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In 1977 Texas Instruments, a recent entry into the market, cut its price for LCD watches to under $10. As a vertically integrated company it could still make a profit - but few of its competitors could. The LCD market began to collapse... 
In comparison Seiko had fully automated its watch production, diversified into quartz analogue as well as LCD digital, and continued to innovate with new watch features. In 1979 it bought the now-defunct Pulsar brand. LCD was king.
Throughout the 1980s both Casio and Seiko continued to make LCD watches smarter. In 1980 Casio launched the Game-10 which let you play space invaders, and the C-80 - a calculator watch with a keypad you could actually use!
