For everywhere, really.
First of all, it's not just the "US market', but rather The Americas market. The whole continent.
Second of all, Nintendo proved with the NES that gaming was more than just a "toy" and thus not a fad. The market in the Americas had died, and the European one and Japanese would soon follow after, at the very least the home console(which is like 70% of the market as of right now, give or take), since most big players would not exist without Nintendo. Sega probably wouldn't make the genesis, since that was an answer to the NES, and Sony would also never going to enter the market as a result. And since MS created the XBox only to compete with Sony, that would be a no go.
Plus, like I said, most gaming staples were created by Nintendo and it's 3rd and 4rd gen consoles. Without them, I have no idea how many decades of gaming techniques and design behind we would all be.
Actually MS was behind the MSX platform which is the birthplace of Metal Gear Solid. The MSX did well in Japan and in parts of Europe, but for some reason failed in the USA.
Nintendo on the other hand was seen as the kiddie console where I lived with expensive cartridges and crappy conversions. NES and the 50hz curse... Sony dragged consoles away from the games are for kids stigma back to where they were with Atari, Commodore and Amiga.
Anyway, I was born in '74, been playing games since 1980 and never heard of the video game crash until I moved to NA. Apparently I lived through it without ever noticing it, happily gaming away.
Yeah, because the crash only happened in America to begin with. Mostly because outside of the USA no market really was created, only imported machines without a marketing push behind them, so no market, no crash. But the initial console-experiments were enough to show tech-companies worldwide, that moving arcades into the living room was a working technical concept.