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Latin America is an interesting case regarding the Crash: In that region, the situation was a mix between the European case (barely affected) and the Japanese one, for a myriad of reasons. While barely documented, Atari and many other American developers also dumped their unsold stock in that region, mainly to Mexico. Since there was no videogame magazines in that era in Latin America, nor internet, most of the publicity those games received were mostly from mouth-to-mouth and even with this early Latin American gamers were basically disconnected from what happened with the video game industry around the world, so they didn't know many of the games they were playing were basically unpopular unsold stuff from other countries. [[TropesAreNotBad This wasn't exactly a bad thing]], since, even with the Crash happening in the States, that didn't prevent Atari consoles from [[GermansLoveDavidHasselhoff being very popular in Mexico and many other Latin American countries]] until the NES came out, and even with this, that console didn't catch out until the end of the 80s. This also had the side-effect of many Atari games and consoles were still sold and available there until the 2000s, when most of them started to break, but even to this day, you can still buy Atari games for cheap in flea markets, garage sales or the internet. On the other hand, this doesn't apply with other consoles from the same era, with the sole exceptions of the Intellivision and Colecovision, and even in that time, those were considered luxury consoles for the rich, as their asking prices were too high for many people in the region. The effect of the Crash in PC gaming was basically null there, because personal computers were considered as a luxury item out of reach for many Latin Americans, and only big companies and very rich people could afford them.[[note]]Not even Commodore with the Commodore 64 was able to make a dent in Latin America, and let's not talk about the Amiga, which was almost unreachable for many there. Atari, on the other hand, only exported the UsefulNotes/AtariST there, and was just until the earlier 90s, almost six years after its American debut.[[/note]]

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Latin America is an interesting case regarding the Crash: In that region, the situation was a mix between the European case (barely affected) and the Japanese one, for a myriad of reasons. While barely documented, Atari and many other American developers also dumped their unsold stock in that region, mainly to Mexico. Since there was no videogame magazines in that era in Latin America, nor internet, most of the publicity those games received were mostly from mouth-to-mouth and even with this early Latin American gamers were basically disconnected from what happened with the video game industry around the world, so they didn't know many of the games they were playing were basically unpopular unsold stuff from other countries. [[TropesAreNotBad This wasn't exactly a bad thing]], thing, since, even with the Crash happening in the States, that didn't prevent Atari consoles from [[GermansLoveDavidHasselhoff being very popular in Mexico and many other Latin American countries]] until the NES came out, and even with this, that console didn't catch out until the end of the 80s. This also had the side-effect of many Atari games and consoles were still sold and available there until the 2000s, when most of them started to break, but even to this day, you can still buy Atari games for cheap in flea markets, garage sales or the internet. On the other hand, this doesn't apply with other consoles from the same era, with the sole exceptions of the Intellivision and Colecovision, and even in that time, those were considered luxury consoles for the rich, as their asking prices were too high for many people in the region. The effect of the Crash in PC gaming was basically null there, because personal computers were considered as a luxury item out of reach for many Latin Americans, and only big companies and very rich people could afford them.[[note]]Not even Commodore with the Commodore 64 was able to make a dent in Latin America, and let's not talk about the Amiga, which was almost unreachable for many there. Atari, on the other hand, only exported the UsefulNotes/AtariST there, and was just until the earlier 90s, almost six years after its American debut.[[/note]]


With its customer base eroded by inferior technology and their profits consumed by wildly optimistic production runs, Atari racked up nearly ''half a billion dollars' '' worth of losses by the end of 1983. Of course, if it had just been Atari suffering, there wouldn't have been a ''real'' crash, but its competitors were also facing hard times:

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With its customer base eroded by inferior technology and their profits consumed by wildly optimistic production runs, Atari racked up nearly ''half a billion dollars' '' dollars'' worth of losses by the end of 1983. Of course, if it had just been Atari suffering, there wouldn't have been a ''real'' crash, but its competitors were also facing hard times:


* A glut of companies [[FollowTheLeader attempting to cash in on Atari's success]] gave consumers too many choices - which meant no one system could succeed in the long term because very few consumers would buy more than one. These included (amongst others) the Bally Astrocade, UsefulNotes/{{Colecovision}}, Coleco Gemini, Emerson Arcadia 2001, UsefulNotes/MagnavoxOdyssey and UsefulNotes/{{Odyssey 2}}, Creator/{{Mattel}} UsefulNotes/{{Intellivision}}, Vectrex, Sears Tele-Games [[note]](a house brand under which the department store chain sold the Atari 2600 and Intellivision; many of the games for both were also sold under the "Tele-Games" brand at Sears)[[/note]], and Fairchild Channel F-System II. Even so, Atari held dominance on store shelves, meaning there was little true competition and thus several systems ended up being quickly discontinued.

to:

* A glut of companies [[FollowTheLeader attempting to cash in on Atari's success]] gave consumers too many choices - which meant no one system could succeed in the long term because very few consumers would buy more than one. These included (amongst others) the Bally Astrocade, UsefulNotes/{{Colecovision}}, Coleco Gemini, Gemini[[note]]A standalone Atari 2600 clone similar to the Colecovision's own 2600 adapter[[/note]], Emerson Arcadia 2001, UsefulNotes/MagnavoxOdyssey and UsefulNotes/{{Odyssey 2}}, Creator/{{Mattel}} UsefulNotes/{{Intellivision}}, Vectrex, Sears Tele-Games [[note]](a house brand under which the department store chain sold the Atari 2600 and Intellivision; many of the games for both were also sold under the "Tele-Games" brand at Sears)[[/note]], and Fairchild Channel F-System II. Even so, Atari held dominance on store shelves, meaning there was little true competition and thus several systems ended up being quickly discontinued.


Latin America is an interesting case regarding the Crash: In that region, the situation was a mix between the European case (barely affected) and the Japanese one, for a myriad of reasons. While barely documented, Atari and many other American developers also dumped their unsold stock in that region, mainly to Mexico. Since there was no videogame magazines in that era in Latin America, nor internet, most of the publicity those games received were mostly from mouth-to-mouth and even with this early Latin American gamers were basically disconnected from what happened with the video game industry around the world, so they didn't know many of the games they were playing were basically unpopular unsold stuff from other countries. [[TropesAreNotBad This wasn't exactly a bad thing]], since, even with the Crash happening in the States, that didn't prevent Atari consoles from [[GermansLoveDavidHasselhoff being very popular in Mexico and many other Latin American countries]] until the NES came out, and even with this, that console didn't catch out until the end of the 80s. This also had the side-effect of many Atari games and consoles were still sold and available there until the 2000s, when most most of them started to break, but even to this day, you can still buy Atari games for cheap in flea markets, garage sales or the internet. On the other hand, this doesn't apply with other consoles from the same era, with the sole exceptions of the Intellivision and Colecovision, and even in that time, those were considered luxury consoles for the rich, as their asking prices were too high for many people in the region. The effect of the Crash in PC gaming was basically null there, because personal computers were considered as a luxury item out of reach for many Latin Americans, and only big companies and very rich people could afford them.[[note]]Not even Commodore with the Commodore 64 was able to make a dent in Latin America, and let's not talk about the Amiga, which was almost unreachable for many there. Atari, on the other hand, only exported the UsefulNotes/AtariST there, and was just until the earlier 90s, almost six years after its American debut.[[/note]]

to:

Latin America is an interesting case regarding the Crash: In that region, the situation was a mix between the European case (barely affected) and the Japanese one, for a myriad of reasons. While barely documented, Atari and many other American developers also dumped their unsold stock in that region, mainly to Mexico. Since there was no videogame magazines in that era in Latin America, nor internet, most of the publicity those games received were mostly from mouth-to-mouth and even with this early Latin American gamers were basically disconnected from what happened with the video game industry around the world, so they didn't know many of the games they were playing were basically unpopular unsold stuff from other countries. [[TropesAreNotBad This wasn't exactly a bad thing]], since, even with the Crash happening in the States, that didn't prevent Atari consoles from [[GermansLoveDavidHasselhoff being very popular in Mexico and many other Latin American countries]] until the NES came out, and even with this, that console didn't catch out until the end of the 80s. This also had the side-effect of many Atari games and consoles were still sold and available there until the 2000s, when most most of them started to break, but even to this day, you can still buy Atari games for cheap in flea markets, garage sales or the internet. On the other hand, this doesn't apply with other consoles from the same era, with the sole exceptions of the Intellivision and Colecovision, and even in that time, those were considered luxury consoles for the rich, as their asking prices were too high for many people in the region. The effect of the Crash in PC gaming was basically null there, because personal computers were considered as a luxury item out of reach for many Latin Americans, and only big companies and very rich people could afford them.[[note]]Not even Commodore with the Commodore 64 was able to make a dent in Latin America, and let's not talk about the Amiga, which was almost unreachable for many there. Atari, on the other hand, only exported the UsefulNotes/AtariST there, and was just until the earlier 90s, almost six years after its American debut.[[/note]]


Latin America is an interesting case regarding the Crash: In that region, the situation was a mix between the European case (barely affected) and the Japanese one, for a myriad of reasons. While barely documented, Atari and many other American developers also dumped their unsold stock in that region, mainly to Mexico. Since there was no videogame magazines in that era in Latin America, nor internet, most of the publicity those games received were mostly from mouth-to-mouth and even with this early Latin American gamers were basically disconnected from what happened with the video game industry around the world, so they didn't know many of the games they were playing were basically unpopular unsold stuff from other countries. [[TropesAreNotBad This wasn't exactly a bad thing]], since, even with the Crash happening in the States, that didn't prevent Atari consoles from [[GermansLoveDavidHasselhoff being very popular in Mexico and many other Latin American countries]] until the NES came out, and even with this, that console didn't catch out until the end of the 80s. This also had the side-effect of many Atari games and consoles were still sold and available there until the 2000s, when most most of them started to break, but even to this day, you can still buy Atari games for cheap in flea markets, garage sales or the internet. On the other hand, this doesn't apply with other consoles from the same era, with the sole exceptions of the Intellivision and Colecovision, and even in that time, those were considered luxury consoles for the rich, as their asking prices were too high for many people in the region. The effect of the Crash in PC gaming was basically null there, because personal computers were considered as a luxury item out of reach for many Latin Americans, and only big companies and very rich people could afford them.

to:

Latin America is an interesting case regarding the Crash: In that region, the situation was a mix between the European case (barely affected) and the Japanese one, for a myriad of reasons. While barely documented, Atari and many other American developers also dumped their unsold stock in that region, mainly to Mexico. Since there was no videogame magazines in that era in Latin America, nor internet, most of the publicity those games received were mostly from mouth-to-mouth and even with this early Latin American gamers were basically disconnected from what happened with the video game industry around the world, so they didn't know many of the games they were playing were basically unpopular unsold stuff from other countries. [[TropesAreNotBad This wasn't exactly a bad thing]], since, even with the Crash happening in the States, that didn't prevent Atari consoles from [[GermansLoveDavidHasselhoff being very popular in Mexico and many other Latin American countries]] until the NES came out, and even with this, that console didn't catch out until the end of the 80s. This also had the side-effect of many Atari games and consoles were still sold and available there until the 2000s, when most most of them started to break, but even to this day, you can still buy Atari games for cheap in flea markets, garage sales or the internet. On the other hand, this doesn't apply with other consoles from the same era, with the sole exceptions of the Intellivision and Colecovision, and even in that time, those were considered luxury consoles for the rich, as their asking prices were too high for many people in the region. The effect of the Crash in PC gaming was basically null there, because personal computers were considered as a luxury item out of reach for many Latin Americans, and only big companies and very rich people could afford them.
them.[[note]]Not even Commodore with the Commodore 64 was able to make a dent in Latin America, and let's not talk about the Amiga, which was almost unreachable for many there. Atari, on the other hand, only exported the UsefulNotes/AtariST there, and was just until the earlier 90s, almost six years after its American debut.[[/note]]


Latin America is an interesting case regarding the Crash: In that region, the situation was a mix between the European case (barely affected) and the Japanese one, for a myriad of reasons. While barely documented, Atari and many other American developers also dumped their unsold stock in that region, mainly to Mexico. Since there was no videogame magazines in that era in Latin America, nor internet, most of the publicity those games received were mostly from mouth-to-mouth and even with this early Latin American gamers were basically disconnected from what happened with the video game industry around the world, so they didn't know many of the games were playing was basically unpopular unsold stuff from other countries. [[TropesAreNotBad This wasn't exactly a bad thing]] since, even with the Crash happening in the States, that didn't prevent Atari consoles from [[GermansLoveDavidHasselhoff being very popular in Mexico and many other Latin American countries]] until the NES came out, and even with this, that console didn't catch out until the end of the 90s. This also had the side-effect of many Atari games and consoles were still sold and available there until the 2000s, when most most of them started to break, but even to this day, you can still buy Atari games for cheap in flea markets, garage sales or the internet. On the other hand, this doesn't apply with other consoles from the same era, with the sole exceptions of the Intellivision and Colecovision, and even in that time, those were considered luxury consoles for the rich, as their asking prices were too high for many people in the region. The effect of the Crash in PC gaming was basically null there, because personal computers were considered as a luxury item out of reach for many Latin Americans, and only big companies and very rich people could afford them.

to:

Latin America is an interesting case regarding the Crash: In that region, the situation was a mix between the European case (barely affected) and the Japanese one, for a myriad of reasons. While barely documented, Atari and many other American developers also dumped their unsold stock in that region, mainly to Mexico. Since there was no videogame magazines in that era in Latin America, nor internet, most of the publicity those games received were mostly from mouth-to-mouth and even with this early Latin American gamers were basically disconnected from what happened with the video game industry around the world, so they didn't know many of the games they were playing was were basically unpopular unsold stuff from other countries. [[TropesAreNotBad This wasn't exactly a bad thing]] thing]], since, even with the Crash happening in the States, that didn't prevent Atari consoles from [[GermansLoveDavidHasselhoff being very popular in Mexico and many other Latin American countries]] until the NES came out, and even with this, that console didn't catch out until the end of the 90s.80s. This also had the side-effect of many Atari games and consoles were still sold and available there until the 2000s, when most most of them started to break, but even to this day, you can still buy Atari games for cheap in flea markets, garage sales or the internet. On the other hand, this doesn't apply with other consoles from the same era, with the sole exceptions of the Intellivision and Colecovision, and even in that time, those were considered luxury consoles for the rich, as their asking prices were too high for many people in the region. The effect of the Crash in PC gaming was basically null there, because personal computers were considered as a luxury item out of reach for many Latin Americans, and only big companies and very rich people could afford them.

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Latin America is an interesting case regarding the Crash: In that region, the situation was a mix between the European case (barely affected) and the Japanese one, for a myriad of reasons. While barely documented, Atari and many other American developers also dumped their unsold stock in that region, mainly to Mexico. Since there was no videogame magazines in that era in Latin America, nor internet, most of the publicity those games received were mostly from mouth-to-mouth and even with this early Latin American gamers were basically disconnected from what happened with the video game industry around the world, so they didn't know many of the games were playing was basically unpopular unsold stuff from other countries. [[TropesAreNotBad This wasn't exactly a bad thing]] since, even with the Crash happening in the States, that didn't prevent Atari consoles from [[GermansLoveDavidHasselhoff being very popular in Mexico and many other Latin American countries]] until the NES came out, and even with this, that console didn't catch out until the end of the 90s. This also had the side-effect of many Atari games and consoles were still sold and available there until the 2000s, when most most of them started to break, but even to this day, you can still buy Atari games for cheap in flea markets, garage sales or the internet. On the other hand, this doesn't apply with other consoles from the same era, with the sole exceptions of the Intellivision and Colecovision, and even in that time, those were considered luxury consoles for the rich, as their asking prices were too high for many people in the region. The effect of the Crash in PC gaming was basically null there, because personal computers were considered as a luxury item out of reach for many Latin Americans, and only big companies and very rich people could afford them.


But in 1983, something [[GoneHorriblyWrong went terribly wrong]]. Dozens of game manufacturers and console producers went out of business. Production of new games stalled out. The American console market as a whole dried up for two years and when it returned, Japanese companies dominated as old American stalwarts tried to play catch-up.

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But in 1983, something [[GoneHorriblyWrong went terribly wrong]].wrong. Dozens of game manufacturers and console producers went out of business. Production of new games stalled out. The American console market as a whole dried up for two years and when it returned, Japanese companies dominated as old American stalwarts tried to play catch-up.


->''"The enormous let-down of such a hugely anticipated game as ''E.T.'' merely caused the scales to fall from the eyes of the buying public. 'Hey, all these overpriced bleepy games with pixels the size of post-it notes are actually ''kind of shit!''[='=] Yes, seems obvious to us, but cut them some slack: it was the 80s. They still thought [[https://www.youtube.com/watch?v=NkcU2_Vs7Xw Bananarama]] was good."''

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->''"The enormous let-down of such a hugely anticipated game as ''E.T.'' merely caused the scales to fall from the eyes of the buying public. 'Hey, all these overpriced bleepy games with pixels the size of post-it notes are actually ''kind of shit!''[='=] Yes, seems obvious to us, but cut them some slack: it was the 80s. They still thought [[https://www.youtube.com/watch?v=NkcU2_Vs7Xw Bananarama]] {{Music/Bananarama}} was good."''


* A glut of companies [[FollowTheLeader attempting to cash in on Atari's success]] gave consumers too many choices - which meant no one system could succeed in the long term because very few consumers would buy more than one. These included (amongst others) the Bally Astrocade, UsefulNotes/{{Colecovision}}, Coleco Gemini, Emerson Arcadia 2001, UsefulNotes/MagnavoxOdyssey and UsefulNotes/{{Odyssey 2}}, Creator/{{Mattel}} UsefulNotes/{{Intellivision}}, Vectrex, Sears Tele-Games, [[note]](a house brand under which the department store chain sold the Atari 2600 and Intellivision; many of the games for both were also sold under the "Tele-Games" brand at Sears)[[/note]], and Fairchild Channel F-System II. Even so, Atari held dominance on store shelves, meaning there was little true competition and thus several systems ended up being quickly discontinued.

to:

* A glut of companies [[FollowTheLeader attempting to cash in on Atari's success]] gave consumers too many choices - which meant no one system could succeed in the long term because very few consumers would buy more than one. These included (amongst others) the Bally Astrocade, UsefulNotes/{{Colecovision}}, Coleco Gemini, Emerson Arcadia 2001, UsefulNotes/MagnavoxOdyssey and UsefulNotes/{{Odyssey 2}}, Creator/{{Mattel}} UsefulNotes/{{Intellivision}}, Vectrex, Sears Tele-Games, Tele-Games [[note]](a house brand under which the department store chain sold the Atari 2600 and Intellivision; many of the games for both were also sold under the "Tele-Games" brand at Sears)[[/note]], and Fairchild Channel F-System II. Even so, Atari held dominance on store shelves, meaning there was little true competition and thus several systems ended up being quickly discontinued.


With its customer base eroded by inferior technology and their profits consumed by wildly optimistic production runs, Atari racked up nearly ''half a billion dollars' '' worth of losses by the end of 1983. Atari also had by far the Of course, if it had just been Atari suffering, there wouldn't have been a ''real'' crash, but its competitors were also facing hard times:

* A glut of companies [[FollowTheLeader attempting to cash in on Atari's success]] gave consumers too many choices - which meant no one system could succeed in the long term because very few consumers would buy more than one. These included (amongst others) the Bally Astrocade, UsefulNotes/{{Colecovision}}, Coleco Gemini, Emerson Arcadia 2001, UsefulNotes/MagnavoxOdyssey and UsefulNotes/{{Odyssey 2}}, Creator/{{Mattel}} UsefulNotes/{{Intellivision}}, Vectrex, Sears Tele-Games, [[note]](a house brand under which the department store chain sold the Atari 2600 and Intellivision; many of the games for both were also sold under the "Tele-Games" brand at Sears)[[/note]], and Fairchild Channel F-System II. Even so, Atari held dominance on store shelves, meaning there was little true competition and thus several systems ended up discontinued.

to:

With its customer base eroded by inferior technology and their profits consumed by wildly optimistic production runs, Atari racked up nearly ''half a billion dollars' '' worth of losses by the end of 1983. Atari also had by far the Of course, if it had just been Atari suffering, there wouldn't have been a ''real'' crash, but its competitors were also facing hard times:

* A glut of companies [[FollowTheLeader attempting to cash in on Atari's success]] gave consumers too many choices - which meant no one system could succeed in the long term because very few consumers would buy more than one. These included (amongst others) the Bally Astrocade, UsefulNotes/{{Colecovision}}, Coleco Gemini, Emerson Arcadia 2001, UsefulNotes/MagnavoxOdyssey and UsefulNotes/{{Odyssey 2}}, Creator/{{Mattel}} UsefulNotes/{{Intellivision}}, Vectrex, Sears Tele-Games, [[note]](a house brand under which the department store chain sold the Atari 2600 and Intellivision; many of the games for both were also sold under the "Tele-Games" brand at Sears)[[/note]], and Fairchild Channel F-System II. Even so, Atari held dominance on store shelves, meaning there was little true competition and thus several systems ended up being quickly discontinued.


* December 7, 1982 is the closest thing the gaming industry has for a "Black Tuesday": during a shareholder meeting, Atari projected a 10-15% profit increase--way below the 50% people predicted Atari would announce. The stock of Warner Communications, Atari's parent company, dropped 33% on the next day, and a mini-scandal erupted when people discovered that the president of Atari had [[WhiteCollarCrime sold 5,000 shares of the company]] only a half-hour before he made that fateful announcement.[[note]]The president, Ray Kassar, claimed his sale of stock had nothing to with the Warner Communications announcement (he needed the money for an investment opportunity), and that the 5,000 shares he sold was only about 1% of his total holdings; he claimed "If I was really bailing out, I would have sold hundreds of thousands of WC, not 5000 shares." He also noted the SEC investigated and found no wrongdoing, but by then the scandal had caused its damage.[[/note]]

to:

* December 7, 1982 is the closest thing the gaming industry has for a "Black Tuesday": during a shareholder meeting, Atari projected a 10-15% profit increase--way increase - way below the 50% people predicted Atari would announce. The stock of Warner Communications, Atari's parent company, dropped 33% on the next day, and a mini-scandal erupted when people discovered that the president of Atari had [[WhiteCollarCrime sold 5,000 shares of the company]] only a half-hour before he made that fateful announcement.[[note]]The announcement. [[note]](The president, Ray Kassar, claimed his sale of stock had nothing to do with the Warner Communications announcement (he needed the money for an investment opportunity), and that the 5,000 shares he sold was only about 1% of his total holdings; he holdings. He claimed "If I was really bailing out, I would have sold hundreds of thousands of WC, not 5000 shares." He also noted the SEC investigated and found no wrongdoing, but by then the scandal had caused its damage.[[/note]])[[/note]]



With its customer base eroded by inferior technology and their profits consumed by wildly optimistic production runs, Atari racked up nearly ''half a billion dollars' '' worth of losses by the end of 1983 (roughly $1.4B going by the 2012 value). Of course, if it had just been Atari suffering, there wouldn't have been a ''real'' crash, but its competitors were also facing hard times:

* A glut of companies [[FollowTheLeader attempting to cash in on Atari's success]] gave consumers too many choices which meant no one system could succeed in the long term because very few consumers would buy more than one. The glut of home systems included (amongst others) the Bally Astrocade, UsefulNotes/{{Colecovision}}, Coleco Gemini, Emerson Arcadia 2001, UsefulNotes/MagnavoxOdyssey and UsefulNotes/{{Odyssey 2}}, Creator/{{Mattel}} UsefulNotes/{{Intellivision}}, Vectrex, Sears Tele-Games, [[note]]A house brand under which the department store chain sold the Atari 2600 and the Intellivision; many of the games for both were also sold under the "Tele-Games" brand at Sears[[/note]] and Fairchild Channel F-System II. Many of these featured indistinguishable libraries in part because Atari, Coleco, and Mattel released games for each other's consoles.[[note]]The current trope image shows the exact problem left to consumers looking to determine just what system to buy.[[/note]] Consumers largely waited to see which console dominated and by the time everyone figured out that nobody would, companies had started going out of business.
* A similar problem occurred with software development. Companies could produce games for these systems without much cost; since they figured [[UsefulNotes/{{Shovelware}} all video games would sell regardless of quality]], [[SturgeonsLaw poor titles from dozens of hastily-created upstarts flooded the market]]. Non-video game companies (like Quaker Oats) produced [[ProductPlacement thinly-disguised commercials for their products]], such as ''Chase the Chuck Wagon'' (Purina) and ''The Kool-Aid Man''. As the Crash started, these companies died off first.
* As console makers and game developers went out of business, retailers had to deal with their own problem: a stockroom full of unsold products that they couldn't return. Stores offered massive discounts on this hardware in an attempt to salvage ''something'' from the Crash, which caused the market for higher-priced new games to shrink in the face of large amounts of budget-priced crap. Speaking of crap...
* Consumers had no real way to discern good games from bad ones. The Internet existed as a military and academic research project at this time; and video game magazines didn't really appear on newsstands, so most buyers had only screenshots and box text to tell them anything at all about the game. Since these almost always [[CoversAlwaysLie lied to get people to buy the game]], consumers soon felt once-bitten twice-shy. A few stores had demo stations set up for potential consumers, but those didn't really help since they would never warn against bad or buggy games instore.
* The personal computer market made its first competitively-priced entry into American society. [=PCs=] had software libraries which catered to the early gaming crowd, but their educational and office software gave them the edge. Certain computers (such as the UsefulNotes/{{Commodore 64}}) ended up priced and marketed to compete with game consoles. Commodore and other companies marketed these machines to {{Education Mama}}s who were worried their kids would be shut out of good colleges and the job market if they weren't "computer literate."
* Home computers were rapidly outstripping the second-generation consoles in the field of memory capacity, making it possible for game programmers to write larger programs. Features had to be cut out of ''VideoGame/MontezumasRevenge'' and ''Fort Apocalypse'' just so that the code and graphics could fit on 16KB cartridges. It was rapidly becoming obvious that the PC could handle games that couldn't feasibly fit on the available consoles. Was the PC destined for the next generation of gaming? This was the birth of the PC Gamer, who began to enjoy larger, more graphically advanced games - for a price.
* While not a true contributor to the crash, much media had painted video games [[FlashinthePanFad as a fad]] and played up all the company bankruptcies as proof of the industry's inevitable demise.

The Crash killed the American home console market for two years: video game sales dropped from $3B in 1982 ($7.23B in 2017 dollars) to as low as $100M ($241M in 2017 dollars) in 1985 (a dropoff of 97%), which caused a majority of game companies to go out of business.

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With its customer base eroded by inferior technology and their profits consumed by wildly optimistic production runs, Atari racked up nearly ''half a billion dollars' '' worth of losses by the end of 1983 (roughly $1.4B going 1983. Atari also had by far the 2012 value). Of course, if it had just been Atari suffering, there wouldn't have been a ''real'' crash, but its competitors were also facing hard times:

* A glut of companies [[FollowTheLeader attempting to cash in on Atari's success]] gave consumers too many choices - which meant no one system could succeed in the long term because very few consumers would buy more than one. The glut of home systems These included (amongst others) the Bally Astrocade, UsefulNotes/{{Colecovision}}, Coleco Gemini, Emerson Arcadia 2001, UsefulNotes/MagnavoxOdyssey and UsefulNotes/{{Odyssey 2}}, Creator/{{Mattel}} UsefulNotes/{{Intellivision}}, Vectrex, Sears Tele-Games, [[note]]A [[note]](a house brand under which the department store chain sold the Atari 2600 and the Intellivision; many of the games for both were also sold under the "Tele-Games" brand at Sears[[/note]] Sears)[[/note]], and Fairchild Channel F-System II. Many of these featured indistinguishable libraries Even so, Atari held dominance on store shelves, meaning there was little true competition and thus several systems ended up discontinued.
* Even then, games released for multiple systems looked rather similar across the board,
in part because Atari, Coleco, and Mattel released games for each other's consoles.[[note]]The consoles. The current trope image shows the exact problem left to consumers looking to determine just what system to buy.[[/note]] Consumers largely waited to see which console dominated and by the time everyone figured out that nobody would, companies had started going out is an example of business.
this.
* A similar problem occurred with software development. Companies could produce games for these systems without much cost; since they figured cost. Figuring that [[UsefulNotes/{{Shovelware}} all video games would sell regardless of quality]], [[SturgeonsLaw poor titles from dozens of hastily-created upstarts flooded the market]]. Non-video game companies (like Quaker Oats) produced [[ProductPlacement thinly-disguised commercials for their products]], opted to offer tie-in games as mail-in exclusives, such as ''Chase the Chuck Wagon'' (Purina) and ''The Kool-Aid Man''. As Man'', though the Crash started, these companies died off first.
latter was so overproduced that undistributed copies were dumped into grocery stores with a $4 pricetag.
* As console makers and game developers went out of business, retailers had to deal with their own problem: a stockroom full of unsold products that they couldn't return. Stores offered massive discounts on this hardware in an attempt to salvage ''something'' from the Crash, ''something'', which caused the market for higher-priced new games to shrink in the face of large amounts of budget-priced crap. Speaking of crap...
* Consumers had no real way to discern good games from bad ones. The Internet existed as a military and academic research project at this time; time, and video game magazines didn't really appear on newsstands, so most buyers had only screenshots and box text to tell them anything at all about the game. Since these almost always [[CoversAlwaysLie lied to get people to buy the game]], consumers soon felt once-bitten twice-shy. A few stores had demo stations set up for potential consumers, but those didn't really help since they would never warn against bad or buggy games instore.
in-store.
* The personal computer market made its first competitively-priced entry into American society. [=PCs=] had software libraries which catered to the early gaming crowd, but their educational and office software gave them the edge. Certain computers (such as the UsefulNotes/{{Commodore 64}}) ended up priced and marketed to compete with game consoles. Commodore and other companies marketed these machines to {{Education Mama}}s who were worried their kids would be shut out of good colleges and the job market if they weren't "computer literate."
computer-literate (which, in hindsight, was quite justified).
* Home computers were rapidly outstripping the second-generation consoles in the field of memory capacity, making it possible for game programmers to write larger programs. Features had to be cut out of ''VideoGame/MontezumasRevenge'' and ''Fort Apocalypse'' just so that the code and graphics could fit on 16KB cartridges. It was rapidly becoming obvious that the PC could handle games that couldn't feasibly fit on the available consoles. Was the PC destined for the next generation of gaming? This was the birth of the PC Gamer, who began to enjoy larger, more graphically advanced games - for a price.
* While not a true contributor to the crash, these issues, much media had painted video games [[FlashinthePanFad as a fad]] and played up all the company bankruptcies as proof of the industry's inevitable demise.

The Crash killed the American home console market for two years: video game sales dropped from $3B in 1982 ($7.23B in 2017 dollars) to as low as $100M ($241M in 2017 dollars) in 1985 (a 1985, a dropoff of 97%), ''97%'', which caused a majority of game companies to go out of business.



Outside North America, though, the Crash made little impact. In Europe, eight-bit home microcomputers (predominantly the Sinclair UsefulNotes/ZXSpectrum and the [=C64=]) already dominated the gaming market. An outrageous number of one-person coders wrote and released games for the far cheaper tape-distribution system, which helped those machines flourish and become the backbone of Europe's gaming industry for the next decade (this is also why the NES and Master System took a ''lot'' longer to catch on in the UK than they might have). These "bedroom coders" received status labels ranging from "cult hero" (Jeff Minter, Matthew Smith et al) to "legend" ([[VideoGame/{{Elite}} Bell and Braben]], the Oliver Twins) from their fans but that didn't prevent a number of talented developers from making enough stupid decisions to snatch defeat from the jaws of victory (Imagine Software see [[http://worldofstuart.excellentcontent.com/bruceworld/ here]] for info, with a big example of an OrwellianEditor as a bonus). Even with the missteps, the European gaming industry remained solid. (Nevertheless, a similar crash due to market saturation affected the home computer ''hardware'' market in the UK in 1984, causing a lot of the less popular machines like the Dragon 32 and Jupiter Ace to disappear entirely and causing Sinclair and Acorn to be taken over by Amstrad and Olivetti respectively).

The Crash had little discernible effect on the Japanese market, either. Though the home of a massive arcade base that grew out of Pachinko parlors and Mahjong dens, Japan didn't adopt home gaming consoles at first; people deemed American imports as curiosities at best. The massive discounts at which Japan forced people to sell computer technology after the Crash provided the perfect storm for domestic development and the release of the [[UsefulNotes/NintendoEntertainmentSystem Famicom]] console, the {{UsefulNotes/MSX}} computer and the [[UsefulNotes/OtherSegaSystems SG-1000]] in 1983 didn't hurt, either. The Famicom and the MSX systems dominated the Japanese gaming industry for the rest of the decade, though the latter would soon fall to increased PC competition. (Near the start of 1983, Atari had entered into the early stages of negotiating rights for the Famicom's US release. The Crash eventually ended those plans, and it later came out that Atari never had the capital to buy the Famicom for the US. They were just hoping to tie up Nintendo with red tape for as long as possible.)

to:

Outside North America, though, the Crash made little impact. In Europe, eight-bit 8-bit home microcomputers (predominantly the Sinclair UsefulNotes/ZXSpectrum and the [=C64=]) already dominated the gaming market. An outrageous number of one-person coders wrote and released games for the far cheaper tape-distribution system, which helped those machines flourish and become the backbone of Europe's gaming industry for the next decade (this is also why the NES and Master System took a ''lot'' longer to catch on in the UK than they might have). These "bedroom coders" received status labels ranging from "cult hero" (Jeff Minter, Matthew Smith et al) to "legend" ([[VideoGame/{{Elite}} Bell and Braben]], the Oliver Twins) from their fans - but that didn't prevent a number of talented developers from making enough stupid decisions to snatch defeat from the jaws of victory (Imagine Software Software; see [[http://worldofstuart.excellentcontent.com/bruceworld/ here]] for info, with a big example of an OrwellianEditor as a bonus). Even with the missteps, the European gaming industry remained solid. (Nevertheless, a similar crash due to market saturation affected the home computer ''hardware'' market in the UK in 1984, causing a lot of the less popular machines like the Dragon 32 and Jupiter Ace to disappear entirely and causing Sinclair and Acorn to be taken over by Amstrad and Olivetti respectively).

respectively.)

The Crash had little discernible effect on the Japanese market, either. Though the home of a massive arcade base that grew out of Pachinko parlors and Mahjong dens, Japan didn't adopt home gaming consoles at first; first: people deemed American imports as curiosities at best. The massive discounts at which Japan forced people to sell computer technology after the Crash provided the perfect storm for domestic development - and the release of the [[UsefulNotes/NintendoEntertainmentSystem Famicom]] console, the {{UsefulNotes/MSX}} computer computer, and the [[UsefulNotes/OtherSegaSystems SG-1000]] in 1983 didn't hurt, either. The Famicom and the MSX systems dominated the Japanese gaming industry for the rest of the decade, though the latter would soon fall to increased PC competition. (Near the start of 1983, Atari had entered into the early stages of negotiating rights for the Famicom's US release. The Crash eventually ended those plans, and it later came out that Atari never had the capital to buy the Famicom for the US. They were just hoping to tie up Nintendo with red tape for as long as possible.)



The crazy idea proved CrazyEnoughToWork and it ushered in [[UsefulNotes/The8bitEraOfConsoleVideoGames a new era of gaming]] as a result.

to:

The crazy idea proved CrazyEnoughToWork - and it ushered in [[UsefulNotes/The8bitEraOfConsoleVideoGames a new era of gaming]] as a result.
result.


The Crash had little discernible effect on the Japanese market, either. Though the home of a massive arcade base that grew out of Pachinko parlors and Mahjong dens, Japan didn't adopt home gaming consoles at first; people deemed American imports as curiosities at best. The massive discounts at which Japan forced people to sell computer technology after the Crash provided the perfect storm for domestic development and the release of the [[UsefulNotes/NintendoEntertainmentSystem Famicom]] console, the {{UsefulNotes/MSX}} computer and the [[UsefulNotes/OtherSegaSystems SG-1000]] in 1983 didn't hurt, either. The Famicom and the MSX systems dominated the Japanese gaming industry for the rest of the decade, though the latter would soon fall to increased PC competition. (Near the start of 1983, Atari had entered into the early stages of negotiating rights for the Famicom's US release. The Crash eventually ended those plans, and it later came out that Atari never had the capital to buy the Famicon for the US. They were just hoping to tie up Nintendo with red tape for as long as possible.)

to:

The Crash had little discernible effect on the Japanese market, either. Though the home of a massive arcade base that grew out of Pachinko parlors and Mahjong dens, Japan didn't adopt home gaming consoles at first; people deemed American imports as curiosities at best. The massive discounts at which Japan forced people to sell computer technology after the Crash provided the perfect storm for domestic development and the release of the [[UsefulNotes/NintendoEntertainmentSystem Famicom]] console, the {{UsefulNotes/MSX}} computer and the [[UsefulNotes/OtherSegaSystems SG-1000]] in 1983 didn't hurt, either. The Famicom and the MSX systems dominated the Japanese gaming industry for the rest of the decade, though the latter would soon fall to increased PC competition. (Near the start of 1983, Atari had entered into the early stages of negotiating rights for the Famicom's US release. The Crash eventually ended those plans, and it later came out that Atari never had the capital to buy the Famicon Famicom for the US. They were just hoping to tie up Nintendo with red tape for as long as possible.)


* A glut of companies [[FollowTheLeader attempting to cash in on Atari's success]] gave consumers too many choices which meant no one system could succeed in the long term because very few consumers would buy more than one. The glut of home systems included (amongst others) the Bally Astrocade, UsefulNotes/{{Colecovision}}, Coleco Gemini, Emerson Arcadia 2001, UsefulNotes/MagnavoxOdyssey and UsefulNotes/{{Odyssey 2}}, Creator/{{Mattel}} UsefulNotes/{{Intellivision}}, Vectrex, Sears Tele-Games [[note]](a house brand under which the department store chain sold the Atari 2600 and the Intellivision; many of the games for both were also sold under the "Tele-Games" brand at Sears)[[/note]], and Fairchild Channel F-System II. Many of these featured indistinguishable libraries in part because Atari, Coleco, and Mattel released games for each other's consoles.[[note]]The current trope image shows the exact problem left to consumers looking to determine just what system to buy.[[/note]] Consumers largely waited to see which console dominated and by the time everyone figured out that nobody would, companies had started going out of business.

to:

* A glut of companies [[FollowTheLeader attempting to cash in on Atari's success]] gave consumers too many choices which meant no one system could succeed in the long term because very few consumers would buy more than one. The glut of home systems included (amongst others) the Bally Astrocade, UsefulNotes/{{Colecovision}}, Coleco Gemini, Emerson Arcadia 2001, UsefulNotes/MagnavoxOdyssey and UsefulNotes/{{Odyssey 2}}, Creator/{{Mattel}} UsefulNotes/{{Intellivision}}, Vectrex, Sears Tele-Games [[note]](a Tele-Games, [[note]]A house brand under which the department store chain sold the Atari 2600 and the Intellivision; many of the games for both were also sold under the "Tele-Games" brand at Sears)[[/note]], Sears[[/note]] and Fairchild Channel F-System II. Many of these featured indistinguishable libraries in part because Atari, Coleco, and Mattel released games for each other's consoles.[[note]]The current trope image shows the exact problem left to consumers looking to determine just what system to buy.[[/note]] Consumers largely waited to see which console dominated and by the time everyone figured out that nobody would, companies had started going out of business.


So, what happened? The story of '''''The Great Video Game Crash of 1983''''' truly begins with the downfall of Creator/{{Atari}}, a company forever linked to the Crash:

* Atari refused to give game designers authorial credit or royalty for their work. That led to a culture of dissent where many of its programmers [[StartMyOwn started their own companies]] to make games for the 2600 (of which the most successful is Creator/{{Activision}}). Atari lost its legal attempts to prevent the use of its cartridge format, which allowed the most creative people in the industry to directly compete with Atari's own efforts.
* Atari's business strategy--sell its consoles as cheaply as possible while relying on game sales for its profit margin--made the situation worse. The strategy worked when Atari had a home-market monopoly on ''VideoGame/SpaceInvaders'' and ''VideoGame/{{Asteroids}}'', but when competing companies produced either better or cheaper-yet-comparable work, Atari's profits suffered.
* The company produced a number of overhyped but underdone games in late 1982, including the home port of ''VideoGame/PacMan'' and [[VideoGame/ETTheExtraTerrestrial the adaptation of blockbuster film]] ''Film/ETTheExtraTerrestrial''. Those two games, both ChristmasRushed, soon earned a reputation as [[Horrible/VideoGames two of the worst games ever made]]. Atari also overproduced copies of these two (and many others) in the hopes that they would become [[KillerApp system-sellers]]. While initial sales were brisk - indeed, record-breaking in the case of ''Pac-Man'' - word quickly spread of their poor quality, and the sheer volume in which the cartridges were produced negated positive sales figures. Stores either returned the unsellable products in droves or relegated them to clearance sections. The situation was so bad [[http://en.wikipedia.org/wiki/Atari_video_game_burial Atari ultimately took millions of dollars' worth of worthless cartridges (together with defective consoles and accessories) and buried them all in a landfill in Alamogordo, New Mexico.]]

to:

So, what happened? The story of '''''The the Great Video Game Crash of 1983''''' 1983 truly begins with the downfall of Creator/{{Atari}}, a company forever linked to the Crash:

* Atari refused to give game designers authorial credit or royalty for their work. That led to a culture of dissent where many of its programmers [[StartMyOwn started their own companies]] to make games for the 2600 (of 2600, of which the most successful is Creator/{{Activision}}).Creator/{{Activision}}. Atari lost its legal attempts to prevent the use of its cartridge format, which allowed the most creative people in the industry to directly compete with Atari's own efforts.
* Atari's business strategy--sell strategy, sell its consoles as cheaply as possible while relying on game sales for its profit margin--made margin, made the situation worse. The strategy worked when Atari had a home-market monopoly on ''VideoGame/SpaceInvaders'' and ''VideoGame/{{Asteroids}}'', but when competing companies produced either better or cheaper-yet-comparable work, Atari's profits suffered.
* The company produced a number of overhyped but underdone games in late 1982, including the home port of ''VideoGame/PacMan'' and [[VideoGame/ETTheExtraTerrestrial the adaptation of blockbuster film]] ''Film/ETTheExtraTerrestrial''. Those two games, both ChristmasRushed, soon earned a reputation as [[Horrible/VideoGames two of the worst games ever made]]. Atari also overproduced copies of these two (and many others) in the hopes that they would become [[KillerApp system-sellers]].system sellers]]. While initial sales were brisk - indeed, record-breaking in the case of ''Pac-Man'' - word quickly spread of their poor quality, and the sheer volume in which the cartridges were produced negated positive sales figures. Stores either returned the unsellable products in droves or relegated them to clearance sections. The situation was so bad [[http://en.wikipedia.org/wiki/Atari_video_game_burial Atari ultimately took millions of dollars' worth of worthless cartridges (together with defective consoles and accessories) and buried them all in a landfill in Alamogordo, New Mexico.]]



* December 7, 1982 is the closest thing the gaming industry has for a "Black Tuesday": during a shareholder meeting, Atari projected a 10-15% profit increase--way below the 50% people predicted Atari would announce. The stock of Warner Communications (Atari's parent company) dropped 33% on the next day, and a mini-scandal erupted when people discovered that the president of Atari had [[WhiteCollarCrime sold 5,000 shares of the company]] only a half-hour before he made that fateful announcement.[[note]]The president, Ray Kassar, claimed his sale of stock had nothing to with the Warner Communications announcement (he needed the money for an investment opportunity), and that the 5,000 shares he sold was only about 1% of his total holdings; he claimed "If I was really bailing out, I would have sold hundreds of thousands of WC, not 5000 shares." He also noted the SEC investigated and found no wrongdoing, but by then the scandal had caused its damage (Source: Steven L. Kent, The Ultimate History of Videogames).[[/note]]

to:

* December 7, 1982 is the closest thing the gaming industry has for a "Black Tuesday": during a shareholder meeting, Atari projected a 10-15% profit increase--way below the 50% people predicted Atari would announce. The stock of Warner Communications (Atari's Communications, Atari's parent company) company, dropped 33% on the next day, and a mini-scandal erupted when people discovered that the president of Atari had [[WhiteCollarCrime sold 5,000 shares of the company]] only a half-hour before he made that fateful announcement.[[note]]The president, Ray Kassar, claimed his sale of stock had nothing to with the Warner Communications announcement (he needed the money for an investment opportunity), and that the 5,000 shares he sold was only about 1% of his total holdings; he claimed "If I was really bailing out, I would have sold hundreds of thousands of WC, not 5000 shares." He also noted the SEC investigated and found no wrongdoing, but by then the scandal had caused its damage (Source: Steven L. Kent, The Ultimate History of Videogames).damage.[[/note]]



* A glut of companies [[FollowTheLeader attempting to cash in on Atari's success]] gave consumers too many choices which meant no one system could succeed in the long term because very few consumers would buy more than one. The glut of home systems included (amongst others) the Bally Astrocade, UsefulNotes/{{Colecovision}}, Coleco Gemini, Emerson Arcadia 2001, UsefulNotes/MagnavoxOdyssey and UsefulNotes/{{Odyssey 2}}, Creator/{{Mattel}} UsefulNotes/{{Intellivision}}, Vectrex, Sears Tele-Games [[note]](a house brand under which the department store chain sold the Atari 2600 and the Intellivision; many of the games for both were also sold under the "Tele-Games" brand at Sears)[[/note]], and Fairchild Channel F-System II. Many of these featured indistinguishable libraries in part because Atari, Coleco, and Mattel released games for each other's consoles. (The current trope image shows the exact problem left to consumers looking to determine just what system to buy.) Consumers largely waited to see which console dominated and by the time everyone figured out that nobody would, companies had started going out of business.

to:

* A glut of companies [[FollowTheLeader attempting to cash in on Atari's success]] gave consumers too many choices which meant no one system could succeed in the long term because very few consumers would buy more than one. The glut of home systems included (amongst others) the Bally Astrocade, UsefulNotes/{{Colecovision}}, Coleco Gemini, Emerson Arcadia 2001, UsefulNotes/MagnavoxOdyssey and UsefulNotes/{{Odyssey 2}}, Creator/{{Mattel}} UsefulNotes/{{Intellivision}}, Vectrex, Sears Tele-Games [[note]](a house brand under which the department store chain sold the Atari 2600 and the Intellivision; many of the games for both were also sold under the "Tele-Games" brand at Sears)[[/note]], and Fairchild Channel F-System II. Many of these featured indistinguishable libraries in part because Atari, Coleco, and Mattel released games for each other's consoles. (The [[note]]The current trope image shows the exact problem left to consumers looking to determine just what system to buy.) [[/note]] Consumers largely waited to see which console dominated and by the time everyone figured out that nobody would, companies had started going out of business.

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