Replay: The History of Video Games (4 page)

A few weeks later, in September 1971,
Galaxy Game
, the first coin-operated video game, made its debut at the Tresidder Union. From the moment it was switched on the machine attracted a crowd. “We had people 10-deep, packed around the machine trying to look over each other to watch the guys play the game,” said Pitts. The generous approach to charging meant
Galaxy Game
earned nowhere near enough to justify its cost, but the game’s popularity encouraged Pitts and Tuck to persevere.

“Everybody was really excited about it, so Hugh and I decided to build version number two,” said Pitts. The pair went to town on version two, constructing proper fibreglass casing and reprogramming the computer so it could support two games at once just like Bushnell originally planned to do with
Computer Space
to cut costs.

By the time vrsion two was complete, Tuck’s family had spent $65,000 on the project – a huge sum in 1971 – but the machine still couldn’t justify its cost and soon the pair had to give up. “The truth is Hugh and I were both engineers and we didn’t pay attention to business issues at all, my driving goal was to recreate
Spacewar!
with coin receptors on it,” said Pitts. “Nolan was much more of a businessman than I was. His emphasis was to take
Spacewar!
and try to drive it down a business path, whereas I was trying to drive it down a geek path by being honest to the game.”

* * *

In November 1971, two months after the launch of
Galaxy Game
, the first
Computer Space
machine was installed at the Dutch Goose bar near the Stanford University campus. Its black and white TV screen sat encased in colourful and curvy fibreglass that could have come straight from the set of the 1968 sci-fi film
Barbarella
.
Computer Space
screamed the future and to Bushnell’s delight the drinkers at the Dutch Goose seemed to like it. “The Dutch Goose was the first location where we tested
Computer Space
and it did fantastically well. What we didn’t realise is that it had a very high percentage of college students,” said Bushnell.

With the initial test having gone well, Nutting Associates pushed ahead with the production of
Computer Space
hoping to woo arcade operators with its revolutionary technology and lack of moving parts.
[3]
Nutting Associates produced more than 1,500
Computer Space
units expecting a smash hit, but the reaction away from student bars proved less favourable. “When we put it in a few working man’s beer bars it did no money,” said Bushnell. “It didn’t do anything because it was too complex.”

People in the arcade business were equally confused by the game. “In 1971, my brother Bill came out with
Computer Space
,” recalled Dave Nutting. “Empire Distributing was handling my electro-mechanical game
Flying Ace
and was also distributor for Nutting Associates. I was at Empire meeting the principals Gil Kitt and Joe Robbins when a call came through from Bill and Nolan Bushnell asking for their response on receiving their first
Computer Space
. Gil and Joe had the speakerphone on so I could hear. Joe responded that the game play was very confusing and his people were having trouble understanding the controls. Nolan came on to say that
Computer Space
was just the beginning of a new era and the future of the coin amusement would be video games and pinball would no longer be the industry staple. Gil stood up and loudly stated: ‘There is no future in video games and if the day comes that video games take over, I will eat my hat’everal years later at a convention I ran into Gil and asked him if he remembered his comment. He blushed and laughed and said: ‘Boy was I wrong, it is a good thing I retired’.”

Computer Space
did have fans though. Owen Rubin, who would later work at Atari, was one: “It was the first video game I ever saw. I was always hooked on pinball and other coin amusements in arcades near me, so when I saw this, I was immediately hooked.” Another future Atari employee Dave Shepperd also fell in love with the game: “I remember thinking it was the coolest thing I had ever seen. I loved that space-age, shaped-metal, flaked-fibreglass cabinet too.” Inspired, Shepperd built a video game himself: “Being basically a cheapskate and not wanting to drop any more quarters into such a thing, I went home and proceeded to design and build my own video game using parts scrounged from junk bins.” For Bushnell,
Computer Space
had done well enough: “Compared to the games that came after it looks like a flop. But I had never created a million-dollar product before. It represented a reasonable royalty stream for me.” His experience at Nutting Associates also inspired him to form his own business: “I got to see Nutting operating and they gave me a huge amount of confidence to go out on my own because I knew I couldn’t screw it up more than they did.” And with that Bushnell and Dabney, who had stayed behind at Ampex, decided to form Syzygy Engineering with the goal of delivering on Bushnell’s claim that video games would replace pinball as the mainstay of the arcades.
[4]

* * *

Meanwhile, Ralph Baer’s Brown Box was about to finally make it into the shops. Efforts by his employer Sanders Associates to find a licensee for the games console had hit the buffers in early 1968 when the potential buyer TelePrompter went bust. “Nothing happened for a year and a half because we didn’t know what the hell to do with it,” said Baer. “It finally dawned on me that television manufacturers were the companies most likely to manufacture, advertise, distribute, and sell something that’s made with exactly the components and manufacturing techniques as the television sets themselves.” Sanders demoed the Brown Box to the television manufacturers who dominated the US market at the time: General Electric; Magnavox; Motorola; Philco; RCA; and Sylvania. “When we demonstrated to these companies in ’69 everyone of them went ‘that’s great’, but nobody would offer a dime except RCA and when we worked out the agreement we said we couldn’t live with that and walked away,” said Baer.

Once again it looked like the Brown Box was destined for the scrapheap. Then Bill Enders, one of the RCA executives who had been involved in the talks with Sanders, left to join Magnavox and convinced his new employer to look again. The Brown Box’s creators – Baer, Bill Harrison and Bill Rusch – headed to Magnavox’s headquarters in Fort Wayne, Indiana, to demonstrate their work once again. This time Magnavox said yes. In January 1971, Magnavox signed a preliminary deal with Sanders and began work on turning the Brown Box into a marketable product. Magnavox redesigned the casing for the machine and briefly renamed it the Skill-O-Vision before settling on the Odyssey.

The Brown Box’s collection of seven games was built up to 12 titles including the maze-chase game
Cat & Mouse
, an educational title called
States!
and the
Ping-Pong
game developed back in 1967. The rifle game that convinced Sanders to keep the project alive became the sold-separately
Shooting Gallery
add-on for the Odyssey. Magnavox then decided to add paper money, playing cards and poker chips to enhance the games and plastic overlays that attached to the TV screen to make up for the Odyssey’s primitive visuals. And with so much packed in with the game console, the $19.95 price tag Baer originally hoped for became $99.95. Baer was appalled: “I saw the box and out comes 10,000 playing cards, paper money and all this crap. I just knew nobody’s ever going to use this stuff.”

With the enhancements in place Magnavox set a launch date of August 1972 for the world’s first games console, which the company decided would only be available through Magnavox dealerships. In the build up to the launch, Magnavox demonstrated the Odyssey to Magnavox dealerships and the media. On the 24th May 1972 it put the Odyssey on display at the Airport Marina in Burlingame, California, near San Francisco. One of the people who decided to take a look was Nolan Bushnell.

At the time Syzygy, the company Bushnell founded with Dabney, had struck a deal to create video games for the Chicago-based pinball giant Bally Midway. Bushnell wanted Syzygy to make a driving video game for Bally Midway, convinced this would win over the punters alienated by
Computer Space
. Seeing the Odyssey and its
Ping-Pong
game in Burlingame did little to change his mind and so the following month Syzygy, which had been getting by repairing broken arcade machines and running
Computer Space
machines in arcades near its rented offices in Santa Clara, started preparing to create Bushnell’s driving game. Dabney and Bushnell agreed to invest $250 each in the company to incorporate it only to find that another company already had the Syzygy name. Bushnell turned to his favourite game – the Japanese board game Go – for inspiration and suggested the company’s new name should be Atari, a term from Go similar to check in Chess. Dabney agreed and on 27th June 1972 Atari Incorporated was born.

That same day Atari hired Al Alcorn, a young engineer who had worked for Dabney and Bushnell at Ampex as a trainee. Bushnell wanted to give Alcorn a very simple game to get him used to the basics of video game technology and thought of
Ping-Pong
, the Odyssey game he had played the month before. He described the game to Alcorn and told him it was a part of a deal he had done with General Electric. “I thought it would be a good way of getting him through the whole process because the circuits I’d designed were pretty complex,” said Bushnell. There was no deal, however, and Bushnell had no intention of doing anything with the game. He thought the bat-and-ball action was too simplistic to be popular and saw it as no more than on-the-job training for the young employee. Alcorn, however, threw himself into the project. He improved on Bushnell’s brief by making the ball bounce off the player’s bats at different angles depending on which part of the bat it hit. He also added scores and crude sound effects. The result had just one instruction: “Avoid missing ball for high score”. These minor improvements did not drastically change the game, but were enough to make Bushnell and Dabney change their plans. “My mind changed the minute it got really fun, when we found ourselves playing it for an hour or two after work every night,” said Bushnell, who named Alcorn’s game
Pong
.

That September Atari decided to test
Pong
on the customers of Andy Capp’s Tavern in Sunnyvale, California. At the same time Bushnell headed to Chicago to show Bally Midway the game, hoping it would fulfil Atari’s contract with the pinball manufacturer. Bally Midway, however, was unimpressed. “They didn’t want it,” said Bushnell. “First of all, it was only two-player and no coin-op game at the time was only a two-player game, some had two-players but there had to be a one-player option. That was the big veto in their minds.”

Back in California, Alcorn also got some bad news from the owner of Andy Capp’s –
Pong
had stopped working. Alcorn drove over to the bar to investigate. On arrival he opened the coin box so he could give himself free games while trying to diagnose the problem and out gushed a flood of coins; spilling, spinning and sliding all over the barroom floor. The sheer amount of coins put into the
Pong
machine had caused it to seize up. The customers at Andy Capp’s had gone crazy for
Pong
, people had even begun queuing outside the bar waiting for it to open just so they could play the game.

At the time when the average coin-op machine would make $50 a week,
Pong
was raking in more than $200 a week. Atari now knew it had a hit on its hands; the only problem was how to get it into the arcades. Hoping the game’s takings would persuade Bally Midway to change their mind, Bushnell went back to the pinball firm. Worried the company wouldn’t believe the real figure, Bushnell told them it was making a third of what it actually was. Bally Midway once again rejected the game. Atari then offered
Pong
to Nutting Associates in exchange for a 10 per cent royalty, only to be rejected again on the grounds that the royalty demand was too high.

With options drying up, Atari decided to make the game itself. It was a big leap for the young firm: it had next-to-no money, no production line and no links with arcade machine distributors. Bushnell was nervous about the move but figured the game’s simple design meant it would be easy to build. Atari gambled everything on its first run of
Pong
machines. “Our first run was 11 units, which was 100 per cent of the money that we had,” said Bushnell. Each machine cost $280 to make but sold for $900.

“We sold the 11 units immediately for cash, so all of a sudden we had our cash back. The next release was 50 units and we completely ran out of space,” said Bushnell. Luckily for Atari, the company in the business unit adjacent to their offices went bust just as space got tight. “We went from 2,000 square feet to 4,000 square feet and knocked a hole in the wall to link the two,” said Bushnell.