They called it a fever.
In the early 1980s, arcade games were huge: a golden era kickstarted by Space Invaders,
and held aloft by hits like Pac-Man, Galaga and Donkey Kong.
Players were keen to fill coinboxes, and the market obliged: video games were big business.
Atari were the vanguard of the industry, backed by the financial might of Warner and dominant
in the home console market.
The VCS, later known as the 2600, was the standard: with the biggest games and aggressive
marketing, its sales performance was stellar.
Atari couldn't manufacture enough cartridges to meet demand: a license to print money,
retailers commited to sales a year in advance.
But where there's gold, there's a rush.
Atari had no shortage of rivals: Mattel's Intellivision; Fairchild Channel F; Bally
Astrocade; ColecoVision; Vectrex; and the Magnavox Odyssey².
Worse still, with no control over cartridge publishing, 3rd party games started to appear
on the market.
Activision had the talent to deliver hit titles like Pitfall, River Raid - and Kaboom! - but
they were joined by a cavalcade of games of more questionable quality.
During 1982, the total number of games for the system doubled.
In 1983, they doubled again.
Shelf space was stretched thin - and per-game revenue raced to the bottom.
Atari weren't concerned. They were in the lead.
Millions of dollars spent on exclusive licenses, tie-ins and massive marketing budgets - the
more they spent, the more they earned.
The games themselves didn't matter.
Pac-Man was the hottest coin-op of the era - and Atari had the exclusive console rights.
However, with a cruel time budget and the limited hardware of the 2600, the final product
was disappointing: crude graphics, grating sound and flickering ghosts.
The expectation of authentic arcade action fell short.
In the run up to Christmas 1982, Pac-Man was joined by two other lackluster blockbusters:
Raiders of the Lost Ark, written off as an inferior version of Pitfall! - and E.T: the
Extra Terrestrial.
ET is often cited as a reason for the crash: 'the worst game of all time' - but it was
just a mediocre tie-in that was supposed to be an easy cash-grab.
Never the cause: just a symptom.
A few disappointing games aren't enough to sink an industry - but when marketing promise
fails to deliver, a creeping realisation emerged.
Everybody knew it.
The Atari was obsolete.
A cold 1982 was coming to an end.
With no warning, Warner announced earnings for the last quarter: and it wasn't good news.
The systems just weren't selling. Unsold cartridges were being returned from stores in droves.
Instead of meeting their ambitious growth predictions, revenue had dropped 50 percent.
Stock prices plunged and a panic hit Wall Street. Confidence in the nascent industry
evaporated.
Total losses for the year stacked up to half a billion dollars.
No amount of marketing could save Atari from the truth: it was game over.
The upstart company originally driven by curiosity was torn apart by corporate greed, and a refusal
to innovate - rapid growth: at any price.
Where Atari led, their rivals followed - for better or for worse.
The Intellivision brand was liquidated, Coleco and Magnavox both left the games industry;
and a plethora of clones were quietly discontinued.
Atari was sold for a song to Commodore's Jack Tramiel: games were consigned to clearance
bins and shelf space reallocated in favour of hotter trends: Cabbage Patch Kids, Transformers,
He-Man, Care Bears.
The video game fad was over.
Dead and buried.
Gone -
but not forgotten.
America wasn't the only market for video games - nor were consoles the only option.
In Europe, 8-bit microcomputers had taken hold: the BBC Micro, Commodore 64 and ZX Spectrum.
For those playing Manic Miner, Atic Atac or Elite - it was like the crash never happened.
Meanwhile in Japan, their console market was just taking off - with Nintendo and SEGA releasing
their first machines.
Atari were in talks with Nintendo to distribute their console in America - but in light of
their trouble, Nintendo decided to take control.
In 1985, the NES arrived in the USA - and defined the next generation.
In the years that followed, video games saw a return to best-seller lists - and it's mostly
been plain sailing ever since.
But what about today?
Could it ever happen again?
Perhaps it already has.
Whatever happened to skateboarding games? 3D platformers? Real time strategy? World
War 2 shooters? Motion controls?
What's going to happen to block-building games? Open world action-adventure? Early access
survival sandboxes?
What's popular today won't remain forever.
Trend follows trend - and while those who pin their hopes on a single success might
suffer, the industry is broader and more robust than ever.
The truth is - video games never died in 1983.
They just respawned.
Thanks for watching - and until next time, farewell.