By the spring of 1987, the American video game business had spent several years trying to escape its own funeral.
The spectacular collapse of the early home console market had driven companies out of business, left retailers with mountains of discounted cartridges, and made the words “video game” difficult to sell to stores that remembered what had happened only a few years earlier. Yet from May 30 through June 2, 1987, thousands of buyers, journalists, manufacturers, and distributors crowded into Chicago’s McCormick Place for the International Summer Consumer Electronics Show, and anyone who wandered into the game displays found an industry that looked anything but dead.
The official show directory preserved by the Video Game History Foundation confirms the four-day May 30 to June 2 schedule. Contemporary reports estimated that approximately 100,000 people attended the trade-only event, including around 70,000 retail buyers and 2,000 journalists. Roughly 1,400 exhibitors filled McCormick Place with televisions, audio equipment, telephones, computers, video products, and other electronics. Video games occupied only one part of that enormous commercial spectacle, but they became one of its most noticeable stories.
For an industry that had supposedly disappeared, the crowds were difficult to ignore.
Computer Entertainer, reporting immediately after the show, described McCormick North Hall as buzzing with games and computer entertainment software. Dealers who had assumed the industry was finished found enormous displays filled with new consoles, cartridges, computer games, peripherals, and demonstrations. Nintendo commanded a particularly massive section of the hall, Sega stood immediately beside it, and Atari arrived with an airplane hanging over its exhibit.
The 1987 Summer CES did not mark the beginning of the video game recovery, but it offered perhaps the clearest public demonstration yet that the recovery was real.
An Industry Still Haunted by the Crash
The enthusiasm inside McCormick Place made more sense because of what had happened before it.
American home video game sales had reached extraordinary heights during the first console boom, then collapsed as weak software, excessive inventory, uncontrolled competition, and declining consumer confidence overwhelmed the market. By 1985, the business had fallen so far that many retailers wanted nothing more to do with dedicated game machines.
Nintendo entered that environment cautiously. Its Nintendo Entertainment System was tested in New York in 1985 before gradually spreading into additional markets and then national distribution. Rather than simply asking retailers to believe that video games were popular again, Nintendo worked to reduce their risk while presenting the NES as a controlled entertainment platform with a growing library of software.
By June 1987, the results were becoming impossible to dismiss. The Washington Post reported shortly after CES that Nintendo had captured an estimated three-quarters of the American home video game market and that the United States industry was expected to reach roughly $825 million in sales during the year. Nintendo marketing vice president Ron Judy remembered the difficulty of convincing retailers to return to the category after the earlier collapse, while Sega marketing executive Robert Harris argued that enthusiasm for games had never completely vanished. The problem had been giving consumers software worth buying.
CES gave those companies a place to prove their argument in front of the people who decided what would appear on store shelves.
Nintendo Takes Over the North Hall
Few displays communicated the revival more effectively than Nintendo’s.
The Video Game History Foundation preserves Nintendo of America’s Summer CES 1987 publicity folder, created with public-relations firm Hill & Knowlton and distributed during the May 30 to June 2 show. Its surviving material concerns some of the most important names in Nintendo history, including The Legend of Zelda, Metroid, Kid Icarus, and Punch-Out!!.
On the floor itself, Nintendo was difficult to miss. Computer Entertainer called its exhibit the largest in the new McCormick North Hall and jokingly referred to the sprawling space as the “three-acre booth.” Nintendo displayed its own games while giving existing and newly announced licensees room to present their software inside the larger area. The result showed that Nintendo was no longer simply selling a successful console. It was building an ecosystem of publishers around it.
Among Nintendo’s major attractions was the American version of The Legend of Zelda. The adventure was being prepared with its gold cartridge and battery-backed saving system, allowing players to preserve progress rather than complete the game in one sitting or rely on passwords. Nintendo was also promoting Metroid and Kid Icarus, both designed around longer adventures that could be continued through passwords.
A playable version of Punch-Out!! was present as well, although Computer Entertainer noted that the game remained in development and Nintendo was adding fighters beyond those found in the arcade version.
Together, these games demonstrated how sharply Nintendo was moving away from the short, repetitive experiences associated in the public imagination with the first home video game boom. Exploration, character progression, secrets, passwords, saved games, and increasingly elaborate worlds were becoming part of what console owners could expect.
Nintendo was also experimenting with hardware. It displayed a stereoscopic 3D system using liquid crystal shutter glasses alongside a racing demonstration, while the NES Advantage provided an arcade-style controller with adjustable turbo functions and a slow-motion feature.
Not every CES experiment would become an enduring part of the American NES business, but the range of products mattered. Nintendo was presenting the console as something that could expand, change, and support increasingly varied forms of play.
The Third-Party Business Takes Shape
Perhaps even more significant than Nintendo’s own games was the collection of outside publishers gathering around the NES.
Computer Entertainer reported that Nintendo used CES to announce ten additional licensees, adding to companies already producing software for the system. Acclaim Entertainment, founded by former Activision executives Gregory Fischbach and Robert Holmes, was preparing titles including The 3-D Battles of WorldRunner, Winter Games, and Star Voyager. Activision had signed with Nintendo, although it had not yet announced specific games.
Broderbund planned versions of Lode Runner, Raid on Bungeling Bay, Spelunker, and Deadly Towers. Irem showed Sqoon and announced Kung Fu II. Sunsoft was preparing Spy Hunter and Sky Kid. Taito’s planned lineup included Elevator Action, The Legend of Kage, Renegade, and Arkanoid, with the last packaged alongside its own controller. Tecmo was bringing Rygar, Solomon’s Key, Mighty Bomb Jack, and Star Force to Nintendo’s growing American catalog.
Other companies already associated with the NES were expanding their libraries. Bandai displayed its Family Fun Fitness mat and related software. Capcom was preparing Section Z, Speed Rumbler, Side Arms, and Gun.Smoke. Data East had Ring King, Kid Niki, Karnov, and BreakThru. Konami’s schedule included Double Dribble, Stinger, The Goonies II, and Top Gun. Surviving Data East and Sunsoft promotional material from Summer CES provides additional physical evidence of publishers actively courting the American market at the show.
This expanding list of companies was one of the most important developments visible in Chicago. Nintendo had demonstrated that a console could survive the post-crash market. Now other publishers were betting that they could build businesses around it.
The American console industry was becoming a software industry again.
Sega Fights for the Same Buyers
Nintendo did not have McCormick North Hall to itself.
Immediately beside Nintendo stood Sega, whose Master System had entered the American market in 1986. If Nintendo possessed the larger commercial position, Sega still had something extremely valuable: one of the strongest arcade catalogs in the industry.
Its CES display used that advantage.
Computer Entertainer reported that Sega’s booth was jammed with visitors and that Out Run was running across multiple monitors. Yu Suzuki’s arcade racing game had become a sensation, and Sega was attempting to translate that experience into the home. The Master System version could not reproduce everything offered by the arcade machine, but the ability to advertise a recognizable arcade blockbuster gave Sega an important weapon in its competition with Nintendo.
Other Master System projects demonstrated how broad Sega wanted the library to become. A version of Monopoly was still early in development. Great Soccer, Zillion, Kung Fu Kid, Enduro Racer, Great Basketball, Rocky, and Great Golf were among the titles being displayed or discussed, while Fantasy Zone II and Alien Syndrome were also in development.
Sega also continued to emphasize stereoscopic gaming. Its 3D glasses had improved since their appearance at the January CES, and attendees could try games such as Missile Defense 3-D while Zaxxon 3-D demonstrated where the technology might go next. Nintendo was experimenting with similar ideas at the same show, making stereoscopic gaming one of the more visible technological competitions between the two companies.
What ultimately mattered more than the glasses, however, was the crowd.
Buyers were stopping.
Players were lining up.
Retailers who had once regarded home consoles as unsellable inventory were again watching people compete for a chance to play them.
The Washington Post found the same atmosphere when examining the show, describing video game booths as some of CES’s busiest areas. Sega’s Robert Harris credited Nintendo with rebuilding confidence in the category even while Sega was competing against it. Nintendo’s success had shown retailers that people were willing to buy games again, creating an opportunity Sega hoped to share.
Atari Tries to Fly High Again
Few companies carried more baggage into the 1987 revival than Atari.
The Atari name was inseparable from the original American video game boom, but also from the collapse that followed it. Under Jack Tramiel’s Atari Corporation, the company had concentrated heavily on computers, especially the Atari ST line. Yet the rebounding console business was becoming too large to ignore.
At Summer CES, Atari made certain that attendees could not ignore Atari either.
Its exhibit was designed around a “Flying High” theme and topped by a full-size airplane. Contemporary sources disagree on whether to describe the aircraft as a Piper Cub or a Cessna, but they agree on the spectacle. Airport-style decorations, flight attendants, signs, and the aircraft towering above the display turned Atari’s area into one of the most memorable sights at the show.
The product Atari most wanted people to notice was the XE Game System, or XEGS.
Built from Atari’s existing 8-bit computer technology, the machine attempted to blur the boundary between console and computer. Computer Entertainer reported that the package included the XE console, an attachable keyboard, joystick, light gun, and bundled games, with a disk drive available separately. Atari intended to position the system directly against Nintendo and Sega at an expected price of about $150.
Atari also promised a substantial cartridge library drawn partly from its existing computer catalog. Games discussed for the system included Battlezone, Star Raiders II, Food Fight, Ballblazer, Rescue on Fractalus!, HardBall!, Fight Night, Lode Runner, Touchdown Football, and Archon.
The idea was straightforward. Atari already owned or had access to a deep reservoir of 8-bit software. Turning those games into cartridges could give the new machine a sizable library without beginning entirely from scratch.
The problem was confidence.
Computer Entertainer questioned whether Atari could support another system while Atari 7800 owners were still waiting for more software. The magazine’s comparison was revealing. By the time of CES, Nintendo and its third-party publishers had already shipped more than forty NES titles since the system’s broader American introduction, while Sega had built a smaller but growing Master System library. Atari was promising plenty, but buyers had reason to wonder whether those promises would become products.
Atari was nevertheless committing significant resources to being noticed again. Computer Gaming World reported that Atari executive Michael Katz described marketing as the company’s major story for 1987 and said Atari had increased its advertising budget from roughly $2 million to $3 million in the previous fiscal year to a planned $10 million to $15 million range.
At the same CES where Nintendo demonstrated what the new console market could become, Atari was trying to prove that one of gaming’s oldest names still belonged in it.
Computer Games Fill the Other Side of the Revival
The console competition may have provided some of the most visible crowds, but Summer CES also demonstrated how much video game history in 1987 was still being written on home computers.
Computer Entertainer reported that designers were particularly excited about the Commodore Amiga. Epyx surrounded California Games with Beach Boys music while attendees tried events including surfing and skateboarding. Lucasfilm Games and Activision previewed Maniac Mansion, an unusual graphical adventure controlled largely through on-screen commands instead of requiring players to type traditional text-adventure instructions. Infocom was showing games including Stationfall and The Lurking Horror.
Contemporary RUN coverage likewise described a large entertainment software presence and singled out Maniac Mansion among the games shown in Chicago.
The broader computer market was becoming more complicated at the same time. Commodore 64 remained enormously important to entertainment software, while Atari ST and Amiga developers explored the possibilities of more powerful 16-bit hardware. IBM-compatible machines were becoming increasingly important in homes and schools, forcing entertainment and educational publishers to think about DOS as another major platform.
Keith Ferrell’s report for COMPUTE! estimated that computer and software companies represented roughly 15 percent of CES, a minority of the enormous electronics exhibition but a highly visible one. He found developers offering better graphics, sound, complexity, and increasingly ambitious software across Commodore, IBM-compatible, Amiga, Atari ST, and other systems.
The story of Summer CES was therefore larger than a three-way fight among Nintendo, Sega, and Atari. Dedicated consoles were reviving at the same moment that computer gaming was becoming richer, more technically ambitious, and more diverse.
Marketing Becomes as Important as the Game
Another change was less visible on a television screen but just as important to the future of the industry.
Game companies were learning how to sell themselves.
The staff of Computer Gaming World returned from CES struck by how frequently executives talked about marketing. Atari discussed dramatic increases in advertising. Firebird spoke about competing aggressively with larger software companies. Activision emphasized profitability. MicroProse president Bill Stealey acknowledged that although his company had grown because of its products, advertising and promotion were becoming increasingly important.
That attitude reflected lessons learned during the industry’s earlier turmoil.
The companies gathered in Chicago were enthusiastic, but they were not behaving exactly like the companies that had flooded the market only a few years earlier. Computer Entertainer detected more caution, fewer careless announcements, and a greater expectation that products discussed publicly should eventually reach retailers.
The recovery was not simply about making games again. It was about controlling inventory, supporting retailers, building recognizable brands, licensing outside developers, promoting individual releases, and convincing customers that buying into a system would not leave them stranded.
In that sense, some of the most important developments at CES happened in conversations between publishers, distributors, and store buyers rather than on the game screens themselves.
The Moment Retailers Started Believing Again
The most revealing people at Summer CES may not have been the programmers or executives.
They were the buyers.
Computer Entertainer watched representatives from major department stores circulate around the Nintendo and Sega areas, visibly surprised by what they found. One of the problems Nintendo had faced since entering the American market was convincing retailers burned by the crash to dedicate shelf space to games again. A busy trade-show floor provided evidence that sales charts alone could not.
People wanted to play.
The change was so striking because the memory of the crash remained fresh. In interviews published shortly after CES, Nintendo’s Ron Judy recalled retailers who associated video games with lost jobs and unsold merchandise. Yet Nintendo’s sales had forced many of those stores to reconsider. Atari and Sega followed the same opening back onto American shelves.
The crowds in Chicago were therefore more than a curiosity.
They were part of the recovery itself.
CES was a trade show. The people walking those aisles included the buyers who would decide whether The Legend of Zelda, Out Run, an Atari XE Game System, or the latest computer release would appear in front of consumers later that year.
A successful demonstration could become an order. Enough orders could become shelf space. Shelf space could become a national market.
Why the 1987 Summer CES Matters
Looking backward, it is tempting to treat the recovery of the American video game industry as inevitable.
It was not.
The people inside McCormick Place in 1987 still remembered an industry that had collapsed with astonishing speed. Nintendo had become the market leader, but retailers still carried scars from the previous boom. Sega was fighting for recognition. Atari was attempting to reconnect its historic name with dedicated gaming while simultaneously supporting several hardware platforms. Computer software publishers were navigating rapid technological change and a marketplace spread across incompatible machines.
Nothing about the future was completely settled.
That uncertainty is what makes the surviving contemporary accounts so valuable.
The official CES directory fixes the event in time and place. Nintendo’s surviving publicity folder preserves the company’s own presentation of games that would become foundational NES releases. Promotional collections from Data East, Irem, Sunsoft, and others show publishers bringing their products directly to the trade. Magazine reporters described the booths while the machines were still running and the games were still unreleased. Newspaper journalists interviewed Nintendo, Sega, and Atari executives while the recovery was happening rather than decades afterward.
Taken together, those sources capture an industry between eras.
The old Atari-dominated boom was gone, but Atari itself was still standing beneath an airplane trying to reenter the race. Sega was filling screens with Out Run and stereoscopic experiments. Nintendo was occupying an enormous section of McCormick North Hall with a growing army of publishers and games such as Zelda, Metroid, Kid Icarus, and Punch-Out!!. Across the computer exhibits, companies were showing California Games, Maniac Mansion, sophisticated simulations, adventures, and software that pushed newer machines harder than the games of only a few years before.
Two years earlier, American retailers had good reason to believe home video games might be finished.
By the summer of 1987, they were standing in lines to see what came next.
The 1987 Summer Consumer Electronics Show mattered because it captured that change while it was happening. Video games had not merely survived the crash. In the crowded halls of McCormick Place, they were becoming one of the most important forms of home entertainment all over again.
Sources & Further Reading
Consumer Electronics Association. 1987 International Summer Consumer Electronics Show Official Directory. Chicago, May 30–June 2, 1987. Video Game History Foundation Library, BOOK-EVENTGUIDES-CES.87.SUMMER. https://library.gamehistory.org/subjects/216
Nintendo of America Inc. Nintendo Publicity Folder, Summer CES 1987. May 30–June 2, 1987. PROMO-KITS.NINTENDO.87SCES. Video Game History Foundation Library. https://library.gamehistory.org/repositories/2/archival_objects/17459
Data East. Data East Flyer Collection, Summer CES 1987. May 30–June 2, 1987. PROMO-FLYERSMISC.DATAEAST.87SCES. Video Game History Foundation Library. https://library.gamehistory.org/agents/corporate_entities/190
Data East. “Data East Brings More Arcade Realism Home!” Promotional flyer, 1986. PROMO-FLYERSMISC.DATAEAST.87SCES.1. Video Game History Foundation Library. https://library.gamehistory.org/agents/corporate_entities/190
Data East. “New for 1987!” Promotional flyer, 1987. PROMO-FLYERSMISC.DATAEAST.87SCES.2. Video Game History Foundation Library. https://library.gamehistory.org/agents/corporate_entities/190
Irem. Irem Flyer Collection, Summer CES 1987. May 30–June 2, 1987. PROMO-FLYERSMISC.IREM.87SCES. Video Game History Foundation Library. https://library.gamehistory.org/subjects/216?filter_fields%5B%5D=primary_type&filter_values%5B%5D=archival_object&page=5
Irem. “Irem’s Original Hit Games.” Foldout, ca. 1987. PROMO-FLYERSMISC.IREM.87SCES.1. Video Game History Foundation Library. https://library.gamehistory.org/subjects/124?page=43
Irem. Irem Company Profile. Foldout, ca. 1987. PROMO-FLYERSMISC.IREM.87SCES.2. Video Game History Foundation Library. https://library.gamehistory.org/subjects/124?page=43
Irem. Sqoon. Promotional flyer, 1986. PROMO-FLYERSMISC.IREM.87SCES.3. Video Game History Foundation Library. https://library.gamehistory.org/subjects/216?filter_fields%5B%5D=primary_type&filter_values%5B%5D=archival_object&page=8
Sunsoft. Sunsoft Flyer Collection, Summer CES 1987. May 30–June 2, 1987. PROMO-FLYERSMISC.SUNSOFT.87SCES. Video Game History Foundation Library. https://library.gamehistory.org/subjects/84?page=23
“Fun and Games at the Consumer Electronics Show!” Computer Entertainer 6, no. 3 (June 1987). https://upload.wikimedia.org/wikipedia/commons/1/1a/Computer_Entertainer_6-3.pdf
Computer Entertainer 6, no. 2 (May 1987). https://upload.wikimedia.org/wikipedia/commons/b/b6/Computer_Entertainer_6-2.pdf
“Gold Rush: A C.E.S. Report on the Computer Entertainment Software Industry.” Computer Gaming World, no. 39 (August–September 1987): 22–26. https://www.cgwmuseum.org/galleries/issues/cgw_39.pdf
Ferrell, Keith. “CES and COMDEX: A Tale of Two Cities.” COMPUTE!, no. 87 (August 1987). https://www.atarimagazines.com/compute/issue87/CES_and_COMDEX_A_Tale_Of_Two_Cities.php
Ferrell, Keith. “The Summer Consumer Electronics Show.” COMPUTE!’s Gazette 5, no. 9 (September 1987). https://www.atarimagazines.com/compute/gazette/index2.html
Wallace, Louis. “Summer CES: The Show Goes On.” RUN, no. 45 (September 1987). https://www.commodore.ca/wp-content/uploads/2016/01/run_issue_45_1987_sep-www.commodore.ca_.pdf
Osterman, Kirk. “CES in Review: Atari Games Flying High in Chicago.” Current Notes 7, no. 6 (July–August 1987). https://www.atarimania.com/mags/pdf/Current_Notes_Volume_7_Number_6_July-Aug_1987.pdf
ANALOG Computing, no. 56 (1987). Contemporary post-CES coverage of Atari and the XE Game System. https://www.atarimania.com/mags/pdf/analog_no_56.pdf
Ratcliff, Matthew J. W. “The Latest 8-Bit Developments from Chicago.” ANALOG Computing, no. 57 (September 1987). https://www.atarimania.com/mags/pdf/analog_no_57.pdf
Panak, Steve. “Panak Strikes!” ANALOG Computing, no. 58 (October 1987). https://www.atarimania.com/mags/pdf/analog_no_58.pdf
Van Horen, Harry. “CES (Chicago) Part I.” ST NEWS Disk Magazine 2, no. 5 (1987). https://st-news.com/issues/st-news-volume-2-issue-5/features/ces-chicago-part-i
Groves, David G. “Chicago CES NEWS From Saturday, May 30, 1987.” SPACE/MAST Newsletter, June 1987. https://space.atari.org/html/news8706.html
Sullivan, Kent. “Summer CES Worthwhile.” C64 Newsletter, August 1987. https://www.eamonag.org/newsletters/C64-1987-08/
“Around the Route.” Cash Box, June 13, 1987. https://www.worldradiohistory.com/Archive-All-Music/Cash-Box/80s/1987/CB-1987-06-13.pdf
Cash Box, June 27, 1987. Post-CES coverage and industry statistics. https://electronicsandbooks.com/edt/manual/Magazine/C/Cash%20Box%20US/80s/1987/CB-1987-06-27.pdf
Cash Box, August 1, 1987. Coverage of the revived American home video game market following Summer CES. https://manuals.plus/m/17cddf8b4a081dc4b218498bcb506a8d3c3c8287507664b86d0ef6f4f291bbcd
Potts, Mark. “Video Games Are Enjoying a Resurgence in Popularity.” Washington Post, June 21, 1987. https://www.washingtonpost.com/archive/business/1987/06/21/video-games-are-enjoying-a-resurgence-in-popularity/0d5dbfdd-1c29-4dc5-ab8e-5325ae125ac7/
Potts, Mark. “Video Games: They’re Back and Almost as Big as Ever.” Los Angeles Times, June 29, 1987. https://www.latimes.com/archives/la-xpm-1987-06-29-fi-126-story.html
Atkinson, Terry. “A Little of Disc, a Little DAT, and More.” Los Angeles Times, June 5, 1987. https://www.latimes.com/archives/la-xpm-1987-06-05-ca-2991-story.html
Groves, Martha. “Marantz to Break Impasse Over Digital Audio Tape.” Los Angeles Times, June 2, 1987. https://www.latimes.com/archives/la-xpm-1987-06-02-fi-4419-story.html
Atkinson, Terry. “Latest Developments: An Electronics Show Looks Back, Ahead.” Los Angeles Times, June 10, 1987. https://www.latimes.com/archives/la-xpm-1987-06-10-ca-3559-story.html
“Home Tech Analysis: Building Up to Consumer Backlash?” Los Angeles Times, June 12, 1987. https://www.latimes.com/archives/la-xpm-1987-06-12-ca-4042-story.html
Billboard, June 13, 1987. Summer Consumer Electronics Show coverage. https://www.worldradiohistory.com/Archive-All-Music/Billboard/80s/1987/Billboard-1987-06-13.pdf
Sound & Communications, May 1987. Industry calendar listing the International Summer Consumer Electronics Show, May 30–June 2, 1987. https://www.worldradiohistory.com/Archive-All-Audio/Sound-and-Communication/80s/Sound-%26-Communications-1987-05.pdf
Atari Corporation. “Atari to Begin Shipments of New XE Game System Bundled with Three Popular Games.” Press release, 1987. Preserved by Atari Explorer. https://atari-explorer.ctrl-alt-rees.com/8bit/xegs.html
Video Game History Foundation. “Consumer Electronics Show (CES).” Archival collection containing directories, publicity kits, flyers, and other CES materials. https://library.gamehistory.org/subjects/216
Video Game History Foundation. “Nintendo Summer CES 1987 Material.” VGHF Digital Archive. https://archive.gamehistory.org/search?subjects=Legend+of+Zelda+series%2C+The