Although Expansion Module #1 was part of what made the ColecoVision a hit, it was the other Modules that would eventually lead to the systems demise.
Anticipation was high with the announcement of Expansion Modules #2 and #3, neither of which met gamer expectations. Expansion Model #2 ended up being an advanced Steering Wheel controller peripheral. Although at the time it was the most advance peripheral of its kind, complete with a gas pedal and in-pack game Turbo, it was not a big seller and only a handful of compatible games were ever designed for it.
Since the release of the ColecoVision, plans had publically been underway for their third Expansion Model called the Super Game Module. The SGM was intended to expand the memory and power of the ColecoVision, allowing for more advance games with better graphics, gameplay and additional levels. Instead of cartridges the SGM was to use a diskette-like "Super Game Wafers" which stored saves, stats and high scores on magnetic tape. Several games were developed for the Module and it was demoed at the 1983 New York Toy Show, receiving a high amount of praise and buzz. Everyone was so confident the SGM would be a hit that Coleco began working with RCA and video game console creator Ralph Baer (Magnavox Odyssey) on a second Super Game Module, one that could play games and movies on a disk similar to RAC's CED VideoDisk Players, a precursor to Laserdiscs and DVDs.
That June, Coleco unexpectedly delayed the release of the SGM and two months later canceled the project completely, instead releasing a different Expansion Module #3, the Adam Computer.
The Adam Computer Gamble
At the time, the Commodore 64 was the home computer of choice and started to cut in on the video game market. Coleco got the idea that instead of making a computer which plays video games, why not have a game console that doubles as a computer? Hence the Adam was born.
Borrowing many of its components from the canceled Super Game Module, the Adam consisted of an add-on keyboard, the Digital Data Pack - a cassette tape data storage system similar to the one used for the Commodore 64, a printer called the SmartWriter Electronic Typewriter, system software and an in-pack game.
Although Coleco owned the console rights to Donkey Kong, Nintendo was finalizing a deal for Atari to exclusively produce DK for the computer market, so instead a game initially planned for the SGM, Buck Rodgers: Plant of Zoom, became the Adam's in-pack game.
Although an advance system, the Adam was plagued bugs and hardware malfunctions. The most notable of these included an enormous number of defective Digital Data Packs that would break almost immediately upon using, and a magnetic surge emanated from the computer when first booted up that would damage/erase any data storage cassettes close to it.
The Adam's technical woes married with its price tag of $750, a cost higher than buying a ColecoVision and Commodore 64 combined, sealed the systems fate. Coleco lost its shirt on the Adam just as the Video Game Market Crash hit. Although Coleco had made plans for a fourth Expansion Module, one that would allow Intellivision cartridges to be played on the system, all future projects were immediately canceled.
The ColecoVision Ends
The ColecoVision held onto the market until 1984 when Coleco exited the electronics biz to focus primarily on their toy lines such as the Cabbage Patch Kids.
One year after the ColecoVision left the market, their former licensing partner Nintendo came to North America and reignited the video game industry with the Nintendo Entertainment System.
Regardless of the success Coleco found in toys, the financial burden caused by the Adam Computer damaged the company beyond repair. Starting in 1988 the company began to sell off their assets and closed its doors a year later.
Although the company as we know it no longer exists, the brand name was sold and in 2005 a new Coleco was formed, specializing in electronic toys and dedicated handheld games.
In its short two year life the ColecoVision sold over six million units and made a permanent mark as one of the highest quality and advanced home video game consoles of the 80s.