I’ve touched on this in my NES posts but here is a further explanation of why and how the video game market crashed and burnt in 83/84.
By the early 1980s there were simply too many options available to the consumer, with too little information and too little to distinguish the machines. Here is a list of all of the machines that were on store shelves at the time:
NO LICENSING (QUALITY CONTROL)
None of these machines had patented parts or hardware which meant that anyone could develop and publish their own games for these systems. The Atari 2600 was especially popular with bootleg publishers and received a large amount of pornographic games likes Custer’s Revenge, in which a naked and bebonered Custer makes his way across a field of raining arrows in order to rape a squaw tied to a cactus. Don’t get too excited, it’s still the Atari 2600 we’re talking about. Even the official, licensed games had quality control issues, as has been mentioned about a million times concerning the Atari 2600 releases of Pac-Man and E.T.
This issue was expressed in two ways: hardware and software. First, the 2600 and Intellivision systems were licensed out to companies like Radio Shack and Sears to rebrand and sell under their own names. So if you went to Kay Bee (or whatever) you saw an Intellivision on the shelf but at Sears it was the Super Video Arcade and at Radio Shack it was the Tandyvision. Just imagine how confused parents must have been when trying to shop for games for their kids’ systems.
Adding to the confusion was the fact that the Big 3 manufacturers/publishers of the time – Atari, Mattel and Coleco – published games FOR EACH OTHER’S SYSTEMS (without permission, of course). So Atari published Pac-Man for Intellivision, Coleco published Donkey Kong for Atari and so on. The Coleco-published games for Atari 2600 are noted for being particularly bad, possibly in an attempt to make the system look bad.
So, no one knew what system to buy. No one knew what games their system supported. And if you did buy a game there was a good chance it was an unlicensed piece of crap.
And now a screenshot of Custer’s Revenge: