Can we prevent another things like 1983 video game crisis, Atari shock?

Revisiting the 1983 video game crisis: Atari Shock

In 1983, a historical event happened for the game industry. This was video game crash in 1983, a.k.a. ATARI Shock in Japan. In 1982, the amount of sale of home video games was about 3.2B USD, but in 1986 it became only 100M USD. At that time, Atari 2600, a.k.a. Video Computer System: VCS originally produced in 1977, was the most popular home video game platform. It unbundled the entire system of the video game, that is, it separated each game implementation form the video game console. It produced a huge size of the market of home video game and many third-party game companies. Activision Inc, was established by game designers who left from Atari, and it produced third-party game cartridges. At that time, Atari did not allow third-party cartridge, but after the trials, Atari and Activision agreed to allow the creation of its original game with paying the royalty. This opened the door for any third party could create games for VCS.
This change caused the huge number of third-party games, some of them are excellent, but some of them are junk games. The growing size of the game market attracted many outsiders of the game industry, then they came into producing such junk games. At that time, Atari did not manage and control third party game titles. This situation was not comfortable for consumers. Consumers could not know the quality of the game before inserting the cartridge into VCS at home, after paying money. This situation discouraged gamed market, then the price of VCS game fell like Domino Toppling. There were many reasons of the game market shrink, e.g. competition among game platforms and personal computers, but less control of the quality of game titles was one of the major reason for the crash.
The game market revived from 1985 to 1988, with the introduction of Nintendo Entertainment System (NES). It equipped a protection system against unauthorized third parties. It was a reaction from what game industry learned from Atari shock. In the cartridge, a special hardware chip was installed for copy protection, and Nintendo conducted “lot check” to prevent selling game titles which do not aligns Nintendo’s guideline. After that most game platform implements similar protection mechanisms. On the other hand, Atari was out from the game market in 1996.

Another Crisis?

With revisiting the history of Atari shock, I’m thinking the current situation of cryptocurrency and blockchain projects including many of ICOs. Bitcoin and blockchain can unbundle financial business logic and financial platform. They give us the flexibility to produce new ecosystem and this unbundling is a reason which many cryptocurrency and blockchain projects have been initiated, and they collect much attention and investments.
Recently we face many numbers of Bitcoin forks, and many ICOs based on blockchain or blockchain-wise something. One of the main problems is that consumers cannot evaluate the meaning, correctness, and soundness of each coin and projects, at the time of and after paying money for coins/tokens. This is like the situation caused by tons of third party cartridge for VCS. If there are many numbers of junk coin/tokens, they can discount the reputation of entire blockchain ecosystem, then narrow the possibility of good technology and projects. My concern is current many forks of Bitcoin and ICO projects may cause another Atari shock on Bitcoin and blockchain projects. Of course, it is fine if I’m worrying about nothing.

Can we expect similar action like what Nintendo did for decentralized Blockchain projects?

The major difference between the case of Atari shock and revival by NES and Bitcoin/blockchain is, we do not have Nintendo, which can control and manage the quality of coins and projects. From the permissionless nature and community-based organization style, it is not easy to keep the quality of all projects. Bitcoin core community tries to keep quality from their pure principles, but it is a hard task to control external movements. The problem is much less for ICO projects.
Without central authority and governance, utilizing reputation mechanisms seems to be a good idea, but we do not have any good framework and procedures to have sound and neutral reputation database. As we encounter during this couple of years, there may be contamination of fake reputations. The current situation is not good because a small number of experts are forced to be like a police for junk projects and this situation exhausts these limited experts.
What we need is a scalable framework and process for technical due-diligence and evaluation. It is not easy to produce them, in the context of the fully decentralized world. But we need to create a kind of system to give public a sustainable situation like autonomous quality control. I hope the current activities by neutral academia can be a seed of such system, and blockchain technology itself becomes a foundation of such autonomous system.