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Comment by grumast | Hacker News Reader

I think a large part of the problem was the cost of discoverability. On modern PC and mobile, with the availability of free games, it costs nothing but time to wade through piles of bad games. Even on the C64, piracy was prevalent enough that it was easy to obtain and try a large number of games.

Atari 2600 games required purchasing cartridges and therefore an outlay of money. Without the internet, it was difficult to get reviews or feedback on the quality of a game without knowing someone that actually purchased it. Added to this, most of the games sold at full price, regardless of the quality. It doesn't take the purchase of too many full price games that were really bad before one gets very hesitant to lay out cash for a new game.

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I’ll say it simply: consumers had nothing to do with the demise of the Atari. It’s retailers, who bought cartridges without ever thinking the gravy train would stop. Atari and everyone else told them consumers had an insatiable appetite for full price cartridges.

But when the sales cratered, due to an oversupply, retailers were stuck with the cartridges without the ability to return them. So they turned to the measure that killed the Atari: clearance bins. When all the games you could hope to ever play are in a bin for a buck each, no one is buying anything at 30$ anymore.

Nintendo’s never going to say it, but their practices with the NES were not quality control; they were doing price control.

> retailers were stuck with the cartridges without the ability to return them

This was true when it came to dumping 3rd party cartridges, but that wasn't the case with Atari. Atari had a deal with retail that any unsold cartridges could be returned and exchanged for newer titles. So it was win/win for retailers -- just give Atari shelf space for carts and what was there would either sell or get returned. Zero risk to retailer.

This combined with the 2nd problem -- oversupply. What made matters worse is that for a while Atari was struggling to meet order demand. The 2600 was so hot that they couldn't fulfil 100% of retail orders. So if a store ordered 500 of something, they got 250 units. Atari built more manufacturing capacity, but sales still rose. So now the retailers were ordering 1000 units and only getting 500. The retailers got wise and started ordering a lot more than they needed, figuring Atari would only deliver half. Overordering wasn't an issue anyways due to the return policy.

The 3rd problem is that Atari expanded manufacturing enough to finally catch up with order volume. To make it worse the market had just started crashing. So now you have the makings of a perfect storm.

Retail orders double what they need, because historically Atari had trouble delivering. Atari actually delivers the goods in full this time due to increased mfg. Combined with the crashing market, this means that way too many carts were made. The carts don't sell, and semi trucks full of unsold cartridges start showing back up at the Atari docks.

Atari was blindsided, they didn't even understand what was happening at first. They were managed pretty chaotically anyways - like really badly -- and it hadn't mattered up until then because they were making so much money. Once Atari realized what was going on it was too late. They went from $300m profit in 1982 to $538m losses in 1983. They couldn't recover.

This is why there's a landfill full of Atari cartridges -- Atari realized that if they dumped the returns back into the market at a discount, prices would crater even more. So Atari actually lost less money by destroying the unsold cartridges.

What was crazy about the 1983 crash was that it took down the biggest company in that space. Usually the small companies go down but the biggest can weather it. This crash was so severe that it killed the largest company in the space. Imagine if a cratering phone market killed Apple, it was just that big of a shock.

That's very interesting, and the first time I've actually heard an explanation of the 1983 crash that makes sense.

It's always described as "the games were so bad that the market crashed" which never was a satisfactory answer to me.

You see this alot in business... its why there are business cycles.

The bad thing about "boom" markets is that you easily run the risk of building product the market doesn't need. You think it needs it, but it doesn't. So you overbuild without knowing it.

Once the market figures this out, it is usually the same story. Something along the lines of "I don't need any more product, I have enough product on the shelf to last a year" etc.

At this point you can't build anything more until the market recovers and the excess inventory is cleared out. This shuts down plants and is why people get laid off.

The more you overbuild the longer the recovery. We're dealing with the recovery due to overbuilding due to COVID right now.

In the case of 1983, it was a heck of a lot of overbuilding. Atari should be a case study in business school.

That's definitely the case. Nintendo even instituted a 5 games/year limit on publishers to limit the chances that they'd flood the market. Nintendo would have a group internally playtest games and provide feedback to publishers. Because the NES was so popular and games were cheap to develop, some publishers would submit more than 5 games per year and only publish the games that scored highest. As a result, there's tons of fully complete NES games that never got released.

Yes!

Check out the history of Ultra Games if you want some fun trivia.

Exactly this. Even to this day, Nintendo is very smart about almost never discounting their flagship games - and when they do, it’s by a small percent, sometimes with strings attached, not the crazy “90% off” tactics many other developers/publishers follow.

Playstation games being in the $15 bin while desirable N64 games never seemed to go on sale was a big reason kid me had a ton of games compared to my friends with N64s.

I still see this with my kids and their Switch. PS2 and GameCube seemed to follow the same pattern.

Yes. And it teaches the consumers that there's no point in waiting. When you want their game, you just buy it at full price on launch date, because you know that waiting for discount would take years and even then it would be 20-30% off at best.

Or in my case it taught me to not want to play the fucking thing at all.

Simple as.

Well the strategy relies on the games being really good in the first place, so that many people wouldn't take that option.

Although to continue the argument from GP: copious 90% off steam sales haven't killed PC gaming, enough people still preorder PC games at full price. It's literally a meme that people have more games than they can ever play but they still keep buying new ones.

In the '80s the games were mostly being purchased by adults for children, while today PC games are mostly purchased by adults for themselves. (I also remember being encouraged to spend my allowance on clearance-bin games when my parents wouldn't buy them new.)

Piracy of 100 in 1 cartidges for Game Boy was a thing along with Adibas bootleg. Memory was limited and the games are simple because of it. I had a 1 in 4 with space invaders and that was a comparatively shitty game but a hit on Atari (minimum viable product, worse than asteroids). So what killed Atari was extremely low quality, plain and simple.

You may have a point on price control, because I saw no main titles, and I remeber more recently the Mame community held back on (highly priced) arcade titles to not compete with sales. But you present a false dichotomy because quality control is marketing.

See, you're taking the point of view that it must happen through the prism of the player. That it has to be something the player has agency with, in this case, video game quality. I'll push back on that. Devs were making games for a console more akin to a tin can with a string than a computer. Most developers made their games alone, with very tight time constraints. Code quality was nowhere what it is today, due to the tooling. There were hard limits to what they could offer the player, so of course games look terrible with hindsight.

You can listen to They Create Worlds. They very expertly talked about the preconceived ideas about the crash, and why they're wrong.

http://podcast.theycreateworlds.com/e/the-great-video-game-c...

> their practices with the NES were not quality control; they were doing price control

A little of both: https://en.wikipedia.org/wiki/The_Market_for_Lemons

Yes, restricting overall game production held up prices, but a market of uncertain quality tends to drive down prices even for high-quality goods.

$1 video games are an unsustainable market anyway.

Nintendo's practices saved the industry. They weren't suitable forever (limiting publishers per year wasn't popular to begin with) but it's undeniable that they rose the bar in game quality on home consoles and helped restore it to a respectable industry. The Seal of Quality used to mean something.

Iirc nintendo originally allowed retailers consignment for the NES, just to get them to carry it.

This is the correct way for a retailer to do business with new, unproven vendors that do not have any leverage.

Either do consignment or do half upfront. Otherwise the retailer will end up with a bunch of bad inventory.

But review magazines, and word of mouth, would have helped identify the good games?

Review magazines barely existed. Nintendo coming along later and creating it's Nintendo Power official magazine (based heavily on Famitsu) to help direct consumers to the good games was yet another piece of the puzzle that Nintendo laid in creating a vibrant games industry.

review magazines were not universally available. a proper bookstore with a large enough selection of magazines was at least 45 minutes away from me during this time when i was too young to drive. word of mouth has a broadcast radius that is pretty limited as well. hell, i remember the first time i went to a mall with a computer store that actually had magazines dedicated to games. it's also something different from now where you might be into the games/computers, but your parents very well might have held the idea that you were rotting your brain with that stuff.

it's probably pretty hard to imagine compared to what is available today. the 80s and early 90s were pretty much the dark ages if not stone age compared to today.

Atari is before my time, but regarding SNES and gameboy, here the popular games went very much through word of mouth (and seeing) on the school playground.

I'd imagine this also be the case for Atari if multiple kids had Atari 2600's. Of course if it was rare, then that wouldn't work.

> I don't see all the millions of very, very bad games killing the PC or mobile platforms

Firstly, unlike a PC or phone, an Atari 2600 isn't useful without games.

Secondly, without ubiquitous reviews freely available on the net, players essentially had to choose new games based on the name, box design, and copy.

Beyond that, the games weren't necessarily low-quality in the QA sense, i.e. sloppily manufactured or buggy-- most of them just sucked, were ugly, and weren't fun for your average player. Keep in mind, these weren't targeted at video game enthusiasts: they were competing with home video as an entertainment device. You have to compare their appeal with movies, rather than then-current computer games or maybe even board games.

I worked in back-end web dev roles for over a decade, but more recently got an art school education in design (concentrating in a few disciplines,) and work in games in both design and technical capacities. Many old Atari games suck because they're either fundamentally bad ideas as games or disastrously implemented. Video game design wasn't really a thing back then, so all of the design work ended up being done by the developer that made the game. Though many developers get annoyed by my saying that design is a learned skill that you don't automatically gain by being a developer, I assure you that not having any designers involved ensures that these games will be more miss than hit. To make matters worse, Atari's success essentially created a gold rush condition. Everyone who was technically capable of making a game was trying to-- probably not even realizing that's exactly what everyone else was doing. It was like 2000 people on a beach saw 3 talented people surfing a wave, so they all grabbed the nearest flat object and jumped in to disastrous effect.

Poor retail strategy was obviously a problem, as others have pointed out, but if people buying games could be reasonably assured they were good, I doubt it would have had any more effect than any other big retail miscalculation.

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