Maurice Greenberg founded Coleco in 1932 as the "Connecticut Leather Company". Later, it became a successful toys company in the 1980s, specifically known for its mass-produced version of Cabbage Patch Kids dolls and its video game consoles, the Coleco Telstar and ColecoVision.
the company entered the video game console business with the Telstar in 1976. Dozens of companies were introducing game systems that year after Atari's successful Pong console. Nearly all of these new games were based on General Instrument's "Pong-on-a-chip". However, General Instrument had underestimated demand, and there were severe shortages. Coleco had been one of the first to place an order, and was one of the few companies to receive an order in full. Though dedicated game consoles did not last long on the market, their early order enabled Coleco to break even.
Coleco continued to do well in electronics. They transitioned next into handheld electronic games, a market popularized by Mattel. Coleco produced two very popular lines of games, the "head to head" series of two player sports games, (Football, Baseball, Basketball, Soccer, Hockey) and the mini-arcade series of licensed video arcade titles such as Donkey Kong and Ms. Pacman. A third line of educational handhelds was also produced and included the Electronic Learning Machine, Lil Genius, Digits, and a trivia game called QuizWhiz.
Coleco returned to the video game console market in 1982 with the launch of the ColecoVision. While the system was quite popular, Coleco hedged their bet on video games by introducing a line of cartridges for the Atari 2600 and Intellivision. They also introduced the Coleco Gemini, a clone of the popular Atari 2600.
When the video game business began to implode in 1983, it seemed clear that video game consoles were being supplanted by home computers. Coleco's strategy was to introduce the Coleco Adam home computer, both as a stand-alone system and as an expansion module to the ColecoVision. This effort failed, in large part because Adams were often unreliable. The Adam flopped; Coleco withdrew from electronics early in 1985.
Also in 1983, Coleco released the Cabbage Patch Kids series of dolls which were wildly successful. In 1986, they introduced an ALF plush based on the furry alien character who had his own television series at the time, as well as a talking version and a cassette-playing "Talking Alf" doll. The staggering success of the dolls could not stem the tide of red ink that had begun with the launch of the Adam computer. In 1988, the company filed for bankruptcy.