Video gaming today is as big as it’s ever been, with the leaps and bounds in technology over the last several years lending to how such games can be played on nearly any cell phone or mobile device. Gaming has eclipsed just consoles and has evolved into a pervasive part of pop culture today, with many popular gaming franchises having made the leap into other forms of media.

But 35 years ago that all almost came to an end when the industry itself crashed. The video game crash of 1983 (also sometimes called “Atari Shock”) shook what was then a booming industry, one that had seen a meteoric rise in the late 1970s and early 1980s thanks to the success of video arcades.

The competitive nature of high score systems helped draw players away from pinball machines and onto the video game cabinets, and the period of time between 1978 and 1982 is retroactively considered the “Golden Age” of arcades for this reason. Most of the biggest arcade hits were released during this time, such as Defender (1980), Missile Command (1980), Galaga (1981), Tempest (1981), Donkey Kong (1981), and Q*bert (1982). By far and wide the single biggest hit was 1980’s Pac-Man, which sold 96,000 units alone; Pac-Man also was the first of many games to feature an identifiable mascot character, which helped spur many Pac-Man related toys outside the gaming realm.

Revenue jumped spectacularly in the arcades during these four years. In 1978, coin-operated video game revenue was $308 million – by 1982, it was a $8.9 billion dollar industry. The number of arcades in the US also more than doubled, from about 10,000 in ’81 to over 25,000 in ’83.

But this came to a screeching halt in ’83, with many companies ending up bankrupt and others (such as Magnavox and Coleco) abandoning the industry completely.

There were many factors that caused the industry crash. The rising competition from the home computer market meant that many consumers were simply not interested in making a home console purchase anymore.

The console market itself was also completely oversaturated. At the time of the crash in late ’83, consoles available included: the Atari 2600, the Atari 5200, the Bally Astrocade, the ColecoVision, the Coleco Gemini, the Fairchild Channel F System II, the Magnavox Odyssey 2, the Mattel Intellivision and Intellivision II, the various Sears Tele-Games systems, and the Vectrex. The fact that most of these systems had incredibly poor titles – some of them high-profile, such as the 2600 port of Pac-Man and the notoriously bad E.T. The Extra-Terrestrial – only added to the problem.

Immediate fallout of the crash included the infamous burial by Atari of many of their over-produced games and consoles in a New Mexico landfill in 1983. Sales also plummeted during this period; home console sales dropped from about $3 billion in ’82 to roughly $100 million in 1985.

However, all was not lost. Japan’s gaming industry was more than stable during this period – it was thriving. Companies such as Nintendo and Sega, both run out of Japan with major success in the arcade and console scenes there, suddenly had plenty of room to move into the North American market. And did they ever. Nintendo released their Family Computer system in the United States as the Nintendo Entertainment System in October 1985 and helped restart the floundering American console market.

Learn more about the impact of the industry crash and what followed it in The Overstreet Guide to Collecting Video Games, available now.