original piece/idea. Two new comment’ers must mean something special.

    Also: “Oh, and just to refresh your memory, this catastrophe wasn’t a two week fluke like Katie Holmes career. ” Brilliant, absolute gold.

    Keep up the fine work, Jared.

  4. somarix permalink
    June 28, 2009 2:49 pm

    Hardware of ’83 was so unimaginably limited, that good ideas could not be implemented; games could not have stories; there was no back-catalogue to revert temporarily to; it all felt as a burden;
    Games at that time had only gameplay. Current games have a strong circle of gameplay, graphics, story, music, acting/animation. Even if there are many studios that churn-out the same garbage all the time, there are enough studios that make sure every 2-3 months we overdose on the 5 forementioned fronts, and those studios get formidable revenues and incentive to continue doing so.
    DLCs that slash the online-match community in half are bad, other types of DLC are great.
    Innovative small games, distributed digitally, provide the gust of freshness to those that need it; and aren’t given a tiny shelf-time chunk that would cull customers and developers.
    Graphics reached an important milestone – almost a stand-still, where having fresh and useful ideas is becoming much more important for sales.

    People want to escape reality. If you provide a likable and engaging game-world for them, customers will not ever let you down. 1983’s hardware could not provide that. So, this is not yet another “hoho, history repeats itself”

    • June 28, 2009 3:00 pm

      Perhaps it was not made quite as clear in the article as he intended, but Jared obviously does not expect a full-scale crash, by any means. He just thinks that we should learn form what happened, as to a degree it could happen again. Perhaps a video game recession would be a better choice of words, and even that is far from guaranteed. But if we cannot learn from the past, then what hope have we for the future?

  5. Jared permalink
    June 28, 2009 3:13 pm

    The Big Man is right. I am fairly confident we don’t have to worry about this anytime soon, but I love how the article is getting people to think and create conversation. When we are aware of what COULD happen, that is when we are safest.

    Great comments, everyone!

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