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Video games market
Electronic games
first entered the consumer market in the early 1970s with the release of Atari's Pong arcade game and later, Midway's Space Invaders in the USA. These were followed a year later by the launch of the first video game system for the home by Magnavox. A string of competing new and revamped systems then followed with Atari and Mattel, amongst others, also entering the fray. For a decade US companies dominated both the arcade and video game markets. The status quo changed in 1985 when the Japanese company, Nintendo, released its 8 bit Famicom console (renamed the Nintendo Entertainment System for the US market) and another, Sega, released its 8 bit Sega Master System in 1987.
By the time Sega had released its 16 bit Megadrive
(known as Genesis in the USA) in 1989 and Nintendo had released its 16 bit Super Nintendo Entertainment System ("SNES") in 1991, the Japanese companies were enjoying an increasingly firm grip on the global video
games market. Lead by Sega and Nintendo, the games industry reached its cyclical zenith around 1992/3 with combined sales over 55 million hardware units.
First the 3DO company (in 1993) and then Atari (in
1994) tried to break the Sega/Nintendo market stranglehold with what were, at the time, technically more advanced hardware platforms, but both failed due to a combination of over-pricing, poor software support
and, over time, comparative technical obsolescence. In early 1994 the market, reaching the end of its cycle, began to slump dramatically. Although a transition was anticipated, the speed with which the market
deteriorated took many within the industry by suprise. The reasons for this were varied: significant anticipation of the next generation of 32 and 64 bit video games systems (which were still a year from
launch), the increasing perception of 16 bit as being outdated, the failure of the intervening video games technology to stimulate the market and the high risk nature of the cartridge-based games business model
all combined to create a video games market void that lasted until 1995/1996 when Sony and Sega launched next generation consoles.
Computer games market
As early as
1984, a computer games market (as distinct from the above video games market) had also become established following the release of affordable and programmable home computers by Commodore, and, especially in the
UK, by BBC and Sinclair. These were replaced towards the end of the decade by the growing use of IBM-compatible PCs in the home and the cheaper and more games-orientated Atari ST and Commodore Amiga range of
computers. The PC games market with its continual hardware evolution has never been affected by the sorts of cyclical downturns experienced by the video games market as platforms came in and out of fashion. Due
to their failure to evolve at the same rate as the PC, all the other computer games platforms also gave up their market to the PC.
By 1994 the PC was the leading computer games
platform and with the video games industry in decline had become the most important games platform overall.
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