The Crash of 1983
Anyone could publish software, and there was no gatekeeper checking quality. Shelves filled up, customers no longer knew what to buy, retailers were left holding inventory and slashed prices, and trust collapsed. ⚠️ The famous figure often quoted for how far the market shrank ($3.2 billion to $100 million) traces back to fan sites and a 1989 local newspaper. Because the sourcing is weak, this map does not print the number. In Japan this collapse is called "Atari Shock," but that is a Japanese coinage, and who first used the term is not known (in English it is called the video game crash of 1983). And Japan's home console market was beginning that same year — the Famicom was released in July of 1983. The structural answer to the crash — a system deciding who is allowed to publish software — becomes the foundation of the empire that follows.
The myth, corrected
The poor quality of E.T. caused the crash of 1983
The story that cartridges were buried in the New Mexico desert was long told as an urban legend, and an April 2014 excavation confirmed it was true — 1,382 units were actually recovered. But the number buried was not as large as the legend claims, and this one game was not the cause of the crash either. The main causes research points to are market saturation, mass-produced junk, and the excess inventory retailers were left holding. The legend persists because it's easier to grasp, but what broke the market was not one bad game — it was too many games to choose from.