The Video Game Crash: Will it Happen Again?


Credit to Wesley P. Harden II

The Esports team meets in Com 1 for a discussion. Video games have been popular among teenagers for a while. Although sometimes, they can lead to either success or disappointment.

By Connor Peper, North Star Reporter

In 1983, the video game market was worth $3.2 Billion, by 1985 that number had shrunk to only $100 Million. That’s a loss of 97 percent. An entire industry almost completely destroyed in three years. Nobody knew it was going to happen until it happened, is the current industry marching down the same path? Oblivious to what will be their fate? I’m here to tell them they needn’t worry: The crash is already here.

The Past

Now, the video game scene of 1983 is an optimistic one. Everyone thinks video games are the future, and Quaker Oats (Who released 14 video games) and Purina Dog Food (Chase the Chuck Wagon) think if you play their video game, you’ll somehow be convinced to purchase more cereal or change your brand of dog food. Thus, the market had plenty of rushed, full priced games created solely to sell other products. Beyond this, every company also wanted to have its own video game console. There were more than a dozen mainstream consoles, each costing in the hundreds, each requiring to purchase more games, each pretty much indistinguishable from each other. All of these were key ingredients to market crash soup.

How did video games recover? Nintendo came to the rescue. Disguising itself as a toy, not a game console, The Nintendo Entertainment System (NES) was able to bypass the bad press and reintroduce video games to the public. Nintendo was able to gain 70% total market share and because of this monopoly, put heavy quality control on their third party publishers.

The Present

The video game scene of now is much different than the scene of then. While there will always be bad games, most videos games now are designed to be video games; not dog food advertisements. The dozens of consoles that once plagued the industry has been reduced to about five: Xbox One, PlayStation 4, The Nintendo Switch, PC and the emerging smartphone market; however, the new age has brought in new problems.

First, a point needs to be made. There will never be a video game crash like 1983 again. It’s impossible. Video games are too popular in society to “crash” like they did the first time. That’d be like saying “The book industry crashed.” Not going to happen. Half the industry is made up of only mobile games, and the rest of the industry is made of everything else. The half that’s crashing is the largest segment of the “everything else.” The multi-million dollar productions. The Call of Duty’s, the Battlefields, the Fallouts, etc… The games with the most resources behind them. The games called “Triple A” games.

Second, even in the worst of times, it’s unlikely some of the largest publishers: Electronic Arts (EA), Activision/Blizzard, Take-Two, Ubisoft, will shut their doors; however, there’s no way they can maintain their current practices without going the way of previous gaming monolith Atari. So what bad practices plague these companies?

Video game companies need money, but the Triple A publishers have gotten greedy in this pursuit. The same games are “remastered” and “re-released” with minor technical upgrades, but at full price. Games are published with less content than they used to have, but at full price. Instead of paying money for a completed product, consumers are paying for downloadable content (DLC) that would’ve come with the game a few years ago. The in-game “micro-transactions” of exchanging real currency for fake currency has expanded from cosmetic changes, to borderline Pay-To-Win (A term used to describe games in which spending additional money is required to succeed in a game) The quest for profits has eclipsed the quest to make games fans enjoy buying. That’s a mistake a company can’t afford to make. 

Evidence of the consumers losing interest and turning against these companies is now apparent. EA’s latest edition to the Battlefield, Battlefield V, sold 63% less physical copies than Battlefield I. Its sales projections had to be reduced twice and the game was already on sale as much 50% off weeks after launch. The reason? An organized consumer backlash against Battlefield V being unfaithful to history, not delivering on promised content, and releasing the most unfinished Battlefield game yet. While as dreadful Battlefield V has been, it still managed to beat another prominent example: Bethesda’s Fallout 76. Once a highly respected studio, Bethesda has fallen out the good graces of its fans. Their most recent release has faced several controversies since launch. Despite also being a broken mess upon release, Bethesda also experienced negative PR when it was revealed the game’s $200 “Power Armor Edition” promised a West Tek Canvas bag, but only delivered a significantly lower quality nylon bag. Bethesda’s first attempt to resolve this problem was to offer fans 500 of the game’s currency, atoms. The problem is 500 atoms equates to around $5.

The Future

The pessimism from fans seems to be impacting the long term outlook for these companies, and the markets move in the direction people think they’re headed. Take-Two, which owns Bethesda, stock has plunged to below 2018 levels. EA is similar, plunging to near 2017 levels. Ubisoft stock and especially Activision/Blizzard stock has also been hit, falling to or near early 2018 levels as well. While stock isn’t the best measure of a company’s future, it demonstrates concerns about the future. Consumers have had enough of these companies’ blind profit hunting and that sentiment is growing.

Companies must adapt to survive. Many of these corporations will need to reinvent the spirit that once attracted their fans. If they can’t do that: good riddance. A company that fails its consumers fails itself. Atari couldn’t adapt and Nintendo took its place. Nintendo almost lost its place to SEGA, who couldn’t adapt themselves and fell out of the public eye. The largest publishers of today got here because they knew how to make good games, and when they forget how to do that… A smaller indie studio is always willing to take their place.