Skip main navigation
We use cookies to give you a better experience, if that’s ok you can close this message and carry on browsing. For more info read our cookies policy.
We use cookies to give you a better experience. Carry on browsing if you're happy with this, or read our cookies policy for more information.

Skip to 0 minutes and 9 secondsIn 1982, despite having received some fairly damning critical reviews of Pac-Man on the VCS, Atari remained buoyant. Now a subsidiary of Warner Communications, the company looked towards movie franchise tie-ins, thinking that the public would eagerly buy into games that came with a ready made image and recognition factor. Steve Ross, then head of Warner, felt confident enough of Atari's ability to shift cartridges to offer Steven Spielberg a $25 million royalty for the video game rights to his next movie, E.T., regardless of how the game sold. The licencing deal was completed in July of 1982, leaving just six weeks to design and code the game, manufacture it, package it, and market it ahead of the Christmas rush. It was a disaster.

Skip to 1 minute and 6 secondsAtari manufactured five million cartridges, and although the game sold strongly in the run up to Christmas, once customers actually started playing it and realised just how bad it was, nearly all of the game cartridges were returned for refunds. With a stockpile of millions of cartridges, Atari racked up half a billion dollars in losses. With no hope of selling them, they were dumped unceremoniously in landfill in the New Mexico desert and covered over with concrete. The US video game market had crashed. In Europe and Japan, that seismic shock barely even registered. Home computers, not consoles, had always been the machine of choice in the UK, and Japan, whose domestic video game market was more stable, saw continued growth.

Skip to 2 minutes and 1 secondThere, the video game crash was known simply as Atari Shock.

Skip to 2 minutes and 9 secondsNintendo was a company that was rooted in tactile play. It began life in 1894 as a manufacturer of hanafuda, handcrafted playing cards painted on mulberry tree bark. In 1977, it released the Color TV Game 6, a popular but unremarkable Pong clone. Several variants of the TV Game would follow, each of which increased the complexity and the variety of the gameplay. It was a solid start, but each new generation of the TV game was really just a variation on a theme. It wasn't until the company hired a shaggy haired apprentice product planner, Shigeru Miyamoto, that Nintendo really began to change the way we game.

Skip to 2 minutes and 54 secondsNintendo's move to the American video game market began in 1980 when it manufactured 3,000 Radarscope arcade cabinets. Essentially a Space Invaders clone, Nintendo shipped them from Kyoto to a warehouse in New Jersey, but what they hadn't banked upon was that the American market just didn't want another Space Invaders knockoff, and certainly not one by an unknown Japanese company. In a bid to shift the unsold stock of cabinets, the company decided to reprovision them, and Miyamoto was drafted in to develop a new game using Radarscope's components.

Skip to 3 minutes and 36 secondsHiroshi Yamauchi, the company president, wanted the new game to be based on Popeye, but when he found out that it would take years to acquire the arcade rights for the character, the idea was quietly dropped. Leaving the characters of Popeye, Bluto, and Olive Oyl to one side, Miyamoto found himself intrigued by the underlying story, Popeye's continual quest to defeat Bluto, the gorilla like villain, and save the girl. In my Miyamoto's mind, that gorilla like villain translated quite literally into a huge King Kong style antagonist who captured the heroine and held her hostage at the top of the screen. Miyamoto scrambled for the perfect name. He wanted an English phrase that captured the sense of his stubborn gorilla.

Skip to 4 minutes and 28 secondsStubborn translated as donkey and gorilla as Kong. Donkey Kong was a smash hit, and Nintendo began to investigate the feasibility of a low cost, cartridge based home console. Like Atari, Nintendo wanted a system that could build on its growing reputation for arcade games by allowing consumers to play its games at home, and the family computer, or Famicom, launched in Japan in 1983 at a price of just 14,800 yen, around $60. Housed in a cream and burgundy coloured case, it shipped with three games, all ports of Nintendo's arcade hits, Donkey Kong, Donkey Kong Jr., and Popeye, and two controllers that were hardwired to the console.

Skip to 5 minutes and 18 secondsNintendo again set its sights on America, and in April 1983, representatives sat down with Atari executives who had travelled to Kyoto to see a demo of the new hardware and offered

Skip to 5 minutes and 30 secondsthem a deal: Nintendo would make Famicoms and Atari would sell them outside of Japan, branded as an Atari product. Negotiations were already dragging out when the crash happened and the deal fell apart. Nintendo was left without an American partner, but in retrospect, it was perhaps a blessing. Had the deal gone through, the Famicom could have been swallowed up, just one more casualty of Atari Shock. Instead Nintendo, decided to break the American market alone. It showcased its new console, which had now acquired a new, American-friendly name, the Advanced Video System, at US trade shows across the nation. Nobody was interested.

Skip to 6 minutes and 16 secondsThe market, still reeling from the aftershocks of the crash, couldn't see the logic or any future in trying to launch a new video game console. Well, if America wasn't ready for a new games console, perhaps it was ready for a new toy. The Advanced Video System was renamed the Nintendo Entertainment System or NES and bundled with a foot-tall robot, the Robotic Operating Buddy, or R.O.B., that was designed to work with two specially written games, Gyromite and Stack Up, in the hope that toy retailers rather than electronics stores would stock the device. They didn't. In the wake of the crash, even when it was sold to them as a sophisticated electronic novelty, US retailers just wouldn't countenance another games console.

Skip to 7 minutes and 10 secondsIn a last ditch effort to gain a toehold, Nintendo shipped 100,000 consoles to Nintendo's American warehouse in New Jersey and sold direct to as many toy shops, electronics outlets, and department stores as possible, all backed by a cast iron guarantee. Any unsold consoles could be returned for a full refund. That gave Nintendo the toehold that it needed, and by the middle of 1986, the NES was ready to launch nationally. Arguably, it was that Nintendo seal of approval that was the key factor in establishing Nintendo as a manufacturer of home video game consoles in the USA. Nintendo used a closed development model, meaning that only in-house and carefully vetted and approved developers could work on games.

Skip to 8 minutes and 7 secondsThat allowed Nintendo to ensure both the quality control of its games and to develop a very strong house style, which continues through to the current generation of Nintendo titles on the Wii U and the Nintendo Switch. What I'd like you to do now is to log on to the online NES Emulator, a link for which is supplied below, and play through some of the games. Think back to some of the other games that you've played on the Atari, Spectrum, and the Commodore 64. Is there perhaps more consistency here, both in terms of quality and style? What do you think are the benefits and the drawbacks to this sort of approach to creative development?

Skip to 8 minutes and 52 secondsConsider this, and post your thoughts to the discussion group.

The NES

The video game crash of 1983 made it difficult for Nintendo to break into the American market with its new console, the NES.

When it finally did gain a toehold in 1986, it was the Nintendo Seal of Approval, a guarantee of gaming quality, that saw consumer confidence in gaming begin to grow again. In this video, we explore how the NES reintroduced America to console gaming.

Once you’ve completed the video step, I’d like you to log on to the online NES Emulator, a link for which is supplied below, and play through some of the games.

Think back to some of the other games that you’ve played on the Atari, Spectrum, and the Commodore 64. Is there perhaps more consistency here, both in terms of quality and style?

Please note that these links will take you to external websites that are not affiliated with either FutureLearn or Abertay University.

Share this video:

This video is from the free online course:

Game Design and Development: A Bit-by-Bit History of Video Game Music

Abertay University

Contact FutureLearn for Support