Atari: The Golden Years -- A History, 1978-1981

Following his article on Atari's genesis, game historian Fulton returns with an amazingly detailed piece on Atari's 'golden years', from the rise of the Atari 2600 through Asteroids and Battlezone.

[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.

b_spacewar_color_front.jpgSpace 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 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.

firetruck.jpg 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

b_adventure_color_front.jpgSuperman 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

- Warren Robinett

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.

1979: Pinball

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

asteroids.jpgWhen 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

-Howard Delman

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

videopin.jpgAs 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

b_mazecraze_color_front.jpg 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."

b_spaceinvaders_color_front.jpg 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

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