Let`s start with a little history of
Atari before we get to the deal that would have changed the face of gaming history. The deal that never was.
In 1961 a MIT student named Steve Russell creates the first interactive computer game,
Spacewar. In 1962 Nolan Bushnell enters engineering school at the University of Utah. Steve Russell Spacewar game shows up on school mainframes across the country. Russell programmed Spaceship shooter with Sun with gravity. Other students add star backgroun, etc. to the game.
In 1964 Nolan Bushnell stills as an Engineer student at University of Utah sees
Spacewar. He works the summer as a manager at Amusement park. He gets the idea for video arcade games.
Nolan BushnellIn 1965 Ralph Baer begins researching interactive television games at Sanders Associates. Then in 1968 Ralph Baer takes out patent on the 1st video game for Sanders Company.
Ralph Baer
In 1970 Magnavox licenses Ralph Baer’s television game from Sanders Associates. Nolan Bushnell starts work at Ampex where he meets Ted Dabney. Bushnell begins work on an arcade version of
Spacewar called
Computer Space.
By March of 1971 Bushnell quits Ampex alone with Ted Dabney and brings his
Spacewar like game to Netting Ass. Nutting Associates Purchases
Computer Space from Nolan Bushnell and hires him to help manufacture it.
Nutting begins shipping 500 units of
Computer Space, the first arcade video game machine and the first video game failure. .
1972 Magnavox begins demonstrating
Odyssey in Private showings. Bushnell attends a demonstration of the console on May 24, in Burlingame, California. Bushnell Leaves Nutting and starts
Syzygy with partner Ted Dabney. Finding that the name
Syzygy is already taken by a roofimg company, they rename their company
Atari. (june 27th)
Atari engineer Al Alcorn creates
Pong.
Magnavox releases
Odyssey and Magnavox sues
Atari on grounds that Pong infringes on Ralph Baer's patents. (Some books say Nolan Bushnell decides to settle out of court others that the judge found for Magnavox) The outcome is that videogame companies have to pay royalty to Magnavox/Sanders. (in 10 years they take in $100 million. They keep this fact from Ralph Baer)
Atari’s Trademark on
Pong does not come in quickly enough to stop copycat
Pong games. 25 competing companies using the name take giant profits.
Atari only get 10% on 90,000
Pong unit market. Dabney panics and sells out to Bushnell.
1973
Atari`s Gran Track racing game comes out. Bushnell forms exclusive contracts with distributors but then forms
Kee Games (headed by Joe Keenan) to sell to the distributors locked out by exclusive contract. Autonomous company but bringing out same games under other names.
Atari makes a big deal out of bad mouthing
Kee Games as pirates and blackguards. When
Tank becomes giant hit for Kee
Games Atari distributors want to change contract.
Kee “merged” with
Atari.
Bob Brown pushes for home
Pong system. Unit has only one game but is color and lower price. In 1975
Atari Creates prototypical Home
Pong unit and sells idea to
Sears Roebuck.
In 1976 Bushnell sells
Atari to
Warner Communications for $28 million. Stays on as Chairman, Joe Keenan is president. The market is down so he can`t go public to raise money. The money saves
Atari from the fate of other gaming companies in the first gaming market crash.
Corporate stuffed suites block Bushnell from taking an active part in Research & Development (how major dumb it that?). Bushnell uses a young programmer (Steve Jobs) as a spy to keep him in the loop with R & D.
1977 Atari releases the Video Computer System, also known as the 26oo. B/W / Color switch, Handicap switch, 27 variation games switch, joystick controllers. Rotating colors when not in use avoid TV burn in.
Warners Communications want to take
Atari into the computer market. Have no respect for Videogames and not aware of what is happening in computers. Bushnell is opposed to such a move because of his inside information about Apple Computer from his old corporate spy, Steve Jobs.
In 1978 Bushnell is forced out of
Atari and buys the rights to
Pizza Time Theatre (Chuck E. Cheese). Ray Kassar becomes the CEO of
Atari.
In 1979
Atari game designer Warren Robinett introduces concept of "Easter Eggs" to video games by hiding a room with his name in it in a 26oo game called
Adventure.
Warren Robinett1980
Atari releases
Space Invaders for the Video Computer System. The practice of selling home versions of arcade hits is started. After Ray Kassar refuses to give programmers/game designers credit or profit sharing calling them no more important to the company than workers on the assembly line. Renegade programmers flee
Atari and create
Activision, the first third-party game publisher. Ray Kassar holds a grudge,
Atari sues
Actionvision every 6 months in a vendetta that lasts as long as Kassar`s time as CEO at
Atari.
1983
Nintendo is all ready to sign a deal with
Atari to bring out their
Famicom (NES) through
Atari. A deal that would have propped up a company that was in real trouble at the time (nobody outside the company knew about the ill health of the once mighty gaming giant).
A booth jockey at
Winter CES puts
Donkey Kong on as a display for the New
Coleco Adam Computer. Ray Kassar sees it and goes ballistic.
Atari held the computer license for
Donkey Kong while
Coleco had the home console license. Kassar gets rabid with
Nintendo and
Coleco, starts foaming at the mouth and threating legal action against everybody. The papers on the
Famicom deal with
Atari never get signed.
Right after
Winter CES Warner Communications announces that
Atari sales have not met predictions,
Warner stock drops 32 percent.
Atari CEO Ray Kassar has just sold 5,000 shares of
Warner Communications stock 23 minutes before the announcements of record losses at
Atari.
Atari announces that they will be developing software for other consoles (The death song of all gaming hardware companies) Atari eliminates 600 jobs sends Sunnyvale production to Hong Kong and Taiwan.
Nintendo decides that they do not need
Atari and decides to go it alone.
James Morgan,
Philip Morris executive who claimed that cigarettes are no more addictive than Gummy Bears, becomes CEO of
Atari and so messes up the company in his one year that
Atari never get on their feet again.
1984
Warner Communications sells
Atari Corporation to
Commodore Computers founder Jack Tamiel but retains the arcade division as
Atari Games.
If Kasser was not such an ass about
Donkey Kong at the
Winter CES then
Atari would still be with us today and maybe would even make it to the days of
Blade Runner and all those
Atari signs in the future street scenes. The whole face of videogame would have been different. The Japanese would have had a lesser roll.
Nintendo would not have taken over and
Atari would not have tried to sue
Nintendo for $160 million for taking over 80% of the gaming market. (Another sad chapter in the downward spiral of the once great
Atari)