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A boom for personal computers this Christmas season may mean doom for last year's Christmas hit: the video-game machine. Those generally sell for between $125 and $300, but only play games. A small computer has a vast array of other uses. Says Benjamin Rosen, publisher of a widely read industry newsletter: "This is probably the end of the line for straight video games." Arnold Brown, president of the New York consulting firm of Weiner, Edrich, Brown Inc., thinks the game machines could become a consolation prize this Christmas season. Says he: "Some consumers are going to have to settle for them simply because there won't be enough personal computers available."
Atari Chairman Raymond Kassar believes that such claims are wildly exaggerated. His company is introducing a new game machine with improved graphics at a suggested retail price of $269. That is only $30 less than the price of the Atari 400 home computer, but Kassar predicts good sales. Says he: "There will always be a very strong mass market for the ultimate game machine."
Although many computer owners use their systems for little more than game playing, others are branching into fields that include language learning, music writing, investment analysis and other activities. But some analysts believe that the potential for home computers has hardly been tapped. Many expect consumers to begin banking and shopping through them soon (see box). Others stress the value of electronic data banks that offer huge storehouses of information.
The computer price wars and brisk sales are one bright spot in an otherwise bleak economy. Retail sales have not picked up substantially after the July tax cut. With so much going wrong in business, Americans apparently like to go home after a hard day's work and play a rip-roaring game of Pac-Man or chart their biorhythms on a home computer.
— By John Greenwald.
Reported by Dick Thompson/San Francisco and Bruce van Voorst/New York