There was no crash in Europe, however piracy was rampant driving revenue down. Nintendo introduced the perfect DRM with their cartridges. Cassette tapes and floppies were too easy to copy. People were not leaving gaming at all, instead it reached the point where it was just big enough to know someone else who had games so you could copy them off each other.
'82 to '85 I mostly played on MSX, mostly games copied with a dual cassette deck. A friend had the commodore 64, same thing. My dad had a PC a regularly brought copied games home from work. People didn't leave gaming, they figured out how not to pay for it. Nintendo saved publishers with hard to beat DRM. (Instead of enter the 6th word of the 7th line on page 23 of the manual which was easily copied)
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