PONG, a simple arcade game, two paddles knocking a square blip back and forth over a dotted line representing a net

PONG screen

PONG and Atari - The Entrepreneur Builds An Industry


Atari 1972

Videogaming’s Killer App

Nolan Bushnell misses the ball with his Computer Space, the flaccid-selling coin-op video game he makes for Nutting Associates in 1971. At least the futuristic fiberglass cabinet design is a hit though, as the game shows up as a prop near the beginning of the seminal cheesy 1973 SF movie Soylent Green, as a gift given to Joseph Cotten’s female “furniture”, the mistress character played by co-star Leigh Taylor Young.

A montage of stills from the science fiction film Soylent Green, featuring a cameo by coin-op video game Computer Space

Stills from the movie Soylent Green 

JUMP: The making of Computer Space

Despite the inability of his first product to really catch on with the public, Nutting Associates asks Bushnell to take a shot at developing another game. He is unable to reach an equitable agreement with management, however, and Bushnell leaves to create his own company with partner Ted Dabney. Their intention is to design the games and then have a large game company actually produce them. The initial venture capital is $250 from Bushnell and $250 from Dabney, their profits from Computer Space. They plan to christen the new company with the uncomfortable label Syzygy, an term from astronomy meaning cosmic bodies in perfect alignment, such as the sun, earth and moon. Computer Space had sported the label “Designed by Syzygy”. But history thanks the hippies running a candle-making commune that has already registered the name. Thus,  Bushnell presents a list of three terms from Go, a Japanese board game popular with the founders, to the State of California registration office as potential company names, in this order: “Sente”, meaning to move first, “Atari” which is the equivalent of “check” in the game Chess, meaning you’re about to take an opponent’s piece, and “Hane”, to bend around an opponent’s stone with your own pieces. Sente is also already registered, but Atari is free so that is the name that goes through. The company is officially established on June 27, 1972, by a 27 year old Bushnell.

“Avoid Missing Ball For High Score”

The first product is to be a driving game, and 25-year old Al Alcorn, the engineer Ampex had hired to replace Bushnell, is lured over from the company to join Atari and build it. Deciding instead to break Alcorn in with what in Bushnell’s mind is a throwaway experiment, he asks him to build a simplistic Ping-Pong game, where players control paddles knocking a ball back and forth across the screen. Bushnell prods Alcorn along by telling him the company already has a contract with General Electric to distribute it. There is no such contract. Though Bushnell’s design demands impossible-for-the-day sound effects like a roaring crowd, Alcorn pulls beeps and blips that are already present in the circuitry for the sound…and when Alcorn describes the noise of the ball hitting the paddles, he inadvertently names the game…PONG. The electronic guts are entirely solid-state and hardwired…no ROMs or microprocessors are present. This baby is made to do one thing and one thing only, play PONG. Bushnell makes sure you only need one hand to do it, so bar patrons can hold their beer in the other. After much agonizing about various minutia such as the speed of the ball and how fast the spin-dial control moves the paddles, a prototype system is constructed by Alcorn.

The instructions for the world’s next arcade videogame are legendarily simple: “AVOID MISSING BALL FOR HIGH SCORE”. Everybody in the lab has so much fun playing the game that it is decided to try and market it, although it is seen as a stepping stone…Bushnell plans to quickly leave PONG behind and build a “real”, more complex game. He goes on a trip to Chicago to try and sell pinball giant Bally on the PONG concept. In one of history’s great corporate blunders, they blow him off, totally misreading the potential of videogames. Undeterred, Bushnell decide to test the waters by installing the prototype in a local Sunnyvale, California watering hole called Andy Capp’s Tavern. Later Alcorn gets an irate call from the bartender telling him that the game is broken and to “get the fucking thing out of here”. When he arrives at the bar to examine it, he discovers that the machine doesn’t work because the coin mechanism has been filled with so many quarters that it is overflowing and shorting out the machine. In 1979 this location for the first PONG beta test  becomes a comedy club called Rooster T. Feathers, where a sign on the wall will proudly trumpet its role in video game history, although they mis-label PONG as the “very first” video arcade game.

A Smash

With the evidence of the game’s success overflowing from the prototype’s coin bucket, Bushnell thus decides Atari will build PONG itself. He rents a 25,000-square foot, abandoned roller skating rink in Santa Clara, California and hires a few dozen locals. By late 1972 Atari is cranking out big blue and yellow PONG cabinets. The game is a smash, pulling in $300 a week in quarters, where a pinball machine might take in $40. Atari sells 8,500 machines in one year, at a time when 2,000 pinball games is considered a successful run. The PONG cabinets have a production cost of 500 dollars per unit and a sales price of $1,200 each. The game Bushnell considered a quickie knock-off will carry his company for the next two years. With success comes the need for some company branding, so freelance artist George Opperman is commissioned to create a logo.  Meant to represent a stylized “A” for Atari, his design also plays on the idea of two video game players facing off, with the PONG net between them. The design becomes known as the Atari “Fuji”, likely due to it evoking Japan’s famous Mt. Fuji. Opperman later heads up the graphics department for Atari’s coin-op division.

The following year sees the start of a trend that will dog the industry forever more…a flood of imitations following in the wake of a hit game. Literally dozens of PONG clones hit the market…makers including Nutting Associates, Bushnell’s old employer.

Some of the variations on the PONG theme include:

Elopong – Taito, Hockey TV, Pong Tron, Pong Tron II  - SEGA, Paddle Ball – Williams, Pro Hockey – Taito, Super Soccer, Tennis Tourney, Paddle Battle - Allied Leisure, TV Football, TV Ping Pong, TV Tennis - Chicago Coin, TV Ping Pong – Amuntronics, TV Table Tennis – PMC, Winner, Winner IV - Midway, Table Tennis – Nutting Associates

Along with all the clones Atari makes themselves:

Dr. PONG, Pin PONG, PONG Cocktail,
PONG Doubles, Puppy PONG, Quadrapong,
Rebound, Spike, Super PONG

Even old-time billiards and bowling champ Brunswick gets in on the action with 1973′s Astrohockey. That same year Dabney sells his half of the company to Bushnell, rattled by all this new competition with bigger cash reserves and larger presences in the entertainment sector. Atari, though, is the clear market leader, pulling in $3.2 million in video game sales for that year. Bushnell realizes that the only way to compete is to out-innovate the bigger players. Strong competition in this regard comes with rival Kee Games, headed by Joe Keenan. Several key Atari employees defect to Kee, including early Atari engineer Steve Bristow. In 1974 the company releases Tank, designed by Bristow. Gameplay consists of two tanks facing off in a maze, while trying to avoid land mines scattered about. The game breaks new technical ground by incorporating ROM chips to hold graphics memory, enabling it to display more complicated detail on-screen than the simple square blocks of PONG. Tank becomes the biggest hit of 1974, and it is revealed that Kee is actually a secret subsidiary of Atari, set up to circumvent a holdover from the pinball era where distributors demanded exclusive rights to a company’s games. The enormous success of Tank kills all that, as every distributor wants to get their hands on it. The same year of the game’s release, Kee and Atari ‘merge’ back into one company, with Joe Keenan as president of Atari. The company goes on to follow up Tank with three sequels, including 1977′s UltraTank, which allows players to battle the computer. There is also Tank 8, allowing eight players to stand around the unit and compete against each other. Other games manufactured by Atari under the Kee label are:

Elimination – 1973, Formula K – 1974, Spike – 1974, Twin Racer – 1974,
Crossfire – 1975, Indy 800 – 1975, Tank II – 1975, Flyball – 1976,
Quiz Show – 1976, Sprint II – 1976, Drag Race – 1977,
Sprint 8 – 1977, Super Bug – 1977, Ultra Tank – 1978

PONG Bounces Home

In 1974 Atari employees Bob Brown and Harold Lee propose a home version of PONG, able to be hooked up to any TV set. Lee, Brown and Alcorn produce the system, giving it the codename Darlene and starting a long Atari engineering department tradition of naming systems after female co-workers. However, retailers are skittish over the short life of Magnavox’s TV-based Odyssey game and the system languishes in the Atari labs. In 1975 they cut a deal with Tom Quinn, head purchaser for the sporting goods department at national retailer Sears, to sell the system under the Sears Tele-Games label. The order is for 150,000 units. Bushnell has nowhere near the facilities to produce that many in the time Sears wants them, so he taps venture capitalist Don Valentine for a $10 million line-of-credit to expand. By Christmas, Atari’s US$100 home PONG console becomes Sears biggest selling item, with reports of people waiting outside stores for hours to get one. And once again, manufacturers swarm out of the woodwork, this time with myriad versions of home PONG games.

PONG On A Chip

Pinouts for the GI AY-3-8606-1 "PONG-On-A-Chip" IC

Pinouts for the GI AY-3-8606-1 “PONG-On-A-Chip” IC

By 1976, the market has expanded from two companies involved in home videogames to 70, all making clones of Atari’s home game. This insane ballooning of the number of game manufacturers is facilitated by the new AY-3-8500 “PONG-On-A-Chip” LSI (Large-Scale Integration) microchip released by General Instrument Corp early in 1976. The single videogame integrated chip (IC) had been developed at the GI Glenrothes plant in Scotland in 1975, at the behest of Finnish TV manufacturer Salora Oy for use in a new TV design. As the popularity of GI’s game IC spread around Europe in a PAL TV version, work on a NTSC version for North American use was begun in Hicksville, NY.  The IC incorporates all of the circuitry needed for a videogame, including sound, and offers these games: tennis, soccer, squash and a one-player practice mode of handball, along with two rifle-shooting games. It also provides character generation for scoring, as well as externally selectable bat sizes and ball speed. Steep or shallow return angles can also be adjusted, and the choice of manual or automatic serving is also available. At a cost of $5 to $6 per chip, depending on volume pricing, the rush on this IC is so intense that only Coleco receives their full shipment order in time to mass manufacture a large enough supply of videogame units for sale over the 1976 Christmas season. The release of its Telstar video table tennis unit, retailing for half as much as Atari’s console, increases the company’s overall sales by 65 percent. Other game makers sell every console they can produce in 1976, helping to move about 3,390,000 units and creating estimated sales at $187 million dollars for the year. In 1977 General Instrument is producing between 1 to 1.2 million PONG ICs per month.  Later updates to the chip result in the faster AY-3-8606-1 “PONG” IC.

Warner Serves Up a Deal

In 1975 Atari pulls in 40 million dollars for the year, marking it as a hot high-tech company. In 1976 it draws the attention of Emanuel Gerard, a member of CEO Steve Ross’ inner-circle at huge media conglomerate Warner Communications. Gerard is part of a team, titled “Office of the President”, which is tasked by Ross to seek out possible acquisitions for Warner. With Atari making impressive revenues but run by a team of creatives lacking in big industry savvy, it seems a no-brainer to Gerard. Atari has also come to the personal attention of Ross in 1976, via a trip to Disneyland in California. Unable to pull his family members away from a Tank 8 game in the arcade there, Ross quickly realizes the profit potential in electronic games. On October 1, 1976 Nolan Bushnell signs the contract to sell Atari to Warner for $28 million, with Joe Keenan as President and Bushnell pocketing $16 million and the title of CEO. With this new infusion of capital, Atari starts development on a project that will revolutionize the way people play games, and render the dedicated PONG market obsolete. It will soon launch the videogame industry into the mainstream and make the name Atari as ubiquitous as Coke and Kleenex.  This project’s codename?  Stellalogo_stop


Sources (inert links are kept for historical purposes)



Digital Press, DP Library – www.digitpress.com/library/magazines/
MetroActive News and Issues | Nolan Bushnell – www.metroactive.com/papers/metro/09.16.99/cover/bushnell2-9937.html

Image of Joe Keenan and Nolan Bushnell together, as well as other information, from Video Games, “Video Games Interview – Nolan Bushnell”, by Jerry Bowles, pgs. 16, 19 – 20, 78 – 79, Vol. 1 Num. 1, Aug 1982
Image of AY-3-8606-1 IC pinouts from Radio-Electronics, “Build This – Wipeout Videogame”, by L. Steven Cheairs, pgs. 66-70, Sept 1980
Atari Gaming Headquarters – www.atarihq.com/
Image of Al Alcorn at the 25th anniversary of the C64 from flickr, Vonguard photostream
Atari Age, “Game-Grams”, pg. 6, Vol. 1 Num. 2 (relaunch), Jul./Aug. 1982
DP Royal Archives – Hollywood/Video Games pt 5 – digitpress.com/archives/arc00041.htm
CHEGheads Blog, “By Any Other Name: The Origin of Atari”, by Shannon Symonds, May 16 2011
The Arcade Flyer Archive – www.arcadeflyers.com/?page=home
Radio-Electronics, “Videogames – Videogame History”, by Jerry and Eric Eimbinder, pgs. 50 – 54, July 1982
Videotopia – Arcade Games – www.videotopia.com
Sensei’s Library, “Japanese Go Terms”, Aug. 11 2013
Atari Age, “Game-Grams”, pg. 6, Vol. 1 Num. 5, Jan./Feb. 1983
Image of exterior of Rooster T. Feathers from their Facebook photo stream – www.facebook.com/RoosterTFeathers/photos_stream
Photos of Winner IV were taken at the Musée Mécanique antique coin-op museum, Pier 45, Fisherman’s Wharf, San Francisco
Game industry News – Gameindustry.com
Image of Bob Brown from Video Games, “Future Shock Talk”, compiled by Bob Mecoy, photo by Victoria Rouse, pg. 38, Vol. 1 Num. 5, Feb 1983
OLD COMPUTERS.COM Museum ~ Coleco Telstar – www.old-computers.com/museum/computer.asp?c=665&st=3
Electronic Games, “A Decade of Programmable Video Games”, pg. 20 – 23, Mar. 1982
Redlands Daily Facts (UPI), “Computerized ‘pinball’ may catch on”, by Richard Harnett, pg. A6, Feb. 28, 1973
GameArchive – http://www.gamearchive.com
The Revolutionaries: Nolan Bushnell – www.thetech.org/revolutionaries/bushnell/i_a.html
Image of Al Alcorn’s Syzygy business card taken at the Videogame History Museum display, CGE 2014 in Las Vegas
Brownie Harris’ image of Manny Gerard playing Asteroids, and other information from New York magazine, “Steve Ross On the Spot” by Tony Schwartz, pgs. 22-32, Jan 24 1983
Discovery Online, You Shoulda Been There — Pong – www.discovery.com/stories/history/toys/PONG/birthday1.html
Electric Escape – The Atari Timeline by Robert A. Jung – www.digiserve.com/eescape/atari/Atari-Timeline.html#1972
Phoenix: The Fall and Rise of Videogames, by Leonard Herman – www.rolentapress.com

Referenced Books (click to open)



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