Third generation of video game consoles


In the history of computer and video games, the third generation began on July 15, 1983, with the Japanese release of two systems: the Nintendo Family Computer and the Sega SG-1000. When the Famicom was released outside of Japan it was remodelled and marketed as the Nintendo Entertainment System. This generation marked the end of the North American video game crash, and a shift in the dominance of home video game manufacturers from the United States to Japan. Handheld consoles were not a major part of this generation, although the Game & Watch line from Nintendo had started in 1980 and the Milton Bradley Microvision came out in 1979 though both are considered second generation hardware.
Improvements in technology gave consoles of this generation improved graphical and sound capabilities. The number of simultaneous colours on screen and the palette size both increased which, coupled with larger resolutions and more sprites on screen, meant that developers could create scenes with more detail. Five channel audio became common giving consoles the ability to produce a greater variation and range of sound. A notable innovation of this generation was the inclusion of cartridges with on-board memory and batteries to allow users to save their progress in a game, with Nintendo's The Legend of Zelda introducing the technology to the market. This innovation allowed for much more expansive gaming worlds and in-depth story telling, since users could now save their progress rather than having to start each gaming session at the beginning. By the next generation, the capability to save games became ubiquitous, at first saving on the game cartridge itself, and later when the industry changed to read-only optical disks, on memory cards, hard disk drives, and eventually cloud storage.
The best-selling console of this generation was the NES/Famicom from Nintendo, followed by the Sega Master System, and then the Atari 7800. Although the previous generation of consoles had also used 8-bit processors, it was at the end of the third generation that home consoles were first labeled and marketed by their "bits". This also came into fashion as fourth generation 16-bit systems like the Sega Genesis were marketed in order to differentiate between the generations. In Japan and North America, this generation was primarily dominated by the Famicom/NES, while the Master System'' dominated the European and Brazilian markets. The end of the third generation was marked by the emergence of 16-bit systems of the fourth generation and with the discontinuation of the Famicom on September 25, 2003.

Overview

The Family Computer became very popular in Japan during this era, crowding out the other consoles in this generation. The Famicom's Western counterpart, the Nintendo Entertainment System, dominated the gaming market in North America, thanks in part to its restrictive licensing agreements with developers. This marked a shift in the dominance of home video games from the United States to Japan, to the point that Computer Gaming World described the "Nintendo craze" as a "non-event" for American video game designers as "virtually all the work to date has been done in Japan." The company had an estimated 65% of 1987 hardware sales in the console market; Atari Corporation had 24%, Sega had 8%, and other companies had 3%.
The popularity of the Japanese consoles grew so quickly that in 1988 Epyx stated that, in contrast to a video game-hardware industry in 1984 that the company had described as "dead", the market for Nintendo cartridges was larger than for all home-computer software. Nintendo sold seven million NES systems in 1988, almost as many as the number of Commodore 64s sold in its first five years. Compute! reported that Nintendo's popularity caused most computer-game companies to have poor sales during Christmas that year, resulting in serious financial problems for some, and after more than a decade making computer games, in 1989 Epyx converted completely to console cartridges. By 1990 30% of American households owned the NES, compared to 23% for all personal computers, and peer pressure to have a console was so great that even the children of computer-game developers demanded them despite parents' refusal and the presence of state-of-the-art computers and software at home. As Computer Gaming World reported in 1992, "The kids who don't have access to videogames are as culturally isolated as the kids in our own generation whose parents refused to buy a TV".
Sega was Nintendo's main competitor during the era in terms of market share for console units sold. Unlike the NES, Sega's SG-1000, which preceded Sega's more commercially successful Master System, initially had very little to differentiate itself from earlier consoles such as the ColecoVision and contemporary computers such as the MSX, although, despite the lack of hardware scrolling, the SG-1000 was able to pull off advanced scrolling effects, including parallax scrolling in Orguss and sprite-scaling in . In 1985, Sega's Master System incorporated hardware scrolling, alongside an increased colour palette, greater memory, pseudo-3D effects, and stereoscopic 3-D, gaining a clear hardware advantage over the NES. However, the NES continued to dominate the North American and Japanese markets, while the Master System would gain more dominance in the emerging European and South American markets.
This era contributed many influential aspects to the history of the development of video games. The third generation saw the release of many of the first console role-playing video games. Editing and censorship of video games was often used in localizing Japanese games to North America. During this era, many of the most famous video game franchises of all time were founded that outlived the third generation and continued through releases on later consoles. Some examples are Super Mario Bros., Final Fantasy, The Legend of Zelda, Dragon Quest, Metroid, Mega Man, Metal Gear, Castlevania, Phantasy Star, Megami Tensei, Ninja Gaiden, and Bomberman.
The third generation also saw the beginning of the children's educational console market. Although consoles such as the VideoSmarts and ComputerSmarts systems were stripped down to very primitive input systems designed for children, their use of ROM cartridges would establish this as the standard for later such consoles. Due to their reduced capacities, these systems typically were not labeled by their "bits" and were not marketed in competition with traditional video game consoles.
In North America the Atari 7800 and Master System were discontinued in 1992, while the NES continued to be produced for several more years. In Europe, the Master System was discontinued in the late 1990s. However it has continued to sell in Brazil through to the present day. In Japan, Nintendo continued to repair Famicom systems until October 31, 2007.

Home Systems

SG-1000

On July 15, 1983 the SG-1000 was released in Japan, the first console to be created by Sega. It was released alongside the Famicom making them the first two consoles of the third generation. While it didn't sell as well as other consoles of the generation, it was considered important to the development of Sega as a console manufacturer.

Famicom/Nintendo Entertainment System

The Famicom, released on July 15, 1983, in Japan and in the North American region in September 1986 as the Nintendo Entertainment System, was an 8-bit cartridge based console developed and marketed by Nintendo. It went on to become the most popular console of the generation, selling over 60 million units. It was the first home system to feature a controller with a directional pad designed by Gunpei Yokoi, which became an industry standard. While the NES was discontinued in North America on August 14, 1995, it wasn't until September 25, 2003, that the Famicom was discontinued in Japan.

Sega Master System

The Sega Mark III was released on October 20, 1985 for the Japanese market and was the third iteration of the SG-1000. The name was changed to the Master System and the design altered for release outside of Japan. It was designed to be more powerful than the NES in an attempt to give it an edge over the competition but despite good sales, it couldn't match the success of the NES making it the second best selling console of the generation. This was the case in all regions apart from Brazil where it continued to sell for years after the end of the generation. The Master System had few third party games which was likely due to Nintendo's licensing agreements that required developers only to release games for their system.

Atari 7800

The Atari 7800 was released in May 1986 and was the successor to the Atari 5200. it was the first console to be backwards compatible without additional hardware. It was originally due for launch on May 21, 1984 but due to the sale of the company the launch didn't happen until two years later and coupled with a small library of games the console didn't sell well.

Comparison

Other consoles

Sales comparison

The NES/Famicom sold by far the most units of any third generation console in North America and Asia. In North America in 1989, between Nintendo and Sega, there was a 94% to 6% split between the two in market share between the NES and the Master System, in Nintendo's favor. By 1992 in North America, Nintendo had a market-share of 80%, followed by Atari's 12% and Sega's 8%. This was due to its strong lineup of first-party titles, and Nintendo's strict licensing rules that required NES titles to be exclusive to the console for two years after release, putting a damper on third party support for other consoles. Atari, on the other hand, fared a bit better than the Master System in North America, but still finished a distant second place. In Europe, competition was tough for the NES, and was outsold by the Master System despite the hegemony that it had in the North American and Japanese markets.
ConsoleUnits sold worldwideJapanAmericasElsewhere
Nintendo Entertainment System61.91 million 19.35 million 34 million 8.56 million
Sega Master System17.8 million 1 million United States: 2 million
Brazil: 8 million 		Western Europe: 6.8 million

Software

Milestone titles