Death of a Dream

Posted by E

Monday, February 18, 2008

In 1982 the video game industry started stagnating. Though production was still high and multitudinous games were still being released, a malaise spread among the consumer base, complacency borne by the excess of games and consoles available coupled with a general low quality of game play and lack of innovation.

What had until recently seemed exciting and novel had now become commonplace and droll. And the video game industry, riding high on its horse and unaware of the trends that would later come to define it nearly disappeared from the American conscience and relegated itself to obscurity.

Many factors bore responsibility for the ultimate crash of the industry and many companies paid the price for their arrogance. Riding atop the wave of popularity and goodwill that they had generated, major players such as Atari were soon to be crushed into near non-existence.

Atari was founded in 1972 as Syzygy, an engineering firm. After discovering that another company was using that name, they quickly switched to Atari, a term from the Japanese board game Go, which founder Nolan Bushnell was quite fond of. After hiring engineer Al Alcorn, Atari went on to create Pong and singlehandedly brought video gaming into the American vernacular. It should be noted that Pong was initially created by Ralph Baer, father of the Odyssey home console. Nolan Bushnell played a demonstration of it in 1972 and brought it to market before Baer was able to.

With the advent of Pong, people became interested in playing electronic games and almost overnight arcades began to pop up all over the American landscape. These arcades would house sometimes hundreds of machines and quickly became popular hangouts for American youths.

After Pong opened the floodgates, the industry exploded. Before long companies such as Taito, Namco, Nintendo, and Data East were bringing to life their ideas and soon new genres and means of entertainment presented themselves. Atari recognized the market for a home console and set to work creating the Video Computer System, later to be known as the Atari 2600.

The 2600 in the early 80's was synonymous with gaming. You didn't get together to "play video games", you went to your friend's house to "play Atari". And play we did. After licensing Space Invaders from Taito for their console, Atari grossed more than $2 billion in profits.

However, internal disputes ran rampant between upper management and the programmers, largely due to the lack of recognition for their work and the lack of royalties on the games they made. This dispute led to an exodus of Atari employees and the founding of Activision.

Atari was not pleased by Activision releasing cartridges for their system and ultimately went to court in an attempt to block third party games. This failed and soon the third party developers began to supersede Atari in popularity. These troubles, coupled with the emergence of several other companies looking to cash in on the video game craze began a slow saturation of the market.

By 1982 several consoles were available: the Atari 2600, the ColecoVision, Intellivision, Bally Astrocade, and Vectrex, just to name a few. With this large influx of systems it became more and more difficult for companies to find shelf space in stores to peddle their wares. Games which were previously selling for $35 began to sell for $5 as stores struggled to make way for the constant stream of inventory.

Atari's first major faltering came with the release of Pac-Man for the 2600. The highly anticipated port of this ubiquitous arcade game was considered subpar and poorly executed. Couple the low quality of this release with the inexplicable decision on Atari's part to manufacture more cartridges of Pac-Man than there were Atari systems on the market and the crashing of the video game wave became all the more inevitable.

The final nail in Atari's coffin and the symbol for many of the ultimate crash of the industry was the release of E.T. The film was expected to be a massive success and Atari, banking on this popularity rushed a game to market that is widely considered to be one of the worst games ever made.

Designed by Howard Scott Warshaw, who was given a mere five weeks to conceptualize, create, test and have the game ready to sell, E.T. was doomed to failure from the start. Atari was blind to this, arrogantly assuming that because it was E.T., it would sell by the truckloads.

And truckloads it ended up being for E.T. Only, these were not truckloads of cartridges being shipped to customers. No, these truckloads of cartridges ended up destined for a landfill in New Mexico in order to dump off excess inventory.

With poorly executed games flooding the market, too many consoles for consumers to keep up with, and a general lack of technological advancement since the 2600's inception in 1976, the video game industry came crashing to a halt in 1983. Almost overnight companies bankrupted and pulled out of the gaming business. Former giants like Atari found themselves being sold off, liquidated or closing shop.

Analysts predicted that gaming had been a fad and that the age of electronic entertainment was drawing to a close. The arcades began to close, the fervor began to die and the end drew ever nearer. And the end would have arrived shortly, had it not been for the machinations of a playing card company named Nintendo...