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The_Liquid_Laser said:

I agree that consoles are the most important part of the video game industry.  The NES is what caused so much money to be present in the game industry and it did attract other console makers (Sony, Microsoft, Sega, NEC, etc...).

However, you have to also realize why the arcades died off.  They did not die because of lack of customers.  They died because of lack of games.  In the 90's, fighting games were so popular that at least 50% of the games in any arcade were fighting games.  However, no other genres were popular anymore.  The gamers were there, but the games weren't.  The reason is that most game makers moved to consoles.  It was far easier for them to make money on consoles, so consoles bled arcades of all of their potential games.

The arcade business model is fine.  Arcades are still going strong in Japan (or at least they were before COVID hit).  Arcades would have continued on their own in the absence of consoles.

The PC is a similar situation.  PC gaming really came into its own in the 90s with a combination of the mouse, Windows, DirectX, etc....  PC gaming still continues today.  Consoles do not keep PC gaming going.  If anything they hinder PC gaming, because consoles take away from potential PC gamers. 

I said this in an earlier post, and I'll say it here.  I think, without the NES, the PC would be the main gaming platform, but revenues would be about 1/4 of what they actually ended up being.  Gaming could survive just fine on the PC, but it wouldn't be nearly as big of an industry.

Arcades were a limited business to begin with where it ended up was where it was always destined to be fighting games were one of the big fads in the 90s and like everything else that floods the market it got oversaturated quick and the genre began to die in the late 90s and by the time the early 00s came along it was on life support, Arcades weren't going to survive because it was a business built on riding trends and the trends were very limited for it no other genre was popular on them because those trends had ran their course or a trend couldn't be created for them.

PC I know all about because I dabbled in PC gaming in the late 90s the are factors you're forgetting and one is many of the games were inspired by the NES influence with SMB influencing many key designers like Carmack and co secondly even with the resurgence in the early 90s it ended up being a bubble that burst come the 00s because of what I highlighted earlier. Not user friendly, rampant piracy leading to low returns for most developers (this was the era when programs like Kazaa and Limewire took off) etc... PC wouldn't have taken off if the NES wasn't about it would have likely crashed the very fact that EA who were anti console in the 80s declared the platform dead to focus mainly on consoles show PC was not in a good spot, even when Steam arrived it took 7 years to begin to fix any problem on the platform with out the console market we'd likely had seen a third crash there and then as nothing would have been around to sustain the industry.

The expanding of the market that consoles brought and the innovations they inspired are really what kept the market alive as that's what gave the industry sustainability to whether future storms as the growth brought in more money and big players to further push it.