Editing Video game crash of 1983 (section)

=== Japanese domination ===
The U.S. video game crash had two long-lasting results. The first result was that dominance in the home console market shifted from the United States to Japan. The crash did not directly affect the financial viability of the video game market in Japan, but it still came as a surprise there and created repercussions that changed that industry, and thus became known as the "Atari shock".<ref name=downmany>{{cite web |url=http://sh.diva-portal.org/smash/get/diva2:213024/FULLTEXT01.pdf |title=Down Many Times, but Still Playing the Game: Creative Destruction and Industry Crashes in the Early Video Game Industry 1971–1986 |url-status=live |archive-url=https://web.archive.org/web/20140501201148/http://sh.diva-portal.org/smash/get/diva2:213024/FULLTEXT01.pdf |archive-date=May 1, 2014 }}</ref>

Prior to the crash, Jonathan Greenberg of ''[[Forbes]]'' had predicted in early 1981 that Japanese companies would eventually dominate the North American video game industry, as American video game companies were increasingly licensing products from Japanese companies, who in turn were opening up North American branches.<ref name="Greenberg">{{Cite magazine|last=Greenberg|first=Jonathan|date=April 13, 1981|title=Japanese invaders: Move over Asteroids and Defenders, the next adversary in the electronic video game wars may be even tougher to beat|url=https://jonathangreenberg.com/wp-content/uploads/2018/01/Japanese-Invaders-April-13-1981.pdf|magazine=[[Forbes]]|volume=127|issue=8|pages=98, 102|access-date=December 2, 2021|archive-date=December 2, 2021|archive-url=https://web.archive.org/web/20211202200213/https://jonathangreenberg.com/wp-content/uploads/2018/01/Japanese-Invaders-April-13-1981.pdf|url-status=live}}</ref> By 1982–1983, Japanese manufacturers had captured a large share of the North American arcade market, which Gene Lipkin of [[Data East|Data East USA]] partly attributed to Japanese companies having more finances to invest in new ideas.<ref>{{cite magazine |title=Special Report: Gene Lipkin (Data East USA) |magazine=RePlay |date=January 1991 |volume=16 |issue=4 |page=92 |url=https://archive.org/details/re-play-volume-16-issue-no.-4-january-1991-600dpi/RePlay%20-%20Volume%2016%2C%20Issue%20No.%204%20-%20January%201991/page/92}}</ref>

As the crash was happening in the United States, Japan's game industry started to shift its attention from arcade games to home consoles. Within one month in 1983, two new home consoles were released in Japan: the Nintendo [[Family Computer]] (Famicom) and [[Sega]]'s [[SG-1000]] (which was later supplanted by the [[Master System]]) heralding the [[Third generation of video game consoles|third generation of home consoles]] retrospectively.<ref name="usgamer 1983">{{cite web | url = https://www.usgamer.net/articles/greatest-years-in-gaming-history-1983 | title = Greatest Years in Gaming History: 1983 | first = Jeremy | last = Parish | date = August 28, 2014 | access-date = September 13, 2019 | work = [[USGamer]] | archive-date = January 29, 2021 | archive-url = https://web.archive.org/web/20210129233449/https://www.usgamer.net/articles/greatest-years-in-gaming-history-1983 | url-status = live }}</ref> These two consoles were very popular, buoyed by an economic bubble in Japan. The units readily outsold Atari and Mattel's existing systems, and with both Atari and Mattel focusing on recovering domestic sales, the Japanese consoles effectively went uncontested over the next few years.<ref name="usgamer 1983"/> By 1986, three years after its introduction, 6.5 million Japanese homes – 19% of the population – owned a Famicom, and Nintendo began exporting it to the U.S., where the home console industry was only just recovering from the crash.{{r|takiff19860620}}

[[File:Nintendo Family Computer (Famicom).jpg|thumb|The Famicom's international debut was delayed by two years as a result of the crash.]]
The impact on the retail sector of the crash was the most formidable barrier that confronted Nintendo as it tried to market the Famicom in the United States. A planned deal with Atari to distribute the Famicom in North America fell apart in the wake of the crash, resulting in Nintendo handling the international release themselves two years later.<ref name="Ultimate History">{{cite book |last=Kent |first=Steven L. |author-link=Steven L. Kent |title=[[The Ultimate History of Video Games: The Story Behind the Craze that Touched our Lives and Changed the World]] |year=2001 |publisher=Prima Publishing |location=Roseville, California |isbn=0-7615-3643-4}}</ref>{{rp|283–285}} Additionally, retailer opposition to video games was directly responsible for causing Nintendo to brand its product the [[Nintendo Entertainment System]] (NES) rather than a "video game system", and using terms such as "control deck" and "Game Pak", as well as producing a toy robot called [[R.O.B.]] to convince toy retailers to allow it in their stores. Furthermore, the design for the NES used a front-loading cartridge slot to mimic how [[video cassette recorder]]s, popular at that time, were loaded, further pulling the NES away from previous console designs.<ref name="g4tv gamemakers">{{Cite episode |title=NES |url=http://g4tv.com/gamemakers/episodes/4844/NES.html |series=Icons |series-link=Icons (TV series) |network=[[G4 (U.S. TV channel)|G4]] |airdate=December 1, 2005 |season=4 |number=5010 |url-status=live |archive-url=https://web.archive.org/web/20121016233741/http://www.g4tv.com/gamemakers/episodes/4844/NES.html |archive-date=October 16, 2012 }}</ref><ref>{{cite web |url=http://archive.gamespy.com/articles/july03/25smartest/index22.shtml |title=25 Smartest Moments in Gaming |publisher=[[GameSpy]] |page=22 |date=July 21–25, 2003 |url-status=live |archive-url=https://web.archive.org/web/20120902124439/http://archive.gamespy.com/articles/july03/25smartest/index22.shtml |archive-date=September 2, 2012 }}</ref><ref>{{cite web | url = https://www.theverge.com/2015/10/18/9554885/nintendo-entertainment-system-famicom-history-masayuki-uemura | title = 7 things I learned from the designer of the NES | first = Sean | last = O'Kane | date = October 18, 2015 | access-date = September 21, 2018 | work = [[The Verge]] | archive-date = October 19, 2015 | archive-url = https://web.archive.org/web/20151019130146/http://www.theverge.com/2015/10/18/9554885/nintendo-entertainment-system-famicom-history-masayuki-uemura | url-status = live }}</ref>

{{Image frame|width=225 | align=right | content=[[File:NES-Console-Set.jpg|200px]]<br />[[File:Sega-Genesis-Mod1-Set.jpg|200px]]|caption=Following the crash, Nintendo became the market leader in America with the [[Nintendo Entertainment System]] (top), with Japanese companies dominating the market for years to come. The [[Sega Genesis]] (bottom) released in 1989 was the first real challenger to Nintendo's market dominance in North America.}}
By the time the U.S. video game market recovered in the late 1980s, the NES was by far the dominant console in the United States, leaving only a fraction of the market to Atari. By 1989, home video game sales in the United States had reached $5 billion, surpassing the 1982 peak of $3 billion during the previous generation. A large majority of the market was controlled by Nintendo; it sold more than 35 million units in the United States, exceeding the sales of other consoles and personal computers by a considerable margin.<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 |archive-date=February 9, 2023 |archive-url=https://web.archive.org/web/20230209133536/https://books.google.com/books?id=raDNu1lThHQC&pg=PA90 |url-status=live }}</ref> New Japanese companies entered the market to challenge Nintendo's success in the United States, NEC's [[TurboGrafx-16]] and the [[Sega Genesis]], both released in the U.S. in 1989. While the TurboGrafx underwhelmed in the market, the Genesis' release set the stage for a major rivalry between Sega and Nintendo in the early 1990s in the United States video game market.