Coleco (a contraction of COnnecticut LEather COmpany) was the first company to use a “dedicated chip” in a home video game with Telstar Arcade in 1976. Trying to replicate the success of this first console, Coleco decided to produce nine different variations of Telstar.
But in the following year, as many as 75 producers put similar products on the market and this competition, combined with some wrong commercial choices, led Coleco to economic disaster. While Coleco sold pocket games for 20 million dollars, in fact, it was forced to literally throw away a million Telstar units, and in 1978 the company lost 22.3 million dollars. With the introduction of home video games with replaceable game cartridges, Fairchild and Atari completely swept away non-updatable home video game manufacturers from the market.
Colecovision was the third-generation console designed by Coleco, distributed in 1982. It offered controls and performance very similar to the arcade games of the time, and an initial catalog of 12 titles plus ten promised shortly. During its commercial life, Colecovision has been able to count on a playground of 170 titles. Most of the games were conversions of arcade titles of the time, extremely similar to originals and sometimes the only thing that set them apart was a few levels less.
Coleco also offered on the market an adapter that allowed the games of the Atari 2600 – the market leader – to be used on the Colecovision. This obviously allowed Coleco to acquire new buyers and to take advantage of an enormous quantity of games ( the Atari ones ) without spending anything in planning. The expansion module obviously caused a heavy legal action to break out from Atari, but there was no way to block sales due to the fact that the Atari 2600 was built with “generic” chips.
Coleco proposed new expansion modules for the console over time, such as the steering wheel and pedals to be used with the Turbo driving game. The third module – the final one – released in 1983 expanded the video game into a real home computer, the Coleco ADAM.
In Christmas 1982 Coleco reached the goal of 500,000 units sold thanks to the strength of the games offered. While Atari enjoyed the popularity of games like Space Invaders, Colecovision was the first console to have Nintendo’s Donkey Kong box office champion.
Coleco had an hard time to get this video game. In fact, in December 1981, Coleco sales representatives left for Japan to negotiate the purchase of a license from Nintendo. The Coleco Manager would have preferred to return to America to check the contract with lawyers, but was forced to sign with Nintendo immediately, almost blindly, as Atari and Mattel were around the corner to steal the agreement.
In April 1982, Coleco and Nintendo ended up sued in court by Universal Studios who considered Donkey Kong a plagiarism of their King Kong movie. Coleco, who had invested a fortune to win those rights from Nintendo and which was close to the market launch of the video game, decided to close the matter by granting 3% of all Donkey Kong home sales to Universal. Nintendo, on the other hand, began a tough legal battle that eventually saw her victory. Coleco, a long time later, will try to take back the royalties from Universal.
Colecovision sales in early 1983 easily exceeded one million units, just before sinking into the “video game crash” that occurred at the end of the year. In fact, Coleco will stop production at the beginning of 1984. The last produced titles (Illusions, Spy Hunter, Telly Turtle, Root Beer Tapper) were seen very little in the shops. Shortly thereafter Telegames bought a part of Coleco shares and produced some other games but the impact on the market was rather lukewarm. When Coleco left the industry it had reached the threshold of 6 million Colecovision sold (in just two years and despite the ups and downs of the market caused by the video game crash!). Many experts in the video game industry believe that if it weren’t for the ’84 video game crash Coleco and his console would have dominated the market for a long time yet. Coleco had surpassed Atari and Intellivision both economically and qualitatively in the market battle. But Coleco was not able to recover from the crash.
Today, to remember the old days of the Colecovision, we can use emulators and roms of the original games, now considered “abandonware”. In fact, although the games are protected by international copyright, the owners of the latter have decided not to use it, tolerating the free distribution of all the material.