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Atari: the Golden Years -- a History, 1978-1981 10/13/11 3:22 PM Gamasutra - Features - Atari: The Golden Years -- A History, 1978-1981 10/13/11 3:22 PM Atari: The Golden Years -- A History, 1978-1981 By Steve Fulton [Following his article on Atari's genesis, game historian Fulton returns with an amazingly detailed piece on Atari's 'golden years', from Asteroids through Battlezone.] Atari was founded in 1972, but its crowning accomplishments in console gaming and computers were the Atari Video Computer System (or 2600) and the Atari 400/800 line of personal computers. This four-year period -- from 1977 to 1981 -- contains some of the most exciting developments the company ever saw in its history: the rise of the 2600, the development of some of the company's most enduringly popular games (Centipede, Asteroids) and the development and release of its first home computing platforms. This comprehensive look back, filled with quotes from the original creators and other primary sources, offers a detailed peek into the company that popularized video gaming as the '70s turned into the '80s, and created the first viable market for home consoles. For more detail, be sure to read Gamasutra's first Atari history article, which covers the period of 1971 to 1977 -- the latter date being the year that the Atari VCS was first released. Innovate, Kind Of Like You Did Last Year "One of the guys at Warner said... I had made a proposal to make a really interesting set of games. I can remember him not even blinking and looking at me and saying 'Nolan, why don't you innovate kind of like you did last year, none of this new stuff?' He did not understand what he said, he was so out of tune with what the nature of innovation is, and I've been thinking I was going to get that put into needle-point sometime." i - Nolan Bushnell Innovative leisure. It was a concept that Atari, under guidance of Nolan Bushnell, had cultivated for its entire existence. The engineer entertainers of Atari either invented or were driven to invent by competition, some of the most mind- blowing gaming creations of the 20th century. "These people were my friends and co-workers and we were sort of united in this quest for cool stuff." ii - Nolan Bushnell However, dreaming up ideas is only one part of a successful business -- you also need to find customers to buy them. The objective pursuit of engineering cool stuff is almost entirely at odds with the subjective nature of marketing it. "The marketing department had never played a video game... marketing thought the programmers were lazy, the programmers thought marketing was stupid... we didn't like them, they didn't like us." iii - Rob Fulop (Atari VCS game developer) When Atari was focused on coin-operated games, marketing was not as much of a factor. The small audience that needed to know about its games (arcade operators and distributors) could be reached fairly easily through publications like Replay http://www.gamasutra.com/view/feature/3766/atari_the_golden_years__a_.php?print=1 Page 1 of 49 Gamasutra - Features - Atari: The Golden Years -- A History, 1978-1981 10/13/11 3:22 PM magazine and Coin Connection, mail-outs of advertising flyers, and trade shows. However, with the Atari VCS effort, the company was firmly working outside the confines of its old business, and it required a more sophisticated marketing effort than Atari could manage on its own. Warner Communications brought this marketing focus to the table -- as well as the vast amount of money needed to make Atari's ideas come to life. "Warner put a lot of money into the company, which certainly helped pay for marketing and manufacturing the games and computers." iv - Alan Miller However, the sudden oil and water mix of engineers and marketers at Atari almost single-handedly created a computer age cliché that is now common place in many failed technology companies: engineers and marketers can't coexist peacefully for very long. "If there is anything engineers despise, it is dumb marketers defining the impossible." v - Nolan Bushnell Instead of celebrating the successful launch of the VCS in 1978, Atari was lamenting missed opportunities and mistakes that held sales back. While management scrambled to find ways to save the consumer business, programmers struggled to come to grips with the new technology, and R&D looked towards the future. The eternal struggle of the marketing and engineering was set alight, and put on course to explode within the company, taking many of the pioneers along with it. 1978 As 1978 started, Atari was having trouble on several fronts. While the VCS had sold well during Christmas 1977 (upwards of 350,000 - 400,000 units), sales were stunted because of production problems that had the VCS units delivered late to retailers, resulting in a $25 million dollar loss for the period. vi Atari was also hobbled with warehouses filled with unsold dedicated Pong units, the stagnation of the coin-op business, and an increasing divide between Warner brass and existing Atari management. Even so, Bushnell was positive that, with the VCS, Atari had a winner on its hands. It just needed to find enough talent to make games for the system. http://www.gamasutra.com/view/feature/3766/atari_the_golden_years__a_.php?print=1 Page 2 of 49 Gamasutra - Features - Atari: The Golden Years -- A History, 1978-1981 10/13/11 3:22 PM "I see us as having built a record player and now it's up to our creative people to decide how many records there will be." vii - Nolan Bushnell In his mind, if he could make it work, the sky would be the limit for Atari's game system. The profit potential for a system like the VCS was one of Bushnell's crowning achievements for Atari. "The thought of taking something that cost $3 and selling it for $20, or selling it for $40, I take great pride in that as a concept." viii - Nolan Bushnell At the same time, Bushnell found himself butting heads with Warner's executive VP, Manny Gerard. Bushnell and Joe Keenan disappeared from Atari for some time after the VCS was released, but popped back in at times to give their opinions on the business. This frustrated Gerard. "You can't disappear and walk in six months later and say 'let's do this.'" ix - Manny Gerard Also, Gerard was positive that Atari was spending far too much effort on engineering and R&D and not enough time trying to sell and market its products. "They had no sales, no advertising, no marketing, nothing but R&D." x - Manny Gerard "We had a very powerful engineering team working on a lot of projects -- a lot more than Manny thought we should have." xi - Nolan Bushnell In February 1978, Manny Gerard encouraged Bushnell to find some help marketing Atari's products. When Bushnell was slow to respond, Gerard suggested Harvard educated Ray Kassar, an ex-marketing VP from Burlington textiles. Kassar was exactly the button-down, straight-laced businessman that Bushnell was not. Kassar began as a consultant, with his directive from Warner to find out if Atari should be dumped altogether. What he found was not encouraging. "It was a disaster." xii - Ray Kassar However, Kassar was impressed with one thing at Atari: the VCS xiii. Instead of recommending liquidation to Warner, he set out to develop an integrated marketing plan that would save Atari. At the same time, Bushnell and president Joe Keenan found themselves struggling to hold on to the company that they had created. Instead of leading Atari in new directions that would build the business even further, Bushnell was constantly clashing with Manny Gerard and Ray Kassar over the future of Atari's products and especially R&D. "Where we became unglued was when Manny started killing the research projects. I saw that as building a very fragile company." xiv - Nolan Bushnell 1978: The Languishing VCS The VCS group started 1978 with a crew of about 12 programmers, many of them new hires -- including David Crane, Jim Huether and Warren Robinett. They all found the consumer division to be a rewarding place to work. "We had a lot of fun, Warner had owned it for a while, but Nolan was still running it. He's an engineer, and he ran the company as an engineer would run it and that's why Warner bought it. But he would still isolate the engineering http://www.gamasutra.com/view/feature/3766/atari_the_golden_years__a_.php?print=1 Page 3 of 49 Gamasutra - Features - Atari: The Golden Years -- A History, 1978-1981 10/13/11 3:22 PM department. He'd say, 'You guys go over there and have a lot of fun. We'll come back and talk to you every once in a while.'" xv - David Crane "It was all sort of started by Nolan Bushnell who was the founder and he kind of instilled this family friendly feeling, parties every Friday... but you had to get your job done or otherwise you didn't hang around too long." xvi - Jim Huether "It was a cool job to have. For me, it was like dying and going to heaven." xvii - Warren Robinett The pressure in the consumer division to come up with new games and get them to market to support the platform created a department with a different face than the R&D heavy Coin-Op division. While it was still a casual environment, there was a cut-throat edge. "People in the engineering group worked very hard. It's true that it was a casual environment and the kind of clothes you wore was not important in the engineering group.
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