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TVTranscript
00:01It all started with the name.
00:06We wrote down a list of names and Atari was the third on the list.
00:12And I looked at it and I said, it's okay.
00:18That developed into a legacy.
00:21Well, when you think about video games, Atari is the word.
00:26Atari was the first and the boldest, the most broadly disseminated game name that was ever done.
00:33At times, they were unstoppable.
00:39And there's a pawn on the ferry boat.
00:42Oh, my God, it's everywhere.
00:44Like, oh, God, what have I done?
00:46And there were times filled with turmoil.
00:48E.T. was not a good idea.
00:49The game was programmed in six weeks.
00:51And as you probably know, most of them wound up in a landfill.
00:54And there was lots of partying.
00:58Coke sort of came into vogue right about that time.
01:01And so it went through Atari as well.
01:04This is the unbelievable true story of the rise...
01:09...and fall...
01:12...of the most famous video game company in the world.
01:15It's the story of...
01:16Atari!
01:22In the late 60s, an unknown industry begins to evolve.
01:26Engineer Ralph Baer receives the first video game patent for his version of Video Table Tennis.
01:31And develops the first home video gaming system, the Brown Box.
01:35Ralph Baer started peddling his game in around 1970.
01:39Didn't find a buyer.
01:40Went to RCA.
01:41Went to Zenith.
01:42And it took a few years before Magnavox picked it up.
01:46Baer signs a contract with Magnavox.
01:48And the system is renamed the Odyssey.
01:51Magnavox and Sanders, which was the company that Ralph Baer worked for...
01:55...were showing off the game, their new product.
01:58This is in January 1972.
02:00And Nolan Bushnell went to see this product.
02:03And he signed the guest book that he was there.
02:05And he saw the Magnavox Odyssey.
02:06He wasn't impressed with it.
02:08Nolan Bushnell, a University of Utah graduate and engineer...
02:11...moves out to California and hooks up with friend Ted Dabney.
02:14And if you're going to be an electrical engineer, and it's the late 60s, early 70s...
02:21...you're going to be in Silicon Valley, in the center of the action.
02:24And with $250 from a savings account, they formed their first company.
02:29It's called Syzygy.
02:31Syzygy.
02:32Syzygy.
02:33Syzygy.
02:33Syzygy.
02:33Syzygy.
02:34No one could pronounce it.
02:37In 1971, technology isn't exactly peaking.
02:41One of the first uses of the computer video screen, somebody programmed a game called Space War.
02:48But Syzygy still manages to develop their very first coin-operated video game, called Computer Space.
02:54Computer Space was the first game, and what I was trying to do was really bring Space War to a
03:03cost point.
03:04Computer Space is a commercial failure.
03:07And in 1972, Nolan Bushnell changes the name of his company.
03:12We wrote down a list of names.
03:15And I remembered that Atari was the third on the list.
03:20And I looked at it, and I said, well, it's okay.
03:26Atari starts development on their second video game, one with a very simple concept.
03:32So we know Computer Space did not do well.
03:34It was too complex for people at that time.
03:36So he wanted to come out with a simpler game.
03:38So he challenged me to do a ping-pong game.
03:42I told him I wanted to go.
03:45A very simple, one-moving spot, like the Magnavox Odyssey.
03:50I suspect he'd seen the Magnavox Odyssey, knew it wasn't a very good game the way Magnavox had it done,
03:55but nothing could be simpler.
03:58And what could be more simpler than a ball bouncing and two paddles hitting it?
04:09And the title is just like the game.
04:12We named Pong just because you couldn't own a ping-pong game.
04:16And so we just truncated it and called it Pong.
04:24Well, Nolan, that's, gee, well, let's put it in the box.
04:28And we put it with a coin mech on the side of the box, very simple.
04:31We went to Walgreens, got a black and white TV, made a monitor out of it,
04:34and put it in Andy Capps Tavern, one of our locations, over the weekend to see what would happen.
04:38And the rest is history. It took off.
04:40But before Atari can begin celebrating, they're slapped with a lawsuit.
04:45Magnavox went around showing this toy before they put it on the market in very closed sessions.
04:52And Nolan Bushnell attended one of those closed sessions and beat everyone to market by a few months with Pong.
04:58So Magnavox sued Atari and Nolan Bushnell.
05:03And they proved that Nolan Bushnell was at this meeting, Berlin Game, California.
05:07And he did sign his book and his guest book.
05:09And he did see a video game of table tennis before it came out.
05:13So they settled out of court.
05:14And what they settled for, I think, was Atari got the rights to video games for $100,000.
05:19That was it.
05:20And then they made a killing after that.
05:22Pong becomes a nationwide phenomenon.
05:25Soon after, Ted Dabney decides to move on and sells his share of the company to Bushnell.
05:30Although copycats are popping up everywhere, by the end of 1972,
05:33Atari still reports earnings of $3.2 million, thanks to the success of Pong.
05:40And Nolan Bushnell moves forward with another idea.
05:44But then it came time to do Consumer Pong.
05:48And everyone says, well, you know, boy, what a great idea.
05:52So I figured, okay, I'll do Consumer Pong.
05:55I'll show them.
05:55We'll see how far we get with this thing.
05:57We'll bankrupt the company.
05:58Because, I mean, how can we launch a consumer product with nothing?
06:02We had no backing, no equity, no.
06:04He's crazy.
06:06I remember the day we got the Consumer Chip to work.
06:09And it was like, it felt like a dog chasing a car.
06:12You caught it.
06:12Now what do you do with it?
06:13Well, you try and sell it.
06:16So we called Chicago, Sears Tower, cold call.
06:19And got Tom Quinn, the buyer, the right guy.
06:22And he was there in three days.
06:23And thank God for Tom Quinn.
06:25And we were in the consumer business.
06:27Sears signs on as an exclusive distributor for Home Pong.
06:30And it flies off the shelves.
06:32Atari reaches $40 million in sales, $3 million in profits.
06:36And Pong is out of control, selling more than 150,000 units.
06:42Atari owns the video game industry with their home version of Pong.
06:45But competition, wild parties, and Bushnell's departure will soon become a major part of this company's history.
06:53With Atari's release of the home version of Pong, the young company is making millions.
06:58And having a blast while doing so.
07:02We had this camaraderie that it was us young guys.
07:06And remember, this was just after the 60s.
07:08So the age of the query is don't trust anyone over 30.
07:15People came to work whenever they wanted, and they picked what topic they were going to do games on.
07:20People would sit around, literally get stoned, and start brainstorming ideas for games and things like that.
07:27It was very much a part of the creative process.
07:29So they pretty much were doing what they wanted, okay?
07:33And it worked because these games were labors of love for a lot of the programmers.
07:38MRB was a marijuana review board.
07:40And that was like our open code for, okay, let's go get high.
07:44It was also a time where we didn't worry that much about legal liability.
07:50You know, getting drunk and going home and, you know, I mean, almost everybody went home with everybody else.
07:56Sexual harassment or things like that wasn't an issue.
07:59As time went on and as more and more money came into the environment,
08:04the class and quality of the drugs tended to increase substantially.
08:09Coke sort of came into vogue right about that time anyway.
08:13And so it went through Atari as well.
08:19Experiencing a cash flow problem for the upcoming Christmas season,
08:23Nolan sells Atari to Warner Communications in 1976 for $28 million.
08:29Yeah, a lot of people don't realize that when you have a successful company,
08:33that a growing company actually consumes cash.
08:39You can very seldom throw off cash fast enough to grow as fast as you want to.
08:45So it was either take the company public or sell it to somebody that needed to be pocketed.
08:51When Warner bought us in late 1976, I couldn't believe it.
08:57And all of a sudden there was real money in the bank.
09:00Wow, this actually did work.
09:02But now that Atari has sold its soul to Warner,
09:05things inside the company begin to drastically change.
09:11When Warner Communications took over, all of a sudden it became this big corporation.
09:15This is the way you're going to work.
09:16You have to wear suits, you have to come at this time, you have to leave at this time.
09:19Atari, under Nolan Bushnell, its motto was innovative leisure.
09:24Woo!
09:25Under Warner, it was, we're the Atari VCS company.
09:28And that's a big difference.
09:29With a change in atmosphere, Atari goes on to develop Stella,
09:33a prototype console that accepts cartridges.
09:36It's Atari's response to Fairchild's programmable Channel F home video game system.
09:41So there were a lot of arcade games out there, particularly Atari arcade games.
09:45And what they wanted to do, one of their marketing strategies was,
09:49let's take these successful arcade games into the home and sell home versions.
09:53What Atari had that the other companies didn't have was this stock of arcade titles that they were able to
09:58use.
10:00In 1977, Atari releases the VCS, later to be renamed the 2600, with a retail price of $200 and a
10:09library of nine games.
10:13So we introduced it and you could just feel it in the air.
10:16The product was so revolutionary, everybody knew it.
10:20It felt great.
10:22Atari enjoys strong sales in 1978 and a fantastic holiday season,
10:26and releases more games, like Outlaw, Space War,
10:31and the fan favorite, Breakout.
10:34Breakout. There'll be a new wall come up.
10:36I'll break out that entire wall, a new wall comes up.
10:38You can just keep playing into infinity.
10:42Internally, however, Atari is at odds.
10:45And the man that formed the company decides to leave.
10:49There were so many vulnerabilities that the company had,
10:52and it seemed like nobody at Warner was aware of them.
10:55And I felt that if they were bound any tournament to go down these Volushe roads,
11:01then I didn't want to do it.
11:09New CEO Ray Kassar moves in, but not with open arms.
11:13Meanwhile, several programmers are getting fed up with the lack of credit for their games,
11:17and the management of Mr. Kassar.
11:19When we asked for credit for it, we were turned down pretty flatly.
11:22In fact, we were told that we were no important to that process than the person on the assembly line
11:26who put them together.
11:27You had several companies that were willing to give credit for the games,
11:31and better still, they were willing to pay royalties on the games.
11:36Guys like David Crane and Al Miller, who were creating games, and they were selling millions of copies,
11:42and they were collecting their salary, and they couldn't even get their names on the games.
11:47So four guys make a decision that will change the video game industry forever.
11:52There were four of us at Atari who worked together. We went to lunch together.
11:56We were just a little group of four guys.
11:58We were just sitting at lunch one day and said, you know, we could do this.
12:01Why don't we design our video games and market them ourselves?
12:05And it wasn't all that easy, of course, but thus Activision was born.
12:10This is Pitfall, the smash hit video game by Activision.
12:15Activision becomes the first third-party software developer for the 2600,
12:18and releases such hits as Pitfall and Fishing Derby.
12:22All gone. Pitfall, designed by David Crane.
12:27Atari goes on to release two more great games for the 2600,
12:31Space Invaders and Asteroids.
12:35Atari licensed Space Invaders from Tato in 1980 for the VCS,
12:40and this was the first game ever to be licensed from another company.
12:44And that was just a huge hit for Atari.
12:48That's what basically sold the VCS.
12:50Then, of course, Asteroids.
12:52That was probably their second big hit, again, based on the arcade game.
12:57When it comes to space games, nobody compares to Atari.
13:01By 1982, the video game industry becomes a horse race between the 2600, Intellivision, and Coleco.
13:07You'll see amazing grass, like this.
13:10Atari releases Pac-Man.
13:13And E.T. for the VCS.
13:15Two incredibly hyped games, which are critical flops as well as commercial failures.
13:19The video game that lets you help E.T. get home.
13:23E.T. was not a good idea.
13:24And it got to the point where Atari's attitude was, we put anything out, it's going to sell.
13:30Great, send I don't know how many million dollars to Spielberg for the name.
13:35What?
13:36And now we had to go make a title out of it.
13:40The game was programmed in six weeks.
13:42Atari had lost a lot of the skills and the people.
13:45All the really good guys were over at Activision.
13:47Somehow that cartridge got built. It just didn't play well.
13:50They manufactured more copies of E.T. than there were Atari 2600 in existence.
13:55Not a good idea.
13:56And as you probably know, most of them wound up in a landfill.
14:01Pac-Man is probably considered one of the worst games of all time.
14:05E.T. No disrespect to how it was developed, but they were terrible games.
14:15Atari, needing cash, re-releases the 2600, but the masses aren't buying it.
14:20With a string of bad decisions, Atari finds itself in a tailspin.
14:24Al Alcorn is gone, and Stock and Warner drops 33%.
14:30The whole ambience of Atari changed, and very rapidly.
14:33They began selling off divisions their computers didn't sell.
14:36But things at Atari are only getting worse.
14:38I didn't know.
14:40Ms. Pac-Man?
14:40This means plays only on the Atari 5200 Super System.
14:44In 1982, Atari introduces the 5200 to the gaming public.
14:48Now you're talking.
14:49And it bombs.
14:51Atari came out with the 5200, which was really developed as a competition for Intellivision.
14:58Look at Atari basketball.
15:00And Intellivision.
15:02I think Intellivision plays much more like real basketball.
15:05If you think ColecoVision plays all Atari cartridges...
15:08By the time it was released, it was competition for the ColecoVision.
15:11And we bring the arcade hysteria home.
15:14But I think the ColecoVision games were better.
15:17They looked truer to the real games.
15:19Of course, when the 2600's lifespan ran out, and they had to go to the 5200, the American consumer went,
15:28Wait a minute, I've had the same record player for 25 years, for the same television set for 25 years.
15:34Why are you suddenly telling me now that after like four years, five years, I've got to trade in this
15:40game system for a whole new game system?
15:42This is a very difficult concept to get across.
15:47Christmas 83 sees a glut of inferior games, and 600 Atari employees are laid off.
15:57But the scrappy company's not giving up just yet.
16:00In 1984, they announced the release of the 7800, and promised more 2600 games with improved graphics and sound.
16:08Unfortunately, the improved 2600 games are never released, and Atari ends up selling their home video game division to former
16:14Commodore CEO Jack Tramiel.
16:16Jack Tramiel, actually he ruined Atari.
16:21He wanted to make Atari a computer company, no more games.
16:25The 7800 was announced, but never released.
16:27The warehouses were full of them, but he wanted nothing to do with them.
16:33In 1985, Nintendo shows up, and Atari misses a huge opportunity.
16:38When Nintendo came out with the NES, they were afraid of Atari.
16:43Because Atari had global dominance.
16:45Atari meant video games at the time.
16:48So they approached Atari to give Atari the rights to the NES outside Japan.
16:54Atari didn't take it.
16:56Then Nintendo took over.
16:58So Atari decides, well, we have all this warehouse full of 2600, 7800, let's sell them.
17:04Discover a world beyond your wildest dreams.
17:07So their heart really wasn't into games.
17:11They just had the games, let's try to make some money on it.
17:14The release of the 7800 is sloppy.
17:16Few stores carry it, and the system fails.
17:23In 1988, Atari makes a shocking decision, and rehires Bushnell with hopes that using his name will increase sales.
17:30Well, you remember, I was just a consultant, but I just did a couple of projects for them.
17:34And I had a creative team.
17:37And in some ways, Atari was so over at the time, you know, in terms of being on the cutting
17:44edge, that it was nostalgic, but it was not rewarding.
17:49I like Lynx. The screen is bigger.
17:51I like Lynx. More can play at the same time.
17:55In 1989, Atari goes head-to-head with Nintendo once again, and releases the Lynx, their first portable video game
18:03system, against Nintendo's Game Boy.
18:05I like Game Boy.
18:07The Lynx is more expensive and heavier.
18:13And Nintendo ends up the holiday winner.
18:171991 marks the last year Atari will see a solid profit from operations.
18:24Nintendo reinvented the world.
18:26Nintendo showed that people still wanted entertainment, they still wanted fun, and they still wanted games.
18:32But Atari isn't giving up.
18:34They released the Jaguar, a system with a CD-ROM attachment, Pro Controller, and some marquee titles, like Primal Rage...
18:42...and NBA Jam Tournament.
18:47But it's too little, too late.
18:49They announced they will merge with hardware manufacturer JTS, and discontinue supporting the Jaguar.
18:56Atari Jaguar. Suddenly, nothing else seems fun anymore.
19:01Hasbro Interactive bought Atari for $5 million. It was the beginning of the retro craze.
19:08They started releasing all the old Atari games, but in updated versions of it.
19:17And unfortunately, they didn't do a good job.
19:22In 2001, French-owned Infogrames purchases Hasbro Interactive, obtaining the Atari name in the process.
19:28Atari means so much to people who grew up in that age. Atari is video games.
19:34You see the Atari logo. It means something.
19:37The younger people today who might buy an Atari game, it's just a name on a box. They have no
19:42idea what it means.
19:44Regardless of where Atari is today, people around the world will always remember it for what it was, and what
19:50it began.
19:51Oh, I think it was wonderful. My experiences at Atari were one of the greatest times of my life.
19:55Because the people were fun. The challenges were fun. We did not take ourselves that seriously.
20:00We played games with other people, other industries.
20:03And no matter what terms these guys left on, they are all proud to have worked at Atari.
20:07Well, when you think about video games, Atari is the word. It's the name.
20:12Atari was the first and the boldest, the most broadly disseminated game name that was ever done.
20:19And you never know what the future will hold.
20:21Now, Infogram has taken the Atari name, and I think they're disassociating it from the entire catalog they have,
20:28and they're releasing brand new games with the Atari logo.
20:31Which is nice that Atari is now a new company again, which is what it was in the beginning.
20:36But it's something very interesting.
20:37And a year came to Japan is people-based, and yet people love this stuff,
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