There were a lot of second generation games consoles, in fact the over-abundance of them and the large number of games being produced led to an over saturated market. Gen 2 consoles started to make use of cartridges so many games could be produced for each console. After many Atari programmers left to form the games publisher Activision due to lack of recognition, the two companies got into a legal battle as to whether Activision could develop games for Atari’s consoles. In 1982 the case was settled, but with third party development now legal. This led to many inexperienced companies making their own games, often for the purpose of advertising, which were usually over hyped and of poor quality.
To be fair, not all the games made by first party developers were that great either.
At the beginning of the 80’s computers had just started to be made affordable. They were built to use TVs as an output, and had the practical advantage in that they could be used for purposes other than gaming. The games were also quite affordable, more so than consoles. They had much better graphics and sound than consoles, and they had more memory too. In fact, the computer’s memory could allow players to save their progress in games, something that could not be done on the writable memory lacking consoles of the time.
The result of what I have mentioned so far was what is now called the ‘Great Video Games Crash of 1983’. The games market became so saturated that smaller publishers quickly went bust, and the shops selling the games couldn't return them. These low-quality titles were then sold cheap to get rid of them, and the market began to centre around them rather than the more expensive, well-made games. Subsequently the larger publishers, including the ones that made the consoles themselves, started losing a lot of money. Meanwhile the home computers market was thriving, taking away many console industry customers. To make things worse, toy retailers assumed that video games were a fad, and that the fad was over. The poor sales continued until the release of the Nintendo Entertainment System in 1985, which Nintendo managed to get into toy stores by packaging with R.O.B, which was pretty much the console’s mascot. By the time the market had recovered, third party developers had to have licenses to produce games for consoles, ensuring a similar crash couldn't reoccur.
Apparently in the future we'll be building giant statues of useless game peripherals.
The third generation of consoles was largely dominated by the NES, along with the Sega SG-1000. Consoles started to be referred to by the number of bits their processors used in this generation, though it was not that this generation was the first to be 8-bit, just that the next generation was dominated by 16-bit consoles. The fourth generation was also primarily dominated by Nintendo and Sega, with their Super Nintendo Entertainment System and Mega Drive respectively. Also notable is that during this generation was the release of the Game Boy. There had been other handhelds before it and even some with better hardware, but none had a decent battery life before the Game Boy, and this was before rechargeable batteries were widely available.
The fifth generation, beginning in 1993, was led by the Nintendo 64, the Sony PlayStation and the Sega Saturn. This generation, games made in full 3D became the norm- 3D games had just started being made in the previous generation. Pretty much every console around this time used CDs to store games, other than the Nintendo 64, the last to use this form. Many Nintendo third party franchises (such as Final Fantasy) switched consoles because of this- cartridges could hold nowhere near as much data as discs.
As for computer gaming at this time, the rapid development of the internet began to increase the popularity of emulating games, especially older titles that were no longer available.
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