Posted by: seanmalstrom | March 15, 2014

History: Origin of Atari


“I am Trade Master Greenish in command of the Melnome starship ‘Inevitably Successful in All Circumstances’.

“I bid you a formal welcome, reader.

“Though we Melnorme have just recently arrived in this region of the Internet, we have long desired to make contact with you gamers and look forward to an extended profitable relationship.”

“Where the hell did you come from? And how did you get on Malstrom’s blog?”

“These are very good questions, and they have very good answers! However, you would be unable to afford such answers. Let us just say that I come from a video game called Star Control 2 where I supply answers of current events, new technology, and ancient history for a price of credits. Ask your question, and let us get on to business.”

“I would like to purchase information on ‘Ancient History of Video Games’ for 75 credits, please.”

“While you probably believe video games were old back with the NES or PlayStation, there existed a decade in the 1970s where gaming was being done. We know it today as the cryptic First Generation of Video Games.

“Nolan Bushnell grew up in Great Salt Lake as a son of a cement contractor. He already showed signs of being an unusual child. When he was in seventh grade, he was six foot four. He constantly read science fiction and built futuristic things in his garage. He enjoyed doing entertaining pranks. By attaching a hundred watt light bulb to a giant kite, he convinced the neighborhood that aliens were attacking. In another instance, he removed the shot from a few shotgun shells, wore a ski mask, borrowed a car, and ‘shot’ a fellow student. The fellow student smashed ketchup packets on his chest as he fell over on cue.

“Nolan Bushnell went to college at Utah State and then University of Utah by majoring in engineering. Once in a heated game of Poker, Bushnell bet and lost his tuition money forcing him to work at an amusement park guessing people’s weight and ages. Soon, he ran the arcade there. He began hanging out in the computer’s computer lab that was running one of the first video games made: Space War!.”

Above: Space War!

“After graduating, Bushnell moved to California and worked at the computer-graphics division of Ampex. At home, he created versions of Space War! that did not require an entire computer as the university had used. Now you might ask, reader, what does any of this have to do with video games? We all know about Space War. But Bushnell innovated in two ways. First, his home version of Space War!, called Computer Space, did not require a huge computer. It was using cheap parts. Second, Bushnell envisioned Computer Space standing alongside pinball machines, pool halls, and bowling alleys. It was Nolan Bushnell who invented the video game arcade.

“Bushnell approached various companies, especially pinball companies, about Computer Space. They turned him down. The one that didn’t was Nutting Associates that made solid state coin op games. 1,500 Computer Space units were made.

“Computer Space was not successful. Out of 1,500 made, only around 500 to 1000 were sold. Bushnell offered to make a sequel but demanded he be given ownership in the company in return. Nutting Associates refused causing Bushnell to make his own company.

“Making a company with a friend named Syzgy, Bushnell was ready to make Computer Space machines and sell them himself. However, Syzgy was already taken. Nolan Bushnell, being a gamer already and a huge fan of the Japanese game Go, made the name of the company on the equivalent of ‘check’ in Go: Atari. The investment in Atari was $250 from each partner meaning a $500 investment behind Atari.

Above: Nolan Bushnell

“Back in his home laboratory, Bushnell made a new game. The problem with Computer Space is that it required both hands and had an instruction manual over a page long. Bushnell thought of the simplest game which was tennis from the demo of Odyssey console by Ralph Baer in LA in May of 1972. The Odyssey, launched in 1972, was the first video game console.


“The Magnavox Odyssey was powered by six C batteries though an AC power adapter could be bought separately. The console had no sound capability. It launched at the price of $100 in 1972. The console came with dice, poker chips, and score sheets to help keep score. While there are many reasons cited for Odyssey’s failure in the market, the most interesting one is that people thought the tennis game was the home version of PONG. Realizing it wasn’t, people returned the Odyssey in droves.

“Bushnell went with the tennis game idea because it could be played with one hand (with a beer in another) and understanding the rules were simple: “Avoid missing ball for high score.” Bushnell improved on the game concept by adding scoring within the game and sound. It was named PONG for the sound it made.

“In the fall of 1972, Bushnell placed PONG in Andy Capp’s tavern. As people began to play, people gathered around and a line formed. One woman expressed her shock at how the signal could go to the TV studios and back in such a fast amount of time. The idea that the signal was generated locally was not perceived by her. This was, after all, the first time the masses interacted with a computer. On the second day, the machine broke due to it overflowing with quarters. Another larger coinbox was installed, this time a casserole dish. It now took a week to fill up with quarters.

“PONG was generating $300 a week. Knowing he had a hit on his hands, Bushnell wasted no time into going into full PONG production. He drove by the unemployment office and hired people off the street. They were long haired technicians of ill reputed characters. Atari would have a fund for ‘unwanted pregnancies’ as well as a fund to get employees out of jail.

“With the long haired technicians he got off the street, Bushnell had PONG production in an abandoned roller-skating ring. Remember that there was no monitor business in those days. All PONG machines used Motorola TVs. The plastic case, tuner, and RF circuitry were thrown away and only the raw tube and video drivers were used. Production was around ten PONG machines a day.

A vertical rectangular wooden structure with a visual display unit embedded in the front side.

“This was not fast enough for Bushnell. He needed to expand. Investment bankers who visited Atari were shocked to see employees in stripped jeans and sneakers (if they wore shoes at all) working whenever they wanted. There were no staff meetings. Bushnell, himself, was wearing T-shirts or flower-print shirts. The smell of marijuana ran throughout the air-conditioning system. A few of the employees there had beards so large that you couldn’t see their faces.

“It was the cash infusion from venture capitalist, Don Valentine, that allowed the company to grow. More staff was hired, and Bushnell lied to Al Acorn to make a home version of PONG saying that General Electric was waiting for it. The fact that General Electric never called and never showed up did not register to Acorn that something was off.

“Atari was growing so fast as PONG became an international hit. Help-wanted ads were placed in the local newspaper that said ‘Have Fun and Make Money’. This would attract the fortieth employee of Atari (a technician making $5 an hour). He was a college drop out of Reed College and living with his Mom and Dad. He was skinny, long-haired, with a thick beard, whose resume had nothing relevant except for a few engineering courses he had taken. “We’ve got this kid in the lobby,” Bushnell’s secretary announced. ‘He’s either a crackpot or he’s got something.’

“His name was Steve Jobs.”


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