The bulk of Coleco's library was comprised of overlooked coin-op games such as Venture and Lady Bug. With a library of twelve games, and a catalog showing ten more on the way (many of which were never released), the first one million ColecoVisions sold in record time. In 1983 it topped sales charts, beating out Atari and Mattel, with much of its success being contributed to its pack-in, Donkey Kong. The ColecoVision soon had more cartridges than any system except the Atari 2600, and with the 2600 converter still today has more playable games than any other system.

Coleco was also the first home videogame maker to devote the majority of their product line to arcade conversions, using the superior graphics of the ColecoVision to produce nearly arcade-quality games, albeit often missing a screen or level.

Unfortunately, the ColecoVision suffered the same fate as the rest in the great video game shake-out of 1984. Coleco's unsuccessful bug-ridden ADAM computer only complicated the problem; running behind schedule, Coleco is rumored to have used another manufacturer's computer as the Adam prototype at a CES show while at the same time Adam software was being developed with the system. Some believe if it wasn't for Coleco's Cabbage Patch dolls, they would have completely disappeared. Even the Cabbage Patch dolls couldn't keep Coleco going forever, though; the company went under for good a few years later. Ironically, Mattel (the producers of Intellivision) now own the rights to the Cabbage Patch dolls.

Coleco stopped production of the ColecoVision in 1984. Their last few titles (Illusions, Spy Hunter, Telly Turtle, and Root Beer Tapper) were barely seen in stores. Soon after that, Telegames bought much of Coleco's stock and even produced a few titles of their own that didn't reach the shelves before the shake-out. As recently as 1991 a mail order electronics store was known to sell ColecoVision motherboards and joysticks.