Someone can find some real sources, but I read an article a while back explaining that - from what I recall - what really killed the industry was supply issue that got out of hand. When the Atari started to take off, they didn't have the production capacity to keep up with orders stores were putting in. Stores were being sent about x% of the size of order they requested, so the stores started putting in much bigger order requests to get the amount of stock to actually fulfill demand for their store. Because of this, Atari figured there was way more demand than there was in reality, so once they finally scaled up production they were suddenly able to fulfill the giant order requests stores were putting in, which was way more than they could actually sell. Suddenly stores were overloaded with Atari cartridges, and putting them into bargain bins just to get rid of stock. From there, it seemed like the home console thing was just a fad that came and went. ET just happened to be the big game Atari was pumping out units of because of their overestimation of demand.