The video game crash of 1977 was different from the video game crash of 1983 in that the crash was not so much caused by games as it was caused by a single game/unit. Atari's Pong had become so popular that it was cloned until the market could no longer hold that many cloned consoles.

This crash is not as well known as the 1983 one, since the video game market in 1977 was extremely small in modern terms, and mostly oriented towards adults. Video games were still seen as just another pastime which would probably soon diminish as some new leisure activity caught the mainstream's interest. The release of the Fairchild Channel F and the Atari 2600 (each known as the VES and VCS at the time) helped bring the video game market back onto its feet with their use of programmable removable game cartridges thereby making the systems theoretically usable forever.