Editing Commodore 64 (section)

=== 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>