The video game industry was brought to its knees in 1983. The North American market crashed harder than a poorly controlled Mario Kart driver, with revenues plunging by a staggering 97% over the next two years (Kent, 2001). Out of the ashes, two companies revived gaming from the brink – Nintendo and Sega. Their 8-bit consoles kicked off the third generation of video games.
The Crash Heard ‘Round the Gaming World
On July 15, 1983, the industry was reeling from its darkest days. A flood of low-quality titles had eroded consumer trust in video games. Giants like Atari were hemorrhaging money. Retailers were stuck with millions in unsold merchandise. With players and programmers jumping ship, it looked like the short life of home consoles was over.
Little did they know two Japanese companies were about to change everything with the near-simultaneous launch of brand new systems – the Nintendo Family Computer (or Famicom) and Sega SG-1000.
Enter the Famicom and SG-1000
While Sega‘s console fizzled out in Japan, the Famicom was about to capture lightning in a bottle (Sánchez-Crespo Dalmau, 2022). Equipped with a modified Z80 CPU, 2 KB of RAM and dozens of colored sprites, the hardware was unassuming. But with arcade hits Donkey Kong and Popeye built-in, the system flew off Japanese store shelves faster than Mario with a raccoon tail power-up. By 1984, it dominated the market.
Emboldened by success abroad, Nintendo throttled efforts to crack the North American market. After delays and rebranding the console as the Nintendo Entertainment System worldwide (minus Japan), NES consoles started appearing in New York and Los Angeles in 1985 (Szczepaniak, 2014). Packaged with Super Mario Bros and Duck Hunt, systems were priced at $179 including accessories like the Zapper light gun.
Though met with initial skepticism, innovative games like The Legend of Zelda, Metroid and Mega Man soon made NES the must-have toy for an entire generation. By 1988, Nintendo controlled 80% of the North American video game market (Morris, 2004).
Sega Strikes Back
After misfiring early with the SG-1000, Sega was hungry to best its rival. In October 1985, they released a successor – the Sega Mark III in Japan. Featuring enhanced 8-bit visuals and processing clout, it was later rebranded abroad as the Master System in 1986 (Forster, 2005).
Touting popular arcade ports and exclusives like Alex Kidd and Phantasy Star, Master System quickly trounced Atari‘s 7800 console in Europe. And though it carved a niche in South America and Australasia, Nintendo‘s head start and game library kept it firmly in second place in North America with 125,000 consoles sold by 1987.
Atari Stumbles on the Launch Pad
In May 1986, Atari‘s long-delayed 7800 console tried to swoop in for third place against the NES and Master System (Buchanan, 2008). Backward compatible with the 2600‘s massive library, Atari banked on a budget $79 price and ports of arcade classics Joust and Pole Position to stand out.
However, glacially slow game development left the console starved for content. By 1987, 7800 sales languished around 100,000 units compared to 1 million for Nintendo‘s juggernaut (Snow, 2008). Atari could never gain a foothold, eventually abandoning console hardware to focus on computer games.
Defining Features
Beyond sales numbers, several key features defined the 8-bit era:
Controllers – The digital D-pad debuted on Nintendo‘s controller, becoming essential for platformers and 2D games. Simple designs ensured approachability for players of all ages.
Graphical Capabilities – Tile-based backgrounds with up to 256 x 240 pixel resolution allowed for smooth side-scrolling visuals (Therrien, 2004). Master System boasted 64 on-screen colors vs. NES‘s 52, at the cost of more system memory.
Sound – Consoles output basic square wave tones from 5 audio channels. Iconic themes from Mario, Zelda and Sonic had to carefully maximize every "beep" and "bloop".
Accessories – NES took off thanks to pioneered peripherals like the Zapper and Power Pad. Unique controllers expanded the concept of video game play (Harris, 2022).
Game Changers
It wasn‘t just hardware that defined the era. Landmark titles like Super Mario Bros. and The Legend of Zelda changed public perceptions of gaming‘s depth. While simple by today‘s standards, their mix of tight controls, rewarding progression, whimsical characters and varied settings were an intoxicating proposition in the mid-80s. Combined with Nintendo‘s savvy restrictions on third-party development, they drove fans to crave its exponentially expanding library (Sheff, 2011).
By contrast, the lack of killer exclusive games greatly hampered Master System and Atari 7800 in the face of Nintendo‘s onslaught. Despite more horsepower, neither could answer demand for golden NES cartridges like Metroid, Castlevania and Mega Man.
Who Won the Generation?
With 61.91 million units sold, the Nintendo Entertainment System was the undisputed conqueror of third-generation consoles (Nelson, 2022). Beyond reinvigorating the North American gaming scene, Nintendo also dominated Europe and parts of South America once considered Sega territory. For many, the NES defined gaming itself during the late 80s into the 90s.
Sega Master System‘s respectable 19.17 million tally cemented its‘ status as Nintendo‘s perpetual "number two." And Atari‘s stumbling 7800 would be their last attempt at the home console market. For both companies, the age of the 16-bit consoles arriving in 1989 ushered in new hope of topping Nintendo.
Beyond 8-Bits
By 1991, NES was feeling its age against flashy Genesis games. The SNES and Sega Genesis ushered in 16-bit graphics and sound that made even the best NES titles appear blocky and basic. Consumers turned towards the promise of arcade perfect ports and formerly impossible visuals like scaling and rotation effects (Altice, 2015).
Nintendo‘s iron grip on the market had been broken. The ensuing battle between Super Nintendo and Genesis throughout the 90s brought video games even further into the mainstream. Their heated but respectful rivalry resulted in beloved classics like Street Fighter II, Mortal Kombat and Sonic 2- perhaps the greatest console generation ever.
Conclusion
In just a few short years, Sega and Nintendo lifted video gaming back to prominence with innovative 8-bit hardware and memorable games. Without the pioneering third generation, the vibrant, multi-billion dollar console industry we enjoy today would not exist.
So which console deserves your game time in 2023? Check out our guides to the best NES games, top Sega Master System titles or hidden gems of the Atari 7800 to see where it all began. Game on!
