In 1983, the North American video game industry experienced a major “crash” due to a number of factors, including an oversaturated game console market, competition from computer gaming, and a surplus of over-hyped, low-quality games, such as the infamous E.T., an Atari game based on the eponymous movie and often considered the worst game ever created.
Lasting a couple of years, the crash led to the bankruptcy of several home computer and video game console companies.
The video game home industry began to recover in 1985 when the Nintendo Entertainment System (NES), called Famicom in Japan, came to the United States. The NES had improved 8-bit graphics, colors, sound and gameplay over previous consoles.
Nintendo, a Japanese company that began as a playing card manufacturer in 1889, released a number of important video game franchises still around today, such as Super Mario Bros., The Legend of Zelda, and Metroid.
Additionally, Nintendo imposed various regulations on third-party games developed for its system, helping to combat rushed, low-quality software. Third-party developers released many other long-lasting franchises, such as Capcom’s Mega Man, Konami’s Castlevania, Square’s Final Fantasy, and Enix’s Dragon Quest (Square and Enix would later merge to form Square Enix in 2003).
In 1989, Nintendo made waves again by popularizing handheld gaming with the release of its 8-bit Game Boy video game device and the often-bundled game Tetris. Over the next 25 years, Nintendo would release a number of successful successors to the Game Boy, including the Game Boy color in 1998, Nintendo DS in 2004, and Nintendo 3DS in 2011.
Also in 1989, Sega released its 16-bit Genesis console in North America as a successor to its 1986 Sega Master System, which failed to adequately compete against the NES.
With its technological superiority to the NES, clever marketing, and the 1991 release of the Sonic the Hedgehog game, the Genesis made significant headway against its older rival. In 1991, Nintendo released its 16-bit Super NES console in North America, launching the first real “console war.”
The early- to mid-1990s saw the release of a wealth of popular games on both consoles, including new franchises such as Street Fighter II and Mortal Kombat, a fighting game that depicted blood and gore on the Genesis version of the game.
In response to the violent game (as well as congressional hearings about violent video games), Sega created the Videogame Rating Council in 1993 to provide descriptive labeling for every game sold on a Sega home console. The council later gives rise to the industry-wide Entertainment Software Rating Board, which is still used today to rate video games based on content.
In the mid-1990s, video games leaped to the Big Screen with the release of the Super Mario Bros. live-action movie in 1993, followed by Street Fighter and Mortal Kombat over the next two years. Numerous movies based on video games have been released since.
With a much larger library of games, lower price point, and successful marketing, the Genesis had leapfrogged ahead of the SNES in North America by this time. But Sega was unable to find similar success in Japan.