How can you describe the crash in the video game industry in 1982?
The video game industry was doing better than ever in 1982. It was the industry to be in until it crashed in 1983. The competition started increasing, and newer companies started popping up which led to a demand for more games, which led to games being released at a faster rate to keep up with the competition and that led to poorer quality games. The improvement of home computer systems also began to hurt the video games industry. The biggest hint of a drop in arcade game sales was when Atari held a Coin-Op World Championship which was held in Chicago on October of 1981 which drew only 250 players out of the 10,000 expected. Many new companies couldn’t handle the drop in sales which made them go bankrupt, and distributors ended up with a large amount of unsold inventory.
This wasn’t the first time the industry crashed. There was a crash in 1977 that was similar to the one in 1983 but on a smaller scale. Commercial success in the games industry led to much higher expectations from companies, and that led to competition from newer companies which forced the dropping of prices. Fairchild, Atari, Bally, Coleco, and RCA all produced cartridge-based systems, but none of them caught on immediately. There was also major technological advancements that made the older systems outdated making them useless which led to a lot of unsold inventory in 1978.