The History of Atari: 1971-1977 (really, really long)

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http://www.gamasutra.com/view/feature/2000/the_history_of_atari_19711977.php

The History of Atari: 1971-1977

Mt. Fuji towers 3776 meters as Japan's highest mountain. It's a
striking landmark, one that rises almost impossibly out of an
unassuming plain to a pinnacle of ice-capped beauty. After its mammoth
breadth is realized, it settles back down again into a valley as if it
was never there. It was formed by a volcanic eruption about 10,000
years ago, and has since been worshipped as a sacred landmark by the
Japanese. In the shadow of that mountain, the people of Japan have
played a strategy game named Go for thousands of years.


First created in China about 2000 B.C., Go is a compelling and subtle
strategy game. It vies with Parcheesi as the world's oldest game that
still exists in its original form. Go is unique, in that there are
literally trillions -- if not an infinite number -- of board
combinations. So many, in fact, that it is theorized that no two Go
games played have ever been, or will ever be the same. Yet the game
looks so simple -- just a series of black and white stones placed on a
19x19 grid.

Some players have described the binary pattern of stones as a thing of
beauty, with the game attaining a level of complexity at times so
vast, the players put more emphasis the complex stone patterns to help
them decide their next move, then on any sort of strategy.

It's no small wonder that the simple beauty of a game like Go appealed
to the college campus computer hackers of the 1960s. While chess was
still very popular, its regimented opening moves and seemingly finite
strategies were more in-tune with the "powers that be" than with new
movements based on social change. Computer hackers were opening new
doors to information that were only dreamed about a decade prior.

Go's binary nature -- like that of a computer -- appealed greatly to
these pioneering computer enthusiasts. It was a game of infinity, that
could be explored and experimented upon, just like the computing
machines the hackers coveted so much. However, the infuriating part of
Go is that it's almost impossible to master. For a group of people who
wanted to explore every nook, cranny, and corner of a computer, the
inability to "master", this must have been both cathartic and
frustrating.

Atari founder Nolan Bushnell was a Go player who learned the hacker
ethic at the University of Utah. When Bushnell finally decided on the
name for his pioneering video game company, he called it "Atari". In
Go terms this is like saying "watch the hell out, I'm just about to
win the game". A couple years later, Atari would adopt a curious
looking logo -- a three-part, vertically split triangle, that looked a
bit like an "A", but more like a mountain.

This symbol would commonly be known as the "Fuji", and it was under
its shadow that an entire new industry was created. It was also under
this shadow that the simple lessons of Go would affect the design of
video games in their first decade. The "simple to learn, difficult to
master" game design philosophy is the one that helped propel Atari's
games from mild parlor amusements into the psyche of an entire
generation.
The Engineer Entertainer

Born in 1943 in Clearfield, Utah, the founder of the modern video
games industry, Nolan Bushnell, always loved playing games.

"I can remember playing Monopoly and Clue with my neighborhood
friends, chess incessantly. I played tournament chess. I played #2
board at Utah State University. I've always been a game player,
period" i -Nolan Bushnell

He also loved science. His world was upended in 3rd grade he was given
a science assignment by his teacher Mrs. Cook.

"The spark was ignited when I was assigned to do the unit on
electricity and got to play with the science box. I remember
constantly making stuff as a kid that amazed my friends using
electricity." ii - Nolan Bushnell

With a love of play, and a love of science, an engineer entertainer
was born.


Bushnell's love of electricity led him to Utah State University where
he studied for a BS degree in Electrical Engineering. While in the
engineering department, Bushnell was exposed to a DEC PDP-1 computer,
and Steve Russell's game Spacewar! He fell in love with the quirky
little one-on-one space battle game, and was fascinated by the impact
it had on the other students, especially in how much free time the
other students spent playing it.

At the same time, Bushnell was working his way through college by
working at Lagoon Amusement Park in Farmington Utah. There, he worked
the midway games like a master carnival barker.

"I think that working at the amusement park gave me a sense that I had
a special knack for that. I was able to have a lot of people have fun
and spend their money while doing it. Those were two good
characteristics" iii - Nolan Bushnell

Near the midway was a small arcade that featured mostly pinball
machines. Bushnell envisioned the day that the pinball games would be
replaced by machines playing games like Spacewar! He noted how much
free time his classmates were spending on the game. He realized that
if he could figure out a way to monetize that time, he could be very
successful. However, after much pondering, it seemed impossible. A DEC
PDP-1 computer cost $120,000, and there was no way someone could break
even on a game that cost that much create.

"When you divide 25 cents into an $8 million computer, there ain't no
way,"iv - Nolan Bushnell

He put the notion aside so he could start a career as an engineer.
After graduation from Utah State as a "Distinguished Fellow" in 1968,
Bushnell moved to California where he continued his graduate education
at Stanford University. He wanted to work for Walt Disney, because he
felt they were doing very interesting things with technology. Even
though Bushnell thought of his endeavors as technical feats, he still
felt the need to entertain people.

"I always considered myself an engineer. A guy who used technology to
solve problems. I was fascinated with Disney who used technology to
entertain people. I felt technology was truly magical." v - Nolan
Bushnell

However, since, Disney did not hire engineers straight out of school,
so he had to look elsewhere.

"When I graduated from college, my vision of the perfect job was to
work in the research section of Disneyland. But they weren't hiring
new engineering grads. " vi - Nolan Bushnell

Bushnell found a job at Ampex Corp, in the Silicon Valley and started
working as computer graphics department research designer. He worked
at Ampex for a couple years, where he met fellow engineers (and future
Atari employees) Al Alcorn and Steve Bristow. However, Bushnell was
never able to settle down as a line engineer. The need to entertain
people kept biting at him. Soon after, he was introduced to a free-
standing version of Spacewar! named Galaxy Game, designed by Bill
Pitt, another Stanford graduate.

Galaxy Game was a full version of the DEC PDP version of Spacewar!,
right down the mini-computer that was necessary to run it. While the
technical feat of a free-standing Spacewar! game was impressive, the
$40,000 cost associated with basing a game on mini-computer was not.
Bushnell knew he could do better. His day dreams of electronic games
replacing pinball machines from working at Lagoon were rekindled. He
felt he could engineer a machine that could entertain people, and
still make money at the same time.



Simplifying A Revolution

In the Spring of 1971, while still working for Ampex, Bushnell along
with fellow engineer Ted Dabney, started crafting their own version of
Spacewar! named Computer Space. They worked out of Bushnell's daughter
Britt's bedroom, turning it into a computer lab in which they could
engineer their masterpiece. All sort of ideas crossed their minds,
including using a minicomputer like Galaxy Game, and using a series of
terminals for a multiplayer experience, but these ideas were far too
expensive for this bedroom outfit.

computer space Instead, it hit them one day to go in the opposite
direction and simplify their design to cut costs as much as possible.
The pair decided that they did not need thousands of dollars in
hardware to make their dream come to life, instead choosing a much
simpler solution. They crafted a working game using TTL (Transistor To
Transistor Logic)vii to create a computer whose sole purpose was to
play Computer Space. While this might have seemed like a step-back
technology wise, it was a huge leap forward for creating a commercial
game. With a black and white G.E. TV and $100 worth of electronic
parts, they created the first viable, commercial video game.

"I worked it out and the economics were overwhelming."viii - Nolan
Bushnell

This seemingly simple decision towards simplification fueled the
entire video game industry for most of the 1970's.

"100% of the video games up until 1977 used my discreet logic
technology... that I had a patent on." ix - Nolan Bushnell

However, before a video game revolution could be started, it would
need a game that people wanted to play. Unfortunately, Computer Space
was not that game. Bushnell and Dabney sold their idea to Nutting
Associates in late 1971. It landed in the coin-op industry with a
resounding "thud". Amusement operators who were used to buying
jukeboxes and pinball machines had no idea what to do with it. The
controls were too complicated, and the game too confusing for the
average barroom (read: drunk) player.

"Nobody wants to read an encyclopedia to play a game"x - Bushnell on
Computer Space

In the spring on 1972, while still working with Nutting to sell
Computer Space, Bushnell visited Magnavox to take a look at the TV
video game system that Ralph Baer had developed for the company.
Bushnell left unimpressed. The analog computer used in the game (a
computer used for applications that require a continuous change of one
or more variables) was only useful for very simple games, and the
graphics looked fuzzy. However, a simple tennis contest on display
stuck with him, and the idea for a ping pong-type game was born.

1972: Atari Is Born

On June 27th, 1972, Nolan Bushnell and Ted Dabney officially created
their own company named Syzygy Co., each contributing a $250 share --
mostly from the meager profits earned from Computer Space.xi Bushnell
said they decided on Syzygy because "I thought it was a cool name when
I found it in the dictionary".xii However, they soon discovered that
the name Syzygy was already taken by a roofing company.xiii Although
they continued to use it for couple years afterwards to describe their
engineering process, they had to choose another name.xiv Bushnell
suggested "Atari", a hold-over from his days as Go player at Utah
State. Atari roughly translated to "you are about to be engulfed"xv,
which they thought sounded pretty cool at the time and also served
another purpose.

"I thought Atari was a good warning to the competition in the gaming
industry" xvi - Nolan Bushnell

They started their new business on two fronts. While Bushnell went
ahead to start designing a new video game, Ted Dabney used some
existing equipment to start a coin operated game service business.

"When we did Computer Space there were about 7 prototype units that
were really not to standard that could be sold to 3rd parties. We saw
them as an opportunity and we put them on location and collected the
quarters every week. When we did that some of the places wanted
pinball so we started buying equipment and collecting the quarters.
That was one of the early ways we financed the business." xvii - Nolan
Bushnell

In the spring and summer of 1972, Atari began the engineering process
for their first game. To augment their team, Atari hired one of
Bushnell's fellow Ampex employees, Al Alcorn, as a senior engineer. To
lure Alcorn to Atari, Bushnell told him a little white lie: that he
had a contract with G.E. to create a home version of Pong.

"Nolan told me that we had a contract from General Electric to design
a home video game on a ping-pong theme." - Al Alcorn

Atari did have a tentative contract (with Bally, to create a driving
game) but Bushnell wanted Alcorn to cut his teeth on something simple
for his first effort. The primitive ping-pong game Bushnell had seen
at Magnavox seemed like a good candidate.

"I had to come up with a game people already knew how to play;
something so simple that any drunk in a bar could play."- Nolan
Bushnell

Neither Alcorn nor Bushnell were impressed with Odyssey and its analog
components, so the game would have to be improved. In any event, Pong
was only practice, and Bushnell did not plan to take it seriously. "I
thought it was going to be a throwaway," Bushnell told Playboy
Magazine, "but when he (Alcorn) got it up and running, it turned out
to be a hell of a lot of fun."

Just like Computer Space, Pong was a TTL discreet-logic machine. It
had no microprocessor, but instead used individual chips to create the
logic for the game. The key to saving money was to design the game so
well that it used the fewest number of chips.

"I had the prototype running in three months and I was very
disappointed because it had about 75 TTL IC's and would cost way too
much for a high volume home machine. It turns out that Nolan had
something else in mind. He lied about the contract with GE and gave me
this project because it was the simplest game he could think of and he
just wanted me to practice on something." - Al Alcorn


Alcorn added small details like ball English and simulated physics
that went beyond Bushnell's original concept, but still kept the
design elegant, and cheap.

"Since I was under the impression that this was to be a real product I
worked hard to make it playable and inexpensive." - Al Alcorn

After Nolan Bushnell saw how well Pong was turning out, he and Ted
Dabney decided to test-market it at one of the locations on their
pinball route, Andy Capp's Tavern in Sunnyvale California. xxiii It
was an almost instant success. People started lining up before the bar
opened just to play the game. Some wouldn't even order anything --
just play Pong. Unlike the pages of instructions for Computer Space,
Pong instructions are the model of simplicity: "Avoid missing ball for
high score."

"Two weeks after installing the game, Al Alcorn got a late-night phone
call from the manager of the bar. The game had broken down, and he
wondered if he could fix it. When Alcorn went to check the machine, he
found a most unusual problem. There were so many quarters jammed into
the coin drop that the game had stopped working. xxiv Under the coin-
drop was a plastic milk jug with the top cut off, and it was filled
with quarters, making the "credit" mechanism not work.

"When we first put it on location I asked Nolan what would constitute
good performance. I think he said that if it did $25 a week that would
be a good game. It was doing over $100 per week right away." - Al
Alcorn

"At that point in time, I knew I had a successful business." xxvi -
Nolan Bushnell

A successful test-market, however, did not mean instant sales. In the
fall 1972 Bushnell set out on a road trip with a portable version of
Atari's Pong machine to look for potential buyers. The Pong game was
offered to Bally first, but they declined to purchased it, preferring
a game that did not require 2 players. Bally had contracted Atari to
do a driving game, and Nolan tried very hard to get them to accept
Pong instead, but Bally refused.

Other amusement manufacturers at the AMOA trade show didn't "get it"
either. In 1972, the pinball and other amusement game manufacturers
made machines with many electromechanical and moving parts. Pong had
only two moving parts and this baffled them. They didn't understand or
envision the industry changing.

Instead of persuing established manufacturers, Bushnell decided to
manufacture Pong himself. It was not an easy sell to Dabney or Alcorn,
who thought Atari was a technology company that would license its
inventions, not manufacture them.

"Nolan had to convince us to be in the manufacturing business. In the
end it turned out to be the best strategy" - Al Alcorn

It was his boldest move yet, and would prove ultimately successful. He
leased an old roller rink in Santa Clara and converted it into a
production line manned by low-paid hippies. The first Pong game
shipped from this facility in November 1972.

On November 19th, 1979 Pong was officially released,xxix and the
"Steam Age" of the coin operated video game began.

1973: Pong Is A Smash Hit!

"As a result of Pong, a player can gain a deep intuitive understanding
of the simplest Newtonian physics." - Carl Sagan

By March of 1973, Pong was deemed a bona fide phenomenon for Atari.
They had sold 8000 - 10000 machines, and would eventually sell upwards
of 35,000. The day Pong was released is marked by the coin-op industry
as the first nail in the coffin of pinball. xxxi

Atari was so successful in its first year for two reasons. First, they
used an early version of a "Just-In-Time" manufacturing processes.

"With expensive parts, such as cabinets, we tried to get them out the
same day they came in and we made sure that 75% of the cost turned
over in less than a week." xxxii - Nolan Bushnell

Secondly, Atari also took advantage of the soaring demand for Pong by
insisting on cash payments from distributors instead of going along
with the longer terms common in the coin-operated game industry.
xxxiii

pong By March of 1973, Atari had made a little over $3.2 million
dollars. However, there was a black side to this fortune. Atari's
patent for Pong took a long time to clear -- too long to stop a myriad
of copycats from showing-up almost immediately.

"I filed for a patent, but in those days patents took 3 years to
issue. I don't think my patent issued until 1975 or 1976." xxxiv -
Nolan Bushnell

Since the game was designed using a discreet logic TTL design, there
was very little they could do to protect their intellectual property.
Anyone who owned a machine could open it up, examine the circuit
board, and copy it chip for chip. By the end of 1973, there were so
many competitors selling Pong-style games that Atari was no longer the
leading manufacturer of its own game. Some of the copies were made so
well that they looked exactly like the original Atari versions.

Some of the Pong competition in 1973 included: Elepong from Taito,
Davis Cup by Taito (each player had two paddles), Computer Space Ball
(1972) from Nutting Associates, Hockey by Ramtek, Hockey TV from Sega,
Leader from Midway (a very innovative 4-player Pong variant with a
wall in the middle for deflection), Olympic Tennis from See-Fun (2 or
4 players), Pro Tennis from Williams Mfg. Co. (4 players), Paddle
Battle from Allied Leisure (exact copy of Pong), Paddle-Ball from
Williams (exact copy of Pong), Pong-Tron from Sega (exact copy of
Pong), Pong-Tron II from Sega (exact copy of Pong), Pro Hockey from
Taito, Rally from For-Play, TV Hockey from Chicago Coin (exact copy of
Pong), T.V. Tennis from US Billiards (exact copy of Pong), TV Ping
Pong from Chicago Coin (exact copy of Pong), Table Tennis from Nutting
Associates (exact copy of Pong), Tennis Tourney from Allied Leisure (4
player Pong), Winner from Midway (an exact copy of Pong) and Winner IV
from Midway.

Atari could have fought each one of these copycats -- but they could
not afford to do it.
According to Nolan Bushnell

"Atari was always scrambling for cash, and we thought to spend money
on attorneys was not a smart thing to do." - Nolan Bushnell

However, it wasn't just the copycats Atari had to worry about, it was
other legal problems as well. Magnavox and Ralph Baer did not take
kindly to the success of Atari's Pong, especially since they had
created a very similar game more than a year earlier. They took Atari
to court, suing them over Pong. They used the sign-in-sheet for the
1972 Magnavox demo that Bushnell attended as proof that he saw the
Magnavox video games before he came up with his own idea. However,
Bushnell maintained that while he might have seen the Magnavox
product, his was far superior:

"They did an excellent job of creating a game using analog circuitry,
but it just wasn't fun." xxxv - Nolan Bushnell

Skillfully, Nolan Bushnell turned this legal problem into an advantage
for Atari. Atari settled with Magnavox, and the case never went to
court. They paid a licensing fee close to $500,000 and became the sole
licensor of Pong from Magnavox.

"It was a strategic thing. Magnavox was desperate to settle with me.
They had seen lab books and I had been in business for two years
before the Odyssey game was supposed to hit the streets. We settled
basically for an amount of money that was less than I was spending on
attorney's fees at the time. $500,000 paid over five years. Less than
1/10th of 1%. It was a usage royalty."- Nolan Bushnell

"As far as we were concerned, that was the end of our problems with
Atari" xxxvii - Ralph Baer

Magnavox then agreed to go after all of Atari's competitors as part of
the deal, which basically freed Atari to create new and different
games while the competition was stuck in court.

"In our agreement we required that they go after all our competitors.
Literally, I felt that if we could keep everyone else distracted and
paying money, that could only help our business. I was not worried
about Magnavox being a competitor. It was a strategic business move.
Any time you can damage your competitors, walk away from it with token
royalty and have everyone else sweating bullets because they knew that
had copied my stuff. It was a good thing for Atari." - Nolan Bushnell

The final analysis of these early lawsuits shows that it really did
not matter who invented "the video game", but it did matter who made
it successful.

"I didn't invent the video game -- I commercialized it." - Nolan
Bushnell

1973: Innovative Leisure

Besides fighting copycats and legal battles in 1973, Atari continued
to strengthen their engineering team, and create new games. At this
point, creating games was almost entirely an engineering process. All
the gameplay, graphics, and controls were governed by the TTL discreet
logic and mechanical engineering skills of the technical team. For
this reason, Atari continued to hire as many good technical people as
possible. In June of 1973, Al Alcorn hired Steve Bristow to help
create new games. Bristow was a fellow Ampex employee, and great
engineer. He would stay at Atari for more than 10 years. Bristow and
Alcorn, along with a couple of electrical engineers, set out with a
directive from Bushnell to develop more games in vein of Pong.

However, while Bushnell concentrated on the engineers, the
manufacturing process was in trouble. Pong games were breaking down,
and customers were complaining that Atari's machines were not
reliable. Part of this problem was that Atari was not able to pay
enough money to its manufacturing staff.

"We were hiring people as fast as we could and paying them hippie
wages, which was still above minimum wage. It was a situation where we
were doing an awful lot of training"xl - Nolan Bushnell

Equipment "disappeared" from their facilities daily. They needed to
make some kind of move to allay the fears of their customers.

To do this Atari created the "Durastress" trademark and began
marketing their games as meeting "Military Specification 883" to their
customers. "Military Specification 883" is defined by the Department
Of Defense "Standard Test Methods and Procedures for
Microelectronics", and was a requirement for defense contractors.
While their arcade games might not have required this process, it sure
looked good on their advertising and showed that Atari, at least in
print, was trying to seem more reliable. To improve manufacturing,
Atari hired outside experts and began giving benefits to their line
staff that were almost unheard of at the time.

"...all employees received the same medical benefits as the
executives" " - Nolan Bushnell

At just about the same time, Atari created the first real slogan to
describe their products:

"We define our product as innovative leisure. We will build the best
products possible, and serve our markets in such a way that through
time the Atari name is synonymous with: quality, imagination,
research, after-sale service, and social responsibility."- Nolan
Bushnell

On July 16th, 1973 saw Atari second coin-op release, Space Race. It
might not have been the complete innovation they needed, and while it
was not exactly Pong, Atari made sure their customers knew it did not
fall far from the tree.

"From The Originators Of Pong..." - Space Race flyer

Space Race was designed by Al Alcorn as a two player-only timed game
involving two ships flying towards the top of the screen. Players
controlled the vertical position of the ships, and attempted to dodge
asteroids to get to the top of the screen.. If they made it to the
top, they received 1 point. The service manual has "Pong" scratched-
out and "Space Race" written over it.xliv The machine is basically
Pong with different TTL logic. Atari licensed the game to Bally/Midway
under the name Asteroid.

Atari quickly followed-up Space Race with their second Pong-style
game, Pong Doubles, in the Autumn of 1973. It was a 2-4 player version
of Pong designed to stave off some of their growing competition.

"Atari's New Video Game. 2 Or 4 Players" - Pong Doubles Flyer

--------

1973: Partner's Split

By late 1973 the growing competition in the games manufacturing
business made Nolan Bushnell's partner Ted Dabney very nervous. He
decided to leave the company.

"We only had so much money and somewhere along the line he said 'let's
split, I'll take the operations business' because at that time
operations was making more money than manufacturing" - Nolan Bushnell

Bushnell was not immune to Dabney's fears, but he still believed in
the arcade games business. But instead of quitting, Bushnell decided
to expand the business. To do this he had to do something very
creative. In October of 1973, Bushnell decided to grab as much market
share as possible by signing exclusive contracts with distributors in
each geographic area to buy only Atari games.

Because most geographic areas had two distributors, Bushnell
separately (and semi-secretly) created Kee Games, named after Bushnell
friend Joseph Keenan who became president of the company. Kee would
sign exclusive contracts with the second distributor in a geographic
area. The games that Kee and Atari produced individually were
eventually released by both companies with unique names and some
cosmetic differences. Steve Bristow went to work for Kee as their head
of engineering.

"Joe Keenan was my next door neighbor. I told him, "I'd like to hire
you to set up a company called Kee Games. We'll make it look like it's
Kee for Keenan, and it will look like you've come in and started up a
new coin-op manufacturer"xlvi - Nolan Bushnell
1973: Pong At One

After one year of operations, in November 1973, Atari had built and
sold 6000 Pong machines, and sales were about $1,000,000 a month, with
$15,000,000 in sales expected by the end of the fiscal year (June
1974). xlvii Even though there many competitors, Atari was still tried
to push Pong in directions that the competition had never considered.
Some of these ideas included prototypes, limited-run and unreleased
versions of Pong such as Pong In A Barrel, Doctor Pong, and Puppy
Pong. xlviii

At the same time, they worked on new ideas. The November AMOA show
that year was quite different from 1972, when no one would give
Atari's Pong a passing glance. This time, Atari generated much
interest with a showing of Pong Doubles, and a new game, Gotcha.

"An Amazing Maze Of Fun! Another innovative winner from Atari, the
leader in video skill games" - Gotcha flyer

Gotcha showed that Atari's investment in engineering paid off. It was
the first ever maze game, and featured a technical marvel for the
time: an ever-changing maze. Gotcha was another 2-player game,
featuring a scantily-clad woman chased by a man on the side of
cabinet, suggesting sexual overtones that could not be conveyed by the
rudimentary graphics of the time. Gotcha was another "simple to learn,
difficult to master" game aimed at the bar crowd.

In December of 1973, Newsweek published an article that called
Bushnell "King Pong". The name stuck for many years. Bushnell told the
magazine (referring to Pong) "We've created a whole new market"l
Players liked Pong because no luck is involved, and the more you
played the more skillful you became. Bushnell described Atari's
successful process for game design thus: "We have to walk a tightrope
between reward and frustration". At this time, Atari acquired one of
their most infamous employees: Steve Jobs as was hired as a wiring
technician by Al Alcorn.

Even with all their success, by the end of the year, more well-
established competition was winning out. By the end of 1973, Midway
has sold 9000 Pong-type machines opposed to Atari's 6000. Atari was
now up against the big boys, and they weren't about to give Atari any
credit for their inventions.

"The small companies will be in trouble when the crunch arrives" liii
- 1973, Jack Mittel, Vice President of Sales for Williams Electronics
1974: More Of The Same

Superpong Atari started 1974 on a high note. Pong had sold well in
'73, and they were creating new and innovative games almost every
month. In January they released another Pong variant named Superpong.

"An Improvement On a Proven Money Maker From The Originators Of Pong"
- Superpong Arcade Flyer

Superpong was a one or two player contest, an evolution over Pong that
used variable ball speeds, angles, and three paddles (vertically
aligned) for each player. To further spice-up the game, the ball was
served from random positions on the screen. Atari described Superpong
as "not easily mastered."lv In February, the first sign of Bushnell's
Kee Games ploy arrived in the form of Atari's Rebound, and Kee's clone
of it, Spike.

"It's A Whole New Ball Game" - Rebound Arcade Flyer

Rebound was a simple game of volleyball -- in fact the Schematic dated
11/31/73 describes this game as "volleyball".lvii It's formed from a
vertical version of Pong with simulated gravity. Hitting the ball
would send it on a parabolic path over 4 short lines that represented
a net.

"The Spike-Man Cometh... from Kee" - Spike Arcade Flyer

Spike Was Kee's copy of Atari's Rebound. Kee's products were mostly
copies of Atari's games with innovative features added to
differentiate them from their Atari cousins, and create the feeling of
a "rivalry" between the two companies. In this case, "the Spike
button" was added.

March of 1974 brought another Pong variant named Quadrapong.
Quadrapong was a distant cousin of the Atari coin-op to come,
Warlords. The game featured 2-4-player action in table-top, look-down
cabinet.

"Another Video Action Favorite! Quadrapong is the newest addition to
Atari's Line of unique video skill games." - Quadrapong Arcade flyer

Each player was given four points, and tasked with defending one-side
of a diamond-shaped screen. Players lose a point each time one of the
others score in his goal, and is eliminated if this happens 4 times.
At that point, their goal is sealed, and it becomes a solid wall.
Quadrapong was actually an Atari copy of Kee game named Elimination.


1974: The Crunch Hits

While these variations on Pong were very interesting from a game
design perspective, they were not as thrilling to the public or arcade
operators are Atari had hoped. Sales were off, competition up, and
Atari needed something new. Sensing the need for some serious
innovative development away from the grind of company, Nolan Bushnell
contracted with two ex-Ampex engineers, Steve Mayer and Larry Emmons
at Cyan engineering, and created the Grass Valley Think Tank, an R&D
lab for new Atari products.

The first project for the Grass Valley Think Tank was to finally
create the racing game that Bally had contracted Atari created two
years prior. However, this time the game would be for Atari itself,
and Bushnell was hoping it would be a new direction away from Pong.

Grass Valley was tasked with creating an all-new cabinet and control
mechanism for video games. Gone were the simple buttons and
potentiometers used for control of Pong games, and instead there would
be a steering wheels, gear-shift, gas, and brake pedals to give the
game a realistic feel. It was a tough assignment, and for Grass
Valley, it was a rough entry into designing video games. Al Alcorn had
to step in and fixed the flawed design before it could be sold.

"We had built about 100 and they were badly engineered that they had
to take them back. I came off of sabbatical and re-designed it."lix -
Al Alcorn

Besides the innovative cabinet and controls, the game included
realistic (for the time) sound effects, and, in addition to the TTL
logic, used ROM memory in the form of diodes to store graphics
information.

"From the 'Pong People', New video game concept, big racing action,
fantastic sound effects, worldwide market in millions!" - Gran Trak 10
marketing flyer

The game is a race against the clock on a single track. There are no
other cars on the track except the player. Oil slicks make the
player's car spin-out. The side of the track had to be avoided.
Besides all the costly rework and delays for the game, an accounting
error had Gran Trak 10 selling for $995, when it cost $1095 to
manufacturelx. All of this led to the near financial collapse of the
company. For the fiscal year of 1973-1974, Atari lost $500,000. Pong
competition, Gran Trak 10, and a failed venture into Atari Japanlxi
(sold off to Namco for $500,000) left the company near bankruptcy.
Nolan Bushnell was forced to lay-off half of Atari's staff, and
rethink his next moves.
1974: Corporate Retreats

In dire need of new ideas, Nolan Bushnell started taking his key
engineers on corporate retreats to relax and come up with and
innovative ideas. These were not simple marketing brainstorms, but
"assisted" technical and game design discussions. These sessions
started at the local Holiday Inn, but soon moved out to Grass Valley,
and later into the hot tub at Nolan's house and into the one that he
has installed in the engineering building.lxii

While these sessions were legendary for alcohol and marijuana
consumption, those activities were not the focus. It was Bushnell's
attempt to get his engineering team to come up with new ideas to save
the company and move it forward. Most of the best game and product
ideas game from these sessions, including coin-ops and consumer
products such as the home version of Pong. They also solidified the
notion that the "laid back engineer" ruled the day at Atari in these
early years.

The effect of this brainstorming could be seen in the games that Atari
produced thereafter. The second half of 1974 showed a marked
difference in game design from the first. Atari started with a
redesigned version of Gran Trak 10 that fixed technical issues and
added a second player. The game also offered the pinball-like feature
of a free game for a high score. Gran Trak 20 featured two complete
sets of controls (steering wheel, brake pedal, gas pedal, 4 speed gear
shift) and offered operators more money per play (2 quarters for two
players).

Double your pleasure... double your earnings! - Gran Trak 20 marketing
flyer

The innovation continued into October with Pin-Pong -- a kind of
pinball game with a patented "ball movement circuit".

"In Pin-Pong a gravity algorithm accelerates the ball downward to give
realistic pinball action on the screen". - Pin-Pong marketing flyer

Atari finished out 1974 with two more games. One was their first light-
gun game Qwak!, a duck hunting game that included a realistic-looking
rifle, complete with an alarm that would sound if it was stolen --
plus the ability for the operator to set time limits, extended time
and free games. The other was Touch Me, a screen-less coin-op game and
precursor to the hand-held game Simon (incidentally created by Ralph
Baer for Milton Bradley).
1974: The Rise Of Kee Games

While Atari continued to struggle, Kee games was operating at maximum
efficiency. Joe Keenan, as it turned out, was not too bad at running
an arcade games business. As well, Steve Bristow was designing up a
storm. While Kee continued to copy Atari games (Formula K and Twin
Racer were their answers to Gran Trak 10 and Gran Trak 20), they also
started to design a few games of their own.

One of their first was Tank!, and what a first it turned out to be!
The game featured two tanks battling it out on the playfield filled
geometric shaped barriers. It was the same type of game that Atari
would make famous in their Combat! cartridge for the VCS three years
later. Steve Bristow designed the game and Lyle Rains finished it. It
was one of the first games to use actual ROM to store graphics.

"I was working on it when I hired Lyle then I gave it to him and he
finished it. A lot of the implementation was his, but the original
idea was mine."lxiii - Steve Bristow

The importance of Tank! in the history of Atari cannot be understated.
It was the game that saved Atari from bankruptcy in 1974. The game
became so popular that the exclusivity agreements Atari demanded from
distributors were thrown out the window. Everybody wanted it, and
Atari made sure they got it. Bushnell's cash flow problems at Atari
were suddenly reversed. Atari and Kee merged at the end of 1974, and
Joe Keenan became president of Atari, Steve Bristow became head of
engineering and Al Alcorn became head of R&D. Atari was suddenly
infused with new engineering and game design blood from Kee, like Lyle
Rains. Nolan Bushnell also moved into a new role.

"I really became the CEO. I was still doing what I call game
producing, but I was not doing any of the design. We would sit down in
creative sessions and I would pretty much decide which games we would
be doing, but I became less and less involved in the actual
engineering." - Nolan Bushnell

Atari ended 1974 on the same high they had just one year earlier. They
had surmounted their cash flow problems and cemented engineering and
game design as the most important parts of the company.


1975: Innovate Or Die

With his newly fully-realized company, Bushnell was firing on all
cylinders. The parties and game design sessions continued, and Atari
started getting reputation as the place to "work hard and party
harder". As the engineering group grew in size and importance, it got
the reputation of being a very informal and laid-back place to work.

About this time, Nolan Bushnell created a manifesto that described
their business. Bushnell was pushing to define Atari's place in the
entertainment world.

"We define our product as innovative leisure. We will build the best
products possible, and serve our markets in such a way that through
time the Atari name is synonymous with: quality, imagination,
research, after-sale service, and social responsibility." - Nolan
Bushnell's Atari Manifesto

The manifesto also described Bushnell's ideas for the ideal workplace:

"A corporation is simply people banding together in an organized
fashion to produce products or accomplishments which would not be
possible otherwise. When the goals of Atari and the goals of its
people are in harmony, Atari is strong and its people are happy and
satisfied." - Nolan Bushnell's Atari Manifesto

It went on to describe a couple ways people would be treated:

"Maintain a social atmosphere where we can be friends and comrades
apart from the organizational hierarchy. Encourage and promote
personal growth through education and training such as that we may all
reach our individual potentialities." - Nolan Bushnell's Atari
Manifesto

However, if it seemed like a fun place to work, Atari was also a very
difficult job. For instance, while there were no set hours, you had to
make games well or get out. There was little room for time wasters or
people who were not interested in making games, and making them
well.lxiv

"Atari's strategy was actually quite simple and, I think, quite
elegant. We were known as a party place, but the important thing is
that parties didn't happen unless quotas were made. We had a lot of
parties because people made their numbers." lxv - Nolan Bushnell
1975: Coin-Op Division

Shark Jaws The coin-operated games that Atari produced in 1975 built
on the success of Tank! And the strides in innovation they had made
the previous year. Since the success of Tank! had brought more people
into the arcades and proved that more than Pong could be successful,
it was easier to sell more and different types of games. While there
still were a couple Pong-style games (i.e. Goal IV), and the odd R&D
offshoot (Compugraph Photo Machine) many were Tank!-inspired military
concepts.

In January Atari released Pursuit, a WWI game in which you shoot down
enemy planes in your crosshairs. Later that year came Anti-Aircraft,
which played much like the VCS launch title Air Sea Battle that would
appear two years later (it also included an undocumented switch that
could turn the planes into UFOslxvi). Still later, in October 1975
came Jet Fighter, another game that would see its home debut two years
later on the VCS Combat cartridge.

"Atari's Jet Fighter is a video action game in which players pilot two
airplanes across the sky in a fast-moving duel."- Jet Fighter
marketing flyer

Throughout the year, new versions of Tank! arrived as well, including
Tank 2, Tank III, and a cocktail table version of the original Tank.
Tank 2 added land mines represented by X's.

Throughout 1975, Atari continued producing racing games. One of the
first of the year was in March with Hi-Way, a sit-down cockpit-style
driving game, the first with a scrolling playfield that Atari patented
(and perpetuated) for many years. They also continued to produce the
single screen, multiplayer racing games that they invented with Gran
Trak 20, but now allowing many more people to play once.

New 8 Player version of the greatest money-maker ever! - Indy 800
marketing flyer

Indy 800 was an 8-player racing game with a full-color screen. An
optional control module allowed an official "starter" to facilitate
tournaments. The game included a mirrored canopy to allow spectators
to view the racing action, and even equipped each driver with their
own horn. The entire cabinet took up 16 square feet of space.

Another multi-player racing game was released in October 1975 with
Steeplechase. This time the theme was horse racing, and the game could
be played by as many as 6 people at once. Atari also tried its hand at
a demolition derby style game with Crash 'n Score in October of 1975.

"Atari's Crash 'n Score is a video action game in which one or two
players drive race cars on a rectangular playfield and earn score
points by driving through lighted score flags. During play a player
has to maneuver his car around certain obstacles and has to avoid the
opponent car."
- Crash 'n Score service manual

Atari's most notorious coin-op game from 1975 was probably Shark Jaws.
Shark Jaws was a one player game designed to capitalize on the movie
Jaws. Legend has it that Atari tried to secure the rights to the movie
Jaws, but failed. Instead of jeopardizing Atari, Bushnell created
"Horror Games" specifically for this game, and released it anyway. The
game was very simple, consisting of a swimmer, fish, and shark. The
swimmer had to catch the fish, without being eaten by the shark.

"Atari had a real crude attitude about things. Jaws was such a big
movie and we decided we would do a game that was sharks eating people.
We decided we would do it under the nom de plum of 'Horror Games'.
Shark Jaws was actually a huge success, we sold a couple thousand." -
Nolan Bushnell


1975: Home Pong

At one of the Grass Valley retreats, when Atari was struggling in
1974, the subject of a home version of Pong was brought up to Nolan
Bushnell by engineer Bob Brown. Fellow engineer Harold Lee and Bob
Brown had been bouncing the idea around as far back as 1973, but at
the time it did not amount to a serious discussion. However, with
Atari on the brink of financial disaster in '74, the time seemed right
to investigate the possibility once more. To make a home version of
Pong viable required that the entire game be placed on a single
microchip. Up until that point, Atari had never used microchips in its
products, so it was a huge step for them to attempt to enter that
arena.

"I got to talking about Pong with an engineer friend of mine named
Harold Lee, who was working in coin-op. I really wanted to do a
consumer product so I asked him whether we could put Pong on a chip.
It would be a dedicated home game for TV that would essentially be
like the coin-op Pong. He said it could be done, and then we sold
Atari on the idea."- Bob Brown

By the fall of 1974, Al Alcorn had joined Harold Lee and Bob Brown,
working on a home version of Pong, now code named "Darlene".
Discussions at the Grass Valley retreats tended to move into two
directions: technology and women. It just so happened that when Home
Pong was discussed, so was a particularly attractive Atari employee
named Darlene. The name stuck, and so did the trend of Atari to use
female names as code words for their most secret of projects.

"We were all young, it was the '70s, it seemed like the right thing to
do." - Nolan Bushnell

By early 1975, the success of Tank! left Atari in a good position to
start to seriously work on home Pong. They earned $3.5 million on $39
million in sales for fiscal 1974-1975, and could afford new R&D. The
cost of microchips had come down to a level that would make the
project economically viable, so Atari decided it is the time to go
full-bore and enter the home market. Even though Bushnell was urged by
advisors to stay away from the home market (the same one that Magnavox
was struggling in), he decided to do it anyway.

"The next epiphany, if you would, was when we figured out we could put
Pong on a single LSI chip... All of a sudden, we knew we could put one
in every home. All of a sudden, we went from a very successful coin-op
business to a potential consumer business." - Nolan Bushnell

Alcorn, Lee and Brown worked through 1974 and into 1975 perfecting a
microchip-based home Pong unit that could not be easily copied by the
competition. By mid-1975, they had succeeded, but then had no idea
what to do next. Atari had never marketed anything to the public
before. Most of their previous marketing materials consisted of flyers
sent out to amusement operators to announce their new games. Gene
Lipkin, their VP of marketing, had experience in the coin-op world,
but this was very new to him. What was good enough for a company based
on engineering and game design that sold to a limited audience for
$1,000 or more per unit would never work in the high-volume, low-
margin world of consumer goods.

Atari took Home Pong to industry trade shows like the New York Toy
Fair, directly to toy stores, and offered it to various departments at
Sears (toys, appliances) but all refused. The only person even
remotely interested was Tom Quinn, who managed the buying for the the
Sporting Goods department at Sears. He initially ordered 50,000 units
which increased to 150,000 by Christmas. It was the perfect way to
start. If any company had experience in consumer goods it was Sears
and Roebuck, then the largest consumer goods retailer in the country.

Aside from a lack of marketing experience, Atari also had no
experience manufacturing consumer goods in the amount required to
service a huge account like Sears. New facilities had to be created,
processes put in place, employees and hired. To make their Sears quota
Bushnell enlisted the aid of Donald Valentine to help secure venture
capital for Atari. He came through with $600,000 in the summer of
1975, and another $300,000 in December, which was enough to help get
the home Pong manufactured.

The home Pong unit (sold under the Sears Tele-Games label) was a huge
seller in the Christmas 1975 season. The gamble paid off -- Atari was
now a technology leader in two separate markets, arcade and home,
something no one had ever done before.

"We risked the company every year on new ideas. We were young and if
it failed we could always get jobs in Silicon Valley"- Al Alcorn



1976: Coin-Op Business

Coming off the success of home Pong, Atari did not rest on its coin-op
laurels. It started the year releasing more games based on TTL
discreet logic. The first came in February with Stunt Cycle.

"Now the people who brought motor sports racing to a video track
brings your customers a fantastic motorcycle jump and stunt
attraction." - Stunt Cycle marketing flyer

The action in Stunt Cycle was influenced by the then reigning king of
motorcycle jumping and crushed pelvic bones, Evel Knievel. Much like
Shark Jaws though, inspiration was enough -- no license was acquired.
The cabinet included realistic motorcycle handlebars, and a handle-
grip throttle.

Stunt Cycle was followed by Quiz Show and Indy 400 (a cheaper, smaller
4-player version of Indy 800) in April, and the racer LeMans in July.
However, it was the March release of Outlaw that was more
significant... for the wrong reasons.

Inspired by the success of Midway's Gun Fight from 1975 (the first
game to use a microprocessor), Outlaw was a discreet logic TTL game,
and the technology was showing its age. The difference between the
sharp graphics from Gun Fight, and the blocky designs of Outlaw were
unmistakable. And while the two-player action in Gun Fight was
thrilling, Outlaw's simple quick-draw seemed ancient by comparison.
Atari's game looked behind the times, and they needed to act fast.
Atari engineering was already working on games that used 8-bit
microprocessors, but before any were released, the last and greatest
TTL discreet logic game would take the arcade by storm.

"Nolan Bushnell wanted a game that was like a single player Pong with
bricks that you would hit and the ball would go behind them" - Steve
Wozniak

breakout

Atari's Breakout coin-op was released in May of 1976, and it was an
instant classic. Designed by Nolan Bushnell, the game was engineered
by Steve Wozniak in a 4-day challenge to see how few TTL chips could
be used to create a fully functioning game. Wozniak's forte was
designing systems with as few chips as possible. His friend, Steve
Jobs, had been working as a technician at Atari for a few years, and
asked Wozniak to see if he could design a game with as few parts as
possible. There was incentive, in the form of bonuses for Jobs -- who
shared part of it, but not all, with Wozniak -- but also incentive on
Atari's part to move away from cumbersome designs that used hundreds
of TTL chips.

"The reason Atari wanted me to design it is they were tired of their
games taking 150, 200 chips, and they knew I designed things with very
few chips, so we had incentives for getting it under 50 or under 40
chips." - Steve Wozniak

The final design used 46 TTL chips, and was so intricately created
that it had to be sent to Grass Valley to be re-engineered for
manufacture.

"The design was so minimized that normal mere mortals couldn't figure
it out." - Al Alcorn

Breakout generated sales of over 11,000 units priced at $1095 each.
However, it did more than just that. It made people want to go back to
the arcade. The game was also a worldwide success. Atari sold the
Japanese rights to their old partner, Namco. Since supplies were so
low, Atari could not get enough units to Namco, so the company made
their own knock-off (everyone else was doing the same) and it helped
make them a huge player in the Japanese game industry.lxxvi

Even though Breakout was a huge success, and showed how few TTL chips
could be used to create a great game, the days of discreet logic
design were nearly over. 8-bit microprocessors had come down in price
to the point where they were a feasible alternative, and could provide
much more power with a standardized architecture. The first two chips
Atari engineers used were the MOS 6502 and the Motorola 6800. Plus,
there were things that you could do with microprocessor that were
nearly impossible with a TTL logic design. A.I. , for example, was so
difficult to recreate with discreet logic, that Atari's games had
continued to increase the amount of human players they could support
to compensate, and in turn increased the games' size and cost, while
decreasing the ability for an amusement operator to buy them or find
space to display them.

Developing a microprocessor-based game was much different than
designing one with only TTL chips. Most of the early microprocessor-
based gamed were hybrids of TTL and microprocessor, and it made the
job that much harder. Owen R. Rubin was one of a new breed of coin-op
designers hired around 1976 to help move Atari into the microprocessor
age. His first game, the unreleased Cannonball, was one of Atari's
initial forays into microprocessor based games.

"The hardware was rather simple. You have a number of 'motion objects'
which could be placed anywhere on the screen. Early version simply
took graphics from a PROM and the programmer simply set a value in a
register to select which picture. There were missile graphics, 2x2 or
1x1 objects to use as bullets. The playfield was a "stamp" based
graphics made up of 8x8 or 16x16 graphic stamps that were also pulled
from a PROM." - Owen R. Rubin

The power of microprocessor-based hardware could be seen almost
immediately. Cops 'N Robbers, released in July, was essentially a
modernized version of Gun Fight. Two very detailed cars were
controlled by the players as they attempted to shoot each other across
a roadway.

"New programming and electronic design give the players more action,
movement, and larger, more animated figures" - Cops 'N Robbers
marketing flyer

Fly Ball, a two player baseball style game (more "over the line" than
baseball actually) featured animated players of a kind Atari had never
produced up to that point. Sprint 2, released in November, was a major
update on the Gran Trak-style game. It included multiple tracks, on-
screen text, and for the first time, A.I. cars to compete against the
player.

"A solo driver sprints against the clock in a white car, but he is not
alone. He competes against a black car and two grey cars that drive
automatically."- Sprint 2 marketing flyer

Arcade operators saw $200 - $300 a week from the machine.

"Sprint 2 is earning extremely well... we feel it will surpass many of
the other video games" - Ray Galante of Music Vend Seattle in Coin
Connection Feb. 1977

Sprint 2 went on to became a huge hit, selling more than 8200 units,
and spawning multiple sequels.

Also a success was an update of Tank! for 8 players named
appropriately enough, Tank 8. However, it was the October release of
Night Driver that really showed the power of the microprocessor. One
of the very first games viewed from a first-person, 3D perspective,
the game was designed by Dave Shepperd. It featured a winding road at
"night" (you could only see white dots that represented the side of
road) that needed to be traversed by the player.

"I have fond memories of spending time watching the white lines in the
street and fence posts whiz by my car as I drove to and from work,
trying to work out in my mind's eye what kind of math I can use to
make little squares on a TV kind of do the same thing." - Dave
Shepperd

The game was a sizable hit for Atari, and it proved that advanced
technology could not only improve video games, but could open up new
styles of play that were once nearly thought to be impossible to
produce.


------

1976: The Home Front

Even with successful coin-ops using new technology, Atari was still
finding the competition for arcade floor space suffocating. With a
$250,000 cost to develop a game, and about 10% chance it would be
successful, Atari had to become serious about their second front: the
home.

However, that would not be easy. After being successful in 1975 and
early 1976 with home Pong, sold through Sears, Atari created more
versions of home Pong to market both themselves and through Sears
including C-140 Super Pong, C-160 Pong Doubles, C-180 Super Pong Ten.
However, by that time, Atari was not the only company selling a chip-
based Pong unit. At least 75 companies announced their intentions to
get into the business in early 1976. Atari might have made the first
home Pong, but just like its experience with their coin-op Pong,
dozens of imitators were in pursuit of the same dollars. Atari tried
to combat the imitators by generating a sense of loyalty in consumers
to buy "A Real Atari", but compared to some of the newer models,
Atari's home units looked primitive just 6 months after they went on
sale.

In early 1976, General Instrument created the AY38500 microchip that
included 6 paddle and shooting games in one unit. Coleco was the first
buyer of the chip, producing the Telstar Arcade, an impressive-looking
console that was competitively priced with Atari's Pong.

Worse for Atari, in the summer of 1976 came the Fairchild Channel F
system, the first console that used interchangeable games on
cartridge. The Channel F was never a huge seller, but, coupled with
the Christmas best-seller Coleco Telstar, these moves rendered Atari's
dedicated home business almost worthless in less than a year.

1976: The Apple Mistake

With the focus on home video games and coin-ops, Atari did make one
move in 1976 that, in hind-sight, could have been their biggest
mistake. Steve Jobs, who had left Atari and was working for HP at the
time, brought a piece of equipment to Al Alcorn that he and Steve
Wozniak had been working on in their garage. It was a computer based
on the same MOS 6502 processor that Atari had started using in their
coin-op games. Alcorn thought it was a "neat engineering project" but
did not think it was right for Atari.

"we said 'no thank you'...but I liked him, I thought he was a nice guy,
so I introduced him to venture capitalists'" - Al Alcorn

Atari did not have the resources enter a third, unproven market. They
let the opportunity go. The machine became the Apple I computer, and
rest is history for Jobs and Wozniak. Atari learned to regret this
mistake as they tried to enter the home computer market a few years
later.
1976: Building The 2600

Bushnell was convinced that Atari needed to outthink their competitors
-- and could. The 1975 hit coin-ops Tank! and Jet Fighter were
suggested as dedicated follow-ups to the Pong units, but Atari was
tired of designing and selling dedicated hardware that cost $100,000
to developlxxxi with only two to three months of shelf-life before it
became outdated. The company needed to design a platform that could
sustain a life of two or three years, and at the same time support
incremental game sales to an already established user-base. Months
before the Fairchild Channel F appeared on store shelves, Atari was
well on its way to creating a similar, yet much more flexible system.

The R&D team at the Grass Valley Think Tank started working on ideas
for a programmable unit that could use interchangeable games as early
as mid-1975. The problem was, most suitable microprocessors, like the
Motorola 6800, cost $100 each. This was too much for a consumer
product. In September 1975, Steve Mayer and Ron Milner met Chuck
Peddle (who had recently left Motorola) at Wescon and made a deal to
buy his microprocessors (MOS 6502) for $8 apiece. The 6502 met the
minimum specs required for the reprogrammable system they were
planning to create, and could also be used as the basis for
microprocessor based coin-ops.

In December 1975 Atari R&D at Grass Valley hired Joe Decuir, and one
of his first projects was to help debug a piece of hardware that would
become the Atari VCS console.

"Steve Mayer and Ron Milner conceived of the VCS, and designed the
first prototype of its ancestor." - Joe Decuir

Soon, the VCS project attained the name "Stella", named after Decuir's
bicycle. The first programmable system prototype used controllers from
Kee's Tank coin-op, the custom Stella chip, a 6502 hobbyist board, and
a 5 volt power supply.

A second prototype was developed in Los Gatos in March 1976lxxxiv, as
Joe Decuir worked as an apprentice to Jay Miner, a legendary Silicon
Valley hardware designer, and the only person Al Acorn knew of who
could pull off the project. They set out to create a machine whose
inner workings were accessible to the programmer, and could be
exploited by those who got to know the hardware well.


Work on the VCS took place in Grass Valley, and in Los Gatos,
California.

"In March of 1976 I moved to Los Gatos CA to apprentice for Jay Miner,
the lead chip designer." - Joe Decuir

There, Jay Miner and his team designed the guts of the Stella. This
included the 6507 processor, TIA sound chip, cartridge slot and
controllers. For most of the team, the project was thrilling.

"I would bicycle to work and back marveling that I was getting paid to
do this." - Joe Decuir

In the fall of 1976, Atari showed how serious they were about this new
"programmable console", so much so that they bought out the Grass
Valley Think Tank ouright, and moved the entire development team to
Atari's new headquarters in Sunnyvale, California. They incorporated
the team into Atari's R&D staff, and Steve Mayer led the team.

We had to wait until we got to the 6502 or the 6800 series before
there was even a possibility. Even then, they were too slow. We had to
develop the Stella chip... which basically did all the screen refresh
and other things that have to happen in real time, much faster than a
microprocessor running at 300KHz could possibly do." - Nolan Bushnell

It was at this point that Nolan Bushnell pulled off one of the most
brilliant moves of his already brilliant career. Since Atari had been
beaten by their competition at their own game more than once, he
decided to head them off at the pass. Instead of waiting for
competitors to emerge after the Stella project was released, he
decided to tie-up all available chip fabricators that could possible
make a similar piece of silicon. It would not matter if someone tried
to copy Atari -- because this time they would not be able to get any
chips produced.

"I always played business as a game. What a lot of people don't
realize is that I tied-up every N-Channel manufacturer in the world,
except for IBM, who had no interest in the game business. In those
days when you built with slight modifications to tie them up. I wanted
to have everybody working for me contractually. They did not
necessarily know about one another." - Nolan Bushnell

However, these projects were very costly, to the tune of $100,000 each
per year. To finish the Stella project, Atari needed an infusion of
cash. They had finished fiscal 1975-1976 with $3.5 Million profit on
$39 million in sales, but with growing competition, Bushnell did not
think they would have enough money to finish the project.

"When you're a little company, and you hear that National
Semiconductor is going to build a game and that Magnavox is going to
build a game, then all of a sudden you say, I'm this little tiny ...
do I have the resources?" You don't realize at that time that big
companies tend to be really screwed up, so that they're sometimes
really easier to beat than a good, well-tuned entrepreneurial
operation." - Nolan Bushnell

In the summer of 1976, Nolan Bushnell enlisted Donald Valentine again
to help raise capital for the company. This time though, Valentine
suggested Bushnell try to find someone to buy them out.

"What happened is a growing business consumes capital at prodigious
rates. And Wall Street had a hard time distinguishing between the
frivolity of our product and the fact that it was a serious business.
Raising capital was very, very difficult for us. In order to go into
the consumer marketplace, we just needed much deeper pockets, and
that's why we decided to sell." - Nolan Bushnell

About the same time Manny Gerard was hired by Warner Communications to
look for ways to expand the business. They wanted key acquisitions
that would help the company move beyond its reliance on selling 7"
singles, a product line that had been declining for a number of years.
He heard about Atari being offered for sale, and was very interested.

While negotiations are being held, Bushnell tried to keep the true
"laid-back" nature of the company away from the Warner executives who
he as sure would frown upon Atari's liberal attitude toward dress and
drug use. One story says that right before a surprise visit from a
Warner executive, Bushnell had all the assembly line employees hide
inside game cabinets for 45 minutes, so as not be seen by the Warner
visitors.

However, no insurmountable roadblocks appeared, and by November of
1976, Atari was sold for $28 million dollars, with Bushnell himself
pocketing nearly $15 million, and Joe Keenan a sizeable sum as well.
Warner was smart enough to see something special in Bushnell, and they
kept him on as Chairman and CEO, while Joe Keenan acted as president.
$100 million was pumped into Atari, and Stella was put into the
forefront as the company's most important project.

In a matter of a few months, one of the greatest R&D and entertainment
engineering companies of its day was suddenly matched with a one of
the biggest entertainment marketing companies on earth. At the
beginning, it seemed like a good marriage.

"...we had originally made a grocery list of 10 companies we would be
willing to merge Atari with and Warner was not on that list. But
through a connection, we made contact with Warner. We were really
impressed with them, and I think they liked what they saw." - Gene
Lipkin, Atari V.P. Of Marketing

The "creative" atmosphere that Bushnell fostered at Atari seemed like
it would match well with a company that saw much of its revenue from
the music business. If the two could find a way to stay in sync, they
could prove to be an unstoppable force.


------

1977 Coin-ops

With all the drama on the consumer side, the coin-op division of Atari
sailed into 1977 building off of Breakout and its successful
microprocessor advances from 1976. The infusion of marketing people
from Warner had an almost instant effect, as the coin division
launched a monthly newsletter named "Atari Coin Connection". This
monthly newsletter would act as Atari's official mouthpiece to
amusement operators for game announcements, promotions, etc. The
downside to the influx of new marketing people into Atari was that
some creative freedom got lost in the process. The days of batting
around games in a hot tub that were quickly green-lit and put into
production were over. Fierce brainstorming sessions still existed, but
the days of engineering and R&D leading the charge at Atari were
quickly evaporating, with the newly bolstered marketing department
filling the void. Coin-op designers like Owen R. Rubin would come up
with ideas that were quickly shot down by the V.P. of marketing.

"It happened so often, that we would have the hardware engineer add a
button under the table that would cause the hardware to crash, so when
the VP came into the lab, we could not show him them game. That only
worked for a while. " - Owen R. Rubin

superbug For the most part, the coin-ops of 1977 took few chances and
built on already established concepts. Racing contests continued to
fill up much of Atari's 1977 coin-up lineup. Sprint 4 and Sprint 8 (4
and 8 players respectively) were multiplayer follow-ups to
phenomenally successful Sprint 2 microprocessor-based racing game from
1976, which itself was a distant cousin of Gran Trak 10. However, the
new power of the microprocessor-based coin-ops allowed Atari's coin-op
division to move into other types of racing games. In June they
released Drag Race, which allowed one or two players too complete in a
side-view drag race, complete with detailed, animated cars. September
saw the release of Super Bug, designed by Howard Delman, a top-down,
multi-directional scrolling racing game.

"Super Bug was my first coin-operated video game. It presented a top
down view of a city street. (Its original name was 'City Driver'.) The
player had a fixed amount of time to drive his bright yellow 'bug' as
far as he could. Obviously, the idea was to drive as fast as possible.
This was made difficult by sudden turns in the road, surprise oil
slicks, sand traps, and parked cars." - Howard Delman xciv

Beyond racing games, Atari was trying to design a multitude of other
games based co concepts that could not have been easily created in the
pure TTL logic era. Dominoes (designed by Dennis Koble) released in
January, took the concept of Gremlin's Blockade coin-op and added a
Domino theme. Pool Shark, released in June, played a top-down game of
pool, complete with realistic physics.

"Pool Shark is an Atari game that simulates the game of Pocket Pool
(no pun intended) on 23" monitor." - Actual introduction from Pool
Shark operations and service manual

The concentration on military themed coin-ops continued unabated as
well, with Destroyer in September, another game that would be mined
for the VCS game Air-Sea Battle later that year (along with Anti-
Aircraft from '76). More significant was Canyon Bomber, released in
November. A strikingly different game from most in the arcade, Canyon
Bomber took the basic concept of Breakout, and turned it on its head.

"As the aircraft fly over the canyon at random speeds, players press a
simple push-button control to bomb as many targets as possible without
missing"- Canyon Bomber marketing flyer

Canyon Bomber was another game by Howard Delman, one of the new crop
of coin-op designers who helped bridge the gap between the TTL games
of old and the new microprocessor-based games.

"I designed the hardware and wrote the software. The logic was still
all TTL, but now the micropressor was the MOSTEK 6502. I wrote the
code in assembly, and won a friendly bet with my supervisor by fitting
the code into a single 2K ROM. (Take THAT Windows programers!)"xcv -
Howard Delman

Not quite military, but a gun-based game nonetheless, Triple Hunt,
designed by Owen R. Rubin, was significant in that it was a single
arcade game that could be converted into three separate light-gun
games: Hit The Bear, Witch Hunt, and Raccoon Hunt.

However, one of the best selling games (3500 unitsxcvi) for Atari in
1977 came in June: Starship 1.

''Sensors detect another quarter in your pocket, deposit it to be the
captain of Starship 1'' - Starship 1 message on attract screen

Starship 1 was a space combat game that used 3D perspective, and space
ships that looked remarkably similar to those from Star Trek. It was
obvious though, that the mammoth success of Star Wars, released in the
movie theaters just a month earlier, had an effect on the timing of
Starship 1, as the game included "proton torpedoes", and allowed the
player to destroy entire planets.


1977 Atari Pinball Division

Even though Atari had been making coin-op video games for 3 years, the
industry itself was at a crossroads in 1975. The average video game
was only making about $43 a week, which was far less than a pool table
could make in the same period, and much less than the first Pong
machines made.xcviii Amusement operators were getting nervous, and
Atari decided to try its hand at an age-old staple of the arcade: the
pinball machine.

"I got in because I felt there was a market for a novelty pinball.
There was a lot of innovation that pinball needed and in those days in
the coin-op world you really wanted to be a full-service supplier.
There were places that just wanted pinball, period. We knew that we
had such a large market-share of video, so we felt that it would make
sense to do pinball." - Nolan Bushnell

However, Atari did not want to just make typical pinball machines. In
1975 Atari created its Pinball Division with the hope of using the
type of innovation it put into their video games for new and different
types of pinball machines. Atari needed to do this, because the
margins on standard pinball games were very low. If Atari was going to
get into pinball, it would have to price their games higher than the
competition, and to do this, it needed to offer something different.

"So we had about $100 cost differential and the pinball machines in
those days were kind of commodity priced. I felt we could make a
business, but we could not do a commodity pinball, one that looked
like it was the same size, so we created these wide bodies and these
various other innovations which allowed us to price them anywhere we
wanted to" c - Nolan Bushnell

After merging with Kee in '75, Gil Williams (who had "left" Atari with
Steve Bristow to help form Kee in the first place) was put in charge
of the new Pinball Division. The first decision was to make the games
"solid state". This meant that they would use electronics instead of
the electromechanical parts of standard pinball machines. This meant
they would be cheaper to maintain, and offer video-game like features
such as digital sound effects. Starting with five employees, Williams
set out to create the best solid-state pinball games ever produced.

"You need steel balls to play Atari pins." - Gil Williams

Atari's first solid-state pinball game, The Atarians, was finished and
test-marketed in late 1976, after nearly 2 years in development.
Besides a solid-state design -- like all Atari pinball games, The
Atarians utilized a Motorola 6800 processor -- it included a wide-body
with a much larger playfield than standard pinball machines, and ball
sensors under the playfield instead of switches.cii

"The Atarians introduces a new generation of advanced coin operated
amusement products. Two years of research, planning and development
and an extensive field-test program has verified strong player
acceptance of the game." - The Atarians marketing flyer

The game was released in February 1977 to early success. Early tests
of The Atarians showed that the game drew players who usually did not
play pinball games. The Atari name was now known by the arcade-going
public, and they were eager to what Atari had to offer in the pinball
arena. In December 1977, Replay magazine cited Atari's entry into the
pinball arena as "clear proof that pinball is the industry's number
one favorite."

Two more pinball machines were released in 1977 -- Time 2000 in
September, and Airborne Avenger in October. Airborne Avenger had a
playfield designed by Steve Ritchie, who would go on to design the
legendary Black Knight for Williams, and was programmed by Eugene
Jarvis (creator of the Defender and Stargate video games for
Williams).
1977: Chuck E. Cheese

One of the more interesting ideas spawned by the engineer entertainers
of Bushnell's Atari was The Chuck E. Cheese's Pizza Time Theater. The
idea was spawned in about 1974 when Atari was having trouble getting
games placed in the limited arcade space of the day. In an attempt to
appeal to families, Atari came up with the idea of a pizza restaurant
with animatronic animals, and as large an arcade as they could build.
While families waited for their pizza, they could play Atari's video
games. The concept took a very long time to establish into an actual
business. It was not until May 16th, 1977 that the first Pizza Time
Theater made its debut in San Jose.

"The grand opening on May 16th was a great success. Mayor Janet Gray
Hayes, together with many other prominent people from the community
and the press, came to welcome Chuck E. Cheese and the Pizza Time
Theatre to San Jose. This new concept in family entertainment is
another amusement innovation from Atari." - Coin Connection, June 1977

The restaurant was filled with animatronic figures developed
originally at the Grass Valley Think Tank. Besides Chuck E Cheese,
they created Crusty the Cat, Jasper T. Jowels the singing dog,
Pasqually the Italian chef, and a team of three singing magpies known
as the Warblettes.

The brass at Warner Communications looked the other way over Chuck E.
Cheese because it kept Bushnell busy as they went about discovering
all the ins and out of the new company they had acquired.

"They sort of tolerated it but they figured it was going to be
something that would go away. They didn't understand it." - Nolan
Bushnell




All the new programmers soon learned how difficult Stella was to
program. Programmers had to learn the quirks of the VCS to get as much
power out of it as possible. There were few objects to work with, and
and very little memory, so everything had to be done on the fly. A
typical game would use the "Vertical Blank" (the time between
refreshes of the TV screen display) to do collision detection, take
input, compute game conditions and new graphics locations, and then
use the "Horizontal Blank" to write everything to screen. It was a
complicated process that forced programmers to count the computation
cycles of every instruction to make sure they could fit their code
into these small intervals.

"Writing the kernels that make up the game programs, is like solving
acrostic puzzles with lots and lots of possibilities. There's a
certain class of programmer that can deal in the microcode like that.
If it were easier to program, we wouldn't have these programmers,
because they'd be bored. The VCS is an absolute challenge." cxi -
Steve Mayer

"In the early days, the extreme hardware constraints eliminated most
obvious game designs. So, game concepts had to be developed with those
constraints expressly in mind. After I came up with a concept that I
thought would be fun and could be implemented, I wrote it up and
discussed it with others in the group, like David Crane, Bob
Whitehead, and Larry Kaplan."cxii - Alan Miller

The 2600 as designed was a hacker's machine. It was deceptively
simple, but with enough "open" and explorable parts that more and more
power would be squeezed out of it for almost 20 years.

"Most early VCS ROM carts were only 2Kbytes. Programmers had to put
tremendous effort into implementing a decent game in that small
space." - Alan Miller

To program the VCS developers had to "unlearn" good programming
practices to get their code to fit within the bizarre hardware. Tricks
were passed around by programmers, and new programmers would have to
pick them up quickly if they were going to be successful. Joe Decuir
developed the color-cycling routine of the VCS to help stop "burn-in"
that was a complaint of the Pong systems, which also doubled as a
feature in games. "Flicker" (objects flashing on the screen) was
caused by a trick that let programmers get more objects on the screen
than were allowed.

Atari showed the VCS at the Summer CES in 1977, and prepared it for
release in October. They knew that had the best product on the market,
but they did not know how to inform the public of that fact.

During the manufacturing process, they ran into some problems that
delayed the release of the unit. The VCS was very difficult to produce
and test. The design required two types of screws that were difficult
for assembly line workers to distinguish. Also, the cases were created
as two plastic parts that would warp if not used quickly after being
manufactured. The multiple integrated circuits and reliance on both
cartridges and a television made testing the 2600 units extremely
difficult. Some supplier chips were not fast enough for production
2600's, but passed inspection because they worked fine in individual
unit tests -- but not when the machine was put together. All of these
things led to shipping delays and disappointed retailers.

Sears catalog By late November 1977, the Atari VCS shipped to
retailers, including Sears who marketed their own version named the
Sears Tele-Games Video Arcade. The system cost $199 and included the
console, TV switchbox, two joysticks, a set of paddle controllers, and
the pack-in game Combat. Eight other games were released with the
console, most of which were conversions of Atari's most popular coin-
op games from years past.

Combat was programmed by Joe Decuir, Larry Wagner. Larry Kaplan. It
was based on the Tank! and Jet fighter coin-ops. It was the perfect
pack-in game for the VCS. It displayed incredibly addictive two player
action, and contained one of the best two player games ever designed,
Tank Pong.

"The first time I saw Combat on display in the local Fedmart TV
section, I was blown away. There were actual arcade games up on that
screen." - Anonymous Atari Fan

Air-Sea Battle was programmed by Larry Kaplan. It was based on the
Destroyer and Anti-Aircraft coin-ops.

"Air-Sea Battle was based on an Atari coin-op called Anti-Aircraft. In
those days, we just ripped off anything we could make work.- Larry
Kaplan




Besides engrossing two player action, Air-Sea Battle was packaged
behind some of the best box-art ever created for a video game. The art
was painted by Cliff Spohn, who also painted the amazing art for
Combat, Street Racer and several later games.

"Those paintings on the box detailed exactly how I felt about the
games. The graphics were so minimal at the time, the boxes formed an
important part of game play experience. When I was playing Air-Sea
Battle, I was playing in that painting." - Anonymous Atari Fan

Air-sea battle Video Olympics was programmed by Joe Decuir. It
included every imaginable variation of Pong. The idea was to make any
and all dedicated Pong units obsolete with this cartridge. The game
allowed 1-4 players, and contained many variations and was based on
Atari coin-ops like Pong, Pong Doubles, Goal IV, Quadrapong and
Rebound.

Street Racer was programmed by Larry Kaplan. It contained 27 1-4
player top-down racing games with very basic graphics and sound. Its
saving grace was the strangely addictive "Number Cruncher", where
players raced to catch the biggest numbers possible.

Surround was programmed by Alan Miller in four months.cxv It was based
on the Dominos coin-op with added variations.

"Surround was based on a game play concept implemented in several
arcade games in the mid-70s, such as Atari's Dominos, Gremlin's
Blockade, and Meadow's Bigfoot." - Alan Miller

Indy 500 was programmed by Ed Riddle. It was based on the Gran Trak
10, Gran Trak 20, Indy 4, Sprint, LeMans, and Crash n' Score coin-ops.
Indy 500 shipped with the "Racing Controllers" included in the box.

"A total of 14 game variations enliven this auto sports cartridge. It
is priced somewhat higher than all the other early Atari releases
because it includes a pair of specially designed game
controllers."cxvii - Arnie Katz And Bill Kunkel

Also released were Star Ship programmed by Bob Whitehead and based on
the Starship 1 coin-op, Blackjack programmed by Gary Palmer, and Basic
Math programmed by Bob Whitehead.

The late shipments and consumer indifference led to soft sales for
Christmas 1977. The VCS was the best selling console that season, but
that did not amount to much. By the end of the 1977-1978 fiscal year
in June, Atari had sold most of the 400,000 units manufactured, and
had sales of $120 million, but still lost money on the VCS.

"People didn't know whether to spend $30 to $50 on the numerous
dedicated games that were still on the shelves or slap down $180 for
the VCS, a considerably larger expense."cxix - Alan Miller

The nine original cartridges were thought to stretch the Atari VCS to
the limit. Just before its release, Bushnell quickly started to work
on a follow-up machine. He, wanted to create a next-generation VCS
that fixed all the limitations of the original unit.

"In the Summer of 1977, I went back to Grass Valley to work with Ron
and Steve on the next generation machine." - Joe Decuir

Nolan Bushnell was convinced that hardware only had a 2-year life-
span, and he wanted to make sure Atari was ready with a follow-up to
the VCS as soon as possible. However, with sluggish initial sales, the
VCS had to prove itself in the marketplace first before any new
consoles could be fully developed.

[Look forward to the continuation of The History of Atari on
Gamasutra.com.

[s***@yahoo.com]

Post by NV55
Also released were Star Ship programmed by Bob Whitehead and based on
the Starship 1 coin-op, Blackjack programmed by Gary Palmer, and Basic
Math programmed by Bob Whitehead.

Gary Palmer didn't program Black Jack, Bob Whitehead did.

[Mr. Maddog]

Nice read and very interesting, can't wait for the rest of the
series. (Im looking forward to the 80's but cringing about the
90's...)

Just post the link only please, no need to paste the whole article. :)