12
These Violent Delights
On October 8, 1956, a new shopping complex called Southdale Center opened in the Minneapolis suburb of Edina, Minnesota. The building was designed by architect Victor Gruen, an Austrian immigrant who decried the rise of suburban living in the United States because it isolated people in a chaotic jumble of “billboards, motels, gas stations, shanties, car lots, miscellaneous industrial equipment, hot dog stands, [and] wayside stores.” Gruen determined that suburban communities required something akin to a town center to unite people in a common environment. Therefore, he conceived of a fully enclosed and climate-controlled building of two stories joined by escalators full of retail and entertainment spaces anchored by large department stores on either end and centered on a courtyard in the middle. Southdale was the first realization of this vision, and it became the archetype for a new type of community space: the suburban shopping mall.1 By 1964, roughly 7,600 malls had opened throughout the United States. By 1972, that number had risen to 13,174.2
On its face, the shopping mall was a perfect venue for coin-operated games, as the high volume of foot traffic would insure a constant stream of visitors much as the old penny arcades at the turn of the twentieth century had been fed by the pedestrians of downtown thoroughfares and public squares. Unfortunately, shopping mall owners had no interest in allowing coin-operated games onto their premises, for the remaining inner city arcades held poor reputations as dirty, smoke-filled hangouts for delinquents and miscreants. In 1969, one man decided to change that.
Jules Millman had been fascinated by coin-operated amusements nearly his entire life, so after graduating from the Coral Gables campus of the University of Miami he relocated to Chicago to work for World Wide Distributors, one of the biggest coin-op distributors in the country. Once there, he was shocked at the lack of business acumen he found among operators, who basically just put the same few machines in the same few locations without sophisticated presentation or marketing yet appeared to make money despite themselves. Millman believed that if an operator put some real effort into maintaining a prime location, the business could be far more profitable.3
Millman’s key brainstorm was to hire full-time attendants to watch over a group of games on location to make sure the facilities were clean and the patrons well behaved. Justifying the salary of an employee required a large concentration of machines in a single place. Millman’s first thought was to approach airports or military bases, but he realized these were locations already well known to most operators, and he would have too much competition for real estate. He finally settled on the enclosed shopping mall as the ideal location after experiencing success operating five games at the entrance of a discount store owned by an uncle and coming to believe that retail and coin-operated amusements were a natural fit.4
Millman hoped to launch his new arcade operation through World Wide. When management turned him down, he left to found his own company dubbed American Amusements, Inc.5 He began approaching malls in the Chicago area only to be turned down by every single one. Finally, he approached the Dixie Square Shopping Center in Harvey, Illinois, which was experiencing problems filling all of its space and was therefore desperate enough to take a chance on Millman.6 The location proved immensely profitable, and when other mall owners realized what a clean and orderly enterprise Millman was running, they reconsidered and let him expand into their locations as well. By 1974, Millman and his brother Tuffy were operating roughly 20 shopping mall arcades under the name Aladdin’s Castle.
Even with the new quality and cleanliness standards imposed by Millman, the shopping mall arcade would probably have never caught on if not for the fundamental changes occurring in coin-operated amusements during the same period. As quiz games, advanced electromechanical novelties like Periscope and Speedway, air hockey, and the first video games emerged in rapid succession between 1967 and 1973, the public perception of the coin-operated amusement industry shifted as it took on a more high-tech, family-friendly image. When these games appeared in new arcade venues that felt respectable due to their clean, well-maintained, and safe environments, the industry was poised for its greatest period of growth in decades.
With shopping mall arcades becoming a new disruptive force in arcade revenues, coin-op manufacturers rushed to embrace these new venues, none more so than Bally. In 1972, the company purchased an operator of kiddie rides and games in discount stores called Carousel Time. The chain had been established by Arthur Gold and Irvin Brodsky, who met while executives at the Neisner Brothers chain of variety stores and later went into business together with four stores of their own. In 1951, they pivoted to coin-operated kiddie rides and established Carousel Industries. Within a few years, it was one of the largest operators of rides in the country.7 Upon purchasing the company and incorporating it as Carousel Time, Inc., Bally expanded the business into shopping malls.8 Two years later, Bally purchased American Amusements from Millman, merged it into Carousel Time,9 and changed both the name of the company and its arcade locations to Aladdin’s Castle. Bally began aggressively opening new locations and became the leader in the shopping mall arcade business over the course of the next decade.
For Nolan Bushnell, the shopping mall arcade represented one of several avenues he explored as he began expanding Atari in 1973. In February, the company opened an arcade in the relatively new Orange Mall in Los Angeles.10 Soon after, Atari opened two more locations in the Oakridge Mall in San Jose and the Bay Fair Shopping Center in San Leandro.11 Meanwhile, on the technology front Nolan exhorted his engineers to build elaborate new products like a 20-player version of Gotcha and a color version of Pong for the home market.12 When VP of engineering Al Alcorn responded to an August 1973 memo regarding these engineering projects by reminding Nolan that the company did not have any money, his boss was loath to accept the excuse. In the end, 20-player Gotcha was never built, while a home version of Pong would need to wait for better technology.
During this period, Bushnell realized he did not possess the managerial skills necessary to oversee the massive growth his company was experiencing. In summer 1973, he hired his brother-in-law, psychologist and business consultant Dr. John Wakefield, to serve as president and kept only the chairman of the board title for himself.13 Wakefield subsequently recruited the general manager of Hewlett-Packard’s (HP) Intercontinental Sales Division Region, Richard Mobilio, to serve as VP of Marketing. Mobilio brought several HP employees with him, most notably Leslie Oliver, who became VP of Finance.14 In September 1973, Al Alcorn took a leave of absence to care for his terminally ill mother,15 so early the next year Bushnell brought in another former Videofile engineer, Lloyd Warman, as his new VP of engineering.16 Bushnell hoped his new management team would provide Atari with the necessary skills to grow into a major corporation, but in this he was disappointed. None of these men had experience in the fast-paced coin-operated amusement business, and the more rigid corporate structure they created led to a lack of effective communication across departments.17 These issues came to a head as Atari attempted to bring its latest product to market in early 1974, a driving game called Gran Trak 10.
The plan for a driving game originated at a new Atari subsidiary acquired during Nolan Bushnell’s expansion spree called Cyan Engineering founded by electrical engineers Steve Mayer and Larry Emmons. Like Nolan Bushnell and Ted Dabney, Mayer and Emmons spent time in the Ampex Videofile Division in the early 1970s, and Mayer even became a key source of electronic components for Bushnell and Dabney’s Computer Space prototype by smuggling them out of the Videofile installation he was setting up for the Los Angeles County Sheriff’s Department. Mayer and Emmons soon fled the collapsing Videofile Division and joined another defense contractor called Arvin Systems working on videodisc technology. They also began doing some consulting work on the side, including an ultimately fruitless project to create a remote-control version of Atari’s Pong game.18
Before long, Mayer and Emmons realized that the Arvin videodisc project was going nowhere, so in February 1973 they struck out on their own. They had previously been introduced to the sons of famed engineer Charles Litton, who owned an old hospital building in Grass Valley, California, a sleepy hill town near the Nevada border. The duo relocated to Grass Valley and leased a space in the building for their new consulting firm, which they eventually named Cyan Engineering.19
Mayer and Emmons continued their relationship with Atari after founding Cyan, and Bushnell convinced them to become his advanced R&D group so his in-house engineering staff could focus on putting games into production to meet his relentless release pace of one new game every other month. Cyan essentially became a division of Atari, although it technically continued as an independent consultancy until being formally acquired in mid-1974. The first game Cyan worked on was Gotcha, which it transformed from Alcorn’s idea based on defective chips into a finished game. Next, the company worked on Atari’s growing library of Pong variants before turning its attention to creating the first driving video game.20
While a video driving game was an obvious evolution of the electromechanical games like Speedway popular in the late 1960s and early 1970s, the direct inspiration for Gran Trak 10 came from a pen-and-paper game called Racetrack published by Martin Gardner in his “Mathematical Games” column in the January 1973 issue of Scientific American. The column presented rules for calculating the movement of cars along a curvy track. After reading this article, Steve Mayer believed these game mechanics would translate well into a video game.21 Mayer designed most of the game himself, but near the end of the project a recent hire named Ron Milner also worked on the game.22 A veteran of the Lawrence Berkeley National Laboratory, Milner joined Cyan because he happened to be passing through town looking for work after leaving a small electronics firm in Colorado.23
Gran Trak 10 represented several important firsts for a video game. Previously, games like Computer Space that displayed more complex graphics than the simple blobs and rectangles of the ball-and-paddle genre incorporated diodes soldered onto the circuit board to create a primitive form of read-only memory (ROM). Mayer realized that depicting an entire race track on the screen would require a prohibitive number of diodes, so he incorporated the first IC ROM chip used in a video game instead. This allowed him to store all the information for the car, track, and scoring digits on a single piece of silicon. The ROM chip was a custom design created by a small chip company called Electronic Arrays, but Atari gave it the same part number as a Texas Instruments circuit in the hopes that any company attempting to copy the game would put the wrong chip in the socket and fry the board.24
Another innovation present in the game was the use of an interlaced video signal, in which the CRT draws the screen in two passes by first completing all the odd numbered lines and then returning to the top of the screen to complete the even numbered lines. Previous games were rendering using non-interlaced video, in which the entire screen is drawn in a single pass, to save money by cutting down the number of required chips, but this method resulted in a lower screen resolution and increased flicker compared to a standard television signal. Mayer switched to interlaced video for Gran Trak 10 so the movement of the race car on the screen would be much smoother.25
Gran Trak 10 was also the first game to incorporate a dedicated monitor rather than a modified television set with the receiver removed. At the time, the monitor industry in the United States was in its infancy, and the few companies creating products in the field were serving a small set of clients in highly specialized areas like airport arrival and departure displays and closed-circuit security systems. When the Pong fad hit in earnest in 1973, Chicago-based monitor manufacturer Motorola realized that a new outlet for its products was opening up and decided to market its new 19-inch XM-501 directly to the video game industry. This marked the real birth of the dedicated monitor industry and eliminated the need to convert televisions for coin-operated game use.26
With its sprite-based graphics, realistic car physics, and innovative controls consisting of a steering wheel, gear shift, and pedals, Gran Trak 10 was more sophisticated than any video game currently on location. Unfortunately, these advanced features caused a host of problems with the design. Mayer’s partner Larry Emmons created a complex hybrid chip containing both analog and digital components for the game sole-sourced to National Semiconductor in an effort to forestall the copying that had plagued Pong. National proved unable to fabricate the chip, however, and turned it into a far more expensive three-chip configuration. Furthermore, the steering wheel and pedals in the Cyan design were authentic components sourced from automotive manufacturers and were not cost effective.27 Finally, the game proved extremely finicky and did not work well once out in the field.28 An experienced coin-op engineer might have spotted some of these issues before they became serious, but the game was largely developed after Al Alcorn left the company. The inexperienced Lloyd Warman failed to catch the problems, which became a key factor in the near demise of Atari.29
Atari could have probably weathered the Gran Trak 10 debacle save that the market for the company’s Pong clones was drying up, and the company was losing money on an ill-advised international expansion plan. Sensing Atari was entering a period of financial distress, National Semiconductor suddenly changed its terms for the special circuits in Gran Trak 10 to cash on delivery, and Atari could not afford to pay. The company was forced to shut down production after only a few units were released, leaving the company without a major product to sell just when it desperately needed one.30
Al Alcorn returned to engineering to redesign Gran Trak 10 sans National Semiconductor circuits. Atari was able to resume production in May, but at that point another problem reared its head: due to the poor coordination fostered by Atari’s new management team, the game actually sold for $100 less than it cost to build.31 While this issue was eventually sorted out and the game ultimately became a 10,000-unit smash hit,32 the lost revenue from the production delays and accounting errors helped plunge the company into the red. In the fiscal year ending in June 1974, Atari’s revenues rose to $12 million, but it suffered a $600,000 loss.33 With little cash on hand and banks refusing to finance the struggling firm, there was a real possibility Atari would be out of business before the end of the year. It was saved by a secret subsidiary established the year before called Kee Games.
***
In the coin-operated amusement business of the 1970s, distributors carried equipment on an exclusive basis. As the business was still oriented around the jukebox, this meant that most regions were served by two or three distributors each handling one of the major jukebox lines: Seeburg, Rockola, and Rowe International.34 These distributors insisted on being the sole market supplier for any pinball or video game lines they carried and locked their operators into exclusivity deals. Therefore, Atari not only found itself out produced by many of the clone makers, but was also limited to only half – or even a third – of the market in any given region even when it could supply machines in quantity. Worse, Atari built its early distribution contacts with the help of its first customer, Advance Automatic, which was primarily a Bally distributor. While this relationship proved crucial to achieving national distribution for Pong, it had the side effect of locking Atari in with Bally distributorships in many major markets whether they were the most effective company in that market or not.35 For Nolan Bushnell, this was completely unacceptable.
In search of a solution, Bushnell turned to a friend named Joe Keenan. A Philadelphia native and 1964 graduate of LaSalle University with a degree in accounting, Keenan moved to Princeton after college to sell IBM computers. After a brief stint at General Electric, he joined a startup called Applied Logic. The company moved Keenan to California in May 1969 to serve as its western regional sales manager, where he lived across the street from another recent arrival to the area: Nolan Bushnell.36 Bushnell and Keenan became friends, and at a New Year’s Eve party at Bushnell’s house in 1972, Keenan played Pong for the first time.37
In 1973, Bushnell approached Keenan to help solve his distribution difficulties. Keenan remembered a story he had heard about GE buying a curling iron company and deciding not to fold the acquisition into its existing business so it could increase its market share by running two distribution networks. Keenan advocated a similar approach for Atari through the establishment of a secret subsidiary that could build a second distribution network for Atari products. Bushnell asked Keenan to run this new organization and dubbed it Kee Games in honor of his neighbor.38
Atari incorporated Kee on September 25, 1973, and provided an initial capital investment of $50,000. Kee also sourced most of its personnel from the parent company. Bill White, who had briefly moved from head of operations to CFO of Atari before the arrival of Leslie Oliver, became the comptroller of the company, while Gil Williams, who had just joined Atari from Ampex that August, became head of operations and opened the company’s new factory in Santa Clara. To head engineering, Atari gave the company its number-two designer, Steve Bristow.39
Born in Oakland, California, on December 31, 1949, Stephen Dixon Bristow majored in electrical engineering at the University of California at Berkeley and graduated at the top of his class in 1973.40 Like fellow Berkeley student Al Alcorn, Bristow participated in the university’s work study program and interned in the Ampex Videofile Division, where he worked for none other than Nolan Bushnell. Bristow’s first tour of duty at Ampex lasted from September 1969 to March 1970.41 When he returned for a second round in early 1971, Bushnell was hard at work on what became Computer Space and actually tasked Bristow with building some of the circuits for the memory and motion controller boards of the prototype hardware.42
When it came time for Bristow to do a third tour of duty in early 1972, Ampex was experiencing financial difficulty and eliminated his position, so Bristow went to work for Bushnell at Nutting Associates instead. He started as a technician fixing faulty Computer Space boards, but when Bushnell and Dabney left to incorporate Atari, he took over as the company’s chief engineer. In that capacity, he brought in his wife, Pati, to build the wire-wrapped prototype for Nutting’s two-player Computer Space design and exhibited it at the MOA show in September 1972.43 He then returned to Berkeley for his final semester of college and took a job with Atari collecting coins along the company’s game route.44 After graduating, he joined Atari full time as an engineer in June 1973 and built the four-player Pong Doubles. At Kee, Bristow designed the company’s first game, Elimination,45 which Atari also produced later in the year as Quadrapong.46
Ostensibly, Kee was an independent company that had poached Atari personnel to enter the coin-op business, but in truth Atari owned 90% of the stock,47 Nolan Bushnell and Al Alcon sat on the company’s board,48 both companies received prototypes from Cyan with slightly different features, and many of the PCBs for Kee Games were produced at Atari.49 The company executed various ploys in the trades to throw off suspicion about its real relationship with its parent company. For instance, Elimination, was supposedly licensed to Atari to prevent a lawsuit over theft of trade secrets,50 while the companies announced in February 1974 that Atari had purchased an interest in Kee and would provide “basic financial support.”51 At one point, Bristow even staged a phony break in at Atari to “steal” game parts while his wife distracted a security guard.52 Although some distributors saw through these tricks, the companies were generally able to maintain the illusion of functioning as separate, squabbling entities.
Unlike Atari, however, Kee employed an experienced coin-op engineer in Bristow and a competent manager in Keenan. As a result, while Atari was failing under the weight of its foreign misadventures and manufacturing disasters, Kee Games was selling 6,000 units of its version of Atari’s Gran Trak 10, Formula K,53 at a profit alongside a successful two-player follow-up called Twin Racer. Kee thus assumed a central role in a plan to save Atari advocated by its international vice president, Ron Gordon.
Although he studied philosophy at the University of Colorado, Ron Gordon cultivated a passion for international trade. After apprenticing with several businesses, he established his own trading firm, the Multi-National Corporation, in 1963 when he was just 23 years old. Multi-National connected manufacturing operations with overseas distributors and used letters of credit collected from the overseas companies to finance the operation. All he asked for in return was a small royalty on all foreign sales.54
In 1973, Gordon learned about Atari from a friend and showed up one day to introduce himself to Nolan Bushnell. Gordon made his pitch, and Bushnell contracted with Multi-National to ship games to distributors across Europe. Gordon became Atari’s VP of international sales, but he never actually became an employee and worked on a commission basis through Multi-National Corporation. The company sent entire cabinets overseas until Gordon realized the whole operation would be more cost effective if he shipped only the circuit boards and sourced cabinets and televisions locally.55
When John Wakefield became president of Atari, he decided the company could make more money by owning its own international distribution. Therefore, he established a string of subsidiaries in the Far East starting with Atari Japan in August 1973 and continuing with Atari Pacific and Computer Games Ltd. in February 1974 in Hawaii and South Korea, respectively.56 Wakefield tapped personal acquaintances who had no experience in the coin-op industry to run these companies and largely sent them older back stock to sell, which failed to generate much interest.57 Consequently, these subsidiaries added significant new overhead costs while not generating many additional sales and played a significant role in Atari’s financial crisis in 1974.
Despite the difficulties Atari faced in Asia, sales in Europe remained an important part of its overall business, and the company remained Multi-National’s most lucrative client. Therefore, Ron Gordon had a vested interest in preventing an Atari bankruptcy. To keep the company solvent, he cosigned a loan from Bank of America and heavily lobbied Bushnell to fire Wakefield and retake control of the company.58 Wakefield was duly dismissed after the company’s disastrous fiscal 1974, and Gordon temporarily assumed the powers of the presidency to terminate the company’s relatively new management team on Bushnell’s behalf, sell off the international subsidiaries, and restore a positive cash flow. More importantly, he helped convince Bushnell to fold Kee Games into Atari and elevate Keenan to the presidency of the combined company.59 Atari took full control of Kee in September 1974, which technically remained a separate subsidiary with its own game line, but with manufacturing consolidated at the Atari factory. Keenan became president of Atari, while Bushnell retained the role of chairman.60
In November 1974, Kee debuted its biggest game yet: Tank. The concept originated with Steve Bristow, who desired a return to the Computer Space conceit of two players shooting at each other, but without the confusing Newtonian physics that had turned off so many players. Bristow decided to ground the action by having the players drive tanks using a two-lever control scheme influenced by his experience driving a Caterpillar tractor in his youth. After developing the basic concept, Bristow turned the design over to a newly hired engineer named Lyle Rains, who set the action in a maze and added mines to the playfield.61 Debuted at the MOA show in November 1974, Tank took the industry by storm. Demand became so great many distributors were willing to ignore exclusivity and place the game with their operators. This marked the beginning of the end of that time-honored practice.62 Atari produced over 15,000 units of the game,63 contributing to earnings in fiscal 1975 of $19 million and a return to profitability.64
The success of Gran Trak 10 and Tank spurred a new phase in the nascent video arcade game industry. While the Pong craze of 1973 proved merely a fad in the larger coin-op landscape, Atari’s new games represented the next step in the evolution of the traditional driving and shooting games that had populated the arcade for decades. This continuity played a critical role in legitimizing the video game with skeptical distributors and operators.
Despite Atari’s renewed success, the traditional coin-op manufacturers in Chicago remained spooked by the crash of the Pong market and stayed with their electromechanical roots. Even those few companies that remained in the video game business like Chicago Coin largely concentrated on ball-and-paddle variants for their video line while releasing a range of traditional electromechanical products. Therefore, as in the audiovisual game market of the late 1960s, it once again fell to Japanese developers and their American manufacturing partners to take the lead in spreading the video game into traditional coin-op genres.
***
In 1970, Japan hosted the first world’s fair held in Asia. Dubbed Expo ‘70 and staged in Osaka, the event took on great symbolic importance as a recognition of Japanese resurgence following the utter destruction of World War II. It also served as a showcase for a Japanese coin-operated amusement industry that had been growing at an average rate of between 30% and 50% a year in the late 1960s due to a retail boom that prompted the rapid expansion of hotels, bowling alleys, and supermarkets, all of which tended to include a game corner on their premises.65
Internationally, Japanese coin-op firms also exerted their dominance. The four largest manufacturers in the country – Sega Enterprises, Taito Corporation,66 Nakamura Manufacturing, and Kasco – redefined the novelty game market in the late 1960s and ushered in a new era of quarter play in the United States. The audiovisual games developed by these companies sold in quantities in the United States and Europe that had not been approached by most arcade machines in years, opened up new venues for coin-operated games, and launched a technological renaissance critical to fostering a healthy environment in which the newly emerging video game could flourish.
In the early 1970s, this international influence diminished rapidly. Once American firms like Midway, Chicago Coin, and Allied Leisure began cloning the latest novelties coming out of Japan, they were largely able to force the Japanese firms out of the North American market.67 The Japanese companies began an aggressive strategy of releasing new game concepts every four months in an attempt to stay ahead of this clone market, but these efforts proved unsuccessful.68 The rise of the video game caused this situation to become even more untenable because few Japanese firms boasted any expertise with solid-state electronics and could therefore not effectively penetrate this new segment of the market. The rise of Pong also marked the end – for a time at least – of Japanese coin-op relevance abroad.
At the same time, the domestic Japanese industry began evolving in a new direction. Although games of chance like pachinko had been popular in Japan for decades, gambling ostensibly remained illegal in the country, cutting it off from the lucrative slot machine business active in the rest of the world. In 1964, Taito secured special permission from the government to introduce a three-reel slot machine with the capability to stop each individual reel with a button press, thus introducing an (incredibly) small degree of skill. Taito dubbed its machine the Olympia in honor of the 1964 Tokyo Olympics. The game ignited a brief slot machine fad but left no lasting impact. In 1970, the introduction of the gambling wall game Rotamint manufactured by the German company NSM spurred a new demand for stop-button slot machines, which the Japanese called pachislot. These machines threatened to undermine the country’s coin-operated amusement business.69
In response to this threat, a lawyer named Katsuki Manabe who had entered the coin-operated amusement business in 1967 by establishing a manufacturer called Sigma Enterprises opened a new facility in December 1971 called the “Game Fantasia Milano.” This venue replicated a luxurious casino atmosphere and was populated by modified slot machines that accepted and paid out in tokens with no actual value, thereby providing some of the thrill of gambling without any money changing hands. The popularity of token-fed slot machines, which soon gained the moniker “medal games,” skyrocketed as other entrepreneurs rushed to follow Manabe into the new market.70 By 1974, there were 807 game centers operating 16,483 medal games in Japan.71 Those numbers grew to 1,274 game centers operating 39,314 medal games in 1976.72 The industry peaked in 1977 at 1,544 game centers before increasing regulation brought an end to the medal game phenomenon.73 Game Fantasia Milano and its imitators were the first game centers in Japan not attached to an existing business like a movie theater or a bowling alley, but at this point they did not typically house traditional electromechanical and video amusements.
By 1973, there were somewhere between 500,000 and 700,000 coin-operated amusement machines on location in Japan.74 These consisted largely of electromechanical target shooting and driving games manufactured domestically and pinball machines imported from the United States. The industry was centered in Japan’s two largest metropolitan areas, Tokyo and Osaka, with machines largely spread across 200 amusement parks, 1,000 game centers, 2,755 bowling alleys, and 5,400 hotels and inns. Coin-operated machines remained a significant presence on the rooftops of roughly 500 department stores as well, but these locations were beginning to fade in importance and profitability due to their limited hours when compared to bowling alleys and game centers, which frequently operated 24 hours a day.75
Despite the widespread popularity of coin-operated amusements, video games penetrated Japan only slowly. Both Sega and Taito imported an Atari Pong cabinet for evaluation soon after its release, but Taito management saw no future in what its managers saw as an overly simplistic game and did not even bother to put it out on test. Sega did test it, however, and experienced great earnings on location.76 The company then tasked its three-person R&D group to examine the game and produce a clone. This effort was led by Hideki Sato.
The son of a sawmill and factory worker born in 1950,77 Hideki Sato was an aimless student in high school but demonstrated aptitude in science and enjoyed crafting, so he attended Tokyo Metropolitan Industrial College to study electrical engineering.78 While in college, he became deeply involved with an English-speaking society on campus and planned to spend some time abroad through Saitama Prefecture’s Overseas Youth Cooperation Volunteers organization. When that opportunity fell through, he had to scramble to find a job. Traditional electrical engineering work did not appeal to him, but he became interested in the toy company Tomy. He applied, but because he had waited too long to begin his job search, there were no openings. Next, he turned to Sega and joined the company in April 1971.79
Sato dissected Pong with the help of the circuit diagrams included in the manual for the game and used an oscilloscope to figure out where all the signals from the chips were going and what they were accomplishing. This allowed Sega to create an exact copy of Atari’s hit product.80 Meanwhile, Taito put its own Pong cabinet out on test after hearing about Sega’s successful test. After achieving similar results, the company began importing Pong boards from the United States to place in cabinets of its own design.81 Both Sega and Taito hit the market in July 1973 with Pong Tron and Elepong, respectively. Before the end of the year, Taito followed up by importing Space Race to release as Astro Race, while Sato slightly modified the circuitry in his Pong clone to create the variants Pong-Tron II and TV Hockey, which Sega released in November.82 Taito also began developing its own products late in the year, which were designed by one of the few engineers at any Japanese coin-op company possessing significant electronics expertise, Tomohiro Nishikado.
Born in 1944, the inquisitive Nishikado began conducting his own science experiments at an early age and started working with electronics in junior high school by building his own radios and amplifiers. After graduating from Tokyo Denki University in 1967, Nishikado nearly joined Sony Corporation, but he failed the final round of the company’s testing process. He joined an audio engineering company called Takt instead in early 1967, but after completing his training he was not put in the development department. Bored, he quit a year later. While looking for a new job, Nishikado sometimes met up at a nearby train station with a colleague from his old job who had recently joined Taito. Although he accepted a job offer from a communications company, Nishikado felt the work his friend was doing on games sounded more interesting, so when the friend told him Taito was desperate for new engineers, he ended up joining the company’s Pacific Industries division instead in 1968.83
While he desired placement in the development section of Pacific, Nishikado was assigned to production. After learning the fundamentals of the coin-op business by assembling machines for six months, he rotated through the quality control and technical divisions before finally moving to development in late 1969. At the time, Taito primarily copied concepts from the United States for production in the domestic market, but Nishikado wanted to create original designs. The result was a 1971 target shooting game called Sky Fighter in which he used mirrors to project the images of model planes in front of a sky-blue background provided by a film canister on a rotating drum. While a hit, the game cabinet proved too large for most locations, so a scaled-down sequel followed under the name Sky Fighter II that moved 3,000 units.84
Despite the success of Sky Fighter, Nishikado was transferred again to the department responsible for procuring materials for manufacturing. He considered quitting the company, but ultimately stayed on despite his unhappiness. Perhaps sensing his dissatisfaction, his old boss in development tasked him with learning more about TTL circuits in his spare time because they looked poised to play a significant role in the industry.85 Therefore, when Taito entered the video game business, Nishikado returned to the development division because no other employee of the company knew how to work with IC technology.
After helping bring Taito’s early imports to market, Nishikado decided he wanted to create his own games. He spent six months dissecting a Pong unit to learn how the integrated circuits in the game worked and then developed a modification called Soccer. Released in November 1973 Nishikado’s game added a second paddle and a soccer goal on each side of the screen.86 A four-player ball-and-paddle variant called Davis Cup followed before Nishikado decided to move beyond simple rectangles to character graphics. The resulting game, TV Basketball, is still a ball-and-paddle game in which the players use dials to move paddles up and down to knock a ball into a basketball hoop, but the paddles are shaped like human figures.87
The same year Taito entered the video game business, it also established its first presence in the United States. Taito America opened for business in downtown Chicago in 1973 as an extension of its parent company’s import-export business with a mission to sell knickknacks like ivory carvings in the United States and arrange the shipping of arcade games and jukeboxes being imported into Japan.88 Mike Kogan appointed a man named Ed Miller to run the company. A buyer for the parent company since 1971, Miller first came to Kogan’s attention after he befriended the Taito president’s son, Abba, while running his own charter flight company while attending Boston University. Miller soon dropped the trinket business and began seeking American coin-op companies to which he could license games from Taito, Kasco, and other small Japanese companies. In 1974, he licensed TV Basketball to Midway. This was the first time a Japanese video game had been imported into the United States.89
Meanwhile, Nishikado observed Atari’s Gran Trak 10 and decided to make a driving game himself. Feeling that Atari’s game with its twisty track and complex control scheme was too difficult to be truly enjoyable, he looked to Kasco’s Mini Drive and a 1970 rear-projection driving game from Taito similar to Speedway called Super Road 7 for inspiration. Both games involve guiding a car down an endlessly scrolling road, with Super Road 7 incorporating the need to dodge cars that appear in front of the player. Nishikado adapted these basic gameplay elements in a video game called Speed Race released by Taito in November 1974 in which the player controls a large car situated in the middle of the screen moving along a straight path and dodges other cars that appear from the top of the screen. Nishikado created the illusion of movement by animating a background image of a road and modulating the speed of the oncoming computer-controlled cars based on the speed of the player.90
Due to the complexity of the Speed Race hardware, Taito needed to charge a comparably high price for the game and set it to 100-yen play rather than the standard 50. Nishikado believed that players would balk at such a high price and included a dip switch to let operators set the game to either 50- or 100-yen play, but the game proved a massive hit at the higher price point. After the success of Speed Race, 100 yen per play became a standard that persisted in Japan for decades.91 Speed Race became a hit in the United States as well after Midway licensed and released the game under the name Wheels and sold over 7,000 units.92 Midway also released the game under the name Racer in a smaller cabinet featuring a seat in an attempt to penetrate the lounge market,93 where cocktail-style ball-and-paddle games were becoming increasingly popular at the time. A two-player sequel followed in both markets, Speed Race Twin in Japan and Wheels II in the United States.
For his next project, Nishikado wanted to develop a video game featuring human characters and turned to a competitor for inspiration. In 1970, Sega released an elaborate electromechanical game called Gun Fight in which two players control cowboy figurines positioned on opposite sides of a long cabinet housing a playfield full of obstacles. Each player attempts to shoot his opponent’s cowboy, who collapses when hit. Like Periscope and other games of this type, wipers and contacts under the playing surface register hits. In 1975, Taito released Nishikado’s video take on this game, dubbed Western Gun, which features two cowboys rendered as blocky and squashed sprites who attempt to shoot one another while navigating a landscape dotted with rocks and cacti. The players control their characters via a large joystick with a trigger button for moving and firing and a small lever that changes the angle of the gun between three different positions. The goal is to achieve the most kills within a time limit. The game became a hit and, along with Tank, ushered in a new wave of one-on-one dueling video games in the arcade.94
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Western Gun represented a significant milestone for the emerging video game medium: the first depiction of violence perpetrated against a human target. While pinball and other coin-operated amusements were often derided as gambling devices or frivolous pursuits designed solely to cheat children out of their allowances or lunch money, they largely avoided scrutiny for encouraging violence. This was because even those games that incorporated shooting featured targets that differed little from the abstract representations one might find at a rifle range. Computer graphics offered the prospect of a more realistic – or at least more immersive – experience and thus risked attracting more concern. Western Gun itself invited no controversy, perhaps due to the long-standing tradition of cowboy duels in Western films targeted at children and adults alike, but the next year a driving game created by a small coin-op manufacturer called Exidy touched off the first moral panic centered on video games.
Exidy founder H.R. “Pete” Kauffman traced his history with commercial video games back to nearly their beginning, for after spending time at the Stanford Research Institute and the Data Disc Corporation he joined co-worker Charles McEwan at his new startup, Ramtek, and numbered among those employees of the company who played the first Pong prototype at Andy Capp’s Tavern. Convinced that video games would become a significant form of entertainment, he left Ramtek before the end of 1973 and joined with a former Ampex engineer named Samuel Hawes to establish Exidy,95 a portmanteau of the phrase “excellence in dynamics.”96
Kauffman lured away the Ramtek engineer who designed that company’s earliest video games, John Metzler, to create products for Exidy. These consisted largely of ball-and-paddle variants marketed exclusively on the West Coast. After debuting with a ball-and-paddle game called Hockey/Tennis, the company experienced its first success with another ball-and-paddle game called TV Pinball released in December 1974. After moving into a slightly larger facility the next year, the company prepared to expand nationwide by exhibiting its lineup at the MOA show in October 1975. In addition to TV Pinball and a couple cocktail ball-and-paddle games, the company introduced a driving game called Destruction Derby in which one or two players ram into hardware-controlled cars to score points. When both TV Pinball and Destruction Derby attracted considerable interest, Kauffman realized Exidy would not be able to manufacture both in significant quantities and farmed out TV Pinball to Chicago Coin, which released it as TV Pin Game. Exidy eventually licensed Destruction Derby to Chicago Coin as well, which released it as Demolition Derby.97
Unfortunately, the venerable Chicago Coin was teetering on the brink of collapse. For decades, the company had largely relied on electromechanical novelty games to sustain itself, an approach that brought the company its greatest success with the introduction of Speedway in 1969. The onset of the video game rapidly eclipsed the novelty field, however, and like the major coin-op companies in Japan, Chicago Coin did not possess the solid-state engineering talent to adapt to the new medium. While the company released a smattering of video games between 1973 and 1975 copied or contracted from other developers, it never achieved a breakout hit. In mid-1976, Sam Gensburg hired coin-op veteran Jerry Marcus as general manager in an attempt to turn the company around and promoted him to president in September.98 Marcus refocused the company’s efforts on pinball, where it had always run a distant fourth to Gottlieb, Bally, and Williams.99 Unfortunately, the pinball market was on the verge of transitioning from electromechanical to electronic designs as well, so the company could not compete in that realm either. By December 1976, Chicago Dynamic Industries had declared bankruptcy, and its assets were ultimately purchased by two banks to help satisfy its debts. One of the oldest coin-op manufacturers was no more.100
Exidy entered its own period of difficulty due to the Chicago Coin bankruptcy. Throughout early 1976, Chicago Coin’s version of Destruction Derby was outselling Exidy’s own model due to the former company’s superior manufacturing capability and distributor network, but because Chicago Coin was in such dire straits, it proved unable to make the royalty payments agreed upon in the licensing contract.101 Exidy had hoped its current game lineup could carry it through until the latter half of the year, but now the company needed a new game as soon as possible to remain in business.
The task of creating a new video game fell to the company’s new vice president of engineering, Howell Ivy, whom Exidy hired away from Ramtek when John Metzler left to form his own computer graphics company. With Exidy requiring a new product immediately to stay in business, Ivy decided the only way to quickly design a new game would be to use the existing Destruction Derby as a base because developing a completely new concept from scratch using TTL hardware would be too time-consuming. While this required the gameplay to remain similar to the older game, the graphics were stored on easily replaceable ROM chips and would be relatively simple to replace with new images. Ivy replaced the cars with blocky stick-figures that the players run down for points.102 Originally titled Death Race 98, the name was shortened before release to simply Death Race.103
According to the promotional materials for Death Race, the crude stick figures being run down on the screen were not humans, but rather “gremlins” and “skeletons.” To Associated Press reporter Wendy Walker, however, they looked suspiciously like people when she happened upon the game at the Seattle Center arcade. Although assured by both the arcade manager and Exidy spokesmen that the figures were monsters, she penned an article that ran in newspapers across the United States calling attention to this new level of video game violence and including quotes from a psychologist claiming such a game appealed only to the basest nature of mankind. Exidy marketing VP Paul Jacobs was given a chance to defend the company in the article, but probably did not help matters when he attempted to make light of the situation with Walker by stating that “if people get a kick out of running down pedestrians, you have to let them do it.”104
Walker’s article ran nationwide at the beginning of July 1976.105 It garnered little attention at first, but in December a non-profit organization that promoted traffic safety called the National Safety Council declared Death Race “insidious,” “morbid,” and “sick, sick, sick” in the winter issue of its quarterly magazine, Family Safety. Following the article, a media frenzy developed.106 Hundreds of newspapers ran stories over the next several months, magazines as wide-ranging as Newsweek, Playboy, and the National Enquirer penned features about the game, television news programs like Today and 60 Minutes devoted segments to the game, and a PBS program called Decades declared the controversy one of the major news stories of 1977.107 While Exidy employees performed damage control by attempting to portray the game as harmless fun and stating that they could have made something far more disgusting if violence had been their primary goal, critics felt Death Race trivialized the seriousness of roadway accidents at best and promoted deviant behavior at worst.108
Ultimately, the Death Race controversy passed with little lasting effect, for even most of those observers who feared that the immersive and participatory nature of video gaming might lead to greater psychological harm than passively watching violence play out on television or in the theater had to admit they did not foresee players rushing out to mow down pedestrians after experiencing the title’s crude graphics and limited gameplay. For Exidy, the controversy proved a boon, as the company gained a national profile while selling roughly 2,000 Death Race cabinets in the United States and another 1,000 PCBs for export overseas after a second production run prompted by its sudden notoriety.109 These numbers still paled in comparison to the biggest coin-op hits, however, so with more prosaic ball-and-paddle, driving, and target shooting games remaining the primary sources of video game revenue, Death Race and the controversy it spawned soon faded into obscurity. Indeed, even as the violence debate reached its apex, arcade video games were entering a period of stagnation and were in danger of being eclipsed by a new wave of ball-and-paddle games now entering the home.