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Thread: Atari and Decline...

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    ServBot (Level 11) Aswald's Avatar
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    Default Atari and Decline...

    A while back, while repairing my 5200, something occurred to me- that with each new system, Atari fell further and further behind.

    When they came out with the 2600, Atari was all but unbeatable. NOTHING matched the 2600 in sales; it wasn't even close. This included the technically superior Intellivision a couple of years later, even with initial games like Auto Racing- which was about as good as any racing arcade game back in 1979.

    Now, one could point out timing, the lack of good competition at that point (the era of the programmable was just starting, remember), or the fact that the 2600 was backed by more arcade games- Atari was also producing popular arcade games at that point- but the fact remained that the 2600 was on top then.


    Then, in 1982, the year of the ColecoVision, there was the 5200.

    For the first time, Atari found itself in second place. 5200 sales never matched CV sales; this is one reason why it is easier to find CVs and games out there.

    There could be a number of reasons for this: the CV had a number of popular and good "sleeper" arcade titles to match Atari's; it had an all-important head start of a few months (arcade games had advanced greatly, and a home system to deal with this was anticipated very much); or, very likely, Atari already had the 2600, most 5200 games were versions already found on the 2600, and Atari was still supporting the 2600- as were many third-party companies. The CV stood alone at that point.

    But the 5200 was second to the CV. It was not a very distant second, though, so it was still a strong contender.


    Things get tricky with the 7800. For years, rumors have persisted that it was the 7800, not the 5200, that was supposed to have been Atari's next system, but the release of the CV forced Atari's hand, and they rushed out the 5200- an Atari 400 without the keyboard. This has never been proven, although the timing- the late 1982 release of the 5200, and its abandonment in early 1984, with the 7800 being announced- which meant it was developed at least in 1983- does lend some credibility to it.

    But the break-up of Atari in 1984, and the Baby-Boomer marketer created crash of 1984, stalled the 7800.

    But let's say the crash had not happened, Atari had not broken apart, and Coleco stayed with the CV and not gone with the ADAM- what would have happened?

    As someone who was there, and who knew a number of 5200 owners, before the true Internet age, I can say this for a fact: 5200 owners were disgusted and furious at being dumped by Atari after just 1 1/2 years- if. Even video game magazines from that time said as much.

    So it's highly unlikely that the 7800 would have even done as well as the 5200 did- why would 5200 owners dump their 5200s for games (mostly) they already had? Maybe twice over! If those games did not sway CV owners the first time, it would not have worked that time, so that was a dead end. I will maintain to this day that Atari should have stuck with the 5200, and abandoned the 7800- as it was at that point- altogether. When the time came for a new system, then one superior to the 7800 could have been released.

    But the crash did happen, Atari did break up, and Coleco- if not the CV- was gone.

    By the time the Tramiels (Grrr- puh puh!) released the 7800, the NES was holding over 85% of the market, and it was the big name. The 7800 limped along with some good titles from the past, but access to current arcade games was too limited, third party support was weak at best, and unlike the days of the 2600 and 5200, an "Atari" arcade game no longer was something an Atari home system owner could count on as being brought home to his system.

    So the poor 7800 just hobbled along, left behind by Nintendo and Sega, a joke in the industry.

    It was third- only because there wasn't a fourth.


    By the time the Jaguar came out, Atari was a bad joke, it had no credibility, and were reduced to that truly rotten infomercial. How different things were from when 2600 owners were thrilled by that commercial of the Atari Olympics, announcing...SPACE INVADERS for the 2600- and it did not disappoint! Or the bright promise of 5200 Ms. Pac-Man, or Berzerk.

    Was Atari just lucky with the 2600, I wonder, or did something else happen to it over the years?
    Interesting stuff, here (COMPLETELY unbiased opinion, hehhehheh):

    http://griswaldterrastone.deviantart.com/

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    Kirby (Level 13) diskoboy's Avatar
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    To most of us, Atari was dead before the 5200 was ever released. Atari's lack of quality began to become apparent (some would argue) even before Pac-Man. Not tom mention all the internal struggles with the company, and the early VCS programmers...

    Strike 1 was that abortion they released called Pac-Man - and lets just say, even at Strike 1, Atari couldn't just play this debacle down - Pac-Man was the biggest game in the world, at the time. To alot of people, that was strike 1, 2, and 3, in one blow.

    Strike 2 was ET. None of us knew, nor cared about how much Atari shelled out for that steaming turd, until we found out it was the cause of all of Atari's problems.. We just knew it was an awful game. Most of the time, when a player fell down a pit, it was time to find another game to play.

    Strike 3, and the out was the 5200.

    I vividly remember playing the 5200, for the first time, at a Target, way back around Christmas of 1983. Target made the huge mistake of having Pac-Man being the demo game for the kiosk. Trying to play Pac-Man with a 5200 was a nightmare, since the stick wouldn't self center. And Target even had one of those metal "contoller guides" that you put over your 5200's controller to make games like Pac-Man "easier to control". When in all actuality - it made playing it much, much worse because it seems like the controllers would never calibrate back to center. Instead of asking for a 5200, that Christmas, I asked for a Commodore 64.

    As for skipping on the Famicom.... I'm actually glad they did. Atari wouldnt've marketed it, and let it fail. Nintendo would probably never attempted to release another console here in the US, until probably the N64. And I don't think Zelda, SMB, Metroid, and all the other games we came to know and love during the NES years would've gotten the attention they did then, and still do now.

    The Atari/Famicom deal has always been a fascinating hypothetical, to me...
    Last edited by diskoboy; 10-08-2010 at 05:25 PM.

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    ServBot (Level 11) tom's Avatar
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    Atari was never second to the CV even in 82, I mean the VCS caused the crash in 83, a lesser system would not have done so. So the 5200 was second to the CV, but hey the 2600 was still 'the kaiser'.

    The 7800 was never intended to be released before the 5200, the Maria chip hadn't been out yet, also, pre 7800, GCC were busy creating arcade games for Atari and 2600 carts and 5200 carts too, but starting in 83 with the 7800.
    The VCS was also constantly updated (although not released), the 5200s life was not cut short, it didn't live up to expectations, so by 83 a next system was already in the works. Atari was always designing more systems.
    The 5200 did have updated games of previous 2600 games, not the same, think Super Mario Bros, Nintendo's been doing this for years. Read the Arnie Katz interview, the scope was different, that's all.

    The 7800 was released in 1984, but the video game crash in 1983 and sale of Atari cut its life quite short. Atari had big plans with the 7800, bringing, for the first time, real 'arcade like' looking games home, eg MS. Pac-Man (programmed by Bally for the 7800) etc...

    When NES came about and got popular by 1987 (one year after the 7800 release), Nintendo made all all NES game developers/publishers to sign contracts which forbid them to release the game on other consoles. Due to this illegality Atari could not have had Japanese arcade titles, which at the time, became hugely popular by the Americans.

    Atari was not 'just lucky' with the 2600, Atari Corp was extremly popular with the ST range of computers, selling all over the world, very well in Europe and to musicians due to the inbuilt Midi ports/capabilities, and the Atari Corp. 8-bit range was very succesful too.

    If the crash in 83 wouldn't have happened and Atari would not have broken apart, it would have distributed the NES in the USA, like Nintendo wanted Atari to do so, and it would have been another big seller too.
    (Remember how it took Nintendo almost 3 years to popularise the NES in the USA (AVS showcased in Jan 1984), it wasn't plain sailing for them you know).
    The 7800 would have been history by then.

    By early 90s Atari would have distributed the Genesis in the USA, like Sega wanted Atari to do so, it would have been another huge seller too. Atari would have been 'god'.

    .
    Last edited by tom; 10-09-2010 at 06:02 AM.

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    Atari was poorly managed by the Warner Communications parent. However, remember many of the lessons video game companies follow today were learned unfortunately by Atari, Activision, Coleco, Mattel, etc. back then. There wasn't any history to go on. When new things like that come along, the market becomes flooded and then only the strong survive. The problem Atari had was of course the sale to Tramiel, who torched the console division, only to bring it back with basically crap after Nintendo had taken off.

    Unfortunately Atari always went for the quick fix, which is what the 5200 was. It was designed to steal Coleco's thunder and keep the customers with Atari until the next system (7800) came out. Granted the 5200 was too big and the controllers were horrible, designed by someone who literally had barely any knowledge of console gaming. But the games were very good, sound and graphics. IMO they are much more playable with a decent stick than the CV. They had an arcade perfect Pac-Man. Plans in 1984 were on the way for better games, the "Jr." console, and a centering Analog stick. Crashed canceled it all, which was too bad. I think they could have pulled people into the 5200, weaning them off the 2600 by '85 or so, and then come out with the 7800.

    Now the 7800 that came out could NOT have been the one that was released. I don't care what all the homebrewers are doing now with that 7800 expansion module, compared to the NES and SMS it was dog meat. The resolution was the biggest drawback. Had it been done right, the 7800 could have entered when it did, in the midst of the Nintendo wave, and probably taken position behind Nintendo, but still in the game. At that point, they could have joined forces with SEGA perhaps, and released a 16-bit system, possibly just what the Genesis was.

    The bottom line is Atari just didn't have a system of the NES's standards, even though the Famicom was not much different from the SMS, MSX or Colecovision, but if they'd stayed in it, they could have had a real chance with the 7800. However, the 7800 needed to be much better than the lackluster hulk it was.

    Of course, none of that would have mattered if the IDIOTS at Atari had agreed to distribute the NES with their name on it.
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    ServBot (Level 11) Aswald's Avatar
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    When I said the 7800 was supposed to have been the next system, you have to remember that Atari likely thought they had ample time to do it- they were no doubt thinking of it even in 1982, and may have even had a few initial designs. But since the 2600 was doing so well, they may have been lulled into putting it off- Atari was a notoriously undisciplined company.

    The main strength of that rumor is based on the fact that the 5200 was really an Atari 400 computer with crummy controllers, and that it was abandoned so quickly. Given the timing- that it was released after the CV by a matter of a few months- and the initial batch of games, including Super Breakout, of all things (!?), to me even to this day just feels like it was rushed out to counter the CV, which may have caught Atari by surprise- the popularity, if not the existence.

    The main weakness of the 5200 was the controller, and it was just so easy to make digital controllers for it, and such could even have had a plug for paddle controllers. The games themselves- which should've included Super Pac-Man, Millipede, and Tempest, among others- would've made it at least a close second to the CV, which meant PROFITABLE.

    You know- it does seem as though Atari never really gave the 5200 as much push as the 2600, computers, and arcade games. So I really wonder if the 5200 was supposed to have been produced...

    But there can be little doubt that continuing to support the 2600 as they did did not help the 5200. Atari really was a mess, wasn't it?


    The 7800 was doomed from the start. Even if it had been released by Fall of 1984, the bad taste left by abandoning the 5200 would've hurt it, Atari likely would still have supported the 2600, but then again, would Nintendo have waited too long to try getting in with the NES? There would not have been a void to fill.

    It's largely guesswork and what-ifs, but one thing is for sure: with each new generation, Atari just went down and down.
    Interesting stuff, here (COMPLETELY unbiased opinion, hehhehheh):

    http://griswaldterrastone.deviantart.com/

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    Quote Originally Posted by stonic View Post
    No, E.T. was certainly NOT the cause of all of Atari's problems, nor did it single-handedly cause the crash.
    It may not have been the cause but it was sure as hell one of the symptoms.
    Don't go away mad....just go away!

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    Quote Originally Posted by diskoboy View Post
    Trying to play Pac-Man with a 5200 was a nightmare, since the stick wouldn't self center.
    You know.. speaking as objectively about this as possible, I think that has always been a pretty extreme overstatement.

    Yeah it wasn't the greatest feel in the world, but I think 5200 is perfectly playable and fine with the 5200 sticks. And as a 41 year old game player since the 70's, I KNOW bad control in an arcade title when I feel it, and 5200 Pacman is and always has been fine. About the only thing you probably could not do (and I tried) with the controllers was the old "tap and face away from the wall" trick. But you know what.. that wasn't even possible anyway on the 5200 port.

    Truth is.. the 5200 sticks worked fine for a lot of the library. That being said, they broke all the time on me. And since I was a kid I didn't know how to fix them so I just kept asking mama for more of them.

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    Quote Originally Posted by stonic View Post
    No, E.T. was certainly NOT the cause of all of Atari's problems, nor did it single-handedly cause the crash.
    True... But Atari shelled out a hefty chunk of change for the rights to ET. Then they overmanufactured the game, which cost them a ton more, then ended up burying them in the desert, years later.

    It wasn't the sole factor, but it was basically the 'point of no return', so to speak. By this time, the market was being flooded with crap, and Atari's inner turmoils began to become apparent.

    I honestly think Pac-Man was the main contributing factor to the crash. It turned Atari's named to crap, in the blink of an eye. And since Atari had the rights, and then released a crappy port, leaving basically all Atari owners high and dry, when Atarisoft released better versions on the Inty, 5200, C64, and every other console but their own. Hell, even Odyssey owners had a better version of Pac-Man, that pissed more people off when they had it taken off the market.

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    ServBot (Level 11) tom's Avatar
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    Maybe the (console) video game crash happened because it became the golden age of computer gaming, C64 took off hugely, Apple ][ (around for already six years) softs were the best between 83 and 88, Atari 8bit got classics from companies like Infocom, Microprose, EA, SSI, Broderbound, Synapse, Mindscape, Origin, etc....IBM took off in a big way just like C64 did.....

    and when NES took off in USA (87/88), 8-bit computers died, a sort of 8-bit computer gaming crash.
    Last edited by tom; 10-10-2010 at 07:47 AM.

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    Quote Originally Posted by Aswald View Post
    By the time the Tramiels (Grrr- puh puh!) released the 7800, the NES was holding over 85% of the market, and it was the big name.
    Both the NES and 7800 were released (nationwide) in 1986, so that doesn't really make any sense.

    Quote Originally Posted by Aswald View Post
    So the poor 7800 just hobbled along, left behind by Nintendo and Sega, a joke in the industry.
    They moved 3.77 million of the things. Atari Corp. at one point had a larger market share than Sega. (Of course, that's probably a combo of 2600+7800+XEGS.)

    Interesting 1988 LA Times article - Only 500,000 Sega systems had been sold!

    Quote Originally Posted by tom View Post
    If the crash in 83 wouldn't have happened and Atari would not have broken apart, it would have distributed the NES in the USA, like Nintendo wanted Atari to do so, and it would have been another big seller too.
    (Remember how it took Nintendo almost 3 years to popularise the NES in the USA (AVS showcased in Jan 1984), it wasn't plain sailing for them you know).
    The 7800 would have been history by then.
    In 1984, Nintendo didn't have, say, Super Mario Bros. To me, that's what put Nintendo over the top. I don't know if Donkey Kong or whatever else was out for the Famicom at the time was going to cut it.

    Quote Originally Posted by tom View Post
    By early 90s Atari would have distributed the Genesis in the USA, like Sega wanted Atari to do so, it would have been another huge seller too. Atari would have been 'god'.
    We know now that the Genesis was a success, but that was not a guarantee at the time.

    Quote Originally Posted by Greg2600 View Post
    The problem Atari had was of course the sale to Tramiel, who torched the console division, only to bring it back with basically crap after Nintendo had taken off.
    That's not true...at all, as it turns out. The 7800 wasn't part of the Tramiel purchase because that was a separate deal between GCC and Warner. Jack spent a year (1984-1985) negotiating with Warner over what was owed to GCC for the development of MARIA and the 10 launch titles. Michael Katz was brought in in 1985 to run an entertainment division that would handle video games. The 2600 Jr. was brought out that same year, and sales of 2600 product were apparently pretty good that holiday season. Atari Corp. introduced the 7800 in January 1986 at Winter CES.

    The only thing that was done in response to Nintendo was getting computer game licenses. No one here was making console games anymore (except maybe Activision), and the Japanese companies were locked up with Nintendo. Fortunately, since Katz was previously the president of Epyx, he had connections to various computer game companies.

    Very informative AtariAge post
    A pretty even-handed article from 1986 about Nintendo, Atari Corp., and Sega

    Quote Originally Posted by diskoboy View Post
    True... But Atari shelled out a hefty chunk of change for the rights to ET. Then they overmanufactured the game, which cost them a ton more, then ended up burying them in the desert, years later.
    From what I understand, they made so many copies because that's what the retailers ordered, a point that never seems to come up. They didn't just make that many for the hell of it.

    As for the desert thing, the reality is not as grand as the myth. Atari buried and destroyed a lot of things.

    Quote Originally Posted by stonic View Post
    The main factor was something you already mentioned - far too many companies starting up offering inferior games.
    I don't know if game quality was AS relevant as people have made it out to be. There was a lot of stuff, period. But that may be my personal opinion getting in the way. I like quite a few 2600 games from 1982-1984, some of them from companies like Xonox and Telesys.
    Last edited by CRV; 10-10-2010 at 11:52 AM.

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    You also have to take into consideration that Warner wanted Atari to become their consumer electronics branch. "Atari" had the second highest name recognition in the country (just behind Coke) and they wanted to take advantage of that. Atari had over a hundred assorted offices and buildings spread all across Silicon Valley, developing everything from holographics to telephones and video phones to even heart defibulators. But the whole company hung off of the profits made by the Atari 2600, and none of Atari's management gave a damn about the machine. Like that one manager told the guys who would go on to form Activision right before they were disillusioned with Atari, "I can take a shit in a box and sell 50,000 units". Atari's management had no respect for the programmers or the game purchasers. Then later after the Tramiels took over, they had no desire or interest in the video game market, they only pursued it as a source of income to prop up their computer line. They never put their hearts into it (maybe Sam Tramiel did somewhat from what I've read, but not the rest of the family) and cheapened out whenever possible on development and advertising and let the Jaguar flounder.

    Atari died because of a convergence of problems, not just one or two. Blaming it on Pac-Man and E.T. is short sighted. They were also in a console and computer saturated market, their managers didn't give a damn, they couldn't hang on to good programmers, they altered their purchasing system which made it more difficult for stores to buy games for the holidays, they were losing something like two million dollars a day since they were expanding so rapidly into research and development but not getting anything to market, and so on and so forth.

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    Like I said, if they had taken Nintendo's offer, we might not be having this discussion!
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    Quote Originally Posted by NE146 View Post
    You know.. speaking as objectively about this as possible, I think that has always been a pretty extreme overstatement.

    Yeah it wasn't the greatest feel in the world, but I think 5200 is perfectly playable and fine with the 5200 sticks. And as a 41 year old game player since the 70's, I KNOW bad control in an arcade title when I feel it, and 5200 Pacman is and always has been fine. About the only thing you probably could not do (and I tried) with the controllers was the old "tap and face away from the wall" trick. But you know what.. that wasn't even possible anyway on the 5200 port.

    Truth is.. the 5200 sticks worked fine for a lot of the library. That being said, they broke all the time on me. And since I was a kid I didn't know how to fix them so I just kept asking mama for more of them.
    I agree. I used to love my 5200 when it first came out and never really had problems with game control other than the controllers breaking over time.

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    Quote Originally Posted by CRV View Post
    From what I understand, they made so many copies because that's what the retailers ordered, a point that never seems to come up. They didn't just make that many for the hell of it.
    Actually the deal and the reason for all the carts was because the deal was made by Waner via Steve Ross. Atari originally approached MCA themselves and offered $1 million and were shown the door. Ross had been in the middle of a campaign to woo Spielberg over to Warner Brothers to make films, and decided to use the situation to sweeten the wooing. Ross did it himself over a weekend in East Hampton, flying Spielberg in for a "weekend party" and instead neogtiating the deal. Happened in July, it was for a guaranteed $23 million royalty to MCA/Spielberg, and Spielberg demanded it had to be out that Christmas.

    Apparently the reason 4 million were produced was because that's how many they needed to sell to make a profit after the royalties, production costs, distribution costs, and advertising costs. According to Kassar, unfortunately of the 4 million sent out, 3.5 million were returned.

    It's symbolic of the big problem at Atari Inc. during that time period - dual management. Warner's management often overrided Atari's and played an active part in setting up contracts, projects, etc. and dumping them on Atari. Stonic is certainly right, E.T. was more of a symptom of the crash and it's causes. The first signs of the crash started showing up publicly with the December '82 report which caused shockwaves through the industry and the market to briefly drop, forshadowing what was to come. Layoffs were actually started in January '83 already. Inferior games certainly added to the volatility of the market, but Atari's problems in those regards were more from Warner choosing to ignore Atari's overstocked warehouses (which were still counted as sold inventory for the year's reports) in order to continue to drive up Atari's value projections and in turn Warner's own stock for it's stockholders. Atari could have hunkered down and adjusted accordingly, but Atari was Warner's cash cow and they intended to milk it. Hence the mega-licensing movie deals that Atari had to foot the bill for as well. Atari even had a last chance with Morgan and his NATCO plan but Warner never game him a chance. As Atari was facing losses, so were they - and then a hostile takeover bid by Rupert Murdoch. Warner brought in an appraiser in January of '84 who recommended jettisoning Atari and some other loosing subsidiaries, and they began looking for buyers by that Spring behind Morgan's back. The Murdoch takeover was averted that March when they bought him out, and by July they were splitting up Atari. Morgan stated he had no idea about it until they called him over to a meeting room and there were Ross, Manny Gerard, Jack and Sam Tramiel and the required lawyers, at which point he was asked to put his signature on the transfer papers.

    His NATCO plan wasn't a bad idea, it was a major trimming of the fat from the company along with employee investment similar to what wound up happening when Atari Games got bought out by the employees.

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    There were a lot of contributing factors to the demise of Atari.

    As others have stated poor management had a lot to do with it. Also, as has been stated a lot of crappy games had a lot to do with it well. I wouldn't attribute to one such as Pac-Man or ET. I would say it was a culmination of bad games. Those ones simply stand out more some others.

    Quote Originally Posted by CRV View Post
    Both the NES and 7800 were released (nationwide) in 1986, so that doesn't really make any sense.
    Actually, the NES was released in the United States in October 1985 while the 7800 was released in January of 1986.

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    Quote Originally Posted by Polygon View Post
    Actually, the NES was released in the United States in October 1985 while the 7800 was released in January of 1986.
    It was test marketed in New York in October '85. Just as the 7800 was test marketed there in '84. There's a difference between a test marketing and a full release. If you want to go by first appearances, then the 7800's in '84 was still first.

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    Quote Originally Posted by martyg View Post
    It was test marketed in New York in October '85. Just as the 7800 was test marketed there in '84. There's a difference between a test marketing and a full release. If you want to go by first appearances, then the 7800's in '84 was still first.
    Are you sure that wasn't in August?

    I am finding a lot of conflicting information. I'm finding August and October and I'm finding sources that don't list a month at all. However, I am finding that everyone is listing that the NES was officially released in 1985.

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    Quote Originally Posted by Polygon View Post
    Are you sure that wasn't in August?
    No, it was not in August. That missinformation came from people quoting NOA's mistake they had up for a time on their website, stating August '85 as the launch date. That of course has since been corrected.

    I am finding a lot of conflicting information. I'm finding August and October and I'm finding sources that don't list a month at all. However, I am finding that everyone is listing that the NES was officially released in 1985.
    The NES was test marketed in New York in late '85, followed by the LA test market in February of '86. The national launch wasn't until September of '86. The official start date of the New York test marketing (or "launch date" as it's called) is October 18th. That's probably where you're getting confused, is to what "launch date" means. In this case it's when the console was first made available to the public for sale. It was not available for sale anywhere previous to Oct. 18th, and as stated - it was only available in the New York area during that time. The entire process of the New York test marketing (including how hard it was for them to get in to stores there) is more than well documented in Sheff's Game Over and Kent's Ultimate History of Video Games if you're looking for resources. October 18th doesn't mean that's when they were available all over New York, it's when they first started the push to get in to stores in the New York area. As Gail Tilden, NOA's advertising manager at the time recently recalled, the very first NES sale occured at FAO Schwarz there during the weekend of October 25th (which is when by archived advertisements they first set up there).
    Last edited by martyg; 01-07-2011 at 02:04 PM.

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    AVS (NES fore-runner) was shown in jan 84 CES and again june 84 CES. Failure both times.

    NES shown at june 85 CES, little interest
    NES testmarketed in NYC oct 85, approx 100.000 sold
    L.A. testmarketed feb 86
    Last edited by tom; 01-07-2011 at 01:52 PM.

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    Quote Originally Posted by tom View Post
    NES shown at june 85 CES
    Actually it was a primordial version of the NES shown there that was a cross between the AVS and NES. I have the large brochure given out then, and the unit was the AVS chasis with wired AVS controllers and Nintendo Entertainment System screened on it. Pretty interesting brochure and ROB is certainly the star of it as well.

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