The Day Atari Killed Video Games

We are absolutely spoiled rotten by the modern video game industry. Big game publishers can saturate any major or niche market with a smorgasbord of titles with little to no consequence to their total revenue. Less than 30 years ago, a major game publisher tried this same method with disastrous results, causing the video game industry crash of 1983.

I blame Atari almost entirely, and I’m not worried that Atari hit-men might come to my door since Atari Corporation doesn’t exist anymore.

The facts
Let’s establish some basic facts. Fact one, in 1983 the game industry saw a huge revenue drop for two consecutive years. Here’s what happened.

I guess you had to be there.

In the early 80s, Atari was riding a wave of popularity after it released “Pong.” All the cool kids played Pong, and if I had been writing for The Cool Ship in 1975, I would have posted several reviews and game guides on the internet. That would have been really hard since the internet hadn’t been created yet, and Pong wasn’t a complicated game.

The problem was, this popularity wave was losing energy, and Atari was feeling some pressure from competitors in both software and hardware markets. If Atari had channeled the pressure properly by making good games, they might have had a chance. Instead they released games like Pac-Man and E.T. for the Atari 2600, which loosened its grip on consumers. That opens the floor for fact two: the home computer’s introduction helped kill console gaming.

If you’re a PC gamer, kick back for a well practiced evil laugh. The advent of cheap home computers like the Commodore Vic-20 and Apple II stopped people from buying console games, not that they had much of a choice. I mean, which would you choose, a powerful all-purpose color computer, or a poorly animated and buggy version of Pac-Man that was $50 more?

My favorite fact of all is fact three: everyone was suing everybody. Atari was suing software pirates and at the same time was being sued for practically stealing other companies’ game ideas. Does this sound familiar to anyone? Samsung vs. Apple perhaps?

So decreased profits, home computing and lots of lawsuits and license fees ground Atari to a halt, much of which resulted from games you wouldn’t even allow your mother-in-law to play. The question becomes, why isn’t the video game industry crashing to a halt today? And the follow up question, why do we care?

Where’s the crash?
Over the past few years, sales data for the gaming industry as a whole has trended upward, the exception being 2011 which saw a decrease from 2010’s overall sales (according to NPD data). Now before we all freak out and cite 1983 as proof we’re heading into another game industry crash, don’t forget that even the recession couldn’t stop Activision from selling hundreds of millions of dollars worth of Call of Duty games.

I know none of this is news to you, as long as you haven’t been living under a rock for the last 5 years. If you have, go back under the rock for a few more years, the economy is still recovering. For the rest of us, you must be wondering why I would think the industry would be crashing at all. And the reason is: current games being released by major publishers are every bit as recycled and over-saturated as Pac-Man, Pong and Asteroids were in the 80s.

It would be funny if Pac-Man hadn't helped kill Atari.

Just look at the ten best selling games of 2011. Eight of the ten are sequels, if not sequels of sequels of…well, you get the point I hope. Only one of those games could even be described as original, as long as you believe L.A. Noire isn’t just a beautiful blend of Max Payne and Alan Wake, which it isn’t.

Why do we care?
Atari got a huge slap in the face from consumers back in 83, and it never fully recovered. The Atari you know today is just a name that Infrogames Entertainment uses in the U.S. for brand recognition. Assuming you feel the same as I do about game sequels, how can consumers wind up to land a similar blow to the current heavy weights in the game industry?

The answer is, we are already throwing punches.

Just look at how many games are free-to-play as opposed to subscription based, and pay attention to the business model of all those mobile games you’re playing. Just like arcades were popular and only cost a few quarters to play, mobile games are cheaper than making a long distance phone call (remember doing that?) and they can be every bit as fun or engaging. So many people are playing independent and casual games that the major publishers are noticing and trying to connect with consumers.

One of the best examples of us sticking it to EA and Activision comes from Tim Shafer’s recent Kickstarter project, which has been backed by fans for over $1 million. You can read about it here, and yes I realize that the article I linked disagrees with me.

Conclusion

Jumpman, Miyamoto's first game-changing creation.

Former Atari’s business model clearly wasn’t sustainable, but companies that publish games today are getting away with almost the same thing on a larger scale with a bigger audience. Will we ever see another crash? It’s possible but not likely. What we will probably see in our lifetime is the gradual growth of video games into something even Shigeru Miyamoto, the savior of the industry, could never imagine.

(featured image courtesy of atarimuseum.com)