Editing Video game crash of 1983 (section)

=== Competition from home computers ===
{{see also|History of personal computers}}
[[File:Commodore-64-Computer-FL.jpg|thumb|right|The [[Commodore 64]] survived the crash and became one of the best-selling computers of all time.]]

Inexpensive home computers had been first introduced in 1977. By 1979, Atari, Inc. unveiled the [[Atari 8-bit computers|Atari 400 and 800]] computers, built around a chipset originally meant for use in a game console, and which retailed for the same price as their respective names. In 1981, [[IBM]] introduced the first [[IBM Personal Computer]] with a $1,565 base price<ref name="ibmpc25">{{cite web|url=http://www-03.ibm.com/ibm/history/exhibits/pc25/pc25_birth.html|title=IBM Archives: The birth of the IBM PC|date=January 23, 2003|url-status=dead|archive-url=https://web.archive.org/web/20140102212336/http://www-03.ibm.com/ibm/history/exhibits/pc25/pc25_birth.html|archive-date=January 2, 2014}}</ref> ({{Inflation|US|1565|1981|fmt=eq}}), while [[Sinclair Research]] introduced its low-end [[ZX81]] microcomputer for [[Pound sterling|£]]70 ({{Inflation|UK|70|1981|fmt=eq|cursign=£}}). By 1982, new desktop computer designs were commonly providing better color graphics and sound than game consoles and personal computer sales were booming. The [[TI-99/4A]] and the Atari 400 were both at $349 ({{Inflation|US|349|1982|fmt=eq}}), the [[TRS-80 Color Computer]] sold at $379 ({{Inflation|US|379|1982|fmt=eq}}), and [[Commodore International]] had just reduced the price of the [[VIC-20]] to $199 ({{Inflation|US|199|1982|fmt=eq}}) and the [[Commodore 64]] to $499 ({{Inflation|US|499|1982|fmt=eq}}).<ref name="Ahl">Ahl, David H. (1984 November). [http://www.atarimagazines.com/creative/v10n11/30_The_first_decade_of_perso.php The first decade of personal computing] {{webarchive|url=https://web.archive.org/web/20161210124312/http://www.atarimagazines.com/creative/v10n11/30_The_first_decade_of_perso.php |date=December 10, 2016 }}. ''Creative Computing'', vol. 10, no. 11: p. 30.</ref><ref>{{cite web|url=http://www.westegg.com/inflation/infl.cgi|title=The Inflation Calculator|url-status=live|archive-url=https://web.archive.org/web/20180326173743/https://westegg.com/inflation/infl.cgi|archive-date=March 26, 2018}}</ref>

Because computers generally had more [[Computer storage|memory]] and faster [[central processing unit|processors]] than a console, they permitted more sophisticated games. A 1984 compendium of reviews of Atari 8-bit software used 198 pages for games compared to 167 for all other software types.<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}}</ref> Home computers could also be used for tasks such as [[word processing]] and home accounting. Games were easier to distribute, since they could be sold on [[floppy disk]]s or [[cassette tape]]s instead of [[Read-only memory|ROM]] cartridges. This opened the field to a [[cottage industry]] of third-party software developers. Writeable storage media allowed players to save games in progress, a useful feature for increasingly complex games which was not available on the consoles of the era.

In 1982, a price war that began between Commodore and Texas Instruments led to home computers becoming as inexpensive as video-game consoles;<ref name="pollack19830619">{{cite news |url=https://www.nytimes.com/1983/06/19/business/the-coming-crisis-in-home-computers.html?pagewanted=all |title=The Coming Crisis in Home Computers |work=The New York Times |date=June 19, 1983 |access-date=January 19, 2015 |author=Pollack, Andrew |url-status=live |archive-url=https://web.archive.org/web/20150120040951/http://www.nytimes.com/1983/06/19/business/the-coming-crisis-in-home-computers.html?pagewanted=all |archive-date=January 20, 2015 |url-access=limited}}</ref> after Commodore cut the retail price of the C64 to $300 in June 1983, some stores began selling it for as little as $199.{{r|mitchell19830906}} [[Dan Gutman]], founder in 1982 of ''Video Games Player'' magazine in an article in 1987, recalled in 1983 that "People asked themselves, 'Why should I buy a video game system when I can buy a computer that will play games and do so much more?'"{{r|gutman198712}} ''[[The Boston Phoenix]]'' stated in September 1983 about the cancellation of the [[Intellivision III]], "Who was going to pay $200-plus for a machine that could only play games?"<ref name="mitchell19830906">{{cite news |url=https://news.google.com/newspapers?id=gn0hAAAAIBAJ&pg=5584%2C3561802 |title=A summer-CES report |work=Boston Phoenix |date=September 6, 1983 |access-date=January 10, 2015 |author=Mitchell, Peter W. |pages=4 |archive-date=February 9, 2021 |archive-url=https://web.archive.org/web/20210209104106/https://news.google.com/newspapers?id=gn0hAAAAIBAJ&pg=5584%2C3561802 |url-status=live }}</ref> Commodore explicitly targeted video game players. Spokesman [[William Shatner]] asked in VIC-20 commercials "Why buy just a video game from Atari or Intellivision?", stating that "unlike games, it has a real computer keyboard" yet "plays great games too".<ref name="cbmtvad">{{Cite AV media |url=https://www.youtube.com/watch?v=UK9VU1aJvTI |title=Commodore VIC-20 ad with William Shatner |date=June 9, 2010 |url-status=live |archive-url=https://web.archive.org/web/20170406170423/https://www.youtube.com/watch?v=UK9VU1aJvTI |archive-date=April 6, 2017 }}</ref> Commodore's ownership of chip fabricator [[MOS Technology]] allowed manufacture of [[integrated circuit]]s [[Vertical integration|in-house]], so the VIC-20 and C64 sold for much lower prices than competing home computers. In addition, both Commodore computers were designed to utilize the [[Atari joystick port|ubiquitous Atari controllers]] so they could tap into the existing controller market.

"I've been in retailing 30 years and I have never seen any category of goods get on a self-destruct pattern like this", a [[Service Merchandise]] executive told ''The New York Times'' in June 1983.{{r|pollack19830619}} The price war was so severe that in September Coleco CEO [[Arnold Greenberg (Coleco)|Arnold Greenberg]] welcomed rumors of an [[IBM PCjr|IBM 'Peanut']] home computer because although IBM was a competitor, it "is a company that knows how to make money". "I look back a year or two in the videogame field, or the home-computer field", Greenberg added, "how much better everyone was, when most people were making money, rather than very few".<ref name="coleco19830928b">{{Cite AV media |url=https://www.youtube.com/watch?v=gg_I9TGYM-w |title=Coleco Presents The Adam Computer System |date=May 3, 2016 |publisher=YouTube |orig-year=1983-09-28 |time=1:06:55 |quote=IBM is just not another strong company making a positive statement about the home-computer field's future. IBM is a company that knows how to make money. IBM is a company that knows how to make money in hardware, and makes more money in software. What IBM can bring to the home-computer field is something that the field collectively needs, particularly now: A respect for profitability. A capability to earn money. That is precisely what the field needs ... I look back a year or two in the videogame field, or the home-computer field, how much better everyone was, when most people were making money, rather than very few were making money. |url-status=live |archive-url=https://web.archive.org/web/20170103132547/https://www.youtube.com/watch?v=gg_I9TGYM-w |archive-date=January 3, 2017 }}</ref> Companies reduced production in the middle of the year because of weak demand even as prices remained low, causing shortages as sales suddenly rose during the Christmas season;<ref name="rosenberg19831208">{{Cite news |title=Home Computer? Maybe Next Year |last=Rosenberg |first=Ronald |date=December 8, 1983 |work=[[The Boston Globe]]}}</ref> only the Commodore 64 was widely available, with an estimated more than 500,000 computers sold during Christmas.<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-status=live |archive-url=https://web.archive.org/web/20171107112231/http://www.nytimes.com/1983/12/10/business/under-1983-christmas-tree-expect-the-home-computer.html |archive-date=November 7, 2017 |url-access=limited}}</ref> The 99/4A was such a disaster for TI, that the company's stock immediately rose by 25% after the company discontinued it and exited the home-computer market in late 1983.<ref name="ap19831101">{{Cite news |title=IBM's Peanut Begins New Computer Phase |date=November 1, 1983 |work=The Boston Globe |agency=Associated Press}}</ref><ref name="maceti19831121">{{cite news | url=https://books.google.com/books?id=uy8EAAAAMBAJ&pg=PA22 | title=TI retires from home-computer market | access-date=February 25, 2011 | author=Mace, Scott | date=November 21, 1983 | work=InfoWorld | pages=22, 27}}</ref> [[JCPenney]] announced in December 1983 that it would soon no longer sell home computers, because of the combination of low supply and low prices.<ref name="bg19831217">{{Cite news |title=Penney Shelves its Computers |date=December 17, 1983 |work=The Boston Globe}}</ref> [[Radio Shack]] avoided drastic price cuts for its home computers and remained profitable in 1983.<ref name="ahl198411">{{cite web | url=http://www.atarimagazines.com/creative/v10n11/292_Tandy_Radio_Shack_enters_.php | title=Tandy Radio Shack enters the magic world of computers | accessdate=February 26, 2011 | author=Ahl, David | date=November 1984 | work=[[Creative Computing]] | page=292}}</ref>

By that year, Gutman wrote, "Video games were officially dead and computers were hot". He renamed his magazine ''Computer Games'' in October 1983, but "I noticed that the word ''games'' became a dirty word in the press. We started replacing it with ''simulations'' as often as possible". Soon "The computer slump began ... Suddenly, everyone was saying that the home computer was a fad, just another hula hoop". ''Computer Games'' published its last issue in late 1984.<ref name="gutman198712">{{cite magazine |url=https://archive.org/stream/COMPUTEs_Apple_Applications_Vol._5_No._2_Issue_6_1987-12_COMPUTE_Publications_US#page/n65/mode/2up |title=The Fall And Rise of Computer Games |magazine=Compute!'s Apple Applications |date=December 1987 |access-date=August 18, 2014 |author=Gutman, Dan |pages=64 |volume=5 |number=2 #6}}</ref> In 1988, ''[[Computer Gaming World]]'' founder Russell Sipe noted that "the arcade game crash of 1984 took down the majority of the computer game magazines with it." He stated that, by "the winter of 1984, only a few computer game magazines remained", and by mid-1985, ''Computer Gaming World'' "was the only 4-color computer game magazine left".<ref>{{cite magazine |url=http://www.cgwmuseum.org/galleries/issues/cgw_50.pdf#page=7 |archive-url=https://web.archive.org/web/20160418152038/http://www.cgwmuseum.org/galleries/issues/cgw_50.pdf |archive-date=April 18, 2016 |issue=50 |magazine=Computer Gaming World |pages=6–7 |date=August 1988 |title=The Greatest Story Ever told |first=Russell |last=Sipe |url-status=live}}</ref>