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North American video game crash of 1983

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The North American video game crash of 1983 was a major event in the history of video games where the North American video game industry had crashed. Many makers of home computers and video game consoles went bankrupt. Many business analysts thought that the video game industry would not last, and the crash lasted for several years. However, the Japanese company Nintendo introduced the Nintendo Entertainment System in 1985, which became very popular in 1987 and ended the crash.

There were several reasons for the crash, but the main reason was that companies were making many consoles and hundreds of games, most which were low quality. The video game version of ET: The Extra Terrestrial is often blamed for the crash.

Background[change | change source]

Through the 1970s, many companies, most notably Coleco and Atari released tons of systems. The video game industry became a big thing, and it seemed like video games were the next cool thing. However, soon, companies tried to take advantage. For example, if you mailed to a dog food company, they'd send you a video game. The market was flooded, but the final straw was with the Atari port of Pac-Man and ET: The Extra Terrestrial. They were both bad quality games, and the Pac-Man port itself was just a prototype. Consumers lost confidence in video games, and Atari began to lose money. Most companies left the market, as most experts claimed the market was dead, and nothing more than a fad. The crash was notable for being more bad for the companies, as consumers themselves were happy as most games were much cheaper. The crash would last until 1985, when Nintendo released the Nintendo Entertainment System, which used a VCR look and avoided common terms that video games were typically using, as the packaging of the system never even mentioned the phrase "video game" once. Cartridges were instead called "Game Paks" and the games showed in-game sprites on the covers, to show the arcade-like graphics. This was important, as arcades were not effected by the crash, and became popular again because of the crash.