Fatality

But the golden age was destined to be a very short one. The industry was off the rails, and Walter Day told writer Tristan Donovan, author of the book Replay: The History of Video Games, that there were "too many arcades," with owners ordering more machines than their players could ever support. Day's hometown had four arcades (with a population of less than 10,000). By early 1982, cracks were already starting to show in the newly flourishing industry: that $400 a day machine, Time Magazine reported, was often "sucker bait, dangled to obscure the dreary truths that markets are becoming saturated and that dud games... bring in no money at all."

The same story noted that by 1981, Bally had already stopped producing its blockbuster, Space Invaders, because nobody wanted it anymore: they’d moved onto the next big thing. The video game industry relied on novelty, and on games that challenged its players. One person could only pump so many quarters into a cabinet before he mastered the game and began to look around for the next challenge. Many arcades, Time writer John Skow noted, "keep one [Space Invaders] around as a gesture to the good old days." Game manufacturers responded to player mastery by making their new games harder, often cutting out the draw for mainstream players in the process.

It wasn’t technology, or the games themselves, which caused the long and slow death of arcade gaming to begin in earnest

The big game companies were aware of their predicament: if a game appealed to the mass of players who drove the arcade industry’s profits, the hardcore gamers who made up the base and spent tons of time in arcades mastering them would move on quickly, spending far less in the process. If however, a game was extremely difficult, casual gamers were put off. This dilemma would plague the industry for years.

But it wasn’t technology, or the games themselves, which caused the long and slow death of arcade gaming to begin in earnest. The first hint of sickness within the industry surfaced as a growing fear — much like in the old days of pinball — about the effects of gaming and the environment of arcades on the nation’s youth.

The American public’s fears about arcades — seen as magnets for loitering youth and gateways to bad behavior — had never fully subsided. Even as arcades became big business and were advertised as "family fun centers," many weren’t really very family-friendly, and there were isolated problems, especially in big cities. The arguments about arcades, however, were identical to those of the 1950s. In March of 1981, one hundred people demonstrated at an arcade in Franklin, New York, telling the New York Times that since it had opened a year earlier, vandalism and drug use in the area had risen, though no statistics were forthcoming. The arcade was closed down for lack of proper permits — a common tactic. In another Times article about a different arcade, a mother in Long Island, New York was quoted saying that arcades were run by the "scum of the earth," that they "teach gambling to children," and "encourage aggressive behavior" which could lead to criminal activity. "We will be victorious," she said, in getting arcades out of suburban neighborhoods. This is almost identical language to that used in the 1957 issue of Better Homes and Gardens, which described crazed youngsters driven "to crime" to obtain pinball money, enabled by operators who use violent tactics like "bashing in heads, or even murder" to get their machines into good locations.

In November of 1982, the US Surgeon General C. Everett Koop gave a speech in Pittsburgh, Pennsylvania on the subject of domestic violence and child abuse. After concluding his remarks, he fielded a question about the harmful effects of video games on children. Koop said that while there wasn’t yet scientific evidence of any harm, children were becoming "addicted" to video games, "body and soul." Though Koop quickly released a statement following up to curtail fears, an AP story, wired out to newspapers across the country, had done its damage. By February of 1983, psychologists were positing that the "intensity of the experience" of video games was worrisome, as was the fact that the games "seem[ed] to be real." In July of 1983, two young people were arrested in Houston, Texas for the stabbing deaths of four arcade employees in an after-hours robbery, making national headlines. By 1985, Steve Epstein’s Times Square institution, the Broadway Arcade (which had been Lou Reed’s wedding reception venue), was lumped in with porn shops under a plan to redevelop the area, and the business which had been in the neighborhood for 50 years was forced to close. A customer of the arcade told the New York Times, "it’s a moral crusade. A lot of good things [Epstein’s arcade] will get swept out with the bad" (note: Epstein moved his arcade to a different location, however, and was in business until 1997).

But the content of video games was changing. A 2003 study by Iowa State noted the "first phase," dominated by Atari, was all about abstract violence, and rarely (Death Race being the one notable exception) about violence against human beings. Bushnell is quoted in the study as saying that this was intentional, that he felt there was a difference between "blowing up a tank... or a flying saucer" and blowing up people. "We felt that was not good form, and we adhered to that all during my tenure." He counters, however, telling us that "kids who play video games have higher IQs, it’s clearly good for your brain," calling violent games studies "selective." "They love to say that playing Halo leads to a Columbine massacre, rather than look at the brain benefits." By the early 1980s, however, Bushnell was long gone from Atari, and while video games weren’t yet the virtual violent killing sprees we’ve come to recognize, the industry was beginning to see that violence could sell games.

The outcry over gaming and arcades happened almost simultaneously with a crash in the video game industry on the heels of the Pac-Man bubble. More video games were produced, for arcades and consoles, in the lead up to 1983, than had ever been previously. The market was flooded with games, and arcade operators, who often bought machines on credit or on loan from distributors, saw massive decreases in profits.

The crash hit arcades and home console businesses, and no game signifies the failures of the industry more than the notorious E.T., produced by Atari in December of 1982 as a tie-in with Steven Spielberg’s blockbuster film. Millions of E.T. cartridges were produced, sold, and then returned, ultimately ending up in a landfill in New Mexico. The New York Times reported that the media was kept away from the spectacle by guards as concrete was "poured over the merchandise."

Our culture seems to have decided that kids are better off when they’re not alone with other kids

Gaming revenue, which had peaked at over $12 billion, sank to $100 million by 1985. It’s important to note, of course, that E.T. was a terrible game, and just one of many, many low quality games cranked out at a furious pace to cash in on the growing market. Warner’s stock tanked, falling from $60 to $20 on Atari’s losses, and it began to look for a buyer for the division. "Atari under Warner was suicide," says Bushell. "It was really a record company mentality in a technology business. They didn’t realize that you have to upgrade the hardware." Speaking to the industry at large which Atari was at the forefront of, he says there were "too many" of everything, essentially, and not enough innovation. "It could have been avoided, but the arcade business was always a niche."

The crash of 1983 nearly killed off the entire video game industry. It wasn’t just arcades that suffered, though this marks the beginning of their very steep and permanent decline. History has told us that the rise of home gaming killed off arcades, and so our own laziness is to blame. To an extent, of course, that’s true. If this were a history of video games, it would be time to talk about Nintendo, and the epic release of the revolutionary NES console in 1985. This event reinvigorated a decimated industry, and ultimately gave birth to the video games ecosystem we all still live in. But that didn’t happen until 1985, and so it wasn’t technology that killed off the arcade, not to begin with. It’s fair to concede that the arcade, already dying, was allowed to stay dead because we were all happily gaming at home by the time anybody noticed that all of the actual arcades were disappearing, and fast.

It’s shocking, of course, to realize that the "golden age" of video game arcades lasted just a few, short years, but if we tie it onto the turbulent history of pinball, we’re looking at a much longer, institutional part of our culture which, in the 1980s, began to pass away. Like roller skating rinks and other public spaces "for young people only," our culture seems to have decided that kids are better off when they’re not alone with other kids, and worried parents have been victorious in their mission to rid us of these troublesome spaces for loitering, described by New York City in 1942 as a "menace to the health, safety, and general welfare of the people." The economic problems of the early 1980s, with a recession and gas shortages certainly didn’t help, either.

Nolan Bushnell, a lover of the amusements industry, didn’t necessarily invent the arcade, but he certainly extended its life by a decade or so. What he couldn’t combat, however, was its decades-long reputation as a poisonous element in communities, and when the nascent industry overshot its goal in 1982 by producing too much, too fast, it collapsed. Even Bushnell’s own family fun center chain, Chuck E. Cheese’s, was hurting by the mid-1980s, and Tilt, the mammoth chain of shopping mall arcades, began its descent, too. By the early ‘90s, arcades were still fairly common, but they seemed almost like strange relics from another age, with no new innovations or novelties to offer. But arcades weren’t quite done, yet. They had just entered a long, deadly hibernation that would last almost 10 years.

In March of 1991, Capcom released Street Fighter II into arcades, setting off a renaissance in the business. A massive success, Street Fighter II sold more than 60,000 cabinets worldwide, which was unheard of by the early ‘90s. Japanese fighting games weren’t new, but its combination of novel characters, hand-to-hand combat, and secret moves formed the foundation of fighting games as we still know them. It also brought a new wave of enthusiastic players out of their houses and into arcades. It was important that, while home versions were typically available the next year, they were simplified: arcade technology was simply better than what the SNES or home computer versions could offer. To get the full Street Fighter II experience, you had to be in an arcade. Street Fighter II also spawned countless clones, many of which went onto be juggernaut franchises of their own: Mortal Kombat, first released by Midway in 1992, Sega’s Virtua Fighter in 1993, and Namco’s 1994 Tekken.

In March of 1991, Capcom released ‘Street Fighter II’ into arcades, setting off a renaissance in the business

The arcade, to some extent at least, was back, and the cabinets showed up in whatever businesses remained, grossing millions of dollars for the companies that developed them in the process. Niche, fighting game-only arcades sprang up in the cities that could support them. New York City’s Chinatown Fair, an arcade that had been around since the 1950s, successfully morphed into an arcade catering to fighting games. The scale, this time around, was much smaller, but it was still significant enough to constitute a "boom" of sorts. All of the fighting franchises mentioned above still produce games, including arcade versions, with the exception of Mortal Kombat, which produced its last cabinet in 1997 with Mortal Kombat IV.

Controversy followed these games, too, and a 1994 ABC News report quoted children’s television icon Captain Kangaroo as saying that violent games caused "emotional damage" to children. A Senate hearing led by Joe Lieberman followed in February of ‘94, ultimately leading to the establishment of the ESRB (Entertainment Software Rating Board) ratings sticker system which is now on most video games. The big moment for arcade fighting games didn’t really end with a bang, but a slow fading into twilight of the ‘90s.