Companies that bowed out with the crash

[tz101]

Remembering the heyday of Atari, Intellivision, and Colecovision got me thinking about some of the third party game developers that either went under or just got entirely out of the business with the "great crash of 83". Companies like Imagic, Parker Bros, 20th Century Fox, and CBS. Now, my question is: Why? Obviously companies such as Mattel, Parker Bros, Fox, and CBS exist to this day, so why did they never re-enter the game development arena again on platforms like NES and the 7800? I am guessing that Imagic and Parker Bros. made pretty good money from their 2600, Intellivision, and Colecovision games, so why would they not want to try their hand at success on the platforms that followed? Even if they were gun-shy after the great fallout of '83, they had to see that things had turned for the better after NES began to rule the world around '87 or so. Did they get burned so badly in the great crash that they could not muster the backing among shareholders to re-enter the video game sector? For all intents and purposes, Imagic ceased to exist in the mid 80's, so they must have been irreparably harmed by the crash, but all the others I have named remain to this day. So, the mystery is, why did all these companies permanently bow out of the video game wars after 1983?

[fiddlepaddle]

The video game fad had pretty much played itself out. At least that was the thinking at the time. Nintendo locked down the market with it's marketing, merchandising, and intellectual property tactics. In addition, the Next Big Thing was all about personal computers being able to balance your checkbook and store recipes and stuff. By the time a couple of years went by, most of the people who drove those companies were working somewhere else. I remember even I got a bit cynical about it all, and I've ALWAYS liked video games.

[high voltage]

Because of the almost 5 year gap between consoles (crash - NES) companies like Imagic, Parker etc tried to turn to making computer software, eg follow the route Activision did. Most of them failed. By the time the NES finally made it into the mainstream, companies like CBS, 20th Century Fox lost interest making console games.

Edited February 27, 2010 by high voltage

[Greg2600]

As with many of the start-up tech companies in the late 90's, the game developers were small companies with very little capital to start with. They relied on loans most likely, and when the sales died off, there's no money to pay the debts. Also, when the games didn't sell, the stock was returned to the vendor. That meant the Imagic's of the world were stuck with the inventory, which was doubly worse. When Nintendo came in, and was so successful right off the bat, they immediately instituted several procedures. First, they prevented developers from over-producing games. Second, they refused to take back unsold merchandise from stores. Not exactly very business-like or friendly, but the stores had to cow tow to them.

[jferio]

One can also imagine, in those companies that the video games were a sideline business, there was a rather serious lack of interest in reentering a market that had already spectacularly crashed once, and wasn't guaranteed to do another crash in a quick time. CEOs and investors don't like to get burned twice. By the time they realized it was sticking around this time, it was too late to get in on the ground floor.

[Blues_Bloody]

Parker Bros. made games for the Sega Master System after the crash.

[jaybird3rd]

I suspect that there were several reasons. As others have pointed out, a significant percentage of the companies that were making video games during the pre-crash years (such as Mattel on the hardware side and 20th Century Fox and Quaker Oats on the software side) were only doing it because it was a profitable fad; video games weren't their main business and they didn't have a long-term commitment to the industry, or they were smaller fly-by-night companies trying to cash in on the fad. The crash happened because there were too many companies pumping too much product into the market, with no barriers to entry and no real quality control: if you could reverse-engineer the console and find a high-school kid to do your programming for you, and if you could get cartridges manufactured, you could become a video game publisher. It soon became clear that video games weren't a guaranteed license to print money, and after they decided that video games were dead for good, these companies either went back to their main sources of income, moved on to less-volatile industries, or went under.

 

Those who did have a long-term commitment to video games transitioned to other segments of the industry, so they were making their money elsewhere by the time consumer video games came back (although some of them did get back into the consumer market later). Activision had completed their public offering prior to the crash, and that brought in the cash they needed to survive long enough to make the transition to home computers. But that was a relatively small market at the time and couldn't support more than a few companies: it was mostly divided between Electronic Arts, Sierra, Broderbund, and Activision. Imagic wasn't lucky enough to get their public offering in on time, and although they tried to transition to computers with their IBM PCjr and TI-99/4A product, it wasn't enough to keep them afloat. Others, such as the Videa/Sente guys, moved on to coin-operated arcade games, which weren't as adversely affected by the crash.

 

Another thing to consider is that the revival of consumer video games was sparked by Nintendo, which had learned from Atari's mistakes and made it much more difficult for publishers to enter the market. As I understand it, if you wanted to develop for the NES, you had to get a license from Nintendo, Nintendo decided whether your game would be published and how many units would be produced, and you had to pay Nintendo to manufacture it. Nintendo scored new games according to eight criteria, each on a scale of one to five: graphics, sound, playability, replayability, documentation, initial impression, portability, and originality. Unless your game got a 75% score (30 out of 40 points), Nintendo didn't let it go out. This changed the economics of the business and made it impossible to break into it unless you were a large publisher (such as Electronic Arts, or Atari Games under the Tengen label) who could put enough resources into game development to satisfy Nintendo, so video games weren't seen as a profitable sideline by other businesses, at least not to the extent that they were before the crash. This, along with the bad experiences from the crash, probably kept those pre-crash companies that were still in existence from getting back into the industry.

[CRV]

Parker Bros. made games for the Sega Master System after the crash.

 

And the NES. And the Genesis. And the Super NES.

[gamerz]

Mattel did give it one shot on the Nintendo NES with Super Glove Ball , big fail, probably why they then bowed out.

[Rev]

mattel hyperscan was a big hit!

[tz101]

Mattel did give it one shot on the Nintendo NES with Super Glove Ball , big fail, probably why they then bowed out.

 

Ok, agreed, but Mattel is far too monied of a company to give it up with a single try like the Power Glove project.

 

mattel hyperscan was a big hit!

 

Again, a weak effort with little marketing or brand awareness (I didn't even know these existed until they were being clearanced by all the big retailers a few years back). Mattel is the top toy company in the world and they cannot market a video game system with any success? Are they being run by some amateurs over there?

[fiddlepaddle]

mattel hyperscan was a big hit!

Again, a weak effort with little marketing or brand awareness (I didn't even know these existed until they were being clearanced by all the big retailers a few years back). Mattel is the top toy company in the world and they cannot market a video game system with any success? Are they being run by some amateurs over there?

Mattel is all about Hot Wheels and Barbie; everything else is just an afterthought.

[brak]

i believe mattel was actually a distributor of the NES and NES games in europe/canada. i've seen pics of black label NES games with the red mattel star thing on them. dude over on nintendoage has the while black label mattel set.

[CRV]

Mattel (Mattel Media/Mattel New Media, specifically) put out games for the GBA, DC, GBC, PS1, Windows, and Mac.

Edited March 5, 2010 by CRV

[mattyg]

i believe mattel was actually a distributor of the NES and NES games in europe/canada. i've seen pics of black label NES games with the red mattel star thing on them. dude over on nintendoage has the while black label mattel set.

 

 

In Australia too! Until Nintendo set up an internal distribution network here their NES and SNES consoles were all labelled "Mattel" on the packaging right up to the N64.