Spring+2009+Lecture+6+Notes

= __Spting 2009 Lecture 6 Notes__ =


 


 * 1974 – Atari employee Harold Lee suggests home version of Pong
 * Bushnell – always looking for ways to expand Atari – thinks home market perfect step
 * Odyssey at end of life-cycle by this point – only 100,000 units sold in total
 * Atari saw Magnavox's problems – feels its home game would do better
 * Odyssey – analog architecture; Atari's game – newer digital circuitry – crisper graphics
 * Odyssey – two knobs per plays to control movement and “spin”
 * Atari's game – Alcorn's paddles with hot-spots for angles – needed only 1 knob per player
 * People familiar with Pong, which Atari's game would directly reproduce
 * Prices gone down – digital circuitry cost far less than parts in Odyssey
 * Odyssey better in 1 way – played 12 games, compared to the 1 game Atari's game played
 * Project code-named “Darlene” throughout development – named after female employee
 * Final name given to device – Home Pong
 * 1st Prototype placed in wooden pedestal housing hundreds of wires
 * Final version would use small chip designed by Alcorn and Lee – chip not ready yet
 * Chip, when completed in 1974, was the highest-performance integrated circuit chip ever used in a consumer product
 * Bushnell and Lipkin began marketing Home Pong after chip arrived
 * Believed Toy Stores to be the perfect outlet – continually turned down by store owners
 * Many felt Atari's $100 asking price was too much for a “toy”
 * One toy store owner said he sold nothing over $29, unless it was a bicycle
 * Electronics stores next – turned down again – most remembered failure of Odyssey
 * Stores assumed, based on Odyssey, consumers weren't interested in home videogames
 * Finally, Lipkin decided to try department stores
 * Sears Roebuck largest at the time – started there
 * Toy and Electronics departments at Sears turned him down
 * He saw in catalog that Sporting Goods carried Odyssey – called buyer there – Tom Quinn
 * Winter slow month for sporting goods – sold many indoor ping-pong tables – Quinn augmented sales with Odyssey
 * Lipkin asked if Quinn would be interested in a game that was like Odyssey but better
 * Quinn said he would and came to look at the product
 * After seeing it, Quinn offered Atari an exclusive deal
 * Seeing Quinn's excitement, though, Atari declined the exclusive offer
 * Atari executives still felt that toy stores were the best place for Home Pong
 * Got a booth at the 1975 New York Toy Show
 * Like most conventions, NY Toy Show had its own unwritten rules
 * Most notable rule – though products were shown on show floor, all deals made in private suites around town
 * Atari knew nothing about private deals
 * Many buyers showed some interest in Home Pong at Show, but none bought, since they had all made deals with others already in private
 * Quinn stopped by Atari's booth to see how they were doing – they lied and said they were doing well
 * About a week after the show, Lipkin called Quinn to set up a meeting about Home Pong
 * Quinn was still very interested in buying, but needed his bosses' approval
 * Suggested Alcorn and Lipkin meet with Sears executives at Sears Tower in Chicago
 * Quinn set up a demonstration of Home Pong at the tower and Alcorn and Lipkin brought the wired Home Pong prototype
 * Alcorn hooked prototype up to a TV in the boardroom, turned it on – nothing happened
 * Soon realized the problem was the Sears Tower itself – tower had an antenna on roof
 * Antenna broadcast on channel 3, which Home Pong was set to run on
 * Alcorn opened up the Home Pong's pedestal and made the necessary adjustments to make the machine run on channel 4
 * While it was was open, the Sears executives saw the mess of wires inside and got worried
 * Alcorn noticed their concerns and told them that the final version would replace the wires with a chip the size of a fingernail
 * One executive, not understanding, asked Alcorn how he was going to solder the wires to something that small
 * After the demonstration, Sears agreed to buy Home Pong from Atari
 * Bushnell promised them 75,000 units, Quinn said it was not enough – he wanted 150,000
 * Bushnell agreed, knowing Atari didn't have the money or means for such a large order
 * With the new Sears business, Bushnell felt it was time to expand and get the money
 * Turned to venture capitalist Don Valentine – founder of Sequoia Capital
 * Sequoia Capital was one of the first and most successful high-tech venture capitalist firms
 * Basically, venture capitalists like Don Valentine invested money in risky companies
 * They sought out other investors, loans, etc. in exchange for various interests in a company, like control or stock
 * Bushnell first described Atari's arcade business – Valentine, like many other people, still felt that the Amusement Industry had negative associations (gambling/organized crime)
 * He was not interested until Bushnell started discussing Home Pong – Valentine liked the idea of taking on the home market – decided to take on Atari as a client
 * To minimize the risk he was taking with Atari, Valentine insisted on being an active member of the Atari board
 * Valentine then sought out high-profile investors such as Time Inc. to get enough backing for a sizable bank loan
 * The investors, combined with Atari's annual profits, were enough for Valentine to Atari a credit line of $10 million from a bank
 * Valentine stalled for time before signing any contract with Atari
 * Stalling was common - usually time favored venture capitalists
 * Business usually needed money and became more desperate as time went on
 * Contracts became more favorable to investors as time went on
 * However, by the time Valentine was ready to sign, Atari's situation had improved
 * Merger with Kee games finally went through and Atari was not in trouble anymore
 * Atari could get its own loan from banks and didn't need Valentine as badly anymore
 * Still, they needed some money – risked pushing Valentine for double the price stated in the initial contract
 * Valentine was angry, but finally agreed – Atari now had the money it needed
 * Valentine became very involved in daily decisions at Atari
 * Though he didn't enjoy videogames, he often took them home to play as research
 * Valentine was very business-like and did not mesh with Atari lifestyle – still toured facilities to get an idea of the process (though he always complained of the drug use)
 * Valentine ended up staying with Atari for only 2 years – made a sizable profit
 * Later made an even greater profit with a former Atari employee
 * Jobs and Wozniak, when starting Apple computer, approached Bushnell for money
 * He turned them down, so they turned to Valentine – he made a fortune from Apple
 * Now Atari had the money it needed, it expanded and began producing Home Pong units
 * 1975 - Atari became the first company to make both arcade and consumer products
 * During production of 1st Home Pong units for Sears, almost no problems arose
 * Keenan dealt with Valentine and Sears executives, allowing Bushnell some freedom
 * Alcorn was VP of Research and Development and Bristow was VP of Engineering – Bushnell's 2 favorite departments
 * Bushnell visited these departments on his free time, which was now fairly abundant
 * Often give engineers suggestions on projects – way to fix problems or improve ideas
 * Bushnell wasn't familiar with whole projects – suggestions usually slowed projects down
 * Alcorn called Bushnell's visits “Nolan Attacks”
 * Bristow had his workers come to him to approve any changes
 * Alcorn had a more indirect solution to the Nolan Attacks
 * Made a rule in his department – no one was allowed to do anything suggested by Bushnell unless he repeated the suggestion 3 times
 * Bushnell soon learned of the rule – held a meeting with Alcorn's men
 * Told them that he was the boss, and they were to do what he said when he said it
 * One engineer shouted back: “Could you repeat that 2 more times?”
 * Alcorn found another way to reduce the damage from Nolan Attacks
 * Alcorn personally showed Bushnell around to projects – when Alcorn wasn't there, he had his engineers use special beepers to contact him
 * Eventually Bushnell found a way around this – had a secret informant inside Alcorn's departments
 * He got someone fairly insignificant to Alcorn's engineers – Steve Jobs
 * 1976 – a number of big events in the gaming world
 * Irving Holtz – President of the New York Music and Amusement Association
 * Holtz lobbied to the NY City Council to remove LaGuardia's 40-year ban on Pinball
 * City Council held a hearing – key testimony from Roger Sharpe – editor at Gentleman's Quarterly magazine
 * Sharpe wrote a book on Pinball and was an expert player
 * Testified on behalf of the skill involved in Pinball – also was to demonstrate techniques
 * 2 Pinball machines in the court – 1 main one with all the cameras pointed at it, 1 back-up
 * Sharpe went to main one, but council told him to use second machine – they thought the first was fixed
 * Sharpe played 2 balls to familiarize himself with the machine
 * He then described exactly what target he was going to hit and how
 * He hit his intended target exactly – Council removed the ban on Pinball
 * Also in 1976, first controversy over violence in videogames
 * Outcry was directed at a game from Exidy games
 * Exidy – founded by Pete Kauffman
 * Kauffman's 1st game was called Destruction Derby
 * Game had players drive a car at computer-controlled cars to try and destroy them
 * Destruction Derby was sold to Chicago Coin – makers of Speedway
 * Chicago Coin refused to pay any royalties to Exidy
 * Kauffman responded by publishing the game himself, with some slight changes
 * New game was called Death Race
 * Biggest change was changing computer-controlled cars into “demons”
 * Players had to run over these demons, who turned into tiny crosses when hit
 * Problem was, the “demons” were just stick-figures
 * People thought that the player was running over pedestrians – parents flipped out
 * Many petitions and protests were form, saying the game the game encouraged running over people
 * There was even a special on CBS news program "60 Minutes"
 * Game did OK before the outcry – became very successful after the controversy
 * Publicly – Exidy said the controversy was unfounded – game was about killing demons
 * Privately – admitted the controversy drove sales
 * Other companies saw success of Death Race, but still thought that it was a problem
 * Pinball had just been legitimized – companies worried that violence in games would bring negativity back to Amusement Industry
 * Atari went so far as to instate a policy where no game would be made where there was violence against people
 * In 1977, Exidy released Death Race II – it was almost the exact same game as the first
 * Last big event in 1976 – Home Pong became Sears' most successful product
 * Home Pong sold 150,000 units in a single season – more than the 100,000 Odyssey sold in its entire lifetime
 * Competitors soon followed
 * In 1976 - 75 companies intended to release home video-tennis games
 * Magnavox re-created the Odyssey as the Odyssey 100
 * Odyssey 100 had only 1 game – tennis – 11 less than original Odyssey (even less when factoring in game-cards that original could use)
 * Odyssey 100 was not bought by many retailers - they remembered the failure of original
 * Atari's biggest competitor at this time – Connecticut Leather Company
 * More commonly known as Coleco
 * Coleco originally a company that made leather-craft products
 * Eventually taken over by Arnold and Leonard Greenberg – Arnold made most decisions
 * 1956 – Greenberg got equipment to produce plastics – made Coleco the leading manufacturer of above-ground pools
 * 1966 – Coleco acquired Eagle Toys – started making tabletop hockey and football games
 * 1975 – Greenberg decided to take Coleco into the videogame market
 * Coleco engineers created the Telstar
 * Originally a Pong-clone, Telstar would be used to name a number of later Coleco consoles as well
 * Coleco ordered its chips from General Instrument – as did many other companies
 * General Instrument did not expect so many orders – only Coleco, who placed their order first, received the full number of chips they requested
 * If Telstar was released on schedule – June 1976 – would see little competition
 * Problem – Telstar did not pass FCC interference tests (tested radio emissions from electronic devices)
 * Coleco had a week to fix problem, or be sent to the back of FCC queue for testing
 * Coleco happened to be in talks with Sanders Associates about future projects
 * Sanders Associates were the employers of Ralph Baer
 * Greenberg had chief engineer of Coleco call Sanders to ask for help with problem
 * Talked to Ralph Baer
 * Coleco had not yet signed contract with Sanders to bring in projects
 * Baer told Coleco that if they signed contract, he would fix their radio emission problem
 * Coleco agreed, and Baer shielded Telstar enough to pass interference tests
 * Telstar released on schedule – in time for Father's Day 1976
 * By August, new competitor would enter market, forever changing home videogames
 * Fairchild Camera and Instrument – company that pioneered transistor technology
 * Fairchild co-founded by Robert Noyce, who later co-founded Intel
 * Entered home videogame business in August 1976 with Channel F (originally known as Video Entertainment System)
 * Channel F used interchangeable cartridges - 1st in the industry
 * Original Odyssey had a number of circuit boards that the user would slide into the console – this basically acted as a switch to activate internal programming for games
 * Channel F's cartridges – called “Videocarts” – had full games programmed onto them
 * Channel F was not a big success
 * Enough consumers played, it, though, that it forever changed the home market
 * Consumers no longer wanted single-game systems
 * All of the videogame companies took notice and started working on their own answers to the Channel F
 * Atari began work on the home console that they are most widely recognized for.


media type="custom" key="4236495"