Boom, collapse, and a business rebuilt on rules

Start with the noise. For the first three or four years of the decade the coin-operated business was the loudest and richest part of the medium, and its designers were solving a commercial problem that happened to produce superb design: how to make a stranger spend money again within ninety seconds. Escalating difficulty, a visible high-score table with room for initials, and characters recognizable from across a crowded room all came out of that pressure. A maze game built deliberately to appeal to women and children, rather than to the young men already filling arcades, became one of the highest-earning machines ever made and proved the audience was far larger than the trade had assumed.

Mainstream America noticed. A novelty single about an arcade game climbed the pop chart, a Saturday-morning cartoon followed, national magazines put cabinets on their covers, and the mall arcade became both a fixture of adolescence and a target of municipal ordinances about loitering. This was a boom with all the usual features of one, including the confident assumption that it would simply continue. Manufacturers, publishers and retailers planned on the basis of demand that only ever went up, and the home side of the business filled shelves with cartridges made quickly by companies with no track record, sold at whatever price would move them off the shelf.

Then the American home market fell apart. The causes were structural rather than mysterious: too many incompatible consoles chasing the same buyers, too many interchangeable cartridges of poor quality, no way for a parent to tell a good purchase from a bad one, and a platform owner with no mechanism for refusing to let anything be published at all. Prices collapsed, publishers closed, and one company's unsold inventory ended up buried in a New Mexico landfill, a story treated as folklore until it was excavated decades later. Estimates of the contraction's exact scale still vary between accounts, but the direction and the severity were never in doubt.

Recovery came from Japan, and it came with rules. A console released in Tokyo in 1983 reached the United States two years later, carefully positioned as something other than a game machine, complete with a robot accessory and a light gun, because the category had become poison at retail. More important than the presentation was the control. A chip that rejected unauthorized cartridges, a licensing program that limited how many titles a publisher could release in a year, and an approval seal that gave retailers someone to hold responsible. Quality control became a business model, and the platform holder's leverage over publishers dates from precisely this arrangement.

The software that arrived on that hardware is why the arrangement stuck. A side-scrolling platform game taught players its own rules without a word of instruction. An overhead adventure saved progress to a battery and let people wander a world with no fixed route through it. Games stopped being sessions and became things you came back to for weeks. Europe meanwhile went its own way, with cheap keyboard computers loading from cassette, teenagers mailing their own programs to tiny publishers, and 16-bit machines used as much for music and graphics as for play. Inexpensive liquid-crystal handhelds put games in pockets, and two Japanese firms were about to spend a decade fighting.