At the 1989 Computer Game Developers Conference, Robert Garriott, the business strategist behind Origin Systems, stood up to discuss what felt like a very contemporary problem: there were just too many computer games on the market.
The Ultima series had been so successful in the 1980s that it made Richard Garriott rich enough to fund expeditions to the ocean floor and space itself. Much of that success came from his brother Robert's business acumen at Origin Systems, who would later become a vice president at Electronic Arts and eventually run the North American arm of NCSoft during its MMO boom.
But in 1989, the PC gaming industry was in trouble. As Robert explained to the conference, the computer game industry had grown sales by 15-25% annually for three years; healthy by any standard. But new game releases had jumped 25-50%, meaning each individual title was selling less. Consumers were confused. "The consumer is being very confused," Garriott said. "The consumer doesn't really know what to buy for their computer, and they're being basically lost from the entertainment market."
Garriott blamed a drop in PC hardware sales from Apple, Commodore, and Dell, as well as what he called "product proliferation"—1989 business speak for too many videogames. Arcade and entry-level PC role-playing and strategy games were being affected by Nintendo's exploding popularity, but Garriott argued that deep RPGs and strategy games weren't viable on game consoles, so why were sales down for PC games too?
The Nintendo factor deserves context. The Nintendo Entertainment System dominated as the best-selling home console for the sixth consecutive year in 1989, with Super Mario Bros winning game of the year for the fifth time running. Garriott recognised Nintendo's explosive growth as a real threat, though he viewed Nintendo as something of a scapegoat for what he saw as a deeper industry problem.
What made Garriott's analysis prescient was his candid assessment of the industry's blind spot. He said he was "embarrassed to say that I don't believe software publishers really understand the relative weight of all these factors," yet remained optimistic that the market would recover.
His closing advice to publishers was to develop products that consoles couldn't match: "long-playing, in-depth, high graphic, lots-of-memory types of products" and to "increase our quality. Quality always has, and always will, sell."
Garriott had no idea then how vast PC gaming would become, or that more games would eventually launch on Steam in a single day than the computer industry of 1989 would see in a month. The challenge he identified in 1989 would prove both more enduring and more solvable than he imagined.