October 2, 2019 • 44 mins
Remember Pong? Breakout? Combat? PAC-MAN? That was all Atari. So, was Atari the OG of gaming? Or did they just do it better than the rest? And if they were so great, what the heck happened? In this episode of Bizography we go back to the 70s and 80s, and get all cultural on ya!
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Speaker 1 (00:00):
Some iconic brands have changed how we eat, some how
we shop, and somehow we interact. But at their core,
they're all stories about business. The story of Atari might
seem to be just about play, but it's really so
much more. This is Bisiography, the show where we dive
(00:36):
into the strange but true stories of iconic companies. Whether
they're a current bright star, in the midst of a
massive dumpster fire, or settling into the dust heap of history,
they all have a past worth knowing. I'm Dana Barrett.
I'm a former tech exec, an entrepreneur, and a TV
and radio host, and over the course of my career,
I've interviewed thousands of business leaders and reported on the
(00:57):
bright beginnings and massive flame outs some of the brands
we know and love. Some of their stories are inspiring,
some are cringe worthy, and some are bigger and more
impactful than they really should be. Phisiography is a production
of I Heart Radio and dB Media and is co
hosted as always by my producer, Nick Bean, who today
will be playing the role of gamer. Nick. How much
(01:19):
did you even know about Atari before we started researching
this episode? I mean, well, they're like the O G right,
like the original popular gaming console was the Atari Dred,
so it's kind of why we have video games the
way we do now. Somewhere along the line, though, they
just they just kind of died, right, Yeah, it certainly
(01:39):
does feel that way. I mean, I think most people
who were around in that era of the seventies, uh,
I guess mostly the seventies maybe early eighties sort of
remember Atari and then just sort of looked around and
it wasn't there anymore. Yeah, Um, And they were sort
of thought of as the original, But I think that
(02:00):
is going to inform how we have to start this episode,
because they really weren't the first. The first ever computer game,
not surprisingly, came out of m I T. Yeah, it
was not actually created by Atari. It was UM And
of course this is sort of it was believed to
be the first ever game because there were probably other
people UM in basements and in other colleges and whatever,
(02:22):
who were tinkering and coming up with games of their own.
But the first one that really got any usage was
called Space War and it was created in nineteen sixty
two by a group of students at M I T.
And it was the kind of story where two or
three students worked on it. These three other guys helped out.
Then it got moved over here and four other people
worked on it. So there's not really one person to
credit um with Space War. But it ran on a
(02:44):
Deck computer. UM. For people who are slightly older, you
might remember Deck. The computer at the time the size
of a large car. Oh my gosh, I could not
put that in your pocket. For the record, Yeah, it
was called Yeah, it was called a PDP one And actually,
by today's standards, of course, the graphics were pretty primitive.
(03:04):
But the truth is they really were less primitive than
some of the games that came after them in the
you know, late seventies and early eighties. And this is
two that's fascinating, probably because they had the computer the
size of a car and it's mighty not gonna lie um,
So it was kind of advanced really for a first
ever game. It was like a two player Each one
(03:25):
has a spaceship kind of game, um, and they shoot
at each other and kind of can turn their ships
around and you know, accelerate and slow down, and of
course the goal is not to get hit by the
other player, you know, and to keep on hitting them
until you kill them. Basically right the early days of
shooting games, and like Space War is really considered to
be the most important influential game in the early history
(03:47):
of video games. It was really popular within its small
community of what we would now call like programming nerds,
because that's really who was using it. Those were the
only people that really had access to any kind of
computing power, right, yeah, not everyone could go use a
car sized computer. Had to have one at school, that's right. Um.
And even at school, only certain programs had them, you know,
(04:09):
they Weren't's not like every college everywhere had them. Um.
And of course the reason when I was reading the
description of Space War, I could sort of picture it
in my mind. And I'm pretty sure I never played
Space War, but the reason it was familiar to me is, um,
that's kind of what Asteroids was, like a much later
version of it. If you can think about the game Asteroids,
which many more people know than Space War, it was
(04:31):
sort of a much later version, much much later version
of Space War. So because Asteroids didn't come out in
and this was two yeah, and so in between there
were a lot of other copies of Space War. Also.
Oh and I've got to mention that for the record,
in two thousand seven, Space War was actually named to
a list of the ten most important video games of
(04:51):
all time. Um. And it's actually sort of the start
of the game canon at the Library of Congress. Wow,
So it actually started video games. Now, it's kind of
actually started the history of video sort of, and it's
been acknowledged, you know what I mean, it's sort of
it's noted. Um you have to say noted like that
if it's serious, it's noted. Uh. Say, space War was
(05:12):
created in one but it's not really until ten years
later that our story kind of starts. So in a
guy named Nolan bush Now and another guy named Ted
Dabney found an engineering company and they called it siss
A j which I kind of like that three times
best with peanut butter in your mouth siss a g uh.
(05:32):
And they sort of produce a Space War inspired game,
one of the predecessors also to Asteroids, called Computer Space,
which is a terrible name, but it becomes the first
arcade video game. So Space War was played on this
car sized computer and other computers like it. Um as
they got I guess a little bit smaller over the
(05:52):
next decade. Um. But this version of a computer. Space
is the first arcade video game and also the first
video game to bemercially available. Yeah. So it was designed,
of course by Bushnell and Dabney as essentially a way
to make money on Space War. They're like, we want
a coin operated version of Space War, and so that's
why they created it. And it came in its own
(06:15):
sort of custom designed very like sixties looking fiberglass cabinet.
And isn't that kind of the fascinating part of this
is that they started the first arcade game and for
the longest time, from seventy one on for a while,
that's kind of how they came, right. They came in
these big, huge boxes in the whole game was built
into the thing, and it had its own special controls.
(06:35):
They literally built them from the ground up, physically hand
in the software side. And now it's not even that way.
A video game maker literally just makes the game part
of it. Hardware is somebody else's job, not even associated
any longer. Yeah, it's also interesting to think about the
arcade games at the time were meant for everyone to
be standing up and playing, which in a sense would
(06:57):
limit how long you would play them. And if you
think about it now. Not only do they make them
for little consoles where you can, they make the chairs
so you can basically mold yourself into a chair and
not move for days. I mean, I'll be honest to
have one of those chairs, I'm not don't move for days.
I don't. I don't not move for days. But it is,
it is. It is difficult sometimes to get out of them, right, Yeah,
(07:18):
that's a whole different mentality, right. I remember my brothers
saying he remembers, because he's a little older than I,
when arcade chairs became a thing because barstool chairs were
too high and normal chairs were too low. You had
to have a weird in between. And he remembers when
he would go and some of the arcades had them,
and that's why they went to them, if they had
arcade seats. And it's funny that you say that, because
I didn't think about this, but I remember playing pinball
sitting on a bar stool. Yeah. Um. In any case, Yeah,
(07:43):
it was a very different world the way they were
creating video games in the day. So of course those
were the early days, and that was sort of the
first game created by Bushnell and Dabney Well in nineteen
seventy two, they officially incorporate their company. I don't know
why they changed name from Scissor G. But in nineteen
seventy two they start a new company, if actually, and
it's called Atari. I have to point out that, while
(08:05):
we're doing an episode on Atari, and they were certainly
seen as you know, the top of the heap at
the time, they were not the only ones getting into
this field. Magnavox, which was a company with a very
long history, much longer. In fact, their history involved a
lot of making of hardware, radio's, television's, record players, electronics
in general. Well, they got into the video game world
(08:26):
around the same time, and in nineteen seventy two they
released their first ever video game console. It was called
the Odyssey. Alright, so hang on real fast, though, do
you do you even know what atari means? You know,
I'm not gonna lie. I always kind of thought it
was Japanese. Is that wrong? No, you're right. So the
term atari in Japanese means quote to hit the target
or to receive something fortuitously. But they named it Atari
(08:50):
based on the game Go. Have you ever played the
board game Go? It's an old Chinese style board game
like a vague bell. So that's the simplest of it
is you have little stones like a Chinese marble, and
when yours is surrounded by four pieces, your stone gets
taken out of the game. You don't want that. When
your stone is surrounded by three and there's only one
spot left, your stone is in atari. Basically, it's like
(09:14):
a like the check version in chess, like it's not
game over, but you need to watch out. It's like
check checkmate. So it's interesting that they named it based
off of the game kind of you could almost be
finished here and yeah, I mean their company after it,
which is also interesting because they were sort of, you know,
in competition with companies like Magnavox and some of the
(09:35):
others that were coming up around that time. Just very
interesting that they saw something there. There was something competitive
in their naming and for what it's worth, I guess
maybe it's unique enough and it's stuck well. And also
the idea of like I'm playing a game with you,
my competitors, but I'm going to hit the target right,
you know, like you're missing by a little bit. I'm
gonna get it. I'm gonna checkmate you, you know. Yeah,
(09:57):
very very interesting. All right. Well, while we're doing some
digging in from a detailed perspective, I gotta tell you
there are a lot of amazing bunny trails in this story. Um.
That one, obviously is sort of more of a gaming
bunny trail, but there's a fascinating business bunny trail that
we've got to talk about. We're gonna do it right
after this. So Atari gets its start in the early
(10:24):
nineties seventies and um with their sort of arcade version
of space War, and they're often running and they've got
competitors in the space and they're getting into this world
of selling games into arcades. Now, look, we were talking
a little bit about some of the side stories already.
UM from a gaming standpoint, the name of Atari and
(10:45):
this funny idea that they chose their name almost based
on being competitive and hitting the target, which makes sense.
They were creating games, but if you look at the
game play essentially on a bigger level as business gameplay,
they were all about the business gameplay. Also, they weren't
just creating games for their you know, clients, their users.
(11:06):
They were playing games themselves, and some you could not
get away with in today's business marketplace. In nineteen seventy three,
Atari secretly created its own rival company. They literally created
a company to fake compete with them. The company was
called Key Games k E. And they did this because
(11:27):
UM game distributors at the time, we're insisting on exclusive
rights to a game. Now, this is of course in
the time of arcades and putting sort of arcade games
and restaurants and that kind of thing. So if you
wanted to put your UM arcade game, and we'll go
forward into the future a little bit for this example.
But let's say you have you owned you know, uh,
pac Man or Centipede or one of those, if you
(11:49):
wanted to put it in Let's say, you know, all
of the pizza huts. That distributor wanted an exclusive. They
did not want you to put that same game in
Denny's or you know, Dominoes or whatever, and so they
would make you sign an exclusive. You're giving your games
only to me. So what they did is created Key
Games who took you know, and they gave them essentially
(12:09):
the actual games they were creating, and they changed them
ever so slightly, gave them like a different name, you know,
they changed some colors or whatever. They changed it around
a little bit, and so Atari would sell the rights
to whatever their game was to let's say, in our example,
Pizza Hut, and then Key Games would sell essentially the
same game to Dominoes completely like circumventing the distributorships. Yeah,
(12:34):
that would be totally highly illegal. You'd see that. Yeah,
you'd see that in court and in like Business Insider,
Wall Street Journal, everybody, everybody. Yeah, but somehow they managed
to get away with that. In nineteen seventy three. It
was a different time. Times were simply then, crimes were easier.
I feel like there's a slogan in there it was
a good time for crime um. In any case, that's
(12:57):
the kind of stuff they were doing. And the funny
side part of story is that the guy who was
tapped to run Key Games, that fake competitor, he was
Joe Keenan, that was his name, which I guess is
where they got the key um, was actually so good
at his job that he eventually became the president of
actual attari. Hey, we need you to come run the
Shell corporation and just basically just do what we say,
(13:19):
don't worry about it, right, And he actually took his
job seriously and did better than they did. Essentially, he
did better than they did. Yeah, alright, So back to
our main storyline in Atari and Magnifox really are both
in the business of creating games, uh and selling them out,
you know, directly and through these distributorships and all of that. Well,
(13:40):
Magnifox is doing pretty well, and they create a tennis
game for their Odyssey player, and then Atari sees how
that's going, and they go, that seems to be working
for Magnifox. We'll create our own tennis game. They did so,
and they called their game Pong. So Pong, the game
we all know and love, the Boop Boop is essentially
(14:01):
a rip off the Boop Boop, the one everybody remembers
and things of almost as the first ever video game
wasn't first, and it wasn't even their idea. Yeah, it
was basically a rip off. Yeah. Look, since you and
I are not historians, and I happen to have one
in the family, I thought we would get her expertise
for today's episode. Lauren Kladkin has been a museum professional
(14:24):
for the past five years. She has her masters in
art history, and she's now focused in her career on
the intersection of video games and American visual culture. She's
spoken at video game conferences and conventions and luckily agreed
to give us some historical perspective. They weren't the first everything,
but they were sort of the best at everything, especially
(14:45):
early on. It's really not that they, you know, were
predecessors to Saga and Nintendo and all of that. It's
more that, you know, they took what these other companies
were doing in a lot of cases and did it better,
marketed it, better, made it speaker. Um, we're able to
sell it more successfully. And and that is true of
(15:08):
their consoles. You know, they're not the first. Is not
the first video game console on the market. It's actually
the second, but it's better than the Magnavox Odyssey. So
it's the one that becomes iconic. Palm is actually not
the first tennis games, but it's a better one. It's
a sleeker one, and it's the one that becomes in arcades. Uh.
And so Atari kind of takes on this ole as
(15:30):
the king of the early video game era, not king
by birthright, but king by coup. I kind of love that.
I'm going to start, you know, running coups on all
kinds of things, I think, and just to be kind
of become someone hill right, you just had just reinvented,
you do it better, you become more successful, and so
you did a coup, right. But it's so interesting. So
not king because they were by birthright, as she said,
(15:52):
not king because they were first, but king because they
were best essentially King Bayku. And and it's interesting because
you know, we look at a lot of second place
a companies UM that aren't better, and and that's a
different story because they're but there there's like two kinds
of second place companies. There's are not second place but
like second to market companies. There's the ones that are
(16:12):
um second and they just always stay second. And there's
the ones that are second but they're better and they
eclipse the first. Right, It's almost like there's there's some
that are two point oh, and there's some that are
just knockoffs. Yes, and and atari very much. What the
kind of two point away? Yeah? You like the Odyssey game,
well you like this one even more? And people did. Yeah,
And I think most people probably couldn't tell you anything
(16:34):
about Magnavox at this point. I think I think most
folks listening just like myself. We'll hear Magnavox Odyssey and
go that was a thing, right, And when I think
of Magnavox, I can vaguely sort of picture their brand
logo on like a stereo TV. Yeah, exactly. I don't
think of them as anything to do with video games. Yeah,
so pretty interesting. Um that that is who they were
(16:56):
and what they um, what they did? You know, Atari,
that they just they were one of some you know,
certainly two big competitors, but maybe even others. They just
were sleeker and better, you know, all of the things
that that Lauren pointed out there. So I think the
question really becomes is a company viewed positively even if
they're not the O G? Because you called Atari the
(17:18):
O G? Right, because I thought they were right, but
turns out they really weren't. And knowing that, which I
think maybe some people do well if they don't, they
do now, right, But but if you're not the original,
can you still be viewed positively? So we asked Lauren
how she perceived Attari. It's viewed positively, but that that
(17:41):
positive outlook is so much about nostalgia. It's not that
people look back at, you know, the Atari links or
the very seventy eight hundred and think wor that pinnacle
of beaming console. But rather you look at this old
it's got that kind of fow dawn it. It's that
big joystick. There's something really fun and silly and old
(18:07):
school about it feels very retro. It's so funny that
like being retro is cool again. I mean maybe it's
always been the way, Like you get ten or twenty
years past something and then it's retro cool. Yeah, back
then is so now. Yeah. It's like when you're you know,
the decade after it, you're like, oh, that's out, Like,
oh God, look at us, I can't believe we did that. Yeah,
(18:28):
But then by two or three or four decades later,
it's like, oh, that's really happen, remember, And I'm glad
it didn't stick on that. You know, Big hair was
trying to come back a little bit when I was
in high school. I'm glad it didn't, but I remember
that there were some girls coming around with some crazy
dues because I guess it was starting to be cool again.
Eighties was back. Is that what we're saying. It's interesting though,
(18:49):
that atari Um is sort of looked back on positively,
not because of what it did as a business, and
not really because of what it did as you know,
a technology, even as engineers as you know, none of that. Really,
it's really because of the nostalgia of it, because they
were sort of a big thing back in the day.
I mean, I do remember going to people's homes, you know,
(19:12):
in the early eighties who had Atari consoles and being
like excited to go to a friend who had one
because we didn't and we could go and play, you know,
and that was like a cool thing that the Jones
has had down the street, right, and it's and now
it's it's really cool because it was cool, right, It's
just because not because it was great. Yeah, there was
nothing special about it in its time other than it
(19:35):
was just neat and because it was everywhere, it's everywhere again. Yeah,
very very interesting. And Atari's story I think is interesting
not only because of how the gaming console looked when
we think back on it, or how the logo looked
when we think back on it, or the fact that
people my age remember playing you know, Atari games back
(19:55):
in the day, but also the story itself has so
much weird like nostalgi history mixed in. In fact, there
are some famous people and some famous company names that
are part of the story. We'll get to them right
after this. So we have to talk about some of
(20:16):
the noteworthy let's call them characters that got their start
working for Atari. So, for example, in four kind of
where we left our story, there were these two young
guys who were outside contractors doing some work at Atari
on a game you might have heard of called Breakout, which,
by the way, I loved that game. That was a
(20:36):
fun one. Anyway, they cobbled together some spare parts from
Atari and created home computer. Essentially, they went to Atari
and asked them to buy the idea, but Asari said no.
So then they went to Nolan Bushnell personally to UH
and asked him to invest. He also said no, big
bummer for him because their names were Steve Wozniak and
(20:59):
Steve Jobs. Yeah, and we know how that story turned out.
So you got to be asking how did Steve Jobs
end up at Tari in the first place. Well, apparently
he found them. Atari was like the granddaddy, like the
great granddaddy of what all companies now are trying to achieve.
(21:19):
It was like the Google of its time, right, the
first Google workplace Yeah. It was like the hippie, dippy,
trippy version of what people are trying to accomplish today.
It was like a warehouse. It was really relaxed. I
think they could dress however they wanted. They were allowed
to have side hustles, which weren't even called side hustles then.
But but like the company didn't care if they worked
on other projects. People could sort of work from home
(21:40):
and bring things back and forth. You know. That's how
Jobs and Wozniak got parts and made a home computer.
Right Like, they were allowed to sort of take some stuff.
And apparently it also smelled a lot like marijuana coincidence
around the place. Yeah. Um. In any case, it was
so cool. So Steve Jobs at eighteen years old just
kind of found his way there, knocked on the door, essentially,
(22:02):
came in and was like, dude, you gotta hire me,
and so um. You know, the story sort of goes
that they looked at him and they thought, who is
this weird guy. He's either like really got something or
he's a hot mess and we're not hiring him. Ultimately,
they did decide to give him a chance, and it
was really probably one of the most incredible things Nolan
Bushnell could ever take credit for in his own career.
(22:26):
Here's a little bit of an interview from Startup Grind
where Nolan Bushnell talks about those early days. He was
hired by al Alcorn and that afternoon he came into
my office as though that was the right thing to do.
First day. I said, Hi, what's up? He says, I
(22:46):
think you've got a really awesome company. Awesome He uses
that a lot and uh and he said, I think
that everything is pretty good. I've seen your soldering connections
and they're really crappy. I said, well, let let's fix him.
He says, I will. That was kind of that. That's
(23:09):
kind of how our working relationship started. Nick god a
really good show here, but it's kind of crappy, but
fix it. Yeah, that's not exactly how that Goes's not
a good way to impress your boss on day one
what you're doing wrong, right, But apparently it worked for jobs.
Uh and and Bushnell obviously was the kind of leader
who was willing to hear something like that and not,
(23:31):
you know, fire the guy on the spot if it
takes a lot of guts. I think it's a boss
to be willing to let someone kind of innovate on
their own as the new guy, and not let your
toes get stepped on, get your feelings hurt. Yeah. It
takes a lot. Yeah, and apparently Steve Jobs the whole
time he was working at Atari, which was a couple
of years, he was sort of hard to get along with.
He was weird. The other people didn't like him. He
was doing strange things. Um, but in any case, there
(23:53):
he was in. The famous game Breakout was released by Atari.
Had been um, you know, sort of an effort by
the company to deal with competition. They were starting to
see competition in the marketplace, and they're like, we need
something other than Pong, right, so we got to do something.
So they come up with Breakout, and um, they do
(24:14):
some testing, they make a prototype, and they realize that
Breakout needs a lot of chips because remember this is
an era in which you're not just developing software, you're
developing the hardware that it works on. And so apparently
it needed too many chips to be like cost you
know appropriate. They couldn't make it. It was too expensive
to to to mass produce essentially, and so um, here's
(24:38):
where this like sort of legendary story of Steve Jobs
and Steve woznia comes into play. The story goes that
Atari decides that they got to get the number of
chips down, so they basically sort of put it out
to everyone who works there, Hey, if you can figure
out a way to bring the number of chips down,
will give you, I think with like seven d dollars.
I think there's different stories about exactly how much. And
(25:00):
somehow Steve Jobs convinces Atari that he's the guy to
do it, even though he has no engineering capability whatsoever.
What he has is Wozniak, who works at HP at
Hewlett Packard at the time, but his buddy Wassniac, who
does side projects with him, who's brilliant, So he's kind
of sneaking out the back door Jobs is and bringing
stuff to Wosniac who's doing it for him. So he
(25:20):
takes this challenge to Wosniak and he says, Okay, here's
the deal, you know, can you do this? Of course,
Wosniac does it because he's genius, he's brilliant, and they
win essentially, and they get the seven hundred dollars and
Jobs gives Wosniac the three hundred and fifty his share
of the money. But it turns out there was a
five thousand dollar bonus that was also paid to Steve
(25:42):
Jobs that he never told Wozniak about it, and so
ten years later was finds out about this five thousand
dollar bonus, and there are rumors there are you know,
there's sort of an urban legend that this was sort
of a falling out that the two had. Wasniacto has
been asked about it many times since then, and he
always said, as you know, it was no big deal.
I think Steve just needed the money and he didn't
(26:03):
want to ask me. But the truth is I would
have given him the money. I would have let him
keep it because that's I had a full time job
and I was fine, and I just loved what I
was doing. And that is sort of Wazniak's personality. If
you've ever seen him interviewed, he's such a he's just
such a good guy, very humble. Well also, I think
who really did the things he did for the love
of the game, not for the money. And so because
(26:25):
you can tell when you look at his later career
he did a lot of work for you know, K
through twelve schools, and he's just that kind of person.
But you know, Jobs was the other kind of person,
the kind who wouldn't tell the guy who actually did
the work that there was five thousand dollars up for
grabs as well. In any case, that's one of the
famous legends of the two of them. All Right. So meanwhile,
(26:45):
um bush Nell, who is uh also at this point
working with an outside engineering firm and starting to bring
in other help because I guess he's not getting enough
from internal in the company, begins to develop the Attor,
which is probably the most Famo s Atari console I think, right, Yeah,
that's got to be the that's the classic. That's the
one that everyone remembers having on the at the TV
(27:06):
in the early eighties. Yeah, and so this it wasn't
originally called by the way. I think it was originally
called like the vcs that had some weird prototype names
for Yeah, but ultimately it became and uh they released
it that year. It's so interesting because they released it
in ninety six and it was able to I think
it came with combat on it one game and then
it could play like eight other games or something. Yeah. Yeah,
(27:29):
that's not really kind of the way things go now. No. Yeah,
if you said, hey, we've got this brand new gaming
console coming out with eight games on it, you probably
would sell five of the console and that would be it.
Because nowadays video games come out with hundreds of titles
available from day one. Yeah, and if they don't, they
don't work, nobody buys it. Yeah. I remember it was
(27:50):
controversial when the original Xbox came out back in the
day because it only was going to have fifty something
games available at launch, and everyone was like, I'm not
going to spend money on that, right, fifty and people
were taking these Ataris off the shelves like hotcakes, right
for eight games. Yeah. Absolutely. Well. Bushnell obviously was a
savvy businessman because in ninety six he actually sold Atari.
(28:12):
That was sort of the end in a way, or
the beginning of the end of bush Nell's actual part
in Atari. He sells the company to Warner for an
estimated thirty two million dollars, and he stays on to
work for Warner, kind of the way a lot of
startup founders do today. You saw the company, but you
have a contract to stay on for a year two
to kind of make the transition smooth. Okay, I gotta
(28:33):
get to another iconic intersection of total randomness. So here
bush now, when he sold the company, supposedly use some
of that money from the sale to buy a mansion
which had originally belonged to the Folder family, as in
Folder's Coffee. Really yeah, from the random intersection probably smells great.
(28:53):
I bet it does. But maybe you can never sleep
there because you're always just caffeinated. Yeah, all right, and
we gotta get to another kind of interesting intersection with
another iconic company. So Bushnell has another business venture that
he is famous for, and it is randomly and very
weirdly Chuck E Cheese. Yeah. Originally known as Pizza Time Theater,
(29:16):
Chuck E Cheese is Pizza Time Theater. And here's the
crazy part. It wasn't just like something Bushnell started on
the side. It was actually originally a subsidiary of Atari,
and it was developed as a place that Attari could
promote and distribute its own arcade games. That's great, right,
So this is like another form essentially of Atari doing
(29:38):
sort of what they did with Key Games in the
early days, right where they formed their own competitor. Well
now instead of just trying to get their games widely
distributed in arcades. They just made their own arcade essentially
with Chuck E Cheese. That is glorious. It's like it's
almost like the companies now, the clothing companies that have
their own name brand store, except you didn't know it
was actually their store. Fascinating and you did you you
(30:00):
also know it almost wasn't Chuck E Cheese. Now, right, So,
originally when Bushnell got the first costume for the theater
part of it, he originally had ordered a coyote costume. Okay,
is it going to be called coyote Cheese? No, it
was actually gonna be coyote Pizza a little simpler, and
then when he found out it was a mouse costume, decided, oh,
(30:22):
it's a great idea to name it Rick Rat's Pizza. Yeah.
The marketing team shot that one down basically instantly and
came up with Chuck E Cheese and that's where it
went from there. So, yeah, we almost had Rick Rats Pizza.
And in fairness, coyote pizza is way better than coyote cheese.
I don't know why, but I um all right, interesting
side note on Chuck E Cheese. So it's so it's
(30:44):
formed as part of Atari. You now remember um Bushnell
sells his you know, he sells Atari to Warner and
he stays on board. But then uh bush Now gets
fired by Warner, which also I think sort of happens
with startup founders because they kind of just take a
desk and don't really do a whole lot. Well, he
also at the time bush Now buys the concept of
(31:06):
Chuck E Cheese back from Warner Communications in ninety eight
and actually starts to franchise Chuck E Cheese in nineteen
seventy nine. So he left all of the computer stuff
to them and went forward with this restaurant concept, which,
as we know, went on and on and on and on.
So the next time you have to go to one
of those birthday parties at Chuck E Cheese, you know,
you know the history of the Talian with Atari, That's right,
(31:28):
You have a whole new appreciation for what was going
on there. All right, So fast forward, Uh Bushnell is
gone now from what is still sort of Atari owned
by Warner, and in nineteen seventy nine, Uh, they start
allowing third party companies to make software for the gaming
consoles at Harry Does and Activision is the first third
(31:50):
party game developer um that sort of comes to play,
and it of course is founded no less than by
four former Atari programmers who had been frustrated at Atari
would not give them credit, like they couldn't have their
names at the end of the game, and didn't like that,
so they left and started Activision, created their own games,
and were the first ones to actually put their games
(32:10):
on Atari systems. Another company that's been bought and sold
and moved around, but still actually active today in making games. Activision.
They're they're usually integratly involved in Call of Duty. I'm yeah, fascinating,
and it's so interesting too, because it just goes to
show you that something as simple as giving your employees
credit for their work could have completely changed the game,
(32:33):
Like Atari could have owned that if they hadn't upset
their employees, absolutely it would still be Atari Games, right yeah, yeah, uh.
In any case, we we proceed through the timeline a
little bit in the eighties and you have the Atari
four hundred and eight hundred released onto the market and
eight one Atari releases. It's most popular title forred and
(32:59):
it's you want to guess, Oh, it wasn't Asteroids or Breakout.
I don't know what was it. Oh, you know it
was pac Man. Everybody loves pac Man. Yeah, so that
nice that comes out in one And pac Man was
also a third party game developed by the Japanese company Namco,
(33:19):
which when you say it out loud, you're like, oh, yeah, Amco.
I remember, um two of the Attari is released, but
it's kind of a hot mess. It's incompatible with the
original game library, big mistakes, and it also had other
issues like we just sort of talked about because it
wasn't compatible with the old games and there's a limited
(33:41):
number of new games. And also apparently the Harvard just
wasn't that good. It had sort of notoriously faulty controllers.
And I will say this brings a thing that's now
pop big in the gaming industry called backwards compatibility. You
have to have it or your consoles dead from the start.
Absolutely yeah, and that this was like an early mistake.
This is the lesson they learned from there. You go two.
(34:02):
Despite all of that, Atari had uh one point three
billion dollars in annual sales and they were the fastest
growing company in the history of American business at the time.
That's incredible. Ye, right in Three, this is now seven
years after Nolan Bushnell cashed out, the video game industry crashed.
(34:24):
I mean it just it just went from the top
of the heap to like almost nothing. And it was
for three reasons essentially, and oversaturation of the market. Um,
a new and increased interest in personal computers over gaming
consoles because in those early days, with personal computers, you
could play simple games on them. So for people who
(34:45):
were there was no such thing as a gamer back then.
And for people who like to just sort of play
a game here there you could do it on a
personal computer and get all that other stuff with it,
kind of like the fitbit to the Apple Watch, right. Um.
And so that those were the two reasons. And the
third reason that the gaming industry crash was Atari. It
(35:05):
was Atari's fault. Their part in the crash, in fact,
was so significant that in Japan that crash is actually
called Atari Shock. Yeah. So what did Atari get wrong
that year? Well, here's our gaming expert Lauren Colligan to
tell us what happened. It really all centers around this
particular game E T the Extra Terrestrial, which you guys
(35:29):
may have heard of. Basically, when EAT came out, Atari
spent a lot of money buying the rights to to
that film so that they could make a game off
of it exclusively, and they sort of banked on the
fact that it would sell really well. And what actually
happened is that it took them so long to buy
(35:50):
the rights for this movie that by the time they
actually were ready to go, they only had about six
weeks before the Christmas Eve. And and and this was a
gaming to get out for Christmas. Uh, And so they
cranked it out in six weeks. And I don't know
how much you guys or your audience knows about how
(36:12):
to make video games, but you can't really do a
game justice in six weeks. And so what they made
is sort of now consider the worst video game of
all time. And so it was a disaster. And basically
Atari ended up with tons of copies of this game.
They assumed it would sell in the you know, millions,
(36:32):
and they barely sold any They sold you a few
hundred thousands. And so the rumor kind of went around
in the industry for a very long time that Atari
had secretly buried hundreds of thousands, if not a million,
copies of ET the Extra Terrestrial in the desert, and uh,
(36:52):
in two thousands fourteen, some archaeologists decided to look into
this myth and they went out to the Alamo Gordo
Desert in New Mexico and they started digging in the
rumored site that these cartridges were buried. And it turns
out it wasn't a miss. They actually buried seven hundred
(37:14):
and twenty eight thousand Atari game cartridges in the desert. Now,
not all of them are et. There were a couple
other but ones in there. Centipede, for example, is among
the buried cartridges. But they buried over seven hundred thousand
cartridges in the desert. They dug these up, and an
Atari manager who was actually in charge of the burial
(37:37):
at the time, went to the dig and confirmed that, yes,
on Atari's orders, they had buried all of this product
in the desert. And actually a fun fact about these
games is that they're not all gone. Um one of
them is in the collection at the National Museum of
American History in Washington, d C. Crazy, completely crazy on
(37:59):
all for on that story is crazy, but look, it's
fascinating on a lot of levels. And what happened in
that era of the seventies and eighties with Atari also
fascinating in some ways. The story of Attari goes on
until today, but really the story was almost over by
the early eighties. We'll get to how it essentially ended
right after this. So a story that essentially started in
(38:28):
the early nineteen seventies is almost basically over just a
little over a decade later. Um by three, the story
of Atari is almost over. Now. The Atari name lives
on to this day. There are still things that have
the Atari name, but really it was pretty much over
by then. I gotta paint the picture though, because as
we said, revenue for the gaming industry was at an
(38:51):
all time high. We we talked about the one point
two or one point three billion that Atari had. The
gaming industry on the whole at that time was at
three point two billion, yeah, which in today's dollars is
over eight billions. It was a humongous industry, almost as
big as it is currently. Yeah, but the crash in
three of the video game industry caused it to go
(39:13):
down from three point two billion all the way to
a hundred million within two years. That was so they
were riding high the industry. Two years later, how much
percent did we saying almost nine seven percent drop off.
That is a full blown collapse crash, all the bad words. Yeah.
And so as a part of that, in what was
(39:37):
Atari owned by Warner, of course, is split into three
pieces essentially to be sold off. So there was the
coin operated arcade division that became Atari Games. That part
was retained by Warner, but eventually even that was sold
off to Namco. Remember Namco and pac Man. Yeah, the
consumer division was sold to Jack Trammel who folded it
(39:57):
into his Trammell Technology Limited. And then the third division
was this butting Atari Tell division, which was sold to
Mitsubishi Electric. And that was sort of random, sort of
collection of prototypes of consumer electronics like speaker phones and
video phones. I don't know why, but I think of
the one in Charlie's Angels, the speaker phone. I don't
know if that's relevant or not, but there you go.
(40:19):
But I have to say, speaking of that image of
the speaker phone in Charlie's Angels, which is sort of
iconic in and of itself. Right, Um, all of these
things Atari and that Charlie's Angels speaker phone, and Pong
and the consoles that Attari made have become a part
of history. Lauren referred to it when she talked about
the cartridge being you know, in the Smithsonian collection, and
(40:41):
you know, it's so interesting to try to sort of
figure out how something that was just a new invention
and fun ends up really being a part of our history. Um,
not only just as a story to be told on
a podcast like ours, but really in museums, part of
the cultural history. I think the big question becomes what
should be part of that history? And that's why we
(41:02):
brought Lauren in. What games are important? When we're talking
about American visual culture. It's easier for us to justify
a connection when we're looking at say Washington crossing the Delaware,
or a portrait of Bill Clinton or Ronald Reagan, or
even a landscape the beautiful, huge images of the Yosemite.
(41:27):
We see that, we say, yeah, okay, bx American visual culture.
But Mario Brothers is part of that story too, So
is Assassin's Creed, so is Pong. I'm interested in what
does this tell us about the people who made this thing,
but also about the people who consumed this thing back
when it first came on the market and today, which
(41:48):
is really what the telling of history is all about.
Very cool to have Lauren's insight. You know, we sort
of started the episode by um dividing and conquering, right.
We said, you know, Nick was the game or Lauren
was sort of our academic, and I was sort of
looking at this from a business perspective, and it was
weirdly kind of successful on all three fronts. I think
(42:09):
Lauren made another interesting point, which was that, um, we
think of gamers today, as you know, we described you
as a gamer and you're playing sort of a multiplayer
games online with your friends. Are certain kinds of games complicated, intricate, fancy,
flashy graphics. Yeah, absolutely right. And really though, there's so
everything that is a video game, everything from candy Crush
(42:32):
to you know, anything you play on your phone is
also a game. But I would also say, too, have
you ever had a farm on Facebook? It's a video game?
Yeah it is, Yeah, any of those things. So therefore,
I guess I'm kind of a gamer. We are all gas,
we are all gamers, because I would think Lauren probably
is too. Yeah you're a gamer. I love that. Um,
(42:53):
it is really fascinating. So I think to some extent,
our story today has been about where atari and video
gaming fit into American cultural history, but also how do
you get to be an Atari? What is it really about?
How did Nolan Bushnell do that? Who was he and
what made this happen? Well, I have to say if
you were worried about Noland and where he turned out,
(43:14):
he's since those days and his success with Atari and
Chuck E Cheese and many other investments, um has become
an author and a keynote speaker, and he makes the
point that it's really all about hard work. So we're
gonna leave you with a little bit of modern day
Nolan Bushnell. Everybody who's ever had a shower has had
(43:34):
a good idea. Do you own that idea? No? Is
it your idea? No? You don't own an idea until
you work on it, until you fine tune it, until
you research it. Anybody who says he stole my idea
is a fool. If you had an idea and you
(43:54):
didn't do anything on it, you're lazy. Success does not
fall ideas. Success follows hard work. That's Nolan bush Now,
that's Atari, and that's our show for today. See you
next time. Photography is a production of I Heart Radio
and dB Media. I'm your host, Dana Barrett. My co
(44:15):
host is Nick Bean, our producer is Tory Harrison, and
our executive producer is Jonathan Strickland. Have questions I want
to give us feedback or have a company you'd like
us to cover. Email us at info at Physiography dot Show,
or contact us on social. I'm at the Danta Barrett
on Facebook, Twitter, and Instagram, or just search for me
on LinkedIn. Thanks for your support.
Some iconic brands have changed how we eat, some how
we shop, and somehow we interact. But at their core,
they're all stories about business. The story of Atari might
seem to be just about play, but it's really so
much more. This is Bisiography, the show where we dive
(00:36):
into the strange but true stories of iconic companies. Whether
they're a current bright star, in the midst of a
massive dumpster fire, or settling into the dust heap of history,
they all have a past worth knowing. I'm Dana Barrett.
I'm a former tech exec, an entrepreneur, and a TV
and radio host, and over the course of my career,
I've interviewed thousands of business leaders and reported on the
(00:57):
bright beginnings and massive flame outs some of the brands
we know and love. Some of their stories are inspiring,
some are cringe worthy, and some are bigger and more
impactful than they really should be. Phisiography is a production
of I Heart Radio and dB Media and is co
hosted as always by my producer, Nick Bean, who today
will be playing the role of gamer. Nick. How much
(01:19):
did you even know about Atari before we started researching
this episode? I mean, well, they're like the O G right,
like the original popular gaming console was the Atari Dred,
so it's kind of why we have video games the
way we do now. Somewhere along the line, though, they
just they just kind of died, right, Yeah, it certainly
(01:39):
does feel that way. I mean, I think most people
who were around in that era of the seventies, uh,
I guess mostly the seventies maybe early eighties sort of
remember Atari and then just sort of looked around and
it wasn't there anymore. Yeah, Um, And they were sort
of thought of as the original, But I think that
(02:00):
is going to inform how we have to start this episode,
because they really weren't the first. The first ever computer game,
not surprisingly, came out of m I T. Yeah, it
was not actually created by Atari. It was UM And
of course this is sort of it was believed to
be the first ever game because there were probably other
people UM in basements and in other colleges and whatever,
(02:22):
who were tinkering and coming up with games of their own.
But the first one that really got any usage was
called Space War and it was created in nineteen sixty
two by a group of students at M I T.
And it was the kind of story where two or
three students worked on it. These three other guys helped out.
Then it got moved over here and four other people
worked on it. So there's not really one person to
credit um with Space War. But it ran on a
(02:44):
Deck computer. UM. For people who are slightly older, you
might remember Deck. The computer at the time the size
of a large car. Oh my gosh, I could not
put that in your pocket. For the record, Yeah, it
was called Yeah, it was called a PDP one And actually,
by today's standards, of course, the graphics were pretty primitive.
(03:04):
But the truth is they really were less primitive than
some of the games that came after them in the
you know, late seventies and early eighties. And this is
two that's fascinating, probably because they had the computer the
size of a car and it's mighty not gonna lie um,
So it was kind of advanced really for a first
ever game. It was like a two player Each one
(03:25):
has a spaceship kind of game, um, and they shoot
at each other and kind of can turn their ships
around and you know, accelerate and slow down, and of
course the goal is not to get hit by the
other player, you know, and to keep on hitting them
until you kill them. Basically right the early days of
shooting games, and like Space War is really considered to
be the most important influential game in the early history
(03:47):
of video games. It was really popular within its small
community of what we would now call like programming nerds,
because that's really who was using it. Those were the
only people that really had access to any kind of
computing power, right, yeah, not everyone could go use a
car sized computer. Had to have one at school, that's right. Um.
And even at school, only certain programs had them, you know,
(04:09):
they Weren't's not like every college everywhere had them. Um.
And of course the reason when I was reading the
description of Space War, I could sort of picture it
in my mind. And I'm pretty sure I never played
Space War, but the reason it was familiar to me is, um,
that's kind of what Asteroids was, like a much later
version of it. If you can think about the game Asteroids,
which many more people know than Space War, it was
(04:31):
sort of a much later version, much much later version
of Space War. So because Asteroids didn't come out in
and this was two yeah, and so in between there
were a lot of other copies of Space War. Also.
Oh and I've got to mention that for the record,
in two thousand seven, Space War was actually named to
a list of the ten most important video games of
(04:51):
all time. Um. And it's actually sort of the start
of the game canon at the Library of Congress. Wow,
So it actually started video games. Now, it's kind of
actually started the history of video sort of, and it's
been acknowledged, you know what I mean, it's sort of
it's noted. Um you have to say noted like that
if it's serious, it's noted. Uh. Say, space War was
(05:12):
created in one but it's not really until ten years
later that our story kind of starts. So in a
guy named Nolan bush Now and another guy named Ted
Dabney found an engineering company and they called it siss
A j which I kind of like that three times
best with peanut butter in your mouth siss a g uh.
(05:32):
And they sort of produce a Space War inspired game,
one of the predecessors also to Asteroids, called Computer Space,
which is a terrible name, but it becomes the first
arcade video game. So Space War was played on this
car sized computer and other computers like it. Um as
they got I guess a little bit smaller over the
(05:52):
next decade. Um. But this version of a computer. Space
is the first arcade video game and also the first
video game to bemercially available. Yeah. So it was designed,
of course by Bushnell and Dabney as essentially a way
to make money on Space War. They're like, we want
a coin operated version of Space War, and so that's
why they created it. And it came in its own
(06:15):
sort of custom designed very like sixties looking fiberglass cabinet.
And isn't that kind of the fascinating part of this
is that they started the first arcade game and for
the longest time, from seventy one on for a while,
that's kind of how they came, right. They came in
these big, huge boxes in the whole game was built
into the thing, and it had its own special controls.
(06:35):
They literally built them from the ground up, physically hand
in the software side. And now it's not even that way.
A video game maker literally just makes the game part
of it. Hardware is somebody else's job, not even associated
any longer. Yeah, it's also interesting to think about the
arcade games at the time were meant for everyone to
be standing up and playing, which in a sense would
(06:57):
limit how long you would play them. And if you
think about it now. Not only do they make them
for little consoles where you can, they make the chairs
so you can basically mold yourself into a chair and
not move for days. I mean, I'll be honest to
have one of those chairs, I'm not don't move for days.
I don't. I don't not move for days. But it is,
it is. It is difficult sometimes to get out of them, right, Yeah,
(07:18):
that's a whole different mentality, right. I remember my brothers
saying he remembers, because he's a little older than I,
when arcade chairs became a thing because barstool chairs were
too high and normal chairs were too low. You had
to have a weird in between. And he remembers when
he would go and some of the arcades had them,
and that's why they went to them, if they had
arcade seats. And it's funny that you say that, because
I didn't think about this, but I remember playing pinball
sitting on a bar stool. Yeah. Um. In any case, Yeah,
(07:43):
it was a very different world the way they were
creating video games in the day. So of course those
were the early days, and that was sort of the
first game created by Bushnell and Dabney Well in nineteen
seventy two, they officially incorporate their company. I don't know
why they changed name from Scissor G. But in nineteen
seventy two they start a new company, if actually, and
it's called Atari. I have to point out that, while
(08:05):
we're doing an episode on Atari, and they were certainly
seen as you know, the top of the heap at
the time, they were not the only ones getting into
this field. Magnavox, which was a company with a very
long history, much longer. In fact, their history involved a
lot of making of hardware, radio's, television's, record players, electronics
in general. Well, they got into the video game world
(08:26):
around the same time, and in nineteen seventy two they
released their first ever video game console. It was called
the Odyssey. Alright, so hang on real fast, though, do
you do you even know what atari means? You know,
I'm not gonna lie. I always kind of thought it
was Japanese. Is that wrong? No, you're right. So the
term atari in Japanese means quote to hit the target
or to receive something fortuitously. But they named it Atari
(08:50):
based on the game Go. Have you ever played the
board game Go? It's an old Chinese style board game
like a vague bell. So that's the simplest of it
is you have little stones like a Chinese marble, and
when yours is surrounded by four pieces, your stone gets
taken out of the game. You don't want that. When
your stone is surrounded by three and there's only one
spot left, your stone is in atari. Basically, it's like
(09:14):
a like the check version in chess, like it's not
game over, but you need to watch out. It's like
check checkmate. So it's interesting that they named it based
off of the game kind of you could almost be
finished here and yeah, I mean their company after it,
which is also interesting because they were sort of, you know,
in competition with companies like Magnavox and some of the
(09:35):
others that were coming up around that time. Just very
interesting that they saw something there. There was something competitive
in their naming and for what it's worth, I guess
maybe it's unique enough and it's stuck well. And also
the idea of like I'm playing a game with you,
my competitors, but I'm going to hit the target right,
you know, like you're missing by a little bit. I'm
gonna get it. I'm gonna checkmate you, you know. Yeah,
(09:57):
very very interesting. All right. Well, while we're doing some
digging in from a detailed perspective, I gotta tell you
there are a lot of amazing bunny trails in this story. Um.
That one, obviously is sort of more of a gaming
bunny trail, but there's a fascinating business bunny trail that
we've got to talk about. We're gonna do it right
after this. So Atari gets its start in the early
(10:24):
nineties seventies and um with their sort of arcade version
of space War, and they're often running and they've got
competitors in the space and they're getting into this world
of selling games into arcades. Now, look, we were talking
a little bit about some of the side stories already.
UM from a gaming standpoint, the name of Atari and
(10:45):
this funny idea that they chose their name almost based
on being competitive and hitting the target, which makes sense.
They were creating games, but if you look at the
game play essentially on a bigger level as business gameplay,
they were all about the business gameplay. Also, they weren't
just creating games for their you know, clients, their users.
(11:06):
They were playing games themselves, and some you could not
get away with in today's business marketplace. In nineteen seventy three,
Atari secretly created its own rival company. They literally created
a company to fake compete with them. The company was
called Key Games k E. And they did this because
(11:27):
UM game distributors at the time, we're insisting on exclusive
rights to a game. Now, this is of course in
the time of arcades and putting sort of arcade games
and restaurants and that kind of thing. So if you
wanted to put your UM arcade game, and we'll go
forward into the future a little bit for this example.
But let's say you have you owned you know, uh,
pac Man or Centipede or one of those, if you
(11:49):
wanted to put it in Let's say, you know, all
of the pizza huts. That distributor wanted an exclusive. They
did not want you to put that same game in
Denny's or you know, Dominoes or whatever, and so they
would make you sign an exclusive. You're giving your games
only to me. So what they did is created Key
Games who took you know, and they gave them essentially
(12:09):
the actual games they were creating, and they changed them
ever so slightly, gave them like a different name, you know,
they changed some colors or whatever. They changed it around
a little bit, and so Atari would sell the rights
to whatever their game was to let's say, in our example,
Pizza Hut, and then Key Games would sell essentially the
same game to Dominoes completely like circumventing the distributorships. Yeah,
(12:34):
that would be totally highly illegal. You'd see that. Yeah,
you'd see that in court and in like Business Insider,
Wall Street Journal, everybody, everybody. Yeah, but somehow they managed
to get away with that. In nineteen seventy three. It
was a different time. Times were simply then, crimes were easier.
I feel like there's a slogan in there it was
a good time for crime um. In any case, that's
(12:57):
the kind of stuff they were doing. And the funny
side part of story is that the guy who was
tapped to run Key Games, that fake competitor, he was
Joe Keenan, that was his name, which I guess is
where they got the key um, was actually so good
at his job that he eventually became the president of
actual attari. Hey, we need you to come run the
Shell corporation and just basically just do what we say,
(13:19):
don't worry about it, right, And he actually took his
job seriously and did better than they did. Essentially, he
did better than they did. Yeah, alright, So back to
our main storyline in Atari and Magnifox really are both
in the business of creating games, uh and selling them out,
you know, directly and through these distributorships and all of that. Well,
(13:40):
Magnifox is doing pretty well, and they create a tennis
game for their Odyssey player, and then Atari sees how
that's going, and they go, that seems to be working
for Magnifox. We'll create our own tennis game. They did so,
and they called their game Pong. So Pong, the game
we all know and love, the Boop Boop is essentially
(14:01):
a rip off the Boop Boop, the one everybody remembers
and things of almost as the first ever video game
wasn't first, and it wasn't even their idea. Yeah, it
was basically a rip off. Yeah. Look, since you and
I are not historians, and I happen to have one
in the family, I thought we would get her expertise
for today's episode. Lauren Kladkin has been a museum professional
(14:24):
for the past five years. She has her masters in
art history, and she's now focused in her career on
the intersection of video games and American visual culture. She's
spoken at video game conferences and conventions and luckily agreed
to give us some historical perspective. They weren't the first everything,
but they were sort of the best at everything, especially
(14:45):
early on. It's really not that they, you know, were
predecessors to Saga and Nintendo and all of that. It's
more that, you know, they took what these other companies
were doing in a lot of cases and did it better,
marketed it, better, made it speaker. Um, we're able to
sell it more successfully. And and that is true of
(15:08):
their consoles. You know, they're not the first. Is not
the first video game console on the market. It's actually
the second, but it's better than the Magnavox Odyssey. So
it's the one that becomes iconic. Palm is actually not
the first tennis games, but it's a better one. It's
a sleeker one, and it's the one that becomes in arcades. Uh.
And so Atari kind of takes on this ole as
(15:30):
the king of the early video game era, not king
by birthright, but king by coup. I kind of love that.
I'm going to start, you know, running coups on all
kinds of things, I think, and just to be kind
of become someone hill right, you just had just reinvented,
you do it better, you become more successful, and so
you did a coup, right. But it's so interesting. So
not king because they were by birthright, as she said,
(15:52):
not king because they were first, but king because they
were best essentially King Bayku. And and it's interesting because
you know, we look at a lot of second place
a companies UM that aren't better, and and that's a
different story because they're but there there's like two kinds
of second place companies. There's are not second place but
like second to market companies. There's the ones that are
(16:12):
um second and they just always stay second. And there's
the ones that are second but they're better and they
eclipse the first. Right, It's almost like there's there's some
that are two point oh, and there's some that are
just knockoffs. Yes, and and atari very much. What the
kind of two point away? Yeah? You like the Odyssey game,
well you like this one even more? And people did. Yeah,
And I think most people probably couldn't tell you anything
(16:34):
about Magnavox at this point. I think I think most
folks listening just like myself. We'll hear Magnavox Odyssey and
go that was a thing, right, And when I think
of Magnavox, I can vaguely sort of picture their brand
logo on like a stereo TV. Yeah, exactly. I don't
think of them as anything to do with video games. Yeah,
so pretty interesting. Um that that is who they were
(16:56):
and what they um, what they did? You know, Atari,
that they just they were one of some you know,
certainly two big competitors, but maybe even others. They just
were sleeker and better, you know, all of the things
that that Lauren pointed out there. So I think the
question really becomes is a company viewed positively even if
they're not the O G? Because you called Atari the
(17:18):
O G? Right, because I thought they were right, but
turns out they really weren't. And knowing that, which I
think maybe some people do well if they don't, they
do now, right, But but if you're not the original,
can you still be viewed positively? So we asked Lauren
how she perceived Attari. It's viewed positively, but that that
(17:41):
positive outlook is so much about nostalgia. It's not that
people look back at, you know, the Atari links or
the very seventy eight hundred and think wor that pinnacle
of beaming console. But rather you look at this old
it's got that kind of fow dawn it. It's that
big joystick. There's something really fun and silly and old
(18:07):
school about it feels very retro. It's so funny that
like being retro is cool again. I mean maybe it's
always been the way, Like you get ten or twenty
years past something and then it's retro cool. Yeah, back
then is so now. Yeah. It's like when you're you know,
the decade after it, you're like, oh, that's out, Like,
oh God, look at us, I can't believe we did that. Yeah,
(18:28):
But then by two or three or four decades later,
it's like, oh, that's really happen, remember, And I'm glad
it didn't stick on that. You know, Big hair was
trying to come back a little bit when I was
in high school. I'm glad it didn't, but I remember
that there were some girls coming around with some crazy
dues because I guess it was starting to be cool again.
Eighties was back. Is that what we're saying. It's interesting though,
(18:49):
that atari Um is sort of looked back on positively,
not because of what it did as a business, and
not really because of what it did as you know,
a technology, even as engineers as you know, none of that. Really,
it's really because of the nostalgia of it, because they
were sort of a big thing back in the day.
I mean, I do remember going to people's homes, you know,
(19:12):
in the early eighties who had Atari consoles and being
like excited to go to a friend who had one
because we didn't and we could go and play, you know,
and that was like a cool thing that the Jones
has had down the street, right, and it's and now
it's it's really cool because it was cool, right, It's
just because not because it was great. Yeah, there was
nothing special about it in its time other than it
(19:35):
was just neat and because it was everywhere, it's everywhere again. Yeah,
very very interesting. And Atari's story I think is interesting
not only because of how the gaming console looked when
we think back on it, or how the logo looked
when we think back on it, or the fact that
people my age remember playing you know, Atari games back
(19:55):
in the day, but also the story itself has so
much weird like nostalgi history mixed in. In fact, there
are some famous people and some famous company names that
are part of the story. We'll get to them right
after this. So we have to talk about some of
(20:16):
the noteworthy let's call them characters that got their start
working for Atari. So, for example, in four kind of
where we left our story, there were these two young
guys who were outside contractors doing some work at Atari
on a game you might have heard of called Breakout, which,
by the way, I loved that game. That was a
(20:36):
fun one. Anyway, they cobbled together some spare parts from
Atari and created home computer. Essentially, they went to Atari
and asked them to buy the idea, but Asari said no.
So then they went to Nolan Bushnell personally to UH
and asked him to invest. He also said no, big
bummer for him because their names were Steve Wozniak and
(20:59):
Steve Jobs. Yeah, and we know how that story turned out.
So you got to be asking how did Steve Jobs
end up at Tari in the first place. Well, apparently
he found them. Atari was like the granddaddy, like the
great granddaddy of what all companies now are trying to achieve.
(21:19):
It was like the Google of its time, right, the
first Google workplace Yeah. It was like the hippie, dippy,
trippy version of what people are trying to accomplish today.
It was like a warehouse. It was really relaxed. I
think they could dress however they wanted. They were allowed
to have side hustles, which weren't even called side hustles then.
But but like the company didn't care if they worked
on other projects. People could sort of work from home
(21:40):
and bring things back and forth. You know. That's how
Jobs and Wozniak got parts and made a home computer.
Right Like, they were allowed to sort of take some stuff.
And apparently it also smelled a lot like marijuana coincidence
around the place. Yeah. Um. In any case, it was
so cool. So Steve Jobs at eighteen years old just
kind of found his way there, knocked on the door, essentially,
(22:02):
came in and was like, dude, you gotta hire me,
and so um. You know, the story sort of goes
that they looked at him and they thought, who is
this weird guy. He's either like really got something or
he's a hot mess and we're not hiring him. Ultimately,
they did decide to give him a chance, and it
was really probably one of the most incredible things Nolan
Bushnell could ever take credit for in his own career.
(22:26):
Here's a little bit of an interview from Startup Grind
where Nolan Bushnell talks about those early days. He was
hired by al Alcorn and that afternoon he came into
my office as though that was the right thing to do.
First day. I said, Hi, what's up? He says, I
(22:46):
think you've got a really awesome company. Awesome He uses
that a lot and uh and he said, I think
that everything is pretty good. I've seen your soldering connections
and they're really crappy. I said, well, let let's fix him.
He says, I will. That was kind of that. That's
(23:09):
kind of how our working relationship started. Nick god a
really good show here, but it's kind of crappy, but
fix it. Yeah, that's not exactly how that Goes's not
a good way to impress your boss on day one
what you're doing wrong, right, But apparently it worked for jobs.
Uh and and Bushnell obviously was the kind of leader
who was willing to hear something like that and not,
(23:31):
you know, fire the guy on the spot if it
takes a lot of guts. I think it's a boss
to be willing to let someone kind of innovate on
their own as the new guy, and not let your
toes get stepped on, get your feelings hurt. Yeah. It
takes a lot. Yeah, and apparently Steve Jobs the whole
time he was working at Atari, which was a couple
of years, he was sort of hard to get along with.
He was weird. The other people didn't like him. He
was doing strange things. Um, but in any case, there
(23:53):
he was in. The famous game Breakout was released by Atari.
Had been um, you know, sort of an effort by
the company to deal with competition. They were starting to
see competition in the marketplace, and they're like, we need
something other than Pong, right, so we got to do something.
So they come up with Breakout, and um, they do
(24:14):
some testing, they make a prototype, and they realize that
Breakout needs a lot of chips because remember this is
an era in which you're not just developing software, you're
developing the hardware that it works on. And so apparently
it needed too many chips to be like cost you
know appropriate. They couldn't make it. It was too expensive
to to to mass produce essentially, and so um, here's
(24:38):
where this like sort of legendary story of Steve Jobs
and Steve woznia comes into play. The story goes that
Atari decides that they got to get the number of
chips down, so they basically sort of put it out
to everyone who works there, Hey, if you can figure
out a way to bring the number of chips down,
will give you, I think with like seven d dollars.
I think there's different stories about exactly how much. And
(25:00):
somehow Steve Jobs convinces Atari that he's the guy to
do it, even though he has no engineering capability whatsoever.
What he has is Wozniak, who works at HP at
Hewlett Packard at the time, but his buddy Wassniac, who
does side projects with him, who's brilliant, So he's kind
of sneaking out the back door Jobs is and bringing
stuff to Wosniac who's doing it for him. So he
(25:20):
takes this challenge to Wosniak and he says, Okay, here's
the deal, you know, can you do this? Of course,
Wosniac does it because he's genius, he's brilliant, and they
win essentially, and they get the seven hundred dollars and
Jobs gives Wosniac the three hundred and fifty his share
of the money. But it turns out there was a
five thousand dollar bonus that was also paid to Steve
(25:42):
Jobs that he never told Wozniak about it, and so
ten years later was finds out about this five thousand
dollar bonus, and there are rumors there are you know,
there's sort of an urban legend that this was sort
of a falling out that the two had. Wasniacto has
been asked about it many times since then, and he
always said, as you know, it was no big deal.
I think Steve just needed the money and he didn't
(26:03):
want to ask me. But the truth is I would
have given him the money. I would have let him
keep it because that's I had a full time job
and I was fine, and I just loved what I
was doing. And that is sort of Wazniak's personality. If
you've ever seen him interviewed, he's such a he's just
such a good guy, very humble. Well also, I think
who really did the things he did for the love
of the game, not for the money. And so because
(26:25):
you can tell when you look at his later career
he did a lot of work for you know, K
through twelve schools, and he's just that kind of person.
But you know, Jobs was the other kind of person,
the kind who wouldn't tell the guy who actually did
the work that there was five thousand dollars up for
grabs as well. In any case, that's one of the
famous legends of the two of them. All Right. So meanwhile,
(26:45):
um bush Nell, who is uh also at this point
working with an outside engineering firm and starting to bring
in other help because I guess he's not getting enough
from internal in the company, begins to develop the Attor,
which is probably the most Famo s Atari console I think, right, Yeah,
that's got to be the that's the classic. That's the
one that everyone remembers having on the at the TV
(27:06):
in the early eighties. Yeah, and so this it wasn't
originally called by the way. I think it was originally
called like the vcs that had some weird prototype names
for Yeah, but ultimately it became and uh they released
it that year. It's so interesting because they released it
in ninety six and it was able to I think
it came with combat on it one game and then
it could play like eight other games or something. Yeah. Yeah,
(27:29):
that's not really kind of the way things go now. No. Yeah,
if you said, hey, we've got this brand new gaming
console coming out with eight games on it, you probably
would sell five of the console and that would be it.
Because nowadays video games come out with hundreds of titles
available from day one. Yeah, and if they don't, they
don't work, nobody buys it. Yeah. I remember it was
(27:50):
controversial when the original Xbox came out back in the
day because it only was going to have fifty something
games available at launch, and everyone was like, I'm not
going to spend money on that, right, fifty and people
were taking these Ataris off the shelves like hotcakes, right
for eight games. Yeah. Absolutely. Well. Bushnell obviously was a
savvy businessman because in ninety six he actually sold Atari.
(28:12):
That was sort of the end in a way, or
the beginning of the end of bush Nell's actual part
in Atari. He sells the company to Warner for an
estimated thirty two million dollars, and he stays on to
work for Warner, kind of the way a lot of
startup founders do today. You saw the company, but you
have a contract to stay on for a year two
to kind of make the transition smooth. Okay, I gotta
(28:33):
get to another iconic intersection of total randomness. So here
bush now, when he sold the company, supposedly use some
of that money from the sale to buy a mansion
which had originally belonged to the Folder family, as in
Folder's Coffee. Really yeah, from the random intersection probably smells great.
(28:53):
I bet it does. But maybe you can never sleep
there because you're always just caffeinated. Yeah, all right, and
we gotta get to another kind of interesting intersection with
another iconic company. So Bushnell has another business venture that
he is famous for, and it is randomly and very
weirdly Chuck E Cheese. Yeah. Originally known as Pizza Time Theater,
(29:16):
Chuck E Cheese is Pizza Time Theater. And here's the
crazy part. It wasn't just like something Bushnell started on
the side. It was actually originally a subsidiary of Atari,
and it was developed as a place that Attari could
promote and distribute its own arcade games. That's great, right,
So this is like another form essentially of Atari doing
(29:38):
sort of what they did with Key Games in the
early days, right where they formed their own competitor. Well
now instead of just trying to get their games widely
distributed in arcades. They just made their own arcade essentially
with Chuck E Cheese. That is glorious. It's like it's
almost like the companies now, the clothing companies that have
their own name brand store, except you didn't know it
was actually their store. Fascinating and you did you you
(30:00):
also know it almost wasn't Chuck E Cheese. Now, right, So,
originally when Bushnell got the first costume for the theater
part of it, he originally had ordered a coyote costume. Okay,
is it going to be called coyote Cheese? No, it
was actually gonna be coyote Pizza a little simpler, and
then when he found out it was a mouse costume, decided, oh,
(30:22):
it's a great idea to name it Rick Rat's Pizza. Yeah.
The marketing team shot that one down basically instantly and
came up with Chuck E Cheese and that's where it
went from there. So, yeah, we almost had Rick Rats Pizza.
And in fairness, coyote pizza is way better than coyote cheese.
I don't know why, but I um all right, interesting
side note on Chuck E Cheese. So it's so it's
(30:44):
formed as part of Atari. You now remember um Bushnell
sells his you know, he sells Atari to Warner and
he stays on board. But then uh bush Now gets
fired by Warner, which also I think sort of happens
with startup founders because they kind of just take a
desk and don't really do a whole lot. Well, he
also at the time bush Now buys the concept of
(31:06):
Chuck E Cheese back from Warner Communications in ninety eight
and actually starts to franchise Chuck E Cheese in nineteen
seventy nine. So he left all of the computer stuff
to them and went forward with this restaurant concept, which,
as we know, went on and on and on and on.
So the next time you have to go to one
of those birthday parties at Chuck E Cheese, you know,
you know the history of the Talian with Atari, That's right,
(31:28):
You have a whole new appreciation for what was going
on there. All right, So fast forward, Uh Bushnell is
gone now from what is still sort of Atari owned
by Warner, and in nineteen seventy nine, Uh, they start
allowing third party companies to make software for the gaming
consoles at Harry Does and Activision is the first third
(31:50):
party game developer um that sort of comes to play,
and it of course is founded no less than by
four former Atari programmers who had been frustrated at Atari
would not give them credit, like they couldn't have their
names at the end of the game, and didn't like that,
so they left and started Activision, created their own games,
and were the first ones to actually put their games
(32:10):
on Atari systems. Another company that's been bought and sold
and moved around, but still actually active today in making games. Activision.
They're they're usually integratly involved in Call of Duty. I'm yeah, fascinating,
and it's so interesting too, because it just goes to
show you that something as simple as giving your employees
credit for their work could have completely changed the game,
(32:33):
Like Atari could have owned that if they hadn't upset
their employees, absolutely it would still be Atari Games, right yeah, yeah, uh.
In any case, we we proceed through the timeline a
little bit in the eighties and you have the Atari
four hundred and eight hundred released onto the market and
eight one Atari releases. It's most popular title forred and
(32:59):
it's you want to guess, Oh, it wasn't Asteroids or Breakout.
I don't know what was it. Oh, you know it
was pac Man. Everybody loves pac Man. Yeah, so that
nice that comes out in one And pac Man was
also a third party game developed by the Japanese company Namco,
(33:19):
which when you say it out loud, you're like, oh, yeah, Amco.
I remember, um two of the Attari is released, but
it's kind of a hot mess. It's incompatible with the
original game library, big mistakes, and it also had other
issues like we just sort of talked about because it
wasn't compatible with the old games and there's a limited
(33:41):
number of new games. And also apparently the Harvard just
wasn't that good. It had sort of notoriously faulty controllers.
And I will say this brings a thing that's now
pop big in the gaming industry called backwards compatibility. You
have to have it or your consoles dead from the start.
Absolutely yeah, and that this was like an early mistake.
This is the lesson they learned from there. You go two.
(34:02):
Despite all of that, Atari had uh one point three
billion dollars in annual sales and they were the fastest
growing company in the history of American business at the time.
That's incredible. Ye, right in Three, this is now seven
years after Nolan Bushnell cashed out, the video game industry crashed.
(34:24):
I mean it just it just went from the top
of the heap to like almost nothing. And it was
for three reasons essentially, and oversaturation of the market. Um,
a new and increased interest in personal computers over gaming
consoles because in those early days, with personal computers, you
could play simple games on them. So for people who
(34:45):
were there was no such thing as a gamer back then.
And for people who like to just sort of play
a game here there you could do it on a
personal computer and get all that other stuff with it,
kind of like the fitbit to the Apple Watch, right. Um.
And so that those were the two reasons. And the
third reason that the gaming industry crash was Atari. It
(35:05):
was Atari's fault. Their part in the crash, in fact,
was so significant that in Japan that crash is actually
called Atari Shock. Yeah. So what did Atari get wrong
that year? Well, here's our gaming expert Lauren Colligan to
tell us what happened. It really all centers around this
particular game E T the Extra Terrestrial, which you guys
(35:29):
may have heard of. Basically, when EAT came out, Atari
spent a lot of money buying the rights to to
that film so that they could make a game off
of it exclusively, and they sort of banked on the
fact that it would sell really well. And what actually
happened is that it took them so long to buy
(35:50):
the rights for this movie that by the time they
actually were ready to go, they only had about six
weeks before the Christmas Eve. And and and this was a
gaming to get out for Christmas. Uh, And so they
cranked it out in six weeks. And I don't know
how much you guys or your audience knows about how
(36:12):
to make video games, but you can't really do a
game justice in six weeks. And so what they made
is sort of now consider the worst video game of
all time. And so it was a disaster. And basically
Atari ended up with tons of copies of this game.
They assumed it would sell in the you know, millions,
(36:32):
and they barely sold any They sold you a few
hundred thousands. And so the rumor kind of went around
in the industry for a very long time that Atari
had secretly buried hundreds of thousands, if not a million,
copies of ET the Extra Terrestrial in the desert, and uh,
(36:52):
in two thousands fourteen, some archaeologists decided to look into
this myth and they went out to the Alamo Gordo
Desert in New Mexico and they started digging in the
rumored site that these cartridges were buried. And it turns
out it wasn't a miss. They actually buried seven hundred
(37:14):
and twenty eight thousand Atari game cartridges in the desert. Now,
not all of them are et. There were a couple
other but ones in there. Centipede, for example, is among
the buried cartridges. But they buried over seven hundred thousand
cartridges in the desert. They dug these up, and an
Atari manager who was actually in charge of the burial
(37:37):
at the time, went to the dig and confirmed that, yes,
on Atari's orders, they had buried all of this product
in the desert. And actually a fun fact about these
games is that they're not all gone. Um one of
them is in the collection at the National Museum of
American History in Washington, d C. Crazy, completely crazy on
(37:59):
all for on that story is crazy, but look, it's
fascinating on a lot of levels. And what happened in
that era of the seventies and eighties with Atari also
fascinating in some ways. The story of Attari goes on
until today, but really the story was almost over by
the early eighties. We'll get to how it essentially ended
right after this. So a story that essentially started in
(38:28):
the early nineteen seventies is almost basically over just a
little over a decade later. Um by three, the story
of Atari is almost over. Now. The Atari name lives
on to this day. There are still things that have
the Atari name, but really it was pretty much over
by then. I gotta paint the picture though, because as
we said, revenue for the gaming industry was at an
(38:51):
all time high. We we talked about the one point
two or one point three billion that Atari had. The
gaming industry on the whole at that time was at
three point two billion, yeah, which in today's dollars is
over eight billions. It was a humongous industry, almost as
big as it is currently. Yeah, but the crash in
three of the video game industry caused it to go
(39:13):
down from three point two billion all the way to
a hundred million within two years. That was so they
were riding high the industry. Two years later, how much
percent did we saying almost nine seven percent drop off.
That is a full blown collapse crash, all the bad words. Yeah.
And so as a part of that, in what was
(39:37):
Atari owned by Warner, of course, is split into three
pieces essentially to be sold off. So there was the
coin operated arcade division that became Atari Games. That part
was retained by Warner, but eventually even that was sold
off to Namco. Remember Namco and pac Man. Yeah, the
consumer division was sold to Jack Trammel who folded it
(39:57):
into his Trammell Technology Limited. And then the third division
was this butting Atari Tell division, which was sold to
Mitsubishi Electric. And that was sort of random, sort of
collection of prototypes of consumer electronics like speaker phones and
video phones. I don't know why, but I think of
the one in Charlie's Angels, the speaker phone. I don't
know if that's relevant or not, but there you go.
(40:19):
But I have to say, speaking of that image of
the speaker phone in Charlie's Angels, which is sort of
iconic in and of itself. Right, Um, all of these
things Atari and that Charlie's Angels speaker phone, and Pong
and the consoles that Attari made have become a part
of history. Lauren referred to it when she talked about
the cartridge being you know, in the Smithsonian collection, and
(40:41):
you know, it's so interesting to try to sort of
figure out how something that was just a new invention
and fun ends up really being a part of our history. Um,
not only just as a story to be told on
a podcast like ours, but really in museums, part of
the cultural history. I think the big question becomes what
should be part of that history? And that's why we
(41:02):
brought Lauren in. What games are important? When we're talking
about American visual culture. It's easier for us to justify
a connection when we're looking at say Washington crossing the Delaware,
or a portrait of Bill Clinton or Ronald Reagan, or
even a landscape the beautiful, huge images of the Yosemite.
(41:27):
We see that, we say, yeah, okay, bx American visual culture.
But Mario Brothers is part of that story too, So
is Assassin's Creed, so is Pong. I'm interested in what
does this tell us about the people who made this thing,
but also about the people who consumed this thing back
when it first came on the market and today, which
(41:48):
is really what the telling of history is all about.
Very cool to have Lauren's insight. You know, we sort
of started the episode by um dividing and conquering, right.
We said, you know, Nick was the game or Lauren
was sort of our academic, and I was sort of
looking at this from a business perspective, and it was
weirdly kind of successful on all three fronts. I think
(42:09):
Lauren made another interesting point, which was that, um, we
think of gamers today, as you know, we described you
as a gamer and you're playing sort of a multiplayer
games online with your friends. Are certain kinds of games complicated, intricate, fancy,
flashy graphics. Yeah, absolutely right. And really though, there's so
everything that is a video game, everything from candy Crush
(42:32):
to you know, anything you play on your phone is
also a game. But I would also say, too, have
you ever had a farm on Facebook? It's a video game?
Yeah it is, Yeah, any of those things. So therefore,
I guess I'm kind of a gamer. We are all gas,
we are all gamers, because I would think Lauren probably
is too. Yeah you're a gamer. I love that. Um,
(42:53):
it is really fascinating. So I think to some extent,
our story today has been about where atari and video
gaming fit into American cultural history, but also how do
you get to be an Atari? What is it really about?
How did Nolan Bushnell do that? Who was he and
what made this happen? Well, I have to say if
you were worried about Noland and where he turned out,
(43:14):
he's since those days and his success with Atari and
Chuck E Cheese and many other investments, um has become
an author and a keynote speaker, and he makes the
point that it's really all about hard work. So we're
gonna leave you with a little bit of modern day
Nolan Bushnell. Everybody who's ever had a shower has had
(43:34):
a good idea. Do you own that idea? No? Is
it your idea? No? You don't own an idea until
you work on it, until you fine tune it, until
you research it. Anybody who says he stole my idea
is a fool. If you had an idea and you
(43:54):
didn't do anything on it, you're lazy. Success does not
fall ideas. Success follows hard work. That's Nolan bush Now,
that's Atari, and that's our show for today. See you
next time. Photography is a production of I Heart Radio
and dB Media. I'm your host, Dana Barrett. My co
(44:15):
host is Nick Bean, our producer is Tory Harrison, and
our executive producer is Jonathan Strickland. Have questions I want
to give us feedback or have a company you'd like
us to cover. Email us at info at Physiography dot Show,
or contact us on social. I'm at the Danta Barrett
on Facebook, Twitter, and Instagram, or just search for me
on LinkedIn. Thanks for your support.
Bizography with Dana Barrett News
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Dana Barrett
Nick Bean
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