Rewind: Putting the 1983 Video Game Crash in Perspective

The 1983 video game crash. A sinister sentence for gamers who lived the event or those who recently saw tons of Atari 2600 E.T. cartridges being dug-up from decades in landfill. What was this crash, and did it really almost destroy gaming?

Figure 1: A fictionalised 1980s Atari game designer

In 1982, the home console market looked pretty solid in the US: sales totalled $3.2 billion, and 25% of US households owned a console. Atari (figure 1) and its 10,000-strong workforce represented 70% of this market share (The Dot Eaters, 2017). However, things were perhaps a little *too* good, leading to an overall saturation of the market. In 1982 alone five different consoles were released (Video Game Console Library, 2016), adding to the growing list of hardware released by various manufacturers, all eager to carve their share of this profitable market. Wider acceptance of third party game development and fast turnarounds on game production lowered overall production quality (Oxford, 2011), allowing the market to become saturated both with consoles… and with poor quality games. This is famously illustrated by the game “E.T.” for the Atari 2600, of which 4 million produced only 1 million was sold; the game cartridges ended up in landfill, and the gaming industry was forced to its knees, with revenues dropping 97% (World Public Library, no date).

Was gaming almost eradicated as a hobby and industry, however? Hardly.

Figure 2: The NES arrives in the US

Firstly, it is worth noting that this event is also sometimes called “the American video game crash”. Indeed, this crash, while having an impact on the industry worldwide, did not have the same disastrous consequences in every country. Japan, for example referred to this event as the “Atari Crash” (World Public Library, no date), not as a global disaster. Nintendo, equally undeterred by this so-called American crash, continued production on their first home console during this period and released the Famicom in Japan on July 15th 1983; it would later be released in the US and prove to be an enduring success in both countries (figure 2).

There is an even bigger trend to consider when discussing the 1983 video game crash: home computers. Technology was advancing at a fast pace in the early 1980s, making computing increasingly cheap, small, and powerful, and this improvement created the perfect environment for the rise of home computers. Not only could these machines be used for work or programming, but they could also be used for gaming. Testament to their versatility, their success endured throughout, and long after, the video game crash.

Figure 3: A fictionalised 1980s programmer at work on the Commodore 64

The UK had its own gaming sensation with the ZX Spectrum, an inexpensive home computer with gaming capability and developed by Sinclair Research Ltd. How would this 1982 console fare in the doom and gloom of 1983? Very well: in the run-up to Christmas 1983, over 50k machines were sold every month in the UK (Retroinspection: Sinclair ZX Spectrum, 2015, p11). On the other side of the pond, and in the very land for the video game crash, the Commodore 64 was released in August 1982. The Commodore 64’s success was such that it eventually became the largest-selling console in history, with an estimated 20 to 30 million sales (Commodore Computers, 2016).

Was the 1983 video game crash as disastrous as it sounds? The answer is yes, but only for part of the industry. Did the industry truly learn the lesson? This is a question for another day…


Commodore Computers (2016) Commodore 64 – The Best Selling Computer In History [online]. Available at: computer-in-history/ (Accessed 29 November 2016)

Oxford, N. (2011) Ten Facts about the Great Video Game Crash of ’83 [online]. Available at: (Accessed 22 February 2017)

Retroinspection: Sinclair ZX Spectrum. (2015). Retro Gamer, (The ZX Spectrum Book).

The Dot Eaters (2017) The Great Video Game Crash – End Game [online]. Available at: (Accessed 22 February 2017)

Video Game Console Library (2016) History of the Video Game Console : 1980s [online]. Available at: (Accessed 22 February 2017)

World Public Library (no date) North American video game crash of 1983 [online]. Available at: (Accessed 29 November 2016)


Halt and Catch Fire – Computers (2014) [image]. Available at: (Accessed 22 February 2017)

Halt and Catch Fire – Atari (2016) [image]. Available at: (Accessed 22 February 2017)

Halt and Catch Fire – NES (2016) [image]. Available at: (Accessed 22 February 2017)

Halt and Catch Fire – Cameron (2016) [image]. Available at:×04-recap-firing-lines/ (Accessed 22 February 2017)

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