The Complete History Of Console Gaming Part 2: The 1980's

The Complete History of Console Gaming - Part 2

Welcome to MojoPlays, and welcome to part 2 of our journey through video game history. Over the coming weeks we’re gonna be looking at the complete history of console gaming, and after our breakdown of the ‘60s and ‘70s in part 1, we’re ready to jump straight into the ‘80s. No time to catch ya’ll up, so if you missed part 1 make sure to check it out - links in the description below! If I miss anything important, let me know in the comments.

1980s: Icarus and Rebirth

We just left the ‘70s with three massive changes to the industry: Atari released the Atari 2600 and made home consoles what they are. Taito dropped “Space Invaders!” at arcades. Namco dropped “Pac-Man”. The gaming world was BOOMING.

But in 1981, things went from “booming”, to “barreling”. Nintendo introduced Mario in the game “Donkey Kong,” two names more familiar than the Pope’s… Honestly, what is the Pope’s name? And by 1982, arcade games were making more money than movies and music combined, a feat that has never been achieved by any other entertainment industry, INCLUDING Bop-Its. Thanks to this video game boom, home consoles were ready to get HOT.

The previously mentioned Atari 2600 was STILL dominating living rooms five years on, and this obviously meant that competitors wanted a piece of that very profitable pie. Therefore, other companies started cooking up their own home consoles.

The Magnavox Odyssey 2 dropped to sales of 2 million, improving sound design. Mattel dropped their own console, the “Intellivision,” to 3 million fans, offering more realistic games. And even Coleco popped out the ColecoVision to 2 million sales, simply improving the power of home gaming to match arcades.

Home consoles came out by the bucketload. These three were very popular, but other consoles included the Bandai Super Vision 8000, Atari 5200, something called the Cassette Vision? Even that sold half a million units. It was a massive influx for the industry... But there was a problem. A problem that seems obvious to us now in the year 2026: Too many consoles, and too many people trying to pump out games and rake in cash. Output was increased, and in order to achieve increased output, quality control was basically nothing, zilch. In fact, some games were going to market basically unplayable. In the early ‘80s, the simple problem was there were too many bad games. The North American market became a mess. And then, 1983 happened.

1983: The Crash.

This was the year it all collapsed. The year that the industry was almost wiped off the face of the Earth for good. The year that turned a beloved film about a boy and an alien into a trigger for gamers of the ‘80s. Now, don’t get us wrong, “E.T. The Extra-Terrestrial” does take a lot of the blame for the crash (and we’ll talk about that soon), but don’t let the hundreds of YouTubers who talk about this fool you. It's obviously a much more fun story to blame one epically terrible title, but the reality is it was far more complicated than just one big villain. The industry was crashing HARD, LONG before E.T. had even started development. In fact, it was long before the film was released. It was 1981 and ‘82 when stores were flooded with low-quality titles. Consumer confidence tanked. And if there actually was one big villain to blame, it wasn’t E.T., but instead its publisher, Atari.

Atari was pumping out dogsh*t at an Olympic pace. And with home computers like the Commodore 64 looking smarter and more versatile than any home console at the time, people were ready to let home gaming die. Now, like I said, home gaming was already in its coffin well before E.T; but every coffin needs a final nail, and when people talk about infamous gaming disasters, “E.T. the Extra-Terrestrial” is basically the final-est nail you could ever dream of.

The idea sounded unstoppable on paper: After the massive success of E.T. the Extra-Terrestrial (the film), Atari secured the license, a HUGE get for the company, and they were hoping to cash in during the 1982 Christmas season. The problem? Well, Christmas is in December… you guys know that, right? And the film came out in June. That’s only 6 months, and that’s not even including waiting for the film to be popular enough to catch Atari’s eye, and the time spent acquiring the license. When all was said and done, and the game was ready to start development, they gave programmer Howard Scott Warshaw just five weeks to design and code the entire game for the Atari 2600. Five. Weeks. That’s about as much time as it takes to program one character’s leg to move today.

Warshaw built a surprisingly ambitious game involving exploration, item collection, and phone assembly to “call home.” But confusing mechanics (especially those infamous pits) left players frustrated and underwhelmed. Atari overproduced cartridges, expecting record-breaking sales for Christmas, but instead returns piled up, contributing to massive financial losses and (as some would argue) the official video game crash of 1983. There were so many unsold copies of E.T. that they were reportedly buried in a New Mexico landfill. Crazy.

Companies folded. Retailers panicked. And the console industry flatlined. But here’s the twist, and the reason why the home console maintained a quiet heartbeat: that crash was mostly an American problem. In Japan, gaming was thriving! America is very easy to centralize in our minds as Westerners, but don’t forget that in the same year the industry crashed, Nintendo launched the Famicom in Japan. And for any gaming fans of yesteryear, you know exactly how important that console was to gaming as we know it.

Okay, so the home console industry crashed in the U.S., but arcades were still strong. Good work, arcades. Europe wasn’t really panicking either. Gamers there were already deep into home computers like the ZX Spectrum and Commodore 64, so the console collapse didn’t wipe out the scene there either, it just carried on in another form as it did with arcades in the US. Globally, gaming never really died. It just respawned. In 1985, the single greatest thing to happen to gamers of the West happened: Nintendo brought the Famicom to North America in a redesigned form, and that form was now titled the Nintendo Entertainment System. Good lord, look at that beast. What a console. Ignoring how it feels today next to the space ship PS5, at the time the NES looked modern, felt reliable, and most importantly: Nintendo enforced strict quality control to prevent another flood of terrible games from entering the market. And boy did it work. The NES has some of the greatest games ever made, and actually not that many borderline terrible ones.

“Super Mario Bros.,” “The Legend of Zelda,” and “Metroid” didn’t just sell systems; they defined a generation. By the late ’80s, Nintendo owned living rooms worldwide, with basically no substantial competition. But peace never lasts long in gaming... Eventually, the fire nation always attacks. Sega entered the fight with the Master System, but let’s not fluff it up just for the drama, they basically failed. It was an admirable fight, but they were no match for the NES. The real punch came with the 16-bit Sega Genesis. Faster gameplay. Sharper graphics. Cooler attitude. And in 1991, Sonic the Hedgehog showed up like a blue blur with something to prove. This began one of the greatest constants in the industry: competition. What Xbox is to PlayStation, Sega was to Nintendo.

Nintendo’s answer to the Sega Genesis was the Super Nintendo, which was released in 1990, and it was a damn strong fighter. For years, Nintendo vs. Sega wasn’t just marketing; it was playground politics. Franchises exploded in popularity. “Street Fighter II” ruled fighting games. “Mortal Kombat” pushed violence into the spotlight, sparking U.S. congressional hearings and eventually leading to the creation of the ESRB rating system in 1994. And as much as I’m trying to avoid talking about handheld console gaming, because that’s a tale for another video, Nintendo did change the game with the Game Boy in 1989, BUT I’LL SHUT UP ON THAT.

Nintendo had sold tens of millions of NES units, and Sega was a legitimate challenger. Mario and Sonic were household names, arcades were still social hotspots, and most importantly, the center of gaming power had shifted. Japanese companies were now leading the charge globally, while Europe and North America balanced consoles with home computers. The crash didn’t kill video games, it forced them to level up.

In the late 1980s, a little company by the name of Sony was planning to work with Nintendo. The partnership began when Sony engineer Ken Kutaragi secretly developed a sound chip for the Super Nintendo Entertainment System. And although Sony was mad at Ken for working secretly, they were impressed, as was Nintendo who agreed to collaborate on a CD-ROM add-on for the SNES, codenamed the “Play Station.” The idea was simple: combine cartridges with CDs to allow bigger, more advanced games. But this partnership? It resulted in one of the biggest backstabs gaming has ever seen.

And the ’90s? That’s where things get wild.

Unfortunately, that ends part 2. Next time, we’re gonna dive into the ‘90s, the PS1, the N64, and some of the greatest innovations the industry ever saw, so make sure you’re subscribed if you’re not already, and I’ll see you VERY soon.