The Fall of the Atari Empire — The Great Video Game Crash of 1983,One of the most harrowing mo

The Fall of the Atari Empire — The Great Video Game Crash of 1983,One of the most harrowing moments in video game history, the Great Video Game Crash of 1983 was an apocalyptic event that turned the video game industry upside down forever.  The mighty were brought low, the low became mighty, and an mustachioed Italian plummer would become a hit cultural icon.  By 1983, the American company Atari dominated the video game market with its classic Atari 2600.  However a number of bad business decisions combined with uncontrollable market forces would spell doom for Atari Inc.  The fall of the Atari empire in 1983 could be likened to the fall of the Roman Empire.  First and foremost, it was devastating and chaotic.  In 1983 sales of video games from all consoles peaked at $3.2 billion.  By 1985, what remained of the video game industry only claimed sales of $100 million, a 97% dropped in revenues.  However, the Crash of 83 revolutionized video games, giving birth to the Nintendo Entertainment System (NES), and shifting the market from an American dominated industry into a Japanese dominated industry.  So how did this happen?  What brought mighty Atari to its knees?Firstly, 1982-83 were bad years for Atari in terms of sales due to gimmicky promotions and bad business decisions. First, Atari produced a 2600 version of the arcade game Pacman.  While the Atari 2600 version was not as good as the arcade version, Atari managed to sell 7 million copies, the best selling 2600 game in history.  While this may seem like a good thing, in reality it was a disaster, as Atari had overestimated the market, producing 12 million copies, leaving 5 million unsold. In a cruel irony, Atari’s best selling video game would net a terrible loss. Then, Atari released ET: The Extraterrestrial a video game based on the Steven Spielberg blockbuster of the same name.  Atari spent $25 million to obtain copyrights, then spent another $100 million to market and produce the new video game.  Creation of the game was over-rushed, with developers only given 5 weeks to create a hit.  What resulted was a turd.  Now considered one of the worst video games in human history.   Atari had produced 5 million copies, of which 1.5 million sold, of which around half were returned.  Atari only netted $25 million in sales from ET, resulting in a $100 million dollar loss. Finally in 1983, Atari released the Atari 5200 (bottom picture).  With better graphics and more advanced technology, the Atari 5200 was supposed to a big seller for the company.  However, Atari mostly released the same old titles from the older 2600.  Often, such games had similar graphics, but could not be interchanged with the 2600. It also had a shitty controller. As a result, few warmed up to the Atari 5200, which was another flop added to Atari’s woes.  After only two years of production the Atari 5200 was discontinued.Finally, while Atari was top dog, it was not the only video game console out there.  1983 culminated with the production of a number of competing game consoles which are all but forgotten in gamer history, names like the Bally Astrocade, the ColecoVision, the Coleco Gemini, the Emerson Arcadia 2001, the Fairchild Channel F System II, the Magnavox Odyssey 2, the Mattel Intellivision and Intellivision II, the Sears Tele-Games systems, the Tandyvision, and the Vectrex.  The video game market was becoming over-saturated with competition, and due to Atari’s and other companies overproduction of video games, the market was over-saturated with games. The rise of the home computer only made this situation worse. Atari itself was partly to blame due to poor employee relations.  Atari neither payed its employees based on royalties of sales, nor even listed their names in the credits.  As a result, many Atari game developers left the company to form their own firms, which produced unlicensed Atari games. One of those most prosperous of these break away companies was Activision, the first independent video game publisher and producer of the hit Call of Duty series. Atari tried to stop these companies through the courts, but chose the settle, thus losing control of their publishing rights.  The net result of all these problems compounded resulted in the crash of the Atari Inc. and a crash of the video game industry.  In 1983 alone, Atari posted a loss of $500 million. As for its surplus unsold video games; Atari buried them in a landfill near Alamogordo, New Mexico.  By 1984, Atari was bankrupt, and was forced to sell out to Jack Tramiel, owner and founder of Commodore International.  Most of Atari’s competitors went out of business.  For the next few decades Atari would produce a number of unpopular video game consoles, going into bankruptcy and being bought out by a number of corporations.  Atari’s latest bankruptcy occurred in 2013.  Currently Atari is changing it business strategy, becoming involved in the casino industry, especially online social casinos. -- source link

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