1986 saw many sequels and prequels in video games, such as Super Mario Bros. 2, along with new titles such as Arkanoid, Bubble Bobble, Castlevania, Dragon Quest, Ikari Warriors, The Legend of Zelda, Metroid, Out Run and R.B.I. Baseball. The year's highest-grossing arcade video games were Hang-On in Japan, Hang-On and Gauntlet in the United States, and Nemesis (Gradius) in London. The year's bestselling home system was the Nintendo Entertainment System (Famicom) for the third year in a row, while the year's best-selling home video games in Western markets were Super Mario Bros. in the United States and Yie Ar Kung-Fu in the United Kingdom. Video game developer Masahiro Sakurai considers 1986 the most incredible year for the video game industry. He cited the release of several games that were the beginning of popular and long-lasting franchises such as The Legend of Zelda, Dragon Quest, Castlevania, and Kunio-kun. He attributed their release to new hardware like the Famicom Disk System and megabit ROMs that afforded developers with greater memory storage, which allowed for more creative possibilities. Sakurai noted that the better games in the competitive market generated more appeal.

Financial performance

In the United States, the home video game industry recovered with the arrival of the third generation of video game consoles led by the Nintendo Entertainment System (NES).

Highest-grossing arcade games

Japan

In Japan, the following titles were the highest-grossing arcade games of 1986, according to the Game Machine charts.

United Kingdom and United States

In the United Kingdom and United States, the following titles were the highest-grossing arcade video games of 1986.

Best-selling home systems

Best-selling home video games

Japan

In Japan, home video games that sold at least one million copies in 1986 include The Hyrule Fantasy: Zelda no Densetsu (The Legend of Zelda), which sold 1 million copies for the Famicom Disk System (FDS) on its first day of release in February; Dragon Quest, which sold over 1 million cartridges for the Famicom (Nintendo Entertainment System) within six months between May and November; and Gradius, which sold over 1 million between April and December. According to Famicom Tsūshin (Famitsu) magazine, the following titles were the top ten best-selling 1985-1986 releases during the three-year sales tracking period between May 1986 (when Famitsu began tracking sales) and mid-1989. The following titles were the best-selling home video games on the bi-weekly Famitsu charts in 1986. Famicom Tsūshin magazine began tracking sales from May 1986.

United Kingdom

In the United Kingdom, the following titles were the top ten best-selling home video games of 1986, according to the annual Gallup software sales chart. The top ten titles were all home computer games. The best-selling game was Yie Ar Kung-Fu, making it the second year in a row that a fighting game topped the annual charts, after The Way of the Exploding Fist in 1985.

United States

In the United States, Super Mario Bros. for the Nintendo Entertainment System (NES) was the best-selling home video game of 1986. The following titles were the best-selling home video games on the bi-weekly FAO Schwarz charts in 1986, reported by Famicom Tsūshin (Famitsu) magazine from June 1986 onwards.

Top-rated games

Major awards

Famitsu Platinum Hall of Fame

The following 1987 video game release entered Famitsu magazine's "Platinum Hall of Fame" for receiving a Famitsu score of at least 35 out of 40.

Business

Notable releases

Hardware