Email: The milquetoasts of yesteryear

Hello Malstrom,

 

There has been lots of talk of an impending industry crash on discussion forums recently. I recall you mentioning what computer game enthusiasts thought of the NES at the time but not earlier than that. What discussion was taking place around the time of the crash? Who saw it coming?

 

Thanks for sharing your insight.You might be trying to compare apples to oranges here. The Atari crash was one thing. The computer game companies denying the success of the NES is a different thing.

The NES was never thought to succeed not just because it was a game console (and game consoles had crashed with Atari). The reason why is that everyone believed the future platform for video games was on the personal computer. That’s right. The Apple II and IBM type machines.

The founder and president of Electronic Arts, Trip Hawkins, refused to use the NES as a platform. He was a true believer that PCs were the future for all video games and the NES would only crash again like Atari. The board of Electronic Arts threatened to fire Hawkins unless he began licensing EA’s games on the NES. Based on that, Hawkins submitted. Nintendo of America released a celebratory PR announcement when Electronic Arts became a licensee. Electronic Arts was the last hold out of the Nintendo invasion of the 1980s.

Above: Shatner says to buy a computer because it can do ‘more’ than just play games. Why buy a game console when you can buy a computer which can play games just as well?

The same exact parallel between the ‘PC is better value than game console because PCs can do more than just play games’ is going on right now with smart phones and dedicated portable game consoles. All the people saying the iPhone will destroy Nintendo or Sony’s gaming handhelds are falling exactly under the same incorrect premise that made everyone so wrong about the NES in the 1980s.

PC gaming and console gaming are not the same. They do not encroach upon one another. One being successful does not mean the other fails.

What is a smartphone? It is a portable personal computer. It is not designed around gaming. The inputs are essentially only touch screen based. The reason why games are sold around a dollar or for free is because there is little market value for these games.

Now I’m not saying these smartphone games are bad or don’t have a place in the world. They are what they are. But they are not Tetris or Pokemon or Super Maro Brothers.

If dedicated game handhelds go into decline, it has nothing to do with cell phones or smart phones. It has everything to do with the makers of the dedicated game handhelds. Nintendo realizes making a handheld designed around 3d was a mistake. It was expensive and less accessible than the DS. The 3DS suffers as a result. The 3DS (or Vita) does not have problems due to Apple or other makers of portable PCs.

Why did Atari implode?

There is much written about Atari’s implosion, but I must remember there are many younger people who do not know about it. I will give a rough summary about what occurred.

During its time, Atari was the fastest growing company ever in the United States. It grew faster than anything in the Industrial Revolution. Steve Jobs was an early employee at Atari. Steve Wozniak also helped Jobs there. My point is that the birth place of the personal computers was in Atari, not Apple. If Apple is the fruit of the computer revolution, then Atari would be the tree.

The masses of Humanity first experienced computers through PONG. While PONG seems ludicrously simplistic to you or me, it was incredible because it was the very first time anyone had used a computer. As one woman remarked to Nolan Bushnell, she couldn’t understand how the TV studios were able to manipulate the image so fast and quickly. The idea that the signal was being generated right there, in the computer, was completely foreign to her. It is why everyone lined up at Andy Capp’s tavern in order to see this amazing PONG.

Atari was not run like traditional businesses. Nolan Bushnell and the others did not come from business schools. But Atari’s success certainly showed something was being done right.

People who did come from these business schools and all despised Bushnell and Atari. They forced Bushnell out of the company, and they took it over. All the bad business decisions Atari did were actually considered ‘amazingly awesome’ decisions in the minds of these people.

They thought it was a good business decision to make more E.T. cartridges than there were Atari 2600 consoles.

It is no surprise, today, that these bad business people destroyed Atari. Atari is only unusual because of how fast these guys put the medal to the pedal and sped into the wall. Their arrogance was extreme.

This is a constant pattern we see in gaming consoles. The ‘business wizards’ think they have all their ducks in a row and end up destroying the company. Look at the graveyard of consoles. Every single game console, every single one, had businessmen who convinced investors that this was the way to success.

Sony’s PlayStation 3 is a good example of this. While they make Kutragi the scapegoat, he wasn’t the one responsible for demanding the PS3 use blu-ray or to be a certain technological level or to use the CELL chip. But the business minds at Sony thought they were smarter than they were.

Over the three or four decades of video games, there is a disturbing trend that businessmen do not allow the birthplace of computers to shape them. Instead, they insist on shaping the computers. It is as absurd as a farmer trying to tell factories how to run their business. The farmer needs to get with the times and understand the factories are creating the new reality.

The New World is this undiscovered country of thought process and mentalities that gave birth to video games (and then to personal computers and the Internet). We have seen how the microchip has changed the world and our daily lives.

But that is not the actual revolution.

The true revolution is in that New World. Businessmen keep bringing their Old World ideas and wonder why the businesses self destruct (like Atari or Sega).

The question is, “Are there parallels between the crashes of the past and what is occurring today?” And in order to answer that question, we need to answer this question: “Are Old World business ideas taking control of this New World medium?”

I would say the answer is yes. There is no respect for the gamer out there. The marketers and other businessmen do not look at the gamer as something to learn from but only as an object of scorn and disrespect. The reason why you feel insulted when you play these ‘industry games’ is because you sense the condescension.

These businessmen feel they are over-educated and likely feel it is ‘beneath them’ to work with video games.

This doesn’t just apply to businessmen. Developers too can feel video games and computers are actually about them, and not the customers, and have nothing but contempt for gamers when they do not buy their ‘visionary’ works (usually narrative trash that no other medium would touch).

The problems of the Game Industry have been around for a while. They have been hidden by economic expansion and population growth. Now that there is population decline and economic decline, none of this can be hidden any longer.

The Golden Age of Video Games occurred during an economic recession of the early 1980s. The birth of video games occurred during the stagflation of the 70s. And the Atari crash occurred when the economy skyrocketed around 1983 and 1984. The health of video games isn’t dependent on the economy.

People keep talking about the Game Industry and video games as if they are both the same thing. But they are different and have different origins. The Game Industry is a set of business systems. If these business systems destroy themselves, video games will still be around. History shows that people will create new systems to take their place.

The future of gaming is bright. The future of the industry is not. But why does gaming need an industry in the first place?