Home Video Game Industry
In 1972 founders Nolan Bushnell and Ted Dabney scrounged $50,000 from family, friends and local banks, formed their own company. They hired Alan Alcorn who created Pong and put a sample unit in Andy Capp's Tavern in suburban Sunnyvale to see if anyone would play it. Twenty-four hours later, the owner called Bushnell in a rage and demanded that he get over to the bar with his tool kit as soon as possible--the prototype game had broken down because it was being flooded with money. Pong was more than a game of Ping-Pong on a video screen. This was the beginning of Atari, while Atari made millions off the game consoles, they sold the software to many other major companies, and in turn they came out with their own version of pong. Although Atari saw profits from software royalties they kicked themselves out of the video game markets as other companies were using the pong model to penetrate the market.At the time of the U.S. crash, there were numerous consoles on the market, including the Atari 2600, Atari 5200, Bally Astrocade, ColecoVision, Emerson Arcadia 2001 Magnavox Odyssey 2,and the Vectrex. Home computers had more memory and faster processors than a console, they permitted more sophisticated games. They could also be used for tasks such as word processing and home accounting. Games were easier to duplicate, since they could be packaged as floppy disks or cassette tapes instead of ROM modules. This opened the field to third-party software developers. In 1986, Nintendo president Hiroshi Yamauchi noted that "Atari collapsed because they gave too much freedom to third-party developers and the market was swamped with rubbish games". In response, Nintendo limited the number of titles that third-party developers could release for their system each year, and promoted its Seal of Quality, which it allowed to be used on games and peripherals by publishers that met Nintendo's quality standards]The North American video game crash had two...
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