While the Commodore PET was sold through authorized dealers, the VIC-20 primarily sold at retail—especially discount and toy stores, where it could compete more directly with game consoles. It was the first computer to be sold in K-Mart. Commodore took out advertisements featuring actor William Shatner (of Star Trek fame) as its spokesman, asking: "Why buy just a video game?"

In 1982 the VIC-20 was the best-selling computer of the year, with 800,000 machines sold. Sales of the VIC-20 started declining after the launch of the Commodore 64 in that same year. The Commodore 64 used the same housing and almost the same operating system and BASIC interpreter as the VIC-20, but was a much more powerful machine with higher resolution graphics, a more capable sound generator and a full 64 kilobytes of address space (38911 Bytes free of RAM to the VIC-20's 3583 Bytes). In January 1983, the VIC-20 became the first computer in history to pass the 1 million unit mark. At its peak, over 9000 units per day were produced, and a total of 2.5 million units were sold before it was discontinued in January 1985.

In 1984, Commodore released the SX-64, a portable version of the C64. The SX-64 has the distinction of being the first full-color portable computer. The base unit featured a 5 in (130 mm) CRT and an integrated 1541 floppy disk drive. The SX-64 did not have a cassette connector.

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