Editing Commodore 64 (section)

== History ==
[[File:C64 startup animiert.gif|260px|left|thumb|The Commodore&nbsp;64 startup screen]]
In January 1981, MOS Technology, Inc., Commodore's [[integrated circuit]] design subsidiary, initiated a project to design the graphic and audio chips for a next-generation [[video game console]]. Design work for the chips, named [[MOS Technology VIC-II]] (Video Integrated Circuit for graphics) and [[MOS Technology 6581|MOS Technology SID]] (Sound Interface Device for audio), was completed in November 1981.<ref name="ieee85">{{cite journal|last2=Wallich |first2=Paul |date=March 1985 |title=Design case history: the Commodore 64 |url=https://spectrum.ieee.org/ns/pdfs/commodore64_mar1985.pdf |journal=IEEE Spectrum |pages=48–58 |issn=0018-9235 |last1=Perry |first1=Tekla S. |volume=22 |issue=3 |doi=10.1109/MSPEC.1985.6370590 |s2cid=11900865 |access-date=November 12, 2011 |url-status=dead |archive-url=https://web.archive.org/web/20120513181613/https://spectrum.ieee.org/ns/pdfs/commodore64_mar1985.pdf |archive-date=May 13, 2012 }}</ref> Commodore then began a game console project that would use the new chips—called the ''Ultimax'' or the ''[[MAX Machine]]'', engineered by Yash Terakura from Commodore Japan. This project was eventually cancelled after just a few machines were manufactured for the Japanese market.<ref>{{Cite web|last=Holmes|first=Mike|title=Gaming's Defining Moments – The Commodore 64|url=https://www.gamereactor.eu/gamings-defining-moments-the-commodore-64/|access-date=July 1, 2020|website=Gamereactor UK|date=April 15, 2012 |language=en}}</ref> At the same time, Robert "Bob" Russell (system programmer and architect on the [[VIC-20]]) and [[Bob Yannes|Robert "Bob" Yannes]] (engineer of the SID) were critical of the current product line-up at Commodore, which was a continuation of the [[Commodore PET]] line aimed at business users. With the support of Al Charpentier (engineer of the VIC-II) and Charles Winterble (manager of MOS Technology), they proposed to Commodore CEO [[Jack Tramiel]] a low-cost sequel to the VIC-20. Tramiel dictated that the machine should have {{nowrap|64 KB}} of [[random-access memory]] (RAM). Although 64-[[Kilobit|Kbit]] [[dynamic random-access memory]] (DRAM) chips cost over {{US$|100|1985}} at the time, he knew that 64K DRAM prices were falling and would drop to an acceptable level before full production was reached. The team was able to quickly design the computer because, unlike most other home-computer companies, Commodore had its own semiconductor [[semiconductor fabrication plant|fab]] to produce test chips; because the fab was not running at full capacity, development costs were part of existing corporate overhead. The chips were complete by November, by which time Charpentier, Winterble, and Tramiel had decided to proceed with the new computer; the latter set a final deadline for the first weekend of January, to coincide with the 1982 [[Consumer Electronics Show]] (CES).{{r|ieee85}}

The product was [[code name]]d the VIC-40 as the successor to the popular [[VIC-20]]. The team that constructed it consisted of Yash Terakura,<ref>{{cite web|url=http://sceneworld.org/blog/2015/02/12/video-interview-with-yash-terakura/|title=Video interview with Yash Terakura &#124; Scene World – The C64 NTSC/PAL Disk Magazine|publisher=Sceneworld.org|access-date=December 30, 2015}}</ref> [[Shiraz Shivji]],<ref>{{cite book|url=https://books.google.com/books?id=QZS_gXpshd4C&pg=PT230|title=Classic Videogame Hardware Genius Guide|first=Imagine|last=Publishing|publisher=Imagine Publishing|isbn=9781908222220|via=Google Books}}</ref> Bob Russell, Bob Yannes, and David A. Ziembicki. The design, prototypes, and some sample software were finished in time for the show, after the team had worked tirelessly over both [[Thanksgiving (United States)|Thanksgiving]] and [[Christmas]] weekends. The machine used the same case, same-sized motherboard, and same [[Commodore BASIC]] 2.0 in [[Read-only memory|ROM]] as the VIC-20. BASIC also served as the [[user interface]] [[shell (computing)|shell]] and was available immediately on startup at the <code>READY</code> prompt. When the product was to be presented, the VIC-40 product was renamed C64. The C64 made an impressive debut at the January 1982 [[Consumer Electronics Show]], as recalled by Production Engineer David A. Ziembicki: "All we saw at our booth were [[Atari, Inc.|Atari]] people with their mouths dropping open, saying, 'How can you do that for $595?{{'"}}{{r|ieee85}}<ref>{{cite news|url=https://www.telegraph.co.uk/technology/news/9449764/Commodore-64-at-30-computing-for-the-masses.html |archive-url=https://ghostarchive.org/archive/20220111/https://www.telegraph.co.uk/technology/news/9449764/Commodore-64-at-30-computing-for-the-masses.html |archive-date=January 11, 2022 |url-access=subscription |url-status=live|title=Commodore 64 at 30: Computing for the Masses|first=Christopher|last=Williams|newspaper=[[The Daily Telegraph]]|date=August 4, 2012|access-date=August 16, 2015}}{{cbignore}}</ref> The answer was [[vertical integration]]; due to Commodore's ownership of MOS Technology's [[semiconductor device fabrication|semiconductor fabrication]] facilities, each C64 had an estimated production cost of {{US$|135}} (equivalent to $350 in 2022).{{r|ieee85}}

=== Reception ===
In July 1983, ''[[Byte (magazine)|BYTE]]'' magazine stated that "the 64 retails for {{US$|long=no|595}}. At that price it promises to be one of the hottest contenders in the under-{{US$|long=no|1000}} personal computer market." It described the SID as "a true music synthesizer&nbsp;... the quality of the sound has to be heard to be believed", while criticizing the use of Commodore BASIC&nbsp;2.0, the floppy disk performance which is "even slower than the [[Atari 810]] drive", and Commodore's quality control. ''BYTE'' gave more details, saying the C64 had "inadequate Commodore BASIC 2.0. An 8K-byte interpreted BASIC" which they assumed was because "Obviously, Commodore feels that most home users will be running prepackaged software - there is no provision for using graphics (or sound as mentioned above) from within a BASIC program except by means of POKE commands." This was one of very few warnings about C64 BASIC published in any computer magazines.<ref name="wszola198307">{{cite news | url=https://archive.org/stream/byte-magazine-1983-07/1983_07_BYTE_08-07_Videotex#page/n231/mode/2up | title=Commodore 64 | work=BYTE | date=July 1983 | access-date=October 20, 2013 | author=Wszola, Stan | page=232}}</ref> ''Creative Computing'' said in December 1984 that the C64 was "the overwhelming winner" in the category of home computers under {{US$|long=no|500}}. Despite criticizing its "slow disk drive, only two cursor directional keys, zero manufacturer support, non-standard interfaces, etc.", the magazine said that at the C64's price of less than {{US$|long=no|200}} "you can't get another system with the same features: 64K, color, sprite graphics, and barrels of available software". The [[TRS-80 Color Computer|Tandy Color Computer]] was the runner up. The [[Apple II]] was the winner in the category of home computer over {{US$|long=no|500}}, which was the category the Commodore 64 was in when it was first released at the price of {{US$|long=no|595}}.<ref name="ahl198412">{{Cite magazine |last=Ahl |first=David H. |author-link=David H. Ahl |date=December 1984 |title=Top 12 computers of 1984 |url=https://www.atarimagazines.com/creative/v10n12/10_Top_12_computers_of_1984.php |magazine=Creative Computing |access-date=March 16, 2019}}</ref>

=== Market war: 1982–1983 ===
[[File:CBM64Cartridges.JPG|thumb|right|Game cartridges for ''[[Radar Rat Race]]'' and ''[[International Soccer]]'']]
Commodore had a reputation for [[Vaporware|announcing products that never appeared]], so the company sought to ship the C64 quickly. Production began in the spring of 1982, and volume shipments began in August.{{r|ieee85}} The C64 faced a wide range of competing [[home computer]]s,<ref name="computerhistory1982">{{cite web |url=http://archive.computerhistory.org/resources/text/Commodore/Commodore.Commodore64.1982.102646264.pdf |title=Commodore 64, 1982 |website=Archive.computerhistory.org |access-date=March 18, 2017 |archive-url=https://web.archive.org/web/20120227063845/http://archive.computerhistory.org/resources/text/Commodore/Commodore.Commodore64.1982.102646264.pdf |archive-date=February 27, 2012 |url-status=dead }}</ref> but, with a lower price and more flexible hardware, it quickly outsold many of its competitors.

In the United States, the greatest competitors were the [[Atari 8-bit computers]], the Apple II, and the [[TI-99/4A]]. The Atari 400 and 800 had been designed to accommodate previously stringent [[Federal Communications Commission|FCC]] emissions requirements and so were expensive to manufacture. Though similar in specifications, the C64 and Apple II represented differing design philosophies; as an [[open architecture]] system, upgrade capability for the Apple II was granted by internal expansion slots, whereas the C64's comparatively closed architecture had only a single external [[ROM cartridge]] port for bus expansion. However, the Apple II used its expansion slots for interfacing with common peripherals like disk drives, printers, and modems; the C64 had a variety of ports integrated into its motherboard, which were used for these purposes, usually leaving the cartridge port free. Commodore's was not a completely closed system, however; the company had published detailed specifications for most of their models since the Commodore PET and VIC-20 days, and the C64 was no exception. This was in contrast to the TI-99/4A, as [[Texas Instruments]] focused less on hobbyists and more towards unsophisticated users.<ref>{{Cite book |last=Black |first=Michael L. |url=https://books.google.com/books?id=HDhiEAAAQBAJ&pg=PA130 |title=Transparent Designs: Personal Computing and the Politics of User-Friendliness |date=2022-03-29 |publisher=JHU Press |isbn=978-1-4214-4353-9 |language=en}}</ref> C64 sales were relatively slow due to a lack of software, reliability issues with early production models, particularly high failure rates of the [[programmable logic array|PLA chip]], which used a new production process, and a shortage of 1541 disk drives, which also suffered rather severe reliability issues. During 1983, however, a trickle of software turned into a flood and sales began rapidly climbing.

Commodore sold the C64 not only through its network of authorized dealers but also through department stores, discount stores, toy stores and college bookstores. The C64 had a built-in [[RF modulator]] and thus could be plugged into any television set. This allowed it (like its predecessor, the VIC-20) to compete directly against video game consoles such as the [[Atari 2600]]. Like the Apple IIe, the C64 could also output a [[composite video]] signal, avoiding the RF modulator altogether. This allowed the C64 to be plugged into a specialized monitor for a sharper picture. Unlike the IIe, the C64's NTSC output capability also included separate luminance/chroma signal output equivalent to (and electrically compatible with) [[S-Video]], for connection to the [[Commodore 64 peripherals#Other peripherals|Commodore 1702]] monitor, providing even better video quality than a composite signal.

Aggressive pricing of the C64 is considered to have been a major catalyst in the [[video game crash of 1983]]. In January 1983, Commodore offered a $100 [[rebate (marketing)|rebate]] in the United States on the purchase of a C64 to anyone that traded in another video game console or computer.<ref name="PM Jun 1983">{{cite magazine|last=Protecto Enterprise|date=June 1983|title=Commodore computer advertisement|url=https://books.google.com/books?id=itUDAAAAMBAJ&pg=PA141|magazine=Popular Mechanics|volume=159|issue=6|page=140|issn=0032-4558|quote=We pack with your computer a voucher good for {{US$|long=no|100}} rebate from the factory when you send in your old Atari, Mattel, Coleco electronic game or computer&nbsp;...}}</ref> To take advantage of this rebate, some mail-order dealers and retailers offered a [[Timex Sinclair 1000]] (TS1000) for as little as {{US$|long=no|10}} with the purchase of a C64. This deal meant that the consumer could send the TS1000 to Commodore, collect the rebate, and pocket the difference; [[Timex Group USA|Timex Corporation]] departed the computer market within a year. Commodore's tactics soon led to a [[price war]] with the major [[home computer]] manufacturers. The success of the VIC-20 and C64 contributed significantly to Texas Instruments and other smaller competitors exiting the field.

The price war with Texas Instruments was seen as a personal battle for Commodore president Jack Tramiel.<ref name="TM Apr 84">{{cite magazine |last=Nocera|first=Joseph|date=April 1984|title=Death of a Computer|url=https://books.google.com/books?id=DSsEAAAAMBAJ&pg=PA224|magazine=Texas Monthly|location=Austin, Texas|publisher=Emmis Communications|volume=12|issue=4|pages=136–139, 216–226|issn=0148-7736|quote=Once before, Commodore had put out a product in a market where it chief competitor was TI: a line of digital watches. TI started a price war and drove Commodore out of the market. Tramiel was not about to let that happen again.}}</ref> Commodore dropped the C64's list price by {{US$|long=no|200}} within two months of its release.{{r|ieee85}} In June 1983 the company lowered the price to {{US$|long=no|300}} (equivalent to ${{Inflation|US|300|1983|r=-2}} in {{Inflation/year|US}}), and some stores sold the computer for {{US$|long=no|199}}. At one point, the company was selling as many C64s as all computers sold by the rest of the industry combined. Meanwhile, TI lost money by selling the TI-99/4A for {{US$|long=no|99}}.<ref name="mitchell19830906">{{cite news|url=https://news.google.com/newspapers?id=gn0hAAAAIBAJ&pg=5584%2C3561802|title=A summer-CES report|date=September 6, 1983|work=Boston Phoenix|page=4|access-date=January 10, 2015|author=Mitchell, Peter W.}}</ref> TI's subsequent demise in the home computer industry in October 1983 was seen as revenge for TI's tactics in the [[calculator|electronic calculator]] market in the mid-1970s, when Commodore was almost bankrupted by TI.<ref>{{cite web|first=Jeremy|last=Remier|url=https://arstechnica.com/articles/culture/amiga-history-4-commodore-years.ars|title=A history of the Amiga, part 4: Enter Commodore|work=Ars Technica|date=October 22, 2007|access-date=August 4, 2008}}</ref>

All four machines had similar memory configurations which were standard in 1982–83: {{val|48|u=KB}} for the Apple II+<ref name="APPLEII+">{{cite web|url=http://www.old-computers.com/museum/computer.asp?st=1&c=571|title=Apple II+|website=old-computers.com|access-date=September 13, 2008|archive-url=https://web.archive.org/web/20020826094834/http://www.old-computers.com/museum/computer.asp?c=571&st=1|archive-date=August 26, 2002|url-status=dead}}</ref> (upgraded within months of C64's release to {{val|64|u=KB}} with the Apple IIe) and {{val|48|u=KB}} for the Atari 800.<ref name="Atari800">{{cite web|url=http://www.old-computers.com/museum/computer.asp?st=1&c=460|title=Atari 800|publisher=old-computers.com|access-date=September 13, 2008|archive-url=https://web.archive.org/web/20100506081912/http://www.old-computers.com/MUSEUM/computer.asp?st=1&c=460|archive-date=May 6, 2010|url-status=dead}}</ref> At upwards of {{US$|long=no|1200}},<ref>{{cite web|url=http://apple2history.org/history/ah06.html|title=Apple&nbsp;II History Chap 6|work=Apple II History|access-date=November 17, 2014|url-status=dead|archive-url=https://web.archive.org/web/20100710011643/http://apple2history.org/history/ah06.html|archive-date=July 10, 2010}}</ref> the Apple&nbsp;II was about twice as expensive, while the Atari 800 cost $899. One key to the C64's success was Commodore's aggressive marketing tactics, and they were quick to exploit the relative price/performance divisions between its competitors with a series of television commercials after the C64's launch in late 1982.<ref name="Commercials">{{cite web|url=http://www.commodorebillboard.de/Commercials/Commodore/english/CommodoreCommercialsEnglish.htm |title=Commodore Commercials |publisher=commodorebillboard.de |access-date=September 13, 2008 |url-status=dead |archive-url=https://web.archive.org/web/20080820101519/http://www.commodorebillboard.de/Commercials/Commodore/english/CommodoreCommercialsEnglish.htm |archive-date=August 20, 2008 }}</ref> The company also published detailed documentation to help developers,<ref name="gupta198306">{{cite news | url=https://archive.org/stream/1983-06-compute-magazine/Compute_Issue_037_1983_Jun#page/n135/mode/2up | title=Commodore 64 Programmer's Reference Guide | work=Compute! | date=June 1983 | access-date=October 30, 2013 | last=Gupta | first=Anu M. | page=134 | type=review}}</ref> while Atari initially kept technical information secret.<ref name="tomczyk1984">{{cite book | title=The Home Computer Wars: An Insider's Account of Commodore and Jack Tramiel | url=https://archive.org/details/the-home-computer-wars | publisher=Compute! Publications | last=Tomczyk | first=Michael S. | year=1984 | page=[https://archive.org/details/the-home-computer-wars/page/n121 110] | isbn=0-942386-78-7}}</ref>

Although many early C64 games were inferior Atari 8-bit [[port (video gaming)|ports]], by late 1983, the growing installed base caused developers to create new software with better graphics and sound.<ref name="Yakal198606">{{Cite magazine |last=Yakal |first=Kathy |date=June 1986 |title=The Evolution of Commodore Graphics |url=https://archive.org/details/1986-06-computegazette/page/n35 |magazine=Compute!'s Gazette |pages=34–42 |access-date=June 18, 2019}}</ref> Rumors spread in late 1983 that Commodore would discontinue the C64,<ref name="wierzbicki1983">{{cite news|url=https://books.google.com/books?id=6C8EAAAAMBAJ&pg=PA24|title=Longevity of Commodore 64, VIC 20 questioned|date=December 5, 1983|work=InfoWorld|page=24|access-date=January 13, 2015|author=Wierzbicki, Barbara}}</ref> but it was the only non-discontinued, widely available home computer in the US by then, with more than 500,000 sold during the Christmas season;<ref name="nyt19831210">{{Cite news |url=https://www.nytimes.com/1983/12/10/business/under-1983-christmas-tree-expect-the-home-computer.html |title=Under 1983 Christmas Tree, Expect the Home Computer |date=December 10, 1983 |work=The New York Times |access-date=July 2, 2017 |language=en-US |issn=0362-4331 |url-access=limited}}</ref> because of production problems in Atari's supply chain, by the start of 1984 "the Commodore 64 largely has [the low-end] market to itself right now", ''[[The Washington Post]]'' reported.<ref name="reid19840206">{{Cite news |url=https://www.washingtonpost.com/archive/business/1984/02/06/colecos-adam-gets-gentlemans-c-for-performance/c231169a-0e52-4192-b54f-b2b9f5bfd84d/ |title=Coleco's 'Adam' Gets Gentleman's 'C' for Performance |last=Reid |first=T. R. |date=February 6, 1984 |newspaper=The Washington Post |author-link=T. R. Reid}}</ref>

=== 1984–1987 ===
{{Blockquote|Some of the graphics modes on the 64 are really strange, and they have no analogs to the Atari or Apple, like the ability to change color of the character basis across the screen. That gave us a lot of color capability that had not been exploited.|Craig Nelson of Epyx, 1986{{r|Yakal198606}}}}

With sales booming and the early reliability issues with the hardware addressed, software for the C64 began to grow in size and ambition during 1984. This growth shifted to the primary focus of most US game developers. The two holdouts were [[Sierra Entertainment|Sierra]], who largely skipped over the C64 in favor of Apple and PC-compatible machines, and [[Broderbund]], who were heavily invested in educational software and developed primarily around the Apple II. In the North American market, the disk format had become nearly universal while cassette and cartridge-based software all but disappeared. Most US-developed games by this point grew large enough to require multi-loading from disk.

At a mid-1984 conference of game developers and experts at [[Origins Game Fair]], [[Dan Bunten]], [[Sid Meier]], and a representative of [[Avalon Hill]] said that they were developing games for the C64 first as the most promising market.<ref name="cgw198410">{{cite magazine | title=The CGW Computer Game Conference | magazine=[[Computer Gaming World]] | date=October 1984 | url=http://www.cgwmuseum.org/galleries/index.php?year=1984&pub=2&id=18 | access-date=October 31, 2013 | page=30 | type=panel discussion}}</ref> By 1985, games were an estimated 60 to 70% of Commodore 64 software.<ref name="128book">{{cite book | chapter-url=https://archive.org/stream/The_Official_Book_for_the_Commodore_128#page/n91/mode/2up | title=The Official Book for the Commodore 128 Personal Computer | publisher=Howard W. Sams & Co. | last1=Waite | first1=Mitchell | last2=Lafore | first2=Robert | last3=Volpe | first3=Jerry | year=1985 | page=80 | isbn=0-672-22456-9 | chapter=The C64 Mode}}</ref> ''[[Computer Gaming World]]'' stated in January 1985 that companies such as [[Epyx]] that survived the video game crash did so because they "jumped on the Commodore bandwagon early".<ref name="jacobs198501">{{cite magazine | title=An Agent Looks at the Software Industry | magazine=Computer Gaming World | date=January 1985 | url=http://www.cgwmuseum.org/galleries/index.php?year=1985&pub=2&id=20 | access-date=October 31, 2013 | last=Jacobs | first=Bob | page=18}}</ref> Over 35% of [[Strategic Simulations|SSI]]'s 1986 sales were for the C64, ten points higher than for the Apple&nbsp;II. The C64 was even more important for other companies,<ref name="maher20160318">{{cite web | url=http://www.filfre.net/2016/03/opening-the-gold-box-part-3-from-tabletop-to-desktop/ | title=Opening the Gold Box, Part 3: From Tabletop to Desktop | publisher=The Digital Antiquarian | date=March 18, 2016 | access-date=March 19, 2016 | author=Maher, Jimmy}}</ref> which often found that more than half the sales for a title ported to six platforms came from the C64 version.<ref name="maher20150619">{{cite web | url=http://www.filfre.net/2015/06/the-evolution-of-the-epyx-games/ | title=The Evolution of the (Epyx) Games | publisher=The Digital Antiquarian | date=June 19, 2015 | access-date=March 19, 2016 | last=Maher | first=Jimmy}}</ref> That year, ''Computer Gaming World'' published a survey of ten game publishers that found that they planned to release forty-three Commodore 64 games that year, compared to nineteen for Atari and forty-eight for Apple&nbsp;II,<ref name="cgw198604">{{cite magazine | title=Survey of Game Manufacturers | magazine=Computer Gaming World | date=April 1986 | url=http://www.cgwmuseum.org/galleries/index.php?year=1986&pub=2&id=27 | access-date=November 1, 2013 | page=32}}</ref> and [[Alan Miller (game designer)|Alan Miller]] stated that [[Accolade, Inc.|Accolade]] developed first for the C64 because "it will sell the most on that system".<ref name="boosman198611">{{cite magazine | title=Designer Profiles / Alan Miller | magazine=Computer Gaming World | date=November 1986 | url=http://www.cgwmuseum.org/galleries/index.php?year=1986&pub=2&id=32 | access-date=November 1, 2013 | author=Boosman, Frank | page=6 | type=interview}}</ref>

In Europe, the primary competitors to the C64 were British-built computers: the [[ZX Spectrum|Sinclair ZX Spectrum]], the [[BBC Micro]], and the [[Amstrad CPC 464]]. In the UK, the 48K Spectrum had not only been released a few months ahead of the C64's early 1983 debut, but it was also selling for £175, less than half the C64's £399 price. The Spectrum quickly became the market leader and Commodore had an uphill struggle against it in the marketplace. The C64 did however go on to rival the Spectrum in popularity in the latter half of the 1980s. Adjusted to the population size, the popularity of Commodore&nbsp;64 was the highest in [[Finland]] at roughly 3 units per 100 inhabitants,<ref>{{cite web |url=http://yle.fi/aihe/artikkeli/2016/08/09/legendaarinen-tietokone-juhlii-tanaan-koko-elokuu-c64month |title=Legendaarinen tietokone juhlii tänään – koko elokuu on #c64month |last=Pulkkinen |first=Marko |date=August 9, 2016 |website=yle.fi |language=fi-FI |access-date=January 12, 2019}}</ref> where it was subsequently marketed as "the Computer of the Republic".<ref>{{cite web |url=http://yle.fi/ohjelmat/1285543 |title=Jakso 1: Commodore 64 <nowiki>|</nowiki> Se päivä muutti Suomen |date=February 4, 2012 |website=yle.fi |language=fi-FI |access-date=July 15, 2012 |archive-date=January 25, 2012 |archive-url=https://web.archive.org/web/20120125060600/http://yle.fi/ohjelmat/1285543 |url-status=dead }}</ref>

By early 1985 the C64's price was {{US$|149|long=no}}; with an estimated production cost of {{val|p=$|35|–|50}}, its profitability was still within the industry-standard markup of two to three times.{{r|ieee85}} Commodore sold about one million C64s in 1985 and a total of 3.5 million by mid-1986. Although the company reportedly attempted to discontinue the C64 more than once in favor of more expensive computers such as the [[Commodore 128]], demand remained strong.<ref name="halfhilll198604">{{cite news | url=https://archive.org/stream/1986-04-compute-magazine/Compute_Issue_071_1986_Apr#page/n31/mode/2up | title=A Turning Point For Atari? | work=Compute! | date=April 1986 | access-date=November 8, 2013 | last=Halfhill | first=Tom R. | page=30}}</ref><ref name="wagner198608">{{cite magazine | title=The Commodore Key | url=http://www.cgwmuseum.org/galleries/index.php?year=1986&pub=2&id=30 | magazine=Computer Gaming World | date=August 1986 | access-date=November 1, 2013 | last=Wagner | first=Roy | page=28}}</ref> In 1986, Commodore introduced the 64C,<ref>{{cite web|url=https://archive.org/stream/1986-08-computegazette/Compute_Gazette_Issue_38_1986_Aug#page/n0/mode/2up|title=Compute! Gazette Issue 38|date=August 1986}}</ref> a redesigned 64, which ''Compute!'' saw as evidence that—contrary to C64 owners' fears that the company would abandon them in favor of the [[Amiga]] and 128—"the 64 refuses to die".<ref name="compute198607">{{cite news | url=https://archive.org/stream/1986-07-compute-magazine/Compute_Issue_074_1986_Jul#page/n7/mode/2up | title=Editor's Notes | work=Compute! | date=July 1986 | access-date=November 8, 2013 |last1=Lock |first1=Robert |last2=Halfhill |first2=Tom R. | page=6}}</ref> Its introduction also meant that Commodore raised the price of the C64 for the first time, which the magazine cited as the end of the home-computer [[price war]].<ref name="leemon198702">{{cite news | url=https://archive.org/stream/1987-02-compute-magazine/Compute_Issue_081_1987_Feb#page/n25/mode/2up | title=Microfocus | work=Compute! | date=February 1987 | access-date=November 9, 2013 | last=Leemon |first=Sheldon | page=24}}</ref> Software sales also remained strong; [[MicroProse]], for example, in 1987 cited the Commodore and IBM PC markets as its top priorities.<ref name="brooks198711">{{cite magazine | title=Titans of the Computer Gaming World / MicroProse | url=http://www.cgwmuseum.org/galleries/index.php?year=1987&pub=2&id=41 | magazine=Computer Gaming World | date=November 1987 | access-date=November 2, 2013 | last=Brooks |first=M. Evan | page=16}}</ref>

=== 1988–1994 ===
By 1988, [[PC compatible]]s were the largest and fastest-growing home and entertainment software markets, displacing former leader Commodore.<ref name="keiser198806">{{cite news | url=https://archive.org/stream/1988-JUn-compute-magazine/Compute_Issue_097_1988_JUn#page/n81/mode/2up | title=MS-DOS Takes Charge of Fun Software | work=Compute! | date=June 1988 | access-date=November 10, 2013 | author=Keiser, Gregg | page=81}}</ref> Commodore 64 software sales were almost unchanged in the third quarter of 1988 year over year while the overall market grew 42%,<ref name="gazette198902">{{Cite magazine |date=February 1989 |title=Commodore Software Sales: Games |url=https://archive.org/details/1989-02-computegazette/page/n11 |magazine=Compute's Gazette |page=10 |access-date=January 19, 2020}}</ref> but the company was still selling 1 to 1.5 million units worldwide each year of what ''[[Computer Chronicles]]'' that year called "the [[Model T]] of personal computers".<ref>{{cite web|url=https://archive.org/details/CC517_commodore_64|year=1988|title=Computer Chronicles: Interview with Commodore president with Max Toy|access-date=July 24, 2007}}</ref> Epyx CEO [[Dave Morse (executive)|Dave Morse]] cautioned that "there are no new 64 buyers, or very few. It's a consistent group that's not growing... it's going to shrink as part of our business."<ref name="compute198809">{{cite news | url=https://archive.org/stream/1988-09-compute-magazine/Compute_Issue_100_1988_Sep#page/n11/mode/2up | title=Epyx Grows with David Morse | work=Compute! | date=September 1988 | access-date=November 10, 2013 |last1=Ferrell |first1=Keith |last2=Keizer |first2=Gregg | page=11}}</ref> One computer gaming executive stated that the [[Nintendo Entertainment System]]'s enormous popularity{{spaced ndash}}seven million sold in 1988, almost as many as the number of C64s sold in its first five years{{spaced ndash}}had stopped the C64's growth. [[Trip Hawkins]] reinforced that sentiment, stating that Nintendo was "the last hurrah of the 8-bit world".<ref name="ferrell198907">{{cite news | url=https://archive.org/stream/1989-07-compute-magazine/Compute_Issue_110_1989_Jul#page/n29/mode/2up | title=Just Kids' Play or Computer in Disguise? | work=Compute! | date=July 1989 | access-date=November 11, 2013 | last=Ferrell |first=Keith | page=28}}</ref>

[[Strategic Simulations|SSI]] exited the Commodore 64 market in 1991, after most competitors.<ref name="maher20170331">{{cite web |url=http://www.filfre.net/2017/03/opening-the-gold-box-part-5-all-that-glitters-is-not-gold/ |title=Opening the Gold Box, Part 5: All That Glitters is Not Gold |last=Maher |first=Jimmy |date=March 31, 2017 |website=The Digital Antiquarian}}</ref> ''[[Ultima VI]]'', released in 1991, was the last major C64 game release from a North American developer, and [[The Simpsons (video game)|''The Simpsons'']], published by [[Ultra Games]], was the last arcade conversion. The latter was a somewhat uncommon example of a US-developed arcade port as after the early years of the C64, most arcade conversions were produced by UK developers and converted to NTSC and disk format for the US market, American developers instead focusing on more computer-centered game genres such as RPGs and simulations. In the European market, disk software was rarer and cassettes were the most common distribution method; this led to a higher prevalence of arcade titles and smaller, lower-budget games that could fit entirely in the computer's memory without requiring multiloads. European programmers also tended to exploit advanced features of the C64's hardware more than their US counterparts.{{Citation needed|date=June 2020}}

The Commodore 64 Light Fantastic pack was released in time for the 1989 Christmas holiday season. The package included a C64C, a Cheetah Defender 64 Light gun and 3D-glasses. This pack included several games compatible with the light gun, including some developed purely for the packs release (Mindscape.) 

In the United States, demand for 8-bit computers all but ceased as the 1990s began and PC compatibles completely dominated the computer market. However, the C64 continued to be popular in the UK and other European countries. The machine's eventual demise was not due to lack of demand or the cost of the C64 itself (still profitable at a retail price point between £44 and £50), but rather because of the cost of producing the disk drive. In March 1994, at [[CeBIT]] in [[Hanover]], [[Germany]], Commodore announced that the C64 would be finally discontinued in 1995, noting that the [[Commodore 1541]] cost more than the C64 itself.<ref name="AFNS">{{ cite magazine | url=https://archive.org/details/AmigaFormatMagazine_201902/Amiga_Format_Issue_059_1994_05_Future_Publishing_GB/page/n21/mode/2up | title=Commodore at CeBIT '94 | magazine=Amiga Format | date=May 1994 | access-date=10 December 2023 | pages=22–23 }}</ref>

However, only one month later in April 1994, the company filed for [[bankruptcy]]. When Commodore went bankrupt, all production on their inventory, including the C64, was discontinued, thus ending the C64's {{frac|11|1|2}}-year production. Claims of sales of 17, 22 and 30 million of C64 units sold worldwide have been made. Company sales records, however, indicate that the total number was about 12.5 million.<ref>{{cite web|url=https://www.pagetable.com/?p=547|year=2011|title=How many Commodore 64 computers were really sold?|access-date=November 11, 2020}}</ref> Based on that figure, the Commodore 64 was still the third most popular computing platform into the 21st century until 2017 when the [[Raspberry Pi]] family replaced it.<ref>{{Cite news|url=https://www.raspberrypi.org/magpi/raspberry-pi-sales/|title=Sales soar: Raspberry Pi British board beats Commodore 64, world's third best-selling computer|date=March 16, 2017|work=The MagPi Magazine|access-date=October 22, 2018|language=en-GB}}</ref>

While 360,000 C64s were sold in 1982, about 1.3 million were sold in 1983, followed by a large spike in 1984 when 2.6 million were sold. After that, sales held steady at between 1.3 and 1.6 million a year for the remainder of the decade and then dropped off after 1989. North American sales peaked between 1983 and 1985 and gradually tapered off afterward, while European sales remained quite strong into the early 1990s.{{r|PageTable}} Commodore itself reported a robust sales figure of over 800,000 units during the 1991 fiscal year, but sales during the 1993 fiscal year had declined to fewer than 200,000 units. Throughout the early 1990s, European sales had accounted for more than 80% of Commodore's total sales revenue.<ref name="commodore1993">{{ cite book | url=https://archive.org/details/commodore-annual-report-1993/page/n3/mode/1up | title=Commodore International Limited 1993 Annual Report | publisher=Commodore International Limited | date=17 December 1993 | access-date=17 November 2024 | pages=2 }}</ref>