The Birth of the ColecoVision: Wishing Upon a Telstar

The Connecticut Leather Company is founded in West Hartford, Connecticut by Russian immigrant Maurice Greenberg in March of 1932, selling shoe repair supplies out of a shop at 28 Market Street. Joining the family business after graduating from Hartford’s Trinity College with a Bachelor of Science degree in mathematics in 1948, his son Leonard champions a move to leather craft kits featuring character licensing from the likes of Disney and Howdy Doody. He also moves the company into vacuum form plastic molding in 1957 and sells off the leather business as their plastic products like sandboxes, toboggans and wading pools go soaring off store shelves. Organizing as Coleco Industries in June of 1961 and holding an IPO with 120,000 shares available to the public in Sept, by the end of the decade the company is the largest manufacturer of above-ground swimming pools. Lawyer Arnold Greenberg joins his father and brother at Coleco in 1966 as general counsel, and the company sets the stage for its eventual development of toys and video games like the Colecovision by paying $2 million in Oct. of 1968 and acquiring Eagle Toys, a large, Montreal-based maker of popular rod hockey tables that becomes Coleco Canada.

1972 ad for Coleco Swimming Pools

Maurice’s two sons Leonard and Arnold take the helm of Coleco in 1973, jointly serving as CEO until December 1982. Leonard keeps an eye on the manufacturing and engineering side, with Arnold looking to the finances and marketing as president. In a quest for diversification, Coleco purchases Canadian company Featherweight Corporation, makers of the Alouette snowmobile line, in March of 1972. With a name change to Alouette Recreational Products, Ltd., this division of Coleco Canada diversifies into the off-season with the design and production of its first motorcycle, the AX-125 dirt bike, with disastrous results. A limited run of around 600 bikes, all flagged by the U.S. National Highway Traffic Safety Administration with multiple defects and subject to a safety recall. After 12 consecutive years posting record profits, Coleco posts a loss in 1973 of $1.2 million. The company divests itself of Alouette Recreational Products in 1975, selling it to Rupp Industries of Mansfield, Ohio. That same year, the success of Atari’s home PONG game opens up a new genre of entertainment, and shows Coleco the path out of possible bankruptcy.

Click button to play a recreation of PONG from 2006

The lynchpin for Coleco’s eventual Telstar PONG-type game console is the 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 General Instrument 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 the General Instrument PONG game IC spread around Europe in a PAL TV version, work on a NTSC version for North American use is begun in Hicksville, NY. The IC incorporates all of the circuitry needed for a PONG clone, 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.

Ralph Baer, inventor of the first home video game Odyssey by Magnavox, gets wind of this new “PONG” chip, and tips off his friend Arnold Greenberg. Thus does Coleco become General Instrument’s first customer for the sensational PONG-game silicon. 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, early enough to mass manufacture a large enough supply of videogame units for sale through 1976. The release of its Telstar video table tennis unit in May of the year, retailing for half as much as Atari’s console, increases the company’s overall sales by 65 percent; sales of Telstar for 1976 exceed $110 million.

The $49.95 Telstar home PONG clone is ranked at #5 for top-selling Christmas toys in 1976, according to a survey by Toy and Hobby World magazine; by 1979 there will be around 300,000 of the original Telstar unit sold. Coleco has been given a taste of the profits to be had in electronic video games, and it thirsts for more. A 60-day East Coast dock workers strike prevents the company from getting enough circuit boards for the 1977 Christmas season, but Coleco soldiers on in 1978 to produce nine more varieties of the Telstar unit, nearly bankrupting itself again as the home videogame market moves over to programmable, cartridge-based game units like Atari’s powerhouse VCS. They try to up their game with their own cartridge-based entries like Telstar Game Computer and Telstar Arcade, but the graphics of these machines aren’t much above PONG. With game manufacturers slashing the price of their own dedicated consoles up to 75%, Coleco is forced to dump over a million obsolete Telstar machines onto the market, contributing to a posted loss for Coleco of 22.3 million dollars, with the company holding over $35 million of bank debt.

The Third Wave: Making ColecoVision

The success of Coleco’s line of electronic handheld sports games such as Electronic Quarterback and the Head to Head series help keep the company afloat in the late 70’s, with $200 million in sales for the devices posted in 1979, and $400 million for the handheld electronic games industry overall in 1980, a year in which the company’s Head-to-Head Baseball is the #1-selling self-contained electronic handheld game. To handle manufacturing of these games, Coleco has scaled back on its bread-and-butter business of above-ground swimming pools. However, as the toy and games industry is want to do, that year more than 80 companies follow the money and shovel 300 electronic games onto the market.

By 1981 the bottom has fallen out of the handheld electronic games market, with Coleco in 1982 posting earnings of $7.7 million, down from $13.1 million the previous year. This leads the brothers to ignore the near disaster experienced with the Telstar PONG clones and fund a new R&D video game division to the tune of $1.5 million, in order to create a next-generation game system that will take a year to create and eventually land somewhere between 3$ – 5$ million in total development costs and become the ColecoVision. The team is led by Eric Bromley, who has experience under his belt heading the R&D departments of coin-op companies such as Midway. Bromley’s team is charged to develop a videogame system that will set the standard in graphics quality, performance, and expandability. Bromley himself had done preliminary work in designing and costing a system several years earlier, but the high cost of RAM kept an advanced console out of reach.

By 1981, however, RAM prices have dropped dramatically, so much so that the project is now within range of the target price-point set by Coleco. Bromley and Arnold Greenberg hash out the specs of the new system, giving it the placeholder moniker of ColecoVision until the marketing types can think up a better one. They never do, so the name sticks. At a cost of between $3 million to $5 million, the new system is developed around an 8-bit 3.58 MHz Z80A CPU, with 1K of RAM and 8K ROM.  Also on-board is the powerful Texas Instruments TMS9918A video controller chip, giving the system 16K of video RAM and allowing a screen resolution of 256×192. It has the capability to display 32 sprites on-screen at the same time, along with a 16 colour on-screen palette out of a total of 32. Three channel sound via the TI SN76489 sound generator chip is also thrown into the mix for good measure. The ColecoVision cartridges are 32K, the most memory of any system currently on the market.

The ColecoVision is a sturdy looking device, a large black box with two controllers that follow the Intellivision‘s lead by allowing overlays to be inserted over a 12 button membrane keypad. But the system splits the difference between the joysticks of the Atari VCS and the control disk of the Intellivision by having a short, thumb-busting mushroom-shaped stick which proves to be too imprecise for most gamers. At one point in the prototype stage, there are fly-wheel spinners called “speed rollers” included on the controllers, for greater player precision or throttle control in some games. Due to mechanical issues and costing considerations, these are dropped from the design, to resurface again in the later released Super Action Controllers by Coleco. Their omission might also be attributed to the fact that they make the ColecoVision controllers, already outrageously large in smaller hands, even bigger. The machine’s durable cartridges come with connecting boards that are designed to withstand 10,000 insertions into the console cartridge slot, the equivalent of inserting a cart three times a day, every day, for ten years. Probably the greatest promise of longevity of the ColecoVision, however, comes from the large port in the front of the box covered by a sliding panel, called the Expansion Module Interface. Into this maw is where purchasers will plug in the many add-on modules planned to be released for the system. It is Coleco’s insatiable desire to fill this hole that will eventually lead it, and the ColecoVision system, to destruction.

Koming with Kong. Donkey Kong, That Is…

The key to the success of this new machine is to be its pack-in cartridge, an adaptation of the smash arcade hit Donkey Kong. Coleco sends Bromley over to Japan to negotiate the rights, where imposing Nintendo chairman Hiroshi Yamauchi presents him with an ultimatum. Either agree to a pay Nintendo a $2 royalty per cartridge sold and wire a $200,000 advance by the end of the day or risk losing the license to either Atari or Mattel, both of whom are scratching at the door looking to buy. Bromley makes the call to Greenberg and convinces him that the rights to the biggest hit since Pac-Man are within their grasp. A verbal agreement to the Donkey Kong license is made. Bromley later gets a scare when Nintendo informs him they have changed their minds and decided to give Atari the license, but an impassioned plea to Yamauchi persuades the usually iron-willed Nintendo president to stick with the original Coleco deal and later grant Atari only the home computer rights.

ColecoVision Donkey Kong Lawsuit: Coleco v. Universal Pictures

Coleco’s tight adaptation of Donkey Kong for the ColecoVision, realized by about eight months of programming work within the company, propels it to becoming one of the greatest system-sellers in video game history. There will not be a game bundled with a console more effective at showcasing the strengths of the system until 2006 when Nintendo includes Wii Sports with the Wii, perfectly showing users the fun and challenge of swinging its motion-sensing controllers. In 1982, lawsuits are swung against both Nintendo and Coleco by Universal Studios, claiming Donkey Kong and its various ports infringe on their King Kong movie copyright and demand royalties from their sales. This suit is probably helped along by such references in the media of Donkey Kong being “loosely based” on King Kong. A trademark infringement action is also filed, to the tune of over a $100,000,000. With the large sum of money already invested in the license looming in their minds, Coleco cuts a deal with Universal, giving them 3 percent of Donkey Kong sales. Nintendo, however, fights the lawsuit, offering numerous in-court demonstrations of gameplay vs. movie plot. In 1983, Manhattan District Court Judge D. J. Sweet eventually finds for Nintendo, ruling that Donkey Kong has “a totally different concept and feel from the drama” and that “no reasonable jury could find likelihood of confusion”. It is also discovered that MCA Universal themselves had argued in court in 1975 that the King Kong copyright had lapsed into the public domain, in a lead-up to the movie company producing a remake of the 1933 original, eventually released as King Kong in 1976. Appeals by Universal continue to fall in Nintendo’s favour, from the Federal Court of Appeals all the way to the U.S. Supreme Court. The Second District Court of Appeals unanimously upholds the District Court decision in 1984, stating “the two properties have nothing in common but a gorilla, captive woman, a mere rescuer and a building scenario,” and that “the two characters are so different that no question of fact was presented on the likelihood of consumer confusion.”. When Nintendo countersues claiming tortious interference with licensees and unjust enrichment, in 1985 Judge Sweet finds that Universal has operated in bad faith with spurious litigation and rules that the media company must pay Nintendo $1.8 million in damages and legal fees. The Supreme Court, without comment, refuses to hear an appeal against this judgement on Monday, December 1, 1986, so the penalties against Universal stand. These rock-solid legal outcomes prompt Coleco to eventually file suit to receive a portion of their lost royalties. In February of 1987, an out-of-court settlement has MCA Universal buying $20 million in preferred stock in Coleco, which will convert to 2.2 million shares in the company on the first of January, 1995. MCA promises not to buy any more Coleco stock for the next eight years, pending Coleco’s approval of such a purchase. This deal will put MCA’s equity investment in Coleco as one of the largest, at 23%.

Donkey Kong is also released for the VCS/2600 by Coleco, in early 1983. Game design is contracted out to small engineering and development house Wickstead Design Associates, where Garry Kitchen programs the hotly anticipated title. His version of Nintendo’s arcade hit sells over 4 million copies on Atari’s ubiquitous game platform. Kitchen will eventually end up joining his brothers at Activision.

Click button to play Donkey Kong on the Atari 2600

ColecoVision: That Arcade Quality

Along with Donkey Kong, twelve additional cartridges are announced along with the ColecoVision. While Atari had pioneered the licensing of arcade games for home play with Space Invaders, Coleco makes this a key part of their strategy, aggressively seeking available licenses for coin-op games instead of concentrating on creating original titles. “Arcade games are the backbone of demand in this business,” company president Arnold Greenberg tells The New York Times in November of 1982, “The key to tapping that demand is licensing, which will continue to be a very important part of our operations.”

The potential of ColecoVision and the Greenbergs’ smart moves in the market leading up to the console’s release juices Coleco’s share price on the NYSE, moving from $6.75 per share at the beginning of 1982 to a high of $19 by the middle of July. After a year of development time, the ColecoVision makes its February debut at the Toy Industry Association’s Toy Fair in New York City, and Coleco starts production of the console in July. The ColecoVision sees a slow rollout, with limited amounts of consoles available to retailers first in the Boston and NYC area. Other major markets like L.A. and Chicago, and eventual national distribution, continue through late-summer and fall of 1982, all at a competitive retail cost of $199 at the high end for the unit. In comparison, Intellivisions are selling at the high end for $250, minus a $50 rebate offered by Mattel, and the Atari VCS for $200. The more contemporary Atari 5200 retails at a high end price of $269. The initial ColecoVision units that come off the line at Coleco, some 50,000 of them, end up causing the company trouble. They were released to stores before the FCC gave their approval for their design on Sept. 27. The next month, Coleco agrees to a $2000 FCC fine for what is termed “marketing violations” and will also notify purchasers of the possibility of radio interference from the affected consoles, and how to correct it. Quantities of “launch” games for the ColecoVision are as scarce as the console, especially in the western U.S. Distribution of the powerhouse console outside of North America is handled by CBS Electronics. If one was lucky enough to pick up the console in the official nationwide launch month of August, there wasn’t a single “launch title” game available for purchase for ColecoVision: you only had the pack-in Donkey Kong cartridge to play with. Cosmic Avenger, Smurf: Rescue in Gargamel’s Castle and Venture are the first ColecoVision games to hit the store shelves, in September. These are followed in October by Carnival, Ken Uston’s Blackjack/Poker, Lady Bug and Zaxxon. Mouse Trap and Turbo round out the 1982 ColecoVision game releases, in November. Three other Exidy games are also announced as arcade conversions, but ultimately cancelled: Side Trak, Spectar and Rip Cord.

Click button to play arcade version of Venture. Hit Tab after loading to set controls

The department inside Coleco developing these translations is staffed by around 30 artists, designers and programmers at start up. Once the rights to an arcade game is secured for the ColecoVision, the design team receives an arcade unit that joins its brethren in the “game room”. Lacking any technical source material, the game designers at Coleco must videotape gameplay from the coin-op version for reference while translating the game. The usual timeframe for development of a game at Coleco is three to four months. While the conversions are not flawless interpretations, they are one giant step towards capturing the graphics and game mechanics of the original coin-op for play at home. One fly in the ointment, however, is the seemingly interminable (at least for an anxious kid desperately waiting to play the game) ten-second or so delay between turning on the console with a cartridge inserted, and the game selection screen showing up. This can be chalked up to Coleco wanting to get as many arcade game hits out on their game machine as possible, as quickly as possible; the initial suite of games for the ColecoVision are programmed in PASCAL, an easier language to create in than the machine language the Z80 CPU natively deals in. While this allows for speedy development, the console must put the brakes on and parse the information from the cartridge at the start of each of each new play session.

Click button to play arcade version of Zaxxon. Hit Tab after loading to set controls

The ColecoVision hits the market in the midst of the public relations war Atari and Mattel are waging against each other. The console is an instant success, with the first run of 550,000 machines selling out by Christmas 1982…. although in an eternal struggle Coleco will fight with its production capacity, 500,000 of these purchases end up backordered into 1983. In the first quarter of 1983, Coleco reports that one million of the devices have been sold in total, along with eight million cartridge sales overall for the company. Coleco’s amazing stock price run has it named the best performer on the NYSE for 1982, increasing  to 36 3/4 per share during the Christmas season. Helping the balance sheet along is the incredible reception of Coleco’s electronic tabletop replicas of arcade games, including Pac-Man, Donkey Kong and Galaxian. Coleco reports that over 2.2 million of these tabletop games have been ordered by retailers since the beginning of 1982, although unsaid is that only 200,000 units have actually made it off the production line. Demand is so strong that Coleco must withdraw their TV ad campaign for these devices in the NYC area after their launch, due to a lack of ability to keep up with demand.

Click button to play Coleco tabletop Donkey Kong. Left CTRL button to start, arrows to move and Left CTRL to jump

In front of the slow rollout of Colecovision, Coleco also leverages their arcade game licenses with versions for the Atari VCS starting at the end of July of 1982. Cash ape Donkey Kong arrives on the Atari VCS scene first, along with shooting gallery game Carnival, adapted from the Sega coin-op. Zaxxon and Turbo are scheduled for the following few months. Mousetrap, as well as Smurf Action are to hit shelves by the Christmas season. The unfortunate sounding latter title is eventually renamed Smurfs:Rescue from Gargamel’s Castle.There are also home versions of games for the Intellivision released by Coleco, including a dubious Donkey Kong adaptation released towards the end of August. It takes a little over a year before ColecoVision gamers start enjoying the fruits of third-party game support for their system, with products like  platformers Popeye by Parker Brothers in August of 1983 and Miner 2049’er by Microfun in October. Meanwhile, Coleco’s exported games to other systems meet with great success, and the company’s financial performance reflects it. By the fall of 1982 the company’s performance on the stock exchange leads the New York Times to name Coleco as one of its 10 Super Stocks of 1982. Sales revenue for the company has tripled from $178 million in 1981 to $510 million through 1982.

Click button to play Popeye on ColecoVision. Hit Tab once loaded to choose controls

In light of Coleco’s astounding success, their sprawling factory and warehouse complex in Amsterdam, NY is a hive of activity. Things get so intense, in fact, that safety concerns over the deteriorating conditions of freight elevators in Building 8 are ignored. In order to get around damaged doors and gates, safety interlocks are bypassed to allow the elevators to move while the doors are not fully closed.  On February 17, 1984, Coleco employee Blaine Lamson is on the third floor of Building 8, attempting to load pallets onto elevator #12 with a forklift truck.  Due to some jury-rigging with the elevator’s control lever, the elevator begins to rise with the forklift half inside, and Mr. Lamson is crushed to death.  A $10,000 civil penalty is eventually levied against Coleco in May of 1984 by the Occupational Safety and Health Review Commission, with the company found to have been willfully negligent in ensuring the safety of their employees.

ColecoVision: “I must have this machine!”

 

In 1982 my Atari VCS is three years old, and while I’m enjoying the new games being produced for the system by Activision, the horrible Pac-Man translation from Atari really starts me thinking it might be time to put the old beast to pasture and move on to a better system. I look at the Intellivision as a possible upgrade, but the games really don’t appeal to me, along with that crazy control disc. That year my family and I take our annual trip to the Canadian National Exhibition in Toronto, and coming through the Dufferin Street gates I notice a large crowd gathered around a big geoscopic dome. From within, the magical sound of electronic boops and beeps drifts out of the entryway and plays its siren song in my young ears, and as I enter a girl hands me a button that says “Try ColecoVision“. “What the heck is a ColecoVision?” I wonder, and the answer is like a slap in the face when I look around inside. Amid smaller displays with Intellivisions and VCSes crying to be heard looms a huge set-up with a line of people standing in front of a bank of monitors playing what looks from a distance like the arcade version of Donkey Kong. As I approach, I’m amazed to see that this game is being played on a home system! The ColecoVision! I stand in the large queue and wait my turn, inching up the line, anxiously shifting from foot to foot like I have a full bladder, eternities ticking away as I watch those other lucky bastards play the game. Finally, I’m up against the rope separating me from the play area, and miracle! Someone who must have been playing for at least three hours is led away by an attendant and I fly to the monitor, a large popping sound echoing through the place as the air rushes in to fill the vacuum where I had been standing microseconds before. I look at the machine secured to its pedestal, large and black and imposing. I pick up the controller, surprised by the size and heft, and press the start key. There’s Mario! He looks like Mario! There’s the gorilla Kong! He looks like Kong! I don’t even notice deficiencies like the reverse positioning of Kong or the lack of detail on the barrels or the missing ‘mudpie’ level. For once, the pitch phrase “The Arcade in Your Home!” doesn’t come off like so much hyperbole. As my thumb strains against the stiff mushroom controller, guiding Mario over barrels and gaps and rivets, an epiphany washes over me like rain: I MUST HAVE THIS MACHINE! Then suddenly, Oh No! The screen goes blank! A hand on my shoulder! Reality snaps back as I find myself back in Toronto, Ontario, being led out of the play area to the popping sound of another vacuum being filled behind me. The 5-minute play interval, now seeming like 3 seconds instead of 3 hours, is over. I get in line three more times, and each session at the ColecoVision is as wondrous as the last. I then wander around the rest of the displays, check out Lost Luggage for the VCS, play Mattel’s Downhill Skiing, …but even the graphics of the Intellivision seem like images chiseled onto a stone tablet compared to the Coleco. And the VCS? Pfffft. What had been cutting edge a couple years ago was now hopelessly antiquated. That Christmas, I got my ColecoVision.

Filling the Hole: Expanding ColecoVision

Expandability is what Coleco promised, and they keep to their word with the release of two hardware add-ons in 1982. Expansion Module #1 is the Atari 2600 converter, the first such hybridizing device for a home console, selling for about $60 MSRP. It allows users to plug in the hundreds of cartridges available for Atari’s system and play the games on the ColecoVision. Scheduled for release in August, then bumped to October, 150,000 converters are sold within the first three months. Eventually, however, it becomes apparent that due to slight differences between the original cartridge slot on the 2600 and the one on the expansion module, some game cartridges for the Atari system to not make full contact when inserted. Starpath’s Supercharger cartridge adapter is also a victim of this discrepancy, although the company eventually includes an extender with their unit to make it fit Coleco’s adapter.

Courtroom Games: Atari v. Coleco

Along with the Atari converter, in 1983 Coleco shamelessly comes out with a stand-alone VCS/2600 clone, priced at around $100 and called Gemini. It does everything the 2600 can do, with the added touch of combination joystick/paddle controllers. Coleco helpfully packages their own 2600 version of Donkey Kong with the clone, along with their adaptation of Exidy coin-op Mousetrap. In the wake of the announcements of these two hardware releases comes the inevitable flurry of litigation. It starts in late 1982, with a $350 million lawsuit from Atari, filed with the Eastern Division of the Northern District Court of Illinois, in Chicago. The charge is infringement by Coleco of two Atari patents: US 4112422A  was filed back in 1976 by Steve Mayer and Ron Milner, during the development of the VCS, titled Method and apparatus for generating moving objects on a video display screen. To keep things brief, it deals with the method of how the VCS uses a beam to draw images on a screen, controlled by a microprocessor, with the image data read from system ROM which receives it from the RAM of a game cartridge. The second patent, filed in 1982, deals with how the VCS produces sound effects. Atari also includes various accusations of deception in Coleco’s marketing of the expansion module, as well as describing Expansion Module #1 and the Gemini as a mere repackaging of the VCS hardware. Or as Atari chairman Ray Kassar describes it, “…merely a thinly disguised copy of Atari’s VCS unit.” And to round out the litany of Atari complaints, they accuse Coleco of confusing the public with prominent referrals to trademarked Atari games in their advertising.

Coleco files a countersuit in the same court for $550 million, arguing that Atari had produced games based on circuitry referred to in the Mayer/Milner patent a full year before filing, proving in their mind that the company knew the technical obviousness of the design. They also claim that Atari is infringing on American anti-trust laws by using various strong-arm tactics to maintain a monopoly in the video game market. Accusations such as patent abuse and threats to game distributors who carry competing products to Atari are mentioned. On March 23, 1983, the two companies propose a settlement dealing with all issues raised, with the case formally closing four days later. The settlement requires that Coleco pays royalties to Atari on every Converter and Gemini sold as a licensee of Atari’s technology. Despite this legal rigamarole, there is also an adapter planned to allow the ColecoVision to play Intellivision cartridges, but it’s doubtful at that point whether Mattel would put up such a struggle at having a company produce another purchase path for their software. At any rate, while reports of the device coming out in early 1984 are floated, the Intellivision adapter never makes it to store shelves.

The second module is the Expansion Module #2 driving controller, consisting of a steering wheel and foot pedal, and is run off of C-Cell batteries or the separately purchased Battery Eliminator from Coleco. Packed in with the driving controller is a translation of Sega’s arcade driving game Turbo. The $60 hardware is required equipment in order to play coin-op conversions of Bump ‘N Jump, Destructor and TV tie-in game Dukes of Hazzard. The module plugs into joystick port #1, and a controller in the other port is used as a gear shift.

Click button to play Bump ‘n’ Jump on the ColecoVision. Hit Tab after loading to choose controls

Other additional control devices are also introduced, such as the complicated Super Action Controllers, with the Super Action Baseball cartridge included with them. These enlarged controllers feature four colour-coded trigger buttons conveniently placed where your fingers can rest upon them, as well as a 12-key keypad, a large joystick and speed roller spinners located on the top face. Early prototypes actually featured a force-feedback system, but such a farsighted option is eventually costed out of the devices before their release in September of 1983. Other peripherals abound, such as the Roller Controller, sold along with Coleco’s port of the 1982 shooting gallery arcade game Slither, by GDI.  Another interesting device is the Kid Vid Voice Module, sold by Coleco in 1983, also known as the Sound 1 Voice Module in Canada. The technology behind the device is developed by none other than Ralph Baer, creator of the Odyssey for Magnavox, the first home video game. Coleco redesigns Baer’s invention into a device for their 2600 clone Gemini, moving from an original prototype into something resembling nothing more than a regular black tape recorder. The Kid Vid uses data on one track of a tape cassette to drive the audio on the other track, providing recorded speech, sound effects and music in synchronicity with a video game played on either the Gemini or an actual Atari 2600. Released in 1983 during troubled times at Coleco, only two game packages are made available for the Kid Vid: Smurfs Save the Day, and a game featuring the Berenstain Bears, packed in with the device.

Leading Vision: ColecoVision Catches On

In 1983 the ColecoVision takes its place at the top of the video game heap. It has sold 1.5 million units since its release, moving 900,000 systems in ’83 alone beating the mighty 2600, the Intellivision, and Atari’s new 5200 Supersystem. For the first half of the year, this equates to over $300 million in sales of ColecoVision consoles and cartridges. There are 29 game publishers producing game for the system, although Coleco, enjoying the popularity of its console, strong-arms dealers by refusing to indulge them in the buy-back policies of unsold games other manufacturers are forging. With the Atari converter, the ColecoVision has the largest game library of any console on the market. Although the company forcefully pursues licenses for arcade games for their system, they are outmaneuvered on occasion. After they forge an agreement with coin-op game company Centuri for several of their arcade hits including Vanguard and Phoenix, Atari swoops in and snaps up the rights with a higher bid. Parker Brothers take a similar action by outbidding Coleco for the Popeye home license. Like other major players in the industry, by now Coleco is leveraging thier licensing deals into cartridges for other company’s game systems. This runs them into trouble when their cartridges for Intellivision are found not to be compatible with the updated Intellivision II.

ColecoVision ad featuring special effects by John Dykstra’s Apogee, 1982
In 1983 Coleco announces a partnership with visual effects wizard John Dykstra, winner of the Academy Award for Best Visual Effects for Star Wars. Dykstra and his Apogee effects company have produced the effects for several impactful TV spots for the ColecoVision, and the new venture is to have the company designing graphics and concepts for new games on the system. It’s not known if anything might have come to fruition through the partnership between Dykstra and Coleco, especially considering Dykstra’s reported desire to create “experimental” games for the company.

Creating the Coleco ADAM Home Computer

The success of their console is firmly established, so of course, Coleco takes the next seemingly obligatory step and risks it all with a precarious reach for the Holy Grail of video game manufacturers…the Home Computer Conversion! First, comes the ColecoVision Super Game Expansion Module #3, aka the Super Game Module, announced at the February 1983 Toy Fair in NYC with a planned release reported to be in July, then bumped to the fall, at a retail price of $125. This box, the width of the ColecoVision and slightly less thick in height, is inserted into the expansion slot and features 128K of extra memory, allowing room for souped-up versions of games that will be yet another step closer to flawless interpretations of the arcade originals, including enhanced graphics, animations and added game elements such as intermission, formerly omitted screens and the ability to save players’ high scores and initials. These are facilitated by a high-speed storage drive in the Super Game Module that accepts what are originally referred to by Coleco as Super Game Wafers; small tape cartridges 3/16-inch thick that, with a 500K storage capacity, hold 125 times the information of a 4K Atari 2600 cartridge. About the size of a business card, inside is near 50ft. of 1/8″ magnetic tape. The media is otherwise known as the stringy floppy and the hardware to play it the MicroDrive, made by a company called Exatron. The company, eventually changing their name to Entrepo, also markets standalone versions of the technology for computers such as the Commodore VIC-20 and Apple II.

To be Included with the Super Game Module are two enhanced versions of current ColecoVision games: Super Donkey Kong, and Super Gorf. “Super” versions of Buck Rogers Planet of Zoom, Donkey Kong Junior, Zaxxon, Turbo, Smurf: Rescue in Gargamel’s Castle, Subroc and Time Pilot will be available for purchase. With Atari aggressively seeking ownership of the magnetic media rights to Donkey Kong from Nintendo (see ADAM section below), Coleco decides to drop Super Donkey Kong and include the Super Buck Rogers tape with the SGM. The arcade adaptations are intended not only to match their source games for gameplay but would actually contain extra screens and gameplay features. Continued problems with the performance of the stringy floppy drive and Exatron’s inability to meet production rates of the drive required by Coleco lead the toy company to shelve the Super Game Module mid-way through 1983. Another reason for the delay is that another project has taken over the Coleco assembly lines, a top-secret project previously developed via 34 million dollars of R&D cash: what is originally referred to as the Computer Expansion Module. Talk had inevitably  been floating around from Coleco since the introduction of the ColecoVision of a keyboard-only computer expansion priced at a range of a mere $100-$200. Now dubbed the ADAM Family Computer System, the company is going all in: one version is an entire stand-alone home computer system with printer and tape storage, and the other a package that includes the same equipment but plugs into the ColecoVision game unit and takes on the Expansion Pack #3 label. While Coleco assures the press that the Super Game Module will eventually see store shelves in 1984, it never materializes.

ADAM is introduced at the June 1983 Summer CES in Chicago, in the 1000 square foot Coleco booth and heralded by flashing lasers and other elaborate fanfare. The unit itself, however, is ensconced under a rotating, tinted glass case and no show goers are allowed to touch it. Reporters eventually notice that the box on display is not driving the demonstration, but instead is being run by another device hidden under the table. The brains for ADAM are very similar to its ColecoVision cousin.  They are composed of an 8-bit, 3.58 MHz Zilog Z80A CPU with 80K of RAM (expandable to 144K), and 32K of ROM. A Texas Instruments graphics chip offers 16K of video RAM, as well as 16 colours and the ability to move 32 sprites around the screen. As for a pixel count, ADAM sports 256×192 screen resolution. There is a sound chip by TI as well, giving the system three-channel sound capability. These are also supported by four Motorola 6801 CPUs: one as a network controller, the other three each handling memory I/O, the tape drive and the keyboard. All run at a 1Mhz clock speed and they allow the ADAM to offer users its flavour of multitasking. There are three internal slots accessible to users within the main component, called the Memory Console, along with a 6-pin phone connector called AdamNet for various promised peripherals. The stand-alone system features an external cartridge slot into which ColecoVision cartridges can be inserted and played, as well as two game controllers. Both systems include a full-size, 75-key keyboard, with a stepped layout and fully-travelling keys. Several of these keys are labeled and dedicated to the built-in word processor SmartWRITER, such as MOVE/COPY, PRINT and UNDO. The keyboard also sports six Smart Keys labelled with Roman numerals from I to VI.

A move made just days before the computer’s debut at CES changes the previous wafer tape drive system into a digital cassette tape drive. This accepts what are now called Digital Data Packs, a storage medium developed in-house at Coleco that replaces the stringy floppy technology planned for the Super Game Module. The Data Packs ADAM is to use are high-speed 500K tape cassettes, of the same ferric oxide formulation found in high-end audio tapes. Their speed at retrieving data is not quite up to snuff compared to floppy drives, but still sport a data transfer rate of 1500 characters per second or 20 times faster than ordinary tape cassettes, due to circuitry inside the drive Coleco refers to as FasTransfer. Due to the extra CPUs controlling peripherals like the tape drive, the system can load in the high-res graphics from tape ahead of time in games like Buck Rogers: Planet of Zoom, while the user is playing the previous screen. At least one reviewer, Michael Blanchet of the magazine Electronic Fun with Computers & Games, expresses concern over the durability of the data tapes: in his review of the ADAM version of the Buck Rogers game, Blanchet notes that every time the game is reset to play again, the tape has to rewind back to the start, leading to a lot of wear and tear on the media. In his review he notes graphical glitches appearing increasingly on-screen over 50 play sessions. There is space provided in the Memory Console for an optional second data drive, which is planned to run customers about $150. By the time the ADAM is eventually released, the memory size of the data packs has been reduced to 240K. Also promised as a vector to video game play is an inexpensive laserdisc add-on for the ADAM, scheduled for release in “early” 1984. This would allow for play of a version of the smash-hit arcade laserdisc game Dragon’s Lair, licenced by Coleco to the tune of $2 million, along with first rights of refusal for any other games by Cinematronics/Starcom. Coleco’s laserdisc add-on ending up a pipe dream, Dragon’s Lair would eventually be brought to the ADAM in conventional graphics form in 1984.

Click to play the arcade version of Buck Rogers: Planet of Zoom

Also included is a humongous, letter-quality daisy-wheel printer rated at 120 words-per-minute, and by some reports rated in decibels as loud as a construction site while operating, as the printer noisily hammers letters onto paper and advances to the next line. FYI, 120 WPM is  about five minutes to print a page of text. Only 10 pitch type size Diablo Pica font is available, but other daisywheel typesets can be purchased. Printing is bi-directional across lines, and the system uses a standard ribbon cartridge for ink. Budding novelists are also stuck with 36 characters per line, but an optional circuit board is promised that will bring with it a full 80-character line. Further, the platen only works in friction feed mode… optional tractor feed is promised to come later for around $150. An unusual configuration has the printer also serving as the entire system’s power supply, so the printer must always be turned on in order to operate the ADAM, and it will become precipitously warm in spots, reportedly up to 15C above room temperature over time. This setup also means, in the event of a printer breakdown, the computer cannot be used until the device is fixed. In the ADAM expansion system, the box containing the CPU and expansion slots has a somewhat lower profile than the stand-alone system, since the components in the original ColecoVision game unit do not have to be included. The add-on has its own port for video output to a monitor, as well as two external joystick ports, but TV output to channels 3 or 4 is handled by the original game console, which the CPU box fits onto through the expansion slot at the front of the console. An included System Interlock Tray keeps the ColecoVision and ADAM module attached to each other. In the standalone version, two ColecoVision controllers are included, and in both versions of the computer, one of them can be mounted to the right side of the keyboard via a cradle. The controller can be used to move the on-screen pointer and as a numeric keypad.

 

A blank Data Pack is included with the computer, as well as SmartBASIC and Super Buck Rogers Planet of Zoom. An added bonus for the computer, since the ADAM is running a Z80 CPU, is its compatible with the popular CP/M operating system. At the summer 1983 CES, a company called InfoSoft debuts a compatible operating system for ADAM titled I/OS, allowing the computer access to the vast library of CP/M software. The ADAM can also handle AppleSoft BASIC programs, albeit with some modifications to the program. Hardware peripherals promised for the ADAM after its release include a 64K memory expansion card for under $200, a 5 1/4 inch floppy drive for about $350, and a 300 baud modem for around $50. Documentation included inside the enormous ADAM box includes a reference guide for the SmartWRITER program and a manual for the Buck Rogers game. Also nestled inside is a 64-page set-up manual, a programming guide for SmartBASIC, based in part on Russ Walters’ general purpose reference work The Secret Guide to Computers. As a well-known computer guru from the Boston area, Walters gained a certain amount of infamy by insisting that readers with computer issues call his phone number directly with queries, day or night. In fact, the ADAM manual gives the same advice, if their listed support number is busy (which it usually was). Finding the info from Secret Guide, in their words, “inadequate”, Coleco eventually re-writes the BASIC manual, removing mention of Walters and his guide. Walters then threatens to sue, stating that his contract with the company stipulates that these mentions are required. Things are eventually settled out of court for $20,000, with the settlement requiring that Walters must stop criticizing the ADAM to callers.

Over a Barrel: Coleco v. Atari, Again

The complete computer package, with an announced $600 price-tag for the stand-alone version that’s far below any other comparable system cost up to that point, attracts a lot of buzz at the Chicago CES in 1983, with entertainment trade paper Variety calling it the “undisputed hit” of the show. On the show floor, Coleco demonstrates the added storage capabilities of the ADAM‘s Data Pack cassettes by running its version of Super Donkey Kong on the demo machine. A much-improved home version of Nintendo’s arcade game, featuring the intro with Kong climbing to the top of the structure as well as the 4th mud pie level previously missing in all other versions, the game quickly draws the ire of Atari execs attending the show. They are there to seal a deal with Nintendo to distribute the company’s hit Japanese game console, the Famicom, world-wide. More salient, Atari has also recently secured magnetic media rights from Nintendo to distribute Donkey Kong and Donkey Kong Jr. on computers. Atari head Ray Kassar complains to Nintendo that they are in breach of contract over Coleco’s version for the ADAM computer. Nintendo president Hiroshi Yamauchi subsequently rakes Coleco over the coals, and no assertions about ADAM being both a game console AND a computer assuage him. Coleco eventually pulls the game from the ADAM library, removing it as a pack-in game inside the ADAM box, to be replaced by a Super version of Buck Rogers Planet of Zoom.

Click to play Super Donkey Kong on the ADAM computer

The kerfuffle delays the Atari/Nintendo deal long enough to expose serious financial problems at Atari. In July of 1983, Ray Kassar suddenly steps down as Chairman and CEO, after his company posts a giant loss for the fiscal quarter, and with him embroiled in an insider trading scandal.  When John J. Morgan comes over from Philip Morris to replace him, the new CEO places a freeze on new projects and no deal is signed between the two companies. Nintendo eventually goes it alone, and the result is the famous NES console, released wide in North America in 1986.

Super Donkey Kong on the Coleco ADAM, with intro screen and mudpie level, 1983To further complicate matters, a day after the ADAM release date announcement, the consumer division of AT&T announces a developing joint venture with Coleco; an online interactive game service using existing phone lines. Instead of aping the existing telegaming services like Gameline for the Atari VCS or Playcable for the Intellivision, the system would feature unique two-player games created by Coleco but outside of the ColecoVision milieu. Purchasing a 300 baud modem projected to cost under $100, subscribers would call a 900 flat-rate phone number and be matched with a fellow gamester, playing strategy, arcade and “entertainment software” on either a video game console or a computer. High scores would go on record, and national tournaments a distinct possibility. Scheduled to begin operation in a few U.S. cities in 1984, the system never gets a dial tone.

The Coleco ADAM Home Computer Falls From Grace

On tap for Coleco ADAM users is third-party software support, including Sierra On-Line porting over several of their Hi-RES adventures like Ulysses and the Golden Fleece and Cranston Manor. The enthusiasm shown by the press for such a cheap, complete and well-supported  computer package has Coleco stock riding on a high, rising 14 points surrounding the ADAM introduction at Summer CES and priced at $65 per share by June of 1983. However, dealers have started grumbling about the price markup of the system; at $600 retail for the full system and $400 for the add-on, the wholesale price of around $560 for the standalone and $415 for the add-on leaves near non-existent wiggle room to make any money on ADAM. Slipping release dates also start causing nervous rumbles. The late August release timeline promised at CES turns into September, with a further announcement that In order to make way on the production line for ADAM, Coleco has paused manufacturing of the Colecovision in the US… adding the assurance that production of the popular console will resume in early 1984. The release date for ADAM then continues its slide to mid-October, but as that month progresses there is still no sign of the computer system on shelves. Not only has Coleco’s delays in submitting the printer software to the FCC for approval caused these sliding dates, but also a rash of problems discovered in the system’s design. The built-in SmartWriter word processor is severely lacking in standard editing functions and is painfully slow to move around in. Coleco further incenses potential buyers by stating that a utility pack will be offered later to unlock the advanced functions of the word processor, estimating the price of such an upgrade at around $30. The data drive accesses its cassettes with agonizing slowness when working at all, and the speed of the printer has to be stepped down from 40 CPS to 10, because the innards of the device fly apart at the higher speed. It is also supremely loud when printing. Further, concerning the printer, probably its most dramatic problem is the enormous magnetic pulse it emits when powering up, erasing any tapes left in the data drive.

It’s reckoned by industry analysts that every month of delay could be costing Coleco sales of 100,000 units. In late 1983 Coleco finally receives approval from the FCC on the ADAM design. The company frantically begins mass production to meet the 500,000 units promised to retailers before the much-valued Christmas season. Units are air-shipped out to stores near the end of Oct. 1983, and Coleco has listened to retailers’ previous worries about the low markup on the machines. The retail price is now $100 higher than the previously announced price tag: $699 for the stand-alone and $499 for the ColecoVision add-on package. Dealers pay a wholesale price of around $575 per stand-alone unit, making room for a slightly increased markup. To add stress to an already stressful launch, in October Coleco is served with three lawsuits, instigated by investors accusing company brass, CEO Arnold Greenberg included, of dumping eight million dollars of their stock at its peak price while publicly promising huge sales for the ADAM system. At the same time of this promotion of the machine, “Coleco had not yet solved serious engineering problems which remained before ADAM could be sold as represented. Despite these difficulties, Coleco continued to deny or minimize these troubles publicly and to reaffirm the delivery deadlines”. A settlement for these charges is tended in August of 1985, with Coleco issuing 644,295 shares of stock valued at $6 million in August of 1987 as a final payment to resolve the case. A further distraction in 1983 comes in the form of another lawsuit from a company called Logical Business Machines. The charge is that Logical already has a business computer called ADAM, that costs $20,000 and introduced to the market in 1977. Their request is an injunction against Coleco selling their own computer under that name, as well as $500,000 to use in advertisements to dissuade the public of a connection between the two.

Coleco accompanies the ADAM  launch with a $15 million television ad campaign, but the company can only manage to get 95,000 ADAMs of their promised 400,000 out the door for the year. Due this disparity between the amount of units promised to be manufactured and the amount actually shipped, Coleco stock takes a nosedive at the end of 1983 down to $19.50 a share, a drastic drop from their high of $65 immediately after the June announcement of ADAM. Worst yet, no sooner have units gone out than complaints start pouring in, and ADAMs start piling up at Honeywell service centres, under contract to Coleco to service the system. Also ominous is the fact that the company has accumulated a large amount of debt producing their home computer system.

The Enormity of the Loss of the Coleco ADAM Computer

Nearly 60 percent of all ADAMs sold end up returned to stores as defective. The vaunted consumer advocacy magazine Consumer Reports delivers a devastating hit to the computer in January of 1984 by stating that the word-processor on their system started failing “within hours after we began using it.” Coleco stock takes it on the chin with this news, losing a fourth of its value on the day of the announcement.  Consumer Reports had already sent up a flare in late 1983, stating that they weren’t able to review the ADAM because four of the production models that they got ahold of wouldn’t work. Mass retailer JCPenney decides to get out of home computers altogether after their experience with ADAM; while they had ordered 5000-6000 computer systems from Coleco, after receiving only 500 units they cancel the rest of the order, citing the multiple flunking of ADAM during the retailer’s quality checks. Their public statement is that they are finding “inadequate profits” with home computers. On March 7, 1984, Coleco delivers the bad news: it lost $35 million in its fourth quarter. Upon making the announcement a company spokesman admits that even Coleco brass were surprised by the “enormity of the loss” taken by the ADAM. In the first quarter of 1984, Coleco reports earnings of $4.4 million on net sales of $186.1 million. This is a drop in earnings of over 70 percent from the same period the year before. At the Winter 1984 CES in Vegas, Coleco puts on a brave face and attempts a relaunch of ADAM, assuring show attendees that the numerous bugs in the computer have been dealt with, and that there have been 300 “improvements” made to the system. The problem is that the basic design of the ADAM remains unchanged. The only solution for the problem of tapes being erased when left in the data drive during power-up comes in the included documentation for the computer, with Coleco now adding helpful notices inside the manual and on a label atop the Memory Console, reminding users of this potentially devastating design flaw. A six-month warranty program is also announced to demonstrate faith in the system, along with The ADAM Family Computer Scholarship Program. Qualifying buyers of the ADAM or ColecoVision are eligible, if the system is purchased between September 1 and December 31, 1984. They must have kids enrolling into an accredited U.S. college or university before their 19th birthday and will get $125 from Coleco over four successful academic years, for a total of $500.

Over 100 new hardware and software items are announced at the show. Productivity software such as the SimpleCalc spreadsheet program, SmartFiler database creator and SmartMoney Manager. Previously promised hardware peripherals are also trotted out, like the AdamLink 300-baud modem, the 64K Memory Expander, and an add-on digital data drive that can store 512K of data on two data packs. One jaw-dropping pronouncement is that the ADAM will be getting a module that will allow it to run IBM-PC compatible software, although the only timeline given is “during 1984” for a release of this golden goose. Coleco also touts that there are 100 of their own software titles in the planning stages or available for the ADAM, and flout a laundry list of powerhouse third-party suppliers for their computer, including Activision, Broderbund, Synapse, Epyx, Sierra On-Line and Sirius Software. “The Best of Electronic Arts” series of popular EA games is planned and designed for the ADAM, including Hard Hat Mack and the groundbreaking Pinball Construction Set by Bill Budge. While completed, these game will remain officially unreleased through the coming turmoil (spoilers!), but in 1985 Coleco ultimately decides to release them to ADAM user groups with the proviso that copyright notices be removed from them. A new medium is also introduced for the ADAM at CES: a 5 1/4″ floppy drive accepting single-sided, double density disks with a capacity of 160K.

These incentives and peripherals do help pick up sales figures, but not enough to save the system or its reputation. The pipeline of new games for the ColecoVision dries up, with highly anticipated products, some announced back when the console itself was released, remaining MIA. Such lost potential is probably most typified in Tunnels & Trolls, a game based on a popular paper-and-dice RPG from Flying Buffalo in the vein of TSR’s Dungeons & Dragons. A video game of astoundingly advanced graphics, and of such complexity that its various commands would be supported by the Super Action Controllers. Alas, only the awesome title sequence for the ADAM version to this treasure is ever unearthed.

 

Click to play a tech demo of Tunnels & Trolls on the ColecoVision

Through 1984, additional promotions are rolled out to try and increase interest in the ADAM: the wholesale price to dealers is steadily slashed down to $475, which is selling the computer below cost. Coleco also attempts to create some synergy between its electronic wares and their hot-selling Cabbage Patch Kids dolls with the offer of a free doll with every purchase of a ColecoVision and game cartridge. There is also the giveaway of 32 BASIC programs on four Data Packs for purchasers of ADAM. Coleco also announces that development of software for the ColecoVision and ADAM computer is now open-sourced, with technical support and documentation freely provided to software developers, along with the promise of distribution by the company. This theoretically will spur the creation of more product for the systems.

Despite these incentives, the computers stubbornly remain on store shelves and ColecoVision console inventory piles up. By the end of 1984, ADAM has managed a meagre installed user base of around 250,000 units, or about half of what Coleco had expected to sell upon its launch in 1983. With the home videogame market hemorrhaging badly, the consumer electronics division of Coleco loses over 258 million dollars.

As far back as October 1984, Coleco had firmly denied rumours of the demise of the ADAM computer and the ColecoVision. In November, Atari UK had turned a few heads by issuing a press release that Coleco was pulling out of the marketplace, leaving Atari unchallenged. UK Coleco distributor Ideal Toys, along with Coleco HQ in America, deny such rumours, in the face of which Atari UK reiterates “We have it on good authority that Coleco is withdrawing.” Said Coleco executive vice president Morton E. Handel at the time, “We are definitely not getting out of the Adam business. We are here to stay.” However, a year-end letter to stockholders issued by Arnold and Leonard Greenberg describes the trouble impacting the profitability of ADAM as “an unusually volatile business environment” for the computer industry, specifically citing price cutting, accelerated technological developments, changing public preferences and oversaturation as culprits. So it comes to be that on Jan 2, 1985, just days before the January CES, Coleco announces that the ADAM line has been discontinued by the company some 14 months after it showed up on store shelves. When the stock market closes on the day, Coleco stock has risen slightly from its low of $14.37 a share on the news of the Adam’s demise. This announcement catches the people with the unenviable task of manning Coleco’s booth at the CES flat-footed, who find out about the ADAM cancellation while setting up for the show. They then have to paste death-rictus smiles on their faces while curious showgoers peruse the remains of ADAM, peripherals and programs proudly on display for their once heavily hyped and now-defunct computer system. Anyone needing a reason for the abandonment of the ADAM need only look to a fourth-quarter loss of somewhere between $64 – $80 million for Coleco. All remaining inventory is sold off to the familiar dead-tech vultures at NYC-based Odd Lot Trading, Inc., while Coleco stock tanks at $13 dollars a share. The ADAMs are expected to be unloaded to buyers for somewhere south of $300. While Coleco assures that production of the ColecoVision game console will continue, it eventually succumbs to the evaporating video game market later in the year.

Last Life: Coleco Bankruptcy

While Coleco might have lost the Colecovision and ADAM, they’ll always have the Cabbage Patch Kid doll line, right? After being introduced in 1983, the same year as the fateful ADAM, for three years the wildly popular, ugly little dolls, accessorized with adoption papers sent to kids upon registration with Coleco, fill the company’s coffers to the tune of $1.2 billion in revenues. Hitting a high of $600 million in sales in 1985, the fad shows definite signs of cooling when the doll line only pulls in under half that the next year, or $250 million. This accounts for a drop in total revenues to only $776 million for 1986. Meanwhile, what profits are made are gobbled up in a series of acquisitions and licensing deals trying to find the next big thing.  The Cabbage Patch Kid craze comes and goes, and Coleco fails to catch lightning in a bottle with the Couch Potato doll, an equally ugly, spud-shaped plushie advertised as “the complete vegetable”, that lazily refuses to budge off toy store shelves in 1987.

Click to play Cabbage Patch Kids Adventures in the Park on the ColecoVision

Coleco hoped to replicate the success of the Cabbage Patch Kids with Couch Potato, 1987 ad

Their nine lives finally exhausted, Coleco defaults on $335 million in interest payments to its debt holders in 1988. Coleco shares have gone from a high of $22.25 in 1984 to $2.50 in March of 1988 – and they would go lower still. Coleco announces the layoff of 475 employees and the departure of its chairman. On July 11, 1988, Coleco, the 6th largest toy manufacturer in the United States, files for Chapter 11 bankruptcy.

Most of Coleco’s assets, licenses and rights wind up purchased by Hasbro in 1989, but at the time of the bankruptcy a company out of Texas called Telegames almost immediately buys up the rights to the ColecoVision IP and remaining stock. They sell the machines through mail-order, and work to finish original games, as well as licensed ports to other systems like the 2600, that were left hanging when Coleco went under. They begin selling the $40 Personal Arcade aka Dina through mail-order, a redesigned system using the ColecoVision hardware. The machine is small, featuring low-rent versions of Nintendo’s NES controllers. The original’s membrane keypads have been reduced in number to one, mounted on the cabinet and incompatible with game overlays. Space shooter Meteoric Shower is included as a built-in game for the system.

Click to play Meteoric Shower on the Dina Personal Arcade

Another interesting aspect of the machine is a second cartridge port, right behind the ColecoVision slot. This extra slot accepts Sega SG-1000 cartridges, a Japanese precursor to the Sega Master System. The Ultimate Critic eventually weighs in with His review of the Dina, when a tornado wipes out all remaining Personal Arcade stock in 1994. The Coleco brand itself eventually resurfaces in 2005 via a Chicago-based company, releasing new lines of handheld games and virtual TV plug-and-play devices.

With over six million ColecoVision units sold in the space of just two years and approximately 190 cartridges released in total, it makes you wonder whether Coleco could have established itself as an enduring force in the video game market if the big crash, coming just one year after the ColecoVision’s introduction, hadn’t cut the legs out from under their system.