Basically Atari, the then market leader, ended themselves with the ET video game, and buried the cartridges in the desert.
Nintendo revived the US console market by advertising the Famicom as a "entertainment system" (NES), complete with a robot buddy, just to appear to not be a games console:
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But they had a strict 5 games per year per company limit on NES games. Publishers worked around that by starting shell companies and sub-labels. Konami for example launched "
Ultra Games" in the USA, which for example published the first Metal Gear. In Europe it was Palcom Software.