The 2nd console generation featured several home consoles, such as, the VES, RCA Studio II, and the Atari 2600. The Fairchild Video Entertainment System (VES), which was released by Fairchild in 1976, was also the first console to have its cartridges contain a programmable microprocessor, so they only needed a single ROM chip to store microprocessor instructions. Atari ported over Space Invaders, an incredibly popular arcade game, onto their Atari 2600 in 1980, where it found great success and started a trend of console manufacturers porting arcade games to their systems.
This generation saw the birth of the handheld console market, however, none of them were very successful. The 1st handheld game console with interchangeable cartridges was from Microvision, which was designed by Smith Engineering, and distributed and sold by Milton-Bradley in 1979. Another attempt at creating a sustainable handheld market was with the Epoch Game Pocket Computer. Released in 1984, it was powerful enough to produce graphics at about the same level as early Atari 2600 games. Neither system sold very well and both were discontinued shortly after they were released. The only successful attempt at creating a handheld market was by Nintendo, who released several different Game & Watch handheld systems, starting with the release of ball, in 1980, and ending with the release of Mario the Juggler, in 1991.
Thanks to a massive tsunami of low-quality games, including the forever infamous Atari 2600 game E.T and the horrible Atari 2600 Pac-Man port, and the rise of home computers, most americans lost faith in the video game industry. This caused most video game companies to either file for bankruptcy or to leave the industry, and the revenue generated by the industry fell by 97%.