North American video game crash of 1983 — 1983 video gaming economic recession
A near-total collapse of the North American home video game market from 1983 to 1985 reshaped the industry and ended the second generation of console gaming.
Key Facts
- Peak revenue (1983)
- $3.2 billion USD
- Revenue at trough (1985)
- $100 million USD
- Revenue decline
- ~97%
- Duration
- approximately 2 years (1983–1985)
- Recovery driver
- Nintendo Entertainment System (NES), released October 1985
By the Numbers
Location
Cause → Event → Consequence
The crash stemmed from market saturation in both consoles and games, a flood of low-quality titles eroding consumer confidence, and a broader shift in consumer interest toward personal computers over dedicated gaming hardware.
From 1983 to 1985, the North American video game industry experienced a severe economic recession. Home video game revenues collapsed from approximately $3.2 billion in 1983 to around $100 million in 1985, a drop of nearly 97%, abruptly ending the second generation of console gaming.
Several companies producing home computers and video game consoles went bankrupt, and industry analysts questioned whether console gaming had a viable future. Recovery came only with Nintendo's successful launch of the NES in October 1985, which was deliberately designed to overcome the stigma the crash had created.