The Home Video Game Industry Essay

741 Words Jan 27th, 2015 3 Pages
Atari enjoyed early success but the growth of the home video game industry came to an abrupt halt in 1983. The underlying cause was an inability on the part of Atari to control the very market it created. Atari’s flagship console, the VCS 2600, lacked any sort of security mechanism to lock out unwanted developers, which also hindered the company’s ability to collect royalties on these titles. More importantly, the market was flooded by over “1,000 games of highly variable quality.” Unable to gain any traction, these independent distributors quickly began to fall while consequentially reducing prices to all-time lows. This had the effect of reducing prices across the industry as a whole as well as the demand for consoles in general, resulting in an operating loss of $539 million for Atari in 1983. Nintendo emerged as a key player with the launch of the NES in the American market in 1985. Learning from the mistakes of Atari, NES cartridges were equipped with an authentication chip which allowed Nintendo to effectively control the quality of games released for its platform and ensure the collection of royalties. Additionally, Nintendo took a different approach to game development. As opposed to releasing a wide array of games, Nintendo focused on developing “one or two hit games per year.” It recognized the value of creating game “franchises;” titles Super Mario Brothers and the Legend of Zelda would go on to serve as cornerstones of Nintendo’s gaming platform for years to…

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