JEFF BLACKMORE COLLEGE OF INFORMATION SCIENCE AND TECHNOLOGY UNIVERSITY OF NEBRASKA AT OMAHA JEFF BLACKMORE, COLLEGE OF IS & UNO

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1 JEFF BLACKMORE COLLEGE OF INFORMATION SCIENCE AND TECHNOLOGY UNIVERSITY OF NEBRASKA AT OMAHA

3 ATARI PRIMORDIAL On June 27, 1972, Bushnell and Dabney filed to have Atari incorporated Within in 10 years, it would be making $2 billion a year First offices were in a garage/warehouse in Santa Clara, CA Bally was one of Atari s first customers, asking them to develop extra-wide body pinball games for the Bally nameplate Bushnell worked on multiplayer Computer Space in hopes of enticing Nutting Started a pinball machine route to ensure a steady income which included the student union at Stanford University, Dabney received the route when he left First employee was receptionist cum dogsbody Cynthia Villanueva, Bushnell s 17 year old babysitter, she stayed at Atari over10 years after Bushnell himself was gone Nolan wanted someone else to answer the phones to give illusion of a big operation

4 AL ALCORN - MR. PONG Atari s second employee was Al Alcorn, one of Dabney s acquaintances from Ampex Al had been a work-study at Ampex whilst finishing his degree at Cal-Berkeley Offered Vice President o R&D at Syzygy for $1000 a month as Ampex downsized Company car concept clinched the deal for Alcorn First project from Bushnell was for Alcorn to build a home electric console game Fictitious contract from General Electric one ball, two paddles, and a score Alcorn later said it was a simple game that Nolan was going to dispose of Bushnell s Computer Space schematics were illegible so Alcorn started from scratch building his own eletronics based on TTL As he worked, Al beefed up the concept with additional enhancements

5 PONG, PONG, PONG First replaced more expensive components with cheaper ones Devised a way to add English to the ball and use the paddles to aim it Paddles were broken down into 8 segments each sending the ball back across the field at a different angle after striking the surface. After a few volleys, the ball would begin to move faster Alcorn already had too many parts for the machine to make a good home game, it would have been too expensive To add sound he played around with the components already in place and managed to get the bap sounds as the ball struck the paddle Streamed the game through a $75 black and white television, built a mailbox shaped cabinet and hardwired the components in place to have a working prototype. Bushnell added a bread pan for collecting quarters and an instruction card that read avoid missing ball for high score

received a request to come and fix the machine. He opened the door to give himself a test game, and this money gushed out.

6 ANDY CAPP S TAVERN Andy Capp s was a peanut-shell-on-the-floor beer bar in Sunnyvale, California. It was nothing special ~Bushnell They put the Pong prototype on an old wine barrel the owner used as tables They sat the first night and watched as people played the game Two weeks later Al Alcorn received a request to come and fix the machine. He opened the door to give himself a test game, and this money gushed out. The coin box was overflowing, the bartender said that he had people coming in solely to play pong not to drink When Bushnell returned from a trip trying to sell the Pong prototype to Bally abd Midway Alcorn told him about the broken machine at Andy Capp s Nolan told Midway the Bally guys wouldn t take it, told the Bally guys Midway wouldn t take it and instead manufactured the games at Atari

7 THE BAER FACTS Magnavox had begun showing the Odyssey at trade shows in the early 70 s On May 24 th, 1972 at a San Francisco trade show, a Nutting employee named Nolan Bushnell played the demo of the Odyssey According to Nolan later he said he could have, should have, would have been there. So it s one of those pissing matches Bushnell deny it or not, was taken to court by Magnavox after they started shipping out Pong arcade machines. Nolan was less than meticulous about recordkeeping Baer was just the opposite and in a lawsuit good clear records triumph In the end Magnavox settled out of court with Bushnell for $700k extremely advantageous, nonburdensome license Baer stated If anybody had any inkling of what was going to happen to this business at Atari, they never would have gotten those terms Magnavox had rights to any products developed by Atari for 365 days

essence smacking down Atari s rivals those who would clone Pong Nolan became

8 THE SETTLEMENT Baer and Bushnell settled on the steps of the courthouse Magnavox would prosecute others who violated the licensure agreement, in essence smacking down Atari s rivals those who would clone Pong Nolan became the father of video games and Ralph Baer faded into obscurity Al Alcorn employee 003?

10 THE PINBALL CONNECTION Remember Fiorello LaGuardia and the ban on Pinball machines? The NYC ban was only removed in 1976, and the proof of skill versus luck claim by pinball aficionados was almost unsuccessful The association of coin-op and jukeboxes with organized crime stigmatized the early video game industry, in some cases the mafia was involved Bushnell found the spectre of mafioso haunted his attempts to gain financing to further his aims for Atari In addition Bushnell s tall gangly unruly long hair [made him look] more like a biker or a hippie than a gangster Bankers didn t like bikers or hippies either Wells-Fargo finally tendered a $50k line of credit Allowed Nolan to knock down the wall between two spaces and create an assembly space, 4000 square feet to build Pong machines

11 IN THE BEGINNING Atari scrambled to bring in workers, hiring nearly every prospect the [California unemployment] office sent them Paid at slightly above minimum wage - $1.75 per hour. Benefits for employees were Friday night beer busts and playing free games As orders mounted into the thousands, employees would work 16 days to attempt to meet demand, and Bushnell hired almost anyone Former Execs from Atari described the assembly line workers as long-haired bikers, junkies and hippies Employee theft of parts like the televisions was rampant Marijuana use at work was more common than not Syringes found as litter on the restroom floors by a former designer The process only resulted in 10 machines a day many of which did not pass quality testing

12 JUST KEEP PONGING AWAY AT IT Bushnell began placing Pong machines at other locations on the coin-op route Pong brought in $200 a week compared to $40 50 a week for others Positive cash flow from the route, Steve Bristow who collected the money carried a hatchet while collecting the coins afraid he and his wife would be burgled Each Pong machine cost ~$400 to make and sold for $1200 More positive cashflow, from the first machines out the door By the close of the year in 1973 they had shipped 2500 units, in 1974, million in cost, 9.6 million in recepts in 1974 dollars, 6.4 million profit $6,400,000 of 1974 dollars would be worth: $29,767, in 2012 Ralph Baer and Magnavox rode on Atari s successful coattails, pushing out 100,000 Odyssey units in the first year There was definitely a complimentary effect ~Ralph Baer

13 KING, QUEEN, AND FIVE PRINCES Bushnell felt Dabney was holding the company back, incapable of having an international company mindset and asked him to leave Granted stock and the amusement route, Ted became a millionaire when his stock sold Bushnell was King, Joe Keenan was Queen (because he was second in command) The Princes were Al Alcorn, R&D Steve Bristow, VP Eng g Bill White, CFO Gil Williams, Head of Mfg Gene Lipkin, VP Sales (only one with experience in coin-op) Board Meetings sometimes held in a hot tub in Los Gatos, California Added Steve Mayer and Larry Emmons from Ampex In charge of the Grass Valley think tank, building what couldn t be built

14 GRASS VALLEY? In the sierra mountains near the Nevada border Became a monument in Atari corporate culture Used as an executive retreat Bushnell bought Emmons and Mayer s consulting firm there outright As Atari became more and more successful, Bushnell began to focus on management responsibilities and left the technical wizardry to the Grass Valley guys Taking a page from Ralph Baer and the Magnavox lawsuit he dedicated his time to patenting Atari technology, in order to protect the company from the Jackals A fundamentally incompetent patent attorney filed patent papers too late to protect the pong boards, and clones appeared all over the country

16 A PIECE OF THE ACTION! There were some companies that just came oout of nowhere, saw what was happening with Pong, and said I want to get a part of this action ~Eddie Adlum Three months from the release of Pong to the public, competitors came out with their clones, Nutting, Ramtek, Meadows Games were among the first Midway and National Semiconductor also produced ping-pong video games After Breakout was released in 1975, an Italian company was found to be selling games with the Atari logo, and Atari s then current address, while Atari used the old plant address on their machines, the two were otherwise identical In 1974 Atari decide that since they could not beat the Jackals at their game, Bushnell decided the company would beat them with new ones I wonder what else we can do with a video game than play tennis and hockey.

17 ATARI: THE NEXT FIRST GENERATION After that decision, Mayer and Emmons came up with the first racing game Trak 10 The second new game was Space Race Bushnell's last game for some time was called Gotcha, a maze chase imagine what would have happened if Bushnell had somehow managed to patent those ideas. You coiuldn t have had Pac-Man or Pole Position. The whole industry would have been different. ~Steve Baxter, CNN s Computer Connection Space Race did poorly in sales, but within a short time they brought out new titles again, Steeple Chase and Stunt Cycle bringing Atari to the forefront of the industry in the diversity of its portfolio In 1975 in the wake of the movie Jaws, a company called Project Support Engineers, PSE, deviated from the pong-based games with Maneater

18 MIDWAY COMES IN STRONG Midway hired Dave Nutting, remember Computer Quiz, to design game for their company, becoming Atari s closest competitor Their first hit was Gunfight, a western themed shoot out between two players Created in Japan and licensed to Midway- Nutting improved it Added obstacles like a stagecoach Needed a microprocessor to handle the advanced graphics Japanese company was called Taito Other Nutting titles included Sea Wolf Wizard of Wor Baby Pac-Man

19 ONLY THE PARANOID SURVIVE KEE GAMES Many successes and lots of failures in the first years of Atari Throughout the Bushnell era the work smart party hard attitude was supreme Bushnell consistently looked to diversify the company with ventures in different areas In 1974 a new startup called Kee Games emerged Queen Joe Keenan is said to have lured two of the princes from Atari Atari execs complained about the theft of Steve Bristow by Kee Bristow was supposed to have used his wife to distract a security guard while he rifled his papers and equipment from Atari Bushnell floated rumours that the Kee games people were untrustworthy traitors Other competitors were merging and garnering more market share as well

20 MEMBERS OF THE BOARD If one looked at the incorporation papers of Kee Games, one would have found that Nolan and Alcorn were members of the board of directors Kee games was a ruse set up by Bushnell to compete with himself If someone didn t like Atari, Kee games would court them and the profits would all flow in Nolan s direction Kee Games however, was suddenly a real rival in the form of Steve Bristow s game for Kee called Tank Primitive graphics but addictive gameplay ensured the popularity of the machine Atari s next venture was Grantrak 10 developed by the Grass Valley team As delivered it was unplayable Alcorn fixed the problems Cost $1095 to make sold each machine for $995 due an accounting error In light of the bad year, Atari and Kee merged once again becoming 1 company

21 HO CHI MINH TRIAL There was a real scuzzy kid that showed up on Atari s doorstop, a skinny kid with long hair and a wispy beard Several ex-atari people described him as looking like a 20-year-old Ho Chih Minh Came to work with a jar of cranberry juice and told his supervisor if I pass out just lay me on a workbench I m a little weak right now [from fasting] Co-workers complained he smelled bad Offended other by treating them like idiots If he thought your were a dumb shit, he d treat you like shit. That pissed certain people off. I liked him a lot still do ~Nolan Bushnell He was given a one-way ticket to Germany by Atari because they needed someone to fix a problem with Atari consoles there and he was headed to India to a guru He came back from India wearing saffron robes and a shaved head Apparently he had hepatitis.. and had to get out before he died The scuzzy kid s name was Steve Jobs

22 A BREAKAWAY HIT Nolan s last game concept for Atari (and for 20 years after) was Breakout. The person Al Alcorn set to work on the title was Steve Jobs. Bushnell believed the game would need 75 chips to produce 10,000 shipped consoles was the standard ship for Atari s popular cabinets Factoring in savings from circuit board construction and repairs, each chip below 75 would save Atari $100,000 over the amortized life of the machines Nolan offered Steve a bonus for each chip below 75 they could remove [W]hat really happened is Jobs never designed a lick of anytihng in his life. He had Woz do it [redesign Breakout] ~Al Alcorn Steve Wozniak co-founder of Apple managed to remove 50 chips from the design and retain all the functionality The factories couldn t replicate the design, prototypes they built wouldn t work The redesign contained about $100 chips

23 100 YEN AT A TIME Nakamura Masaya, a former naval engineer started Namco with two ride on horses for $3000, he would personally greet the mothers who let their children ride Nakamura-san bega to visit and purchase games from Atari s japanese branch soon after it opened, but in 1974 Bushnell decided to sell the distributorship to Namco Nakamura received breakout in 1976 and saw great potential Atari allowed distribution rights but not manufacturing The Yakuza recognized profit as well and they began to produce clone copies of Breakout,Nakamura asked them to stop but instead they wanted a partnership He asked once more for Atari to increase the number of units sent but they did not, keeping the same slow pace of delivery Nakamura made his own copies, until an Atari representative saw that there were more copies of Breakout in Japan than in the rest of the world combined Atari won a lawsuit against Namco over the issue in the late 70 s, and ended their partnership deal with Namco

24 NAKAMURA SENSAI - NAMCO

25 COMING NEXT TIME: THE PROBLEM WITH PIZZA

WeekI. , of video games IND - Survey of peers on Interactive Entertainment

WeekI. , of video games IND - Survey of peers on Interactive Entertainment Games for Education 14 Article: Peppler, K., & Ka/ai, Y. (n. d.). What videogame making can teach us about literacy and learning: Alternative pathways into participatoly culture. GRP Genre Power Point