The main thrust of it was oversaturation. A whole bunch of companies put a whole bunch of money into video games at once, but the demand wasn't there, so only a few titles and/or consoles could become hits and the rest were just huge wastes of money. It ended up snowballing and iirc the market receded by circa 95%, resulting in a lot of bankruptcies. Stores either returned surplus, or marked it down considerably, which meant little or no revenue for companies that made the products, and so of course they died. That includes US games, Atari, lots of other famous brands.