In what is becoming as familiar a holiday activity as hanging mistletoe and stirring eggnog, the makers of video games are once again struggling to satisfy an apparently insatiable demand for their products.
“Our research indicated that the market would double to 7 million games this year,” says Michael C Shea, marketing director of Atari Inc., which claims to be the market leader. “But it seems that the market could be closer to 10 million units if the products were available.”
Chances are, however, that they will not be. After last year’s Christmas binge, when shoppers snapped up more than $200 million worth of the game-players that attach to home television sets, demand all but disappeared. “Retailers bought a great quantity of games last spring,” observes one knowledgeable buyer, “expecting people still to be interested. But it wasn’t Christmas.”
The realization that video games were strictly a seasonal business hit the industry like a blow in the solar plexus. Heavy discounting forced some small game makers out of the business, and many of those that stayed took a very cautious approach to gearing up for this year’s selling season. Now demand is high again, but production is falling short. “It’s so frustrating to see them and not be able to get them onto the street,” complains William D Hunter, a national merchandise manager at Montgomery Ward and Company.
Dozens of games & consoles
The biggest shortfall is in the new programmable players, which are built around a microprocessor, or miniaturized computer. Separate plug-in cartridges containing semiconductor memory devices imprinted with computer codes can program such units to play dozens of games.
“Everything is going to be, very tight in the programmables right up to the last minute,” predicts the merchandise manager of one New England discount chain.
The shortage stems from the difficulty in developing both the programmable player and the software for the game cartridges. Because it can take two years to get a unit on the market, there currently are only a handful of producers. Fairchild Camera and Instrument Corporation, which launched the programmable concept a year ago, is turning away orders to avoid the kind of over-expansion that cost the company millions of dollars in digital, watches.
Bally Mfg. Corp. says that delays in getting the complex components are holding up production of its $300 “Bally Arcade,” and Arnold C Greenberg, president of Coleco Industries Inc., notes that the East Coast dock strike held up shipments of circuit boards. “And it’s very tough to get air space, because so many people are clamoring for it,” he adds.
Sales of programmables will suffer this year as a result. Some forecasts were cut recently from 700,000 units to 400,000 units. But in the true fashion of the electronics industry, many companies are touting the next generation of computerized game players at a time when they cannot satisfy demand for their current products.
In the original home games, introduced only five years ago by Magnavox Co., hard-wired logic circuits were used to generate just one game, or a few simple games, on the TV screen. Programmables get around the basic problem of these first generation games a quick erosion of interest by consumers in playing the game — by offering plug-in cartridges that make available a virtually limitless variety of games.
The next step, adding keyboards, printers, and memory devices that expand the game-player into a true computer, is already starting. The Bally unit, which comes with a calculator-like keyboard, is a forerunner of this new generation.
Fairchild, Atari, and Coleco are all planning more complex games with computer-like features for next year. And Umtech Inc. has just announced a product called VideoBrain that plays games, teaches elementary computer programming, math, and music, and even balances a checkbook.