TITLE
Video Games Go Crunch!
AUTHOR
Charles P. Alexander
PUBLICATION
Time
YEAR
1983
ARTICLE TYPE
Article
FROM THE ARTICLE
As the Christmas season nears, once thriving makers struggle for survivalThe imaginary world of video games has always been a treacherous place, full of alien star cruisers, speeding asteroids, menacing centipedes and ravenous Pac-Men. Such dangers, however, are hardly more fearsome than the real-world disasters now battering the manufacturers of the games. With the crucial Christmas season approaching, the once thriving industry is being zapped by overheated competition, an oversupply of games, relentless price-cutting, plunging profits and a new finickiness among young video fans. For the dozens of companies in the contest, the name of the game has suddenly become Survival. Admits President William Grubb of Imagic, which makes Demon Attack and Cosmic Ark: “Our industry is in chaos.”
Warner Communications’ Atari, which pioneered home video games with such classics as Space Invaders and Asteroids, has lost $356 million so far this year, dropped 3,000 employees from its payroll of 10,000 and finished moving all its manufacturing facilities to Hong Kong and Taiwan. Plagued partly by sluggish sales of Intellivision games, the electronics division of Mattel has run a $201 million deficit in 1983, while laying off 37% of its 1,800-member work force. Activision estimated that it lost $3 million to $5 million in the past three months despite scoring hits with its new Enduro and Robot Tank games. At Bally, the leading manufacturer of arcade video machines, profits are off 85%.
TOPICS MENTIONED
Business
PRINT AVAILABILITY
October 17, 1983