Third generation of video game consoles

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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 (commonly abbreviated to Famicom) and Sega's SG-1000.^[1][2] 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.^[3] Handheld consoles were not a major part of this generation; the Game & Watch line from Nintendo (which started in 1980) and the Milton Bradley Microvision (which came out in 1979) that were sold at the time are both considered part of the previous generation due to hardware typical of the second generation.

Improvements in technology gave consoles of this generation improved graphical and sound capabilities, comparable to golden age arcade games. The number of simultaneous colors on screen and the palette size both increased which, along with larger resolutions, more sprites on screen, and more advanced scrolling and pseudo-3D effects, which allowed developers to create scenes with more detail and animation. Audio technology improved and gave consoles the ability to produce a greater variation and range of sound. A notable innovation of this generation was the inclusion of cartridges with on-board memory and batteries to allow users to save their progress in a game, with Nintendo's The Legend of Zelda introducing the technology to the worldwide market. This innovation allowed for much more expansive gaming worlds and in-depth storytelling, since users could now save their progress rather than having to start each gaming session at the beginning. By the next generation, the capability to save games became ubiquitous—at first saving on the game cartridge itself and, later, when the industry changed to read-only optical disks, on memory cards, hard disk drives, and eventually cloud storage.

The best-selling console of this generation was the NES/Famicom from Nintendo, followed by the Master System from Sega (the successor to the SG-1000), and the Atari 7800. Although the previous generation of consoles had also used 8-bit processors, it was at the end of the third generation that home consoles were first labeled and marketed by their "bits". This also came into fashion as fourth generation 16-bit systems like the Sega Genesis were marketed in order to differentiate between the generations. In Japan and North America, this generation was primarily dominated by the Famicom/NES, while the Master System dominated the Brazilian market, with the combined markets of Europe being more balanced in overall sales between the two main systems. The end of the third generation was marked by the emergence of 16-bit systems of the fourth generation and with the discontinuation of the Famicom on September 25, 2003. However, in some cases, the third generation still lives on as dedicated console units still use hardware from the Famicom specification, such as the VT02/VT03 and OneBus hardware.