In the history of video games, the third generation of video game consoles, commonly referred to as the 8-bit era, began on July 15, 1983, with the Japanese release of two systems: Nintendo's Family Computer and Sega's SG-1000. When the Famicom was released outside of Japan, it was remodeled and marketed as the Nintendo Entertainment System (NES). This generation marked the end of the video game crash of 1983, and a shift in the dominance of home video game manufacturers from the United States to Japan. Handheld consoles were not a major part of this generation; the Game & Watch line from Nintendo and the Milton Bradley Microvision that were sold at the time are both considered part of the previous generation due to hardware typical of the second generation.

The video game crash of 1983 was a large-scale recession in the video game industry that occurred from 1983 to 1985, primarily in the United States. The crash was attributed to several factors, including market saturation in the number of video game consoles and available games, many of which were of poor quality. Waning interest in console games in favor of personal computers also played a role. Home video game revenue peaked at around $3.2 billion in 1983, then fell to around $100 million by 1985. The crash abruptly ended what is retrospectively considered the second generation of console video gaming in North America. To a lesser extent, the arcade video game market also weakened as the golden age of arcade video games came to an end.