Video game crash of 1983 in the context of "Sega Model 1"

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⭐ Core Definition: Video game crash of 1983

The video game crash of 1983 (known in Japan as the Atari shock) was a large-scale recession in the video game industry that occurred from 1983 to 1985 in the United States. The crash was attributed to several factors, including market saturation in the number of video game consoles and available games, many of which were of poor quality. Waning interest in console games in favor of personal computers also played a role. Home video game revenue peaked at around $3.2 billion in 1983 (equivalent to $10.1 billion in 2024), then fell to around $100 million (equivalent to $292.36 million in 2024), a drop of almost 97%. The crash abruptly ended what is retrospectively considered the second generation of console video gaming in North America. To a lesser extent, the arcade video game market also weakened as the golden age of arcade video games came to an end.

Lasting about two years, the crash shook a then-booming video game industry and led to the bankruptcy of several companies producing home computers and video game consoles. Analysts of the time expressed doubts about the long-term viability of video game consoles and software.

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👉 Video game crash of 1983 in the context of Sega Model 1

Sega is a video game developer, publisher, and hardware development company headquartered in Tokyo, Japan, with multiple offices around the world. The company's involvement in the arcade game industry began as a Japan-based distributor of coin-operated machines, including pinball games and jukeboxes. Sega imported second-hand machines that required frequent maintenance. This necessitated the construction of replacement guns, flippers, and other parts for the machines. According to former Sega director Akira Nagai, this is what led to the company into developing their own games.

Sega released Pong-Tron, its first video-based game, in 1973. The company prospered from the arcade game boom of the late 1970s, with revenues climbing to over US$100 million by 1979. Nagai has stated that Hang-On and Out Run helped to pull the arcade game market out of the 1983 downturn and created new genres of video games.

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Video game crash of 1983 in the context of PC game

A personal computer game, or abbreviated PC game, also known as a computer game, is a video game played on a personal computer (PC). The term PC game has been popularly used since the 1990s referring specifically to games on "Wintel" (Microsoft Windows software/Intel hardware) which has dominated the computer industry since.

Mainframe and minicomputer games are a precursor to personal computer games. Home computer games became popular following the video game crash of 1983. In the 1990s, PC games lost mass market traction to console games on the fifth generation such as the Sega Saturn, Nintendo 64 and PlayStation. They are enjoying a resurgence in popularity since the mid-2000s through digital distribution on online service providers. Personal computers as well as general computer software are considered synonymous with IBM PC compatible systems; while mobile devices – smartphones and tablets, such as those running on Android or iOS platforms – are also PCs in the general sense as opposed to console or arcade machine. Historically, it also included games on systems from Apple Computer, Atari Corporation, Commodore International and others. Microsoft Windows utilizing Direct3D become the most popular operating system for PC games in the 2000s. Games utilizing 3D graphics generally require a form of graphics processing unit, and PC games have been a major influencing factor for the development and marketing of graphics cards. Emulators are able to play games developed for other platforms. The demoscene originated from computer game cracking.

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Video game crash of 1983 in the context of Takashi Tezuka

Takashi Tezuka (手塚 卓志, Tezuka Takashi; born November 17, 1960), sometimes called Ten Ten, is a Japanese video game designer and gaming company executive. Since 1984, he has directed, produced, or supervised development of numerous games released by Nintendo. He is now executive officer of their board of directors, and senior officer of their Entertainment Planning & Development division.

Tezuka assisted designer Shigeru Miyamoto on the platformer Super Mario Bros. (1985) for the Nintendo Entertainment System (NES). The game was incredibly innovative and influential to the medium; it began the Super Mario game series, and revived the North American gaming industry after it had suffered a recession in 1983. Tezuka helped Miyamoto design the action-adventure game The Legend of Zelda (1986), which began the Zelda series. The duo have had a creative partnership on many projects in the four decades since.

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Video game crash of 1983 in the context of 1980s in video games

The 1980s was the second decade in the industry's history. It was a decade of highs and lows for video games. The decade began amidst a boom in the arcade video game business with the golden age of arcade video games, the Atari 2600's dominance of the home console market during the second generation of video game consoles, and the rising influence of home computers. However, an oversatuation of low quality games led to an implosion of the video game market that nearly destroyed the industry in North America. Most investors believed video games to be a fad that had since passed, up until Nintendo's success with its Nintendo Entertainment System (NES, Famicom) revived interest in game consoles and led to a recovery of the home video game industry. In the remaining years of the decade, Sega ignites a console war with Nintendo, developers that had been affected by the crash experimented with PC games, and Nintendo released the Game Boy, which would become the best-selling handheld gaming device for the next two decades. Other consoles released in the decade included the Intellivision, ColecoVision, TurboGrafx-16 (PC Engine) and Sega Genesis (Mega Drive).

Notable games of the 1980s included Pac-Man, Ms. Pac-Man, Donkey Kong, Super Mario Bros., Super Mario Bros. 3, Mario Bros., Duck Hunt, Tetris, The Legend of Zelda, Metroid, Castlevania, Mega Man, Final Fantasy, Dragon Quest, Double Dragon, Punch-Out!!, Contra, Mega Man 2, SimCity, Prince of Persia, Gauntlet, Gradius, Out Run, Defender, Missile Command, Frogger, Q*bert, Dig Dug, Pitfall!, Elite, and Maniac Mansion.

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Video game crash of 1983 in the context of Activision

Activision Publishing, Inc. is an American video game publisher based in Santa Monica, California. It serves as the publishing business for its parent company, Activision Blizzard, and consists of several subsidiary studios. Activision is one of the largest third-party video game publishers in the world and was the top United States publisher in 2016.

The company was founded as Activision, Inc. on October 1, 1979, in Sunnyvale, California, by former Atari, Inc. programmers for the popular Atari Video Computer System (later renamed to Atari 2600) home video game console. Upset at their treatment by Atari, they left to develop games for the same system. Activision was the first independent, third-party, console video game developer. The video game crash of 1983, in part created by too many new companies trying to follow in Activision's footsteps without the experience of Activision's founders, hurt Activision's position in console games and forced the company to diversify into games for home computers, including the acquisition of Infocom. After a management shift, with CEO Jim Levy replaced by Bruce Davis, the company renamed itself to Mediagenic and branched out into business software applications. Mediagenic quickly fell into debt, and the company was bought for around US$500,000 by Bobby Kotick and a small group of investors around 1991.

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Video game crash of 1983 in the context of History of Nintendo

The history of Nintendo, a Japanese video game company based in Kyoto, starts in 1889 when Fusajiro Yamauchi founded "Yamauchi Nintendo", a producer of hanafuda playing cards. Sekiryo Kaneda was company president from 1929 to 1949. His successor Hiroshi Yamauchi had Nintendo producing toys like the Ultra Hand, and video games, including arcade games, the Color TV-Game series of home game consoles (1977—83), and the Game & Watch series of handheld electronic games (1980—86).

Shigeru Miyamoto designed Donkey Kong (1981) for arcades: Nintendo's first international hit game, and origin of the company's mascot, Mario. After the American video game crash of 1983, Nintendo filled a market gap there by releasing their Japanese Famicom home console (1983) as the Nintendo Entertainment System (NES) in 1985. Miyamoto and Takashi Tezuka's innovative Famicom/NES titles, Super Mario Bros. and The Legend of Zelda, greatly influenced gaming. The Game Boy handheld console (1989) and the Super Nintendo Entertainment System home console (1990) were successful, yet Nintendo had an intense business rivalry with Sega's consoles. The Virtual Boy (1995), a portable console with stereoscopic 3D graphics, was a critical and financial failure. With the Nintendo 64 (1996), Nintendo began making games with fully-3D computer graphics. The Pokémon media franchise, partially owned by Nintendo, has been a worldwide hit since 1996.

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Video game crash of 1983 in the context of Game Boy family

Nintendo has developed eight home video game consoles and multiple portable consoles for use with external media, as well as dedicated consoles and other hardware for their consoles. As of September 19, 2025, Nintendo has sold over 869.95 million hardware units.

The company's first console, the Color TV-Game, was a success in Japan but was never released in other territories. Their first systems to achieve worldwide success were the Game & Watch handheld series, before achieving greater worldwide success with the Nintendo Entertainment System (NES), originally released as the Family Computer (Famicom) in Japan in 1983. The NES restarted the video game industry after the video game crash of 1983, and was an international success. In 1989, Nintendo released the Game Boy, which became the first handheld console to sell in large numbers. In the early 1990s, Nintendo's market lead began to decrease; although the 1990 Super Nintendo Entertainment System (SNES) was a strong seller, the Sega Genesis was a very strong contender. Nintendo and Sega would both lose a significant portion of the console market towards the end of the 1990s, as Sony's PlayStation became the most popular console, beating the Nintendo 64, though Nintendo managed to sell more than Sega Saturn.

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Video game crash of 1983 in the context of NES Zapper

The Zapper is an electronic light gun accessory launched within the Nintendo Entertainment System (NES) in North America on October 18, 1985. It is a cosmetic redesign by Nintendo of America's head designer Lance Barr, based on Gunpei Yokoi's Video Shooting Series light gun (光線銃シリーズガン), which had been released in Japan for the Famicom on February 18, 1984. The Zapper requires compatible NES games, such as Duck Hunt, Wild Gunman, Gumshoe, and Hogan's Alley. Its internal optical sensor allows the player to aim at a television set and accurately shoot at in-game targets.

The Zapper bridged Nintendo's existing library of hit arcade light-gun shooter games into the NES's launch library. As distinct toys, the Zapper and R.O.B. (Robotic Operating Buddy) were key to the identity of the NES bundle, for positioning the NES's 1985–1986 launch into the North American toy market instead of into the crashed video game market.

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Video game crash of 1983 in the context of Atari

Atari (/əˈtɑːri/) is a brand name that has been owned by several entities since its inception in 1972. It is currently owned by French holding company Atari SA (formerly Infogrames) and its focus is on "video games, consumer hardware, licensing and blockchain". The original Atari, Inc., founded in Sunnyvale, California, United States in 1972 by Nolan Bushnell and Ted Dabney, was a pioneer in arcade games, home video game consoles, and home computers. The company's products, such as Pong and the Atari 2600, helped define the electronic entertainment industry from the 1970s to the mid-1980s.

In 1984, as a result of the video game crash of 1983, the assets of the home console and computer divisions of the original Atari Inc. were sold off to Jack Tramiel's Tramel Technology Ltd., which then renamed itself to Atari Corporation, while the remaining part of Atari, Inc. was renamed Atari Games Inc. In early 1985, Warner established a new corporation jointly with Namco subsequently named Atari Games Corporation, which took control of Atari's coin-operated games division. The rights to Atari, Inc.'s game properties were shared between the two companies: Atari Corporation receiving the trademarks and the home rights, while Atari Games receiving the rights to use the logo and brand name with appended text "Games" on arcade products. In 1996, Atari Corporation reverse-merged with disk-drive manufacturer JT Storage (JTS) and effectively perished. In 1998, Hasbro Interactive, part of the toy company Hasbro, acquired all Atari Corporation–related properties from JTS, as part of a subsidiary which it then renamed to Atari Interactive. Meanwhile, Atari Games was acquired by Midway Games in 1996, and effectively retired the Atari name on arcades by 2000 to avoid public confusion with Hasbro's Atari home releases.

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