Have You Played Atari Today?
Atari’s infamous entry in the programmable home video game system race begins in 1975. The first Stella prototype is developed this year by Steve Mayer and Ron Milner, of the Atari consulting firm Cyan Engineering. Cyan is part of the company’s far-out Grass Valley, CA think tank, located northeast of Sacramento. A further prototype of the programmable system is then created by Cyan employee Joe DeCuir, with Jay Miner (who later designs the ground-breaking Amiga computer) further refining the Stella chip at Atari’s Los Gatos plant. The finished casing measures 23.5″ by 13.45″, constructed of plastic with a simulated wood grain panel on the front to help the machine fit in next to family TV console sets. Two banks of three silver toggle switches perch near the top of the device, controlling power, B&W or colour display, difficulty levels for each player, game select to navigate through the various modes offered by some games and a reset switch to restart an inserted game. Named the Video Computer System (VCS), it barely arrives in stores in time for the 1977 Christmas season. It comes with the pack-in cartridge Combat, designed by programmer Larry Kaplan, along with DeCuir and Larry Wagner. Under the initial design of the console, Combat had been planned to be integrated right into the ROMs of the machine as a built-in game. The included cartridge combines two early Atari arcade games, Tank by the Kee Games subsidiary, as well as Atari’s Jet Fighter, released to the arcades in 1975. A dedicated home version of Tank, the name of which vacillates between just Tank and Tank II, is also announced by Atari for release in 1977. The console comes with two joysticks, rounder variations of the controllers that will eventually ship with the VCS, with a single fire button and a flared tip. These sticks can be placed into two holders in the Tank II unit, allowing one player to control the left and right treads of the tank separately. In two-player mode, the sticks can be taken out for each player. Tank II is quietly canceled by Atari after the release of the VCS and its Combat game. With the VCS setup, there are two rheostat paddle controllers included as well, to facilitate comfortable play of the various PONG-type games to be sold for the console.
Pushing Bushnell Out
Running a 1.19 MHz 8-bit MOS Technology 6507 microprocessor, the designers of the system initially figure that it would only be playing tank battle games and PONG–esque titles, so the allocated ROM memory for the programs is 2K. It is eventually decided to bump that to 4K, even though Combat itself is only 2K and there is little hope that any program would ever need as much as the allowed maximum. Upon release, nine cartridges are introduced along with the system. With an initial retail price of $249.95, there is very little markup on the machines due to the high price of the components, although the game carts cost very little to produce and sell for around $40 each. Sound is sent through the speakers of the television hooked up to the device, allowing users to hear the action as loud or as soft as they like.
For two years the VCS struggles to find a niche in the marketplace, and Atari profits drop precipitously, substantially dragging down parent company Warner Communication’s stock price. There are major production problems, including defective chips and cases, and the easy-going Zen attitude of Atari co-founder and CEO Nolan Bushnell, who describes himself as “a bizarre manager”, starts to wear out his welcome even with Warner head Steve Ross, himself a chairman noted for having a laissez-faire management style. Things get so bad for the VCS that Bushnell dramatically stands up during an Atari/Warner budget meeting and suggests that the console has its price slashed and be discontinued by the company. It remains in Atari’s catalog, but under pressure from above, it is Bushnell who exits the company in 1978, with a multimillion-dollar package, but with strings attached. A 5-year “no-competition” clause is cited by Atari for a later lawsuit launched against Bushnell and Sente Technologies, a video game company he starts in early 1983. Atari and Bushnell eventually reach an agreement in the fall of that year, with his former company gaining the consumer rights to any arcade games released by Sente.
After Bushnell’s exit, the work atmosphere changes perceptively as new head Ray “The Czar” Kassar cracks down on the relaxed attitude towards dress and work hours that the ‘hippies’ at Atari had previously enjoyed. Following a $120 million infusion of cash from Warner, in 1978 Atari produces 800,000 VCS units. The console is selling; Atari moves over a million units between 1977-1979. Still, that’s only on the cusp of the kind of mass-market penetration Atari is looking for to be a real success. Indicating his allegiance to marketing over technical innovation, Kassar quickly halts funds for R&D and pours $6 million into an advertising campaign to help move VCS consoles off the shelves. As a whole, 1979 sees about 1-1.5 million U.S. homes with some kind of game console. These systems require games, so somewhere between 3-4 million cartridges are sold for them this year. The projected explosive growth of the VCS market also spawns an industry for third-party video games for the system, starting with Activision in 1979. Founded by disgruntled former Atari game programmers Alan Miller, Bob Whitehead, David Crane and Larry Kaplan, their venture is quickly followed by others entering the lucrative market, including Imagic in 1981.
By 1980, there are 36 cartridges available for the VCS, including a simplified version of soccer featuring three players to a side, plus goalies. After signing Brazilian football superstar Pele in 1980 to a five-year contract as spokesman, Atari quickly changes the name of the game from Soccer to Pele’s Soccer, resulting in one of the earliest celebrity athlete video game endorsements. But the company is about to make a move that will truly blow the lid off the home videogame industry: Atari becomes the first home videogame company to license an arcade game. It is Warner executive Manny Gerard who realizes the enormous home potential for arcade hit Space Invaders, originally made by Japanese game maker Taito and then licensed for North American release by Midway. He persuades Kassar to enter into an agreement with Taito for exclusive non-coin-operated, personal computer and handheld electronic game licenses for Space Invaders, and the January 1980 release of Atari’s home video game version becomes the killer app for the VCS; people rush out and buy the system just to play the game. There are 112 different variations on gameplay available, including invisible aliens, moving bunkers and simultaneous two-player action. Selling over a million cartridges in its first year, the arcade adaptation rakes in over $100 million for Atari, as well as moving tonnes of VCS consoles to people who want to play the game. However, the designer of the game, Rick Maurer, only earns his $11, 000 salary that year in the wake of Space Invaders. He eventually moves to the Atari arcade division and their more favourable bonus program.
Atari’s attitude towards its game creators is that they should remain anonymous and that the games are identified as a corporate creation rather than the effort of individual employees. In a response to that, Warren Robinett hides his name within his VCS game Adventure, a graphical version of Will Crowther and Don Woods’ text adventure Colossal Cave, aka Adventure. This is widely recognized as the first hidden “Easter Egg” within a video game, although it does attract the ire of upper management.
Over the next two years, the Atari VCS completely dominates the home videogame market, its only rival of any significance being Mattel’s Intellivision unit. Profits for the company jump from $6 million in 1979 to $145 million in 1981, on sales of over $1 billion. Bucking industry convention, the idea of keeping toy promotion only to the end-of-year Holiday season is thrown out the window; Atari begins pushing the pplo[0-0-= and all of its games throughout the year, including a $75 million ad campaign through 1982. The company also spends $334,000 for a commercial spot during Super Bowl XVI. Combined with $25 million in cooperative ad dollars spent by Atari dealers, Atari figures this makes them the biggest spender in advertising for a single brand in America. This year also sees Atari provide full sponsorship of a prime-time science education series of TV specials produced by two alumni from the PBS series Nova, Graham Chedd and John Angier. Titled Discover: The World of Science, it is produced in association with science magazine Discover, and airs on around 75 stations across the U.S, covering more than 80% of American homes. Hosting duties for the show are carried out by Peter Graves, of Mission: Impossible and Airplane: The Movie fame. Atari co-produces some episodes at a cost of $1 million each which promote computer use and literacy, a nice bit of synergy with the company’s 8-bit home computer line. After the video game market evaporates in 1983-1984, the science series finds a home at PBS. The VCS monopolizes family use of the television set to such an extent that TV pundits start referring to the “Big Four” networks: CBS, ABC, NBC, and Atari. Over the course of its production run, over 200 games are produced for the VCS/2600 by 40 manufacturers. Approximately 120 million cartridges are sold, and there are 55 different compatible videogame systems eventually released worldwide. Atari, the company that had shrunk Warner Communication’s market share during the early days of the VCS is now responsible for half of the mother corporation’s profits, with revenues for Warner in 1981 alone amounting to $1.23 billion.
Riding the Digital Wake
The VCS also becomes a cottage industry for third-party developers of hardware add-ons for the system. The SuperCharger is released by Arcadia and designed by former Atari engineer and home PONG co-creator Bob Brown, also serving as executive vice-president of the company. Another former Atari employee, Craig Nelson, is also involved in the venture. They are forced to change their company name to Starpath after threats of litigation from Emerson Electronics, maker of the Arcadia 2001 home game console. The SuperCharger, costing $44.95, is an outsized cartridge that plugs into the VCS and adds an extra 6K of RAM memory available to the system. It also boosts the graphics capability, allowing for hi-res output. A cable comes out the side of the SuperCharger and ends in a 1/4 inch audio jack, which users plug into the headphone jack of any regular cassette recorder. They can then play games sold by Starpath on audio cassette tape, with each priced at an attractive $14.95. Loading a game in via this procedure usually takes about 30 seconds, and a clean duplicate version of the game is offered on the other side of the cassette if something goes wrong with the original. Phaser Patrol is the tape packed in with the SuperCharger, a graphically advanced version of the popular game Star Raiders for Atari’s 400/800 computers, and then later for the 2600. Others games, such as Escape From the Mindmaster and Communist Mutants From Space, are released for the system by Starpath. The company is eventually bought out by computer game maker Epyx.