In 1971, the team at Intel released the first single-chip microprocessor, the Intel 4004, which enabled the production of affordable home computers, or microcomputers. By early 1975, mail-order home computer kits were already popular with do-it-yourselfers. Although preassembled systems remained scarce through 1976, the evolution of the home computer continued with the release of the relatively sophisticated Apple I circuit board. In 1977, this success was followed by Apple with the factory-assembled Apple II, Tandy with the TRS-80, and Commodore with the PET, the first complete system featuring a keyboard, cassette drive, monitor, and power supply in one unit. In 1978, Apple introduced the Disk II, the first truly affordable disk drive peripheral, which surpassed the performance and reliability of the then-standard cassettes to store and retrieve data.
Ralph Baer and Magnavox kicked off the home television videogame revolution in mid-1972 with the release of the Odyssey Home Entertainment System, but Magnavox was never able to properly leverage their running start—except in the courtroom. By late 1975, Atari’s Pong found its way into many homes, quickly followed by countless clone systems from manufacturers such as APF, First Dimension, and Coleco. However, the 1976 introduction of the Fairchild Video Entertainment System (VES), with its interchangeable game cartridges, signaled the beginning of the end for the fixed game Pong-style units, despite game and control variations, including color graphics and enhanced sound. By the beginning of the 1980s, as the era covered in this section of the book came to a close, fixed-game systems were no longer attractive to most consumers. However, the fixed-game concept would return successfully for a time in the early 2000s, starting with devices like Toymax’s Activision TV Games, a gamepad controller that ran on batteries, with built-in Atari 2600 games and television output.
With the required technological and marketing groundwork in place, home videogame and computer systems gained serious consumer traction in the 1980s. While still mysterious and intimidating to many people, computers were heavily advertised and received enthusiastic press coverage, including being named TIME Magazine’s “Machine (Man) of the Year” for 1982.1 Home computers were moving out of the hobbyist’s workshop and into American living rooms.
Computer and console makers weren’t content to rely on the press and enthusiastic owners to generate hype for their products. The early 1980s saw the first signs of aggressive and even hostile competition among different brands, leading to a seemingly endless array of spokespersons from the early to mid-1980s. These celebrity spokespersons included Alan Alda (Atari), William Shatner (Commodore), Isaac Asimov and Bill Bixby (Tandy), Bill Cosby (Texas Instruments), George Plimpton (Mattel), Sarah Purcell (Tomy), and Roger Moore (Spectravideo).2 In an attempt to one-up the competition, IBM licensed Charlie Chaplin’s The Tramp likeness to pitch its PC and PCjr line of computers. At a time when most consumers had never seen a computer before—much less be in a position to compare their hardware specifications—the marketing appeal of charming celebrities was deemed essential.
To distinguish their machines from the competition, marketing and design teams would work to create a unique “personality” for their machines to attract and identify with their owners. An early advertisement for the Apple II, for instance, shows a handsome and stylish young man in a turtleneck creating a graph and sipping from a bright orange cup—while his smiling wife looks on with obvious admiration as she chops tomatoes. An early ad for the Commodore PET, by contrast, shows the computer against the stark backdrop of a college classroom complete with chalkboard, with a stern-looking professor standing at a lectern. Perhaps some early adopters made their decisions based simply on which of these images best suited their personality, although it’s more likely they also consulted with salespersons and anyone they knew with a computer.
This era also saw the first memorable videogame system war, fought by the Atari 2600, the Mattel Intellivision, and the Coleco ColecoVision. All three companies created games for each other’s systems while loudly declaring their competitors’ weaknesses. A typical ad from this era shows an Intellivision screenshot juxtaposed with one from the Atari 2600, with a slightly uncomfortable-looking George Plimpton declaring that these two pictures are worth a thousand words. Naturally, the Intellivision screen is much more visually detailed. Atari could boast that their top-charting system had more games, including best-selling ports of their own arcade hits. Thus, from the very beginning, we see marketers trying to distinguish their platforms in terms of raw power, with consumers usually preferring the system with the largest library of fun games.
While companies battled it out in the mainstream media, the decisive struggle was taking place in thousands of small groups and pockets of fans all over the country. Regardless of a platform’s perceived strengths and weaknesses, many consumers who invested in them felt a keen sense of loyalty to their chosen brand, especially if they were part of a group of like-minded enthusiasts. In much the same way that football fans become enamored (and defensive) of their favorite team, computer and console owners can grow downright belligerent if anyone questions their choice. Often derided as “fanboys,” these extremely loyal and devoted system owners would literally preach the virtues of their system (and vices of the rest) to anyone who cared to listen, and plenty who didn’t. It wasn’t all just fanaticism, though. If the kids in your neighborhood owned ColecoVisions, for instance, you could borrow or trade games with them, an important consideration given the high cost of acquiring new cartridges. Likewise, computer owners could copy and swap software, sometimes legally (public domain software or their own programs) and illegally (piracy). If you were the isolated Atari 400 owner in a town full of Commodore VIC-20 fans, you’d miss out on a lot of “free” software—but you might also feel even more pressure to defend and identify with your machine.
As long as there were plenty of first-time computer and console purchasers in the market, the young computer and videogame industries thrived. Once production finally caught up and then wildly surpassed consumer demand, however, the videogame market suffered what became known as the Great Videogame Crash. The industry had become drunk on its own rising sales success between 1980 and the early part of 1983. Arnie Katz best described the crash in a June 1989 article in Video Games and Computer Entertainment magazine:
Companies acted like sales were guaranteed to double every year till the end of time. Publishers stamped out a dizzying array of new cartridges, far more than consumer demand could possibly support. Therefore, retailers dumped the cartridges they couldn’t sell at distress prices. The availability of $5 games ruined the market for labels like Activision, Imagic, and Parker Brothers, who wanted to sell titles in the $25 to $40 range.
While fewer systems were sold in 1983 than in the previous year, cartridge sales were up. By mid-1984, however, the industry hit the ceiling, and sales of both consoles and cartridges fell dramatically—followed by a retail backlash against videogames. The mass media turned on the industry, declaring it “dead,” and investors pulled out wherever they could. Department stores that had once clamored just to keep games on their shelves were now slashing prices and incurring frightful losses just to get rid of them.3
The media consensus at the time was that consumers no longer needed videogame systems because low-cost computers like the Commodore 64 provided the same entertainment value along with all the other benefits of a full-blown computing device. However, news of the videogame console’s death was premature. After the supply chain was mostly cleared of the glut of cut-rate videogames and consoles, the Japanese company Nintendo was able to restore consumer confidence. The introduction of the Nintendo Entertainment System at the end of 1985 began the process of salvaging the videogame console from the bargain bin of history, though Nintendo had to use some unusual and downright aggressive initiatives to win over skeptical retailers.
This era was similarly unkind to most computer manufacturers, as what started out as a wide-open field dwindled to a select group. In the lead was Commodore, who had achieved near total dominance of the low-end computer market with unheard-of bargain prices and just enough computing power for both quality games and more serious software applications. For just a bit more money than a dedicated game machine, families could take home a full-fledged computer. The tremendous value of the Commodore 64 led to unrivaled success—indeed, the unit continues to hold the Guinness World Record for the most sales of any single computer system. However, soon after the end of this era would also see the introduction of higher-end, higher-priced systems that would eventually eliminate the demand for relatively underpowered budget systems, particularly when computers based around Microsoft DOS (and eventually Windows) would rise to dominance both in the office and at home.
1 Famously, Apple’s Steve Jobs was removed from consideration once the magazine decided to instead run a feature that took a rather harsh look at his life.
2 Even software companies got in on the “spokesperson wars” with, for instance, CBS Video Games enlisting the services of a pre-EA Sports John Madden!
3 This backlash was mostly isolated to North America. The rest of the world’s markets featured different growth trajectories that mostly avoided the highs and lows of the Great Videogame Crash.