The Atari Years
1980 marked the beginning of a new decade, the decade of Reaganism, a decade of rampant greed and materialism, a decade in which America searched for its soul and came up empty-handed. The new decade also marked two major developments in gaming: the videogame explosion and the coming of age of computer games.
Atari and Videogames
I joined Atari in September, 1979, and at that time the success of the Atari 2600, the original videogame console, was very much in doubt. I recall an engineering department meeting that fall, in which the entire engineering staff of Atari gathered in a single room to hear the Vice President of Engineering present a summary of the company’s position. Sales of the 2600 were adequate to justify continued software development; the 400 and 800 had just been introduced and the company had high hopes for these machines. Fortunately, the coin-operated games group was making steady profits that could keep us afloat. And our parent company, Warner Communications, had deep pockets.
The creative source for game designs in those days was the coin-op business. If a game did well in the coin-op business, it was ported over to the cartridge environment. All of the big hits of those days were originally designed as coin-op games. For example, Space Invaders started life as a Japanese coin-op game. Atari bought the rights to the game, and Rick Maurer designed an absolutely brilliant port to the 2600, where it became a big hit. Sometimes, however, this process didn’t work. When Atari ported Pac-Man to the 2600, the result was so bad that critics dubbed it "Flicker-Man" and the customers were deeply disenchanted with Atari.
Although the aforementioned games were both Japanese designs, Atari Coin-Op created quite a few hits on its own. Missile Command, Centipede, Battlezone and Tempest were some of their more successful games. Some of these were later ported to both the videogame and the computer game environments.
It’s difficult to realize just how much the coin-op mentality dominated game design. Coin-op games were all designed to last for three minutes, for perfectly sound economic reasons. This was carried over into both cartridge games and disk-based games, even though the value of a three-minute termination on these platforms was nil. Designers just couldn’t conceive of a game as anything other than a coin-op game that you played at home.
Meanwhile, computer games were enjoying growth that was rapid, although not as spectacular as that of coin-op games and cartridge games. More important, computer games were already showing greater creative diversity and a more mature form of game. Automated Simulations was just starting on its fantasy role-playing games, culminating in the Temple of Apshai series. Scott Adams released his adventure game series on casette tapes. SSI created quite a stir when it released Computer Bismarck at a price of $59.95. This was an absurdly high price, especially in 1980 dollars, but enough people bought it to keep the company going, and they released a series of wargames over the next few years, all on the Apple II. At about the same time, Ken and Roberta Williams were selling their graphic adventures, starting with Beneath Apple Manor. Doug Carlston was designing, programming, and selling his own games, also on the Apple II.
Which brings me to the subject of hardware platforms. With the benefit of hindsight, and a healthy dose of historical revisionism, it is easy to see that the Apple II was destined to surpass its competitors. But it didn’t look that clear in 1980. The Apple II was an expensive machine, a favorite of hobbyists with money to spend, but many computer junkies preferred the less expensive TRS-80 and Commodore PET. The Apple’s big advantage in the early days was its color display, but this advantage was shattered with the appearance of the Atari computers, whose graphics far outshone that of the Apple. The Apple had a better disk drive (by dint of violating FCC regulations) and a larger software base. But the really big break came when Visicalc appeared on the Apple in 1980. Visicalc gave the Apple II a big advantage. The program was eventually ported to other machines, but it took about a year, and in that time the Apple II established a huge lead.
Despite all this activity, the fact remained that computer games were still in a primitive state in 1980. There were only a handful of developers and publishers. The supply of games was desperately short; the release of any new game was eagerly awaited by computer users. The games available were not very good. Almost all were written in BASIC. They were slow and used almost nothing in the way of graphics. Moreover, since most had to run on machines with about 8K of RAM, they were quite limited. The distribution and retail outlets were primitive. Many games were sold by mail order; a typical game would be lucky to sell more than a thousand units.
The computer games industry perked up dramatically in 1981. Many of the basic problems had been solved; there was now a sizable group of people who knew how to create, program, publish, and distribute computer games. Game production acoordingly took off. There were now a number of publishers who released multiple products in 1981: Automated Simulations, SSI, Avalon-Hill, Broderbund, Adventure International, and several companies in southern California whose names I have since forgotten. 1981 was also a banner year for me: four of my programs were published in that year: Energy Czar, Scram, Tanktics, and Eastern Front (1941). (Note, however, that those four products represented two years’ work.)
Meanwhile, videogames and coin-op games continued their own steep growth. The Atari 2600 was enjoying sensational success, but it was growing from a small base. The emphasis on coin-op games continued, although there were a few nontraditional videogames. The most striking of these was Warren Robinett’s version of Adventure, (programmed in 1979 but not released until late 1980) an astounding achievement on the 2600 that gave rise to many derivative games.
1981 also saw the birth of Computer Gaming World. We were starting to become a real industry, and now we had our own magazine. Still, 1981 was a year of waiting, of gathering momentum.
1982: Anno Mirabilis
Everything exploded in 1982: videogames, coin-op games, and computer games. Time Magazine put videogames on its cover. It’s difficult to convey the wild goldrush feeling that pervaded the industry that year.
The most sensational developments were in the videogame field. Atari sold $2 billion worth of hardware and software that year; Atari’s sales were doubling every 9 months. A wild frenzy set in; everybody was working on videogames. There were scores of companies publishing videogame cartridges. Some were good, many were bad, but it didn’t seem to matter. The public bought whatever was on the shelves. Companies that had gotten in early made sensational profits. Atari released Pac-Man for the2600 that year. Despite the fact that it was a poor implementation, Atari sold 10 million copies of the game at $20 wholesale, with a cost of goods of just about $5, and a development cost of perhaps $100,000. You figure the profits.
The most important requirement to make videogames was to find a programmer who knew how to program the Atari 2600. This machine was hell to program. There was no display buffer the display was created on the fly by the 6502 CPU. There was a video display chip that displayed one scan line at a time. To get a display, you wrote a program that frantically stuffed bits into the display chip at just the right time. If you were really good, you knew how to change the display registers on the fly, allowing more sumptuous graphics. But this took exquisite timing. The 6502 in the 2600 ran at 1 MHz; at that speed, you had exactly 77 machine cycles during one scan line. Your main display loop had to execute each scan line in 77 cycles or less. Really good 2600 programmers knew the instruction cycle counts of the 6502 by heart; they tweaked and tweaked their code trying to squeeze one last cycle out of the code. The game logic itself had to be executed during vertical blank, when there was no display to manage. This gave about 3,000 machine cycles every 60th of a second, as I recall.
Great 2600 programmers were worth their weight in gold, and publishers realized this quickly. There was intense competition for the old pros. Activision was most successful at this, sending limousines to pick up their programmers, featuring them in their promotional campaigns, and making them feel like kings.
The coin-op business enjoyed a parallel boom, only not as lucrative or sensational. Still, those were good times to be in the coin-op business. Good programmers were earning very high salaries, royalties on their work, and all manner of other perks. Those were the days.
In the computer games business, 1982 was also a great year. The fabulous success of videogames carried over to computer games, but along with that success came a sudden emphasis on skill-and-action games. It was as if all the computer owners suddenly decided that they wanted to be in on the excitement of the videogame field. The serious computer games that had been developing during 1981 were overshadowed by the more graphically intense but intellectually inferior shoot-em-ups.
Still, everybody prospered. You could make a great deal of money out of a program that took very little time to develop. An extreme example of this was Greg Christensen, a high school student who hacked together a variation on Defender. He did it with the Atari Assembler cartridge over the course of several months, working nights and weekends. When he was done, it was published by the Atari Program Exchange as Caverns of Mars and it sold about 50,000 copies, earning Greg something like $80,000. My own Eastern Front (1941) enjoyed similar success; it was developed at home, nights and weekends, over a six month period. I put about three months of full-time effort into it and earned something like $90,000 for the product. Even more sensational success stories can be related about games for the Apple II during 1982. Programmers like Nasir Gebelli, Bill Budge, and Bob Bishop made huge sums on games that they hacked together in months. Nasir Gebelli was particularly productive. He ground out a series of Apple II games that enjoyed high sales figures. Most of his games played poorly, but each one sported some neat new graphics effect. People loved it and plunked down their money.
Yes, 1982 was a fabulous year.
1983: The Crash Begins
The storm clouds gathered in December of 1982. Atari executives briefing Wall Street analysts admitted that sales for that Christmas were off slightly. Realizing that the boom was over, they dumped their stock in Atari’s parent company, Warner Communications. Sales that Christmas were still good, better than the previous Christmas, but it was obvious that the boom was over. In any other industry, it would have been a simple matter to retrench slightly, cut costs, and weather the lean times. But the videogame industry had a boomtown mentality; when the word got out that the boom was over, everybody started looking for lifeboats.
Things grew steadily worse all through 1983. The market was glutted with product, much of it junk. Atari was just as guilty as everybody else. Their E.T. cartridge was a piece of crap thrown together in six weeks by a programmer who boasted to Stephen Speilberg, "This is the game that will make the movie famous!" Ray Kassar, Atari’s CEO, had paid $20 million for the license. In the end, hundreds of thousands of unsold E.T. cartridges were bulldozed in a landfill in Albuquerque.
The dozens of opportunistic cartridge publishers that had sprouted liked weeds in 1982 died just as quickly in 1983. The fiscal carnage was on a scale just as great as the boomtime profits.
The home computer industry started off 1983 with high hopes. Everybody believed that the troubles of the videogame industry would only lead consumers to move up to home computers. The TRS-80 and the PET were long since dead, and the field had narrowed to the Apple II Plus and the Atari 800. There were other challengers, of course: the Radio Shack Color Computer, the Commodore 64, the Coleco Adam, and the looming IBM Peanut. But these other machines did not have the market share or software base to make them major competitors. At the beginning of 1983, it looked like a simple head-to-head competition between Apple and Atari -- and Atari was steadily gaining ground. Its software library was nearly the equal of Apple’s and growing faster. Moreover, developers had learned how to use its advantages to their fullest, so we were starting to see software for the Atari that was clearly superior to anything running on an Apple.
Then Jack Tramiel at Commodore began a price war, steadily ratcheting the price of the Commodore 64 downward. Atari elected to follow suit; Apple disdained to do so. All through the spring and summer of 1983 the prices marched downward, much to the delight of consumers. Atari, desperate to keep up with Commodore, moved its manufacturing overseas. The disruption in supplies was not repaired quickly, and when Christmas 1983 came, the only machine on the shelves in quantity was the C64. This was the death-blow to Atari; the company collapsed seven months later.
Apple’s refusal to lower its prices proved to be the right move. Even though its machine was patently inferior to both the Atari and the C64, it maintained an aura of respectability from its high price. The Atari and the C64 were seen as toys, while the Apple II Plus was perceived as a personal computer. This may have been one of the reasons why Apple later refused for so many years to lower the price of the Macintosh.
1984: Death and Birth
The videogame industry died in 1983; home computer sales boomed in Christmas 1983. Nevertheless, entertainment software sales for disk-based machines died in 1984. At the time, it made no sense. Those of us in the home computer industry had thought that, with the death of videogames, the mantle had been passed to a new generation: us. Instead, videogames dragged us down with them. Computer games were too closely identified in the public mind with videogames. The dramatic collapse of the videogame industry convinced everybody that this had been just a passing fad. They turned their backs on everything.
The damage was greatest in those areas of computer gaming that were closest to videogaming. Most of the smaller publishers, and all of those who had specialized in skill-and-action games, went out of business. Those that did survive did so by cutting costs and having something other than games, or at least something more serious, to keep them going. Broderbund had Print Shop; Electronic Arts had moved quickly to the C64; Sierra just barely eked by; SSI kept its head down and later moved to the D&D license. Many more publishers simply disappeared.
A great many good people lost their jobs and their careers in the collapse. A few, like Ann Kelsey, Jim Dunion, and Bill Carris lost their lives shortly afterwards, and I will always believe that it was the stress of seeing everything collapse that shattered their lives. An entire generation of game people was blown away in 1983-84. Only a fraction of that generation hung on, largely by fierce determination. There certainly wasn't any money.
There were some positive notes during those grim years. Anybody who had C64 product did well. One publisher, Human Engineered Software, prospered during 1984-85 largely on the strength of their C64 line. Epyx also did well, for much the same reason. Infocom, publishers of high-quality text adventures, also did well during those years, largely because their products were so clearly distinct from videogames.
Atari had created the boom and it died in the collapse. The layoffs began in earnest in 1983. From a peak of 10,000 employees in December 1982, Atari fell to just 200 employees in July 1984. I was one of the lucky ones; I lasted longer than most., not getting the ax until March 1984.
In January of 84 Jack Tramiel resigned from Commodore. Realizing that Commodore had been the chief cause of our woes, I had posted a note on our department bulletin board: "The good news is, Jack Tramiel has left Commodore. The bad news is, he's coming here!" Little did I know how right I was. In July, Tramiel bought Atari from Warner Communications for a song and laid off most of the remaining staff.
A New Age
Out of the ashes of the industry collapse of 1984, a new entertainment software industry began to emerge. Because the videogames business had been so thoroughly discredited, Nintendo was able to enter the market with no competition and rebuild the videogame industry in its own desired image. The C64 died within a few years, its place taken by the IBM.
The industry that emerged by the late 80s was a more sober, more conservative one. Chastened by the catastrophe that had struck down so many, the survivors went about their work with less self-assurance and a heightened sense that bankruptcy is just around the corner. But the story of those years must await another article.
Thanks to Tim Oppenlander for pointing out that the original version of this essay had been truncated.