The PET computer line was used primarily in schools, due to its tough all-metal construction (some models were labeled "Teacher's PET"), but did not compete well in the home setting where graphics and sound were important. This was addressed with the introduction of the VIC-20 in 1981, which was introduced at a cost of US$299 and sold in retail stores. Commodore took out aggressive ads featuring William Shatner asking consumers "Why buy just a video game?" The strategy worked and the VIC-20 became the first computer to ship more than one million units. A total of 2.5 million units were sold over the machine's lifetime.

In 1982, Commodore introduced the Commodore 64 as the successor to the VIC-20. Thanks to a well-designed set of chips designed by MOS Technology, the Commodore 64, (also referred to as C-64), possessed remarkable sound and graphics for its time and is often credited with starting the computer demo scene. Its US$595 price was high compared with that of the VIC-20, but it was still much less expensive than any other 64K computer on the market. Early C-64 ads boasted, "You can't buy a better computer at twice the price." Australian ads used a tune speaking the words "Are you keeping up with the commodore? Because the commodore is keeping up with you."