They Create Worlds

30
Home Invasion

On February 11, 1980, the 87th annual Toy Fair opened in New York City, and some of the biggest stars of the show were a diverse array of handheld electronic games. In 1979, electronic game sales had exploded from $180 million in 1978 to $720 million, which translated into 16 million units sold.¹ Now every company in the toy business was scrambling to take a piece of the action.² Over 300 electronic games were displayed at the show. Mattel, which experienced great success with an update to its Football game in 1979, showcased updates to its basketball and soccer handhelds, while Coleco debuted a new series of head-to-head sports games that could be played by two people. Parker Brothers followed up its smash hit Merlin with a unit called Split Second that challenged the player to complete six different games in as short a time as possible. Milton Bradley continued to push its extremely popular Simon, the best-selling electronic game of 1979, alongside a game called Milton that featured speech.³

Analysts remained bullish on the handheld market for 1980 and expected sales to double once again. In contrast, the video game was increasingly seen as a stagnant product category destined to be displaced by electronic games on the low end and microcomputers on the high end. Indeed, one of the major arguments of video game companies in 1979 was that video games were a user-friendly steppingstone to a full-fledged home computer. All the major programmable console makers were acting to be sure they did not miss the home computer transition.

When all was said and done, handheld factory sales did grow in 1980, but only to $1 billion.⁴ As happened with calculators, watches, and dedicated video game consoles, increasing competition and improving technology drove a rush to the bottom on price and glutted the market with cheap products.⁵ Video game sales, meanwhile, surged, growing from $233 million in retail sales in 1979 to $493 million in 1980.⁶ While this still placed the video game market behind the electronic handheld market in total sales, it was catching up fast. The main instigator and benefactor of this surge was Atari, which continued to grow its commanding market share in the programmable console space and enjoyed complete dominance by the end of the year.

***

Atari’s rise to power began in 1979 as it embarked on a new era under the watch of Ray Kassar. Although the VCS ultimately proved popular during Christmas 1978 despite retailer reluctance to stock it, the company still lost money on the year and owned a backlog of roughly 300,000 units sitting in warehouses. Kassar’s first order of business was to clear out this backstock. To do so, he embarked on a campaign to turn video games into a year-round business rather than just a Christmas item. Atari launched a $2 million advertising campaign in the first quarter of 1979 focusing on its cartridge lineup and increased the number of available games from 20 to 32 by the middle of the year.⁷

As it had in 1978, Atari’s programming team developed games in a diverse array of genres, though it was becoming more difficult to brainstorm new concepts. The lack of new coin-op hits left only secondary titles to port to the VCS such as a target shooting game that was essentially a reverse Breakout called Canyon Bomber, the prototyped but never released coin-operated game Human Cannonball, and a parachuting game called Sky Diver. The company also expanded its sports, board, and casino game lines with Football, Bowling, Miniature Golf, Backgammon, Video Chess, Slot Machine, and a collection of card games called Casino.⁸ Of these games, Video Chess was the most surprising considering the limited VCS hardware and was driven by a consumer complaint that a chess piece was pictured on the VCS box despite no chess game being available for the system. Larry Wagner, the former manager of the VCS programmers, who now worked in an advanced projects group managed by Bob Brown, undertook the programming of the game and partnered with a chess master named Julio Kaplan to create as convincing an algorithm as possible on such a primitive system.⁹

Meanwhile, Bob Whitehead in the VCS programming group developed a new graphical technique that allowed all the pieces on the board to be displayed. Due to hardware limitations, the VCS can draw only five sprites on a scanline, so all 32 chess pieces could not be displayed at once at the start of the game. Larry Kaplan had already demonstrated that sprites could be reused multiple times on the screen via the “H-move” technique, but this only worked on vertical bands rather than horizontal. Whitehead realized that by drawing a different pattern of sprites on every other line, he could effectively double the number of objects on a horizontal band. Because this left noticeable gaps in objects that created a visual effect akin to viewing an object by peeking through a set of open blinds, this programming trick came to be known as the “Venetian blinds” technique.¹⁰

Selling video games as a year-round product fell to Atari’s new VP of sales and marketing, Don Kingsborough. The son of an Oklahoma farmer who moved his family to California in 1940, Kingsborough lived in public housing for much of his childhood. Popular and personable in high school but not particularly studious, he attended the University of California at Berkeley in 1967 to avoid being drafted to fight in Vietnam. Upon graduation, he became a salesman for Westwood Pharmaceuticals and discovered a natural talent for relating to and negotiating with customers.¹¹ After a stint at Learjet, Kingsborough formed his own sales rep company in 1976 called DK Associates.¹²

Through a contact at Wells Fargo, Kingsborough was introduced to Atari as it began marketing its dedicated consoles in 1976 and secured the Northern California territory for DK Associates.¹³ As one of the firm’s more successful reps, he was brought into the company in early 1979 to replace Michael Shea and Don Thompson, who left in the wake of Bushnell’s dismissal.¹⁴ Kingsborough’s mandate was to move backlogged inventory by whatever means necessary, and his natural skills at discovering and meeting customers’ needs played a critical role in making Atari’s sales push a success.

With Atari’s backstock woes largely solved by the middle of the year,¹⁵ Kingsborough returned to his rep company, and Kassar brought in Black & Decker marketer Bill Grubb to take his place. A more traditional corporate executive, Grubb brought an understanding of product development and branding along with distribution contacts from a diverse array of retail outlets. When he arrived, Atari still did almost 50% of its business through Sears, probably in part because Kassar had more experience dealing with department stores from his Burlington days. Grubb and his right-hand man, national accounts manager and fellow Black & Decker alum Mark Bradlee, brought order and uniformity to the company’s network of sales reps and distribution partners and pushed Atari products into mass market retailers like Walmart, Kmart, and Toys R Us.¹⁶

For the Christmas season, Atari increased co-op advertising dollars available to retailers, cut the price of the VCS by ten dollars to $180,¹⁷ and launched promotions giving consumers who bought a VCS and returned the warranty card in the third quarter a voucher for five free Warner Records albums. Anyone who did so in the fourth quarter received coupons good for $2.50 off on five specific games.¹⁸ These moves stirred retailer interest, and Atari sold out its entire stock of systems by early November.¹⁹ Consumer interest was piqued by a major fall advertising campaign that ran through Christmas week on top-rated television shows like Charlie’s Angels, Dukes of Hazzard, Monday Night Football, and the Tonight Show.²⁰ For the year, the company moved roughly 600,000 VCS systems, bringing the install base to a little over 1.3 million.²¹

Atari practically had the market to itself. After a lackluster year in 1978, Fairchild scrapped plans to introduce three new games at the January 1979 CES and was out of the video game business by April.²² Leftover stock was sold to a firm called Zircon International that liquidated most of it during the 1979 Christmas season. By then, Fairchild was no longer independent. Due to the erratic results of its consumer electronics ventures and its failure to transition to new semiconductor technologies, the company was losing money and its stock price was depressed. This made the firm a tempting takeover target, and a battery and ball bearing manufacturer looking to expand into electronics called Gould, Inc. made an aggressive offer. Wanting nothing to do with Gould, Fairchild sued to halt the takeover on antitrust grounds.²³ When that did not work, Fairchild CEO Wilf Corrigan turned to oil field services company Schlumberger Limited to serve as a “white knight.” Schlumberger bought the company in October 1979 and continued to operate it as a subsidiary until 1987, when it was sold to National Semiconductor. It never again played a significant role in video games.

Meanwhile, Bally continued in the industry, but just barely. Early in the year, the company ended its home pinball line, which had never been profitable.²⁴ It introduced six new games for the Professional Arcade, most notably a port of the arcade game Amazing Maze and a Football program significantly more advanced than similar games on competing platforms.²⁵ It also teased the computer expansion again at CES only to once again decline to release it. By the middle of the year, the system had only achieved lifetime sales of 28,000 units, and Bally had yet to realize any profit.²⁶ The company remained in the business through the end of the year, but new CEO Bob Mullane was not interested in continuing to back a losing product. In August 1980, Bally sold the rights to the Bally Professional Arcade to a Columbus, Ohio, startup called Astrovision for $2.3 million.

Magnavox also nearly exited the business as Philips continued to show reluctance to continue in the video game industry. In fact, the company shut down all internal game development partway through the year as new Consumer Electronics Division President Kenneth Meinken, who took over the division after Alfred Di Scipio suddenly resigned in April 1978,²⁷ attempted to stem Magnavox’s losses in consumer electronics. VP of Interactive Devices Mike Staup felt the industry still harbored great promise, however, and was able to keep game development going through an outside contractor named Ed Averett.²⁸

An electrical engineer with bachelor’s and master’s degrees from the University of Tennessee, Averett served in the army for two years and then took a job in marketing at Intel. As part of the sales and support staff for microprocessors, Averett became aware of the Odyssey²⁹ project and decided to leave Intel in April 1977 to become a freelance developer for the system alongside his wife, Linda, who was also an engineer. At the January 1978 CES, Averett approached Staup, and they agreed to enter a game development relationship.³⁰ The Averetts created most of the 11 games Magnavox introduced in 1979, including a maze game called Take the Money and Run, a shooting game called Invaders from Hyperspace, an obstacle avoidance game called Alpine Skiing, and a sports cartridge combining hockey and soccer games that featured two teams of stick figures rather than the typical ball-and-paddle gameplay.³¹ Bolstered by its lineup of unique games, the Odyssey² was the only credible competitor to the VCS in 1979, but it still only moved 125,000 units.³¹

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In 1979, Atari commanded approximately 80% of the cartridge market, but only 4 million total games were sold.³² Home video games at the time generally fell into four categories: sports games that were too complicated to emulate well on current hardware; educational games that may have pleased parents but were of no interest to children; adaptations of existing pen-and-paper, board, and casino games that did little to improve on playing the original versions; and ports of coin-operated games sporting limited gameplay that held up better in a 90-second arcade session than in an extended home marathon. While certain games like Atari’s Combat or Fairchild’s Spitfire provided a few thrills when played against another person, most of the output of the six principle console producers was simply not that interesting.

While home games could not match coin-operated games in audiovisual quality and interesting control schemes, they did possess one attribute that set them apart: the ability to play for hours on end without having to constantly deposit quarters into a machine. Early console games remained tied to the arcade and its short play times and did not attempt to harness this aspect of home gaming, but in 1979, an Atari programmer named Warren Robinett changed that.

Born in 1951, Joseph Warren Robinett, Jr. first encountered computers through a partnership between his high school and the University of Missouri in which the students wrote programs that were sent to the university for execution. At age 16, he attended a National Science Foundation summer math camp that cemented his desire to pursue an education in mathematics and computer science. Robinett matriculated to Rice University in Texas, where he designed his own major, computer applications to language and art, by taking a lot of programming and art courses. He then attended the University of California at Berkeley and earned his master’s degree in computer science with a specialization in computer graphics in 1976.³³

Robinett joined Atari in November 1977 as part of the second wave of VCS programmers hired by the company. Soon after completing his first game, the Combat variant Slot Racers, he was introduced to the text-based Adventure game at SAIL by a roommate who was a Stanford graduate student. Robinett decided to adapt the game to the VCS as his next project. When he proposed the game to the new head of the VCS programming group, an older engineer from Lockheed named George Simcock, it was rejected because Simcock could not see how a game that took up hundreds of kilobytes on a mainframe computer could be squeezed into a 4K cartridge. Robinett ignored his boss and began working on the adaptation anyway.³⁴

Robinett began by distilling Adventure down to its core elements, which he saw as moving through a series of interconnected rooms to collect objects. To replicate this gameplay on the VCS, he decided that each room should take up the entire screen and that using the joystick to move off the edge of the screen in one of the four cardinal directions would substitute for the movement commands of the text Adventure and bring the player into another room. Likewise, running into an object would allow the player to pick it up in lieu of a text command. Adventure implemented an inventory system, but Robinett believed that leaving the action to sift through a collection of items was not conducive to an exciting console experience, so he decided the player would only be able to carry one item at a time. Knowing he would need to save his limited number of player sprites for objects and obstacles, he used the ball sprite for the player’s avatar, which was consequently rendered as a featureless yellow square.³⁵

After about a month of work, Robinett had a basic prototype in place in which the square could move between the rooms of a maze and collide with objects. At this point he revealed his work to Simcock, who was not happy to be disobeyed Dejected, Robinett took a month off even though he was told there was no guarantee the company would hold his job. When he returned, he learned that marketing loved his prototype. Robinett use his technology to create a Superman game, as Atari desired a tie-in product for the Superman movie being developed by Warner Brothers.³⁶ Robinett resisted until a compromise was reached to have another programmer, John Dunn, turn the prototype into a Superman product while Robinett continued to build his Adventure game.³⁷ Released in 1979,³⁸ the Superman game incorporated the multi-screen movement and object interaction developed by Robinett but featured unremarkable gameplay.

Meanwhile, Robinett spent four months barely working on Adventure at all. His prototype featured a castle that the player could only explore after acquiring a key and a dragon that could chase the player, but though the multi-screen world was revolutionary, the limited gameplay was not fun. He finally broke the stalemate by changing the interaction between the dragon and the player by adding a sword that could slay the dragon. He then expanded the world by creating two more castles, two more keys, and two more dragons. In response to a bug that could cause a player to drop an item in an unreachable spot, he also added a magnet that can pull in a nearby object.³⁹ Rounding out the items is a magic bridge that allows the player to pass through certain walls, which was an homage to a magic rod that extended a bridge in the original text-based game.⁴⁰ Late in development Robinett added a bat that can pick up items and move them to another part of the maze to add an element of randomness to the proceedings. The objective of the game became locating an enchanted chalice being held in one of the three castles and bringing it safely to a fourth castle.⁴¹

During the period Robinett worked on Adventure, dissent was brewing in the programming group over recognition for developing hit games. Both Atari and its competitors preferred to keep the identities of their programmers a secret for fear of headhunting and would not allow them to be credited on their projects. This incensed the skilled game developers who worked long hours to brainstorm game ideas, complete every aspect of the product from game mechanics to graphics and sounds, and develop the programming tricks and shortcuts that extended the capabilities of the VCS far beyond what its designers had thought possible. As an act of rebellion, Robinett decided to leave his signature in the game.⁴²

Deep in the final castle, Robinett placed a room only accessible using the magic bridge. Within this room lies an item one pixel in size colored the same gray as the background of most of the game. If that pixel is brought to a specific room in the world, a solid wall becomes passable and the player can enter a new room with the words “Created by Warren Robinett” displayed across the screen. Robinett figured Atari would eventually discover the message and remove it so that no consumer would ever see it, but at least he left his mark.

Robinett left Atari shortly after completing the design of Adventure, and Atari released the game in early 1980.⁴³ By 1981, Atari had received reports about the hidden room. Management was furious, but there was little they could do since Robinett had already departed the company and was not receiving any royalties. Unlike the marketing department, the new head of the VCS programming group, Steve Wright, saw the hidden room as an opportunity. He realized that players would probably enjoy searching out hidden secrets in games and likened the act of doing so to participating in an Easter egg hunt. Wright began encouraging all his programmers to put what he called “Easter eggs” in their games and began publicizing their existence in the press. While not the first game to include a secret, Adventure defined the concept of Easter eggs and led to their widespread adoption not just in video games, but in all forms of media.⁴⁴

***

When Ray Kassar was elevated to CEO of Atari in January 1979, it created a crisis for the Consumer Electronics Division, which was now leaderless. While individual actors like Bill Grubb kept the division on track in their areas of responsibility, other managers were not pulling their weight and gaps were appearing in middle management as the company grew rapidly. In mid-1979, Kassar hired an older lawyer named Don Winn to run Consumer, but he was overmatched in the job and barely lasted five weeks.⁴⁵ In November, Kassar tried again with an executive named Michael Moone.

A graduate of Xavier University in Cincinnati with degrees in political science and economics, Moone joined toymaker Mattel right out of college in 1969 as an account manager.⁴⁶ In 1971, he moved on to Milton Bradley as a national accounts manager for subsidiaries Whiting and Amsco Industries, which produced crafts and dolls, respectively, as well as for select accounts in the Game Division. In 1974, he was promoted to assistant division manager of Whiting.⁴⁷ After his mentor at Whiting, George Ditomassi, became general manager of the Game Division, Moone became Ditomassi’s assistant in 1976 and was promoted to national sales manager in 1978.⁴⁸

Moone was first recruited for Atari in early 1978 to serve in the role Ray Kassar ultimately filled, but he turned down the job both because he was worried that Atari had still not fully embraced the programmable market over dedicated consoles and because he had not been in a high-level management job long enough to prove to himself he was up to the task. In early 1979, Ditomassi became senior vice president for marketing at Milton Bradley, and Moone succeeded him as vice president and general manager of the Game Division.⁴⁹ By the time Atari approached him again in late 1979, he felt more confident in both himself and Atari’s place in the market and also felt certain he had topped out at Milton Bradley, so he took the job.⁵⁰

Upon joining Atari, Moone immediately began cleaning house by firing underperforming managers and staffing up the division in areas it was deficient. The division’s biggest weakness was its inability to deliver product in a timely manner to distributors and retailers, so Moone focused on smoothing out the entire product development and production cycle. He then harnessed his talent for building personal relationships to visit all the toy retailers he had worked with during his Milton Bradley days and reassure them that Atari would be a more reliable partner in the future. He also worked to convince them that video games could become a year-round product category.⁵¹ He was greatly aided in the latter task by the imminent arrival of Atari’s conversion of the hit coin-op game Space Invaders.

While Atari had converted nearly all its own coin-operated games of any popularity to play on the VCS by the end of 1979, it had never occurred to any company in the industry to license another company’s product for release. This was not really an oversight, as there had probably not been a game worth licensing before Taito’s coin-op juggernaut. Warner executive Manny Gerard changed that after noticing on one of his many visits to Atari how popular Space Invaders was with the engineers in the employee game room. Hit by a sudden brainwave, he marched over to Ray Kassar’s office and told him they needed to license the game right away. Kassar saw the value immediately and negotiated a deal with Taito to release the game on the VCS.⁵²

When it came time to program the game, management was surprised to discover there was a version already in development by Rick Maurer, who joined Atari from Fairchild after the semiconductor firm shut down its video game development. While casting about for a first project to do at Atari, Maurer played Space Invaders in the arcade and was instantly hooked. He received permission to create a version for the VCS and implemented most of the gameplay over the course of several months.⁵³ The finished product played remarkably closely to the arcade game because Maurer discovered that the H-move technique Larry Kaplan developed to reuse sprites across multiple horizontal lines could be strobed to repeat sprites within the same line as well since the system did not have any screen memory and would not realize that sprite had already been used. This technique had limited utility because it could only be used to replicate identical objects moving vertically in unison, but it was perfect for the descending rows of aliens in Space Invaders.⁵⁴ The only downside was that the game suffered from a high amount of flicker. Despite the quality of the game, however, no one else in the group played it much, and it was not slated for production.

Maurer turned his attention to a second game called Maze Craze based on a maze game developed for the Channel F while Maurer was at Fairchild. When Kassar closed the Space Invaders licensing deal with Taito, Maurer dusted off his prototype, fixed the flickering graphics, improved the alien art and the sound effects, and created several gameplay variations. Atari released the game in March 1980 and spent $1 million on a television advertising campaign in major media markets focused on the game.⁵⁵ The company also offered the game for $30 rather than the old standard of $20, taking advantage of its brand recognition to establish a new price point necessary to combat inflation and an increased cost of materials.

Although Maurer’s Space Invaders features somewhat blocky graphics and only 36 aliens instead of 55, it captures all the basic elements of the arcade game, including the bunkers, bonus flying saucers, and slowly descending aliens that increase in speed as they are destroyed. This made it not only a fun and challenging game but also an excellent practice platform for high score chasers able to save their quarters by honing their skills at home. As a result, the game not only became the hottest selling cartridge for the VCS in short order, but it also spurred new sales of the system, which the company returned to its original suggested retail price of $190 on April 1.⁵⁶ Bolstered by a multi-million dollar advertising campaign that began after Labor Day, Space Invaders sold 1.25 million units before the end of 1980, while the VCS moved over 1 million units to nearly double its install base to over 2 million. This meant roughly half of all VCS owners purchased Space Invaders.⁵⁷

For the year, Atari captured 67% of the console market and 79% of the cartridge market by dollar volume. Magnavox, despite spending $1 million on its first significant advertising campaign for the Odyssey,² could only capture roughly 10% of the market, selling 160,000 units of its console.⁵⁸ Most of the rest of the market was seized by a newcomer to the business: toy company and electronic handheld powerhouse Mattel, which adopted a different strategy from Atari that factored in the burgeoning market for computers in the home.