The Atari Revolution

and the Microprocessor Shakes Up Video Games

Pong had done quite successful, making Atari one of the most innovative businesses of the time, increasing arcade profits, and allowing 15 new companies to enter the video game market

Companies were making Pong knock-offs, as well as altered versions of Pong, such as Chicago Coin‟s TV Pingame, Ramtek‟s Clean Sweep, and even Atari‟s Quadrapong and Rebound

With this new competition, Atari needed some new games

To encourage innovation, Bushnell wrote a company manifesto that gave the company a social atmosphere and emphasized fun

Atari‟s new model included a lack of fixed working hours, an anything-goes dress code, and company parties with beer

Most managers were in their late 20s and early 30s, and most employees were in their early 20s

This work ethic was severely different from other tech companies of the time, most notably IBM

Despite the laid back nature, Atari employees worked hard because they enjoyed their job

This environment also helped keep Atari ahead of the competition, who were still making Pong knock-offs

Atari made Space Race, where you race through an asteroid field, Gotcha, a maze chase with pink “dome” joysticks, and Qwak!, a light-gun, duck hunting game

Only Nutting Associates made an original game at the time, Missile Radar, which would be the basis for Atari‟s Missile Command

In 1974, Atari created Gran Trak 10, the first driving game

The game had a bird‟s eye view of a racetrack that the player raced around with a steering wheel, accelerator, and brake

It was Atari‟s best selling game since Pong, but an accounting error caused Atari to lose money each time a unit was sold

Atari opened up Atari Japan in Tokyo in 1973, but did so without knowing the international trade laws with Japan

The company was funded with cash and without though of legal documents

Japan‟s business culture openly conspired against overseas firms, and Japanese coin-op distributors refused to work with Atari

In 1974, after losing $500,000, Bushnell admitted defeat and sold Atari Japan to Nakamura Manufacturing, which would become Namco in 1977, and had exclusive rights to distribute Atari games in Japan for 10 years

Taito wanted to become the Atari of Japan, and after making Pong clones Elepong and Soccer, they started to explore new concepts

In 1974, Soccer designer Tomohiro Nishikado created the company‟s first truly original game: Speed Run

Speed Run was similar to Gran Trak 10, but instead of fitting the whole track on the screen, the car stayed at the bottom of the screen, could only move left and right, and accelerated past other cars

The game was popular in both Japan and the US, where it was released as Wheels, and marked Japan‟s start into the international game industry

Because of these bad business mistakes, Atari needed a new plan to increase profits

Atari games only played in so many bars and arcades due to exclusive deals made between distributors and manufacturers

This meant Atari sold fewer games and a serious competitor had a better chance of emerging

Bushnell decided to create a bogus company that would repackage Atari‟s games and sell them to inaccessible distributors

Bushnell created Kee Games, named after his friend Joe Keenan who agree to head up the fake company

Atari leaked a story that Atari employees left to form their own company

Atari also spread rumors that they were going to sue Kee Games for theft of trade secrets, then a couple months later claimed to have worked out a deal

Kee Games had its own offices, salespeople, and a small game development team

Most games from Kee Games were Atari games that were slightly changed, such as Spike, a clone of Rebound

Kee Games later provided the hit Atari needed, Tank, a game where players move tanks in a mine-infested maze and shoot at each other

Tank became the most popular game since Pong and sold more than 15,000 units

With Kee Games making a lot of money, Atari and Kee Games officially merged, with Keenan becoming the new president of Atari

Atari engineer Harold Lee wanted to make a home version of Pong, improving on the design of the Odyssey by using integrated circuits

When the Odyssey was released in the late 1960s, integrated circuits were far too expensive, but Lee believed they would soon be affordable enough to be used on home consoles

Lee and Alcorn went to Bushnell to start the project, but Bushnell was skeptical, believing it would be too expensive

Despite the concerns, Lee, Alcorn, and engineer Bob Brown began working on a prototype

The trio spent most of 1974 working on a prototype, having the best luck when the game was able to fit on a single integrated circuit, cutting the costs

After the Atari-Kee Games merger, Atari had enough money to start selling their new mini-Pong

The home Pong cost $99.95, too much for toy stores to sell, and TV and hi-fi stores were also disinterested

As a last resort, Atari turned to Sears Roebuck, who agreed to include it in their sporting goods department

Sears stocked the home Pong in 900 stores with the deal that it would be called Sears Tele-Games Pong and that Atari couldn‟t release their own version for a year

During the Christmas of 1975, Sears sold 150,000 units of the game, with customers going crazy over the idea of playing Pong at home

This success pulled Atari from the brink of bankruptcy, and as with the original arcade version of Pong, countless imitators followed suit

The AY-3-8500, a microchip created by General Instruments, allowed many companies to make home Pong games without needing to design their own integrated circuit

The chip was so popular that only companies that ordered early, such as Coleco and Magnavox, could get it before Christmas 1976

By Christmas 1977 there were more than 60 Pong-style home consoles on sale around the world and nearly 13 million units had been sold in the US alone

Victor Gruen, an Austrian-born American, felt that the growing suburban lifestyle was destroying the heart of society

Gruen, to create a similar atmosphere of the shopping arcades in Europe, designed the shopping mall, and opened up the first one in Edina, MN in 1954

By the end of 1964 around 7,600 malls had opened across the US, and by 1972 that number grew to 13,174

By the end of his life, Gruen had come to despise what shopping malls had become

After Dave Nutting‟s business partnership with his brother Bill ended, Dave went on to create MCI Milwaukee Coin

Investors in MCI saw the success of Aladdin‟s Castle, a video arcade that rode along the success of the growing number of malls, and felt MCI should be focusing on that

Dave and MCI created 20 Red Baron game rooms across the country, and shortly there after, the investors pushed again to close down MCI and start a new company

This new company, started by Dave and engineer Jeff Fredriksen, was called Dave Nutting Associates

Shortly after Dave Nutting Associates was created, they were contacted by a representative from the up-and-coming firm Intel about a lecture on the 4004

The 4004 was the first functioning microprocessor ever built, and although it could do little more than add and subtract, it was revolutionary

Nutting thought the 4004 was revolutionary, and got connections with Intel to get some of the first ones released

Dave Nutting Associates had a new partnership with Bally Midway, and the first step was to convince them that microprocessors were the future

Nutting took two of Bally‟s Flicker machines, removing all the moving parts in one and replacing them with a 4004 microprocessor and LED scoring system

Bally couldn‟t tell the difference between the two machines, and couldn‟t believe a machine could work with so few parts

Despite being impressed, Bally did not feel that arcade owners could understand this new technology, and passed on it, leading Nutting to turn to Micro Games, which created Spirit of „76, the first pinball game designed for a microprocessor

Because of the lighter weight and cheaper manufacturing costs, soon almost all pinball makers were using microprocessors in their machines

Before microprocessors, video games had to be made with transistor-transistor logic (TTL) circuits, which were designed from scratch for each game

The 4004 processor couldn‟t handle displaying images on a screen, but by 1975, the Intel 8080 could

Bally Midway wanted to remake the Taito game Western Gun, designed by Tomohiro Nishikado

Because Western Gun had many problems with TTL, Bally turned to Dave Nutting Associates to design it with the 8080

Microprocessors made computer programmers key for creating games, and Nutting needed programmers

Nutting enlisted two volunteer programmers from the University of Wisconsin, Jay Fenton and Tom McHugh

Gun Fight, the remake of Western Gun, was ready to go into production, but Midway needed a lot of RAM

RAM was expensive at the time, and in order to make it affordable, Midway bought about $3 million worth, about 60% available in the world

The game was released to popularity, and soon other game companies followed suit by using microprocessors

Death Race Breakout

Death Race was released in 1976 by Exidy, inspired by the film Death Race 2000

Because of the nature of the game, parents, psychiatrists, and politicians all responded to the game quite negatively

Exidy tried to lower controversy by claiming that the player was running over gremlins, but nobody bought it

At its height, Exidy had received a bomb threat and had to have police escorts

After the controversy died down after about two months, Exidy‟s sales of Death Race had actually increased due to the publicity

The idea for Breakout was brought up at a weekend retreat Atari was holding

Bushnell liked the idea, and it was given to a young Steve Jobs, who was working at Atari to raise money to go to India

Atari would give Jobs a bonus for each less integrated circuit he used, so Jobs brought on his friend Steve Wozniak to help

Wozniak was able to cut the number of ICs in half, giving Jobs thousands of extra dollars, however Jobs told Wozniak he only made $700 and gave him only $350

Atari did not go with Wozniak‟s design, as it was too complicated to manufacture, and instead stuck with TTL circuits

The advancement of the microprocessor not only increased the need for computer programmers, it also created a gap between programmers and electrical engineers

Atari started looking in 1976 for new programmers to help develop their new games

One of their recruits was Dave Shepperd, who started programming games as a hobby after playing Computer Space

Shepperd programmed his games on an Altair 8800 from MITS

The Altair 8800 had no included output beyond blinking red lights, had just 256 bytes of memory, and had no keyboard, being programmed on switches instead

Many computer hobbyists of the time used the Altair 8800, including Paul Allen and Bill Gates who wrote a version of BASIC for it and then formed Microsoft to sell it

In order to play games, Shepperd created a video subsystem that integrated into the Altair 8800, and later adapted an old electronic keyboard found in the dumpster

When Shepperd was first hired to Atari, he thought that they would have top of the line technology, only to find out that all the equipment and people were jammed together with no air conditioning

Shepperd‟s first project was Flyball, a simple baseball game

Shepperd‟s second project, Night Driver, would show the possibilities of working with microprocessors

Shepperd had the idea to have Night Driver be in first-person perspective, an idea he got from the flyer of an arcade game he had never played and didn‟t know how it worked

The game worked by having the squares be small in the distance and get bigger and further apart as the player got closer until they disappeared off the edge

The first prototype didn‟t even have a steering wheel or peddles, but it was enough to be very impressive for its time

Night Driver introduced the idea of first-person perspective in driving games, despite not being the first to do it