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the videogame crash that everyone says nintendo saved us from happened when computers such as the C64 were very expensive and complicated to use, the next step after the c64 was the Amig which had an RRP of 500quid when it was first released and this is like 15 years or more ago. This was far too much for the average family to pay out.
The gaming industry needed a simple, cheap and fun games console and all the competitors were doing was diluting the market with different models what basically did the same job. The consumer didn't know which to buy and which offered what. (this sounds pretty similar to nintendos second market domination actually)
I wouldn't say they were solely responsible for gaming as it is today, Im kinda greatful the PS brand was born and has made nintendo work their nuts off to avoid bankrupsy. In one way, sony saved video gaming, by forcing nintendo to save itself :)