Software
In 1982, the C64's graphics and sound capabilities were rivaled only by the Atari 8-bit family, and appeared exceptional when compared with the widely publicised Atari VCS and Apple II.
The C64 is often credited with starting the computer subculture known as the demoscene (see Commodore 64 demos). It is still being actively used in the demoscene, especially for music (its sound chip even being used in special sound cards for PCs, and the Elektron SidStation synthesizer). Unfortunately, the differences between PAL and NTSC C64s caused compatibility problems between US/Canadian C64s and those from most other countries. The vast majority of demos run only on PAL machines.
Even though other computers quickly caught up with it, the C64 remained a strong competitor to the later video game consoles Nintendo Entertainment System and Sega Master System, thanks in part to its by-then established software base, especially outside of North America, where it comprehensively outsold the NES.
Read more about this topic: Commodore 64