Authors: Steven Kent
The Ultimate History of Video Games: From Pong to Pokémon and Beyond—The Story Behind the Craze That Touched Our Lives and Changed the World (14 page)
In 1976, Atari sent Nakamura
Breakout.
As soon as Nakamura saw the game, he recognized it as a sure hit. To his disappointment, however, Atari set special conditions for
Breakout
, allowing Namco to distribute the game but retaining exclusive manufacturing rights. In response, Nakamura asked for as many units as possible.
This game
Breakout
was a wonderful game and I gave a very high evaluation to the game. Namco, through Atari Japan, had the sales rights on the property in Japan, and we were doing quite well. All of a sudden we encountered a great number of copies in the Japanese market.The game was called
Borokukuishi.
It’s literally the Japanese translation of
Breakout.
And we saw more copies [units of
Borokukuishi
] than the original games that we were trying to distribute. It was to the detriment of our business.—Masaya Nakamura
The Yakuza, most easily described as the Japanese Mafia, operates very differently than other criminal organizations. Unlike other gangsters, members of the Yakuza do not try to hide their identity. They often cover much of their bodies with tattoos. For years they were the only people in Japan who wore dark glasses. Many of them had missing fingers—cutting off fingers was a form of punishment within the organization.
In Japan’s structured society, the Yakuza and the police coexist by setting limits on various illegal activities. Although the Yakuza frequently went beyond these limits, many of their activities involved nothing more spectacular than running the Japanese fish market and setting up concession stands at sporting events.
When it came to video games, a few Yakuza clans took a very aggressive stance. One clan tried to take over Konami, the company that made
Frogger
and
Contra.
When the owner of the company appealed to a friend in a rival clan for help, he touched off a war and had to go into hiding.
When Nakamura investigated the counterfeit
Breakout
machines, he discovered that a Yakuza clan had manufactured them. It was a dangerous situation.
We knew exactly where the copies were being manufactured, and I instructed my staff to go to these factories for surveillance.
They would watch from their car, then they would notice a car approaching them from behind and another car coming from the front, making their car immobile. They [the gangsters] would come out of their cars and make threats.
—Masaya Nakamura
Nakamura met with the leader of the group that was manufacturing the counterfeit
Breakout
machines and asked him to stop. The man responded by offering to forge a partnership with Namco. According to Nakamura, the man offered to “suppress” Namco’s competitors and make Namco the biggest company in the industry. Nakamura declined, fearing that the offer would lead to a takeover of his company and possibly the entire industry.
Rather than try to stand up to the Yakuza, Nakamura decided to work around them. He asked Atari to send more
Breakout
machines as quickly as possible, but shipments of
Breakout
continued at the same slow pace.
Nakamura and Bushnell disagree about what happened next. Nakamura says he flew to London to meet with Bushnell at an MOA (Music Operators Association, later renamed the Amusement and Music Operators Association) convention. He claims he explained the situation to Bushnell and asked for help but that Bushnell was in no condition to listen.
My recollection is that Hide Nakajima and I traveled to London to attend a show, and Nolan Bushnell was there. Hide and I went to see him one morning to lodge a very strong claim against the copies in Japan and to ask for his assistance as the manufacturer who created the game, to counter the copies in Japan and do something about it.
Unfortunately, when we met him, it was the morning after apparently a very long night of partying on the part of Nolan Bushnell and he very obviously had a
hangover. He was in no physical condition to concentrate on our very serious claim. He took it very lightly.For that reason and for the sake of self-defense in terms of business, we decided to start manufacturing the game ourselves.
—Masaya Nakamura
Since Bushnell and his associates had a reputation for partying, and liquor bars were prevalent at most MOA parties, Nakamura may have been naïve in his decision to discuss such an important topic at the show.
Unsatisfied after his meeting with Bushnell, Nakamura returned home and began manufacturing his own copies of
Breakout.
Before long, he flooded the Japanese market. The game was a huge success and Namco became one of the most dominant game manufacturers in Asia.
According to Bushnell, Atari knew nothing about Nakamura manufacturing the game. He assumed that Namco did not want more copies of
Breakout
because the game had not caught on. “It was doing so well in the rest of the world, we couldn’t understand why they didn’t like it in Japan.”
The first time he heard about the counterfeits was when an Atari representative visited Japan and reported seeing far more machines than the company had shipped. Most of the machines had been built by Namco.
The first sign that something was going wrong was
Breakout.
We shipped 15
Breakouts
to Japan. All of a sudden, it turns out there were more
Breakouts
in Japan than there were in the rest of the world combined.—Al Alcorn
Breakout
became the first issue in a growing rift that formed between Atari and Namco. The argument ended in a lawsuit that Atari won in the late 1970s.
*
Years later, Steve Jobs claimed that he had developed the concept for
Breakout.
When asked about it, Nolan Bushnell simply responded, “Perhaps he did.”
“Could You Repeat ThatTwo More Times?”
Nolan sent this memo: “To: Engineering, From: Nolan, Subject: Products. You will have in one year a consumer
Pong
game, an eight-player
Tank
game, and a 12-person game for arcade midways.”The fact that we had no manufacturing capacity was not an issue to be brought up.
So I sent a memo back: “To: Nolan, From: Engineering, Subject: Your memo. One small issue, we have no money.”
And Nolan wrote on my memo, “NO,” in big letters, and sent it back to me.
—Al Alcorn
Gene Lipkin called me and said, “I need an advertising agency.”
I said, “No, you don’t. George Opperman [who worked for Atari] is doing very well.”
He said, “No, not for the trade magazines. I need advertising for the general public.”
I said, “For heaven’s sakes, why?”
He said, “Because Nolan has come up with a device that you can plug into your home TV set that will play video games.”
I said, “You’re kidding.”
He said, “No.” They made a deal with Sears Roebuck, and home video was born.
—Eddie Adlum
In 1975, Atari released a consumer version of
Pong
and became the first company to make both arcade and consumer products.
Throughout Atari’s early years, Nolan Bushnell constantly pushed his engineers to come up with a product that could expand his business. In 1974 an engineer named Harold Lee proposed a device that could do just that—a home version of
Pong
that could be attached to a television. Nolan Bushnell immediately recognized Lee’s home unit as a logical next move for Atari.
Lee’s timing could not have been better. The Magnavox Odyssey was now more than three years old and nearing the end of its retail life. Magnavox executives had committed two grave errors in marketing Odyssey: They allowed only Magnavox-exclusive dealers to sell the system, and their advertising suggested that Odyssey worked only on Magnavox televisions. Approximately 85,000 Odysseys were sold in the first year, and only 100,000 Odyssey systems were sold over the product’s two-year life.
Alcorn and Lee, who worked together on
Home Pong
, decided to use the same basic digital technology used in Atari’s coin-operated games. (Odyssey used much older analog architecture.)
I hunkered down and worked with a guy named Harold Lee on the chip prototype. He designed the logic in the daytime, and he would give me a logic design that my wife would wire-wrap at home in the evenings and I would debug. I would give the corrected design to Harold and he would lay out the chip on the design computer at night to save money.
—Al Alcorn
Once the design was approved, Alcorn, Lee, and an engineer named Bob Brown constructed a working prototype. Originally code-named Darlene, after an attractive employee, the finished product was called
Home Pong.
With the price of digital circuits constantly dropping, Atari’s digital home console ended up costing far less to manufacture than Odyssey.
Home Pong
had a sleeker cabinet and created sharper-looking images on television screens. Since it had Alcorn’s segmented paddle design, it only required one knob per player. Odyssey used an extra knob for adding spin to the ball.
On the other hand,
Home Pong
played only one game—ping-pong. Despite its weaknesses, Odyssey could play twelve games.
The finished prototype was attached to a wooden pedestal that contained hundreds of wires. Alcorn and Lee had designed a chip that could replace the wires, but until the first prototype of the chip could be tested, the console could be built only with wire connections. Bushnell placed an order for chips, without even stopping to decide how to market
Home Pong.
In the fall of 1974, the first prototype of the
Home Pong
chip was delivered from the foundry. Alcorn and Lee carefully plugged it in and turned on the console. When they switched on the power, the game came to life. At that time, the chip in
Home Pong
was the highest performance-integrated circuit ever used in a consumer product. Alcorn ran to get Bushnell, and the design team celebrated.
The next day Bushnell and Gene Lipkin began approaching retailers about
Home Pong.
In later interviews Bushnell described being turned down by several toy stores. He says he got the same response from electronics stores. Electronics buyers, remembering that Magnavox had sold only 100,000 Odysseys, asserted that consumers weren’t interested in television games. Toy-store buyers said that the asking price, $100, was too expensive. One buyer told Bushnell that his stores carried nothing that cost more than $29 unless it was a bicycle.
Lipkin didn’t give up. He decided to approach department stores with
Home Pong.
Since Sears Roebuck was the biggest chain at the time, he started there. The buyers from the toy and electronics departments turned him down. As a last attempt, someone looked through the Sears catalog and noticed that the sporting goods department advertised Odyssey. Lipkin asked the operator to connect him to sporting goods.
The guy [Tom Quinn] had done really well the year before on ping-pong tables. In the winter, Sporting Goods would sell some hockey equipment and a few basketballs and that was about it. To make his Christmas numbers, the Sears buyer was focusing on ping-pong tables and pool tables, and he thought consumer
Pong
might be just the thing for the family rec room.—Nolan Bushnell
We talked to Tom Quinn and said, “Remember the Magnavox Odyssey? We got a better version. Would you be interested?”
He said, “Sounds interesting. Next time I’m in California I’ll stop in and see you.”
Three days later he was on our doorstep at 8:00
A.M.
Now, none of us were there at eight o’clock, but he was. He was very excited about the prospect of this thing and proceeded to try to get an exclusive.We said, “No, we’re too smart for that. We don’t want an exclusive with Sears. It could be very dangerous.”
—Al Alcorn
Seeing Quinn’s enthusiasm, Atari’s executive team decided against signing an exclusive contract. Still convinced that the toy industry offered the best channel for selling
Home Pong
, Atari ran a booth at the January 1975 Toy Show in New York City.
