There's a reason why a lot of grandparents, parents, and people from 80s and 90s who never played a video game in their lives still call any console or system they see: "The Nintendo."

No. Let's see to your arguments.

"If Nintendo didn't do it someone else would have"

You say: "After the 1983 crash, literally no one wanted to have anything to do with video games anymore, from companies to consumers and retailers."

This is obviously wrong. True, some companies that had entered the market from other sides like Fairchild and Mattel left the market and fell back on their core businesses. But with Mattel the story becomes already more complicated. Citing from Wikipedia:

"Former Mattel Electronics Senior Vice President of Marketing, Terrence Valeski, understood that although losses were huge, the demand for video games increased in 1983. Valeski found investors and purchased the rights to Intellivision, the games, and inventory from Mattel. A new company, Intellivision Inc, was formed and by the end of 1984. Valeski bought out the other investors and changed the name to INTV Corporation."

https://en.wikipedia.org/wiki/Intellivision#Competition_and_market_crash

Intellivision kept on going until 1990. Why did they stop 1990? Let's see:

"Licensing agreements with Nintendo and Sega required INTV Corporation to discontinue the Intellivision in 1990."

So Intellivision leaving the market wasn't a direct reaction to the crash, it was because of the new competitors Nintendo and Sega.

Magnavox was already since 1974 a subsidiary of Philips. Philips was handling the european distribution of Magnavox Odyssey² under the name Philips Videopac G7000. They followed that up with Philips Videopac+ G7400 and that with the Philips CD-i and the Philips MSX. So also Philips was willing to stay in the market. But Nintendo and Sega were more successful. So Philips ended up cooperating with Nintendo by providing their CD-i for the SNES.

Atari had difficulties as a company and Arcade part and home consumer part were split, but they stayed in the market. The Atari 7800 released in 1986, the Jaguar in 1993. But Atari was unable to compete with Nintendo and Sega.

So yes, without Nintendo we would've seen the market relived by Atari, Philips, Intellivision and Sega. Only the competition with Nintendo and Sega forced the other companies out of the market, not the crash.

"Only the console market crashed, people just moved on to PCs & Arcades after the crash, video games were still popular"

Interesting graphics you have, but it doesn't support your statement. Arcade revenue did also go down as you point out. But it moves independently of the home console market. Look at your graph, Arcade already started contracting as home console revenue was still climbing. Arcade also stopped at around it's former size, while home console revenue completely collapsed in 1985. But the most interesting part is that at the time both Arcade and Home console dropped, the PC-market grew. Only at the point the home console market recovered, the PC market shrinked again. It seems PC-market and home console market were vying for the same customers. As the console market crashed, the gamers went to PC.

But the revenue is much lower. True. But that the graph is about revenue somehow downplays the importance of the PC-market. As on PC was much more piracy (yes, believe me, I was there back then) and lower game prices (lots of Shareware and free demos, think that Doom released the complete first chapter (of three) completely without cost) the revenue is much smaller as on other platforms, but that hides the amount of players and games. As development cost and distribution is much lower on PC, it also was much more simple to have a sufficient business with this much smaller revenue. That is why this small revenue bar hides a plethora of games and players.

More importantly, as the entry hurdles were so low, the PC-market created life-long players and a lot of game developers.

So in conclusion: if the home console market hadn't recovered, the PC-market would've kept on growing. Slowly but solidly.

"The Video Game Crash Only Happened in NA, other regions were still playing games"

The world wasn't as globalized back then, as it is today. You claim the crash would've burned into other countries, but Nintendo itself is proving you wrong. The Famicom released 1983 in Japan, just as the crash was starting in the US. It didn't affect the japanese market, which hadn't for the most part even seen the american home consoles. But even besides Nintendo a lot of Japanese companies developed, mostly for Arcade (Konami, Bandai) or the differing PC-platforms available in Japan (Square, Enix).

In europe the american consoles had some presence, but the home console market never really started there until the Playstation. If there is no market to begin with, it cannot crash. Europe at that time mostly started playing on PC, as you can see with the plethora of european gaming comanies starting at that time with PC games:

• Ubisoft: founded 1986 in France
• Infogrames Entertainment: founded 1983 in France
• Blue Byte: founded 1988 in Germany
• Silmarils: founded 1987 in France
• Adventure Soft: founded 1983 in the UK
• Codemasters: founded 1985 in the UK

And so on. They all started in europe as PC-devs, as this was the viable platform, home console was seldomly a viable market in europe alone, even after the NES. This only changed after the Playstation.

So in conclusion: Japan and Europe had developing gaming markets on their own, for big parts disconnected from what was happening in the US.

I'd say it had a major influence on the definition of the video game market that we know today. 

Your details on the history of the Intellivision has some pretty major omissions and jumps to wild conclusions.  Mattel sold around 3 million Intellivisions between 1979-1983.  They were a minor, albeit successful, competitor to the Atari 2600.  But, by the time the Colecovision released in 1982, and the Atari 5200, the console was already being outclassed graphically.  Mattel Electronics suffered heavy losses in the North American Video Game Crash, and they gladly sold off their remaining inventory to their former Senior VP and his investment partners.  INTV Corp kept the Intellivision going througout the 80's in their own way.  But this was mainly as sell off of parts and games from Mattel's inventory.  They created 20+ brand new games between 1984-1990, but their system release was nothing more than a rebranding of the original 1979 Intellivision, which was already a graphics dinosaur compared to the NES and Sega Master System.  INTV would never have revived the video game market.  Buying up dead stock inventory and selling it via mail order does not make a major player in the video game spectrum.

As for Atari, the performance of the 7800 pretty much tells you everything you need to know about their capability of reviving the market.  Built in 1984, just 2 years after the 5200, the 7800 was another graphical dinosaur compared to the NES.

As for Phillips/Magnavox, the Odyssey 2 had moderate success in NA and actually performed better in Europe.  But as far as the capacity to be a market leader/reinvigorator?  Look at the Phillips CD-i.  Shoddy controllers, crappy games, etc.  It had 4 Nintendo branded games on it, and it still flopped hard.  That's an impressive feat in it's own right.

The only company besides Nintendo that stood a shot was Sega.  But with Master System having not caught on in NA, one could argue that they might not have tried again with the Genesis if Nintendo hadn't already proven NA as a viable market again.

Had NES failed in the US I bet Nintendo would have given up in the west. SMS was a flop and Genesis was an answer to NES. So without NES succeeding in the US. Likely not had gotten SNES/Genesis and thus no PlayStation. So yes. They did crash or no crash in your region. NES made a big ripple effect in the gaming industry.

The release of Super Mario Bros. and the western debut of the NES did save the industry. It's pretty obvious, and the industry has gotten massive since then.

The NES/Famicom definitely saved console gaming.  Did it save gaming in general?  It probably saved it from being a much less popular hobby.  Consoles are really what popularized gaming in the long term.

The alternatives to console gaming during the mid-80s, US, were the arcades and home computers.  The arcades still remained popular even when the home console market crashed.  However, there one big problem with arcades was that people did not want to pay more for newer games.  They still wanted to pay $0.25 per play.  The solution was that games like Guantlet and Street Fighter found ways to get people to put quarters in more frequently, however players were extremely resistant to an across the board price increase.  The alone would have kept arcades from staying mainstream.  Even though arcades still did well in the mid 80's, they still didn't have the massive impact like the games from the late 70's/early 80's era.  This would have gradually become a more and more niche market.

Then there are home computers.  During the console market crash, the C64 became the new leading gaming system.  According to Wikipedia the C64 sold 12.5m-17m, the Atari 2600 sold 30m, and the NES sold 62m.  The C64 basically halved the console market while the NES doubled it.  This illustrates the kind of advantages that consoles have.  They make gaming a lot more mainstream.

But without consoles, PC gaming becomes the main gaming medium, and PC gaming alone would never have gotten to same popularity that consoles have reached.  It might have been somewhat more popular than it actually was historically, but PC gaming never gets to the popularity of console gaming.  The lower hardware costs and convenience of consoles bring in a lot more gamers than there would be on PC alone.  I might be overstating it to say PC gaming is a niche, but the total gaming market becomes significantly smaller without consoles.  And if you look at the devs that popularized PC gaming, they are western devs.  While all of the Japanese publishers would have never become hugely successful in gaming without consoles (including Nintendo, Sony and Sega).

So what the NES really did is that it kept gaming as a popular medium like film and music.  In the US, comic books were actually the most popular medium in the US, but in the 50's and 60's the market imploded and it has been considered more of a niche medium ever since.  That was more like the fate that gaming faced without the NES.  The NES made gaming popular, and it has stayed that way ever since.

American grandparents certainly? Not mine (Dutch). Nintendo wasn't on my radar until the N64 came out, Atari, C64, MSX, PC, Amiga 500, PS1, N64 is my video game history. Atari is much more a household name than Nintendo with the old folks, and it wouldn't surprise me if the BBC Micro would fill that gap in the UK. Anyway the C64 was far more popular.

Yes. The economic build and adoption of the system stalled the collapse created by Atari's fiasco and bought entertainment systems vital breathing room to restructure their approach to sales while growing and shaking off the stigma of being for children.

Yeah, it's the first modern style console and SMB changed how game design was approached, NES increased the market size making it viable to be what it would later become today as it allowing Nintendo the success they got is what drove SEGA to be bought by Japanese business and continue on in the market and Nintendo would later indirectly bring Sony into the equation after their own efforts initially fell flat for the market to become mainstream which prompted MS to then enter later on. The increased viability caused far more investment into the market.

I know about the what if arguments as the home computer market was still functioning after the crash but then piracy was a rampant problem for developers which would impact returns an issue that had no real viable solution until Steam took off plus the platforms were inconsistent causing their decline which is why they conceded the market to consoles and the 90s proved to be a rollercoaster time for the market as PCs came into being which would have become the main gaming medium if consoles weren't about and PC gaming prior Steam was a messy affair to the point things wouldn't have been mainstream which highlights the question would the market have attracted the type of investment consoles did and survive.

For example in the early 00s PC gaming was in serious trouble due to issues like piracy, compatibility issues and not being user friendly etc... For anyone who wasn't around or not into PC gaming in that period prior to Steam if games needed to be patched you had to search the web for developer or user generated patches for each game individually if the developer had gone under or any sites hosting patches were no longer live that's it you have no alternatives, you had to keep hold of CD keys to unlock your games when installed on a new PC, some games just refused to work with new types of hardware etc... It brought the market down to a point where EA who once tried to refuse to develop for consoles in favour of home computers declared the market dead now picture if consoles weren't around at this point as that was practically the anchor for gaming at the point as only a few were doing well with PC at the time. PCs required a one two punch of Steam which was mandatory with HL2 and later Crysis which pushed the new era of PC hardware to recover and eventually become a healthy market again.