Replay: The History of Video Games (18 page)

The stunning visuals of games such as
Xevious
ensured a swift end to the vector game. Atari’s grandiose
Major Havoc
marked the last gasp for the graphical approach. Designed by Owen Rubin with help from Mark Cerny,
Major Havoc
sprawled across game genres. It opened with a 3D space fight against ‘robot fish’ then became a
Lunar Lander
-type game before changing into a platform-maze game hybrid where the player had to guide the character
Major Havoc
through low-gravity mazes filled with traps to set a nuclear reactor to blow up and then escape before it exploded. There was even a version of
Breakout
hidden within the game. “It was rather ambitious,” said Rubin. “A normal game took six to eight months, this one took almost 18 months. The game kept evolving and was put on test several times and tested well, but was incomplete. Why did Atari let me just keep working on it? I have no idea. In hindsight, I am glad they did. I only wish we had done the game in non-vector graphics though because it would have sold so many more. Vector games had a bad reputation by then because they broke all the time.”

By the time
Major Havoc
finally made it to the arcades in November 1983, the arcade and console game industry was in ruins. Few had seen the crash coming. Bill Grubb, the president of Imagic, started 1983 boasting to the press about his plans to spend $10 million advertising the company’s games that year. By the end of the year Imagic was mortally wounded. “We thought the boom would go on forever,” said Fulop. “Like any hot thing, the people who are there assume it’s going to go on forever. And especially when you’re young, you can’t imagine anything would change. It was a total shock. I still haven’t got over it.”

Imagic tried to srvive making home computer games but the damage was too deep and the company eventually closed down. Quaker Oats killed off its U.S. Games division in April 1983. Gottlieb watched its sequel to
Q*bert
,
Q*bert Qubes
, sink. Nintendo’s
Donkey Kong 3
was met with apathy. Unable to pay its debts, Cinematronics filed for Chapter 11 bankruptcy protection to try and stave off its demise.

Soon some of the industry’s leading developers started looking elsewhere for employment. Eugene Jarvis, the designer of the incredibly successful
Defender
, had scored one of the last big hit coin-ops with 1983’s
Robotron: 2084
– a claustrophobic shoot ’em up where players battled swarms of robotic attackers. “Just as
Defender
was about freedom and speed,
Robotron
was about confinement with slower, more precise motion,” said Jarvis. “It is amazing how often in
Robotron
you think you’re dead and then realise somehow you escaped an incredibly tight spot. The adrenalin is intense.” George Orwell’s dystopian novel
1984
inspired the game’s story of defending the last human family from killer robots. “It was working off the Orwellian theme. It was clear in ’82 that nothing was going to happen in 1984 so it had to be 2084 and instead of humans pulling the strings it would be robots,” said Jarvis. “The theme was based upon an extrapolation of Moore’s law, the inexorable doubling of computer power every 18 months. Sooner or later they will be smarter than us because instead of trying to double our intelligence we are trying to halve it with meth and medical marijuana.”

But after his next game, the gaudy
Blaster
, flopped Jarvis decided it was time to abandon the sinking ship. “
Blaster
was an early attempt at a 3D space flight genre,” he said. “It was pretty fun, but was released after the event horizon was crossed by the industry into the black hole of the mid-’80s. It really seemed that the industry was done. Every possible game had been invented and all creativity was exhausted. Just like the Hula-Hoop, Pet Rock and disco crazes of earlier eras, it was over. I thought I would recycle myself with an MBA and get a regular job.”

For those who stayed behind, hopes that the situation would improve faded fast. “People weren’t aware of the speed or magnitude of the crash. Once a company gets big, there’s a feeling that ‘we can do no wrong’. I certainly was taken by surprise at the velocity of events,” said Atari’s Crawford. “We kept scaling back and thinking ‘this time we’ve gotten on top of the problem’ and things just kept getting worse.”

The only glimmer of hope amid the darkness came in the summer of 1983 in the form of a knight in shining armour. His name was Dirk the Daring and he was the animated star of
Dragon’s Lair
, an arcade game released by Cinematronics that used a new data storage formcalled laserdisc. Just like CDs or DVDs, Laserdiscs were a type of optical disc that had a diameter of 30 centimetres and were designed for playing movies.
Dragon’s Lair
looked like an interactive cartoon and was created with the help of Don Bluth, a former Disney animator who had formed his own studio, Sullivan Bluth Studios, which had recently made the animated feature film
The Secret of NIMH
.
Dragon’s Lair
was the idea of Rick Dyer, owner of Rick Dyer Industries, who was looking for ways to use laserdisc’s ability to store pre-recorded video in a game.

“Dyer felt that using the laserdisc player would allow the creation of an interactive ‘movie game’ and that our animation would be the perfect format for the game,” said Bluth. “In October 1982, Rick brought Cinematronics’ co-owner Jim Pierce to our facility in Studio City, California, to discuss the possibilities. When they left, we kind of stared at each other and wondered what they were talking about. We were filmmakers and knew very little about video games, let alone video game production. But, once Rick explained what he was trying to achieve, we felt that we could figure it out.”

The answer was to create a cartoon and chop it into pieces. Players would choose how to react at the appropriate moment, triggering the next slice of animation. But since the story was fixed, the game really consisted of players working out which action they had to do to see the next section of the game. “Laser games didn’t really provide true interactivity,” said Bluth. “It was more of a ‘memory’ game, learning when and which way to move the joystick or when to hit the action button.”

Despite only having a veneer of interactivity,
Dr
agon’s Lair
’s cartoon visuals made it hugely successful.
[8]
Cinematronics sold 10,000
Dragon’s Lair
machines in a little over three months. For a moment it looked like laserdisc could save the video game business. Other laserdisc games followed, such as Stern Electronics’
Goal to Go
, an American football game that used footage from real-life matches, and Sega’s
Astron Belt
, which cannibalised special effects-laden scenes from the movie
Star Trek II: The Wrath of Khan
. Dyer started work on the Halcyon, a computer, console and laserdisc player hybrid designed to bring laserdisc games into the home. “Laser games were very popular,” said Bob Lawton, owner of the Funspot arcade in Weirs Beach, New Hampshire. “We had one set up by our front entrance and even had a television on top of it so other people could see what was being played. Huge crowds would gather whenever a good player got on the machine and they would cheer when he did well.”

But the laserdisc fad died almost as quickly as it arrived. “After a while, the problems of a home laserdisc player started to surface and the constant breakdowns of the laserdisc player spelled the end of laser games for us,” said Lawton. “The players being used were never intended for commercial use or constantly searching for scenes to play. This constancene searching eventually wore out the disc player.”

The lack of interactivity also meant players soon lost interest. It was the final straw for Cinematronics, who went bust when the interest in laserdisc games evaporated. Dyer’s company Rick Dyer Industries closed down shortly after the release of the $2,500 Halcyon in January 1985.

The crash devastated the home console market: it peaked in 1983 with US sales of $3,200 million before withering away to a $100 million-a-year industry in 1986. As the money disappeared, many of the companies that had built the video game business during the 1970s and early 1980s disappeared. Magnavox, the company that released the first game console, cancelled the release of its Odyssey 3 system and left the business. Mattel, the birthplace of handheld gaming, gave up on the Intellivision after losing tens of millions in 1983. Adventure International, the company that brought text adventures to home computers, vanished after risking everything betting on Texas Instruments’ bid to conquer the personal computer market. “To me the crash came when the TI-99/4a was discontinued,” said founder Scott Adams. “That was the real big dip that did us in. We didn’t have the deep pockets to ride out that period.” Coleco gave up on the Colecovision after getting burned in the home computer market and decided to concentrate on its Cabbage Patch Kids line of dolls. Arcade giant Bally Midway’s video game revenues plunged by 60 per cent and it responded by shutting down Dave Nutting Associates, the company that pioneered the use of microprocessors in video games.

Atari was transformed from one of the biggest business success stories ever seen into one of the biggest disasters in corporate history – losing so much money so fast that it threatened to bring down the whole of Warner Communications. Warner desperately tried to save its ailing cash cow. It cancelled the long-held plan to move Atari into a purpose-built campus in Silicon Valley. It moved the manufacturing arm to Hong Kong and fired thousands of employees. It fired Atari president Ray Kassar, slashed marketing budgets and cancelled research and development projects. And when all of this failed to stem the losses, Warner broke Atari in two. The profit-making coin-op division became Atari Games. The computer and console divisions became Atari Corporation and were sold off in July 1984 for $240 million to Tramiel, who had resigned from Commodore that January after clashes with the company’s principal shareholder Irving Gould. “Tramiel bought it and he basically abandoned the games business. It’s one of the great mistakes in history because there was still a business and his walking out left it wide open for Nintendo,” said Gerard. The company that had built and dominated the video game industry would never fully recover.

If any single game summed up both the excesses of the boom years and the pain of the fall, it was
E.T. The Extra-Terrestrial
– Atari’s big VCS 2600 game for Christmas 1982. Steven Spielberg’s 1982 summer blockbuster, a tale of a friendly alien stranded on Earth, had become one of the biggest grossing films of all time. In a bid to ingratiate himself with the hottest director in Hollywood, Warner chairman Steve Ross struck a $25 million deal with Spielberg for the rights to make a game based on the movie and then informed Atari of what he had done. Kassar was shocked: “Ross forced me to make
E.T.
. He called me and said I’ve guaranteed Spielberg $25 million to work on this project. I said: ‘Steve, we’ve never guaranteed anybody any money. Would you want to guarantee $25 million?”

Kassar argued that the film’s lack of action didn’t lend itself to a video game, but Ross had already made his mind up. Atari was told to get the game out before Christmas, leaving the company with barely any time to make the game. “We didn’t have enough lead time,” said Kassar. “This was in August, he wanted it for Christmas. Normally we had a six-month lead time.”

Kassar persuaded VCS game programmer Howard Scott Warshaw to knock the game together in six weeks in return for a hefty bonus. The result was terrible but on time. “Maybe better engineers working 100 hours a day, nine days a week could have hit the window and done it better,” said Gerard. “The real answer, probably, was don’t put the product out until it’s good.”

As per the deal with Spielberg, Atari flooded the shops with five million
E.T.
cartridges that Christmas. “Most of them came back from the retailers,” said Kassar. It was a financial disaster and Kassar took the flak. “I was fired,” he said. “They tried to blame me for the
E.T.
fiasco. Somebody had to be the fall guy and it wasn’t going to be Steve, he was chairman of Warner. Somebody had to be the fall guy and it was me.”

In September 1983 the returned
E.T.
cartridges, along with mountains of unsold and defective Atari game cartridges, consoles, computers and accessories, were loaded on to more than 20 semi-trailer trucks at Atari’s plant in El Paso, Texas.
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From there the trucks headed to Alamogordo in New Mexico where the detritus of Atari’s glory days was dumped into a landfill. “What else are you going to do with them? You had to get rid of them. You reach a point where you couldn’t even sell them into the second-hand market. There were way too many of them,” said Gerard. On 29th September 1983, concrete was poured over the crushed remains of Atari’s golden age that filled the landfill site. The video game was dead and quite literally buried.