[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 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.
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.
"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 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. Results were what counted." xviii
- Alan Miller
"(It was) an environment with little discipline, but yet with clearly stated goals." xix
- Nolan Bushnell
VCS games took roughly 6 months to create from start to finish, with each programmer working mostly alone on their projects.
"When I started they just said, 'We want you to do a game in about six months... you have no set hours, we don't even want to see you until the game is almost done'... It was great." xx
- Jim Huether
Since the VCS was so difficult to program, only people truly dedicated to their projects were successful.
"I believe that Atari in the early days succeeded because the games were labors of love by the programmers who worked on them. At least that was the case with my games for me. In those old far-off days, each game for the 2600 was done entirely by one person, the programmer, who conceived the game concept, wrote the program, did the graphics." xxi
- Warren Robinett
The dedication of the programming team started to show as the sheer number of releases for 1978 rolled out (eleven titles in all), even if the games themselves didn't set the world on fire.
Since most of Atari's original coin-ops were simulated in the VCS launch titles, the second wave of games suffered by comparison. While there were still a couple of notable coin-op translations, many games from second wave were based on traditional games, and not their coin-op brethren.
Space War, programmed by Ian Shepherd xxii and released in May, was a version of the original Computer Space coin-op. However, the button controls of the coin-op version did not prove to translate very well to the VCS.
"The game is uncontrollable. Joystick movement is sluggish and clumsy, and likely to drive an experienced player to irritation."
- The Book Of Atari Software, 1983
Hangman was also released in May. Programmed by Alan Miller, it was notable because it required more ROM to store data for the game than any previous cartridge.
"My game, Hangman, was the first 4K byte cart for the VCS, but the extra space in that cart was simply used to store additional words. Being the first one to use that part, I had to electronically qualify it with the ROM vendor, Synertec, to make sure it met the timing and current requirements of the VCS." xxiii
- Alan Miller
Home Run, released in June 1978, was one of the first home versions of baseball ever attempted. Programmed by Bob Whitehead and David Rolfe, it was a simplified version of the sport that, for nearly five years after its release, remained the only 1-player version of baseball available on any home video game system.
"Jamming a baseball program into 2K of memory forced the designers to prune away many of the elements of real sport. There are lots of factors that worry Earl Weaver that won't lose managers in Home Run a minute's sleep." xxiv
- Arnie Katz and Bill Kunkel
Codebreaker, also released in June, was a version of classic game Mastermind plus the logic game Nim, Hunt & Score, released in June and programmed by Alan Miller, was another attempt at a traditional game brought to the VCS.
"The title of an Atari VCS game I programmed called Hunt & Score was also later marketed by Atari under the title A Game of Concentration. In the early days of the VCS, Atari frequently changed the cart titles for games marketed under the Sears Tele-Games brand. Hunt & Score was called Memory Match for Sears." xxv
- Alan Miller
Slot Racers, programmed by Warren Robinett, was released in July. On paper the game sounded exciting: "A pair of skillful drivers with the killer instinct drive up and down the streets of a city firing hood mounted cannons at each other." xxvi However, the execution left a lot to be desired. The cars resembled shoes, and the "city" was no more elaborate than the maze in the Tanks variation of Combat!, a game that all VCS owners already played for free.
"It would have never gotten published in any normal situation, but Atari needed product and published everything the programmers produced in 1978." xxvii
- Warren Robinett
Brain Games was released in August and programmed by Larry Kaplan. It contained 6 different thinking games, including the VCS conversion of the Touch Me coin-op. It was successful in execution, but its subject matter did not pose to set the world on fire. Polo was developed by Carol Shaw as a cross-promotion with Ralph Lauren (also owned by Warner Communications). It played like a two-player soccer game with horses. The game was finished, but never released.
However among the misses and near hits and unreleased gems of 1978 were several classic VCS games that showed the system had real promise. Outlaw, programmed by David Crane, was more like Midway's Gunfight! than Atari's own Outlaw coin-op game.
Flag Capture was programmed by Jim Huether and released in August. Different from nearly all other VCS titles, it was an engrossing strategy-style game. Your job was to find your flag before your opponent on a grid of squares. Each time you clicked on a square it would give you a clue as to where the flag might be.
"This was the first game I did for the 2600, so it was a big learning experience. It was difficult to do a game in 2K bytes of ROM, 128 bytes of RAM including the stack, and writing to the screen on the fly. I wanted to do something like Stratego, but realized I couldn't do it on a single screen. So I turned it into a capture the flag type of game. It took about six months to complete. The graphics were pretty bad, but the gameplay was very good." xxviii
- Jim Huether
Basketball, programmed by Alan Miller (himself a basketball player) and released in December was a bit of breakthrough with its pseudo-3D playfield and furious 2-player action, even if the ball was a square and animated players looked a bit silly.
However, there was one VCS game that stood out among the rest: Breakout. Released in November, just in time for Christmas, Breakout was a mostly true-to-form translation of Atari's hot coin-op from 1976. Brad Stewart won the right to program the game by beating fellow programmer Ian Shepherd at the coin-op version of the game in the Atari break room. xxix
"Another programmer, Ian Shepherd, became available at the same time. Since Breakout was one of the titles we were going to do, and since there was a coin-op Breakout game in the coffee room, Ian and I decided to play for the coding rights. I can't remember which of us went first, but I managed to knock down both walls of bricks with one ball, then leave the game in "lock up" mode where the ball continues to bounce off the same place on a motionless paddle and retrace the same path over and over. Ian missed when it was his turn to play, so the coding rights went to me." xxx
- Brad Stewart
Ray Kassar's aggressive marketing plan for the VCS showed its fruit in Q4 1978, when Atari's first slogan-filled commercials ("Don't Watch It, Play It") arrived on TV screens across America.
Not only could people see Atari VCS games in their homes, but could see actual celebrities such as Don Knotts, Pete Rose, and Kareem Abdul Jabaar shilling for VCS games (Breakout!, Home Run, and Basketball respectively). In total, Kassar spent $5,000,000 on advertising in 1978. xxxi
Kassar also insisted on creating a QA program to help calm nervous retailers' concerns about defective returns, and used his extensive experience in manufacturing to ramp up VCS inventory for Christmas 1978.
However, it was not just Kassar that helped make the push to get VCS units manufactured for Christmas. Nolan Bushnell pulled out all the stops with his employees to get the products manufactured and shipped. Bushnell rounded up managers, supervisors, and other corporate, salaried employees to help fulfill all orders. Most worked four to eight hour shifts beyond their own work day. xxxii
The other good news for Atari was that Nolan Bushnell's strategy to tie-up the n-channel semiconductor manufacturers with Atari work to stave off competition was holding. No major for the competitor for the VCS arose in 1978, and Atari sailed into the Christmas season with 800,000 units ready for sale.
1978: VCS Follow-Up: Colleen & Candy
When work started on the follow-up to the VCS in 1977, the engineering team Joe Decuir, Jay Miner, and Steve Mayer were tasked to create a machine that could both follow up the VCS, and double as an entry into the burgeoning personal computer market.
"(The follow-up had to) support 1978-vintage arcade games. We knew we would need to leapfrog the 2600 before somebody else did. (It also had to) support home computer character and bitmap graphics. We saw the Apple II, Commodore, and Radio Shack appliance machines coming." xxxiii
- Joe Decuir
The project was soon split into two separate projects, dubbed "Colleen" and "Candy" after two particularly attractive secretaries These products were later re-named the Atari 800 and 400 respectively. "Colleen" was to be the full-fledged computer, while "Candy" was more suited as the game machine follow-up to the 2600.
Both were based on the same basic hardware design with four separate silicon chips that handled different parts of the computer's operation: the 6502 CPU running at 1.8 MHz, the ANTIC display microprocessor, CTIA graphics chip, and POKEY sound chip. The power of these multiple processors pushed the 8-bit computers power far beyond that of the VCS.
Jay Miner, as system architect, led a group that included Joe Decuir, George McCloud and Francois Michel that designed the ANTIC microprocessor for processing display information and the CTIA graphics chip to put it on a screen xxxiv.
It was a very potent combination, giving the Colleen and Candy the most sophisticated graphics for any microcomputer at the time. The ANTIC took graphics information in the form of Display Lists. Display List Interrupts allowed the screen to be cut horizontally into multiple parts, allowing for almost limitless display options.
These instructions were processed and displayed by one of multiple graphics modes by the CTIA (later GTIA) processor. The design also included hardware based sprites (Player-Missile Graphics) for creating games, a character-set that could be completely redefined in code, and per-line fine scrolling. xxxv In terms of sheer horsepower, the graphics capabilities of these new machines made the output of the TIA chip in the VCS look primitive by comparison.
After the 6502, ANTIC and CTIA, the 4th chip of the design was the POKEY. POKEY was a dedicated sound processor started by the core team and finished off by Doug Neubauer.
"The Atari 800's architecture evolved as an upgrade of the 2600. Conceived primarily by Steve Mayer, Joe Decuir and Jay Miner before I arrived at Atari, the original plan for the POKEY chip called for keyboard interface, audio and paddle controllers." xxxvi
- Doug Neubauer
The chip had four distinct sound channels, with the ability to set volume, frequency and waveform per channel. This gave Colleen and Candy sound production abilities far beyond the speaker beeps of most other personal computers at the time.
As the hardware was being finalized, Atari started working on the software required to get the computers up and running. After announcing late in 1978 that the new computer systems would be on display at the January CES in 1979, the scramble was on write software that would run the machines.
"Atari had been designing a personal computer for a couple years and had a group of programmers working on the OS for a long time. Atari then pre-announced that the computer would debut at the January 1979 CES. " xxxvii
- Alan Miller
To meet this date, Atari tapped some of the best programmers from the VCS team, Alan Miller, Larry Kaplan, Bob Whitehead, and David Crane to work on the operating system, while outsourcing the job of creating a version of the BASIC language for the computers.
"There is a period at Atari when there were no games coming from Larry Kaplan, Alan Miller, Bob Whitehead, and myself. As the most senior designers at Atari, we were tasked with creating the 800 operating system. This group, plus two others, wrote the entire operating system in about 8 months. A funny story from this time that Al Miller likes to tell has to do with the Atari BASIC cartridge that was to ship with the system. Atari had contracted with a young programmer named Bill Gates to modify a BASIC compiler that he had for another system to be used on the 800. After that project stalled for over a year Al was called upon to replace him with another developer. So, while Al is the only person I know ever to have fired Bill Gates, I suspect that rather than work on Atari BASIC, Gates was spending all his time on DOS for IBM. Probably not a bad career choice for him, do you think?" xxxviii
- David Crane
The BASIC language was finished by SMI corporation in time for CES, as was the internally developed OS.
"I'm very proud of the OS we created for the Atari 400/800. It was similar in complexity to QDOS -- the OS that Microsoft licensed a couple of years later from Seattle Computer Products and renamed MS-DOS for the IBM Personal Computers. However, the Atari OS was much better designed in terms of its user friendliness and it had a much, much richer graphics subsystem and many fewer bugs." xxxix
- Alan Miller
1978: The Coin-Op Business
At the beginning of 1978 Atari's coin-op business was still coming to grips with the microprocessor technology now used in most of its games, while pushing forward with game and cabinet innovations.
By that time, the coin-op group had expanded to four core teams (adding fresh talent such as Mike Albaugh and Ed Logg to the ranks), each with consisting of a team leader (usually a senior electrical engineer), plus a couple of programmers, a couple electrical engineers, and a couple technicians.
Unlike the solo work on VCS games, coin-ops were a team effort. The focus was still on technology, because the graphical capabilities of the hardware were still fairly primitive.
"Graphic and cabinet design were a 'shared resource', and 'graphics' meant physical stuff, not pixels. Teams did their own pixels, which we called 'dots' at the time, none of us having taken a computer-graphics class." xl
- Mike Albaugh
Atari started 1978 with an aerial action game named Sky Raider released in March. Still working from the "military" theme of earlier games, Sky Raider had the player fly over a scrolling landscape, dropping bombs on enemy targets. It was one of the first games to keep a high score (though without initials).
"Sky Raider will be a super attraction game...it was first previewed at the ATE show in London where the overall reaction was superb" xli
-Frank Ballouz, Atari Marketing executive
One of Atari's earliest coin-ops from 1978 was Avalanche, programmed by Dennis Koble and released in April. Avalanche was a sort of a "reverse Breakout", in which rocks fell from the top of screen and had to be caught by the player.
Soon after, in June, Atari released the Fire Truck coin-op. Fire Truck was one of the first cooperative multiplayer coin-ops. One or two players would guide a hook and ladder fire truck around a city.
The game cabinet consisted of a seat for the driver with a steering wheel for the cab, and a platform directly behind the seat with another steering wheel used for the second player to control the ladder portion of the fire-truck.
"Fire Truck was a follow-up to Superbug. The idea was to create a two player cooperative driving game. In Fire Truck, one player drove the front of the truck, and the other player drove the rear. It was trickier than it sounds. " xlii
A single player version of the game named Smokey Joe was released in August 1978, intended for locations that didn't have room for the massive Fire Truck cabinets.
July 1978 saw the release of Skydiver, programmed by Owen R. Rubin. The game consisted of a player jumping from an airplane and guiding their avatar to hit a spot on the ground.
Rubin, a pinball fan, added a "pinball feature": the name of the game on the marquee would light up when you landed successfully. If you were able to light the full name, you would win a bonus life, points, or a free game. Rubin had to fight his superiors to get this added to the game. xliii
"I was a pinball fan, so this is the first video game to have a pinball feature. When I asked for it, I had to fight to get it added because they thought I was crazy."xliv
- Owen R. Rubin
When Ed Logg joined Atari in 1978, he immediately started working with Atari engineer Dennis Koble on the ill-fated and unreleased coin-op Dirt Bike. When that project was cut short, he moved on to Super Breakout, a follow-up to the established 1976 Atari hit Breakout. Released in August, Super Breakout was a sizable hit with nearly 5000 units sold. xlv
The game improved on Breakout in many ways: it was written for a microprocessor (6502) instead of discrete logic, and it included 3 game variations -- Double Breakout (two walls separated by a space), Progressive (continuous walls that scroll down the screen), and Cavity (two balls embedded in a standard wall).
"The original idea was to have six variations on Breakout... However, in actual play there was one overall favorite, Progressive Breakout". In the end we put three variations in one game: Progressive, Double, and Cavity Breakout." xlvi
- Ed Logg
Other coin-ops released in 1978 were Sprint 1, a 1-player version of Atari sister company Kee's Sprint 2, Ultra Tank, a version of Tank inspired by Atari VCS Combat, with eight game variations, and Orbit, a raster version of Space War developed for the European market by Owen R. Rubin in six to eight weeks. xlvii
As well, there were several notable unreleased games in 1978, many with military themes. These included Wolf Pack, PT Commander, and Captain Seahawk, plus the decidedly non-military Mini Golf.
One very interesting unreleased game from this year was Tunnel Hunt, programmed by Owen R. Rubin. Tunnel Hunt was a pseudo-3D shooting game that was determined to simply not be fun enough for release. The game was later sold to Exidy as Vertigo and then to Centuri as Tube Chase.
"Marketing felt just flying was not fun enough, so we added Star Wars-like objects that flew down the tube at you and you had to shoot them. It was a good game, but they kept wanting changes. It did a solid #2 and #3 for 12 weeks in tests, but Atari could not decide to ship it." xlviii
- Owen R Rubin
The biggest coin-op game for Atari in 1978 was Football. Football was a huge hit when it was released in October, just in time for the NFL season.
"Several folks at Atari had wanted to do a football game for a while, by the time I got there. I believe Steve Bristow and Lyle Rains were the main promoters of the idea, however the technology was not quite up to it. With the move toward microprocessor-controlled games, it started looking possible." xlix
- Mike Albaugh
The game included an innovative new controller scheme named a Trak-Ball (trademarked in October 1977) that was used to control the game. By rolling the ball faster and slower in any direction, the Trak-Ball could be used to control direction and velocity of the X's and O's -- the on-screen players.
"When we brainstormed about controls, I wanted a trackball. They had existed for a while, but were fiendishly expensive. I harassed Jerry Lichac, one of our ace mechanical engineers, with a number of harebrained schemes. Meanwhile, Sega produced a soccer game with a trackball. It was not a great design, but served as an 'existence proof' to quiet Atari management claims that a trackball was inherently too expensive. Jerry came through in style. His "three-point suspension" was the first I ever saw in such a context, and was widely adopted shortly thereafter in pretty much every (mechanical) mouse. Too bad he never patented it." l
- Mike Albaugh
Football sold an astonishing 10,450 arcade machines li within a few months. At the very same time, the Space Invaders coin-op from Taito was sweeping the nation (and the world) and driving thousands of people back into the arcades. Football benefitted from this influx, and held its own against Space Invaders through the end of 1978. However, sales dropped off drastically when the NFL season ended. By early 1979 Atari was giving the games away for the rock-bottom price of $395.
By fiscal 1979, Atari's coin division has only generated $52 million is sales, as opposed to nearly $200 million for the consumer division. It was clear that the coin-op division was not going to be the primary focus of Atari. However, Atari's coin-op division did not take the success of Space Invaders lightly, and moved quickly to create its own space-themed games to compete in the new marketplace.
1978: Atari Electronics and Pinball
Atari's pinball division continued to produce games through 1978. The first was Middle Earth in February. It included a double playfield with sets of flippers and a theme based on Lord of the Rings. Also released in 1978 was the largest pinball machine ever made (83" tall x 39" wide x 93" deep). Hercules in April 1978, and Space Riders in November 1978.
At the same time the Atari Electronics division released its first product, Touch-Me, which was a version of the arcade game of the same name that was similar to well-known toy inventor and patent defender Ralph Baer's Simon game at Milton Bradley.
"(I did) a little product called Touch-Me, which was a hand-held version of Milton Bradley's Simon, which was Milton Bradley's version of Atari's coin-op Touch-Me." lii
- Dennis Koble
Touch-Me was not a huge success, and the Electronics Division never released another product. Three other products were created in 1978, but never sold: handheld versions of Space Invaders and Breakout, plus Pro Coach Football.
1978: Bushnell Leaves
As 1978 continued, Ray Kassar's involvement in Atari moved from mere consultant into a much larger role. As Ray's importance grew -- and confidence in his abilities increased within Warner brass such as Manny Gerard -- Nolan Bushnell and Joe Keenan were systematically pushed out of the company.
"By the time I got to Atari (in the summer if 1978), Nolan was just being phased out by Ray Kassar." liii
- Rob Fulop
Bushnell constantly fought with Warner Communications and Kassar over the direction of Atari. By the end of 1978, Bushnell was convinced that Atari was making huge mistakes. He felt that the VCS was in trouble, and needed to be scrapped for a successor.
"The day that we shipped the 2600, I felt we needed to spend engineering money on getting the next one. By the time it was there, the technology had advanced so much that we could build a much better video game. Warner was horrified by the idea. They wanted to be in the 45 rpm record business and just sell records for ever, and I told them, 'It doesn't work that way, every two to three years you need to upgrade your hardware', and their decision to not upgrade the hardware was really what led to the collapse of the business in 1982."
- Nolan Bushnell
He also felt that the incipient Atari computer line needed to embrace outside developers, but the record company execs from Warner -- who were used to completely controlling IP and the delivery medium for it -- wanted to make the new computers completely closed to outside developers.
"I felt that the computer system should not be a closed system, we needed to have third party software developers. I could see Steve Jobs out evangelizing, and Atari was saying that if you write software for the Atari computers, we will sue you. I just thought that was foolhardy. They were from the record world, where you sue people."
- Nolan Bushnell
Bushnell also continued to fight with Warner over R&D, especially his plan to tie up all the N-Channel chip fabricators with alternative Atari designs, so no competitors could get their products manufactured. They also argued over the premium prices Atari put on pinball machines.
History would prove Bushnell correct on all accounts except for the fate of the VCS, and this became his Achilles heel to his superiors. In November 1978, Bushnell laid his feelings bare about the fate of the VCS during a meeting at Warner headquarters in New York City. Atari had manufactured 800,000 units for 1978, but many remained unsold. liv It looked like dire straits for all involved, including Bushnell and Manny Gerard.
"The meeting -- Warner's annual budget meeting -- took place in November. It proved to be Bushnell's downfall. Before a crowd of high-level executives, Bushnell and Gerard locked horns, screaming at each other for hours." lv
- Steve Bloom
The pair fought about all their outstanding issues, especially the still-poor sales of the VCS.
""It was a very bad year for the company. Clearly we built too many units, which translated into potential disaster. We're talking $40 million worth of inventory that the company was stuck with." lvi
- Joe Keenan
Bushnell was convinced that VCS would have a disastrous Christmas season. Gerard was confident that Kassar's marketing plans would show good results. The meeting turned into a complete disaster, and all involved knew that some kind of change had to be made.
The one thing that could have saved Bushnell was if his prediction for terrible VCS sales had come true. However, it never materialized. The success of Space Invaders in the arcades, plus the unprecedented Kassar-initiated TV marketing blitz for the VCS in the fourth quarter of 1978, meant respectable sales for the Christmas 1978 season, and $200 million for the consumer division in fiscal 1978-1979. Bushnell was very much part of that success.
"Don't forget, I also hired Ray (Kassar). If there was a problem with marketing, as Warner claims, I solved that problem by hiring Ray." lvii
- Nolan Bushnell
However, his prediction of the VCS's failure was his Bushnell's undoing. Manny Gerard suggested a reorganization that would have kept Bushnell at Atari as director, but Bushnell realized that he could never really effectively control his company again.
"I realized no matter what the title was, the real shots were going to be called from New York." " lviii
- Nolan Bushnell
Instead, Bushnell informed Gerard that he wanted to be fired (Warner contended that it fired Bushnell, but the end result was the same) and thus ended the role of the first engineer entertainer in the business of the world's first video game company.
Bushnell signed a seven year non-compete agreement, negotiated for the rights to Chuck E Cheese Pizza Time Theater from his former company (for $500,000 lix), and then set off to try to conquer the world in other avenues.
"You can spend your life doing woulda, shoulda, coulda. I wish I hadn't sold to Warner, because I think that the world would be a very different place with Atari being the preeminent video game company today." lx
- Nolan Bushnell
1979: The Kassar Reign Begins
1979 started as the first full year that Atari did not have Nolan Bushnell at the helm. New president and CEO Ray Kassar moved very quickly to shake things up around the company. One of the first things Kassar did was cancel many engineering projects that he felt unnecessary.
Unfortunately for Atari, this included the "tied-up" N-Channel projects Bushnell had used to stave off VCS competition. This opened the door for a multitude of competitors that would soon challenge Atari for dominance in the home video game arena, including Bally and Mattel.
"Since there were only six labs in the world that could do N-Channel, you created a virtual monopoly with a series of contracts. It was so simple. Ray Kassar was not a technologist, so he had no clue about what was going on" lxi
- Nolan Bushnell
At the same time, Kassar made several moves to break the hold engineering had on Atari. Aside from cancelling Friday parties, instituting dress codes and core working hours, installing security doors, and hiring a former Secret Service agent to head security for the company, lxii Kassar cut Bob Brown's 30-person R&D staff completely, leaving Atari with a huge gap for developing new products.
"In fact, when Al (Alcorn) told me what had happened I didn't understand what he was saying -- I couldn't conceive of Atari cutting off its future by chopping off its R&D work. It will always be my opinion that being engineering-oriented was what made Atari successful." lxiii
- Bob Brown
Kassar's view was simple: Why did Atari need R&D if the company could not sell the VCS units already stocked in warehouses? It was a logical question, but also one that showed Kassar had little respect for Atari as a creative or pioneering company.
The executive's dire view of Atari's entertainer engineers showed in the contemptuous things he called them in private and to the press. Kassar used terms like "spoiled brats", and "prima donnas" to describe a group that had once been Atari's most valued resource.
To make up for the lost focus on engineering and R&D, Kassar hired a slew of marketing MBAs and increased advertising spending to levels Atari had never seen. The new crop of Atari executives knew nothing of games, and in fact hardly played them.
"Ray Kassar wouldn't be caught dead in an arcade." lxiv
- Howard Delman
Kassar quickly shifted Atari's focus from dreaming up new ideas to selling the ones the company already had. Bushnell had created Atari as company where creativity and innovation could flourish.
"It became this almost passionate religious quest, and the more religious fervor, the better and more interesting the games turned out to be." lxv
- Nolan Bushnell
On the other hand, Warner and Kassar were designing a company that could market the existing product line at the expense of everything else.
"They kind of ripped the core out of what created Atari's brilliance and excellence." lxvi
- Nolan Bushnell
1979: Atari VCS
As 1978 ended and as 1979 began, things were looking-up for the VCS's line-up of games. Night Driver (Larry Kaplan, Rob Fulop) and Adventure (Warren Robinett) were coming along nicely. Those titles were shown at the January CES and were very well received.
At the same time, it looked like Bushnell's push in 1978 to augment the VCS programming team to produce for as many games as possible had paid off, at least in numbers. Many new titles were released in 1979, even while some of the core VCS programmers like Kaplan, Crane, Miller, and Whitehead were busy preparing the OS for the home computer division.
Still though, the quality of the games was an issue. Besides the exceptional Bowling, Canyon Bomber and Sky Diver cartridges, there was nothing earth-shattering in the line-up: Casino, BASIC Programming, Backgammon, Football, Human Cannonball, Miniature Golf, and Slot Machine.
" (Sky Diver) also took about six months as I recall, and I started it before I even knew there was a Sky Diver coin-op game...This was the best selling 2600 game until Space Invaders came out." lxvii
- Jim Huether
Video Chess was created when a consumer from Florida sued Atari because there was a chess piece pictured on the system's box, but no game was available. The VCS programmers did not think a chess game would be possible on the VCS, but with some alternating scan-line tricks they got it to work.
"I do remember discussions in the lab of how 'stupid' it was to assume we can do a chess game and how 'impossible' it was to do. And that's all I needed... you see the word 'impossible', it seems, has always been one of my 'igniters' -- it gets the puzzle solver in me going." lxviii
- Bob Whitehead
Also, Warren Robinett finished the rather bizarre entry into the VCS line-up, BASIC Programming, in June 1979.
"The higher-ups at Atari wanted a cartridge that would allow the user to learn simple programming, and I had been vocal in expressing my interest in doing a programming language before management came up with this. I was the only 2600 programmer who had studied computer science." lxix
- Warren Robinett
Another game of note from 1979 was Superman, the first home video game ever licensed from movie franchise. Ray Kassar moved quickly get a VCS programmer to help create a game based on the movie that was released in late 1978. Warren Robinett had been developing a game based on the mainframe text game Adventure since the middle of 1978.
"I was finishing my first video game on the Atari 2600 console. I got a chance, at a Stanford research lab, to play the original text adventure game, which was called Adventure. (Thank you, Don Woods and Willie Crowther.) I decided that this idea -- a journey through a network of rooms, with objects you could move from place to place, and obstacles and monsters to get past -- could work as a video game." lxx
- Warren Robinett
However, instead of an generic adventure game, Atari's new brass asked Robinett to re-write it as a tie-in for Superman: The Movie (released in Dec. 1978).
"Atari's parent company owned the first Superman movie which was about to come out [and decided] that I was to change Adventure into Superman so as to ride on the wave of hype. Every time this came up I said I would do it if I had to, but I didn't want to. After a few weeks, my co-worker John Dunn volunteered to take my code and do the Superman game, leaving me free to do the Adventure game." lxxi
- Warren Robinett
Robinett helped Dunn get started by loaning him the kernel code from his Adventure to use as the basis for the game. Dunn, as an artist at heart, pushed to use 4K of ROM (almost unheard of at the time) to make detailed graphics for the game. lxxii
Even so, the game was a sort of "forced march" that the VCS team had not experienced prior. Instead of being allowed to create their own games in six months, marketing was now dictating which games would be made, and which ones would be released. For Dunn, the process of making the game killed his enthusiasm for Atari.
"Before Warner acquired Atari from Nolan Bushnell, the VCS programmers had the freedom to design their own games from concept to finish. It was an intense, joyfully creative period that did not survive the takeover." lxxiii
- John Dunn
Superman was released in mid-1979, beating Adventure, which was released for Christmas that year. However, no matter which one was released first, Adventure became a huge hit. Sales may have been piqued by the inclusion of the very first known "Easter egg" in a video game.
Since Atari was not keen to credit any development staff for their games, Warren Robinett inserted his name into the game and created an elaborate method to access it -- including a nearly invisible dot and a secret room.
"Each 2600 game was designed entirely by one person. But on the package it said basically 'Adventure, by Atari.' And we were only getting salaries, no cut of the huge profits. It was a signature, like at the bottom of a painting. But to make it happen, I had to hide my signature in the code, in a really obscure place, and not tell anybody" lxxiv
Soon after the release of Adventure, Warren Robinett left Atari, and soon after that, Atari management found out about the Easter egg.
"My model in creating the secret room was the secret messages hidden in Beatle records ('I buried Paul') in the late Sixties, where you had to play the record backwards to hear the message... Atari manufactured several hundred thousand Adventure cartridges, sent them to stores all over the world, and sure enough, some kids here and there did discover the secret room. lxxv
- Warren Robinett
At first they wanted it removed, but soon realized that the "hidden secrets" could sell more games. Adventure ultimately sold more than 1,000,000 copies. lxxvi
"Finding that dot and then the secret room was one my first memories of playing video games. I read about the Easter Egg in Atari Age magazine, and worked for hours and hours to finally get the process to work. Seeing that secret room for the first time was like magic."
- Anonymous Atari Fan
Even though Atari eventually embraced the idea of the Easter egg, management still did not understand the reason why it was actually placed in the game. The programming team was disgruntled and something had to be done about it.
"We all were very unhappy with the changes Warner was making. We felt (correctly, I think) they did not understand that game programmers were creative types, not engineering types, and needed to be treated accordingly." lxxvii
- John Dunn
The most visible manifestation of this programmer unrest came in the form of "The Fantastic Four", a group of the four of the most tenured and best VCS programmers: David Crane, Bob Whitehead, Larry Kaplan, and Alan Miller. The four were seen as the most senior and most knowledgeable programmers on the VCS staff.
There was good reason why the four had received that nickname. Their combined effort had been responsible for the majority of Atari VCS cartridge sales by 1979.
"At that time, David, Bob, Larry, and I accounted for about two-thirds of Atari cart sales." lxxviii
- Alan Miller
Most of these programmers had been borrowed for half of 1978, and into 1979, to write the operating system for the Atari 8-bit computer line. However, as the most senior members of the VCS team, they felt the need to speak up for the rest of the programmers. The morale of the VCS staff was running low in mid-1979.
Pay was low, especially compared to other jobs in Silicon Valley. In addition, the game designers and programmers wanted some credit and some kind of share in the profits of the games they produced. Bushnell had treated the programmers like rock stars, and had provided and environment that let them flourish.
"As time went on it soon became clear that there were rock stars, there were people of extraordinary talent that deserved to make a whole bunch of money." lxxix
- Nolan Bushnell
The new Atari management did not value them quite as much. The "Fantastic Four" put their concerns and needs into written format and submitted them to Ray Kassar. Their requests were not outlandish, and were based on the record industry, a business Warner Communications was well-versed in.
"I researched the compensation aspects of the recording industry and the book industry, drafted a contract that would allow me to be credited for my work and receive a very modest royalty, and presented it to Atari management. After a while, I told my three closest associates at Atari -- David Crane, Bob Whitehead, and Larry Kaplan -- what I was doing. They joined me in those discussions. We developed a growing impression that Atari was going to agree to some plan along the lines we proposed." lxxx
- Alan Miller
However, Kassar's response was less than what they were hoping for.
"They wrote a letter to Ray Kassar saying 'give us a share, give us a fair share'... they wanted a cut a royalty program or something. Ray wrote back this letter that basically dismissed them entirely, including one phrase that specifically said 'you're nothing but a bunch of towel designers, you're a dime a dozen.'" lxxxi
- Rob Zdybel
One by one, the group of four left Atari to set out on their own path... only to join together soon after.
"I told the truth too often and left in August of 1979." lxxxii
- Larry Kaplan
This did not stir anyone in marketing, because they did not really understand much about the engineering group or what it took to make a VCS game. They truly thought the engineers were a dime-a-dozen. However, according to Bushnell, "Their value to the company was such that you could easily see they would have value to another company." lxxxiii
The four had a plan. They decided to raise investment capital to start their own company. On October 1, 1979, David Crane, Alan Miller, Larry Kaplan, and Bob Whitehead joined with Jim Levy, and formed Activision. Their plan was to create games for the Atari VCS as a direct competitor to Atari. It was a bold move that changed the landscape of the home video game business forever.
Atari's struggling pinball division started 1979 with the release of Hercules in January, the largest pinball machine ever manufactured. It stood seven feet tall, was eight feet long, and used (what resembled) pool cue balls in place of steel pin balls.
As you might imagine, while the machine was certainly a spectacle, the action was not all it could have been.
"I was always intrigued by Hercules...and I still am. I try play it when I go to the Redondo Beach Fun Factory (one of the only places that still has an operating version of the game). While it certainly is an 'experience', I can't say it is actually fun to play."
-Steve Fulton (Atari Fan)
The last official Atari pinball machine was Superman, announced in March 1979, and licensed from the movie. The game was significantly successful, selling nearly 3,500 units. lxxxiv
In fact, Atari simply could not produce enough units to fill demand. However, when that license was lost, the machine was re-named and re-themed as Solar War and Orion XIV. Neither of these machines ever saw an arcade.
"Atari pinball machines were disasters, but they were also artistic masterpieces. I mean, we worked day and night, seven days a week on Superman, which was the state of the art, and then it got killed. That's probably something I never really forgave the corporation for." lxxxv
- Noah Anglin, Atari engineering VP
Without Bushnell pushing to innovate in the pinball area, the division soon descended into chaos. Atari simply did not have the manufacturing experience to produce pinball games reliably.
"Bally could have produced in two weeks what took us four months, which is why we dropped out of pinball in 1979." lxxxvi
- Don Osborne
Not soon after, the division was closed completely, leaving multiple machines, including Road Runner, 4x4, Monza and Neutron Star all unreleased.
"It was a mess, but we pulled the plug too soon." lxxxvii
- Gene Lipkin
1979: The Rise Of The Arcade
After the massive success of Space Invaders in 1978, the Atari coin-op division was desperately trying to gain back its reputation as the king of the arcades. Atari had dabbled in space-themed games in the past, but for the most part it had stuck to realistic driving and war concepts. However with Space Invaders literally invading Atari's territory, the company had to respond with something very special.
The engineers at Atari's Grass Valley facility had been tinkering with a vector image generator since they had seen one used by Cinematronics' Space War game in 1977. Atari coin-op engineer Howard Delman was tasked with taking the Grass Valley prototype and perfecting it for use in a game.
"The original architecture for Atari's vector generator came out of the Grass Valley group. They built a prototype of a system that could display vectors on an appropriate monitor. It wasn't ready for production, but it did clearly demonstrate the viability of their ideas." lxxxviii
- Howard Delman
Unlike pixel-based bit-mapped raster graphics, vector images were created by defining points that could be joined with solid lines. While this gave games a "skeleton" feel, mostly because the images could not be filled with color, it made up for it with sharper images, with a then unheard-of 1024 x 768 resolution visuals.
"Vector graphics -- sometimes called XY graphics -- were great for video games because they provided very high resolution, razor sharp images in a day when 200 x 180 pixels was considered 'hi-res'. Atari designed and built all its own game hardware, have it we did, thanks to some very clever engineering by Lyle Rains, Howie Delman, and others at Atari.'" lxxxix
- Owen R. Rubin
After developing a working vector generator, a monitor was required to display the images. Rick Moncrief and Howard Delman combined their efforts to continue to create a working system.
"At the same time, Rick Moncrief was working on the display. (I don't know if he started from scratch, or was provided a preliminary design from Grass Valley.) Rick and I worked together, since our respective elements had to work together in any finished product." xc
- Howard Delman
The hardware was ready to be programmed by 1978, and the team needed a game concept to test. Howard Delman chose the game Lunar Lander, itself a mainframe computer game much like Computer Space. In Lunar Lander, the player attempted to tweak thrust and angle, formulating the proper velocity to land a lunar module on a rocky moonscape.
"Of course, a finished product needed to include a game, and so I was made project leader for Atari's first vector graphic game. I decided to go with the classic vector game, Lunar Lander. Rich Moore was assigned the task of writing to software. Over the next year (roughly 1978), Rick, Rich, and I developed (the game), and the final product was Lunar Lander." xci
- Howard Delman
Lunar Lander was released in August 1979, and while it was only a modest success (4,830 units manufactured, and sold for $1695 each xcii), the design of the game intrigued the other engineers and designers in the coin-op division. Even before Lunar Lander was released, another vector-based game was already in development.
"As the design of the hardware and game progressed, other engineers became interested in using it. A team composed of Lyle Rains, Ed Logg, and Steve Callfee had been working for some time on a traditional raster game called Planet Grab. As Lunar Lander took shape in the lab, they asked about using the hardware for their game, which would eventually be released under the name Asteroids." xciii
- Howard Delman
When the Asteroids coin-op was finally released in November 1979, arcade operators were skeptical, but it took the arcade by storm anyway.
During its run, it was Atari's biggest selling game (at about 55,000 units xciv) and unseated Space Invaders in the mindshare of the rabid and rapidly growing legions of players showing up in arcades across the U.S. as the best space game available.
"Asteroids surpassed Space Invaders. That's when the business community started to think that maybe video games were not flukes." xcv
- Don Osborne
It's interesting to note that, much like some of Atari's advances in hardware from the past (i.e. discrete logic), Atari's vector hardware was took a step back in technology to realize gains for successful production.
In the case of vector graphics, it was Howard Delman who redesigned the hardware from digital to analog circuitry, inventing a hardware design that would help Atari rule the golden age of arcades.
"The original vector generator hardware that was used in Lunar Lander and Asteroids was almost completely digital. It became clear to me that a vector generator was one place where analog circuitry could outperform digital in cost and efficiency. I redesigned a portion of the hardware to replace digital components with analog circuitry, and the analog vector generator was born. Although the player in the arcade wouldn't know the difference, the change shrunk the size of the circuit board, and lowered its cost. ." xcvi
Besides the vector games, Atari released other arcade games in 1979. In an attempt build on the success of Football in 1978, Atari created the Atari Sports label to market its games. The first Atari sports game released was Baseball, in May 1979 -- 1050 units were manufactured and sold for $1595 each. xcvii Baseball had a similar cabinet and control mechanism to Football. Also developed for Baseball was a voice synthesis unit that was cut before the game went into production.
"The whole idea behind this game was to use the same hardware and cabinet design that was used to make the very successful Atari Football game... We did, however, prototype a voice system for this game that was developed by Dan Pliskin. It used delta-modulation technology and played back a sampled voice saying such things as 'Strike', 'Ball', "Foul', and 'Yer out!' It didn't make it into the final product. I believe that I have the only prototype of this voice unit at home. Even though it never made it into production, it was probably the first voice unit ever put into a coin-op game." xcviii
- Ed Rotberg
As well as Baseball, Basketball and Soccer (programmed by Dave Theurer xcix) other games were also produced under the Atari Sports banner in 1979, including Four Player Football (901 units manufactured and sold for $1995 each c) developed at Grass Valley with help from Ed Logg.
Rounding out the coin-op releases in 1979 were Subs (May) and Video Pinball (March), also programmed by Ed Logg.
"I did not believe Video Pinball would be successful... However, there were places video games could go that large pinball machines could not. In the end, the game earned more than I expected and it was a commercial success." ci
- Ed Logg
There were couple games that remained unreleased from this period, including Sebring, a pseudo first-person color driving game designed by Owen Rubin and engineered by Jed Margolin cii.
The game was finished but a dispute with cabinet manufacturer (and possibly the emergence of better hardware) kept it from being sold. Malibu Grand Prix was also a first-person 3D driving game using the vector hardware. ciii It was scrapped because of hardware limitations.
However, all of this was overshadowed by the phenomenal success of Asteroids, and with it the emergence of Ed Logg as one of Atari's top coin-op designers.
"Ed Logg is the world's greatest games designer. He's done the most, the best games." civ
- Steve Calfee, Atari coin-op designer
With old coin-op standbys either leaving Atari (Joe Decuir) or on the ropes (Al Alcorn, Ed Rotberg), it would take a new generation with the likes of Ed Logg and Dave Theurer to launch Atari coin-op into the next decade.
1979: Home Computers
By the January CES show in 1979, Atari had preliminary prototypes of its two new computers, the Atari 400 and Atari 800. With the Apple II, TRS-80 and Commodore PET already released, and with the market for personal computers still an unknown quantity, many people within Atari questioned this move. However, Ray Kassar was adamant that Atari get into the computer business as soon as possible.
In a Spring 1979 newsletter to employees, Ray Kassar explained to Atari employees about the 400 and 800, and the marketplace they would be entering.
"1979 will be a year of new product introductions. The most ambitious of these new products is our new line of personal computers, the Atari 400 and Atari 800. The entry into this marketplace is a significant challenge to all of us. The market is very competitive and the quality and product performance standard very high." cv
-Ray Kassar Q1 report to employees, Spring 1979
The good news was that Jay Miner, Joe Decuir, 'The Fantastic Four', and the rest of the team who had designed the Atari computer line had done an exemplary job.
"It is hard to overstate what a feat these machines were. Based largely on the Apple, they were designed to do everything the Apple could do, and then some. As it turned out, the machines were so far ahead of their time, Atari ended up having no clear idea just what to do with them." cvi
- John Anderson, Creative Computing
However, while the hardware of the computers was outstanding, the software situation was not. Since Warner was in the record business it viewed software for the computers the same way it viewed LPs and song publishing: Warner wanted to control it all.
Warner wanted to build every application, and threatened to sue anyone who would dare make software for the Atari computers. This flew in the face of the rest of the computer industry, and started the 400 and 800 off on a shaky footing compared to the competition, which had no such restrictions.
"The big difference was Warner Communications against Steve Jobs. Warner could never win that one. I don't know if I could have, but I wouldn't have made the same mistakes Warner did. The main problem that allowed Apple to dominate was, in fact, not technology but business strategy. Steve was out evangelizing to software developers to build software for their machines. Our strategy with the video games was that we basically wanted to give away the hardware and make money on the software. That called for a quasi-closed system.
Warner thought that was the right way to do the computers business, too. So they said, 'Not only are we not going to help third-party developers, we're going to sue you if you use our operating environment.' So everybody that wanted to get into the software business supported Apple over Atari. So basically Warner drove the coffin nail in the Atari 800, despite it having a clearly superior chipset, a better operating environment... We had a lot of innovations in the Atari 800 that became standard later on." cvii
- Nolan Bushnell
Even after Bushnell was gone, the remaining team begged Kassar to open up the Atari computer line to independent developers, and open-up the machines to allow for third party peripherals. For several years Atari refused to even provide documentation to owners of the computers about their internals.
"All of us on the project strongly urged senior management to make the Atari 400/800 an open design and publish the operating system and hardware manuals. We felt this was essential to making the computer successful because it would encourage outside development and allow much more software to be developed than Atari could ever produce. Unfortunately, management decided to make it a closed system. A few years later that decision was reversed and the entire listing to the OS was published, but Atari didn't make any effort to sanitize the comments. So, you'll see comments in the listing like, 'I hope this works!'" cviii
- Alan Miller
Even with their "open hardware" limitations, the Atari computers were still feature-filled and powerful. Atari worked feverishly to prepare the line for a November release. Part of Atari's strategy was to return to one of their old stand-bys that had supported them from the beginning of the consumer era: Sears.
To make it into the Sears catalog for the 1979 Christmas season, Atari sent hand-built 400 and 800 units to Sears on August 29, 1979 so they could be considered "shipped" for the Sears deadline. cix
"The first official small shipment of the 400/800 was on August 29th 1979. These were hand built pilot run units to Sears that needed to be in stock by Sept. 1 so they could be placed in the big fall catalog. The units were placed in the Sears warehouse and then immediately returned to Atari after the "in stock" requirement had been meet." cx
- Jerry Jessop
Atari's plan was to create a new market for the 400/800 by calling them "Home Computers". It wanted to take away the "hacker" mystique of the devices and make them accessible to the mass market. This flew in the face of research at the time that suggested the market for home computers would not mature for several years. cxi
"We believe that the Atari computers are different because from word one they were developed to take away whatever apprehensions a first time user might have and help him or her feel good about interfacing with our product. With Atari computers, you don't have to stop and think before you use them. Of course, more and more of the younger generation are learning to program and work with more sophisticated applications, and they will have the capability of doing so with our product." cxii
-Conrad Jutson, Atari Computer Division VP of sales and marketing
"Conrad Jutson was an extremely thoughtful, erudite gentleman with twenty years in consumer electronics, most recently in the stereo field. His experience in that industry revealed a clear understanding of the computer as the central console in a components-oriented system. As it turned out, he and Atari were a little ahead of their time." cxiii
- Michael S. Tomczyk
The first advertisements for the Atari computers appeared in magazines such as Byte in November 1979 (which, at the time, described itself as a "small systems" magazine.) The 400 was priced at $549, the 800 at $999. cxiv
However, despite Atari's efforts to separate the computers from the company's popular video games, some of the first reviews (while positive) still mentioned the connection. It was a reputation Atari's computers could never really shake.
"With the introduction of the Atari line of computers we are seeing a third generation of microcomputer -- not just from the hardware end but also from a marketing approach. These computers are slightly cheaper than those of the previous generation. The major difference is in the configuration and the application for which the systems were designed. A recent article in Computing described the Atari computers as hybrids -- a cross between a video game and a small computer." cxv
- John Victor, Compute! magazine
Because the machines were closed, Atari had to develop all the games and applications for the computers in-house. To do this, the company started ramping up applications developers throughout 1979. Since many of the VCS programmers were disgruntled with their situation, they saw greener pastures with the more powerful and exciting computer line.
However, with the loss of the Fantastic Four, the VCS division was not ready to let them all jump ship just yet. One of the first programmers to make the switch was a recently hired war/strategy game designer named Chris Crawford.
"On September 4, 1979 I began my career as a professional game designer at Atari. The new Atari Home Computer System (HCS) with two models, the 400 and 800, was just coming out, and all the game designers wanted to work on those machines. Management therefore ordered that everybody who wanted to work on the home computers must first complete one on the game machine." cxvi
- Chris Crawford
Crawford had been hired to make VCS games, but his first and only, Wizard, was never released. Crawford said, "It didn't fit well into the product line." cxvii
Since Crawford had already designed a few computer games as a freelancer for the IBM 1130, Commodore PET, Tandy and Apple computers, it was not too much of a jump for him to get to work on software for the Atari 8-bit computer line.
However, without the proper documentation, he and other software programmers for Atari had to piece together information about the innards of the machine before they could make many usable programs.
Even with an emphasis on internal software, the early selection for the computers was rather meager. There were some productivity packages like Atari Accountant, BASIC and Atari Word Processor. However, coming from the premier name in video games, the entertainment software left much to be desired. The meager selection of early game titles for the computers included Basketball and Chess.
"...they didn't want the 800 to be seen as just a game machine; they wanted to compete with the Apple II" cxviii
- Doug Neubauer
1979: Year End
With all of Atari's success in 1979, it was still a difficult year for the company. The VCS sold well, but did not yet have a "killer app" that would have made it a necessary purchase. As well, the 8-bit computer line was launched very late in the year, so its fate would not been known until the end of 1980.
The coin-op division had an amazing hit with Asteroids, but its full effect would also not be felt until the next year. Atari had spread itself into three separate markets and was finding it difficult to mater any one of them.
"As Atari grew -- wildly and with the uncontainable force of Mount St. Helens -- it also grew schizoid. It quickly evolved into a three-headed beast: the coin-op division, the consumer games division, and the home computer division all operated pretty much independently of one another." cxix
- John Anderson, Creative Computing
Added to this was the fact that many of the key people that had made Atari a success since 1972 were leaving the company. Nolan Bushnell and Joe Keenan were gone. Following the completion of the 8-bit computer hardware, Joe Decuir and Jay Miner left also.
Added to this was the defection of the "Fantastic Four". However, if Atari's brass understood the importance of these key entertainer engineers, they certainly did not show it. Ray Kassar might have been successfully building his marketing fortress, but slowly the ground beneath had started to crack.
"Remember that Atari senior management fundamentally didn't understand the business. They didn't seem to know much about or care about the engineer group. I can remember that during our negotiations my boss' boss told me that he could hire several engineers 'off the street' who could do what I did for the amount of money I was asking for. He was essentially clueless about the intricacies of programming the VCS and the creative challenges of designing good games." cxx
- Alan Miller
1980: The VCS Invades
With positive sales for the Atari VCS during the Christmas season of 1979, the rush was on to provide a huge selection of software for the new proud owners of Atari machines. Atari started the year with a huge presence at the January CES show in Las Vegas.
"Atari fueled the suspicion with their own game machine. Their Atari 2600 video game machine was truly the gadget of the year, and Atari's exhibit featured wall-to-wall games that attracted huge crowds." cxxi
- Michael S. Tomczyk
Atari followed its CES presence in January with a marketing blitz that included the largest TV ad campaign Atari had ever undertaken. One of the very first games advertised during this campaign in January was Space Invaders, programmed by Rick Maurer, (who had previously worked on the Fairchild Channel F) and it was a monster. Simply put, Space Invaders saved the VCS.
"The VCS was not doing that well -- there were only a few million in the field, and it looked like it was dying -- then Space Invaders came out, and bam! It exploded." cxxii
- Larry Kaplan
While both Manny Gerard and Ray Kassar have taken credit for licensing Space Invaders, it was Maurer who started with the idea to create a version of the game before anyone even realized it. Maurer started Space Invaders in 1978 when he was first trying to learn to program the VCS, a process that was not easy for him at first.
"With a VCS you have to unlearn every good programming practice you've learned." cxxiii
- Rick Maurer
He got a good way into development, but then he seemed to reach a programming dead-end. The game was working, but no one else in the consumer division seemed to care about a VCS version of Space Invaders.
"After a few months,I got it to where it was fun to play. But few seemed to be interested in it, nobody wanted to play it." cxxiv
- Rick Maurer
Maurer moved onto Maze Craze (also released in 1980) because he thought that programming Maze Craze would help hone him VCS development skills for Space Invaders.
Much later, in early 1979, Manny Gerard convinced Ray Kassar to license the game from Taito so it could be released for the VCS.
"Kassar went to Japan in 1979 for one purpose, and one purpose only -- to get Space Invaders. He did so, cutting a brilliant deal that would generate millions of dollars for Atari and launch the 2600 into orbit." cxxv
- Kevin Bowen, GameSpy's 25 Smartest Moments In Gaming
This allowed Maurer to continue making the game, this time in the light of day. For Maurer, developing Space Invaders for the 2600 was not an easy task. He used rudimentary "programmer art" for the visuals, but wanted to get the box designer to create his illustrations of the invaders on graph paper to use in the game. This never happened, so Maurer used his own drawings instead. cxxvi
Originally Space Invaders was 7K, but he needed to get it down to 4K, so he spent three months shaving code and re-writing as he tried to save every last byte. cxxvii By the time he was finished, his beautifully structured code was now a maze of "JMP" branches, but it was as tight as he could possibly make it.
The finished product was amazing to behold. With 112 game variations, Maurer was able to squeeze every imaginable take on Space Invaders into a VCS cartridge. While the game did not completely resemble the original, it played amazingly similarly. Maurer's fellow programmers were astounded by the game. Rob Fulop sums it up best: "Fucking brilliant."
When Space Invaders was released for the VCS in early 1980, it became an instant hit. Eventually the game made Atari over $100,000,000.
The game was so successful that it proved the staying power of the VCS for the long haul, and proved to Ray Kassar that the VCS could be more than just a seasonal product. Game releases were re-scheduled from the holidays to throughout the entire year.
It also prompted Atari marketing to try more arcade games and development began new translations such as Asteroids and Super Breakout for the VCS. Simply put, Space Invaders was the turning point for home video games. The stage was set for an arcade revolution in the home. By Christmas of 1980, the VCS, with Space Invaders, was the must-have toy for the holidays.
"...one of the biggest blockbusters this Christmas season is expected to be the Atari Space Invaders electronic game that every day draws lines at the model at Woodward & Lothrop's downtown store." cxxviii
- Douglas Chevalier, The Washington Post, Nov. 10, 1980
However, there was one victim in the success of Space Invaders: Rick Maurer. Both Space Invaders and Maze Craze are widely regarded as some of the best-programmed games for the VCS, but they would be the only games Maurer would ever create. As Space Invaders rocketed to success, it saved Atari and pretty much made the next 28 years of home video games possible, Maurer himself was compensated with a mere $11,000 bonus. Disgusted by theindustry, Maurer left and never made another Atari VCS game.
With a new emphasis on releasing games throughout the year, and with hundreds of thousands of new customers to sell them to, Atari embarked on getting as many VCS games to the market as possible throughout the rest of 1980.
One of the first was Circus Atari, released in January, programmed by Mike Laurenzen. Circus Atari was a re-write of Breakout (and almost an exact copy of the Exidy arcade game Circus) in which you launched clowns on a platform in the air to break balloons. Though it was basic, Circus Atari was quite a good little game.
A myriad of other low-key titles joined Circus Atari in the wake of Space Invaders. These games were mostly older-skewing and designed to fill in gaps in the VCS line-up more than become huge hits. They included 3D-Tic-Tac-Toe and Video Checkers (both by one of the first female VCS programmers, Carol Shaw), Golf, the Sears exclusives Steeplechase and Stellar Track, and Othello.
"The 2600 version of Othello I did on the side until my boss caught me at work once making the final changes before it went into production." cxxix
- Ed Logg
One very unique game released in 1980 was Championship Soccer by Steve Wright. While the limited soccer game-play was not much better than the cut-down sports action of other VCS games like Home Run and Football, the reward for scoring a goal was unprecedented: a fireworks show.
"How about that fireworks show when you scored a goal -- was that awesome or what?"
- Bill Kunkel (Co-founder of Electronic Games magazine) cxxx
It was a stunning graphical effect that transcended the quality of the game. Some players would simply let each other score so they could see the fireworks explode. It's no wonder that programmer Steve Wright never made another game, and instead became a well-respected and successful digital FX and CGI guru for feature films and TV. cxxxi
One of the best games on 1980 was Night Driver, programmed by Rob Fulop and released in August 1980. A conversion of Atari's coin-op game, Night Driver used a pseudo 3D perspective to simulate high speed driving.
"My first project in this group was Night Driver, which started with Larry Kaplan handing me a bunch of code and saying, 'Maybe you can get this to work, it seems like too of a headache' ... Basically, I think he was mentally on his way out the door at that point and didn't want to start another game." cxxxii
- Rob Fulop
1980 also saw a growing a trend for VCS games: the unreleased gem. With Atari marketing pulling further away from engineering and refocusing away from unique concepts towards licensed titles, some finished VCS games were being shelved and never released. Stunt Cycle by Bob Polaro was one of the first such games.
Originally designed as a version of the Atari coin-op game, marketing attempted to get it converted to Dukes Of Hazzard game, and then ultimately it remained unreleased. cxxxiii Another such game from 1980 was Chris Crawford's Wizard, which was the victim of the move from 2K to 4K VCS games.
1980: Home Competition
On April 25, 1980, the "Fantastic Four" made it known that they would be producing games for the Atari VCS with their new company, Activision. At first, there was little reaction from Atari. The company went on to announce four games: Boxing, Fishing Derby, Dragster, and Checkers. There was little fan-fare for Activision, and hardly anyone took notice.
More pressing for Atari was the emergence of some serious competition for the VCS. The Mattel Intellivision was test-marketed in 1979 and released wide in 1980. It sold 200,000 units, and was considered superior in some ways to the Atari VCS. However, it was competition that could have been avoided (or at least postponed) if Ray Kassar had respected Nolan Bushnell's SLI chip blocking strategy.
"When I sold the company to Warner and after I left, Ray Kassar looked at and said 'Bushnell is a real idiot, why does he have five different chip manufacturing projects going along?' He cancelled all but the best ones. One went to TI, one went to Bally, and one went to Mattel. All of a sudden, with the stroke of a pen, he generated three major competitors." cxxxiv
- Nolan Bushnell
This has always been a bit of a grey area. The hardware specs of the Mattel Intellivision certainly sounded very similar to a project called The Atari 3200. The 3200 was a system that was supposed to be a successor to the 2600, but development did not start until 1981.
"According to engineering logs, in 1981 Atari began work on a new video game console to replace the Atari 2600 Video Computer System. This new console during development took on many codenames: Sylvia, Super-Stella and also... PAM (with notes next to it saying 'Super-Stella: Multipurpose'. This new console was to be based on a new 10-bit processor and would have more memory, higher resolution graphics and improved sound while maintaining compatibility with all existing Atari 2600 console games." cxxxv
- Curt Vendel
However, this still does not preclude it being the same chip, as no matter when design started on the system, the chip could have been designed long before. The most striking similarity between the 3200 and the Intellivision was the inclusion of 10-bit internals, which were not common at a time when 8-bit was the norm.
The 3200 was never built and Atari moved onto other projects to succeed the 2600. However, if it is true it means that Ray Kassar's contempt for engineering and his misunderstanding Bushnell's blocking strategy led directly to the Atari VCS's fiercest competition in the early '80s.
1980: Atari Electronics
By 1980 the Atari Electronics Division's future looked very bleak. Touch-Me was not success, and its new products in development looked questionable at best. Al Alcorn, Roger Hector and Harry Jenkins lead a team developing Cosmos, a standalone console that combined and LED screen with holographic images. The holograms looked cool, but were mere window-dressing. The real meat of the games were played out on the LEDs.
"..you played a tabletop game then a hologram appeared. They made you think the GAMES were going to be Holograms!" cxxxvi
- Bill Kunkel
Still, there was much public interest in Cosmos and the team was pushing toward a 1981 CES unveiling for the product.
1980: Home Computers
With very little time to sell in 1979, 1980 became the first real year of the Atari 8-bit computers. As the year began, several games were released for the platform including 3D-Tic-Tac-Toe, Super Breakout and Space Invaders. Space Invaders was particularly interesting.
Even though Atari had secured the license from Taito, and the 8-bit computers had the power to replicate the game exactly as designed, programmer Rob Fulop decided to make an almost entirely different game.
"The reason Atari 800 was different from the original was very simple and somewhat embarrassing. I was 23 years old at the time, and with one 'port' already under my belt (2600 Night Driver), I figured I was far too cool to do another straight port of an existing coin-op game. You have to remember that at Atari, programmers had nobody that approved their plans, basically people like myself were given 100 percent liberty to create whatever we wanted. There was no approval process, no 'pitch meetings', no specs that needed sign off.
In retrospect, such freedom is really astonishing to me given what is now required to put something into production. But at that time, it was totally up to the programmer. Nobody told me to do Space Invaders, it was my choice. I decided to change the original, not because I thought the original was 'broken' in any way, but simply because I was looking to 'make my mark' whatever that meant." cxxxvii
- Rob Fulop
The game was so different, in fact, that an independent developer named Joe Hellesen (who would go on to create many more 8-bit, ST and Amiga titles including Pac-Man for the Atari 8-bit computers) created a nearly arcade perfect version in 1981.
After the initial run of games for the 8-bit computers, though, Atari was ready to stop all game development on the machine. Atari management was keen to differentiate the computers and stop the comparisons to the VCS.
"One of the very few decisions they were confident in was the decision to clearly differentiate the home computer from the video game machine... So the rule was simple: no more games." cxxxviii
- Chris Crawford
Instead of working on games, Crawford got started on several edutainment titles, including a power company simulation named Energy Czar and nuclear reactor simulator named SCRAM. Fellow programmers were hard at work on bookkeeping and business software.
However, even though Atari wanted to separate the computer line from its video games so it could be seen as a serious contender in the market, the company made one huge and glaring mistake that would pretty much ruin that idea before it ever got off the ground: it released the game Star Raiders.
Programmed by Doug Neubauer, the game was released in March of 1980. Neubauer was hired by Atari in 1979 as a chip design engineer, but worked on Star Raiders on the side, developing on a wire-wrapped 8-bit prototype before the production models were ready. Star Raiders was designed as 3D version of a game that was very popular on college campuses and computer rooms in the 1970s.
"Star Raiders was to be a 3-D version of the Star Trek game played on the mainframe computers of that time. The Star Trek game was all text and not played in real time, but it had the idea of ship damage and sector scanners and charts." cxxxix
- Doug Neubauer
The 3D visuals and game play of Star Raiders was like nothing that had come before in a computer games. Neubauer's fellow employees at Atari were blown away by the finished product.
"The employees in the company went bonkers over the game, which was the first true-to-life, three-dimensional videogame... The visual effects were dazzling, especially when the stars whizzed by when you warped, or when the four kinds of enemy ships came zooming out of nowhere either behind or in front of you." cxl
- Michael S. Tomczyk
Upon release, Star Raiders became the first "killer app" of computer gaming. It was the first computer game that could be called a "machine seller".
"It's pretty amazing, the way the game caught on. I think it was the first game to combine action with a strategy screen, and luckily, the concept worked out pretty well." cxli
- Doug Neubauer
Even the mainstream press caught on to the fury over the game.
"The name of the game is Star Raiders. It is the best possible combination of a shooting gallery and a planetarium. It is the reason I was up till 1 a.m. the night before. It costs about $530 to own one, assuming you've already got a color TV." cxlii
-Henry Allen, The Washington Post, September 2, 1980
Of course, the success of Star Raiders had a serious downside for the Atari home computer division: it solidified the industry misconception that the 400 and 800 were not serious computers.
"Who would buy a serious computer from the world's most successful video game and arcade company? Many customers thought the Atari 400 and 800 were more expensive versions of the Atari 2600 video game machine. Some people even doubted whether the Atari 400 and 800 were real computers. " cxliii
- Michael S. Tomczyk
One of the main problems for the Atari 8-bit computers was their reputation for having a lack of software. Atari simply could not create enough titles in-house to make the relatively expensive purchase of an Atari computer worthwhile to anyone, other than hardcore gamers and game programmers.
"Unfortunately, Atari neutralized their own advantage. To everyone's shock and dismay, they decided to keep secret vital technical information like memory maps and bus architectures which programmers needed to write software. They then tried to blackmail programmers by indicating that they could get technical information only if they signed up to write Atari-brand software. This alienated the fiercely independent hobbyist/programmer community, and as a result many serious programmers started writing software for other machines instead. By the time Atari realized their mistake and started wooing the serious programmers, it was too late. The only programmers who remained loyal were game programmers." cxliv
- Michael S. Tomczyk
Still, the inside development team continued to speak out about the third party software situation, trying to convince management that they were making a mistake.
"The attitude of the executives was, 'We want to make all the money on the software. We don't want any competitors'. They were having competitors with the VCS and the programmers were trying to explain that, 'No, that's not how it works, you need a big library of software, you need to encourage them,' and I was one of the people doing that." cxlv
- Chris Crawford
By the end of 1980, some third party software started to trickle out for the Atari 8-bit computers. Even though most of it was written in BASIC and text-based, such as Midway Campaign and Lords Of Karma from Avalon Hill, much more was on the way.
Despite Atari's best efforts to bury the gaming capabilities of the computers, there were programmers, hobbyists, hackers and midnight coders finding ways to make quality games and get them to market.
By the end of 1980, Atari had sold 35,000 computers cxlvi and sales picked up so much in December that the machines had to be allocated in small batches to dealers across the country.
Even so, the computer business lost $10,000,000 on $10,000,000 in sales, prompting Atari to spin off the computer division from the consumer division in October so that it would not mar the massive success of the VCS.
1980: Coin Ops
Atari's coin-op business at the start of 1980 was still dominated by Asteroids. At least two new versions of cabinet were created so that the game could fit into spaces that were not ready for a standard arcade cabinet. The sit-down "cocktail" version was released in April 1980 and sold nearly as many units itself as most other arcade games did in their normal runs (8,725 units manufactured and sold for $1746 each cxlvii).
As well, a new "cabaret" design was also released in May. This was a stand-up machine with a much smaller footprint that would allow owners of laundromats, convenience stores, and other establishments with less space to offer Asteroids to their customers.
The record-breaking success of Asteroids highlighted a feature of the game that was fast becoming an issue: the high-score list. While not the first game to allow it (that honor goes the Exidy's riff on Star Wars, Star Fire) Asteroids was the first very popular game to summon players to enter their initials for posterity.
This high-score list coupled with the addictive game play of Asteroids showed a downside in the first part 1980. As more and more players got better and better at the game, driving towards high and higher scores, arcade operators saw a drop in profits.
Players just got better and better at the game, exploiting flaws in the design. By April, the first 1,000,000 point Asteroids game was recorded at U.C. Berkeley by Paul Wollam. While Atari loved to promote these high scores, engineers were secretly working on a fix that would make the game more difficult. A mod-kit released in May of 1980 made the small saucer more intelligent, with a better fire-rate.
Aside from the 1979 carry-over of Asteroids, the first great new game of 1980 for Atari was Missile Command. Playing on the fears of the Generation-X kids who were filling the arcades at the time, the game simulated a nuclear warhead attack on six cities that had to be defended by the player. Designed by Dave Theurer and Rich Adam, some of the suggested early titles for the game were "World War III", "Armageddon", and "Edge Of Blight".
Upon release in April 1980, Missile Command was a great success. While certainly not the size of Asteroids, it was still a huge hit with almost 20,000 units sold. cxlviii
The game certainly caught the imagination of the Cold War generation, and may have even acted as a kind of release for subconscious worries about nuclear annihilation.
""Everybody I know who really got into the game had nightmares about nuclear war." cxlix
- Steve Calfee (Atari coin-op designer)
"There is a little bit of a spooky message in that whole game when you have that final cloud at the end." cl
- Ed Rotberg
Also released in April was Monte Carlo. Monte Carlo was another in Atari's long running series of single-person racing games. Designed and programmed by Norm Avellar and Dennis Koble, Monte Carlo featured top-down, scrolling driving action.
Not too long after, in September, Atari released another advanced war-based game, this time a revolutionary 3D, vector-based tank simulator named Battlezone. The game was championed by Morgan Hoff cli, designed by Ed Rotberg and utilized a math-coprocessor named "the math box" for 3D calculations, developed by Jed Margolin and Mike Albaugh. The erupting volcano in the background was created by Owen R. Rubin.
"It (was) actually developed in one of our company brainstorming sessions. We had recently developed the vector display technology, thanks to Howard Delman, and of course our first thoughts were to do a first-person 3D perspective game. I honestly don't remember who first proposed the tank format concept at those meetings." clii
- Ed Rotberg
Battlezone was another sizable hit for Atari (more than 15,000 units sold cliii), its third in less than a year. All of the sudden, the Atari the coin-op division had entered its golden age. It appeared as though it could do no wrong -- even, it seemed, to the U.S. Government. At the time, Atari was approached by the Army to help create a version of Battlezone to use for combat training.
"There was a group of consultants for the Army -- a bunch of retired generals and such -- that approached Atari with the idea that the technology for Battlezone could be used to make a training simulator for the then-new Infantry Fighting Vehicle. The idea was that such a simulator could be made into a game that would encourage the soldiers to use it. They would learn not only the basic operation of the IFV technology, but would also learn to distinguish between the friendly and enemy vehicle silhouettes." cliv
- Ed Rotberg
While information on the Army Battlezone project is freely available today, in the early '80s it existed as only the reflection of rumor passed around by magazine editors and kids on the playground.
Without any formal information, even more scurrilous rumors evolved pertaining to other Atari games and C.I.A. conspiracies.
"The rumor goes something like this: the Pentagon (or the CIA or the FBI) collaborated with Atari in the development of a realistic video war game. What they were after isn't clear, and the reasoning differs from rumor to rumor. Either the Pentagon wanted to subliminally train future personnel in the art of video. Or the Pentagon wanted to locate and recruit -- immediately -- those talented gamesters with the most impressive war-game skills. Whether they found what they were after -- or whether the story is even true -- is certainly top-secret information. The game was real enough, however, and was appropriately titled Missile Command."
-Matthew White, Joystik magazine, Sept. 1982
Today these conspiracies seem like little more than quaint fantasies, but in 1980s, the era of Reagan, the USSR, War Games and Red Dawn, they were dead serious. While it has never been proven that the U.S. Military was going to use these games for finding the most adept '80s teenage arcade denizens to man 21st century weaponry (that prospect was left to the aliens in both The Last Starfighter movie and in Robert Maxx's book Arcade... and America's Army) it has been substantiated that the Army did want to use early 80's video games to train its troops.
"The Army has noticed that the young people they work with like these types of games, so they've been asking themselves, 'Why can't we use this thing?'" clv
- Donald Osbourne, Atari coin-op sales VP
...and the brass wanted both Battlezone and Missile Command.
"An agreement is being drawn up whereby Atari will produce training prototypes for both the Army's M60A1 Tank and its Chaparral Missile Air Defense System."
- Nathan Cobb, Globe Staff, September 3, 1981
However, Atari's work on these types of military projects did not last very long. It turned out that some of the key engineers at Atari had chosen their profession in the game industry to avoid this type of government contractor work. It went against almost everything they believed in.
"I was vehemently opposed to Atari getting into this sort of business at all. Remember, the world was a very different place in 1981 than it is now. There was still a Soviet Union who was perceived to be our nation's biggest threat. My contention was that many of us engineers had the option to go to work for companies doing military contracting, and we consciously chose to work at a company that was not so involved." clvi
- Ed Rotberg
For the Atari coin-op designers, creating an alternate reality was much more important than simulating the real one. In fact, creating a hit game that took people out of the real world, at least for a short amount of time, was the ultimate satisfaction.
"The best feeling for a game designer is to go out into an arcade and see people having fun playing the game that they created. There is nothing better than that. To walk around and see all the other games, and know that people can choose from anything in there, but they are playing your game. That is pretty heavy stuff." clvii
- Ed Rotberg
1980: Year End
The Space Invaders game for the VCS, along with the success of Asteroids, Missile Command and Battlezone in the arcades, netted Atari Inc gross proceeds of $512.7 million for the year. Suddenly Atari was a major portion of Warner Communications' total annual income, and was deemed the "fastest growing company in the history of USA".
All told in 1980, Atari spent $2.1 million on TV advertising. Even though nearly all the products that made Atari a success in 1980 had been started under Nolan Bushnell, or were products of the teams he had put together, the events made Ray Kassar look like a hero to Wall Street. Predictably, Ray Kassar took full credit for Atari's good fortunes.
"When I came in the product was perceived as a fad, a Christmas item. What we did was try to convince the trade and the consumer it was an everyday product with a long life." clviii
- Ray Kassar
By 1981, the arcade had captured the imagination of an entire generation of kids. New games were being released almost weekly, and most successful new games brought interesting challenges and new gameplay patterns into the fray.
All of this led to the 1981 arcade business growing into the world's number one entertainment medium.
"It was a wacky, extremely competitive business. I was there when coin-operated games were earning $8 billion in quarters a year. These games were out-grossing the record industry and the movie industry combined, in quarters!" clix
- Dan Plishkin (Atari coin-op engineer)
Coin-ops were quickly spreading outside of the arcade. By the summer of 1981, one in five of the approximately 40,000 convenience stores in the USA had added coin-operated video game machines to their locations, and many of these sported Atari products.
"Gamers pour 10 million quarters into Asteroids coin-operated machines every single day." clx
-Frank Laney Jr. (Arnie Katz), Electronic Games Magazine
After the success of Asteroids, Missile Command and Battlezone in 1980, the Atari name and the company's Fuji logo were synonymous with quality gaming experiences. The Atari coin-op division entered 1981 armed with further developments in vector hardware and a continuing dedication to game design.
However, the year started off in the wrong direction with a string of failed ideas and missed opportunities. The first, in March, was Asteroids Deluxe -- a sequel, but not necessarily an improvement, over Atari's most successful game to date.
"Asteroids Deluxe was done by Dave Shepperd. I did not have any input into this game other than the original code he worked from." clxi
- Ed Logg
With shields auto-fire and killer satellites, Asteroids Deluxe proved too difficult to play and not enough of an advance over the original game to match Asteroids' popularity. However, it still sold fairly well with about 22,000 units sold. clxii
"But wait -- what's that over there coming out from behind that large asteroid over there? It's the Zylor saucer you were sent in after. Dodging and weaving, you suddenly realize they've gotten a lot smarter. And what's that strange looking asteroid that seems to be following you? Wait a minute, that's no asteroid! It's a giant ship! This is an ambush!" clxiii
- Asteroids Deluxe Advertisement
About the same time, Atari's first 3D vector flight simulator appeared in arcades: Red Baron. The game was a bit like a flying version of Battlezone (in fact, the Battlezone cabinet was used to house the game clxiv), but with both air and ground targets. The game sold only 2,000 units and was not any kind of sizable hit. clxv
Soon after, Atari's next game to hit the arcades landed with a similar thud. Warlords was a cult favorite, an innovative one to four-player Breakout-style game. It was great fun to play, but simply could not muster the mass audience necessary to break through the influx of games from a multitude of manufacturers that were flooding into the limited arcade space. It sold just over 2,000 units. clxvi
It was not a good time for Atari to release three decent, underwhelming games in a row. By mid-1981, the competition in the arcades was getting fierce. Atari was facing-off against golden age hits in every corner of the arcade floor. Namco's Pac-Man, and Williams' Defender, both released in 1980, were just capturing the imagination of the mass market, as would Namco's Ms. Pac-Man.
Nintendo's Donkey Kong, Namco's Galaga and Sega's (licensed from Konami) Frogger would capture that attention in the second half of 1981. These hit games were both opening up the arcade to women (Pac-Man, Ms. Pac Man, Frogger), while keeping the hardcore players satisfied (Defender, Galaga). To stay in the game, Atari needed to find a new hit game to compete with them.
Instead, it found two.
The first game came in June, and it was a monster success. Centipede was a garden-based "bug shooter" designed and programmed by Ed Logg and Dona Bailey (one of the first female coin-op designers). As to who actually came up with the original idea, this has been the subject of some controversy.
"Centipede was an idea that came from a brainstorming session Atari would have every year." clxvii
- Ed Logg
The game placed the player in a patch of mushrooms. Centipedes, spiders and other garden insects that had to be eradicated to save the patch. Most of the mushrooms could be destroyed, which gave the game the feel of infinite possibilities, and also led to multiple strategies for obtaining a high score.
"Centipede would be considered, at best, a 'casual game' now -- which was so funny to me, because it wasn't that at all -- it was an action game with a story, and now it really doesn't have a narrative at all by today's standards! It probably wouldn't even be released today." clxviii
- Dona Bailey
The game went on to sell just over 54,000 units, and became Atari's second best selling coin-op of all time. The game was also very popular with women, which gave Atari an edge with that growing demographic of arcade patrons.
"Many theories have been suggested. One is that it was created by a woman. Another is that destroying insects fits well with a woman's psyche. I believe this game appeals to women because it is not gender-biased like fighting games or RPGs or sports games." clxix
- Ed Logg, on why Centipede appealed to women
The second big game for Atari in 1981 was Tempest. Originally designed by Missile Command designer Dave Theurer as a 3D version of Space Invaders, it ended up being a third-person, 3D battle around the edges of increasingly more intricate geometrically-shaped proving grounds.
"I came in one day and all of a sudden he had this round tube with these things coming up it. I said, 'What the heck is that Dave?' He said, 'I don't know. Aliens from the center of the Earth? I don't know.' I think he said something about having had a dream about it.
I said, 'How does it work?' He said, 'I don't know. They're coming up around the edge of this thing and you're trying to blow them away.' He just sort of started out with this concept and took it from there. I can see why he would say that Tempest was certainly his proudest achievement. He worked extremely hard on that. It's pure creation from his own brain." clxx
- Rich Adam
Tempest included a knob-style paddle controller to move the player's avatar around the rim of each geometrically designed level. It also used Atari's newest color vector generator ("Color-Quadrascan") and the vector math box to create 3D visuals that had previously never been seen in the arcades.
The combination of great graphics, fast action, and innovative game design created a superb hit for Atari. The game was so hypnotic that some players would go into a trance-like "zone" state while playing, shutting-out everything else around them.
"Tempest controls were good enough to where once you learned how to manipulate them you could almost become one with the machine. That is, a good Tempest player gets to spin that knob and do the firing in the right time and get into sync with the machine or get into a rhythm. I don't know exactly what to call it, but you were so close to the action that part of you entered the experience. You forgot about what was going on around you and you were just there."
- Lyle Rains
Tempest sold about 30,000 units, only 8,000 more than Asteroids Deluxe, however the greatest gain was not in numbers but in mind-share. With Tempest, Atari looked like a company moving forward, not one that was reaching back to old hits for inspiration.
The teenagers and older game players who had grown-up on Pong and Space Invaders now craved more challenging and thrilling gaming experiences, and with Tempest, Atari was in the position to deliver.
Along with the released games, Atari coin-op had several false-starts and abandoned games in 1981, including Force Field, Hyperspace, Space Shoot (by Howard Delman), Time Traveler, and Thogs. clxxi
Even with the hits, all was not necessarily good for Atari's coin-op division at the end of 1981. The engineer that had started it all, Al Alcorn, left the company after Atari failed to ship the Cosmos holographic electronic game he had been working on. Even though Alcorn had taken thousands of orders at CES, Atari still opted to not produce it, effectively shutting down Atari Electronics.
"Ray Kassar was too scared to take a chance on the handheld/tabletop market, the Atari 2600 VCS was the only thing he had faith in." clxxii
- Al Alcorn
The frustration got to be too much for Alcorn. In 1981 Atari was simply not the place he had helped start in 1972. It was time to go.
"I left Atari because it ceased to be fun for me under the Presidency of Mr. Kassar." clxxiii
- Al Alcorn
More engineers followed. The most high profile defection was the trio of Ed Rotberg, Howard Delman, and Roger Hector, who all left to form their own video game design firm.
"In 1981, Roger Hector, Ed Rotberg, and I left Atari and founded Videa, Inc. Our goal was to become a well regarded design firm in the video game business, as well as in whatever other markets we could leverage our skills. We ended up designing the arcade game Gridlee for Gottlieb, a point-of-purchase merchandiser for ByVideo, and a couple of games for the Atari VCS."
- Howard Delman
These high-profile defections were not good for the coin-op division's morale or for its ability to produce hit games. However, Atari found a couple ways to replace this brain-drain, and it was not necessarily by hiring the best and the brightest new game designers to work in the Atari coin-op division.
One way was to start licensing games from other manufacturers. Atari had always had a close relationship with Namco, and in November if 1981 it entered into an agreement to license several of Namco's arcade titles for U.S. distribution. However, these games would not show-up on Atari roster until 1982.
Another way to start using outside development firms to create games. In mid-1981, an opportunity to expand the coin-op division to an outside agency literally fell in Atari's lap.
In June, a small company made-up of MIT students named GCC (General Computer Corporation) created a "mod kit" for Atari's Missile Command coin-op named Super Missile Attack and marketed it for $295. The mod kit would allow arcade operators to change the game, add options, and make it more difficult for players.
Atari found out about this kit, and while it existed in a legal grey area, Atari was worried about its effect on the integrity of its products. It filed a lawsuit against GCC for $15,000,000.
"They (the General Computer game enhancement) appear to our customers and to the public as Atari products, creating confusion and siphoning off legitimate returns from our investment in research and development."
- Frank E Balouz, Atari coin-op marketing VP
It turned out that GCC engineers were fairly skilled at making arcade games. The engineers had created a mod-kit for Pac-Man named Crazy Otto that they eventually sold to Namco, which became Ms. Pac-Man.
Atari knew talent when it saw it. The lawsuit never happened, and Atari settled with GCC out of court.
"They started getting really annoyed that we weren't rolling away... finally the light bulb went on: 'They might as well design games for us', so Atari drops their lawsuit... we signed a development deal with Atari to do engineering for them." clxxiv
- Steve Golson (GCC Engineer)
Atari contracted GCC to develop new coin-ops for the company. GCC went on to create the arcade games Quantum, Food Fight, and Nightmare (unreleased) clxxv, VCS games like Ms. Pac-Man and Vanguard, and the original design for the Atari 7800 console, as well as some of the first games for the system.
However, unlike Grass Valley from years before, GCC was never really integrated into Atari as a whole, and in fact, took direction from the likes of Ray Kassar and Manny Gerard, and not necessarily the internal development teams. Atari management, it seemed, was hedging their bets with the engineering department. If they could not find cooperation inside, they could always buy it from the outside.
"Our contract was not with Atari, our contract was with Warner who owned Atari... Whatever we came-up with would be force-fed to the Atari folks." clxxvi
- Steve Golson
1981: Computer Business
Even though Atari had held back most of the technical documentation necessary for third party developers to create software for the 8-bit computer lines, developers had found their own resources to explore the machines.
Magazines like Compute had started running articles on the 400 and 800 as early as January 1980, and in them they explored topics on how the machine worked and how to write software for them. Some of these were written by Atari employees who were desperate to let the world know about the new machines.
"Anybody who has seen Atari's Star Raiders knows that the Atari Personal Computer System has vastly greater graphics capabilities than any other personal computer. Owners of these computers might wonder if they can get their machines to do the fabulous things that Star Raiders does. The good news is that you can indeed write programs with graphics and animation every bit as good as Star Raiders."
- Chris Crawford, In Compute's first Book Of Atari, 1981
The best news for Atari computer owners came in January when the first dedicated magazine for the Atari 8-bit machines, A.N.A.L.O.G., went into publication. With A.N.A.L.O.G., Atari owners had an independent resource for news that could both push the platform to computer enthusiasts...
"The Atari is also the 'hot' computer of the eighties: at the Consumer Electronics Show in Las Vegas this January -- three questions frequently asked at the information booth were 'where's the best restaurant, which way to the rest rooms, and where's the ATARI booth?'"
- A.N.A.L.O.G. Magazine #1
...and double as leverage on Atari and computer stores to support the platform.
"The color TRS-80 is a joke in comparison to even the 400. The APPLE II is archaic in technology next to the 800, and any other micro on the market just can't match the Atari's built-in computing power. Many computer stores won't carry the 400 or 800... 'there just isn't any software available', well we receive software and new products at an almost daily basis at the ANALOG office, so much that we have a difficult time reviewing it all. I am very impressed with the amount of really good software available in just a year's time." clxxvii
- A.N.A.L.O.G. Magazine #1
One of the reasons for the emergence of a dedicated magazine was that sales for the computers had picked up dramatically at the end of 1980 and into 1981.
"We've been saying Atari sales are picking up, a more than gradual creep that's been in evidence since summer. The trickle has apparently turned into a roar: it seems the pipeline effectively ran dry in mid-December when dealers across the country were selling machines faster than they could get them."
- Robert Lock, Compute!, February 1981
However, much of this had to do with the cult status of the game Star Raiders. The Atari computers provided graphics and gameplay far beyond anything previously available, and die-hard gamers were buying Atari computers simply to play games.
"If you own an Atari 800 computer don't forget there are other game cartridges besides Star Raiders available."
- Robert Baker, Compute!, April 1981
Even though Atari wanted to prove that its machines could do more than play games, the company started releasing its own game titles again in 1981, including a near-arcade perfect version of Missile Command, a surprisingly sub-par Asteroids (with bit-mapped graphics), and a decent Super Breakout, plus Chris Crawford's two edutainment games, Energy Czar and SCRAM.
Atari still supplemented these games with a load of serious software (Conversational Spanish, Bond Analysis, Stock Analysis, Stock Charting, Mailing List, Touch Typing, Calculator, Graph It) but the whether Atari liked it or not, the games had become the hook for new users.
One unique idea that came out of Atari at this time further support the 8-bit platform with software was A.P.X, The Atari Program Exchange. The APX was the brain-child of Dale Yocam. The idea was to take submissions of software from the Atari user community and market the best ones right back to the users.
"The guy who cooked up the idea, Dale Yocam, was trying to explain to the management that there are a lot people out there that like to write programs and if we can publish these programs for them, it's a win-win. The management was not very interested in it. He put together a business plan for it and said 'Look, we only need a little bit of money and this thing can be self sufficient and it might make some money.' They very grudgingly agreed to let him do it. And so he did it and very quickly made it into a monster success. It was a major profit center for Atari. They rewarded Dale for his initiative by bringing in another guy to be Dale's boss... so Dale, in disgust, quit about a year later." clxxviii
- Chris Crawford
It's interesting to note that A.P.X. was not just a resource for Atari customers. Many of Atari's internal VCS development staff wrote games that were released as A.P.X. titles. Lemonade Stand, Mugwump, Preschool Games, Reversi, Space Trek, and Dice Poker were written by Bob Polaro. Avalanche and Chinese Puzzle were written by Dennis Koble. Centurion, Castle, Alien Egg, and Tact Trek were written by Rob Zdybel. Lookahead was written by Bob Johnson, and Load N' Go by Brad Stewart. clxxix
By far, however, the most popular game created by an internal Atari programmer for A.P.X. was Eastern Front (1941), by Chris Crawford, released in September 1981. Eastern Front (1941) was a tactical war game that simulated the battle between the Germans and Russians in World War II.
Unlike most other tactical war games of the time, Eastern Front included colorful graphics and joystick input that completely streamlined the interface for a war game. Even though Eastern Front did not include animated battles, compared to the text-based games from Avalon Hill, it was a cinematic masterpiece. It played well, too.
"I have no hesitation in calling this one of the very best war games available for a personal computer. It is also a virtuoso demonstration of the awesome built-in capabilities of the Atari computer." clxxx
- Creative Computing
With games like these Chris Crawford seemed be on an (almost) singular quest (as an Atari insider) to simultaneously tell the world about the capabilities of the Atari 8-bit computers, and show just what magic you could weave with them. It also sold well. Even with the 10% royalty rate, Crawford made $90,000 from the game. clxxxi
Games and applications began streaming in immediately from outside sources as well. One of the best, Caverns of Mars, was created by Greg Christensen, a high school senior. He submitted it to A.P.X., and it sold remarkably well,
The game was a vertically scrolling, multi-level shooter that took the player deep into the surface of Mars, battling aliens until they reached the center of the planet. Much like Star Raiders, it set the tone for the abilities of the Atari 8-bit computers when it came to games and entertainment.
Christensen's game won a $3,000 prize from Atari, and his first royalty check was $18,000. He would go on to receive over $100,000 in royalties from the game. clxxxii In 1982, Atari converted it to its regular line-up of games for the computer line. Christensen went on to a healthy career making computer games, including two sequels to Caverns of Mars: Phobos and Caverns of Mars II.
As 1981 continued, more and more third party developers were learning how to program the Atari computers and releasing software. Where did they learn the technical information necessary to program a machine that was otherwise kept a total secret? From Atari insiders like Chris Crawford.
"Initially they had never quite defined what it was that had to be kept secret. I was the programmer at Atari who had come in from the outside world and had more contacts with outsiders. I'd be working on Atari software and the phone would ring and it was somebody in Indiana saying, 'Can I get any of the technical documents?' and I would go over to the main area and get a few of the technical documents, photocopy them and mail them off... there were enough loopholes that I was able to send out some documents and not get fired." clxxxiii
- Chris Crawford
Throughout the year, top-tier games began appearing for sale from some the biggest software companies of the era. In March, Automated Simulations (Epyx) released its first three games for the Atari 8-bit computers: The Datestones of Ryn, Rescue at Rigel and Invasion Orion. These were followed closely by ports of 10 Scott Adams text adventure games from Adventure International as well other games, such as an unlicensed Star Trek 3.5, that would net a $10,000 fine.
In May the shooter Threshold from Sierra On-Line was released, July saw the release of Chris Crawford's Tanktics through Avalon Hill, and August saw the release of another Sierra On-Line game, Jawbreaker (which resulted in a losing lawsuit from Atari, which thought it looked too much like Pac-Man, which they had just licensed for millions).
Later in the year, more software arrived, including Upper Reaches Of Apshai and Rescue At Rigel from Automated Simulations and the A.I. experiment Abuse by Randy Simon and Robert Freedman. Dozens of other games were popping up from boutique developers (such as A.N.A.L.O.G. magazine itself) and bedroom coders.
To further encourage new developers,The Atari Home Computer division created the Software Support Group, a new team that would help get developers for other platforms for work on software for the Atari 8-bit.
"Our job was to provide technical support to outside programmers. We had a whole package of goodies we provided for free. By the way, the main thing we did was this tour where I would travel around to cities all over the country. We would rent a hotel meeting room, and people could come-in to these seminars where we taught them all about how to program the Atari and I did almost all the work here. I had a real barnstorming style. My job was to wean people away from the Apple to the Atari. I was pushing that line really hard. Somebody in one of the magazines that had come to it said 'Crawford does a show like an old-time evangelist. You half-way expect him to start quoting the bible', and that is where the term 'software evangelist" arose." clxxxiv
- Chris Crawford
Finally near the end of 1981, the attitude towards third party software at the upper reaches of Atari took a complete 180. A group of Atari developers (including Chris Crawford) published a book named De Re Atari (through A.P.X) that laid out most of the technical details required to make software using all the bells and whistles the Atari 8-bit platform had to offer. Later, in 1982, the full set of technical documentation was finally made available.
"I was sending out some minor stuff and then one day it was sort of like 'the dam broke' and they had an official policy, 180 degree reversal, 'We want to tell everybody about this'. I immediately got on the phone and started calling a bunch of my contacts saying, 'Hey. would you like complete technical documentation on the Atari?' and we shipped a lot of those.".clxxxv
- Chris Crawford
Atari needed to get as much software as possible out for the machine, because the computer market they had entered was showing signs that it could become a battleground. Commodore, who already had its PET in the marketplace prior to the arrival of the 400 and 800 announced the VIC-20, a computer that was more powerful than the standard Atari 400, but priced much lower, at $299.
Atari came back in May by lowering the price of the 400 to $399 and doubling its standard memory from 8K to 16K. The plan appeared to work, as Atari computer sales skyrocketed throughout the year.
"They're still selling as fast as they can make them. What else can we say?"
- Robert Lock, Compute!, March 1981
Atari also worked in other ways to promote its computer line. In the second quarter, it launched its own magazine, named Atari Connection, which was aimed at the home computer user. Atari also secured celebrity endorsements for its software (i.e. novelist Robert Ludlum, who endorsed the Atari Writer word processor). These moves received kudos from the financial community as it looked like Atari was trying to break new ground.
"Atari Inc. is absolutely committed to the consumer business, and despite the fact that it is almost alone in believing that now is the time to do it, the Warner Communications Inc. subsidiary is betting its future on the home computer and ignoring today's high-flying markets."
- Business Week, June 15, 1981
Finally, Atari launched a TV ad blitz in the fall featuring Atari Book Keeper and Star Raiders on network TV. All of this led to strong sales by the end of the year.
"Atari's aggressive pricing moves, in the wake of Commodore's announcement of the VIC-20 last spring, seem to be bringing rewards. We hear that monthly sales now approach last year's annual sales figures. And the numbers are still growing."
- Robert Lock, Compute!, October 1981
1981:The VCS Becomes Unstoppable
Still feeling the effects from the defections of the "Fantastic Four" and the mild reaction of management to it, but bolstered by the massive success of the VCS in Christmas 1980, the Atari Home division entered 1981 on uneven ground.
The VCS had also found new, hearty competition in Mattel's Intellivision, and for the first time had to compete in the home against a (seemingly) superior console, and on the software front with a third party developer -- Activision. Still, the Home Division continued to produce high quality games for the VCS.
One misstep Atari made in early 1981 would start a trend that would haunt Atari for the rest of its existence: vaporware. In this case, it was vapor-hardware in the form of the Remote Control VCS.
Atari introduced both the Atari 2700 Wireless VCS console and a pair of Remote Control Joysticks for the 2600. Both were announced at the January CES, but only the wireless joysticks ever saw the light of day.
"The units were complete, boxes were manufactured, color dealer flyers were sent out, it appears everything was ready. Apparently during the Quality Assurance testing of the Atari 2700 RC Stella by John Protsman, it turned out that the controllers emitted a signal within a 1000 foot radius. What this meant was the units would cause havoc with other Atari 2700s nearby. Also the controller electronics were based on the design of a garage door opener, so the controllers would have the possibility of causing other remote controlled devices to operate." clxxxvi
- Curt Vendal, Atari historian
As far as games went, the Atari VCS started the year with the March release of the very solid Video Pinball by Bob Smith. Even though playfield did not remotely resemble the Atari coin-op of the same name, the pinball action was decent.
A few other releases made their way to the stores in 1981, significant because they were both programmed by one of Atari's first female game developers, Carla Meninsky. First up was Dodge 'Em, an award-winning maze racer in which the player had to drive around and collect objects (dots) while avoiding computer controlled chase cars. It was an imaginative cross between Indy 500 and Pac-Man.
"For Dodge 'Em I was the centerfold for both Playboy and High Timesas being the best game of the year... so I thought I'd really made it." clxxxvii
- Carla Meninsky
Meninsky's second game was the VCS conversion of the Atari coin-op Warlords. While not quite the sizable hits of the year's next releases, both games proved that Meninsky had the programming chops to take on one of the biggest VCS projects for 1982: Star Raiders.
"Even now, where I work I've got a Warlords sign out... from the arcade game, the panel. People go by everyday and they go 'Wow, remember Warlords' and 'Wow, that was a great game.'" clxxxviii
- Carla Meninsky
One of the biggest VCS games of 1981 was released in April. After the success of the licensed coin-op game Space Invaders, Atari began to translate as many of its own coin-op hits to the VCS. Missile Command was one of the first.
Aside from Space Invaders, Missile Command for the VCS became well-known as one of few arcade translations for the platform that were as enjoyable to play as the original coin-op.
Rob Fulop programmed Missile Command as his next project following his "re-imagined" version of Space Invaders for the 8-bit computers.
"I did end up getting some flack for the changes I made (to Space Invaders for the 8-bit) though, not via management, but from my peers. Such is why I ended up making my next project, Missile Command, as faithful a replica to the original coin op, as I possibly could." clxxxix
- Rob Fulop
Missile Command was an amazing success for the VCS, selling millions of copies. It also helped send out the message to consumers that, while there were other system like the Intellivision around, the Atari VCS was the only place you could play true arcade games. However, if that message was merely sent with Missile Command, it was received loud and clear with the year's most significant release for the VCS, Asteroids.
Getting the Asteroids coin-op to fit into a cartridge for the VCS was not an easy task. Brad Stewart, the programmer responsible for the VCS version of Breakout, took on the task, and it was not an easy one. Fitting all the Asteroids graphics and game play into a standard 2K cartridge was impossible. In fact, even a 4K cartridge could not hold it all.
"Asteroids needed the 8K, though. After the game was complete, Bob Smith and I spent some time using every trick we knew to try to get it into 4K, but it just... would... not... fit!" cxc
- Brad Stewart
To get access to 8K, Stewart used a newly devised scheme called bank-switching (originally created for the VCS Basic Programming cartridge) that allowed a programmer to access multiple 4K banks of memory. This was a breakthrough for the VCS.
"The present invention provides a bank switching memory and method for increasing the number of individual address locations that can be addressed in a digital system. The present invention expands the available memory space beyond that capable of being addressed by a conventional addressing having a unique memory location associated with a unique address. Specifically, the invention is used to expand the number of ROM memory locations contained in the game cartridge of a video game system without requiring additional address lines."
- Carl J. Neilson, Bank Switchable Memory System patent, filed May 7, 1981
Bank-switching opened up the VCS to a whole new world of crisper and more elaborate graphics. It made Asteroids possible on the VCS, which in turn would make Atari VCS the need-to-have item for Christmas 1981.
"The ultimate electronics toy won't be found in a toy department. Alongside the TV sets and stereos, merchants are pushing such electronic marvels as Atari's Video Computer System, featuring 18 different games and a price of $169."
- Covey Bean, Daily Oklahoman, December 11, 1981
Going into the Christmas season of 1981, Atari's marketing side was flowering to full bloom. It blasted the airwaves with the biggest television and newspaper marketing push the company had ever put forth.
In all, Atari spent $18 million on TV advertising in 1981, cxci nearly triple what it had spent in 1980. Atari put everything on the line for a huge Christmas in 1981, even going so far as to push its retail customers to make large orders of games that they otherwise would not have purchased, just so they could get their allotment of Atari's hot products.
"Atari, for years, was using the leverage that they had to just screw distributors everywhere. When they had a hot game, they would force distributors to buy copies of the old games that weren't selling anymore, just to get copies of the new game." 
- Howard Scott Warshaw
It was not something that those retailers would soon forget. However, the ill feelings were masked by the massive sales for the VCS. In Q4 of 1981, the Atari division saw $511 million in sales. None was more pleased with the success than Ray Kassar.
""We all go to bed dreaming we'll have the kind of Christmas sell-through that we had this year." cxcii
- Ray Kassar
Atari was a monster-sized company by the end of the year. Total sales in 1981 were $1.1 billion cxciii and Atari owned 70-75% of the total video game market. It had 10,000 employees and sprawled across 50 buildings in the Silicon Valley.
Since the coin-op conversions on the VCS were Atari's point of differentiation and the biggest sellers, Atari had set itself up to dominate the home video game market into the future, by licensing as many hit games as possible to re-make on the VCS. Atari licensed five games, including Pac-Man and Galaxian, from Namco, and six games, including Berzerk, from Stern.
Ray Kassar and the Warner brass had seen their vision all the way through to success. Atari pushed the VCS hardware, then five years old, helping to make it a breakthrough success. They put more money into marketing than had ever been spent to sell a video game, and the fruits of that decision were now readily apparent.
Warner had developed a "take no prisoners" attitude, with the development teams, and the good products still flowed. The sales showed, in every way, that Ray Kassar and Manny Gerard had been proven correct. Bushnell had spent too much effort on technology and engineering, and not enough on marketing. With marketing the dominant force at Atari by 1981, it had become the largest player in the world.
1981: The Competition Mounts
"I think they sold 2-3 million copies of the thing... it made 30-40 million dollars... and I got a turkey." cxciv
- Rob Fulop
Atari may have experienced it largest sales ever in 1981, but that did not mean the people responsible for the products saw any of it. Even with huge sales for Missile Command, programmer Rob Fulop saw almost no benefit. He expected some kind of bonus for the millions of Missile Command games sold but he saw almost nothing.
Fulop eyed the success of the "Fantastic Four" who had formed Activision, and he left Atari in late 1981. He joined Asteroids programmer Brad Stewart, plus Atari vets Dennis Koble, Bob Smith, and Bill Grubb in their new third party VCS software venture, Imagic.
"I was considering going out on my own. I had been with Atari for five-and-a-half years, which is a long time in this Valley. The standard dream of every engineer is to start your own company someday and become rich. Hey, this was the opportunity I'd been waiting 11 years for. I knew a lot about engineering, but nothing about marketing. The more Bill and I talked, the more we seemed like a natural match." cxcv
- Dennis Koble
All of a sudden, the programmers who had made some of Atari's biggest hits of 1979-1981 (Adventure, Space Invaders, Night Driver, Missile Command, Asteroids, Breakout) were not only gone, but forming the competition against them.
Added to that, other companies were forming without Atari insider know-how. In December of 1981, Games By Apollo (started in Texas by Pat Roper using the talents of Ed Salvo) released its first 3 games for the VCS: Skeet Shoot, Lost Luggage, and Space Chase. cxcvi
Mattel was still pushing Intellivision as well, and had great success in 1981. It ran commercials showing the Intellivision sports games alongside games of the VCS, making the VCS games looked primitive by comparison. By year's end, Mattel was a serious contender nipping at Atari's heels.
"A $6 million ad campaign touts Intellivision's graphic superiority over Atari 2600. News media take note, start covering video game 'war', raising profile of entire industry. Although the $300 Intellivision is twice as expensive as the 2600, sales soar, reaching 850,000 consoles by year's end." cxcvii
- Intellivision Lives
Activision had not rested on its original game line-up in 1981 either, and blasted out a bunch of new games for the January CES show. However, by that time, Atari had taken notice of Activision's games and moved to protect the VCS system from these "outsiders". Atari filed a lawsuit early in 1981 to stop Activision.
"They stole our programs, we're suing them, of course." cxcviii
- Ray Kassar
However, Activision had no intention of stopping its work. In fact, all the lawsuit did was bolster its cause.
"...the lawsuit was timed perfectly. It was front page news at the January CES in Las Vegas and catapulted the unknown Activision to a big player and our sales skyrocketed and we never looked back." cxcix
- Larry Kaplan
In the end, Atari efforts were for nothing. The multiple lawsuits were thrown out of court, and they set the precedent for multiple third party vendors to start up by the end of 1981.
"After we started Activision, they sued us three times, every six months, both personally and as a corporation. Their total damage claim as I recall eventually stood at $26 million. It was sheer harassment. There was no basis for their claims and it was eventually settled for nothing. Activision was funded by one of Silicon Valley's most prominent and experienced venture capital companies. In starting the company, we did everything perfectly properly, under the strict guidance of our attorneys and investors." cc
- Alan Miller
Activision backed-up its premier third party status with a host of great games for the VCS: Tennis and Skiing were two of the most realistic sports games ever to grace the VCS, Laser Blast was a hypnotic twitch shooter. Kaboom! Was Larry Kaplan's version of Atari's Avalanche coin-op, while Freeway was a unique take on Frogger starring a chicken.
While these were not coin-op conversions, gameplay and visuals were some of the best the VCS had ever seen, and their screenshots looked great in print.
Which was fortunate -- because at about the same time, the flurry of activity in the video game sector had solidified into a fan base large enough to support a dedicated magazine about video games. On October 29, 1981, the first issue of Electronic Games magazine was published. The magazine started by stating the size of the fledgling industry.
"Nearly four million homes now have programmable videogame systems.This year alone, Americans will buy two million videogame systems -- and 20 million cartridges to use with them." cci
- Frank Laney Jr. (Arnie Katz), Electronic Games Magazine
Arnie Katz and Bill Kunkel started the magazine on the heels of a column they had written for a video magazine named Arcade Alley. Two of the most popular sections of Electronic Games were the letters sections -- "Reader Reply" and the Game Doctor's "Q&A" column. The simple back-and-forth between the editors and the readers in these sections over the course of multiple issues formed the basis for all video game fan/press interactions to follow.
"I think it gave the readers a sense of community. It was the only way they could really interact with us and with one another. And Q&A was, at that point, the nexus for all fan information on the world of gaming." ccii
- Bill Kunkel
There had never been a real consumer advocate for video games prior to Electronic Games. While this was good news for consumers, it was a mixed bag for video game companies. On one hand, there was a place to preview and advertise games long in advance of their release.
On the other hand, journalists could not necessarily be controlled, and thus they could also not be trusted to deliver the exact message that marketing heavy companies like Atari had been crafting to lure the public for several years. Electronic Games marked the beginning of true video game criticism. No longer would the public have to subsist on marketing messages and box-art alone to make their choices for new video games.
[For further Gamasutra-posted reading on the subject, in addition to Fulton's piece on Atari from 1971 to 1977, please refer to Bill Loguidice and Matt Barton's look at the Atari 2600 (VCS) and Atari 800/400 series of computers.]
 Onion AV Club Interview With Howard Scott Warshaw by Keith Phipps
[i] Steve Fulton Interview with Nolan Bushnell, August 2007
[ii] "Once Upon Atari" DVD by Howard Scott Warshaw
[iii] "Once Upon Atari" DVD by Howard Scott Warshaw
[iv] Digital Press, Al Backiel, Interview with Alan Miller
[v] "Once Upon Atari" DVD by Howard Scott Warshaw
[vi] IEEE Spectrum, March 1983, pp. 45-51
[vii] Washington Post, April 28th, 1978
[viii] "Once Upon Atari" DVD by Howard Scott Warshaw
[ix] Droidmaker by Michal Rubin, pg. 292
[x] Zap: The Rise And Fall Of Atari By Scott Cohen
[xi] Zap: The Rise And Fall Of Atari By Scott Cohen
[xii] The First Quarter by Steven L. Kent
[xiii] The First Quarter by Steven L. Kent, p.89
[xiv] Zap: The Rise And Fall Of Atari By Scott Cohen
[xvi] "Once Upon Atari" DVD by Howard Scott Warshaw
[xvii] Halcyon Days by James Hague, http://www.dadgum.com/halcyon/
[xviii] Digital Press, Al Backiel, Interview with Alan Miller
[xix] "Once Upon Atari" DVD by Howard Scott Warshaw
[xx] "Once Upon Atari" DVD by Howard Scott Warshaw
[xxi] Halcyon Days by James Hague, http://www.dadgum.com/halcyon/
[xxii] Scott Stilphen, Digital Press
[xxiv] The Player's Strategy Guide To Atari VCS Home video Games
[xxvi] The Player's Strategy Guide To Atari VCS Home video Games
[xxx] Brad Stewart Interview with Scott Stilphen, http://2600connection.atari.org/stewart.html
[xxxi] The First Quarter by Steven L. Kent, p.155
[xxxiii] 3 Generations Of Game Machines by Joe Decuir, http://www.atariarchives.org/dev/CGEXPO99.html
[xxxv] Atari 8-bit FAQ by by Michael D. Current and Bill Kendrick
[xli] Coin Connection March 1978
[xlvi] Game Design Theory And Practice by Richard Rouse
[lii] January 1983 issue of "Video Games" Magazine), http://www.atarihq.com/othersec/library/imagic.html
[liii] Rob Fulop, via email, November 2007
[liv] IEEE Spectrum, March 1983, pp. 45-51
[lv] The incredible, incredible story of Atari — from a $500 lark to a $2 billion business in 10 short years. By Steve Bloom
[lvi] The incredible, incredible story of Atari — from a $500 lark to a $2 billion business in 10 short years. By Steve Bloom
[lvii] Zap: The Rise And Fall Of Atari By Scott Cohen
[lviii] Zap: The Rise And Fall Of Atari By Scott Cohen
[lx] C/Net News.com "The return of King Pong" by David Becker
[lxi] Steve Fulton Interview with Nolan Bushnell, August 2007
[lxii] Zap: The Rise And Fall Of Atari By Scott Cohen
[lxiii] The incredible, incredible story of Atari — from a $500 lark to a $2 billion business in 10 short years. By Steve Bloom
[lxiv] Zap: The Rise And Fall Of Atari By Scott Cohen
[lxv] "Once Upon Atari" DVD by Howard Scott Warshaw
[lxvi] Steve Fulton Interview with Nolan Bushnell, August 2007
[lxviii] Bob Whitehead Interview with Digital Press
[lxx] Video Game Theory Reader, Introduction edited by Mark wolf and Bernard Perron
[lxxiv] Halcyon Days by James Hague, http://www.dadgum.com/halcyon/
[lxxix] "Once Upon Atari" DVD by Howard Scott Warshaw
[lxxxi] "Once Upon Atari" DVD by Howard Scott Warshaw
[lxxxii] Larry Kaplan Interview with Digital Press, (http://www.digitpress.com)
[lxxxiii] "Once Upon Atari" DVD by Howard Scott Warshaw
[lxxxiv] Zap! By Scott Cohen, page 84
[lxxxv] The incredible, incredible story of Atari — from a $500 lark to a $2 billion business in 10 short years. By Steve Bloom
[lxxxvi] Zap! By Scott Cohen, page 84
[lxxxvii] The incredible, incredible story of Atari — from a $500 lark to a $2 billion business in 10 short years. By Steve Bloom
[lxxxviii] Via email, 2008
[lxxxix] "Memories Of A Vector World" by Owen R. Rubin, ACM SIGGRAPH, Vol. 32, #2 May 1998
[xc] Via email, 2008
[xci] Via email, 2008
[xciii] Via email, 2008
[xcv] Zap! By Scott Cohen, page 84
[xcvi] Via email, 2008
[ci] Game Design Theory And Practice by Richard Rouse
[cvi] Creative Computing, March 1984
[cvii] C/Net News.com "The return of King Pong" by David Becker
[cxi] Compute's First Book Of Atari: "Atari's Marketing Vice President Profiles the Personal Computer Market"
[cxii] Compute's First Book Of Atari: "Atari's Marketing Vice President Profiles the Personal Computer Market"
[cxiii] The Home Computer Wars by Michael S. Tomczyk
[cxiv] Bye Magazine, November 1979 page 15
[cxv] COMPUTE! ISSUE 1 / FALL 1979 / PAGE 62
[cxvi] "On Game Design" by Chris Crawford
[cxvii] "On Game Design" by Chris Crawford
[cxviii] Halcyon Days by James Hague, http://www.dadgum.com/halcyon/
[cxix] Creative Computing, March 1984
[cxxi] The Home Computer Wars by Michael S. Tomczyk
[cxxii] Design case history: the Atari Video Computer System, IEEE Spectrum, March 1983, pp. 45-51, http://www.atarimuseum.com/videogames/consoles/2600/Atari_case_history.html
[cxxviii] Washington Post, Nov. 10, 1980
[cxxx] Confessions Of The Game Doctor by Bill Kunkel
[cxxxii] Via Email, 2007
[cxxxiv] Nolan Bushnell Interview with Steve Fulton, August 2007
[cxxxvi] Bill Kunkel Interview with Steve Fulton, 2005, http://www.gamerdad.com
[cxxxvii] Via email, May 2008
[cxxxviii] On Game Design by Chris Crawford
[cxxxix] October 1986 issue of "Analog Computing" Magazine, http://www.atarihq.com/othersec/library/neubauer.html
[cxl] The Home Computer Wars by Michael S. Tomczyk
[cxli] October 1986 issue of "Analog Computing" Magazine, http://www.atarihq.com/othersec/library/neubauer.html
[cxlii] Washington Post, September 2, 1980
[cxliii] The Home Computer Wars by Michael S. Tomczyk
[cxliv] The Home Computer Wars by Michael S. Tomczyk
[cxlv] Steve Fulton interview with Chris Crawford, September 2007
[clv] Boston Globe, September 3, 1981
[clviii] Washington Post Nov. 8, 1981
[clx] Electronic Games Magazine, Winter 1981
[clxix] Game Design Theory And Practice by Richard Rouse
[clxxiii] http://bb.vg-network.com/ interview with Al Alcorn
[clxxiv] 2004 Atari 7800 Seminar with Steve Golson, Kurt Vendel
[clxxvi] 2004 Atari 7800 Seminar with Steve Golson, Kurt Vendel
[clxxvii] Analog Magazine #1, pg 2
[clxxviii] Steve Fulton interview with Chris Crawford, September 2007
[clxxx] The Creative Atari, edited by David Small, Sandy Small, George Blank, 1983
[clxxxi] "The History of Computer Games: The Atari Years" by Chris Crawford
[clxxxii] Dan Archibald, Video Games Magazine, December 1982
[clxxxiii] Steve Fulton interview with Chris Crawford, September 2007
[clxxxiv] Steve Fulton interview with Chris Crawford, September 2007
[clxxxv] Steve Fulton interview with Chris Crawford, September 2007
[clxxxvii] Once Upon Atari DVD by Howard Scott Warshaw
[clxxxviii] Once Upon Atari DVD by Howard Scott Warshaw
[clxxxix] Via email, May 2008
[cxc] Brad Stewart Interviewwith Scott Stilphen, http://2600connection.atari.org/stewart.html
[cxci] NY Times July 23, 1982
[cxcii] Time Magazine, Jan. 18, 1982
[cxciii] Time Magazine, Dec. 20th 1982
[cxciv] "Once Upon Atari" DVD by Howard Scott Warshaw
[cxcviii] Washington Post, Nov. 8 1981
[cci] Electronic Games Magazine, Winter 1981
[ccii] Steve Fulton interview with Bill Kunkel, January 2006