I was also confused when I first read the synopsis. But I have not played the game so it’s hard to say. I also not from the USA and there was not really crash here so I don’t know how it was there. But I think you are not supposed no think about it too deeply. The video game crash is something talked about a lot by gaming youtubers, so I think most people have heard of it now even if they were not alive at the time of lived in the USA.

So I guess it is just a plot device that they used, to tell an alternative reality for arcade games history. Though I could be wrong.