The major video-game industry crash in North America occurred in 1983.
The downturn followed rapid growth in home consoles, especially after the Atari VCS became popular. Many companies released large numbers of games, while retailers struggled with excess inventory and consumers faced confusingly similar products. Competition from inexpensive home computers also weakened the market.
Poorly received releases, including Atari's E.T. the Extra-Terrestrial, became symbols of the crisis, although the crash had multiple causes rather than one single failed game. Atari buried unsold cartridges in a New Mexico landfill in 1983, an event later confirmed by excavation and documentary evidence.
The crash severely reduced North American console sales and damaged retailer confidence. The market recovered after Nintendo introduced the Nintendo Entertainment System in North America in 1985, supported by tighter quality control and a carefully managed retail strategy. The phrase usually refers specifically to North America; Japan and other markets followed different industry paths.