Video: The Crash and Rebirth of an Industry

Module Introduction: The Crash and Rebirth of an Industry

Welcome to this week's module.

How can a multi-billion dollar industry, larger than Hollywood at its peak, lose 97% of its value and effectively vanish in just two years? It sounds unbelievable, but this is exactly what happened to the video game industry in 1983.

This week, we will analyze one of the most dramatic case studies in modern business history: The Great Video Game Crash of 1983. This event is far more than a historical footnote; it's a powerful lesson in market dynamics, quality control, consumer trust, and business strategy.

The video presentation below, "The Crash That Changed Games," will be our primary learning material for this topic. It masterfully breaks down the "perfect storm" of factors that led to the industry's collapse, from a flooded market of competing consoles to an avalanche of low-quality software, famously symbolized by the disastrous E.T. The Extra-Terrestrial game.

Learning Objectives:

As you watch this video, your goal is to understand and be able to explain:

• The primary causes of the 1983 video game market collapse.

• The strategic differences between Atari's open-platform model and Nintendo's "walled garden" approach.

• The critical importance of quality control and how Nintendo's "Seal of Quality" rebuilt consumer trust.

• The long-term legacy of this crash on the structure of the modern gaming and digital content industries.

Your Task:

Please watch the video carefully. As you do, consider the following questions, as they will be relevant to our upcoming discussion and assignments:

1. Was the failure of the E.T. game a cause of the crash, or merely a symptom of deeper industry-wide problems?

2. How did a lack of market regulation contribute to both the initial boom and the subsequent bust?

3. In what ways do we see the lessons from this crash applied in today's digital marketplaces, such as the Apple App Store or the PlayStation Store?

Enjoy the presentation. This story is a foundational piece of knowledge for anyone interested in business, technology, or media.