Beginning in 1972, the home video game craze took the United States by storm. With tons of companies producing increasingly sophisticated machines, it looked like home gaming was the wave of the future -- so what went wrong? Tune in and learn more.
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Brought to you by the reinvented two thousand twelve camera. It's ready. Are you get in touch with technology? With tech style from how stuff works dot com. Hello again, everyone, welcome to check stuff. My name is Chris Poulette and I am an editor here at how stuff works dot Com. Sitting across from me, as usual, is senior writer Jonathan Strickland on the other side of the screen. It all looks so easy. That's a quote. Never mind, I said, I wasn't gonna say where it was farm anymore, so people have to tell me where it's from. Uh. So, today we're gonna talk about the great video game crash, which really we should specify happened in North America. Yes, and we're not talking about the video game crash that we of arcade games. We're talking specifically of the home market. Yes. So in order to understand this, we really have to uh to think back to the origin of the video game market the home market. Um, because it doesn't really make sense to talk about the crash until you find out how you got to where you were in the first place. Right, True enough, and honestly, the the arcade game market and the home market started roughly the same time they were growing out of um you know some work that different computer programmers were doing in the nineteen sixties, even a little bit earlier. But it's kind of hard to say that it was really becoming a video game of any kind of sort until it got to the late sixties and the early seventies is when you saw the first arcade games and first home video games, and I'm talking early seventies nine. Nineteen seventy two is when we saw the very first home video game console in the North American market, and it was a Magna Vox Odyssey. Man, what a machine that was. Yeah, the original Odyssey. Now there were lots and lots of future Odyssey consoles, which well, I'll chat about briefly. I've got a kind of timeline where i can talk about some of the consoles that came out and the big years in video game the home video game market. But nineteen seventy two is probably the biggest year because it's the first one. Um So you had the Odyssey, which was designed by an engineer named Ralph Bear, and he had been working on the prototype for this since the late sixties, like you had mentioned, and uh, it's interesting. It was um it was powered by batteries. It was not something that you plugged into a wall at that point, and it was analog not digital, so pretty lot. Also, no sound in the earliest console there was no You didn't get audio. You just had a video output. And the video output, of course, was your television. You had to hook it up to a TV. It didn't have its own screen or anything like that. You know what I have to say about that? What's that? Because there was no sounds really funny. So in nineteen seventy, thank you for the pity there, You're welcome. In ninety three, the the Pong coin operated game was starting to make a splash. That's right. So Pong is like the first like major breakthrough arcade game, uh to hit the arcades, well not even arcades at that point, but bars and and things like that. Yeah. Computer Space was the very first coin operated game. Yeah but uh, and and that was done Nolan Bushnell. Those of you longtime listeners or computer game fans probably know who Nolan Bushnell was. But yeah, Pong was actually the second of those games. Yeah. So in nineteen Sears began to sell a Pong home console. I remember that now I should point out I should have said this for the Odyssey as well. These home consoles had games hard coded into them. Yeah, we're talking the chips actually very similar to arcade games. Yes, the chips inside them would tell you what they would do. So I mean you're not removing a cartridge, right, you know, a CD or DVD which hadn't been invented yet. You couldn't even switch a chip out like with with some arcade machines you can switch out rams, so a RAM would be what essentially has the game's programming on it, And some arcade consoles, you know, you can switch one ROM out for another and use the same cabinet to house different games. So if one game is not getting a lot of traffic in an arcade, you could swap out the ROM for and put in a new game. Uh, you couldn't do that with these home consoles. You're stuck with whatever games they were able to put on there. And so a lot of them were variations of pong um. You know, like you might have pong and then you might have handball, which is really just a slightly the paddles are slightly smaller and it moves faster. Um and basketball, in which case everything was was um horizontally oriented rather than vertically oriented, but it was still using the same sort of mechanics as pong. Uh. It was really just variations on that for a while. So se you get the Odyssey one and two hundred. Uh, this one was kind of funny and that um the the PALNK system that Sears put out in had an on screen scoring system. It would keep track of your score. The Magnavox Odyssey on two hundred did not have an on screen scoring system. It had little plastic markers on the console itself, and you would move your marker up a notch every time you scored a point until whoever reached the you know, whatever the limit was that you had decided, whether that was the top of the notches or all right, we'll play to whoever it gets to five points first. So it's kind of like playing a game of pool. You actually had to physically notate what your score was on the console system. Do I get to throw in a plug for my very first video game system? Go for it? Because it was a clone of all these There were lots and lots of Palm clones, but mine, which I still have is colicos tells to our system that came out in Yes, lots of them did. The fair Child Channel F was out about that same time, which actually that was one of the first ones to ever use cartridges. Yes, in seventy six, you've got the Odyssey three hundred, four hundred, five hundred, Super Pong, Wonder Wizard, and the Calico tell Star. And like you said, the tell Star was one that had hard coded games on it, right, the tell Star, yes did, and it had three So this this is before Kalika Vision. This is not that's not what we're talking about. We're talking about earlier system than that. Yeah, that's the that's the whole thing. When you were talking about the cartridges, Um, we're talking about the rams again, which are hard coded inside. But at least these newer machines gave you a slot from which you could remove a RAM and put a new cartridge in, so then you could play. It was extensible, You could play lots of different games on it. Yeah, So the fair Child Channel F never really took off, but it was the first one to actually start using a cartridge based system. So the next year and seventy seven, uh well started seeing things like the Atari Video Pinball Machine, the Atari Stunt cycle machine. But also there were a couple more to tell Star models that came out, and of course more Odyssey games. What about the r C A Studio series. Uh, there's that as well. But the but in seventy seven a big one hit, probably the big one for the earliest video game market story, which is the Atari VCS, the video computer system, which was actually my very first. The other one was technically my brothers, but you know, I just wanted to plug the tell Star Yeah I had as well. Now this was of course a cartridge based system again, so there were no games pre programmed on the console. Yeah, there was a game packaged with the system though for mine it was Combat, Yes it was mine. For Combat was mine as well. And I'll never forget playing jet versus airplane. Yeah, fun times anyway. So actually that that's going back to you, I'm sorry, I didn't mean going back to your scoring thing. For those of you who have never played an Atari. Um the games and about which we were talking, they came with an instruction book, and and most of the instruction books that at Chari published. There the last couple of pages or last page had a note field so that you could write down your high scores because of course at that point, well maybe not of course, but at that point they didn't have any kind of onboard storage, So so I didn't remember your high scores and you wanted to keep it, keep track of it, you needed to write it down. Yeah. This is also before like at this point, the the video games that you would get in the home market were a lot like the ones in the arcade and that they were usually you know, usually would only play them for short burst because uh, there's no way to save your progress. So there was no point in writing a longer game that would require multiple sessions of play because there was no way to to save and pick up where you left off. I mean, why would you come back and and and just basically leave the machine on for day is as you worked your way through a game because there wasn't any way to store that. There are a lot of people who did that with later systems in particular. Um, well we'll get to those. But so then let's go ahead to seventy eight. We get some more tell Stars because you know, every year has to pass with another tell Star getting Uh, that's when the Odyssey Squared came out or Odyssely to um that actually was a computer and it had basic programming. Uh. Then you also had Colico tell Star Gemini, which was an attenty sud clone that came out in Sight, and the one and only entrigue from uh Bally the Ballet Professional Arcade came out in that year. I remember that too, And do you guys if you listen to our Midway podcast, you know that Bally had purchased Midway. This was the result of Bally Midway working together to create a home arcade system use bitmap graphics. Did not succeed those that one. You know, you may not have ever heard of it because it never really well anywhere. Um, did you want to have anything else to add? For seventy eight before I go to see Okay? Seventy nine you had the Zircon Channel F system to Wow, which was like the fair Child is going back, and then um, the Atari four hundred, yes, which also was really kind of a computer. Yeah. It actually had its own keyboard built into that console and uh, yeah it was. It was meant to be like a kid's computer. Like my first computer was the Atari four hundred and it was also cartridge based. It did have an onboard program which was essentially a notepad program. It was kind of like a very very basic word processor. You should, uh, if you're an old if you're a fan of old computers, I didn't want to say old computer fan. If you're a fan of old computers, you should definitely check out the Atari four and, as Jonathan will mention shortly, the eight hundred, which looked very much like it because they were kind of cool. They had a big door and the top of them to remove and insert cartridges from, so you can actually you know, open it up and plug it in and then close the door back again. Very kind of old school computer style, and had a membrane keyboard, which is real pain and neck to type on. It's not entirely differed from the way the Nintendo had a door where she would flip open and take a cartridge out in a way, no, but it kind of reminds me of the old mainframe style things where we had to open it up to actually mess with it, rather than you know, like the hr vcs, which the slot was just on the top right where dust could get in it. Yes, where you got into the hole let's blow into the cartridge before we put it into the machine, because if dust got in there, if enough dust got in there, it wouldn't work anymore. Another big player hits the scene, which is Mattel's in television. I believe you had one of these. I did have an intelevision, and I had an intelevision long after the heyday of intelevision games had had passed. Well, people are still playing the games now, yeah, but there was no way there were no new games coming out by the time I had. I came into possession of one. I inherited it essentially from a cousin, And yeah, it was a It was a really neat game system. It was I would call it more advanced than the Atari twenty hundred. It still wasn't you know, it wouldn't blow you away or anything, but but the games were a little more sophisticated than the ones you would get on the twenty. Well, I think it directly resulted in Atari's next move, which we'll get into in a moment. Yeah, so that's when we start seeing some more some more interesting machines. We see the Clico vision, another big heavy hitter in television and click a vision kind of battled it out in the early eighties to see who would have video game supremacy, and Attari had a leg up just because it'd been around a little longer than the other two, even though the other two had slightly better graphics and and arguably a better controller, depending on whether or not you felt like you got a couple tunnel from it. Well, it's funny because at this point in home video gaming there was sort of this weird crossover between home computers and home video game systems. Um. Like today you see stuff like the WE and the PlayStation series and the the Xbox series, and they can do things that computers do. But uh, some of these systems, you know, um getting into the Colico Vision, and then Colico also started a system called the Atom, which was supposed to be a computer system, but they were sort of compatible with one another, and you know the R four eight hundred UM and uh, you know they're they're things like that, and having the opportunity to use a keypad, because the Colliquo Vision and the in Television both had a Numeriic keypad on their their controllers, as did the R and so for a while there, I think the manufacturers were all sort of flirting with this idea that you know, maybe creating a system that could do all of the stuff. Um. Unfortunately, uh, that didn't come out in the way I think that they really intended, or you know, none of them, none of these companies were able to capitalize on it. Yeah, a lot of the a lot of the consumers seem to think that these games, these systems were more game systems than computer systems. There was more of a division of the two products in the mind of the average consumer, and it was really hard to bridge that gap. I think because I think what they may have been trying to do, and this is just speculation on my part, is that perhaps they thought if they could embed some computer ability in it, that it might encourage more moms and dads to fork over the cash for a video game system that they could do their taxes on. Yeah, you know, later on it's like, well, you know, and like Kate video game system exactly. But um, but yeah, I mean also, Atari had a leg up on Colico because Atari was a, if you will, a pure play h video game company, whereas Colico stood for Kinnectic Get Leather company. They actually had their roots in a completely different business. Yeah, the games that you play with leather. I've made this joke. I made this exact same joke, so I'm not gonna several times I believe. Yeah, well, I mean on the podcast specifically, I make the joke all the time. In the office. Actually, HR will probably talk to me, no, no, but but yeah, I mean they were they were doing something else for a long time and then got into two Electronics and uh, Colico bet hard and the Callico Vision, right, and getting back to two. So Collico Vision comes out. Also the at comes out, which is essentially the Atari four hundred but without the keyboard. Right. You had the vet trex come out. Look like a little console. I had a little cabinet game. Yeah it actually it actually had its own dedicated screen, so it looked like a miniature arcade machine Kaid Cabinet Sorry, go ahead. And it's also vector based and monochromatic. It was vector based on the Grand Fields better but it was monochromatic. So what they they shipped the game system and the games with overlays. Nice. You put an overlay on the screen and that would simulate color. Very nice. Yeah, groovy. Also, the Emmerson Arcadia two thousand one came out in two as well as the in television two. And uh, we're gonna we're gonna pause the timeline there in two because now we're getting up to the point where the actual crash began to take place. And uh, and there are a lot of different reasons for the crash. One of them we've already established just by doing the timeline. There were lots and lots of competing video game systems out there. Yeah, now we've we've basically been going from two up through the mid eighties, early eighties, about eight five, we're sort of getting this thing and um, that's the whole thing that we're in the third generation of consoles in you know, years, ten years really, I mean because because if you look at the crash, the crash is pretty much eighty three, so you think of as the eleventh year. So home video game market had ten amazing years. But as you were pointing out, three generations within ten years, gets, especially for a new kind of product, is hard for consumers to swallow. Ye, I mean it's at that time it was very difficult to think I need to I'm going to make a two or more investment two hundred dollars in those dollars those years, dollars which more than what you would spend today. So you know, you look at an arcade or a video game console as it comes out today and you're thinking, wow, five hundred dollars, it's a lot of money. Well, if you look at the consoles that first came out in the seventies, uh, they were priced around two hundred dollars, including the twenty hundred um when adjusted for inflation, they might be the same or more than what you will pay for a and like a brand new console in today's market. Yeah, as a matter of fact, I'm trying to look that up as we speak, but while the computer is percolating, since we have weird WiFi in this room. Um yeah, and something else too. I mean, at this point, the home video game industry was just huge, and other people were trying to get into it. A little company starting up you may have heard of, Activision, was fighting desperately to get on the Yeah, let's talk about this. This is where you can lay a lot of the blame for the video game crash on Atari's shoulders. Oh yeah, and here's here's what it boils down to. Ultimately is credit. Video game developers wanted to start getting credit for their work. They were designing these games, and they wanted to be able to have their names attached to the games that they were building. Atari meanwhile, wasn't too keen on that idea. They didn't see any need to do that. They wanted the games to look more like they all essentially were, you know, just from Atari. They didn't want to to differentiate that at all. Yeah, and uh, as a result that that did, I would say that ultimately four is the basis of what formed Activision. Yeah, it was game developers who wanted to be able to create games that they would get credit for, you know, they wouldn't remain anonymous. Um. By the way, according to Will from Alpha, at an average rate of inflation of two point nine one per year, two hundred dollars would be approximately four d four dollars and thirty four cents. So that's three. And remember that the came out in the late seventies, So yeah, we're talking about the early video game systems cost then in purchasing power essentially what they cost today. Yep, and uh, Woll from Alpha was working on that Toy seven debut at the tred two hundred dollars at an average rate of inflation of three point nine three percent per years, seven dollars seventy six cents, so actually more expensive than either the PlayStation three or the Xbox three sixty when they debuted. Yes, and in relative terms. But um, but yeah, I mean there was we talked about I think Warren Robinett in an earlier podcast. Probably he was one of the if I think he was the developer behind the game Adventure, and one of the big things to do back when that game was released was to find what was called a micro dot, which is not a micro dot in a classic sense, um in the spy terms, if you will, but a micro dot. There was a little glowing dot, a couple of pixels. I'm not sure exactly how big it was in terms of pickles pixels pickles pickles. It was about three gherkins wide. Anyway, I know, I know it's right before lunchtime. So anyway, if you could find this dot, you could take your character, which was a square through a wall that normally you wouldn't be able to go through. It was just basically cordoning off part of the game. Yes, this was Easter Eggs podcast. Yes, and you could see the name of the designer, Warren Robinett, and uh, because otherwise you never would have seen it at all. Yeah, it wasn't It wasn't listed down. There weren't credits like like you see when you finish one of these, uh, one of the newer video games, you get a whole listing of all the animators and the story developers and the story boarders anybody else who's worked on the game. And it wasn't just a question of credit, although that was definitely important, big it was also royalties. Yeah, because I mean, without being credited for their work, these developers weren't going to be able to claim royalties on any sales. And uh, that's the that's probably the It's hard for me to say because I wasn't there, but I would guess that that was the main reason why Atari resisted this whole credit thing. They didn't want to pay out royalties to the developers, and um, so it boils down to money. So that ended up make having Uh, these these developers found activision, whether they're developing their own game company. Uh, there's a there was essentially a big restraining order that Atari put on on other game developers saying you can't develop games for our proprietary console. But it never panned out. So that kind of opened the doors for third party developers yep, and that allowed all sorts of games to flood on the market. Now, Activision had some of the uh I liked them a lot. I mean I played laser Blast for hours and hours, and Activision do Pitfall. Activision did do that is like and Mega Mania Pitfall. When I think of great home video games, especially for the Atari, Pitfall has got to be in the top ten. I mean it was a wonderful, amazing game and uh I loved it, and um yeah, so I mean the Activision put out some really good games. Now, the problem was not all third party developers put out games of the quality that Activision was creating. And because those floodgates had opened, where now any third party developer could build a an Atari game and sell it. You know, they didn't have to go through Atari to sell it. They just you know, they had to get their own distribut it or whatever, but they didn't have to ship stuff to Atari. Uh. It meant that anyone who had some programming skill could build um an Atari game, and that led to some pretty crappy games. Well, you know, there were some pretty good developers. Oh no, there were some great developers, but there were some really bad ones. Okay, so we're gonna let's talk about two games that helped perpetuate this crash. So we've already established that part of the problem is that there were a lot of game systems on the market, so consumers had way too much choice in that sense, it was really hard for any one console to to do well apart from like the three big ones Collego, Vision and Television and at UM. So that was one problem. Uh The other problems were things like the the fact that the systems were so expensive, so people didn't want to upgrade every few years because they put in such a huge investment already. And then we had the problem of the the the flood of games hitting the market all at once. Uh two games in particular, really heard Atari specifically, and then by extension, the rest of the video game market. Are you going to too? Are these uh Atari specific games? One of them is pac Man. The adaptation of pac Man, which was such a huge hit in the arcade, was an enormous disappointment when it was brought to the problem was that the timeline to develop the game was very very short. Atari was putting pressure on the developers to get it ready by the holiday season that year. I think this in fact, and uh so, uh the developers have to try and build this game in a fraction of the time they would have used to put it together. So when it launches, it looks hardly anything at all like the pac Man of the arcade games. I mean, the basic concept is the same, and that's it. The graphics were terrible, the sound effects, everything was was dreadful, and so people really got turned off by game. The next year, that's when the granddaddy of all terrible arc home video games, uh came out. And it's one that I've talked about multiple times on this podcast and I'm gonna do it again. It was ET. And you know, I have to say, not everyone agrees with you that ET was the worst game for the but not everyone is as smart as I am. No, that's the that's the whole problem. I mean, I remember, even when the A was very popular, going into, for example, drug stores and seeing huge you know how you go into the imagine most of our listeners probably play some kind of video game. And if you've ever been one of the used video store, video game stores, you see those big baskets and it's like these are five bucks, and they'll be games from five or six years ago. I mean consoles like the PlayStation two. They are still enjoying quite a bit of success, you know, still alling new consoles. Um you know, basically they're going out. You know what, we got thirty of these things here take you know, twenty five of them are gonna stick them in the bend, sell them for five bucks or seven bucks or something like that. Was having that same thing, only a lot of these were it was like straight to video, if you will. A lot of them were going straight into those bins of games that were just reprehensible. Yeah, so you've got you've got a flood of really bad games, You've got expensive hardware that keeps steaming to be upgraded. You've got too many choices on the market. Uh, it was just a recipe for disaster. And around in North America, that's when it all came crashing down. And so uh, you know what also helped was the rise of the personal computer. At personal computers were starting to to have their own set of games that were in a way more sophisticated than the home video games. They were different, you know, they didn't they weren't. They didn't have the same kind of twitch based gameplay that a lot of the home video games did. But they allowed you to do more with those games, and once you were able to do things like save games, that really started to change things. So the home video game market really started to crash in on itself. It imploded to the point where there are famous stories about companies having to dispose of enormous inventories of games, including ET, which if you've heard the tales, where did where did all of those ET cartridges end up? Those cartridges ended up in a public landfill? And I believe it's Arizona. I actually found the story on Snopes. I wanted to find out if it was actually true, if it was a miss myth. I'm sorry it's in New Mexico. Oh it was New Mexico. I thought was Arizona. So yeah, yeah, Alama Gordo, New Mexico. In late September. According to Snopes, um Atari took ET and pac Man and dumped them in a city landfill. Uh rolled over them with steamrollers, so you couldn't play them right than that playable before and covered them with cement. Yeah, it's it's interesting to note that they treated that as if it were toxic waste kind of was considering the amount of lead in them. Yeah, I'm talking about a more like philosophical um but yes, but also that so yeah, anyway, the this is all the stuff that kind of together led to that huge crash, and in America it lasted for about two years. It wouldn't be until the debut of the Nintendo Entertainment System in America, which was before the home video game market started to recover. So for two years, home video game market was pretty much dead. You could you could pick up titles for a fraction of what they once went for as people were trying to stores were trying to get rid of them because no one was making new ones. They just needed to get this stuff out of inventory. So uh, yeah, for about two years, there was no way of getting like a new system or new games. And we're gonna have to probably cut it off here, but I think it might be fun in the future. We'll we'll probably give it some time. But to revisit this and talk about how Nintendo helped usher in a new era of home video game systems and and what it took to bring home video game systems back from the dead because Nintendo had a very specific way of doing things that that really changed the whole paradigm of how video game consoles were marketed and how how third party development was handled. And we'll get into that in a future podcast. I do think it's ironic. I'd like to mention you know how I was talking about how Atari had an advantage over Colco because they actually were a video game company. Well, Nintendo wasn't exactly a video game company when it started either Playing Card Company. Yes, still still game weighted, yes, indeed. Whereas Leather, I have to leave it off there, all right, So I guess it's time for us to wrap this up in leather and we will talk to you guys again soon. Remember you can email us. Our entrance is your tex stuff at how stuff Works dot com. Chris and I will chat with you again once Chris is done crying. If you're a tech stuff and be sure to check us out on Twitter, Text stuff, hs ws R handle, and you can also find us on Facebook at Facebook dot com, slash tech Stuff h s W for more on this and thousands of other topics. Does it How stuff works dot com and be sure to check out the new tech stuff blog now on the House Stuff Works homepage. Brought to you by the reinvented two thousand twelve camera. 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