The Video Game Industry In The 1980's

In 1984 the video game industry was reeling from a market saturation crash. During the 1970’s and the beginning of the 1980’s the main form for video game entertainment was to go to a local arcade with a roll of quarters and wait your turn. The home gaming console was still getting off the ground with a handful of proprietary systems. Atari and Intellivision controlled 80% of the market, an estimated 2 billion dollar market(1). These home systems where building up market share but had a problem because the demand was not big enough for the supply. The personal computer was also fighting for the same type of consumer. The release of the Apple 2, the Commodore 64 and TI 99 started a price war dropping the cost of personal computers. These factors

Producing playing cards for a game called Hanafuda. For the next 60 years until the 1950’s the main focus was on creating playing cards, even getting a license to create Disney playing cards(3). In 1956 Hiroshi Yamauchi, grandson of Fusajiro, went to America to meet with the United States Playing Card Company(3). After this meeting Hiroshi realized that if Nintendo were to survive, they would have to change their core business.

During the 1960’s and early 1970’s Nintendo expanded into many different markets, they started a taxi company, food production, even a TV network(3). These ventures failed but one showed some promise, the toy market. With the Ultra Hand, the Ultra machine and some light-gun games, Nintendo found a new market. Bandai and other companies were established in the general toy market so Nintendo turned their focus on the light-gun games. Converting old bowling alleys into shooting ranges Nintendo found success but due to the high overhead costs, they were shut down.

Nintendo still saw that video games was a place for growth and directed all their research and development into video games. In 1979 Nintendo released their first virtual handheld console, Game and Watch. With the success of Game and Watch, Nintendo released Donkey Kong which also had the first “cross” style controller which Nintendo

Yamauchi the grandson of the founder retired this year. The Gamecube did not sell very well and Nintendo had the first operating losses in over 100 years.

During this time Microsoft and Sony released their own home console and started to take over the market. A main difference between Nintendo and their competitors was Microsoft and Sony were aiming to take over the home’s total entertainment needs not just gaming. The decision of Nintendo not to follow into this type of market is deserving of a article of its own. This decision has cost Nintendo market share but because Nintendo owned the software they still remain a major player in the industry even though having a small percentage of the market.

Nintendo DS and the Wii, the release of these consoles was a major gamble for Nintendo after the Gamecube failed to perform(3). Both the DS and Wii were success in the console market and helped Nintendo gain back the market share they had lost. Both consoles were revolutionary with the DS having dual screens one of which was a touch screen. The Wii was another change with the controller and games focusing on social interactions, and health and fitness