Editing History of video games (section)

==1980s==
{{Main|1980s in video games}}
The video games industry experienced its first major growing pains in the early 1980s; the lure of the market brought many companies with little experience to try to capitalize on video games, and contributors towards the industry's crash in 1983, decimating the North American market. In the wake of the crash, Japanese companies became the leaders in the industry, and as the industry began to recover, the first major [[video game publisher|publishing houses]] appeared, maturing the industry to prevent a similar crash in the future.

===Video game crash of 1983===
{{Main|Video game crash of 1983}}
[[File:Atari E.T. Dig- Alamogordo, New Mexico (14036097792).jpg|thumb|right|Unsold Atari VCS games in a landfill]]
Activision's success as a third-party developer for the Atari VCS and other home consoles inspired other third-party development firms to emerge in the early 1980s; by 1983, at least 100 different companies claimed to be developing software for the Atari VCS.<ref name="down many times"/> This had been projected to led to a glut in sales, with only 10% of games producing 75% of sales for 1983 based on 1982 estimates.<ref name="mj198212262">{{cite news|date=December 26, 1982|title=Stream of video games is endless|pages=Business 1|work=Milwaukee Journal|url=https://news.google.com/newspapers?id=nwsdAAAAIBAJ&pg=3635%2C1989311|access-date=January 10, 2015|archive-date=March 12, 2016|archive-url=https://web.archive.org/web/20160312093025/https://news.google.com/newspapers?id=|url-status=dead}}</ref> Further, there were questions on the quality of these games. While some of these firms hired experts in game design and programming to build quality games, most were staffed by novice programmers backed by venture capitalists without experience in the area. As a result, the Atari VCS market became watered down with large quantities of poor quality games. These games did not sell well, and retailers discounted their prices to try to get rid of their inventory. This further impacted sales of high-quality games, since consumers would be drawn to purchase bargain-bin priced games over quality games marked at a regular price.<ref>{{cite web|last=Flemming|first=Jeffrey|title=The History Of Activision|url=https://www.gamedeveloper.com/business/the-history-of-activision|url-status=live|archive-url=https://web.archive.org/web/20161220122651/http://www.gamasutra.com/view/feature/1537/the_history_of_activision.php?print=1|archive-date=December 20, 2016|access-date=December 30, 2016|work=Gamasutra}}</ref>

At the end of 1983, several factors, including a market flooded with poor-quality games and loss of publishing control, the lack of consumer confidence in market leader Atari due to the poor performance of several high-profile games, and home computers emerging as a new and more advanced platform for games at nearly the same cost as video game consoles, caused the North American video game industry to experience a severe downturn.<ref name="gallager innovation"/> The 1983 crash bankrupted several North American companies that produced consoles and games from late 1983 to early 1984. The {{US$|3 billion|long=no}} U.S. market in 1983 dropped to {{US$|100 million|long=no}} by 1985,<ref>{{Cite web|last=Boyd|first=Andy|title=No. 3038: The Video Game Crash of 1983|url=https://www.uh.edu/engines/epi3038.htm|access-date=September 30, 2020|website=www.uh.edu}}</ref> while the global video game market estimated at {{US$|42 billion|long=no}} in 1982 fell to {{US$|14 billion|long=no}} by 1985.<ref name="vgmarket">{{cite web | url = https://www.bloomberg.com/news/articles/2019-01-23/peak-video-game-top-analyst-sees-industry-slumping-in-2019 | title = Peak Video Game? Top Analyst Sees Industry Slumping in 2019 | first=  Yuki | last = Naramura | date = January 23, 2019 | access-date = January 29, 2019 | work = [[Bloomberg L.P.]] }}</ref> Warner Communications sold off Atari to [[Jack Tramiel]] in 1984,<ref>{{Cite news|last=Senger|first=Emily|title=The ODE: Atari (1972-2013)|work=Canadian Business}}</ref> while Magnavox and Coleco exited the industry.

The crash had some minor effects on Japanese companies with American partners impacted by the crash, but as most of the Japanese companies involved in video games at this point have long histories, they were able to weather the short-term effects. The crash set the stage for Japan to emerge as the leader in the video game industry for the next several years, particularly with Nintendo's introduction of the rebranded Famicom, the [[Nintendo Entertainment System]], back into the U.S. and other Western regions in 1985, maintaining strict publishing control to avoid the same factors that led to the 1983 crash.<ref name="odeonnel nes10">{{cite journal | title = The Nintendo Entertainment System and the 10NES Chip: Carving the Video Game Industry in Silicon | first = Casey | last = O'Donnell | date = 2011 | journal = [[Games and Culture]] | volume = 6 | issue = 1 | pages = 83–100 | doi =  10.1177/1555412010377319 | s2cid = 53358125 }}</ref>

===The rise of computer games===
====Second wave of home computers====
[[File:Cpc464.computer.750pix.jpg|thumb|Children playing ''[[Paperboy (video game)|Paperboy]]'' on an [[Amstrad CPC|Amstrad CPC 464]] in 1988]]

Following the success of the [[Apple II]] and [[Commodore PET]] in the late 1970s, a series of cheaper and incompatible home computers emerged in the early 1980s. This second batch included the [[VIC-20]] and [[Commodore 64]]; Sinclair [[ZX80]], [[ZX81]] and [[ZX Spectrum]]; [[PC-8000 Series|NEC PC-8000]], [[NEC PC-6001|PC-6001]], [[PC-8801|PC-88]] and [[NEC PC-9801|PC-98]]; [[X1 (computer)|Sharp X1]] and [[X68000]]; [[Fujitsu FM Towns]], and [[Atari 8-bit computers]], [[BBC Micro]], [[Acorn Electron]], [[Amstrad CPC]], and [[MSX]] series. Many of these systems found favor in regional markets.

These new systems helped catalyze both the home computer and game markets, by raising awareness of computing and gaming through their competing advertising campaigns. This was most notable in the United Kingdom where the [[BBC]] encouraged computer education and backed the development of the BBC Micro with Acorn.<ref>{{cite web |last=Hormby |first=Thomas |title=Acorn and the BBC Micro: From education to obscurity |work=Low End Mac |date=February 8, 2007 |url=http://lowendmac.com/2007/acorn-and-the-bbc-micro-from-education-to-obscurity/ |access-date=March 1, 2007 |archive-url= https://web.archive.org/web/20070303004213/http://lowendmac.com/orchard/07/0228.html |archive-date=March 3, 2007 |url-status= live}}</ref> Between the BBC Micro, the ZX Spectrum, and the Commodore 64, a new wave of "bedroom coders" emerged in the United Kingdom and started selling their own software for these platforms, alongside those developed by small professional teams.<ref>{{cite web | url = https://www.theguardian.com/technology/2004/jan/24/games.gameswatch | title = Death of the bedroom coder | date = January 24, 2004 | access-date = September 30, 2019 | work = [[The Guardian]] }}</ref><ref>{{Cite news|url=https://www.bbc.com/news/newsbeat-46757989|title=How the UK became a major player in the gaming world|last=Blake|first=Jimmy|date=January 6, 2019|work=BBC News|access-date=January 7, 2019|language=en-GB|quote=The gaming industry as it now exists formed around the same time back in the late 70s early 80s - there were a small number of influential people in programming.}}</ref><ref name="bbc260418">{{cite news|url=https://www.bbc.com/news/technology-43907248|title=Sinclair Spectrum designer Rick Dickinson dies in US|date=April 26, 2018|work=BBC News|access-date=April 27, 2018|quote=the machines had "spawned a generation" of coders that had helped to establish the UK's reputation as a creative, game-making powerhouse}}</ref><ref>{{Cite news|url=https://www.bbc.co.uk/news/technology-17776666|title=Sinclair's ZX Spectrum turns 30|last=Kelion|first=Leo|date=April 23, 2012|work=BBC News|access-date=April 26, 2018|quote=The success was also driven by videogame sales - the machines were originally marketed as an educational tool but you ensured titles were ready at launch.}}</ref> Small publishing and distribution companies such as [[Acornsoft]] and [[Mastertronic]] were established to help these individuals and teams to create and sell copies of their games. [[Ubisoft]] started out as such a distributor in France in the mid-1980s before they branched out into video game development and publishing.<ref>{{cite magazine |url=https://www.gameinformer.com/b/features/archive/2011/12/06/ubi-uncensored.aspx |title=Ubi Uncensored: The History Of Ubisoft By The People Who Wrote It |first=Matt |last=Bertz |date=December 6, 2011 |access-date=October 8, 2018 |magazine=[[Game Informer]] |archive-date=October 5, 2018 |archive-url=https://web.archive.org/web/20181005071745/https://www.gameinformer.com/b/features/archive/2011/12/06/ubi-uncensored.aspx |url-status=live }}</ref> In Japan, systems like the MSX and the NEC PC line were popular, and several development houses emerged developing arcade clones and new games for these platforms. These companies included [[HAL Laboratory]], [[Square (video game company)|Square]], and [[Enix]], which all later became some of the first third-party developers for the Nintendo Famicom after its release in 1983.<ref name="gamestudies geemu"/>

Games from this period include the first ''[[Ultima I: The First Age of Darkness|Ultima]]'' by [[Richard Garriott]] and the first ''[[Wizardry: Proving Grounds of the Mad Overlord|Wizardry]]'' from [[Sir-Tech]], both fundamental role-playing games on the personal computer. The space trading and combat simulation game ''[[Elite (video game)|Elite]]'' by [[David Braben]] and [[Ian Bell (programmer)|Ian Bell]] introduced a number of new graphics and gameplay features, and is considered one of the first [[open world]] and [[sandbox game]]s.<ref>{{cite web|last=Breslin|first=Steve|date=July 16, 2009|title=The History and Theory of Sandbox Gameplay|url=https://www.gamedeveloper.com/design/the-history-and-theory-of-sandbox-gameplay|access-date=May 2, 2020|work=[[Gamasutra]]}}</ref> Early installments in a number of long-running franchises such as ''[[Castlevania]]'', ''[[Metal Gear]]'', ''[[Bubble Bobble]]'', ''[[Gradius]]'', as well as ports of console games and [[visual novel]]s appeared on Japanese platforms like the PC88, X68000, and MSX.

[[File:Amiga-Computer.jpg|thumb|right|A child playing ''[[Turrican]]'' on an [[Amiga 500]]]]
Games dominated home computers' software libraries. A 1984 compendium of reviews of Atari 8-bit software used 198 pages for games compared to 167 for all others.<ref name="aw1984">{{cite book|url=https://archive.org/stream/Atari_Software_1984#page/n3/mode/2up |title=The Addison-Wesley Book of Atari Software 1984 |publisher=Addison-Wesley |author1=Stanton, Jeffrey |author2=Wells, Robert P. |author3=Rochowansky, Sandra |author4=Mellin, Michael |year=1984 |pages=TOC |isbn=020116454X |url-status=live |archive-url=https://web.archive.org/web/20150103161051/https://archive.org/stream/Atari_Software_1984 |archive-date=January 3, 2015 }}</ref> By that year the computer game market took over from the console market following the crash of that year; computers offered equal ability and, since their simple design allowed games to take complete command of the hardware after power-on, they were nearly as simple to start playing with as consoles.{{citation needed|date=March 2021}}

Later in the 1980s the next wave of personal computers emerged, with the [[Amiga]] and [[Atari ST]] in 1985. Both computers had more advanced graphics and sound capabilities than the prior generation of computers, and made for key platforms for video game development, particularly in the United Kingdom. The bedroom coders had since formed development teams and started producing games for these systems professionally. These included [[Bullfrog Productions]], founded by [[Peter Molyneux]], with the release of ''[[Populous (video game)|Populous]]'' (the first such [[god game]]), [[DMA Design]] with ''[[Lemmings (video game)|Lemmings]]'', [[Psygnosis]] with ''[[Shadow of the Beast (1989 video game)|Shadow of the Beast]]'', and [[Team17]] with ''[[Worms (1995 video game)|Worms]]''.<ref name="guardian amiga">{{cite web | url = https://www.theguardian.com/technology/2015/jul/23/commodore-amiga-at-30-the-computer-that-made-the-uk-games-industry | title = Commodore Amiga at 30 – the computer that made the UK games industry | first = Keith | last = Stuart | date = July 23, 2015 | access-date  = September 30, 2019 | work = [[The Guardian]] }}</ref>

====IBM PC compatible====
While the second wave of home computer systems flourished in the early 1980s, they remained as closed hardware systems from each other; while programs written in BASIC or other simple languages could be easily copied over, more advanced programs would require porting to meet the hardware requirements of the target system. Separately, [[IBM]] released the first of its [[IBM Personal Computer]]s (IBM PC) in 1981, shipping with the [[MS-DOS]] operating system. The IBM PC was designed with an [[open architecture]] to allow new components to be added to it, but IBM intended to maintain control on manufacturing with the proprietary [[BIOS]] developed for the system.<ref name="apple ibm platform control">{{cite journal | last1= Den Hartigh | first1= Erik | first2= J. Roland | last2= Ortt | first3= Geerten  | last3 = Van de Kaa | first4 = Claire CM | last4= Stolwijk | title = Platform control during battles for market dominance: The case of Apple versus IBM in the early personal computer industry | journal = [[Technovation]] | volume = 48 | pages = 4–12 | year = 2016 }}</ref> As IBM struggled to meet demand for its PC, other computer manufacturers such as [[Compaq]] worked to [[reverse engineer]] the BIOS and created [[IBM PC compatible]] computers by 1983.<ref>{{cite news | url=https://archive.org/stream/byte-magazine-1981-12/1981_12_BYTE_06-12_Computer_Games#page/n315/mode/2up | title=Bytelines | work=BYTE | date=December 1981 | access-date=January 29, 2015 | author=Libes, Sol | pages=314–318}}</ref><ref>{{cite news |url=https://books.google.com/books?id=w_OhaFDePS4C&pg=PA5 | title=Lookalikes From Home & Abroad | work=PC Magazine | date=February–March 1982 | access-date=October 20, 2013 | pages=5}}</ref><ref>{{cite news | url=https://books.google.com/books?id=VDAEAAAAMBAJ&pg=PA29 | title=Let's keep those systems open | work=InfoWorld | date=August 23, 1982 | access-date=January 29, 2015 | author=Zussman, John Unger | page=29}}</ref><ref>{{Cite news |url=https://www.nytimes.com/1983/06/10/business/corporate-triumph-then-death-in-a-ferrari.html |title=Corporate Triumph, Then Death in a Ferrari |last=Barmash |first=Isadore |date=June 10, 1983 |work=The New York Times |access-date=June 19, 2019 |page=A1 |language=en-US |issn=0362-4331}}</ref><ref name="mace19840109_16">{{cite news | url=https://books.google.com/books?id=ey4EAAAAMBAJ&pg=PA79 | title=IBM PC clone makers shun total compatibility | work=InfoWorld | date=January 9–16, 1984 | access-date=February 4, 2015 | author=Mace, Scott | pages=79–81}}</ref><ref>{{cite news |url=https://books.google.com/books?id=kSzKzjWHeVEC&pg=PA39 | title=PC-Compatible Portables | work=PC Magazine | date=January 24, 1984 | access-date=October 23, 2013 |author1=Cook, Karen |author2=Langdell, James | pages=39}}</ref> By 1987, IBM PC compatible computers dominated the home and business computer market.<ref>{{cite web|url=https://arstechnica.com/features/2005/12/total-share/5/|title=Total share: 30 years of personal computer market share figures|last=Reimer|first=Jeremy |website=Ars Technica|date=December 15, 2005|access-date=September 13, 2008}}</ref>

From a video games standpoint, the IBM PC compatible invigorated further game development. A software developer could write to meet IBM PC compatible specifications and not worry about which make or model was being used. While the initial IBM PC supported only monochromatic text games, game developers nevertheless ported mainframe and other simple text games to the PC, such as Infocom with ''Zork''. IBM introduced video display controllers such as the [[Color Graphics Adapter]] (CGA) (1981), the [[Enhanced Graphics Adapter]] (EGA) (1984) and the [[Video Graphics Array]] (VGA) (1987) that expanded the computer's ability to display color graphics, though even with the VGA, these still lagged behind those of the Amiga. The first dedicated [[sound card]]s for IBM PC compatibles were released starting in 1987, which provided digital sound conversion input and output far exceeding the computer's internal speakers, and with [[Creative Labs]]' [[Sound Blaster]] in 1989, the ability to plug in a game controller or similar device.

In 2008, [[Sid Meier]] listed the IBM PC as one of the three most important innovations in the history of video games.<ref name="totilo20080303">{{cite news|url=http://www.mtv.com/news/1582662/the-three-most-important-moments-in-gaming-and-other-lessons-from-sid-meier-in-gamefile/ |title=The Three Most Important Moments In Gaming, And Other Lessons From Sid Meier, In GameFile |work=MTV News |date=March 3, 2008 |access-date=July 7, 2014 |author=Totilo, Stephen |url-status=dead |archive-url=https://web.archive.org/web/20140715192325/http://www.mtv.com/news/1582662/the-three-most-important-moments-in-gaming-and-other-lessons-from-sid-meier-in-gamefile/ |archive-date=July 15, 2014 }}</ref>  The advancement in graphic and sound capabilities of the IBM PC compatible led to several influential games from this period. Numerous games that were already made for the earlier home computers were later ported to IBM PC compatible system to take advantage of the larger consumer base, including the ''Wizardry'' and ''Ultima'' series, with future installments released for the IBM PC. [[Sierra On-Line]]'s first graphical adventure games launched with the ''[[King's Quest]]'' series. The first ''[[SimCity]]'' game by [[Maxis]] was released in 1989.<ref name="pcgamers most important games">{{cite web | url = https://www.pcgamer.com/most-important-pc-games/ | title =  The 50 most important PC games of all time | date = January 18, 2016 | access-date = March 11, 2021 | work = [[PC Gamer]] }}</ref>

The Apple [[Macintosh 128K|Macintosh]] also arrived at this time. In contrast to the IBM PC, Apple maintained a more closed system on the Macintosh, creating a system based around a [[graphical user interface]] (GUI)-driven operating system. As a result, it did not have the same market share as the IBM PC compatible, but still had a respectable software library including video games, typically ports from other systems.<ref name="apple ibm platform control"/>

The first major [[video game publisher]]s arose during the 1980s, primarily supporting personal computer games on both IBM PC compatible games and the popular earlier systems along with some console games. Among the major publishers formed at this time included [[Electronic Arts]],<ref name="polygon ea history">{{cite web | url = https://www.polygon.com/a/how-ea-lost-its-soul/ | title = How Electronic Arts Lost Its Soul | first1 = Colin | last1 = Campbell | first2= Andres | last2= Gurman | date = July 14, 2015 | access-date = March 17, 2021 | work = [[Polygon (website)|Polygon]] }}</ref> and [[Broderbund]], while Sierra On-Line expanded its own publishing capabilities for other developers.<ref>{{cite news | url = https://www.washingtonpost.com/archive/business/1989/04/24/screen-play-software-adventure-games-for-personal-computers/c40aa762-3c1d-408a-b542-2b243c5559ef/ | title = Software Adventure Games For Personal Computers | first = Stephan | last = Jones | date = April 24, 1989 | access-date=  March 19, 2021 | newspaper = [[The Washington Post]] }}</ref> Activision, still recovering from the financial impacts of the 1983 video game crash, expanded out to include other software properties for the office, rebranding itself as Mediagenic until 1990.<ref name="gamasutra activision"/>

===Early online games===
{{See also|History of massively multiplayer online games}}
[[Dial-up Internet access|Dial-up]] [[bulletin board system]]s were popular in the 1980s, and sometimes used for online gaming. The earliest such systems were in the late 1970s and early 1980s and had a crude plain-text interface. Later systems made use of terminal-control codes (the so-called [[ANSI art]], which included the use of IBM-PC-specific characters not part of an [[American National Standards Institute]] (ANSI) standard) to get a [[Box-drawing character|pseudo-graphical]] interface. Some BBSs offered access to various games which were playable through such an interface, ranging from text adventures to gambling games like [[blackjack]] (generally played for "points" rather than real money). On some multiuser BBSs (where more than one person could be online at once), there were games allowing users to interact with one another.

[[SuperSet Software]] created ''[[Snipes (video game)|Snipes]]'', a text-mode networked computer game in 1983 to test a new [[IBM Personal Computer]]–based computer network and demonstrate its abilities. ''Snipes'' is officially credited as being the original inspiration for [[NetWare]]. It is believed to be the first network game ever written for a commercial personal computer and is recognized alongside 1974 game ''[[Maze (1973 video game)|Maze War]]'' (a networked multiplayer maze game for several research machines) and ''[[Spasim]]'' (a 3D multiplayer space simulation for time shared [[mainframe computer|mainframes]]) as the precursor to multiplayer games such as 1987's ''[[MIDI Maze]]'', and ''[[Doom (1993 video game)|Doom]]'' in 1993. In 1995, iDoom (later [[Kali (software)|Kali.net]]) was created for games that only allowed local network play to connect over the internet.  Other services such as [[Kahn (software)|Kahn]], [[Total Entertainment Network|TEN]], [[Mplayer.com|Mplayer]], and [[Heat.net]] soon followed.  These services ultimately became obsolete when game producers began including their own online software such as [[Battle.net]], [[World Opponent Network|WON]] and later [[Steam (service)|Steam]].

The first user interfaces were plain-text—similar to BBSs—but they operated on large mainframe computers, permitting larger numbers of users to be online at once. By the end of the decade, inline services had fully graphical environments using software specific to each personal computer platform. Popular text-based services included [[CompuServe]], [[The Source (online service)|The Source]], and [[GEnie]], while platform-specific graphical services included [[PlayNET]] and [[Quantum Link]] for the [[Commodore 64]], [[AppleLink]] for the [[Apple II]] and [[Mac (computer)|Macintosh]], and [[AOL#History|PC Link]] for the [[IBM Personal Computer|IBM PC]]—all of which were run by the company which eventually became [[AOL|America Online]]—and a competing service, [[Prodigy (online service)|Prodigy]]. Interactive games were a feature of these services, though until 1987 they used text-based displays, not graphics.

Meanwhile, schools and other institutions gained access to [[ARPANET]], the precursor to the modern [[internet]], in the mid-1980s. While the ARPANET connections were intended for research purposes, students explored ways to use this connectivity for video games. ''[[MUD1|Multi-User Dungeon]]'' (''MUD'') originally was developed by Roy Trubshaw and [[Richard Bartle]] at the [[University of Essex]] in 1978 as a multiplayer game but limited to the school's mainframe system, but was adapted to use ARPANET when the school gained access to it in 1981, making it the first internet-connected game, and the first such [[Multi-user dungeon|MUD]] and an early title of [[massively multiplayer online game]]s.<ref>{{cite book  | last1 = Mulligan | first1 = Jessica | last2 = Patrovsky | first2 = Bridgette | year = 2003  | title = Developing Online Games: An Insider's Guide | publisher = New Riders | page = 444 | quote = 1980 ... Final version of ''MUD1'' completed by Richard Bartle.  Essex goes on the ARPANet, resulting in Internet MUDs | isbn = 1-59273-000-0 }}</ref>

===The home console recovery===
====8-bit consoles====
{{Main|Third generation of video game consoles}}
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While the 1983 video game crash devastated the United States market, the Japanese video game sector remained unscathed. That year, Nintendo introduced the [[Famicom]] (short for Family Computer), while newcomer [[Sega]] used its arcade game background to design the [[SG-1000]]. The Famicom quickly became a commercial success in Japan, with 2.5 million consoles sold by the start of 1985. Nintendo wanted to introduce the system into the weak United States market but recognized the market was still struggling from the 1983 crash and video games still had a negative perception there.<ref>{{cite magazine|title=Nintendo's Final Solution|magazine=[[Electronic Games]]|date=March 1985|volume=4|issue=36|url=https://archive.org/stream/electronic-games-magazine-1985-03/Electronic_Games_Issue_36_Vol_04_01_1985_Mar#page/n7/mode/2up|access-date=February 5, 2012|page=9}}</ref> Working with its [[Nintendo of America]] division, Nintendo rebranded the Famicom as the Nintendo Entertainment System (NES), giving it the appearance of a [[video cassette recorder]] rather than a toy-like device, and launched the system in the United States in 1985 with accessories like [[R.O.B.]] (Robotic Operating Buddy) to make the system appear more sophisticated than prior home consoles.<ref>{{cite web | url = https://arstechnica.com/gaming/2013/07/time-to-feel-old-inside-the-nes-on-its-30th-birthday/ | title = The NES turns 30: How it began, worked, and saved an industry | first=  Andrew | last=  Cunningham | date = July 15, 2013 | access-date = September 21, 2018 | work = [[Ars Technica]] }}</ref> The NES revitalized the U.S. video game market, and by 1989, the U.S. market has resurged to {{USD|5 billion|long=no}}. Over 35 million NES systems were sold in the U.S. through its lifetime, with nearly 62 million units sold globally.<ref>{{citation |title=Playing with Power in Movies, television, and Video Games: From Muppet Babies to Teenage Mutant Ninja Turtles |first=Marsha |last=Kinder |publisher=[[University of California Press]] |year=1993 |isbn=0-520-07776-8 |page=90 |url=https://books.google.com/books?id=raDNu1lThHQC&pg=PA90 |access-date=April 26, 2011}}</ref>

Besides revitalizing the U.S. market, the Famicom/NES console had a number of other long-standing impacts on the video game industry. Nintendo used the [[razor and blades model]] to sell the console at near manufacturing cost while profiting from sales of games.<ref name="down many times"/> Because games sales were critical to Nintendo, it initially controlled all game production, but at requests from companies like Namco and [[Hudson Soft]], Nintendo allowed for third-party developers to create games for the consoles, but strictly controlled the manufacturing process, limited these companies to five games year, and required a 30% licensing fee per game sale, a figure that has been used throughout console development to the present.<ref>{{cite web | url  = https://www.bloomberg.com/news/articles/2020-08-19/epic-games-fortnite-battle-with-apple-and-google-can-be-traced-to-nintendo-tax | title = Epic's Battle With Apple and Google Actually Dates Back to Pac-Man |first1 = Takahashi | last1 = Mochizuki | first2=Vlad | last2 =Savov | date = August 25, 2020 | access-date = August 25, 2020 | work = [[Bloomberg News]] }}</ref> Nintendo's control of Famicom games led to a bootleg market of unauthorized games from Asian countries. When the NES launched, Nintendo took the lessons it learned from its own bootleg problems with the Famicom, and from the oversaturation of the U.S. market that led to the 1983 crash, and created the [[10NES]] lockout system for NES games that required a special chip to be present in cartridges to be usable on NES systems. The 10NES helped to curb, though did not eliminate, the bootleg market for NES games. Nintendo of America also created the "Nintendo Seal of Approval" to mark games officially licensed by Nintendo and dissuade consumers from purchasing unlicensed third-party games, a symptom of the 1983 crash.<ref name="lockout">{{cite news |title= The Games Played For Nintendo's Sales|url=https://www.nytimes.com/1989/12/21/business/the-games-played-for-nintendo-s-sales.html?pagewanted=all|access-date=June 28, 2010|date =December 21, 1989|work=[[The New York Times]] | first=Anthony | last=Ramirez}}</ref><ref name="odeonnel nes10"/> Within the United States, Nintendo of America set up a special telephone help line to provide players with help with more difficult games and launched ''[[Nintendo Power]]'' magazine to provide tips and tricks as well as news on upcoming Nintendo games.<ref>{{cite web|url=https://www.gamedeveloper.com/business/nintendo-power-remembering-america-s-longest-lasting-game-magazine|title=Nintendo Power: Remembering America's Longest-Lasting Game Magazine|last=Cifaldi|first=Frank|date=December 11, 2012|website=[[Gamasutra]]|access-date=July 12, 2019}}</ref>

Sega's SG-1000 did not fare as well against the Famicom in Japan, but the company continued to refine it, releasing [[Sega Mark III]] (also known as the Master System) in 1985. Whereas Nintendo had more success in Japan and the United States, Sega's Mark III sold well in Europe, Oceania, and Brazil.<ref>http://www.gamepilgrimage.com/book/export/html/10920 {{Webarchive|url=https://web.archive.org/web/20160331202752/http://www.gamepilgrimage.com/book/export/html/10920 |date=March 31, 2016 }} Sega Master System vs Nintendo Entertainment System – Game Pilgrimage</ref><ref name="consolidatedsales">{{cite web|url=https://www.nintendo.co.jp/ir/library/historical_data/pdf/consolidated_sales_e0912.pdf |title=Consolidated Sales Transition by Region |access-date=February 14, 2010 |date=January 27, 2010 |publisher=Nintendo |archive-url=https://web.archive.org/web/20110224231633/http://www.nintendo.co.jp/ir/library/historical_data/pdf/consolidated_sales_e0912.pdf |archive-date=February 24, 2011 |url-status=dead  }}</ref><ref>{{cite web |url=https://www.nintendo.com/systemsclassic?type=nes |title=NES |access-date=December 4, 2007 |publisher=Nintendo |work=Classic Systems |archive-url=https://web.archive.org/web/20070804161605/http://www.nintendo.com/systemsclassic?type=nes |archive-date=August 4, 2007}}</ref>

Numerous fundamental video game franchises got their start during the Famicom/NES and Mark III/Master System period, mostly out of Japanese development companies. While [[Mario]] had already appeared in ''Donkey Kong'' and the Game & Watch and arcade game ''[[Mario Bros.]]'', ''[[Super Mario Bros.]]'', debuting in 1985, established Mario as Nintendo's [[mascot]] as well as the first of the ''[[Super Mario]]'' franchise.<ref name="gamestudies geemu"/> Sega also introduced its first mascot characters, the Opa-Opa ship from ''[[Fantasy Zone]]'' in 1986 and later replaced by [[Alex Kidd]] via ''[[Alex Kidd in Miracle World]]'' in 1986, though neither gained the popular recognition that Mario had obtained.<ref>{{cite web | url = https://kotaku.com/remembering-segas-exiled-mascot-5789284 | title = Remembering Sega's Exiled Mascot | first=  Luke | last = Plunkett | date = April 6, 2011 | access-date = March 10, 2021 | work = [[Kotaku]] }}</ref> Other key Nintendo franchises were born out of the games ''[[The Legend of Zelda (video game)|The Legend of Zelda]]'' and ''[[Metroid (video game)|Metroid]]'', both released in 1986. The formulative center of turn-based [[computer role-playing game]]s were launched with ''[[Dragon Quest (video game)|Dragon Quest]]'' (1986) from [[Chunsoft]] and [[Enix]], ''[[Final Fantasy (video game)|Final Fantasy]]'' (1987) from [[Square (video game company)|Square]], and ''[[Phantasy Star (video game)|Phantasy Star]]'' (1987) from Sega. [[Capcom]]'s ''[[Mega Man (1987 video game)|Mega Man]]'' (1987), and [[Konami]]'s ''[[Castlevania (1986 video game)|Castlevania]]'' (1986) and ''[[Metal Gear (video game)|Metal Gear]]'' (1987) also have ongoing franchises, with ''Metal Gear'' also considered to be the first mainstream [[stealth game]].<ref>{{cite web|title=The sneaky history of stealth games: Hide and seek through the ages|author=Shane Patterson|publisher=[[GamesRadar]]|date=February 3, 2009|url=http://www.gamesradar.com/the-sneaky-history-of-stealth-games/|access-date=June 21, 2009|url-status=live|archive-url=https://web.archive.org/web/20120523181200/http://www.gamesradar.com/the-sneaky-history-of-stealth-games/|archive-date=May 23, 2012}}</ref>

With Nintendo's dominance, Japan became the epicenter of the video game market, as many of the former American manufacturers had exited the market by the end of the 1980s.<ref name="cgw_50">{{Cite book|author1=Don L. Daglow|title=[[Computer Gaming World]]|date=August 1988|issue=50|page=18|chapter=Over the River and Through the Woods: The Changing Role of Computer Game Designers|quote=I'm sure you've noticed that I've made no reference to the Nintendo craze that has repeated the Atari and Mattel Phenomenon of 8 years ago. That's because for American game designers the Nintendo is a non-event: virtually all the work to date has been done in Japan. Only the future will tell if the design process ever crosses the Pacific as efficiently as the container ships and the letters of credit now do.}}</ref> At the same time, software developers from the home computer side recognized the strength of the consoles, and companies like [[Epyx]], [[Electronic Arts]], and [[LucasArts]] began devoting their attention to developing console games<ref>{{cite magazine | title=The Good, The Bad & The Uncertain | magazine=Computer Gaming World | date=November 1989 |page=4 |url=https://archive.org/details/Computer_Gaming_World_Issue_65 |issue=65}}</ref> By 1989 the market for cartridge-based console games was more than $2 billion, while that for disk-based computer games was less than $300 million.<ref>{{cite news | title=Soaring Into 1989 | magazine=Computer Gaming World | date=February 1989 | page=8}}</ref>

====16-bit consoles====
{{Main|Fourth generation of video game consoles}}
[[File:TurboGrafx16-Console-Set.jpg|thumb|The [[TurboGrafx-16]]]]
NEC released its PC Engine in 1987 in Japan, rebranded as the [[TurboGrafx-16]] in North America. While the CPU was still an 8-bit system, the TurboGrafx-16 used a 16-bit graphics adapter, and NEC chose to heavily rely on marketing the system as a "16 bit" system to differentiate it from the 8-bit NES. This ploy led to the use of processor bit size as a key factor in marketing video game consoles over the next decade, a period known as the "bit wars".<ref>{{cite journal|last1=Therrien|first1=Carl|last2=Picard|first2=Martin|date=April 29, 2015|title=Enter the bit wars: A study of video game marketing and platform crafting in the wake of the TurboGrafx-16 launch|journal=[[New Media & Society]]|volume=18|issue=10|pages=2323–2339|doi=10.1177/1461444815584333|s2cid=19553739}}</ref>

Sega released its next console, the [[Sega Genesis|Mega Drive]] in Japan in 1988, and rebranded as the Sega Genesis for its North American launch in 1989. Sega wanted to challenge the NES's dominance in the United States with the Genesis, and the initial campaign focused on the 16-bit power of the Genesis over the NES as well as a new line of sports games developed for the console. Failing to make a significant dent in NES' dominance, Sega hired [[Tom Kalinske]] to president of Sega of America to run a new campaign. Among Kalinske's changes was a significant price reduction in the console, and the bundling of Sega's newest game ''[[Sonic the Hedgehog (1991 video game)|Sonic the Hedgehog]]'', featuring Sega's newest mascot [[Sonic the Hedgehog|of the same name]], with the console. Kalinske's changes gave Genesis the edge over the NES by 1991 and led off the start of a [[console war]] between Sega and Nintendo. Nintendo's 16-bit console, the [[Super Nintendo Entertainment System]] (SNES) struggled on its initial launch in the United States due to the strength of the Genesis. This console war between Sega and Nintendo lasted until 1994 when [[Sony Computer Entertainment]] disrupted both companies with the release of the [[PlayStation]].<ref>{{cite web | url = https://venturebeat.com/2015/11/28/the-art-and-legacy-of-the-90s-console-war/ | title = The art and legacy of the '90s console war | first = Gavin | last = Greene | date = November 28, 2015 | access-date = February 22, 2021 | work = [[Venture Beat]] }}</ref>

Among other aspects of the console war between Sega and Nintendo, this period brought a revolution in [[sports video game]]s. While these games had existed since the first arcade and console games, their limited graphics required gameplay to be highly simplified. When Sega of America first introduced the Genesis to the United States, it had gotten naming rights from high-profile people in the various sports, such as ''[[Pat Riley Basketball]]'' and ''[[Joe Montana Football]]'', but the games still lacked any complexity. Electronic Arts, under [[Trip Hawkins]], were keen to make a more realistic football game for the Genesis which had the computation capabilities for this, but did not want to pay the high licensing fees that Sega were asking for developing on the Genesis. They were able to secure naming rights for [[John Madden]] and reverse engineer the Genesis as to be able to produce ''[[John Madden Football (1990 video game)|John Madden Football]]'', one of the first major successful sports games.<ref>{{cite web | url=https://www.espn.com/espn/eticket/story?page=100805/madden&redirected=true | title=The Franchise | publisher=ESPN | date=August 5, 2010 | access-date=January 23, 2015 | author=Hruby, Patrick}}</ref> Electronic Arts subsequently focused heavily on sports games, expanding into other sports like basketball, hockey and golf.<ref name="polygon ea history"/>

[[SNK Playmore|SNK]]'s [[Neo Geo (system)|Neo-Geo]] was the most costly console by a wide margin when released in 1990. The Neo-Geo used similar hardware as SNK's arcade machines, giving its games a quality better than other 16-bit consoles, but the system was commercially non-viable. The Neo-Geo was notably the first home console with support for [[memory card]]s, allowing players to save their progress in a game, not only at home but also shared with compatible Neo-Geo arcade games.<ref>{{cite journal | title = Bridging the Gap: The Neo Geo, the Media Imaginary, and the Domestication of Arcade Games | first = Benjamin | last=  Nicoll | journal = [[Games and Culture]] | volume = 12 | issue =2 | pages = 1–22 | date = 2015  |doi =  10.1177/1555412015590048 | s2cid = 147981978 }}</ref>