The Crash of 1984

Like a shot to the heart, consumers in 1984 got turned onto home computers and got turned off of video game consoles. Why did this happen?

There were several reasons for the crash. But before I delve into why it happened, let's discuss what the crash really was.

In 1984, consumers just stopped buying video game consoles. I'm not talking about a slow thing, it seemingly happened overnight. Suddenly people started saying, "Why should I spend $150 for videogame-x when I can spend $200 on computer-y, and my kids could learn on it! I could do home budgeting, it will be heaven."

In 1983, I got my first home computer--a TI 99/4a. My parents were THRILLED because they could buy a cheap $4.95 magazine per month and I'd have 4 or 5 new programs to play with. Granted, I'd have to type it in, but it would save money. My parents weren't the only ones with this idea.

So the crash happened. Why? The home computer idea was part of it, but not all. By late-1983, every company in existence had decided they could make money in the video game marketplace. Chuck Wagon dog food had contracted with Spectravideo to produce Chase the Chuck Wagon, to be a promotional premium to make people purchase the dog food. Kool Aid contracted with Mattel's M-Network division to produce Kool Aid Man for both Intellivision and Atari 2600, again offered as a premium. These are just two examples of how non-electronic related companies were trying to get into the act. As a third example, even Quaker Oats had a videogame division.

Most of these games had one thing in common--they were horrific games. When you play them now, it's quite obvious that these companies decided it didn't matter what the quality of a video game was, people would buy it simply because it was a video game.

Eventually, the public just gave up. BUT...

When Nintendo released the NES, they brought the industry back to life, and it has been this way since 1986. Will there be another crash? Many people say it could never happen again, that the companies have safeguards against it.

But do they really...


This document updated 3-17-96, ©1996 by Greg Chance.