As Nintendo was planning to release the NES in North America, they were aware of the video game crash of 1983 and its effects on the home console market.

By March 1984 the arcade industry recovered enough for a plan to introduce NES titles there, with the VS. System later being a presentation to players who did not yet own the console.

The VS. System did not have lasting popularity in Japan, leading to Nintendo's departure from arcade game development.

The system's success in arcades proved the market for the test release of the NES in North America in 1985.

The VS. System is the first version of the Family Computer (Famicom) hardware to debut in North America during 1984, the success of which proved the market for the official release of the NES console.

Nintendo's negotiations with Atari to introduce the Famicom in North America failed due to Atari's collapse, and Nintendo of America's market research garnered warnings from retailers and distributors to stay away from home consoles, with US retailers refusing to stock game consoles.

Hiroshi Yamauchi realized there was still a market for video games in North America, where players were gradually returning to arcades in significant numbers.

Almost all VS. System cabinets have identical hardware powered by a Ricoh 2A03 central processing unit (CPU), the same in the NES, except for special PPUs or video chips.

Upon release, the VS. System generated excitement in the arcade industry, receiving praise for its easy conversions, affordability, flexibility, and multiplayer capabilities.

Baseball with great success in the US arcade market; Sharpe considered Nintendo "a force to reckon with" based on this strong performance.

[12] The VS. System was declared an "overwhelming hit" by Play Meter, attributing its success to "good games and low price".

[30] The success of the VS. System gave Nintendo the confidence to repackage the Famicom for North America as the NES.

[31] By the time the NES was launched in North America (from late 1985 to 1986), about 100,000 VS. Systems had been sold to American arcades.

[32][33][34] According to Ken Horowitz, the VS. System "was perhaps the most vital catalyst in the rise of the NES to the top of the home video game market".

At London's Amusement Trades Exhibition International (ATEI) show in January 1986, David Snook of Play Meter magazine listed VS. Super Mario Bros. as one of the top five hits of the show, along with Space Harrier, Halley's Comet, Gauntlet and Tehkan World Cup.

The announcement included the last upcoming titles for the NES-based PlayChoice-10 and the SNES-based Nintendo Super System, but none for the VS.