Spring+2009+Lecture+13+Notes

= __Spring 2009 Lecture 13 Notes__ =


 


 * Atari and Mattel doing great business – Coleco suffering
 * Company nearly bankrupt after fall of Pong-style games – barely survived end of 1970's
 * Arnold Greenberg – CEO of Coleco – saw new hand-held market and saw potential
 * Decided to take Coleco into hand-held video-games
 * After Mattel released LED-based game Football, Coleco released Electronic Quarterback
 * Similar LED game - had more features and cost less than Mattel's game
 * Greenberg hired Michael Katz – former Mattel executive
 * Katz had overseen release of Mattel's Auto Race and Football hand-held games
 * Katz brought on to create marketing department for Coleco
 * Coleco created more hand-held games – 2-player Head-To-Head series – sold very well
 * Also licensed a number of popular arcade games – like Pac-Man and Donkey Kong
 * Released table-top games reproducing them – games much simpler than originals
 * Designs of table-top games exactly mimicked arcade cabinets, including exterior artwork
 * Coleco's table-top games also sold very well
 * 1980 – hand-held market already beginning to die off – Greenberg unconcerned
 * Attention elsewhere – wanted to make console capable of playing arcade-quality games
 * Had earned enough money from hand-held games to research new console
 * Meanwhile Coleco used relationships it had formed with arcade companies
 * Entered the home market again as 3rd-party publisher for VCS and Intellivision
 * Did not create new games – licensed and re-created arcade games for home consoles
 * End of 1981 – Greenberg's dream system almost ready – shown at 1982 January CES
 * ColecoVision – had a number of things in common with other consoles
 * Standard 8-bit processor, 8k RAM, 8k Video-Ram – similar to VCS and Intellivision (Intellivision actually used an early 16-Bit Processor, though it was far less powerful than later 16-Bit processors)
 * Had other features that made it more powerful
 * Technology costs much cheaper by this point – Coleco could afford extra chips
 * Implemented separate chips for memory-mapping and frame-buffers
 * Separate chips left out of VCS and Intellivision due to costs
 * Chips resulted in smoother animation and more arcade-quality graphics than competitors
 * ColecoVision's chip set very advanced – could even handle video imagery
 * Later – 1985 – Hasbro engineers began experimenting with interactive video
 * Used modified ColecoVision console
 * ColecoVision more advanced – still had a tough battle ahead
 * Atari dominated home video-game market – over 100 games for VCS
 * Also had tons of money to throw around to secure licenses for big games
 * Mattel didn't have as many games for Intellivision
 * Still had a nice chunk of market due to its sports simulation games
 * Coleco couldn't compete with Atari's money or Intellivision's sports crowd
 * Instead Coleco turned mainly towards licensing smaller games from smaller companies
 * Had a knack for choosing games with large fan-base – like Mr. Do, for example
 * Also helping Coleco compete – an adapter developed for ColecoVision
 * Let ColecoVision play VCS games – Intellivision had similar 2600 adapter to try and limit the advantage of the 2600
 * 2600 games played using adapters still had poor VCS graphics
 * Still, instantly gave ColecoVision (and Intellivision) owners access to huge library of VCS games
 * Big victory for Coleco came with licensing deal from Nintendo
 * 1981 – Nintendo of America still small company
 * Minoru Arakawa – NOA president – felt he needed outside help to market Donkey Kong
 * Turned to Coleco – had offered to make both cartridge and table-top versions of game
 * Howard Lincoln – at this time lawyer and outside consultant for Nintendo
 * Lincoln wrote up licensing contract for Coleco to sign
 * Had no experience with game licensing – researched similar contracts
 * Found that most made original company liable for all claims against game in all formats
 * If Coleco was sued over cartridge version of Donkey Kong – Nintendo responsible
 * Thought this absurd – added clause to contract
 * Coleco responsible for all actions against cartridge version of Donkey Kong
 * Coleco signed deal – clause later paid off for Nintendo (to be discussed in later class)
 * Agreed to pay Nintendo $1.40 for every cartridge sold – $1 for ever table-top game
 * Coleco made a very accurate home-conversion of Donkey Kong
 * Graphics more closely matched arcade version than any home game before it
 * ColecoVision version sold exclusively as pack-in with console for 6 months
 * July '82 ColecoVision released – could only play Donkey Kong at home on ColecoVision
 * After 6 months – Coleco got as much mileage as could with ColecoVision exclusive
 * Coleco released Donkey Kong for VCS and Intellivision as third-party software
 * 1982 - 50th anniversary of Coleco – big year for company
 * Sales more than doubled to $500 million – profits increased by factor of 4 to $40 million
 * J.R. Rissman – President of Tiger Electronics – company that makes hand-held games
 * Summer 1981 – Rissman sees Donkey Kong while in Tokyo
 * Gets back to US – contacts Universal Studios – owns rights to King Kong
 * Tiger wants to license King Kong to make game
 * Universal receives request – one of many Universal Vice Presidents runs standard search
 * Looks for existing licenses – finds only 1 license of King Kong in user
 * License for making costumes/masks based on King Kong
 * Finds number of other unofficial uses – ignores since uses are so small
 * Grants Tiger license in September of 1981
 * 2 months after Nintendo released Donkey Kong in America
 * Month before Donkey Kong becomes a hit
 * January 1982 – another search run at Universal by same Vice President
 * Found new licensing agreement between Coleco and Nintendo – licensing Donkey Kong
 * Contacts universal Vice President of Licensing – Both go to arcade to see Donkey Kong
 * Play game – assume Tiger wants King Kong license to copy Donkey Kong
 * Contemplate taking away Tiger license – do not discuss Donkey Kong as a problem
 * April 1982 – Universal President Sid Sheinberg hears about Donkey Kong
 * Sheinberg known for being mean guy in Hollywood
 * Has Universal lawyer Robert Hadl check out Donkey Kong
 * Hadl feels Donkey Kong infringes upon King Kong copyright – tells Sheinberg
 * Sheinberg arranges meeting with Coleco CEO – Arnold Greenberg
 * Greenberg led to believe meeting about Universal investing in Coleco
 * Sheinberg threatens Greenberg/Coleco at meeting
 * Threatens to sue Coleco unless royalties paid over Donkey Kong game
 * Greenberg panicked – ColecoVision set to ship with packed-in Donkey Kong game
 * Worried that Universal could stall or stop ColecoVision shipment
 * Knew Universal had huge legal department – also knew Coleco on its own
 * Licensing agreement with Nintendo – Coleco responsible for cartridge/table-top version
 * Greenberg signs agreement with Universal
 * Agreement states Universal agrees to not sue – Coleco has to pay all royalties
 * All back-royalties paid as well as all future royalties on Donkey Kong game
 * Universal also threatens Nintendo via a sent memo
 * Memo stated that Nintendo to cease all shipment of Donkey Kong and destroy all units
 * Also had to report all earnings to Universal so they could take cut
 * Hiroshi Yamauchi considered options from Japan
 * Minoru Arakawa and Howard Lincoln flew to California to meet Universal and Coleco
 * Lincoln had run trademark search – found Universal filed for trademark in past decade
 * Suspicious and Lincoln doubted Universal's claim – wanted to do further research
 * Greenberg pushing Nintendo to sign with Universal
 * Nintendo didn't know Greenberg signed an agreement for Coleco with Universal
 * Unknown to Nintendo – next day Coleco and Universal discuss investment in Coleco
 * Nintendo didn't sign agreement in meeting – Universal promise to send “Chain of Title”
 * “Chain of Title” document – meant to establish Universal's claim over King Kong name
 * Never arrived at Nintendo – Lincoln contacted Universal about document
 * Once again threatened by Universal – document never sent
 * Lincoln now believed Universal's claim weak at best
 * Urged Arakawa not to back down from fight – Arakawa trusted Lincoln – took advice
 * Arakawa risked job – Yamauchi wary about battling big American company
 * Nintendo set up another meeting with Universal who expected Nintendo to sign
 * Sheinberg even said that Universal may consider investing in Nintendo if they signed
 * Lincoln responded by saying he doubted Universal's claim on King Kong
 * Nintendo had no intention of signing – Sheinberg taken off guard – exploded
 * Told them to save up money – said even Universal's legal department made a profit
 * June 1982 – Universal officially filed suit – made claim to King Kong name
 * Said owned all rights as result of agreements with RKO Pictures and original writer
 * Same day – Universal announced licensing agreement with Coleco for Donkey Kong
 * Didn't stop at just attacking Nintendo – by this point Donkey Kong huge hit
 * Nintendo had licensed character to over 50 companies – from cereals to cartoons
 * Universal threatened nearly all Nintendo licensees
 * Threatened to sue if they didn't break ties with Nintendo – all backed down
 * Nintendo lost all licensees but 1 – Milton Bradley – never threatened by Universal
 * Shortly before trial – Arakawa asks Lincoln to join Nintendo
 * Lincoln agrees – became Senior Vice President of Nintendo of America
 * Court case lasted 7 days – turned out Universal did not even own King Kong
 * 1975 – Universal took RKO to court – claimed RKO had no claim to King Kong
 * Original RKO film over 40 years old – Universal said King Kong now public domain
 * Suit meant to pave the way for Universal's 1980's King Kong remake
 * Judge learned about previous case – ruled against Universal in Nintendo case
 * Chastised Universal for suing knowing they had sued to show NO ONE owned rights
 * Judge also did not agree that anyone would confused Donkey Kong and King Kong
 * Also ruled that Tiger's King Kong game infringed on Nintendo's Donkey Kong copyright
 * Allowed Nintendo to choose – collect damages from Tiger / take Universal's licensing fee
 * Nintendo chose to take money from Universal
 * Universal had taken away business from Nintendo by threatening licensees
 * Nintendo could now counter-sue for lost damages and lost revenue
 * Other companies saw Nintendo's victory – sought payment from Universal
 * Coleco wanted their royalty money back
 * Atari – had paid royalties for VCS version of Donkey Kong – also wanted money back
 * Even company who made Donkey Kong cartoon filed a claim against Universal
 * Nintendo's counter-suit went to court years later – 1985
 * Universal forced to pay $1.8 million to Nintendo
 * Once case finally settled, video-games had already nearly died-out
 * Middle of 1982 video-game industry started slow demise – no one seemed to notice
 * Popular culture indicated video-games stronger than ever
 * Walt Disney Pictures made Tron – about computer world - 1st to use CG effects
 * Inspired video-games of its own – Bally/Midway made 2 games – Tron and Discs of Tron
 * Mattel made a number of Intellivision Tron games
 * Companies let people buy games at home
 * Columbia House – Columbia Cartridge Club – mail-order catalog
 * TeleSoft Inc. and VideoLivery – toll-free numbers to buy games over phone
 * Companies experimented with delivering games over cable TV and computer modems
 * Activision replaced Atari as fastest-growing company in US history in 1982
 * New consoles/add-ons came to market
 * Zircon International re-released Fairchild Channel F almost unchanged as Channel F II
 * Mattel released voice-module for Intellivision adding synthesized speech to games
 * Magnavox – still trying to make Odyssey II a success – also released voice module
 * Most notable new addition – Atari finally made new console Bushnell wanted in 1978
 * End of 1982 – Atari released the Atari 5200 – began called VCS the Atari 2600
 * 5200 used same process as Atari home computer, the Atari 400
 * New versions of popular VCS/2600 games made for 5200
 * Super Break-Out, Centipede, Space Invaders, Defender, Missile Command, etc.
 * System had 12 games by time it launched
 * 5200 notable improvement over VCS/2600
 * More powerful processor – more on-screen objects, higher-resolution, more colors
 * Relatively sophisticated sound-synthesizer (compared to 2600)
 * Still problems – priced higher than ColecoVision – ColecoVision still had better graphics
 * Atari programmers couldn't work on 5200 – had to support huge number of VCS owners
 * Biggest problem for 5200 – poor controller
 * Atari employees petition against release of 5200 unless controller fixed
 * Kassar ignored them – released 5200 with bad controller
 * 5200 controllers did not center themselves – most other joysticks had internal spring
 * Stick snapped to center when released – 5200 had no spring
 * Joystick fell to sides - Very difficult to control games
 * 5200 specifically did not lead to fall of video-games – other Atari problems did
 * December 7, 1982, Atari announced projected sales figures for 4th quarter of the year
 * Everyone expecting 50-percent increase over previous year – including Atari executives
 * Final report listed only 10-15 percent increase – everyone shocked and panicked
 * Stock exchange closed on December 8th – Warner stock down 17 points
 * News leaked – Kassar sold 5000 Warner shares 23 minutes before announcement
 * Kassar claims selling shares unrelated – probably true – would have sold more if not
 * Damage done – image of Atari as sinking ship in public mind – image not far from truth
 * Atari had significant problems – spread throughout industry
 * Atari too-heavy – at peak had more management and marketers than programmers
 * Focused solely on bottom line – not creation of good games
 * Many industry executives believed that anything could sell as a video-game
 * Video-game from Purina – Chase the Chuck Wagon – based on dog-food commercial
 * Better example – video-game from Atari based on Rubik's cube – was a disaster
 * Bigger disaster came from Atari VCS/2600 version of Pac-Man
 * Atari execs knew VCS Pac-Man would be big hit – Pac-Man biggest game franchise ever
 * Atari had exclusive rights to Pac-Man
 * Believed people would buy VCS just to play Pac-Man – probably right but over-estimated
 * Decided that 12 million Pac-Man cartridges would be made
 * Had research that less than 10 million owned VCS – were making 2 million more
 * Assumed millions of people would buy VCS just to play Pac-Man
 * Had plan – needed to make game quickly to get their sales
 * Made contract with programmer Todd Frye to create VCS version of Pac-Man
 * Contract had Frye receive royalties on every cartridge sold
 * He knew that the game would sell no matter what – even if it was bad he'd make money
 * Rushed through game and it showed – final VCS version horrible
 * Released in May 1982 – VCS Pac-Man was slow – terrible animation – lots of flicker
 * Frye made over $1 million on Pac-Man royalties because game still sold well
 * Games like Rubik's cube disaster because they didn't sell
 * VCS Pac-Man was a paradox – even bigger disaster because it DID sell
 * Almost anyone who bought it completely dissatisfied – hordes of people wanted refunds
 * Number of retails canceled summer orders of Pac-Man
 * Big retailers stuck by Atari despite poor reaction – Sears, JC Penny, Kmart, etc.
 * Final straw came with VCS version of ET
 * Steve Ross – Warner Communications President – first approached Spielberg
 * Wanted him to make movies for Warner – promised a hit game based on his movie E.T.
 * Promised a Christmas release – deal made in July
 * Kassar complained to Ross that games took over 6 months to make
 * Ross had made a deal with Spielberg – told Kassar to get it done
 * Kassar believed E.T. would be big hit – worried about short time-table for game
 * No Atari programmers wanted to do E.T. – high expectations – unrealistic deadline
 * Kassar asked Howard Scott Warshaw to make E.T. game
 * Warshaw made 2 big Atari hits
 * 1st hit - Raiders of the Lost Ark – based off another Spielberg movie – sold over 1 million
 * 2nd hit – Yar's Revenge – inside joke on Ray Kassar
 * Game about Yar from the Rassak Solar System
 * Yar = Ray backwards, Rassak = Kassar backwards
 * Game secretly about Kassar's revenge on Activision – Kassar never found out the joke
 * Yar's Revenge became best-selling original game on VCS
 * Kassar personally asked Warshaw to make E.T. game
 * Final game widely considered to be one of the worst games ever made
 * Poor graphics, even by VCS standards – boring game-play
 * Involved getting pieces of galactic device to phone home
 * Most of game had E.T. falling down holes and getting back out
 * E.T. sold incredibly poorly – consumers started to be turned off from video-games
 * Atari tried to buy its way back into profit – tried licensing top arcade games
 * Coleco bid-up licensing prices – high bid for arcade hits – knew Atari would bid higher
 * Atari spent millions of dollars to get exclusive arcade rights – didn't result in more sales
 * 1983 – Arcade dying – top games old 20,000 units or so, not 80,000 or so of earlier years
 * Atari went into tailspin – took rest of industry with it
 * Ended up with millions of unsold cartridges – put them in landfills
 * People found out about this – stole cartridges from land-fills
 * Atari had to pay to destroy unused cartridges to prevent people from getting free games
 * End of 1983 – Atari had lost hundreds of millions – laid off 3000 employees
 * Moved most of its manufacturing overseas – Warner sold company the following year
 * Mattel Electronics – over $200 million in debt in 1983 – laid off 37% of workforce
 * Activision – lost $5 million dollars over 3 months
 * Bally – leading arcade manufacturer of time – had 85% decline in profit
 * Once-profitable video-game industry was nearly dead
 * Final note – 1982 – General Consumer Electronics (GCE) entered home-console market
 * Industry rumor – GCE President Ed Krakauer vising Asia - warehouse of vector monitors
 * Supposed to be for cardiogram machines – delivery had been refused
 * Offered to sell Krakauer monitors for less than it cost to make them
 * Krakauer bought monitors – had engineers design game console around it
 * Rumor untrue – no warehouse – GCE made monitors themselves in Hong Kong
 * Vectrex – built in Vector monitor - $199 – interchangeable cartridges $30-$40 – overlays
 * Funded production, like Coleco, using money from 1970's hand-held sales
 * GCE made wrist-watch games – GameTime, ArcadeTime, SportsTime
 * Milton Bradley – makers of Simon – bought GCE to market Vectrex
 * Vectrex sold well – appealed to hardcore gamers familiar with vector graphics in arcade
 * Literally had arcade quality graphics – used vector monitors
 * Parents liked that it didn't tie up home TV – Vectrex had built-in monitor
 * Vectrex sold out – no second series made – 1983 no one had parts for 9” vector monitors
 * 1984 Video Game crash also hurt Vectrex - Milton Bradley (who bought GCE) ultimately lost lots of money on Vectrex (having to sell it at a loss and not being able to produce follow-ups due to lack of interest)
 * Vectrex had some unique accessories and ideas for its time, though
 * Light Pen - allowed you to "draw" directly on Vector Monitor
 * 3D Imager - Displayed certain games with a relatively convincing 3D effect (like Virtual Boy, but much earlier and less effective)
 * Vectrex games are STILL being made by the HomeBrew community, with the last finished game (as of this writing) having been released in 2008 (HomeBrew is a term used for home-made software, typically not sanctioned by a system's manufacturer)


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