RSS

Tag Archives: atari

A Tale of the Mirror World, Part 7: Winners and Losers

Hillary Clinton plays with her Game Boy on Air Force One in 1993. While history hasn’t recorded with certainty what game she was playing, I’d bet dollars to doughnuts it was Tetris.

Atari had high hopes for the superlative implementation of Tetris they released for the Nintendo Entertainment System on May 17, 1989, and its initial performance fulfilled all of them, more than justifying their ambitious opening production run of 300,000 cartridges. Indeed, in the first month alone, fueled by positive press and even more positive word of mouth, the Tengen Tetris burned through half of that stock, with sales increasing week over week. Atari clearly had the beginnings of a massive hit on their hands — but not if Nintendo could prevent it.

Nintendo requested that Judge Fern Smith, whose San Francisco courtroom would be the home of most of the legal proceedings in the war between them and Atari, issue a preliminary injunction barring Atari from continuing to sell Tetris until the questions surrounding the rights to it had been fully resolved. Judge Smith agreed to allow the two sides to argue their cases for or against such an injunction beginning on June 15. In the scant few weeks allowed to them, the two companies’ legal teams scrambled to collect documents and depositions in the United States, Britain, and the Soviet Union. Nikoli Belikov, Alexey Pajitnov, and the other Russians associated with ELORG thus got to enjoy the novel experience of being interviewed by opposing teams of American lawyers.

The current proceedings were not a full trial on the issue of the rights to the NES Tetris; that wasn’t expected to begin for months, and could then take more months to bring to a final verdict. This preliminary hearing dealt only with the question of whether Atari should be allowed to continue to sell their Tetris over the course of all those months. If Judge Smith thought it likely that Atari would prevail at the full trial, she could give them permission to do so. If she thought the opposite, she could order the Tengen Tetris pulled from the market for the interim.

When in-court arguments began, Atari pressed two separate lines of defense against Nintendo’s charge that the Tetris rights they claimed to own were ill-gotten. They hoped at least one of them would stick.

One line of defense accepted for the sake of argument the definition of “computer systems” as “PC computers which consist of a processor, monitor, disk drive(s), keyboard, and operation system” which was found in the revised contract Robert Stein had signed with ELORG the previous February. The NES did in fact — or at any rate potentially could — meet this definition, Atari argued. For proof, they looked to the console’s Japanese incarnation. There it was known, conveniently for Atari’s purposes, as the Nintendo Famicom, short for “Family Computer.” As that name would imply, Nintendo’s long-term goal had always been to turn the platform into more than just a game console. As far back as 1984, they had started selling an add-on kit called Family BASIC, an implementation of the BASIC programming language which came complete with a keyboard for typing in code. Should Judge Smith need more evidence, Atari pointed out that just the previous year Nintendo of Japan had introduced the Family Computer Communications Network System, a modem allowing Nintendo owners to take their machines online — albeit, in keeping with Nintendo’s walled-garden philosophy, only to access Nintendo’s own network. Once online, a Famicom could be used to play games with others, but could also be used to access a whole range of other information and services, from an encyclopedia to stock reports, from a travel agency to mail-order retail kiosks.

Sure, these things had only happened in Japan to date, but the North American NES was at bottom the same machine as the Japanese Famicom. All signs pointed to the NES as well being given capabilities that moved it from the category of game console to that of full-fledged home computer. For evidence of that, one needed look no further than Nintendo’s most recent annual report, where plans for a North American version of a Nintendo-branded online service featured prominently: “By employing the Nintendo Entertainment System as a domestic communications terminal, utilizing regular telephone lines, and the establishing of a large-scale network which to this point has been inconceivable, we plan to provide a vital supply of information for the domestic lifestyle in the fields of entertainment, finance, securities, and health management, to mention but a few.” “In court,” said an Atari spokesman, “Nintendo went to great lengths to say that the NES was a toy and its cartridges were the equivalent of Barbie’s arms and legs, but at the same time they were signing up AT&T to use the machine for stock reports. There is a Nintendo computer network in Japan and one planned for the United States. Sounds like a computer to me.”

If Judge Smith was in doubt how seriously Nintendo’s more grandiose schemes should be taken, she needed only ask the Software Publishers Association. The American software industry lived in terror of this potential Nintendo network, as it did of all of Nintendo’s much-rumored plans to use their game console as a Trojan Horse for bringing the walled-garden model of a software marketplace to applications other than games. If and when brought to fruition, such plans might force the entire industry to kowtow to the whims of this one foreign company. Thus the SPA’s support of Atari’s efforts to break into Nintendo’s extant walled garden of videogames by force, before it was too late.

In response to Atari’s claim that the NES effectively was a computer system, Nintendo noted that the contract which they claimed gave them rather than Atari the rights to make Tetris for the NES had been signed between ELORG and Nintendo of America, not Nintendo of Japan; the version of Tetris available for the Famicom in Japan was made by Henk Rogers’s Bullet-Proof Software, and its legitimacy wasn’t an issue to be decided in Judge Smith’s courtroom. Whatever its technical similarities to the Famicom, the North American NES was a separate product, and none of the Japanese accessories which could be construed as turning the Famicom into a “real” computer were available for the NES. If such accessories should become available in the future, the argument might be revisited, but right now the court should deal only in actualities, not hypotheticals.

For their other line of defense, Atari fielded the assertion that the revisions made to the original contract with Robert Stein had been made in bad faith, and that Stein had in fact been tricked into signing the contract. The Russians had originally intended, Atari argued, to license all of the rights to Stein and be done with it before they realized what a big seller the game had the potential to become. When they saw the opportunity to make more money through a deal with Nintendo, they had tried to pull a fast one to duck out of the first agreement. Stein himself testified to all of this in his deposition. Atari’s Dan Van Elderen, who had recently replaced Randy Broweleit at the head of the Tengen subsidiary, claimed the Russians “knew they had sold all those rights until they figured out, counseled by Henk Rogers and Nintendo, that there was a loophole. They realized they could have gotten a lot more money, so they double-dealt us all.” “Something went on between the Russian author and Nintendo,” said Atari’s president Hideyuki Nakajima in a deposition that might have come across better had he shown Alexey Pajitnov the respect of learning his name. “Nintendo knew we had the license, and it urged us to go forward with the game. Nintendo only cared once we filed the antitrust suit against them. They went after us. Howard Lincoln and Arakawa wanted to stop us. It was revenge.”

Nintendo yielded no ground to this argument either. They trotted out depositions from Alexey Pajitnov, Alexander Alexinko, Nikoli Belikov, and others at ELORG, all testifying that they had always understood the contract with Stein as covering only full-fledged personal computers, and had created the revised version merely to clarify what had always been the case. Furthermore, Stein had been given ample time to review this clarified version of the contract, and had signed it of his own free will.

As anyone who has followed the long and winding story of the Tetris negotiations to this point must acknowledge, neither side was presenting anything close to the unvarnished truth. Nevertheless, Judge Smith, who wasn’t privy to the inside details of the case in the way that we are today, had a hard time getting past the presence of a signed contract clearly stating that the rights Stein had licensed applied only to personal computers — which she judged that the NES, whatever it might become in the future, wasn’t as of June of 1989. On June 21, she handed the devastating news to Atari: they must immediately cease manufacturing and selling the Tengen Tetris, unless and until their right to do so was affirmed by the trial which was to follow later in the year. In the meantime, all unsold copies were to be recalled from the retail pipeline and locked away in a warehouse under the supervision of the court.

In a telling sign of which way the winds were blowing, Judge Smith issued no injunction against Nintendo releasing their own NES version of Tetris while both sides prepared for the full trial. But, perhaps wary of attracting her ire when she seemed to be favoring their side, Nintendo opted to hold their version in abeyance as well. Whose Tetris would make it permanently onto store shelves would be decided by a trial which was scheduled to begin in November. Until then, Tetris on the NES would remain in a tense state of stasis.

As the trial date drew near, Nintendo flew Nikoli Belikov to California to become their most important witness. The excitement of a free trip to the Soviet Union’s vision of a Mirror World was rather dampened by the rest of his circumstances. The pressure from Robert Maxwell’s allies inside the Kremlin hadn’t eased. Belikov faced the prospect of losing his career or possibly even his freedom if things went badly in that San Francisco courtroom. “Before my departure, I was invited into the State Committee for Computer Technology,” he remembers, “and they said, if you lose this lawsuit a special commission will be created who will look into how many millions of dollars the Soviet state has lost due to your reckless actions.” Belikov had known his fair share of bureaucratic scuffles during his day, but he had never felt so exposed as he did now. He joked darkly with his new Nintendo friends that if things went south he might just have to defect.

He needn’t have worried; Nintendo’s confidence that Judge Smith was leaning in their direction proved well-founded. The first day of the trial — November 13, 1989 — was a dream for Nintendo and a nightmare for Atari. Judge Smith came into the courtroom that morning only briefly, to announce that, having reviewed the evidence that had already been submitted, she saw no need to hear from witnesses or otherwise go through the motions of a full trial. She announced a summary judgment declaring Nintendo to be entirely in the right, Atari entirely in the wrong. The former was free to release their NES version of Tetris at their convenience, while the latter was to destroy their warehoused copies of the game forthwith. After months of preparation and buildup, the “trial” was over well before lunchtime. Atari announced that they would appeal the summary judgment, as you do in such circumstances, but soon decided that doing so would just mean more lawyers’ fees down the drain.

So, the judgment was allowed to stand, and the remaining copies of the Tengen Tetris were destroyed. Thanks to their relative scarcity as well as their sheer quality as the best implementation of Tetris ever to grace the NES, those copies which were sold during the one month the game spent on the market have become collectors’ items today, fetching prices of $100 or more.

For the Nintendo/ELORG camp, it was all over but the celebrations. “It made both Mr. Arakawa and I feel wonderful, just great” says Howard Lincoln. “There was jubilation,” says Henk Rogers. Rogers took Belikov out on the town. “I remember he turned up the stereo. We were breaking all the laws,” says Belikov. “He was speeding around San Francisco on the hilly streets. I was, honestly speaking, still in shock. Everything was happening in slow motion. The joy came a lot later. The fear started to go. I could go… I could go back!”

When Belikov did go back to Moscow, the money that came flowing the Russians’ way thanks to the deals he had made was finally enough to quiet the storm that had been battering at ELORG’s doors for so long. Robert Maxwell came to ascribe his friend Mikhail Gorbachev’s failure to deliver on his promise to oust “the Japanese company” to his need to placate certain factions within the Kremlin in order to maintain his grip on the General Secretary post: “He said other people in the government felt strongly that it should go the other way, so we stopped.” After threatening to create an international political scandal out of the issue, Maxwell allowed cooler heads to prevail in the end, washing his hands of the whole matter in that way that only the very rich are generally empowered to do. “You take your lumps along the way,” he said with a shrug. As big a deal as Tetris was in the realm of videogames, it was small potatoes in the context of his overall business empire.

And so, not without a whiff of anticlimax, the final questions about who was the rightful owner of Tetris in each of its incarnations were definitively resolved. ELORG, Bullet-Proof, and Nintendo were the winners, the new order they had sculpted in February and March of 1989 having been given the stamp of approval of an American court. Atari, Stein’s Andromeda Software, and Mirrorsoft were the losers. Somewhere in between was Spectrum Holobyte, who had managed — as much due to circumstance as conscious choice — to sit out the conflict as something of a neutral party, and was rewarded by being allowed to continue enjoying the strong sales of the North American personal-computer version of Tetris. Those sales, which would ultimately total several hundred thousand, might not have been a patch on the numbers the NES version would soon be racking up, but they suited a small computer-game publisher like Spectrum Holobyte just fine.

Nintendo’s NES Tetris was inferior to Tengen’s, but was good enough to get the job done.

As for the right and wrong of it all… well, the ethical waters surrounding Tetris had been muddy virtually from the moment Robert Stein had seen Vadim Gerasimov’s implementation of the game running on a computer in Budapest and tried to buy it from his Hungarian programmers without acknowledging where it had actually come from. Still, whomever we decide to label as the heroes and villains of this twisted tale, and in whatever ethical light we choose to see the other aspects of Atari’s war against Nintendo, it’s hard not to feel that Atari got a raw deal when it came to Tetris. They licensed the rights in good faith and created a superlative version of the game, only to be forced to pay for the sins of others. But all’s fair in love and (business) war. “It was revenge,” says Howard Lincoln of spoiling Atari’s plans and spiriting away what would go on to become the most popular videogame in history. “And you know how sweet revenge can be.” I’m not sure I do, actually — but I have a feeling that Howard Lincoln does.

Nintendo’s NES Tetris hit the market within days of the summary judgment, hoping to capitalize on whatever was left of the Christmas rush. The game would spend a year on the NES top-ten chart and sell at least 6 million copies over the course of its unusually long commercial lifetime. Yet, just as Lincoln, Arakawa, and Rogers had all suspected, and despite all the drama that had surrounded its release, this version of Tetris didn’t turn out to be the one that mattered most.

The Nintendo Game Boy had arrived in North American stores near the end of the summer of 1989, just in time to create a major headache for the teachers of all those members of Generation Nintendo who headed back to school with the gadgets in their backpacks. Game Boy would go on to become Nintendo’s second massive success story. In fact, it would become even more massive a success story than the first, selling almost 120 million units — roughly twice the total worldwide sales of the NES and Famicom lines — over the course of more than a decade in production.

For the first handful of those years, every single one of the millions upon millions of Game Boys that were sold in North America and Europe included a copy of Tetris. It was thus the Game Boy that spread Tetris absolutely everywhere, making it popular on a scale that no videogame had ever managed before nor has ever quite managed since. The irony in this is rich. While everyone’s attention had been focused on the grand legal showdown between Nintendo and Atari, the handheld Tetris, the rights to which had never been seriously disputed by anyone since Henk Rogers had picked them up on his first visit to Moscow, was the Tetris which ultimately proved to be the most important by far.

The Nintendo Game Boy Tetris, by far the most successful and historically important version of all.

In discussing such a divine synergy as that enjoyed by the Game Boy and Tetris, it’s impossible to state precisely which half of the equation got more out of the deal. Still, the preponderance of the evidence would seem to indicate that Tetris gave at least as much as it got. In the process, it did nothing less than identify a whole new potential market for videogames.

Nintendo of America’s success to date had been predicated on knowing exactly who constituted the natural market for their games, and targeting that market with pinpoint precision. Nintendo Power, the lifeline that linked the Nintendo executive suites to the youthful Generation Nintendo, looked not at all different from other magazines aimed at teens and preteens, full of exclamation points and eye-popping splashes of color plastered across every page. A closer look at the contents only cemented the impression: alongside articles about the games themselves were profiles of teen pop stars like Debbie Gibson and earnest admonitions not to let playing Nintendo supersede doing homework. While a story might occasionally surface, in Nintendo Power or for that matter in a newspaper, about a sheepish parent who had somehow picked up a Super Mario Bros. obsession, such anecdotes were amusing for the very reason that they were such an exception to the demographic rule.

But as the Game Boy’s sales only continued to increase following a launch that had been explosive beyond even Nintendo’s dearest hopes, the company’s customer surveys began to reveal a curious piece of information: many, many adults were playing with the Game Boys they had bought for their children as much or more than said children were. The adults in question were largely well-educated professionals who would never have dreamed of darkening the doors of an arcade or picking up an NES controller. Yet here they were, playing Game Boy. And, it didn’t take much further probing to reveal, the game they were almost universally playing was Tetris.

Surprised by this development but far from averse to it, Nintendo began aiming some of their marketing fusillade at adults. Game Boy advertisements were soon appearing in in-flight magazines, targeted explicitly at the business travelers leafing through their pages:

If you’re reading this ad, you’re very bored. You’ve mastered the safety instructions in every language, and the flight attendant won’t give you any more almonds. Now what? Game Boy won’t ask you for your dessert, and fits just as neatly into the mouth of that screaming child beside you as it does into your briefcase.

The cleverest of all the new advertisements neatly reversed the typical family’s videogame supply chain to suit the changing times: “This Father’s Day, treat Dad like a kid!”

Many of the Game Boys sold via such advertisements were literally never used to play any other game than Tetris. Reports had it that some players, concerned over a tendency the cartridge had to fall out of its slot as it aged, actually glued it into place — thus cementing permanently, as it were, the link between Game Boy and Tetris. This state of affairs wasn’t entirely ideal in Nintendo’s view — they sold the Game Boy cheap in the expectation of making a lot more money off the game cartridges they would later sell for it, a plan which a Game Boy that was used for nothing other than playing Tetris rather nullified — but Game Boy sales on the whole were so absurdly strong that there was little room to really complain.

Careful readers will note that I described the combination of the Game Boy and Tetris as “identifying a whole new potential market for videogames” rather than creating one in any sustained sense. For years after millions of adults went Tetris crazy, game makers — including the usually astute Nintendo — were remarkably slow to follow up this success. Many students of gaming history date the true beginning of the modern market for casual games to the release of Bejeweled in 2001. Yet if you ask these same students about the first casual game, full stop, the majority will point back to Tetris. Not coincidentally, Bejeweled and its many descendants all inhabit a subgenre broadly known as the “matching game,” which has Tetris as its forefather. When writing A Casual Revolution, his book on the phenomenon of casual games, Jesper Juul interviewed dozens of casual players. One of the constants of these interviews emerges when the players are asked about their experience of playing games before discovering modern casual-game portals like Big Fish Games. As often as not, Tetris is the first thing to spring into their minds. This indicates not simply that many of these casual gamers once played Tetris, but that they also identify it as something broadly like the games they enjoy today. Tetris gave them a glimpse of something circa 1990 that the games industry never fully managed to deliver to them again until the following decade.

Eager like all Tetris publishers to use the game’s origins in the Mirror World for marketing purposes, Nintendo did a fair amount of outreach in the Soviet Union. Here Howard Lincoln visits a Russian summer camp, where he passes out free Game Boys.

Juul published his book in 2010, when countless millions were still playing Tetris on the so-called “feature phones” of the time. For all the anecdotes from Tetris‘s heyday about playing it on work PCs in office cubicles, it was always the collision between the game and a mobile device — whether Game Boy, feature phone, or smartphone — that really brought the magic. It may have taken Tetris five years to make the journey from Alexey Pajitnov’s clunky Elektronika 60 terminal to the svelte little Game Boy, but once it arrived on mobile it was clear that this was where the game would truly thrive. A great casual game can be played obsessively or sporadically with equal success, and thus really comes into its own when combined with a portable gadget of some stripe and a player with a little — or perhaps sometimes a lot — of time to kill. Game designer Frank Lantz:

Tetris might be the ur-casual game. If you think of casual games as the PopCap-style match-3 puzzle games, Tetris is the blueprint for that, and yet it is possible to play Tetris in drunken binges. You are addicted to this activity, this repetitious thing you can’t walk away from for hours. When you finally put it down, you are groggy and have a headache. Or it is possible to play Tetris when you are standing in the line at the DMV and you think, “Okay, I am bored, I’ve got five minutes to fill and I will play some Tetris.” It is still Tetris in either sense.

Tetris, in other words, molds itself to your life rather than the other way around. Rather than gaming as lifestyle, it’s gaming as lifestyle accessory. It turns out that, contrary to almost every one of the games industry’s pre-millennial instincts, there’s even more money to be made in the latter than the former. Tetris, the urtext of the casual game, had sold an estimated 170 million physical copies and 425 million digital copies by 2016, earning nearly $1 billion in the process. By most meaningful measures, it is indeed the most popular videogame in history. A game that somehow managed to become iconic without containing any actual icons — no characters, no story, no essential style or look — it must also be, in light of the market it did so much to identify, at the very least in the conversation for the title of most important videogame of all time.

In 1993, Tetris became the first videogame to be played in space when cosmonaut Aleksandr Serebrov took his Game Boy with him into orbit. This well-publicized event was as close as the Russians ever came to achieving their hopes for a grand promotional partnership between Nintendo and the Soviet space program.

(Sources: the books Game Over: How Nintendo Conquered the World by David Sheff, The Tetris Effect: The Game That Hypnotized the World by Dan Ackerman, and A Casual Revolution: Reinventing Video Games and Their Players by Jesper Juul; the BBC television documentary From Russia with Love; Nintendo Power of July/August 1989, September/October 1989, and November/December 1989; The New York Times of June 22 1989 and December 21 1989.)

 

Tags: , , , , , ,

A Tale of the Mirror World, Part 6: Total War

Howard Lincoln and Minoru Arakawa

Henk Rogers returned to Moscow on March 15, 1989, under very different circumstances from those of his first visit of a month before. Then he had officially been a tourist, a complete unknown to ELORG with no right to do business in the Soviet Union; now he had a meeting with Nikoli Belikov and his fellow bureaucrats scheduled prior to his arrival. Then he had traveled alone; now he brought with him an American named John Huhs, a lawyer and fluent Russian speaker with no experience in videogames but heaps of experience brokering complex international deals with insular non-democratic countries like the Soviet Union. Then he had been working, ostensibly at least, as a free agent, trying to secure the handheld rights to Tetris for his own Bullet-Proof Software so he could license them on to Nintendo; now he was working as a more direct proxy for the Japanese videogame giant, hoping to broker an agreement in principle to license the North American console rights to Tetris directly from ELORG to Nintendo. If he could achieve that goal, Minoru Arakawa and Howard Lincoln of Nintendo of America, two of the three most powerful people in videogames (the third being, of course, Nintendo’s overall president Hiroshi Yamauchi), were willing to drop everything and join him in Moscow for the final signing.

When Rogers walked into his meeting with Belikov, he threw Nintendo’s eye-popping offer for the console rights down onto the table without preamble. In addition to a generous royalty, Nintendo would guarantee that ELORG would make at least $5 million from the deal when all was said and done. If, in other words, royalty payments didn’t reach $5 million within a certain time frame, Nintendo would make up the difference out of their own pocket. This was big money by almost anyone’s standards, but in the context of the Soviet Union of 1989 it was an astronomical sum. The offer was intended to turn Belikov’s head, and in this it succeeded magnificently. Previous negotiations had dwelt on relative nickels and dimes: $50,000 here, $100,000 there. Nintendo’s offer elevated the discussion to another financial plane entirely. It was so much more generous than Belikov could have imagined in his wildest dreams that he was highly motivated to get an agreement finalized before cooler heads in the West prevailed. And this, needless to say, was just what Arakawa and Lincoln had intended.

As their initial offer testifies, Arakawa and Lincoln wanted those Tetris rights very, very badly. While their actions were partially motivated by their firm belief that Tetris was one hell of a game that deserved as wide an audience as possible, this was hardly the sum total of what was driving them. Nor did even the profits they expected the game to rake in fully explain their generosity. Unbeknownst to Nikoli Belikov, Alexey Pajitnov, or anyone else in the Soviet Union, the Tetris rights were about to be tossed like the mother of all live grenades into the greatest war the American videogame industry had ever known. The combatants were nothing less than the two most legendary trademarks in videogames. It was the architect of the first great videogame craze versus the architect of the second: Atari versus Nintendo.

The roots of the conflict ran deep. Forbidden from entering the console market by the agreement which had split the old Atari into two companies in the wake of the Great Videogame Crash, Atari Games had tried to content themselves with building standup arcade machines while Nintendo breathed life back into the supposedly dead North American console market. At last, unable to resist that exploding market’s allure any longer, they had formed their Tengen subsidiary to make console games of their own in 1987.

Whatever their personal feelings toward the company, Tengen had known that Nintendo was the only game — or, rather, the only game console — in town. They had thus signed a contract to become an authorized maker of games for the Nintendo Entertainment System in January of 1988. Tengen was limited, like most such licensees, to five games per year, which were to be manufactured by Nintendo at the times and in the quantities Nintendo chose. Therein lay the first concrete bone of contention between the two companies.

When Tengen delivered their first finished games to Nintendo in June of 1988, Nintendo ordered far fewer to be manufactured than Tengen had requested. They pinned the need for the reduction partially on overoptimism on Tengen’s part and partially on a worldwide microchip shortage they claimed was forcing them to scale back all cartridge production. To say the least, their licensee wasn’t convinced. A livid Atari claimed they could have sold ten times as many game cartridges as Nintendo deigned to provide them with, and openly suspected malice aforethought in Nintendo’s whole production-allotment process. Atari decided that in order to thrive again in the console market they must break Nintendo’s stranglehold on the manufacture of cartridges.

The key to breaking through on that front, they realized, was to break the lockout system employed by the NES. Nintendo’s ability to control their captive market without running afoul of antitrust laws hinged on this patented and copyrighted combination of code and circuitry, which prevented unauthorized cartridges from working on the console. If Atari could develop a lockout-defeating technology from scratch, making no use of any of Nintendo’s schematics or documentation, their lawyers believed that they would be legally in the clear to produce their own Nintendo games in whatever quantity they desired, and without paying Nintendo the customary licensing fee.

Unfortunately, reverse-engineering the lockout system was a tall order; it was by far the most advanced piece of a game console that was otherwise years out of date in purely technical terms. At last, they decided to cheat.

The code that operated the lockout system had been registered by Nintendo with the United States Copyright Office, an act which had required Nintendo to send to the Copyright Office a copy of the code. There it was kept under lock and key, inaccessible to third parties — except under one condition: if the code should become the subject of litigation, both sides were entitled to a copy. In other words, had Nintendo accused Atari of violating their copyright on the code, Atari’s lawyers would have been able to request a copy in order to defend their client.

Nintendo had not done any such thing. Nevertheless, Atari filed an affidavit with the Copyright Office in connection with legal proceedings allegedly about to get under way, for which a copy of the code was needed. The affidavit indicated that the code was “to be used only in connection with the specified litigation.” Failing to do their due diligence in verifying Atari’s claim, the Copyright Office complied, providing a copy of the code to be used in a legal case which didn’t exist. Not coincidentally, Atari’s ongoing efforts to reverse-engineer Nintendo’s lockout system finally bore fruit shortly thereafter.

On December 12, 1988, Atari Games filed suit against Nintendo, charging them with monopolistic business practices. “Through the use of a technologically sophisticated ‘lockout system,'” the complaint claimed, “Nintendo has, for the past several years, prevented all would-be competitors, including Atari, from competing with it in the manufacture of videogame cartridges compatible with the Nintendo home-videogame machine. The sole purpose of the lockout system is to lock out competition.” The complaint went on to make note of Nintendo’s stranglehold on the supply of third-party game cartridges: “The impact of Nintendo’s conduct has been to block any competition in the manufacturing market for videogame cartridges compatible with the Nintendo machine.” Atari asked for a staggering $100 million in damages.

On the same day they filed their lawsuit, Atari announced that they would start manufacturing and selling their own Nintendo games, without involving Nintendo at all or paying them anything at all. Tengen shipped new, unauthorized versions of their three extant Nintendo games — Pac-Man, Gauntlet, and R.B.I. Baseball — using their lockout-defeat technology. And they soon announced another four unauthorized games — Super Sprint, Rolling Thunder, Vindicators, and Tetris — which were to be released in May of 1989. Even more so in its way than the lawsuit, Atari’s decision to start making unauthorized games for the NES was the shot heard round the industry.

The conflict between Nintendo and Atari was a deeply personal one. Whatever Nintendo’s real or alleged legal sins, Atari, barely half a decade removed from their glory days, resented them most of all as the usurpers of what they regarded as their rightful crown. For their part, Arakawa and Lincoln had known Hideyuki Nakajima, Atari’s president, for years, had imagined there was a bond of mutual respect that would prevent him from ever taking a step like this. When Atari had signed on as a Nintendo licensee, they believed they had shown Nakajima exceptional deference, freely divulging, as Lincoln would later put it, “the crown jewels of our business.” In their eyes, then, Nakajima’s declaration of war was a personal betrayal.

It was also nothing less than an existential threat to Nintendo’s entire business model. If Atari got away with this, other publishers would inevitably find their own ways to defeat the lockout system — who knew, maybe Atari would even sell their stolen secrets to them — and the walls around Nintendo’s carefully curated and absurdly profitable videogame garden would be demolished. That scenario must be prevented at all costs. Largely thanks to Howard Lincoln, Nintendo of America already enjoyed a reputation for ruthlessness when their interests were challenged. Now, Arakawa told Lincoln to stop at nothing to quell Atari’s uprising. Atari had opted to go to total war with, in Lincoln’s colorful diction, “a tiger who will skin you piece by piece.”

Nintendo’s legal response to Atari was swift, multi-pronged, and comprehensive. On January 5, 1989, they filed a counter-suit alleging breach of contract (for reneging on Tengen’s existing agreement to sell authorized Nintendo cartridges) and trademark infringement (for printing the Nintendo logo on Tengen’s unauthorized packaging). More audaciously, the suit alleged that Atari had violated the Racketeer Influenced and Corrupt Organizations Act, better known in law-enforcement circles as RICO and normally applied to gangland money-laundering operations, in setting up Tengen as essentially a shell corporation with the intention of defrauding Nintendo. Another suit, filed on February 2, accused Atari of patent infringement of the NES lockout system.

But the courts were hardly the only weapon which Nintendo, the company which for all intents and purposes was the American game-console industry, had at their disposal. They took to calling the major retailers, telling them that selling products “which infringe Nintendo’s patent or other intellectual-property rights” would have dire consequences for their supply of official Nintendo hardware and games. “Companies would not carry our games because there was pressure from Nintendo which could jeopardize their business,” says Nakajima. “Even the big companies like Toys ‘R’ Us couldn’t stand up to them.” Atari executive Dan Van Elederen imagines the way a conversation between a major retailer and Nintendo might have gone: “You know, we really like to support those who support Nintendo, and we’re not real happy that you’re carrying a Tengen product. By the way, why don’t we sit down and talk about product allocations for next quarter. How many Super Marios did you say you wanted?” “If a retailer carried Tengen games, their Nintendo allocations would suddenly disappear,” remembers one retail buyer who was caught in the crossfire. “Since it was illegal, there were always excuses: the truck got lost, or the ship from Japan never arrived.” Tengen was slowly but methodically squeezed out of retail.

A third theater of battle was the press, which the combatants used to lob statements back and forth, jockeying for advantage with the public and especially with the American political establishment, many of whose members had long expressed concern at their country’s longstanding trade deficit with Japan. Atari tried to frame a folksy narrative of a domestic upstart just looking for a fair shake against the calculated malfeasance of a shifty-eyed foe from the Orient: “Let’s say you buy a Ford, and the company says, ‘If you buy a Ford automobile from us, you have to buy Ford gas.’ That’s not the way business is done.” Nintendo replied by claiming — being partly if not entirely truthful about their motivations — that they had put their controls in place to keep the junk games that had done so much to precipitate the Great Videogame Crash of 1983 off the market this time around: “It was the only way we could ensure that there would be consistent, quality software.” Hoping doubtless to curry favor, some American publishers who were closely identified with Nintendo parroted this company line, among them Acclaim Entertainment: “Nintendo is trying to make this into a category, not a fad, where videogaming becomes another part of our entertainment life.”

But the majority of the American software industry stood — tacitly at least — with Atari. Indeed, Atari’s cause was increasingly becoming that of the American software industry as a whole — by which I mean many companies that had never heretofore made console games at all, that had concentrated on the less volatile home-computer market. Yet in recent months, in the face of a Nintendo market that had gone from nothing to three times the size of the total American market for computer games with incomprehensible speed, it had been hard for the computer-game publishers to resist the lure of the other side. Most of those who jumped into publishing agreements with Nintendo were frustrated by the same restrictions and policies that so infuriated Atari. The whole enterprise seemed consciously engineered to let them make some money but never too much — and certainly to keep them from ever making a truly iconic Nintendo game to rival the likes of Super Mario Bros.

The Software Publishers Association, the traditional American software industry’s biggest lobbyist and trade group, left no doubt where it stood on the question: “The SPA believes that Nintendo has, through its complete control and single-sourcing of cartridge manufacturing, engineered a shortage of Nintendo-compatible cartridges. Retailers, consumers, and independent software vendors have become frustrated by the unavailability of many titles during the [1988] holiday season, and believe that these shortages could be prevented by permitting software vendors to produce their own cartridges.” The SPA warned ominously and to some extent presciently of what the walled-garden philosophy of software marketing could come to mean if it spread further: “We don’t want any computer company to get the idea that what Nintendo is doing would be acceptable in the computer business. Software is an intellectual property that thrives in an unrestricted environment.”

That said, few companies were willing to attract the attention of the Nintendo tiger by stating their views too stridently or too publicly, much less by taking the sort of aggressive action Atari Games had opted for. There was, however, one notable exception.

On January 31, 1989, the other Atari — the home-computer company run by Jack Tramiel and his sons — filed their own suit against Nintendo, asking that the latter be forced to pay the towering sum of $250 million in damages. At issue this time was Nintendo’s policy of requiring that many licensees not port their games to other systems for two years from the date of their first appearance on the NES. This policy, Tramiel’s Atari claimed, was an abuse of Nintendo’s near-monopoly of the videogame market and thus a violation of antitrust laws. Atari Corporation’s claim to being an aggrieved party in the issue was perhaps debatable; Tramiel’s company produced mostly hardware, not software, and its main strategic focus was its ST line of computers, whose most successful games tended to be dramatically different in character from those which sold best on the NES. It was, in other words, hard to imagine that the lack of hot Nintendo-style games on the Atari ST was a primary reason behind its lackluster North American sales. But Jack Tramiel had a long history of using the courts as business competition by other means, and, gauging the political mood in the country with respect to Japanese imports, he thought he smelled blood in the water here.

So, it was now the two Ataris against Nintendo — the past of videogames against their future, one might say. Thematics aside, the two Ataris made for some very unexpected bedfellows. Each part of the old, monolithic Atari felt that they were the only part truly worthy of carrying the name’s legacy onward. To put it bluntly, the two companies “don’t like each other,” admitted Atari Games’s Dan Van Elderen. But, as they say, the enemy of my enemy…

Isolated in Moscow, Nikoli Belikov was unaware of this dramatic backdrop to Nintendo’s generous offer for the Tetris console rights. From his perspective, the only thing preventing the negotiation from moving forward immediately was the promise which he had made to Kevin Maxwell to give Mirrorsoft an opportunity to bid on the rights. Thankfully, the Russians hadn’t heard anything at all from Mirrorsoft since Maxwell had departed Moscow over two weeks ago.

On the same day that Henk Rogers first presented Nintendo’s offer, Belikov fired off a telex to London, saying that ELORG was about to sign a deal for the console rights to Tetris and that, in accordance with the arrangement he and Maxwell had arrived at, Mirrorsoft urgently needed to send their own best offer — if they wished to make an offer at all, that was. He gave them exactly 24 hours to do so, an intentionally impossible time frame. When the deadline expired, Belikov considered himself to have done his legal duty. Now nothing lay between him and a deal worth at least $5 million.

When word came to Arakawa and Lincoln from Rogers that an agreement for the console rights looked very possible, they scrambled to secure the visas and airplane tickets they needed to come personally to Moscow. This latest round of Tetris negotiations offered not just the opportunity to secure an all-but-guaranteed massive hit for Nintendo, but also that of taking away an all-but-guaranteed massive hit from Atari. Neither Arakawa nor Lincoln was an especially forgiving man, and they relished this opportunity with their every last fiber of vindictiveness. Their preparations for their journey smacked more of a spy thriller than a typical business trip. The comings and goings of two men such as them within what was once again a multi-billion-dollar American videogame industry hardly went unobserved even when the industry wasn’t racked by total war. On the contrary: their every statement, action, and, yes, movement was closely scrutinized for clues to what Nintendo might do next. Arakawa and Lincoln thus felt compelled to slip away in the dead of night, telling only two of their closest confidants where they were going and why.

They arrived in Moscow on Sunday, March 19. As befit the sense of occasion that surrounded their visit, Henk Rogers forewent the taxis that were his usual mode of transportation around Moscow in favor of picking them up at the airport in a big black Mercedes he had managed to rent at an exorbitant price. The two huddled in the back seat, jet-lagged and bleary-eyed, and marveled at the Mirror World outside the windows, which Lincoln said reminded him of the mean streets of old black-and-white gangster films. Their self-appointed chauffeur, feeling himself by comparison an old hand with Moscow life, merely smiled and nodded. At the hotel, Arakawa and Lincoln were given a room with a single bed, a disconnected stove, and a refrigerator without a door. Don’t complain, Rogers told them; it can only get worse.

Whatever their other prowesses as negotiators, Arakawa and Lincoln weren’t gifted with Henk Rogers’s all-but-irresistible charm. Arakawa was reserved, stoic, even shy among new people, while Lincoln, who looked every inch the corporate lawyer he was, made the most of his native suspicious nature as Nintendo’s attack dog, willing to challenge every point and question every assertion in trying to secure for his company every possible advantage. Alexey Pajitnov, for one, sensed the change in the atmosphere around the table as soon as they all entered the conference room the next day.

Still, it was fascinating in a way to watch Belikov and Lincoln, two sly old foxes with far more in common than the gulf of culture, language, and politics that lay between them might suggest, sniff one another out. Lincoln questioned Belikov long and hard about the previous deal with Stein and the potential trouble it might present. Belikov, meanwhile, notwithstanding the incredible offer that lay on the table, pressed relentlessly for further advantage, persisted in testing every boundary. Apparently not understanding how unique Tetris was, he seemed to see game design as a commodity amenable to the typical Soviet model of mass production, proposing that Nintendo and ELORG set up a joint subsidiary to crank out many more games. Apparently not understanding that the key to Nintendo’s control of their walled garden was their ownership of the means of production of game cartridges — the very thing they were fighting so savagely to maintain far away in the United States — he proposed that the Tetris cartridges be manufactured by ELORG in the Soviet Union, a recipe for quality-control disaster if ever there was one. Then he proposed that ELORG make actual Nintendos in the Soviet Union for sale behind the Iron Curtain. The most surreal moment of the talks came when a cosmonaut trooped in to pitch an idea for plastering the Nintendo logo all over Soviet rockets; when the Soviet Union embraced capitalism, it seemed, it really embraced capitalism.

Another bizarre incident hearkened ironically back to that earlier pivotal instant when Henk Rogers had produced Bullet-Proof Software’s “pirated” Nintendo Famicom version of Tetris to gasps all around the conference table. Wanting to demonstrate how adept his people were at this consumer-electronics thing, one of the Russian bureaucrats reached under the table and came up with a Soviet knockoff of a Donkey Kong standalone handheld game which Nintendo had released back in 1982. In its Soviet form, it was bereft of any acknowledgment of its origins — and bereft of any agreement to pay Nintendo royalties for it. Under normal circumstances, such a thing would have set Howard Lincoln into a paroxysm of enraged threats. But today, managing to see the bigger picture, he swallowed hard and held his tongue with difficulty.

To be fair to Belikov, many of the kookier ideas that he was forced to pitch likely didn’t originate with him. In this era of perestroika, Mikhail Gorbachev had tasked the masterminds of his nation’s economy, so long accustomed to looking inward to quotas and five-year plans, with looking out, with finding areas where the Soviet Union could compete with the other members of the community of free nations Gorbachev was intent on joining. Computer software had always seemed like an area with real potential in this regard, responsive as it seemingly was to the country’s long tradition of mathematical excellence. And now here was the Tetris deal. As a game rather than a more “serious” piece of software, it perhaps wasn’t the completely ideal vehicle for Soviet software’s coming-out party, but it would do. As soon as that $5 million figure started to spread through the Soviet bureaucracy, Belikov’s negotiations over what had heretofore been regarded as a silly little game — a minor transaction at best — took on a dramatically higher profile. Lots and lots of people with lots of different agendas were now trying to muscle their way into the room with these foreigners who so evidently had more money than sense. Lincoln batted away each crazy proposal as politely as he could, and kept trying to steer the discussion back to the deal that was already on the table.

Alexey Pajitnov in his Moscow apartment.

The atmosphere was warmer that evening when Rogers, still playing the role of chaperone and tour guide, located the only sushi restaurant in Moscow and took Arakawa, Lincoln, Pajitnov, and Nintendo’s legal consultant John Huhs out for dinner there. Pajitnov was skeptical of the notion of eating raw fish, but soon got with the program — at least until he popped an entire ball of wasabi into his mouth just ahead of his companions’ urgent warning cries, nearly causing his head to explode. Back at the Pajitnov family apartment, Arakawa gave the children a prototype Game Boy with a prototype of Tetris in the cartridge slot, telling them that they were now quite possibly the first people in the entire Soviet Union to own a Nintendo product. Pajitnov still stood to gain absolutely nothing from this game that so many others were now confidently expecting to earn them millions, but he did appreciate the attention and respect he was shown by the Nintendo delegation, so different from Robert Stein and the ELORG bureaucrats who did little more than tolerate his presence at the negotiating table. And he took Henk Rogers at his word that someday soon he would find a way to get him his financial due — if not with Tetris, than with the next game he designed.

A contract giving Nintendo exclusive worldwide-except-for-Japan console rights to Tetris was signed on March 22, 1989, alongside another giving the Japanese rights to Rogers, thus fully legitimizing in the eyes of ELORG the Bullet-Proof version of Tetris that had started this whole ruckus. Two heavyweight bureaucrats, the head of the State Committee for Computer Systems and Informatics and the head of computer research at the Soviet Academy of Sciences, came out to witness the signings, which were conducted with some pomp and circumstance. To commemorate the occasion, Rogers, who in his standard inimitable fashion was now wheeling and dealing on the Moscow black market like a native, presented Arakawa and Lincoln with tickets for that evening to the Bolshoi Ballet. Much to their amazement, Mikhail Gorbachev himself showed up for the performance — and took a seat that was worse than theirs. That was Henk Rogers for you.

From being the property of Robert Stein in their totality barely a month earlier, the rights to Tetris had now been sliced and diced into a whole pile of discrete parts. The computer-game rights lay with Mirrorsoft in Europe and, through Mirrorsoft, Spectrum Holobyte in North America and Bullet-Proof Software in Japan. The arcade rights lay with Atari Games in North America and Europe and, through Atari, Sega in Japan. The worldwide handheld rights lay with Bullet-Proof, who planned to use them to let Nintendo bundle a copy of Tetris with every Game Boy sold when the new gadget came to North America in four months or so. And now, as a product of this latest round of negotiations, the non-Japanese console rights belonged directly to Nintendo, the Japanese console rights to Bullet-Proof.

This, anyway, was the new world order according to ELORG and Nintendo. But there was soon trouble from the parties whose earlier deals had been retroactively voided, just as Rogers had warned Belikov there would be the previous month.

On the morning of March 22, even as the contract-signing ceremony was about to get under way, a belated response had finally arrived to the telex which Belikov had sent to Mirrorsoft six days before. In the message, Jim Mackonochie of Mirrorsoft, adopting a posture of bemused confusion, said that Mirrorsoft didn’t need to bid for the console rights because they already possessed them. His obvious intention was to pretend that the disastrous meeting between Belikov and Kevin Maxwell had never happened, and to hope that thereby the old status quo would be allowed to reassert itself. But he learned that that most definitely wasn’t a possibility later the same day, when Belikov sent a reply stating that the console rights had never been Stein’s to license to Mirrorsoft, and that those selfsame rights had in fact just been licensed to Nintendo. To rub salt into the wound, Belikov also dropped the bombshell that the handheld rights already belonged to Henk Rogers.

The Mirrorsoft camp’s response was predictably swift and aggressive. Evidently not recollecting how well his last decision to shove Mackonochie aside had gone, Kevin Maxwell jumped personally back into the fray the very next day with a telex telling Belikov he was “in grave breach twice over of our agreements with you.” Having apparently remedied the ignorance that had led him to call the Bullet-Proof Tetris a pirated version on his last trip to Moscow, he wrote that “we already hold the worldwide rights to Tetris on the Nintendo family computer. Indeed, we have been marketing it accordingly, [through] Bullet-Proof Software in Japan since January 1989.” But he was willing, he graciously conceded, to come to Moscow to meet once again with Belikov and learn from him “how you intend to remedy your double breach of our agreement.” Should Belikov refuse to invite him to such a meeting, he warned of legal and political — yes, political — consequences.

Mikhail Gorbachev and Robert Maxwell. The latter was so chummy with the Kremlin that questions would later surface over whether he had acted at times as a Soviet spy.

He wasn’t just blowing smoke. His father, Robert Maxwell, was an absurdly well-connected man, the ruler of a communication and publication empire that spanned the globe and that had placed him on a first-name basis with countless current and former heads of state. When told by his secretary that “the prime minister” was on the phone for him, legend has it that Maxwell would ask, “Which one?” His Rolodex contained the home address and phone number of one Mikhail Gorbachev, just as it had Gorbachev’s predecessors Yuri Andropov, Leonid Brezhnev, and Nikita Khrushchev.

After the Nintendo delegation returned home from Moscow and it became clear to Kevin Maxwell that Belikov had no intention of granting him his mea-culpa meeting, he went to his father to explain what the Russians had done to him, eliciting a desk-pounding fit of rage: “They won’t get away with it! Rest assured of that!” Robert Maxwell wrote directly to the highest levels of the Kremlin, issuing a thinly veiled threat to the many investments he was making into Gorbachev’s new Soviet Union: “We attach high importance to our excellent commercial relations with the Soviet government and many leading agencies in the fields of information, communications, publishing, and, indeed, pulp and paper production. We face the prospect of all this being jeopardized by the unilateral action of one particular agency.” Nice economy you’re building there, Gorbachev, ran the subtext. It’d be a shame if anything happened to it — and all because of one silly videogame.

Maxwell contacted the secretary of state for trade and industry within Britain’s own government, pushing him to place the Tetris issue on the agenda for an upcoming summit between Margaret Thatcher and Gorbachev. Alexey Pajitnov’s little game of falling shapes was now threatening to impinge on agendas at the highest levels of international statecraft. In late April, Maxwell flew to Moscow to meet personally with Gorbachev, ostensibly to discuss his growing number of publication ventures within and on behalf of the Soviet Union. But he brought up the issue of Tetris there as well, and claimed that before he left Gorbachev assured him that he would personally take care of the issue of “the Japanese company” for him.

In actuality, though, Gorbachev did little or nothing, presumably judging that Maxwell wouldn’t really blow up deals potentially worth billions in the long run over a videogame-licensing spat. Still, plenty of others within the Soviet government — among them many representatives of the hard-line communist order that was at odds with Gorbachev — wanted an embattled Belikov to back down and give Maxwell what he wanted.

When Howard Lincoln returned to Moscow about a month after his first visit for a follow-up meeting, a tension that verged on paranoia was palpable around the conference table. Belikov spoke of “calls from the Kremlin, calls from people who never before knew we existed. Many of them have shown up to examine our records and to question us on this deal. We have told them we have done the right thing. We have stood up to them, but we do not know what will happen.”  There were even rumors that the KGB had been put on the case to dig up dirt on Belikov and his colleagues at ELORG, rumors of bugs in telephones and men in descriptly nondescript trench coats trailing people through the streets. Belikov had hired a pair of personal bodyguards for protection.

He clung to a simple but potent line of argument against his persecutors: Gorbachev had said that producers in the Soviet Union needed to have a degree of economic freedom, needed to make decisions in response to the market rather than a hidebound bureaucratic class. That was what perestroika, the buzzword of the age, was all about. He, then, was just doing perestroika. Nintendo had offered ELORG a better deal, and he was bound — duty-bound by perestroika, one might say — to take it.

Howard Lincoln’s son Brad plays Tetris with Alexey Pajitnov.

Helping Belikov stay strong was the fact that he and Howard Lincoln had gone from cagey adversaries to something approaching friends. In the months after signing their deal, Belikov arranged for Lincoln and his son to take a private tour of Star City, the heart of the Soviet space program. He took Lincoln on a traditional Russian fishing trip — “traditional” in this case indicating much more vodka-drinking than fish-catching. He felt a bond with Howard Lincoln and also Henk Rogers, two men who had talked straight to him and treated him as an equal, that he most definitely didn’t feel with Robert Stein or the Maxwell clan. He felt that Lincoln and Rogers had been in his corner, so he would stay in theirs. Crusty old bureaucratic knife fighter though he was, his sense of loyalty ran surprisingly deep.

While Belikov was weathering the storm unleashed by Robert Maxwell upon Moscow, Arakawa and Lincoln were left to deal with the issue of Atari, Mirrorsoft sub-licensee of the Tetris rights, in the United States. It seems safe to say that they relished their situation far more than their Soviet partner did his, not least because it afforded them the luxury of going on the offensive in yet one more way against their bitterest enemy. With delicious satisfaction, Lincoln drafted a cease-and-desist letter that was sent to Atari on March 31, saying that the console rights to Tetris belonged to Nintendo rather than to Tengen, and that the latter thus needed to give up their own plans for Tetris if they didn’t wish to spark another legal battle in the ongoing war. He knew, as he would later put it, that Atari “would go nuts” when they received the letter. On April 6, Nintendo announced via an official press release their plans to release their version of Tetris for the NES that summer. Atari took the bait, suing Nintendo for infringing on their licensing deal with Mirrorsoft on April 18. They honestly believed that the rights they had licensed from Mirrorsoft were perfectly legitimate — “There was no inkling that we were in the wrong,” Tengen head Randy Broweleit would later say — and they had no intention of lying down for Nintendo. Quite the contrary. Having engulfed so much of the American videogame industry already, it hardly surprised anyone that the war between Atari and Nintendo had now sucked Tetris as well into its maw.

The Tengen Tetris, running in this version’s unique cooperative mode.

Ironically, the version of Tetris which Tengen was finalizing against the will of the game’s designer was by far the best version of the game that had yet been created. Indeed, plenty among the Tetris cognoscenti will tell you that the Tengen Tetris still stands among the best versions ever created, far superior to the versions Nintendo was preparing in-house at the time of its release. Tengen had assigned Ed Logg, creator of iconic arcade games like Asteroids, Centipede, and Gauntlet, to head up a team that wound up spending three person-years on the project, a rather extraordinary amount of time in light of what a simple game Tetris really was. Under Logg’s stewardship, Alexey Pajitnov’s core design took on a much more polished look than it had enjoyed to date. The pieces were no longer solid blocks of color, but were given texture and a pseudo-3D appearance that made them look more like falling blocks than falling abstractions, harking back to the physicality of the pentomino puzzles that had inspired the game. Logg also added a head-to-head competitive mode to the game, and an innovative cooperative mode in which two players could work together to clear away lines. And he made the speed of the falling shapes increase slowly and subtly the longer you played, instead of taking a more noticeable, granular leap only when you went up a level. Whatever you could say about the circumstances of its creation, taken purely on its own terms it was truly a Tetris to be proud of.

It needed to be great. Tengen was counting on this game becoming an unstoppable force that would bust right through the blockade Nintendo was erecting around their lifeline to retail. The launch was as lavish as they could make it, beginning with the game’s unveiling at Manhattan’s Russian Tea Room restaurant. As that location would imply, the line of marketing attack developed by Mirrorsoft and Spectrum Holobyte was employed once again by Tengen. In their hands, though, it came to read a little tone deaf, being amped up with far more testosterone than the game destined to go down in history as the very personification of a non-violent, casual puzzler really had need of. “It’s like Siberia, only harder,” ran one tagline. “It’s the nerve-wrackingest mind game since Russian roulette,” ran another. A third said it should only be played by “macho men with the first-strike capability to beat the Russian programmers who invented it. If you can’t make the pieces fit together, an avalanche of blocks thunders down and buries you weaklings!”

But, overheated rhetoric aside, Tengen clearly saw the potential of Tetris to expand the Nintendo demographic beyond boys and teenagers, buying full-page spreads in such mainstream non-adolescent publications as USA Today. And, now that they controlled the means of Nintendo cartridge production, they weren’t going to be caught out by any shortage on that front. They ordered an initial production run of fully 300,000 Tetris cartridges, at an expense of $3 million.

The Tengen Tetris was released on May 17, 1989. It took Nintendo exactly eight days to sue in response; in combination with Atari’s earlier suit against Nintendo, this latest legal salvo meant that each company was now accusing the other of making or planning to make what amounted to a pirated version of Tetris. While American courts tried to sort through the dueling lawsuits, American gamers faced the prospect of deciding between dueling versions of Tetris on the NES, each claiming to be the one and only legitimate version.

Alexey Pajitnov’s little game of falling shapes, having already sparked a bewildering amount of international intrigue, had found yet another role to play as a coveted prize in the greatest war the American videogame industry had ever known. Nintendo and Atari were both willing to use every resource at their disposal to ensure that Tetris belonged to them and them alone. All of the conspiratorial maneuvering that had taken place in Moscow the previous February and March was about to be put to the test. Did all of the rights to Tetris belong to Robert Stein to sub-license as he would, as Atari claimed, or did Stein possess only the computer-game and arcade rights, as Nintendo claimed? It must now be up to a court of law in the United States to decide.

(Sources: the books Game Over: How Nintendo Conquered the World by David Sheff and The Tetris Effect: The Game That Hypnotized the World by Dan Ackerman; the BBC television documentary From Russia with Love; Hardcore Gamer Vol.5 No.1; Nintendo Power of September/October 1989; The New York Times of February 3 1989 and March 9 1989.)

 

Tags: , , , , , ,

A Time of Endings, Part 2: Epyx

On a beautiful May day in 1987, Epyx held a party behind their offices to celebrate the completion of California Games, the fifth and latest in their hugely popular Games line of sports titles. To whatever extent their skills allowed, employees and their families tried to imitate the athletes portrayed in the new game, riding skateboards, throwing Frisbees, or kicking around a Hacky Sack. Meanwhile a professional BMX freestyler and a professional skateboarder did tricks to show them how it was really done. The partiers dressed in the most outrageous beachwear they could muster — typically for this hyper-competitive company, their outfits were judged for prizes — while the sound of the Beach Boys and the smell of grilling hamburgers and hotdogs filled the air. Folks from the other offices around Epyx’s came out to look on a little wistfully, doubtless wishing their company was as fun as this one. A good time was had by all, a memory made of one of those special golden days which come along from time to time to be carried along with us for the rest of our lives.

Although no one realized it at the time, that day marked the high-water point of Epyx. By 1990, their story would for all practical purposes be over, the company having gone from a leading light of its industry to a bankrupt shell at the speed of business.

In the spring of 1987, Epyx was the American games industry’s great survivor, the oldest company still standing this side of Atari and the one which had gone through the most changes over its long — by the standards of a very young industry, that is — lifespan. Epyx had been founded by John Connelly and Jon Freeman, a couple of tabletop role-players and wargaming grognards interested in computerizing their hobbies, way back in 1978 under the considerably less exciting name of Automated Simulations. They hit paydirt the following year with Temple of Apshai, the most popular CRPG of the genre’s primordial period. Automated Simulations did well for a while on the back of that game and a bevy of spinoffs and sequels created using the same engine, but after the arrival of the more advanced Wizardry and Ultima their cruder games found it difficult to compete. In 1983, a major management shakeup came to the moribund company at the behest of a consortium of investors, who put in charge the hard-driving Michael Katz, a veteran of the cutthroat business of toys. Katz acquired a company called Starpath, populated by young and highly skilled assembly-language programmers, to complete the transformation of the stodgy Automated Simulations into the commercially aggressive Epyx. In 1984, with the release of the huge hits Summer Games and Impossible Mission, the company’s new identity as purveyors of slick action-based entertainments for the Commodore 64, the most popular gaming platform of the time, was cemented. One Gilbert Freeman (no relation to Jon Freeman) replaced Katz as Epyx’s president and CEO shortly thereafter, but the successful template his predecessor had established remained unchanged right through 1987.

By 1987, however, Freeman was beginning to view his company’s future with some trepidation despite the commercial success they were still enjoying. The new California Games, destined for yet more commercial success though it was, was ironically emblematic of the long-term problems with Epyx’s current business model. California Games pushed the five-year-old Commodore 64’s audiovisual hardware farther than had any previous Epyx game — which is to say, given Epyx’s reputation as the absolute masters of Commodore 64 graphics and sound, farther than virtually any other game ever released for the platform, period. This was of course wonderful in terms of this particular game’s commercial prospects, but it carried with it the implicit question of what Epyx could do next, for even their most technically creative programmers were increasingly of the opinion that they were reaching an end point where they had used every possible trick and simply couldn’t find any new ways to dazzle. For a company so dependent on audiovisual dazzle as Epyx, this was a potentially deadly endgame.

Very much in tandem with the question of how much longer it would be possible to continue pushing the audiovisual envelope on the Commodore 64 ran concerns about the longevity of the platform in general. Jack Tramiel’s little computer for the masses had sold more and longer than anyone could ever have predicted, but the ride couldn’t go on forever. While Epyx released their games for other platforms as well, they remained as closely identified with the Commodore 64 as, say, Cinemaware was with the Commodore Amiga, with the 64 accounting for well over half of their sales most quarters. When that market finally took the dive many had been predicting for it for years now, where would that leave Epyx?

Dave Morse

It was for these big-picture reasons that Freeman brought a man with a reputation for big-picture vision onto Epyx’s board in January of 1987. All but unknown though he was to the general public, among those working in the field of home computers Dave Morse had the reputation of a veritable miracle worker. Just a few years before, he had found ways to let the brilliant engineering team at Amiga, Incorporated, create a computer as revolutionary in its way as the Apple Macintosh on a budget that would barely have paid Steve Jobs’s annual salary. And then, in a coup worthy of The Sting, he’d proceeded to fleece Atari of the prize and sail the ship of Amiga into the (comparatively) safe harbor of Commodore Business Machines. If, as Freeman was starting to suspect, it was going to become necessary to completely remake and remodel Epyx for a second time in the near future, Morse ought to be a darn good man to have on his team.

And indeed, Morse didn’t fail to impress at his first Epyx board meetings. In fact, he impressed so much that Freeman soon decided to cede much of his own power to him. He brought Morse on full-time as CEO to help run the company as an equal partner in May of 1987, the very month of the California Games cookout. But California Games on the Commodore 64 was the present, likely all too soon to be the past. For Freeman, Morse represented Epyx’s future.

Morse had a vision for that future that was as audacious as Freeman could possibly have wished. In the months before coming to Epyx, he had been talking a lot with RJ Mical and Dave Needle, two of his star engineers from Amiga, Incorporated, in the fields of software and hardware respectively. Specifically, they’d been discussing the prospects for a handheld videogame console. Handheld videogames of a sort had enjoyed a brief bloom of popularity in the very early 1980s, at the height of the first great videogame boom when anything that beeped or squawked was en vogue with the country’s youth. Those gadgets, however, had been single-purpose devices capable of playing only one game — and, because it was difficult to pack much oomph into such a small form factor, said game usually wasn’t all that compelling anyway. But chip design and fabrication had come a long way in the past five years or so. Mical and Needle believed that the time was ripe for a handheld device that would be a gaming platform in its own right, capable of playing many titles published on cartridges, just like the living-room-based consoles that had boomed and then busted so spectacularly in 1983. For that reason alone, Morse faced an uphill climb with the venture capitalists; this was still the pre-Nintendo era when the conventional wisdom held videogame consoles to be dead. Yet when he joined the Epyx board he found a very sympathetic ear for his scheme in none other than Epyx President Gilbert Freeman.

In fact, Freeman was so excited by the idea that he was willing to bet the company on it; thus Morse’s elevation to CEO. The plan was to continue to sell traditional computer games while Mical and Needle, both of whom Morse hired immediately after his own appointment, got down to the business of making what everybody hoped would be their second revolutionary machine of the decade. It would all happen in secret, while Morse dropped only the vaguest public hints that “it is important to be able to think in new directions.” This was by any measure a very new direction for Epyx. Unlike most game publishers, they weren’t totally inexperienced making hardware: a line of high-end joysticks, advertised as the perfect complement to their games, had done well for them. Still, it was a long way from making joysticks to making an entirely new game console in such a radically new form factor. They would have to lean very heavily on Morse’s two star engineers, who couldn’t help but notice a certain ironic convergence about their latest situation: Amiga, Incorporated, had also sold joysticks among other gaming peripherals in an effort to fund the development of the Amiga computer.

RJ Mical and Dave Needle in a very… disturbing picture. Really, perhaps it’s best if we don’t know any more about what’s going on here.

RJ Mical and Dave Needle were a pair of willfully eccentric peas in a pod; one journalist called them the Laurel and Hardy of Silicon Valley. While they had worked together at Amiga for quite some time by June of 1984, the two dated the real genesis of their bond to that relatively late date. When Amiga was showing their Lorraine prototype that month at the Summer Consumer Electronics Show in Chicago, they found themselves working together really closely for the first time, doing some jerry-rigging to get everything working for the demonstrations. They discovered that they understood each other in a way that “software guys” and “hardware guys” usually do not. “He was the first software guy I ever met,” remembered Needle in a joint 1989 interview, “who had more than an inkling of the real purpose of my work, which is building hardware platforms that you can launch software from.” “I could never get hardware guys to understand what I was doing,” interrupted Mical at this point in the same interview. “Dave couldn’t get software guys to understand what the guts could handle. We found ourselves a great match.” From that point forward, they were inseparable, as noted for their practical jokes and wacky antics as for their engineering brilliance. It was a true meeting of the minds, the funny bones, and, one might even say, the hearts. As illustrated by the exchange I’ve just quoted, they became the kind of friends who freely complete each other’s thoughts without pissing each other off.

The design they sketched for what they liked to call the “Potato” — for that was envisioned as its rough size and shape — bore much the same philosophical stamp as their work with Amiga. To keep the size and power consumption down, the Potato was to be built around the aged 8-bit 6502, the chip at the heart of the Commodore 64, rather than a newer CPU like the Amiga’s 68000. But, as in the Amiga, the chip at the Potato’s core was surrounded with custom hardware designed to alleviate as much of the processing burden as possible, including a blitter for fast animation and a four-channel sound chip that came complete with digital-to-analog converters for playing back sampled sounds and voices. (In the old Amiga tradition, the two custom chips were given the names “Suzy” and “Mikey.”) The 3.5-inch LCD display, with a palette of 4096 colors (the same as the Amiga) and a resolution of 160 X 102, was the most technologically cutting-edge and thus for many months the most problematic feature of the design; Epyx would wind up buying the technology to make it from the Japanese watchmaker Citizen, who had created it as the basis for a handheld television but had yet to use it in one of their own products. Still, perhaps the Potato’s most innovative and impressive feature of all was the port that let you link it up with your mates’ machines for multiplayer gaming. (Another visionary proposed feature was an accelerometer that would have let you play games by tilting the entire unit rather than manipulating the controls, but it would ultimately prove just too costly to include. Ditto a port to let you connect the Potato to your television.)

While few would question the raw talent of Mical and Needle and the small team they assembled to help them make the Potato, this sort of high-wire engineering is always expensive. Freeman and Morse estimated that they would need about two years and $4 million to bring the Potato from a sketch to a finished product ready to market in consumer-electronics stores. Investing this much in the project, it seemed to Freeman and Morse, should be manageable based on Epyx’s current revenue stream, and should be a very wise investment at that. Licking their chops over the anticipated worldwide mobile-gaming domination to come, they publicly declared that Epyx, whose total sales had amounted to $27 million in 1987, would be a $100 million company by 1990.

At first, everything went according to plan. Upon its release in the early summer of 1987, California Games became the hit everyone had been so confidently anticipating. Indeed, it sold more than 300,000 copies in its first nine months and then just kept on selling, becoming Epyx’s biggest hit ever. But after that nothing else ever went quite right for Epyx’s core business. Few inside or outside of the company could have guessed that California Games, Epyx’s biggest hit, would also mark the end of the company’s golden age.

From the time of their name change and associated remaking up through California Games, Epyx had been almost uniquely in touch with the teenage boys who bought the vast majority of Commodore 64 games. “We don’t simply invent games that we like and hope for the best,” said Morse, parroting Epyx’s official company line shortly after his arrival there. “Instead, we pay attention to current trends that are of interest to teenagers. It’s similar to consumer research carried out by other companies, except we’re aiming for a very specific group.” After California Games, though — in fact, even as Morse was making this statement — Epyx lost the plot of what had made the Games line so successful. Like an aging rock star grown fat and complacent, they decided to join the Establishment.

When they had come up with the idea of making Summer Games to capitalize on the 1984 Summer Olympics, Epyx had been in no position to pay for an official Olympic license, even had Atari not already scooped that up. Instead they winged it, producing what amounted to an Olympics with the serial numbers filed away. Summer Games had all the trappings — opening and closing ceremonies; torches; national anthems; medals of gold, silver, and bronze — alongside the Olympic events themselves. What very few players likely noticed, though, was that it had all these things without ever actually using the word “Olympics” or the famous (and zealously guarded) five-ring Olympic logo.

Far from being a detriment, the lack of an official license had a freeing effect on Epyx. Whilst hewing to the basic templates of the sports in question, they produced more rough-and-ready versions of same — more the way the teenage boys who dominated among their customers would have liked the events to be than the somewhat more staid Olympic realities. Even that original Summer Games, which looked itself a little staid and graphically crude in contrast to what would follow, found room for flashes of wit and whimsy. Players soon learned to delight in an athlete — hopefully not the one they were controlling — landing on her head after a gymnastics vault, or falling backward and cracking up spectacularly instead of clearing the pole vault. Atari, who had the official Olympic license, produced more respectful — read, boring — implementations of the Olympics that didn’t sell particularly well, while Summer Games blew up huge.

Seeing how positively their players responded to this sort of thing, Epyx pushed ever further into the realm of the fanciful in their later Games iterations. World Games and California Games, the fourth and fifth title in the line respectively, abandoned the Olympics conceit entirely in favor of gathering up a bunch of weird and wild sports that the designers just thought would be fun to try on a computer. In a final act of Olympics sacrilege, California Games even dropped the national anthems in favor of having you play for the likes of Ocean Pacific or Kawasaki. As California Games so amply demonstrated, the Games series as a whole had never had as much to do with the Olympics or even sports in general as it did with contemporary teenage culture.

But now Epyx saw another Olympics year fast approaching (during this period, the Winter and Summer Olympics were still held during the same year rather than being staggered two years apart as they are today) and decided to come full circle and then some, to make a pair of Games games shrouded in the legitimacy that the original Summer Games had lacked. Epyx, in other words, would become the 1988 Olympics’s version of Atari. In October of 1987, they signed a final contract of over 40 pages with the United States Olympic Committee (if ever a gold medal were to be awarded in legalese and bureaucratic nitpicking, the Olympic Games themselves would have to be prime contenders). Not only would Epyx have to pay a 10 percent royalty to the Olympic Committee for every copy of The Games: Winter Edition and The Games: Summer Edition that they sold, but the same Committee would have veto rights over every aspect of the finished product. Giving such authority to such a famously non-whimsical body inevitably spelled the death of the series’s heretofore trademark sense of whimsy. While working on the luge event a developer came up with the idea of sending the luger hurling out of the trough and into outer space after a major crash. The old Epyx would have been all over it with gusto. But no, said the stubbornly humorless Committee in their usual literal-minded fashion, lugers don’t ever exit the trough when they crash, they only spill over inside it, and that’s how the computer game has to be as well.

When The Games: Winter Edition appeared right on schedule along with the Winter Olympics themselves in February of 1988, it did very well out of the gate, just like any other Games game. Yet in time the word spread through the adolescent grapevine that this latest Games just wasn’t as much fun as the older ones. In addition to the stifling effect of the Olympic Committee’s bureaucracy, its development had been rushed; because of the need to release the Winter Edition to coincide with the real Winter Olympics, it had had to go from nothing to boxed finished product in just five months. The Summer Edition, which appeared later in the year to coincide with the Summer Olympics, was in some ways a better outing, what with Epyx having had a bit more time to work on it. But something was still missing. California Games, a title Epyx’s core teenage demographic loved for all the reasons they didn’t love the two stodgy new officially licensed Games, easily outsold both of them despite being in its second year on the market. That was, of course, good in its way. But would the same buyers turn out to buy the next big Games title in the wake of the betrayal so many of them had come to see the two most recent efforts to represent? It wasn’t clear that they would.

The disappointing reception of these latest Games, then, was a big cause of concern for Epyx as 1988 wore on. Their other major cause for worry was more generalized, more typical of their industry as a whole. As we’ve seen in an earlier article, 1988 was the year that the Nintendo Entertainment System went from being a gathering storm on the horizon to a full-blown cyclone sweeping across the American gaming landscape. Epyx was hardly alone among publishers in feeling the Nintendo’s effect, but they were all too well positioned to get the absolute worst of it. While they had, generally with mixed results, made occasional forays into other genres, the bulk of their sales since the name change had always come from their action-oriented games for the Commodore 64 — the industry’s low-end platform, one whose demographics skewed even younger than the norm. The sorts of teenage and pre-teen boys who had once played on the Commodore 64 were exactly the ones who now flocked to the Nintendo in droves. The Christmas of 1988 marked the tipping point; it was at this point that the Nintendo essentially destroyed the Commodore 64 as a viable platform. “Games can be done better on the 64 than on a Nintendo,” insisted Morse, but fewer and fewer people were buying his argument. By this point, many American publishers and developers had begun to come to Nintendo, hat in hand, asking for permission to publish on the platform, but this Epyx refused to do, being determined to hold out for their own handheld console.

It’s not as if the Commodore 64’s collapse entirely sneaked up on Epyx. As I noted earlier, Gilbert Freeman had been aware it might be in the offing even before he had hired Dave Morse as CEO. Over the course of 1987 and 1988, Epyx had set up a bulwark of sorts on the higher-end platforms with a so-called “Masters Collection” of more high-toned and cerebral titles, similar to the ones that were continuing to sell quite well for some other publishers despite the Nintendo onslaught. (The line included a submarine simulator, an elaborate CRPG, etc.) They also started a line of personal-creativity software similar to Electronic Arts’s “Deluxe” line, and began importing ever more European action games to sell as budget titles to low-end customers. All told, their total revenues for 1988 actually increased robustly over that of the year before, from $27 million to $36 million. Yet such figures can be deceiving. Because this total was generated from many more products, with all the extra expenses that implied, the ultimate arbiter of net profits on computer software plunged instead of rising commensurately. Other ventures were truly misguided by any standard. Like a number of other publishers, Epyx launched forays into the interactive VCR-based systems that were briefly all the rage as substitutes for Philips’s long-promised but still undelivered CD-I system. They might as well have just set fire to that money. The Epyx of earlier years had had a recognizable identity, which the Epyx of 1988 had somehow lost. There was no thematic glue binding their latest products together.

RJ Mical with a work-in-progress version of the Handy.

Meanwhile Epyx was investing hugely in games for the Potato — investing just about as much money in Potato software, in fact, as they were pouring into the hardware. Accounts of just how much the Potato’s development ended up costing Epyx vary, ranging from $4 million to $8 million and up. I suspect that, when viewed in terms of both hardware and software development, the figure quite likely skews into the double digits.

Whatever the exact numbers, as the curtain came up on 1989 Dave Morse, RJ Mical, and Dave Needle found themselves in a position all too familiar from the old days with Amiga, Incorporated. They had another nascent revolution in silicon in the form of the Potato, which had reached the prototype stage and was to be publicly known as the Epyx Handy. Yet their company’s finances were hopelessly askew. If the Handy was to become an actual product, it looked like Morse would need to pull off another miracle.

So, he did what he had done for the Amiga Lorraine. In a tiny private auditorium behind Epyx’s public booth at the January 1989 Winter Consumer Electronics Show, the inventors of the Handy showed it off to a select group of representatives from other companies, all of whom were required to sign a strict non-disclosure agreement before seeing what was still officially a top-secret project, even though rumors of the Handy’s existence had been spreading like wildfire for months now. The objective was to find a partner to help manufacture and market the Handy — or, perhaps better, a buyer for the entire troubled company. Nintendo had a look, but passed; they had a handheld console of their own in the works which would emerge later in the year as the Nintendo Game Boy. Sega also passed. In fact, just about everyone passed, as they had on the Amiga Lorraine, until Morse was left with just one suitor. And, incredibly, it was the very same suitor as last time: Atari. Déjà vu all over again.

On the positive side, this Atari was a very different company from the 800-pound gorilla that had tried to seize the Lorraine and carve it up into its component parts five years before. On the negative, this Atari was run by Jack Tramiel, Mr. “Business is War” himself, the man who had tied up Commodore in court for years after Atari’s would-be acquisition of the Amiga Lorraine had become Commodore’s. From Tramiel’s perspective, getting a stake in a potential winner like the Handy made a lot of sense; his Atari really didn’t have that much going for it at all at that point beyond a fairly robust market for their ST line in Europe and an ongoing trickle of nostalgia-fueled sales of their vintage game consoles in North America. Atari had missed out almost entirely on the great second wave of videogame consoles, losing the market they had once owned to Nintendo and Sega. If mobile gaming was destined to be the next big thing, this was the perfect way to get into that space without having to invest money Atari didn’t have into research and development.

For his part, Morse certainly knew even as he pulled the trigger on the deal that he was getting into bed with the most devious man in consumer electronics, but he didn’t see that he had much choice. He could only shoot from the hip, as he had five years before, and hope it would all work out in the end. The deal he struck from a position of extreme weakness — nobody could smell blood in the water quite like Jack Tramiel — would see the Handy become an Atari product in the eyes of the marketplace. Atari would buy the Handy hardware design from Epyx, put their logo on it, and would take over responsibility for its manufacturing, distribution, and marketing. Epyx would remain the “software partner” only, responsible for delivering an initial suite of launch titles and a steady stream of desirable games thereafter. No one at Epyx was thrilled at the prospect of giving away their baby this way, but, again, the situation was what it was.

At this point in our history, it becomes my sad duty as your historian to acknowledge that I simply don’t know precisely what went down next between Atari and Epyx. The source I’ve been able to find that dates closest to the events in question is the “Roomers” column of the December 1989 issue of the magazine Amazing Computing. According to it, the deal was structured at Tramiel’s demand as a series of ongoing milestone payments from Atari to Epyx as the latter met their obligations to deliver to the former the finished Handy in production-ready form. Epyx, the column claims, was unable to deliver the cable used for linking two Handys together for play in the time frame specified in the contract, whereupon Atari cancelled a desperately needed $2 million payment as well as all the ones that were to follow. The Handy, Atari said, was now theirs thanks to Epyx’s breach of contract; Epyx would just have to wait for the royalties on the Handy games they were still under contract to deliver to get more money out of Atari. In no condition to engage Atari in a protracted legal battle, Epyx felt they had no choice but to concede and continue to play along with the company that had just stolen their proudest achievement from them.

Dave Needle, who admittedly had plenty of axes to grind with Atari, told a slight variation of this tale many years later, saying that the crisis hinged on Epyx’s software rather than hardware efforts. It seems that Epyx had sixty days to fix any bugs that were discovered after the initial delivery of each game to Atari. But, according to Needle, “Atari routinely waited until the end of the time period to comment on the Epyx fixes. There was then inadequate time for Epyx to make the fixes.” Within a few months of inking the deal, Atari used a petty violation like this to withhold payment from Epyx, who, of course, needed that money now. At last, Atari offered them a classic Jack Tramiel ultimatum: accept one more lump-sum payout — Needle didn’t reveal the amount — or die on the vine.

A music programmer who went by the name of “Lx Rudis” is perhaps the closest thing to an unbiased source we can hope to find; he worked for Epyx while the Handy was under development, then accepted a job with Atari, where he says he was “close” with Jack Tramiel’s sons Sam and Leonard, both of whom played important roles within their father’s company. “The terms [of the contract] were quite strict,” he says. “Epyx was unable to meet all points, and Atari was able to withhold a desperately needed milestone payment. In the chaos that ensued, everyone got laid off and I guess Atari’s lawyers and Epyx’s lawyers worked out a ‘compromise’ where Atari got the Handy.”

No smoking gun in the form of any actual paperwork has ever surfaced to my knowledge, leaving us with only anecdotal accounts like these from people who weren’t the ones signing the contracts and making the deals. What we do know is that Epyx by the end of 1989 was bankrupt, while Atari owned the Handy outright — or at least acted as if they did. Although it’s possible that Tramiel was guilty of nothing more than driving a hard bargain, his well-earned reputation as a dirty dealer does make it rather difficult to give him the benefit of too much doubt. Certainly lots of people at Epyx were left feeling very ill-served indeed. Dave Morse had tried to tweak the tiger’s tail a second time, and this time he had gotten mauled. As should have been part of the core curriculum at every business school by this point: don’t sign any deal, ever, with Jack Tramiel.

Dave Morse, RJ Mical and Dave Needle walked away from the whole affair disgusted and disillusioned, having seen their baby kidnapped by the man they had come to regard as Evil incarnated in an ill-fitting pinstriped suit. Their one bitter consolation was that the Handy development system they’d built could run only on an Amiga. Thus Atari would have to buy dozens of specimens of the arch-rival platform for internal use, and suffer the indignity of telling their development licensees that they too would need to buy Amigas to make their games. It wasn’t much, but, hey, at least it was something to hold onto.

The erstwhile Epyx Handy made its public debut at the Summer Consumer Electronics Show in June of 1989 as the Atari Portable Entertainment System. But when someone pointed out that that name would inevitably get abbreviated to “APES,” Atari moved on from it, finally settling on the name of “Lynx,” a sly reference to the ability to link the machines together via cable for multiplayer action. Thus christened, the handheld console shipped on September 1, 1989. Recent unpleasantness aside, Mical and Needle had good cause to be proud of their work. One far-seeing Atari executive said that the Lynx had the potential to become a revolutionary hit on the level of the Sony Walkman of 1979, the product which largely created the idea of personal portable electronics as we think of them today. Now it was up to Atari to realize that potential.

The Nintendo Game Boy and the Atari Lynx

That part of the equation, alas, didn’t go as well as Atari had hoped. Just one month before the Lynx, Nintendo of America had released the Game Boy, their own handheld console. Purely as a piece of kit, the black-and-white-only Game Boy wasn’t a patch on the Lynx. But then, Nintendo has always thrived by transcending technical specifications, and the Game Boy proved no exception to that rule. Like all of their products, it was laser-targeted to the needs and desires of the burgeoning Generation Nintendo, with a price tag of just $90, battery life long enough to get you through an entire school week of illicit playing under the desk, a size small enough to slip into a coat pocket, and a selection of well-honed launch games designed to maximize its strengths. Best of all, every Game Boy came bundled with a copy of Tetris, an insanely addictive little puzzle game that became a veritable worldwide obsession, the urtext of casual mobile gaming as we’ve come to know it today; many a child’s shiny new Game Boy ended up being monopolized by a Tetris-addled parent.

The Lynx, by contrast, was twice as expensive as the Game Boy, ate its AA batteries at a prodigious rate, was bigger and chunkier than the Game Boy, and offered just three less-than-stellar games to buy beyond the rather brilliant Epyx port of California Games that came included in the box. Weirdly, its overall fit and finish also lagged far behind the cheap but rugged little Game Boy. Atari struggled mightily to find suppliers who could deliver the Lynx’s components on time and on budget with acceptable quality control. According to RJ Mical — again, not the most unbiased of sources — this was largely a case of Jack Tramiel’s chickens coming home to roost. “The new ownership of the Lynx had really bad reputations with hardware manufacturers in Asia and with software developers all over the world,” says Mical. “Suddenly all those sweet deals we’d made for low-cost parts for the Lynx dried up on them. They’d be like, ‘We remember you from five years ago. Guess what — the price just doubled!'” Mical claims that a “magnificent library” of Lynx games, the result of many deals Epyx had made with outside developers, fell by the wayside as soon as the developers in question learned that they’d have to deal from now on with Jack Tramiel instead of Dave Morse.

California Games on the Lynx’s (tiny) screen.

In the face of these disadvantages, the Lynx wasn’t the complete failure one could so easily imagine it becoming. It remained in production for more than five years, over the course of which it sold nearly 3 million units to buyers who wanted a little more from their mobile games than what the Game Boy could offer. By most measures, the Atari Lynx was a fairly successful product. It suffers only by comparison with the Game Boy, which spent an astonishing total of almost fifteen years in production and sold an even more astonishing 118.69 million units, becoming in the process Nintendo’s biggest single success story of all; in the end, Nintendo sold nearly twice as many Game Boys as they did of the original Nintendo Entertainment System that had done such a number on Epyx’s software business. So, a handheld game console did become worthy of mention in the same breath as the Sony Walkman, but it wasn’t the Atari Lynx; it was the Nintendo Game Boy.

Needless to say, Dave Morse’s old plan to make Epyx a $100 million company by 1990 didn’t come to fruition. In addition to all their travails with Atari, the Commodore 64 market, the old heart of their strength, had imploded like a pricked balloon. After peaking at 145 employees in 1988, when work on the Handy as well as games for it was buzzing, frantic layoffs brought Epyx’s total down to less than 20 by the end of 1989, at which point the firm, vowing to soldier on in spite of it all, went through a Chapter 11 bankruptcy. Just to add insult to the mortal injury Jack Tramiel had done them, they came out of the bankruptcy still under contract to deliver games for the Lynx. Indeed, doing so offered their only realistic hope of survival, slim though it was, and so they told the world they were through developing for computers and turned what meager resources they had left entirely to the Lynx. They wouldn’t even be a publisher in their own right anymore, relying instead on Atari to sell and distribute their games for them. Tramiel had, as the kids say today, thoroughly pwned them.

This zombie version of Epyx shambled on for a disconcertingly long time, plotting always for ways to become relevant to someone again without ever quite managing it. It finally lay down for the last time in 1993, when the remnants of the company were bought up by Bridgestone Media Group, a Christian advocacy organization with ties to one of Epyx’s few remaining employees. By this time, the real “end of the Epyx era,” as Computer Gaming World editor Johnny Wilson put it, had come long ago. In 1993, the name “Epyx” felt as much like an anachronism as the Commodore 64.

What, then, shall we say in closing about Epyx? If Cinemaware, the subject of my last article, was the prototypical Amiga developer, Epyx has a solid claim to the same title in the case of the Commodore 64. As with Cinemaware, manifold and multifarious mistakes were made at Epyx that led directly to the company’s death, mistakes so obvious in hindsight that there seems little point in belaboring them any further here. (Don’t try to design, manufacture, and launch an entirely new gaming platform if you don’t have deep pockets and a rock-solid revenue stream, kids!) They bit off far more than they could chew with the Handy. Combined with their failure to create a coherent identity for themselves in the post-Commodore 64 computer-games industry, it spelled their undoing.

And yet, earnest autopsying aside, when all is said and done it does feel somehow appropriate that Epyx should have for all intents and purposes died along with their favored platform. For a generation of teenage boys, the Epyx years were those between 1984 and 1988, corresponding with the four or five dominant years which the Commodore 64 enjoyed as the most popular gaming platform in North America. It seems safe to say that as long as any of that generation remain on the planet, the name of Epyx will always bring back memories of halcyon summer days of yore spent gathered with mates around the television, joysticks in hand. Summer Games indeed.

(Sources: Questbusters of November 1989; ACE of May 1990; Retro Gamer 18 and 129; Commodore Magazine of July 1988 and August 1989; Small Business Report of February 1988; San Francisco Business Times of July 25 1988; Amazing Computing of June 1988, November 1988, March 1989, April 1989, June 1989, August 1989, November 1989, December 1989, January 1990, and February 1990; Info of November/December 1989; Games Machine of March 1989 and January 1990; Compute!’s Gazette of April 1988; Compute! of November 1987 and September 1988; Computer Gaming World of November 1989, December 1989, and November 1991; Electronic Gaming Monthly of September 1989. Online sources include articles on US Gamer, Now Gamer, Wired, and The Atari Times. My huge thanks to Alex Smith, who shared his take on Epyx’s collapse with me along with some of the sources listed above.)

 
55 Comments

Posted by on December 22, 2016 in Digital Antiquaria, Interactive Fiction

 

Tags: , ,

The 68000 Wars, Part 4: Rock Lobster

In the years following Jack Tramiel’s departure, Commodore suffered from a severe leadership deficit. The succession of men who came and went from the company’s executive suites with dizzying regularity often meant well, were often likable enough in their way. Yet they were also weak-willed men who offered only timid, conventional ideas whilst living in perpetual terror of the real boss of the show, Commodore’s dilettantish chairman of the board and interfering largest stockholder Irving Gould.

The exception that proves the rule of atrocious management is Thomas Rattigan, the man who during his brief tenure saved Commodore and in the process the Commodore Amiga from an early death. Rattigan wasn’t, mind you, a visionary; he never got the time to demonstrate such qualities even if he did happen to possess them. His wasn’t any great technical mind, nor was he an intrinsic fan of computers as an end unto themselves; in common with a rather distressing number of industry executives of the time, Rattigan, like Apple’s John Sculley a veteran of Pepsi Cola, seemed to take a perverse pride in his computer illiteracy, saying he “never got beyond the slide rule” and not even bothering to place a computer on his desk. He may not have even been a terribly nice guy; the thousands of employees he laid off, among them virtually the entire team that had once been Amiga, Incorporated, certainly aren’t likely to invite him to dinner anytime soon. No, Rattigan was simply competent, and carried along with that competence a certain courage of his own convictions. That was more than enough to make him stand out from his immediate predecessor and his many successors like the Beatles at a battle of the bands.

Thomas Rattigan

Thomas Rattigan

Rattigan was appointed President and Chief Operating Officer of Commodore International on December 2, 1985, and Chief Executive Officer on April 1, 1986, succeeding the feckless former steel executive Marshall Smith, whose own hapless tenure would serve as a blueprint for most of the Commodore leaders not named Rattigan who would follow. After replacing Tramiel in February of 1984, Smith had fiddled while Commodore burned, going from the billion-dollar face of home computing in North America to the business pages’ favorite source of schadenfreude, hemorrhaging money and living under the shadow of a gleeful deathwatch. The stock had dropped from almost $65 per share at the peak of Tramiel’s reign to less than $5 per share at the nadir of Smith’s. It was Rattigan, in one of his last acts before assuming the mantle of CEO as well as president, who negotiated the last-ditch $135 million loan package that gave Commodore — in other words, Rattigan himself — a lease on life of about one year to turn things around.

Some of the changes that Rattigan enacted to effect that turnaround were as inevitable as they were distressing: the waves of layoffs and cutbacks that had already begun under Smith’s reign continued for some time. Unlike Smith, however, Rattigan understood that he couldn’t cost-reduce Commodore back to profitablity.

The methods that Rattigan used to implement triage on the profit side of the ledger sheet were unsexy but surprisingly effective. One was entry into the burgeoning market for commodity-priced PC clones, hardware that could be thrown together quickly using off-the-shelf components and sold at a reasonable profit. Commodore’s line of PC clones would never do much of anything in North America — the nameplate was too associated with cheap, chirpy home computers for any corporate purchasing manager to glance at it twice — but it did do quite well in Europe; in some European countries, especially West Germany, the Commodore brand remained as respectable as any other.

Rattigan’s other revenue-boosting move was even more simple and even more effective. Commodore’s engineers had been working on a new version of the 64. Dubbed internally the 64CR, for “Cost Reduced,” it was built around a redesigned circuit board that better integrated many of the chips and circuitry using the latest production processes, resulting in a substantial reduction in the cost of production. The chassis and case were also simplified — for example, to use only two instead of many different types of screws. While they were at it, Commodore dramatically changed the look of the machine and most of its common peripherals to match that of the newer Commodore 128, thus creating a uniform appearance across their 8-bit line. As Rattigan said, “I think you’ve got to give people the opportunity not to have a black monitor, a green CPU, and a red disk drive.”

Commodore 64C

Commodore 64C

All of which was very practical and commonsensical. Looking at the new machine, however, Rattigan saw an opportunity to do something Commodore had never done before: to raise its price, and thereby to recoup some desperately needed profit margin. This really was a revolutionary thought for Commodore. Ever since releasing their VIC-20 model that had created the home-computer segment in North America, Commodore had competed almost entirely on the basis of offering more machine for less money than the other folks — an approach that did much to create the low-rent image that would dog the brand for the rest of the company’s life. Commodore had always kept their profit margins razor thin in comparison to the rest of the industry, trusting that they would, as the old saying/joke goes, “make it up in volume.” Now, though, Rattigan realized that the 64 had much more than price alone going for it. Almost everyone buying a 64 in 1986 was motivated largely by the platform’s peerless selection of games. Most, he theorized, would be willing to pay a little more than what Commodore was currently charging to gain access to that library. Thus when Commodore announced the facelifted 64 — now rechristened simply the 64C for obvious reasons — they also announced a 20 percent bump in its wholesale price. To ease some of the pain, they would bundle with it something called GEOS, an independently developed graphically-oriented operating environment that claimed to turn the humble 64 into a mini-Macintosh. (It didn’t really, of course, but it was a noble, impressive effort for a machine with a 1 MHz 8-bit processor and 64 K of memory.) Anyone who’s been around manufacturing at all will understand just what a huge difference a price increase of that magnitude, combined with a substantial reduction in manufacturing cost, would mean to Commodore’s bottom line if customers did indeed prove willing to continue buying the new model in roughly the same numbers as the old. Thankfully, Rattigan’s instincts proved correct. The 64C picked up right where the older model had left off, a brisk — and vastly more profitable — seller.

Sometimes, then, the simplest fixes really are the most effective. Taken together with the cost-cutting, these two measures returned Commodore to modest profitability well before Rattigan’s one-year deadline expired. Entering 1987, the company looked to be in relatively good shape for the short term. Yet questions still swirled around its long-term future. If Commodore didn’t want to accept the depressing fate of becoming strictly a maker of PC clones for the European market, they needed a successful platform of their own that could become the successor to the 64, which was proving longer lived than anyone had ever predicted but couldn’t go on forever. That successor had to be the Amiga. And therein lay problems.

The Amiga was in a sadly moribund state by the beginning of 1987. The gala Lincoln Center debut was now eighteen months in the past, but it felt like an eternity. The excitement with which the press had first greeted the new machine had long since been replaced by narratives of failure and marketing ineptitude. Commodore had stopped production of the Amiga in mid-1986 after making just 140,000 machines, yet was still able to fill the trickle of new orders from warehouse stock. Sure, some pretty good games had been made for the Amiga, at least one of which was genuinely groundbreaking, but with numbers like those how long would that continue? Already Electronic Arts had quietly sidled away from their early declarations that together they and the Amiga would “revolutionize the home-computer industry,” turning their focus back to other, more plebeian platforms where they could actually sell enough games to make it worth their while. Ditto big players in business and productivity software like Borland, Ashton-Tate, and WordPerfect. The industry at large, it seemed, was just about ready to put a fork in Commodore’s erstwhile dream machine.

The Amiga’s most obvious failing was one of marketplace positioning. Really, just who was this machine for? There were two obvious markets: homes, where it would make the best games machine the world had yet seen; and the offices of creative professionals who could make use of its unprecedented multimedia capabilities. Yet the original Amiga model had managed to miss both targets in some fairly fundamental ways. Svelte and sexy as it was, it lacked the internal expansion slots and big power supply necessary to easily outfit it with the hard drives, memory expansions, accelerator cards, and genlocks demanded by the professionals. Meanwhile its price of almost $2000 for a reasonably complete, usable system was far too high for the home market that had so embraced the Commodore 64. Throw in horrid Commodore marketing that ignored both applications in favor of positioning the Amiga as some sort of challenger to the PC-clone business standard, and it was remarkable that the Amiga had sold as well as it had.

If there was a bright spot, it was that the Amiga’s obvious failing had an equally obvious solution: not one but two new models, each perfectly suited for — and, hopefully, marketed toward — one of its two logical customer bases. Rattigan, industry neophyte though he was, saw this reasoning as clearly as anyone, and pushed his engineers to deliver both new machines as quickly as possible. They were officially announced via a low-key, closed-door presentation to select members of the press at the January 1987 Winter Consumer Electronics Show. The two new models would entirely replace the original, which had always been officially called the Amiga 1000 but had seldom been referred to by that name heretofore. The Amiga 2000 would be the big, professional-level machine, with a full 1MB of memory standard — four times that of the 1000 — and all the slots and expansion possibilities a programmer, artist, or video-production specialist — or, for that matter, a game developer — could possibly want.

Amiga 2000

Amiga 2000

But it was the Amiga 500 that would become the most successful Amiga model ever released, as well as the heart of its legacy as a gaming platform. Designed primarily by George Robbins and Bob Welland at Commodore’s West Chester, Pennsylvania, headquarters — the slowly evaporating original Los Gatos Amiga team had little to do with either of the new models — the 500 was code-named “Rock Lobster” during development after the B-52’s song (reason enough to love it right there if you ask me). Key to the work was a re-engineering of Agnus, the most complex of the Amiga’s custom chips, to make it smaller, simpler, and cheaper to manufacture; the end result was known as “Fat Agnus.” That accomplished, Robbins and Welland managed to stuff the contents of the 1000’s case into an all-in-one design that looked like a bulbous, overgrown Commodore 128.

Amiga 500

Amiga 500

The Amiga 500 wasn’t, especially in contrast to the 1000, going to win any beauty contests, but it got the job done. There was a disk drive built into the side of the case, a “trap door” underneath to easily increase memory from the standard 512 K to 1 MB, and an expansion port in lieu of the Amiga 2000’s slots that let the user add peripherals the old-fashioned Commodore way, by daisy-chaining them across the desktop. Best of all, a usable system could be had for around $1000, still a stratum or two above the likes of a 64 or 128 but nowhere near so out of the reach of the enthusiastic gamer or home hacker as had been the first Amiga. Compromised in some ways though it may have been from an engineering standpoint, enough to prompt a chorus of criticism from the old Los Gatos Amigans, the Amiga 500 was a brilliant little machine from a strategic standpoint, the smartest single move the post-Tramiel Commodore would ever make outside of electing to buy Amiga, Incorporated, in the first place.

But unfortunately, this was still Irving Gould’s Commodore, a company that seldom failed to follow every good decision with several bad ones. Amiga circles and the trade press at large were buzzing with anticipation for the not-yet-released new models, which were justifiably expected to change everything, when word hit the business press on April 23 that Thomas Rattigan had been unceremoniously fired. Like the firing of Jack Tramiel three years before when things were going so very well, it made and makes little sense. Gould would later say that Rattigan had been fired for “disobeying the chairman of the board” — i.e., him — and for “gross disregard of his duties,” but refused to get any more specific. Insiders muttered that Rattigan’s chief sin was that of being too good at his job, that the good press his decisions had been receiving had left Gould jealous. Just a couple of weeks before Rattigan’s firing, Commodore’s official magazine had published a lengthy interview with him, complete with his photo on the cover. To this Gould was reported to have taken grave exception. Yet Rattigan hardly comes across as a prima donna or a self-aggrandizer therein. On the contrary, he sounds serious, thoughtful, grounded, and very candid, explicitly rejecting the role of “media celebrity” enjoyed by Apple’s John Sculley, his former colleague at Pepsi: “When you have lost something in the range of $270 million in five quarters, I don’t think it’s time to be a media celebrity. I think it’s time to get back to your knitting and figure out how you’re going to get the company making money.” Nor does he overstate the extent of Commodore’s turnaround, much less take full credit for it, characterizing it as “tremendous improvement, but not an acceptable performance.” It seems hard to believe that Gould could be petty enough to object to such an interview as this one. But at least one more piece of circumstantial evidence exists that he did: Commodore Magazine‘s longtime editor Diane LeBold was forced out of the company on Rattigan’s heels, along with other real or perceived Rattigan loyalists. It made for one hell of a way to run a company.

True to form of being less of a pushover than Gould’s other executive lapdogs, Rattigan soon filed suit against Commodore for $9 million, for terminating his five-year employment contract four years early for no good reason. Commodore promptly counter-sued for $24 million, the whole ugly episode overshadowing the actual arrival of the Amiga 500 and 2000 in stores. After some five years of court battles, Rattigan would finally be awarded his $9 million — yes, every bit of it — just at a time when everything was starting to go sideways for Commodore and they could least afford to pay him.

With Rattigan now out of the picture — Gould had had him escorted off the campus by security guards, no less — Gould announced that he would be taking personal charge of day-to-day operations, a move that filled no one at the company other than his hand-picked circle of sycophants with any joy. But then, for Gould day-to-day oversight meant something different than it did for most people. He continued to live the lifestyle of the jet-setting super-rich, traveling the world — reportedly largely to dodge taxes — and conducting business, to whatever extent he did, by phone. Thus Commodore was not only under a cloud of rumor and gossip at this critical moment when these two critical new machines were being introduced, but they were also leaderless, their executive wings gutted and reeling from Gould’s purge and their ostensible new master who knew where. There was, needless to say, not much in the way of concerted promotion or messaging as the months marched on toward Christmas 1987, the big test of the Amiga 500.

While it didn’t abjectly fail that test, it didn’t really skate through with honors either. On the one hand, Amigas were selling again, and in better numbers than ever before. The narrative of the Amiga as a flop that was soon to be an orphan began to fade, and companies like Electronic Arts began to return to the platform, if not always as a target for first-run games at least as a consistent target for ports. WordPerfect even ported their industry-standard word processor to the Amiga. But on the other hand, the Amiga certainly wasn’t going to become a household name like the 64 anytime soon at this rate. In addition to the nearly complete lack of Commodore advertising, distribution remained a huge problem. Many people who might have found the Amiga very interesting literally never knew it existed, never saw an advertisement and never saw it in a store. Jack Tramiel’s decision to dump the 64 into mass-market channels like Sears and Toys “R” Us had been a breaking of his own word and a flagrant betrayal of his loyal dealers from which Commodore’s reputation had never entirely recovered. Yet it had also been key to the machine’s success; the 64 was available absolutely everywhere during its heyday, an inescapable presence to tempt plenty of people who would never think to walk into a dedicated computer store. Now, though, having laboriously and with very mixed results struggled to rebuild the dealer network that Tramiel had demolished, Commodore refused to do the same with the Amiga 500, even after some of those dealers had started to whisper through back channels that, really, it might be okay to offer some 500s through the mass market in the name of increasing brand awareness and corralling some new users who would quite likely end up coming to them for further hardware, software, and support anyway. But it didn’t happen, not in 1987, 1988, or the bulk of 1989.

The Amiga thus came to occupy an odd position on the American computing scene of the late 1980s, not quite a failure but never quite a full-fledged success either. Always the bridesmaid, never the bride; the talented actor never quite able to find her breakout role; pick your metaphor. Commodore blundered along, going through more of Irving Gould’s sock-puppet executives in the process. Max Toy, unfortunately named in light of the image that Commodore was still trying to shake, took over in October of 1987, to be replaced by Harold Copperman in July of 1989. Meanwhile the two Amiga models settled fairly comfortably into their roles.

Video production became the 2000’s particular strong suit. Amigas were soon regular workhorses on television series like Amazing Stories, Max Headroom, Lingo; on films like Prince of Darkness, Not Quite Human, Into the Homeland; on lots of commercials. If most of this stuff wasn’t exactly the pinnacle of cinematic art, it was certainly more Hollywood work than any other consumer-grade PC was getting. More important, and more inspiring, were the 2000s that found homes in small local newsrooms, on cable-access shows, and in small one- or two-person video-production studios. Just as the Macintosh had helped to democratize the means of production on paper via desktop publishing, the Amiga was now doing the same for the medium of video, complete with a new buzzword for the age: “desktop video.”

The strong suit of the Amiga 500, of course, was games. At first blush, the Amiga might seem a hard sell to game publishers. Even in 1988, after the 500 and 2000 had had some time to turn things around for the platform, a hit Amiga game might sell only 20,000 copies; a major blockbuster by the platform’s terms, 50,000. The installed base still wasn’t big enough to support much bigger numbers than these. An only modestly successful MS-DOS game, by contrast, might sell 50,000 copies, while some titles had reportedly hit 500,000 copies on the Commodore 64 alone. Yet, despite the raw numbers, many publishers discovered that the Amiga carried with it a sort of halo effect. Everyone seriously into computer games knew which platform had the best graphics and sound, which platform had the best games, even if some were reluctant to admit it openly. Publishers found that an Amiga game down-ported to other platforms carried with it a certain cachet inherited from its original version. Cinemaware, the premiere Amiga game developer and later publisher in North America, used the Amiga’s halo effect to particularly good commercial effect. All of their big releases were born, bred, and released first on the Amiga. They found that it made good commercial sense to do so, even if they ultimately sold far more copies to MS-DOS and Commodore 64 owners. While it’s true that Cinemaware could never have survived if the Amiga had been the only platform for which they made games, neither could they have made a name for themselves in the first place if the Amiga versions of their games hadn’t existed. Some of the same triangulations held sway, albeit to a lesser extent, among other publishers.

All told, the last three years of the 1980s were, relatively speaking, the best the Amiga would ever enjoy in North America. By the end of that period, with the 64 at last fading into obsolescence, the Amiga could boast of being the number two platform, behind only MS-DOS, for computer games in North America — a distant second, granted, but second nevertheless — while Commodore stood as the number three maker of PCs in North America in terms of units sold, behind only IBM and Apple. And Commodore was actually making money for most of this period, which was by no means always such a sure thing in other periods. But perhaps more important than numbers and marketshare was the sense of optimism. Every month seemed to bring some breakthrough program or technology, while every Christmas brought the hope that this would be the one where the Amiga finally broke into the public consciousness in a big way. To continue to be an Amiga loyalist in later years would require one to embrace Murphy’s Law as a life’s creed if one didn’t want to be positively smothered under all of the constant disappointments and broken promises that could make the platform seem cursed by some malicious higher power. But in these early, innocent times everything still seemed so possible, if only there would come the right advertising campaign, the right change in management at Commodore, the right hardware improvements.

But, ah, Commodore’s management… there lay the rub, even during these good years. Amiga owners watched with concern and then alarm as Apple and the makers of MS-DOS machines alike steadily improved their offerings whilst Commodore did nothing. In 1987, Apple debuted the Macintosh II, their first color model, with a palette of millions of colors to the Amiga’s 4096 and a hot new 16 MHz 68020 CPU inside. Yes, it cost several times the price of even the professional-grade Amiga 2000, and yes, 68020 or no, the Amiga could still smoke it for many animation tasks thanks to its custom chips. But then, even Apple’s prices always came down over time, and everyone knew that their hardware would only continue to improve. That same year, IBM introduced their new PS/2 line, and with it the new VGA graphics standard with about 262,000 colors on offer. More caveats applied, as Amiga fans were all too quick to point out, but the fact remained that the competition was improving by leaps and bounds while Commodore remained wedded to the same core chipset that they had purchased back in 1984. The Amiga 1000 had been a generation ahead of anything else on the market at the time of its release, but, unfortunately, generations aren’t so long in the world of computers. Gould and his cronies seemed unconcerned about or, still more damningly, blissfully unaware of the competition that was beginning to match and surpass the Amiga in various ways. In 1989, IBM spent 10.9 percent of their gross revenue on R&D, Apple 6.7 percent. And Commodore? 1.7 percent. The one area where Commodore did rank among the biggest spenders in the industry was in executive compensation, particularly the salary of one Irving Gould.


For the 1989 Christmas season, Commodore launched what would prove to be their first and last major mainstream advertising campaign for the Amiga 500. The $20 million campaign featured television spots produced by no less leading lights than Steven Spielberg’s Amblin Entertainment and George Lucas’s Lucasfilm. The slogan was “Amiga: The Computer for the Creative Mind.” The most lavish of the spots featured cameos by a baffling grab bag of minor celebrities, including Tommy Lasorda, Tip O’Neill, the Pointer Sisters, Burt Bacharach, Little Richard, and astronauts Buzz Aldrin, Gordon Cooper, and Scott Carpenter. Commodore’s advertising agency announced confidently that 92 percent of Americans would see an Amiga commercial an average of twenty times during November and December. Commodore would even begin selling 500s through mass-market merchandisers at last, albeit in a limited way, going through Sears and Service Merchandise alone. The campaign was hyped in the Amiga press as a last all-out effort to make that ever-elusive big breakthrough in North America. Sure, it was something they really needed to have done back in 1987, when the 500 first debuted, but at least they were doing it now. That was something, right? Right? In the end, it proved a heartbreaker of the sort with which Amiga fans would grow all too familiar over the years to come: it had no appreciable effect whatsoever. And with that Commodore slipped out of the mainstream American consciousness along with the decade with which their computers would always be identified.

The next year the first of a new generation of unprecedentedly ambitious games arrived — games like Wing Commander, Ultima VI, Railroad Tycoon — that looked, sounded, and played better on MS-DOS machines than they did on Amigas, thanks to the ever-improving graphics cards, sound cards, and new 32-bit 80386 processors in those heretofore bland beige boxes. Cinemaware that same year released Wings, the last of their big Amiga showcases, and then quietly died. The Amiga’s halo effect was no more. Just like that, an era ended.

And yet… well, here’s where things get a little confusing. As the Amiga was drying up as a gaming platform in North America, it was in many ways just getting started in Europe, with most of the classics still to come. Let’s rewind and try to understand how this parallel history came to be.

Commodore had always been extremely strong in Europe, going all the way back to their days as a maker of calculators. Their first full-fledged computer, the PET, had been little more than a blip on the radar in North America in comparison to its competitors the Radio Shack TRS-80 and the Apple II, yet it had fostered a successful and respected line of business computers across the pond. Commodore’s most consistently strong markets then would also prove the strongest of their twilight years: Britain and, especially, West Germany. Both operations were granted much more autonomy than the North American operation, and were staffed by smart people who were much better at selling Commodore’s American computers than Commodore’s Americans were. Germans in particular developed a special affinity for the Commodore brand, one that was virtually free of the home-computer/business-computer dichotomy that Commodore twisted themselves into knots trying to navigate in the United States. In Germany a good home computer was simply a good home computer, and if the same company happened to offer a good business computer, well, that was fine too.

batmanpack

When Commodore’s European leadership looked to the new Amiga 500, they saw a machine sufficient to make the traditional videogame demographic of teenage boys, who were currently snatching up Commodore 64s and Sinclair Spectrums, positively salivate. They unapologetically marketed it on that basis. Knowing what their buyers really wanted the machine for, they quite early on took to bundling together special packages, usually just in time for Christmas, that combined a 500 with a few of the latest hot games. A particular home run was 1989’s so-called “Batman Pack,” which included the game based on the hit Batman movie, a fresh new arcade conversion called The New Zealand Story, the graphically stunning casual flight simulator F/A-18 Interceptor, and, since this was an Amiga after all, the platform’s signature application, Deluxe Paint II. Deluxe Paint aside, there was no talk of video production or productivity of any other stripe, no mention of the Amiga’s groundbreaking multitasking operating system, no navel-gazing discussions of the platform’s place in the multimedia zeitgeist. Teenage boys didn’t want any of that. What they wanted was great games with great graphics, and that’s exactly what Commodore’s European operations gave them. You were just buying a fun computer, a game machine, so you didn’t need to go through a dealer. From the beginning, the Amiga 500 was widely available at all of the glossy electronics stores on European High Streets. The West German operation went even further: they started selling Amigas through grocery stores. Buy an Amiga 500, hook it up to a television, pop in a disk, turn it on, and start playing.

The British and especially the Germans took to the Amiga 500 in numbers that Commodore’s North American executives could only dream of. By early 1988, Commodore could announce that they had sold 500,000 Amigas worldwide, a strong turnaround for a marque that had been all but left for dead a year before. A rather astonishing 200,000 of those machines, 40 percent of the total, had been sold in West Germany alone; Britain accounted for another 70,000. Even now, with the Christmas season behind them, Commodore West Germany was selling a steady 4000 Amiga 500s every week. A few months later came the simultaneously impressive and depressing news that the total market for Amiga hardware and software in West Germany (population 60 million) was now worth more than that for the United States (population 240 million). And where Germany led, the rest of Europe followed. Eighteen months later, with worldwide Amiga sales closing in on 1.5 million, it was the number one gaming computer in Europe, a position it would continue to enjoy for several years to come. Just about to begin its fade from prominence as a game machine in the United States, in Europe the Amiga’s best years and best games were still in front of it, as bedroom coders learned to coax performance out of the hardware of which its designers could hardly have conceived. The old Boing demo, once so stunning that crowds of trade-show attendees had peeked suspiciously under tables looking for the workstation-class machine that was really generating that animation, already looked singularly unimpressive. The story of the Amiga 500 in Europe was, in other words, the story of the Commodore 64 happening all over again. Commodore was now making the vast majority of their money in Europe, the North American operation a perpetual weak sister.

When journalists for the Amiga trade press in North America visited Europe, they were astounded. Here was the mainstream saturation that they had only been able to fantasize about back home. A report from a correspondent visiting a typical department store in Cologne must have read to American readers like a dispatch from Wonderland.

I came across a computerized book listing that was running on an Amiga 500. As I approached the computer department, I was greeted by a stack of Amiga 500s. I could not believe the assortment of Amiga titles on the book rack (hardcover ones, too!). I found two aisles full of Amiga software, consisting mostly of games. The Amiga selection was more than that of any other computer.

In a sense, it was just a reversion to the status quo. After all, prior to the introduction of the VIC-20 in 1981, Commodore’s income had been similarly unevenly distributed between the continents. Seen in this light, it’s the high times of the 1980s that are the anomaly, when American buyers flocked to the VIC-20 and the 64 and for a time made what had always been fundamentally a European brand — although, paradoxically, a European brand engineered and steered from the United States — into an intercontinental phenomenon. Not that that was of much comfort to the succession of executives who came and went from Irving Gould’s hotseat, fired one after another for their failure to make North American sales look as good as European sales.

But I did promise you 68000 Wars in the title of this article, didn’t I? So where, you might well be wondering, was the Amiga’s arch-rival the Atari ST in all this? Well, in North America it was a fairly negligible factor, although Atari would continue to sell their machine there almost as long as Commodore would the Amiga. The hype around the ST had dissipated quickly with the revelation in late 1986 that Atari really wasn’t selling anywhere near as many of them as Jack Tramiel liked to let on, and the Amiga 500, so obviously audiovisually superior and now much closer in price, soon proved a deadly foe indeed. The ST retained its small legion of loyal users: desktop publishers unwilling to splurge on a Macintosh, who took full advantage of its rock-solid monochrome high-resolution screen and Atari’s inexpensive laser printer, thereby truly making the ST live up to its old “Jackintosh” nickname; musicians, both amateur and professional, who loved its built-in MIDI port; programmers and hardware hackers who favored its simple, straightforward design over the Amiga’s more baroque approach; people who needed lots and lots of memory for one reason for another, on which terms Atari always offered the best deal in town (they released 2 MB and 4 MB ST models as early as 1987, when figures like that were all but inconceivable); inveterate Commodore haters and/or Atari lovers who bought it for the badge on its front. Still, there was little doubt which platform had won the 68000 Wars in North America. In the wake of the Amiga 500’s release, Atari began increasingly to turn to other ways of making money: buying the Federated chain of consumer-electronics stores; capitalizing on nostalgia for the glory days of the Atari VCS by continuing to sell both the old hardware and the cartridges to run on it; wresting away from Epyx a handheld gaming machine, the first of its kind, that was ironically designed by members of the old Amiga, Incorporated, team. When all else failed, there was always Jack Tramiel’s old hobby of lawsuits, of which he launched quite a few, most notably against the former owners of Federated for overstating their company’s value and against the new kid on the block in console gaming, Nintendo, for their alleged anti-competitive practices.

In Europe, the ST also came out second best to the Amiga, but the race was a much closer one for a while. Along with their love for all things Commodore, Germans found that they could also make room in their hearts for the Atari ST. It found a home in many German markets it never came close to cracking in the United States, being regarded as a perfectly respectable business computer there for quite some time. It also continued to do fairly well with gamers, thanks to Atari’s pricing strategies that always seemed to keep its low-end model just that little bit cheaper than the Amiga 500, enough to be a difference-maker for some buyers. When the Amiga became the biggest gaming computer in Europe, it was the Atari ST that slipped into the second spot. It would take the much more expensive MS-DOS machines some years yet to overtake these two 68000-based rivals. The economic chaos brought on by the reunification of West and East Germany, which caused many consumers there to tighten their wallets, only helped their cause, as did the millions of new price-conscious buyers who were suddenly scrambling for a piece of that Western computing action following the fall of the Iron Curtain.

The story of the Amiga, and to some extent also that of the ST, is often framed as a narrative of frustration, of brilliance that never got its due. There are some good reasons for that, but it can also be a myopic, America-centric view, ignoring as it does a veritable generation of youngsters on the other side of the Atlantic who grew up knowing these two platforms very well indeed. When I was writing my book about the Amiga, I couldn’t help but note the markedly different responses I got from friends in Europe and the United States when I told them about the project. Most Americans have no idea what an Amiga is (“Omega?”); most Europeans of a certain age remember it all too well, flashing me smiles redolent of nostalgia for afternoons spent before the television with their mates, when the summer seemed endless and the possibilities limitless. Instead of lamenting might-have-beens too much more, I expect to spend quite some articles over the next few years talking about the Amiga’s innovations and successes — and, yes, I’ll also have more to say about the Amiga’s perpetually overlooked little frenemy the Atari ST as well. Whether you grew up with one of these machines or you too aren’t quite sure yet what to make of this whole “Omega” thing, I hope you’ll stick around. Some amazing stuff is in store.

(Sources: Invaluable as always for these articles was Brian Bagnall’s book On the Edge: The Spectacular Rise and Fall of Commodore. I can’t wait for the better, longer version. The long-running “Roomers” column in Amazing Computing is my go-to source for a month-by-month chronology of developments on the Amiga scene, and the source of most of the nit-picky factoids in this article. The issues of Amazing used include: March 1987, June 1987, July 1987, August 1987, October 1987, November 1987, December 1987, February 1988, April 1988, May 1988, June 1988, July 1988, August 1988, September 1988, November 1988, December 1988, January 1989, February 1989, March 1989, April 1989, May 1989, June 1989, July 1989, August 1989, September 1989, October 1989, November 1989, December 1989, January 1990, April 1990, May 1990, June 1990, February 1991, March 1991, April 1991, May 1991, December 1991. Commodore Magazine‘s fateful interview with Thomas Rattigan appeared in the May 1987 issue. Other sources include Retro Gamer 39 and of course my own book The Future Was Here. Hey, it’s not every day a writer gets to cite himself…)

 
83 Comments

Posted by on November 27, 2015 in Digital Antiquaria, Interactive Fiction

 

Tags: , , , ,

The 68000 Wars, Part 3: We Made Amiga, They Fucked It Up

Amiga 1000

The Commodore/Amiga honeymoon could hardly have been more idyllic. Honoring the wishes of everyone at Amiga to not get shipped off to Commodore’s headquarters in West Chester, Pennsylvania, Commodore instead moved them just ten miles from their cramped offices in Santa Clara, California, to a spacious new facility in Los Gatos, surrounded by greenery and well-tended walking paths that gave it something of the atmosphere of a university campus. The equipment at their disposal was correspondingly upgraded; instead of fighting one another for the use of a handful of aging Sage IV workstations, everyone in a significant technical role now got a brand new Sun workstation of his own. Best of all, Commodore knew when to back off. With their charges now relocated and properly equipped, they left them to it. “Commodore,” says R.J. Mical, “did the best thing they possibly could have done to make sure the product they bought was successful. They left us alone.” They were all “vastly in love with Commodore” in those early days. After all they’d just been through, how could they not be?

With Jay Miner’s chipset, the heart of their project, largely complete before the acquisition, Amiga’s focus now shifted to all of the stuff that would need to surround those chips to finish their computer, now to be called not the Amiga Lorraine but the Commodore Amiga. The need for an operating system becoming urgent, the software folks now came to the fore. The three most prominent systems programmers at Amiga each authored one layer of the software stack that would become the soul of the machine. Carl Sassenrath wrote the Exec, the kernel of a new operating system that borrowed many ideas from bigger institutional operating systems like Unix, not least among them the revolutionary capability of true preemptive multitasking. Atop that Dale Luck layered the Graphics Library, a collection of software hooks to let programmers unlock the potential of Miner’s chipset in a multitasking-friendly way, without having to bang on the hardware itself. And atop that R.J. Mical layered Intuition, a toolbox of widgets, icons, menus, windows, and dialogs to let programmers build GUI applications with a consistent look and feel.

But even as the rest of the system was coming together around it, Miner continued to tinker with his chipset. Out of these late experiments arose one of the most important capabilities of the Amiga, one absolutely key to its status as the world’s first multimedia PC. In the Amiga’s low-resolution modes of 320 X 200 and 320 X 400, Denise was normally capable of displaying up to 32 colors chosen from a palette of 4096. Miner now came up with a way of displaying any or all 4096 at once, using a technique he called “hold and modify” whereby Denise could create the color of each pixel by modifying only the red, green, or blue component of the previous pixel. He hoped it would allow programmers to create photorealistic environments for flight simulators, a special interest of his. When he realized that HAM mode updated too slowly to offer a decent frame rate for such applications, he actually requested that it be removed again from the chipset. But the chip fabricators said it would cost precious time and money to do so, and since it wasn’t hurting anything they might as well leave it in. Thank God for those bean counters. While it would indeed prove of limited utility for flight simulators and other games, HAM would allow the Amiga to display captured photographs of the real world. As advertisements for Digi-View, the first practical photorealistic digitizer to reach everyday computers, would soon put it, “Digi-View brings the world into your Amiga!” It’s that very blending of the analog world around us with the digital world inside the computer that is the key to the multimedia experience that the Amiga was first to provide. HAM mode stands as a classic object lesson in unintended consequences of technological innovation. The Amiga’s claim to historical importance would have been much shakier without it.

As 1984 turned into 1985, Commodore’s patience with the sort of endless tinkering that had led to HAM mode began to decrease; they wanted Los Gatos to just get the Amiga done already. The splashy debut the Atari ST made at the Winter Consumer Electronics Show in January spooked the brass back in West Chester. And by the spring of 1985, with the home-computer market clearly on the downturn, Commodore’s financial position was beginning to look downright precarious. They needed the Amiga, and soon.

A new hire named Howard Stolz, young and inexperienced like so many of the others, became the project’s unsung hero by crafting the external appearance for the new computer. His sleek, trim case still looks great today; whatever else you can say about that first Amiga model, it remains to this day by far the best looking Amiga ever released. Then and now, one is first struck upon seeing it by how small it is; even Apple’s contemporaneous machines look chunky and clunky next to it. And it’s full of thoughtful little touches, like the “garage” below the system unit into which one can slide the keyboard when not in use. Imprinted on the inside cover of the system unit are the signatures of the core Amiga team, an idea borrowed from the original Apple Macintosh. Amongst them is the paw print of Jay Miner’s beloved Mitchie.

The Amiga made its public debut at last on July 23, 1985, in the most surreal event in the long history of Commodore. Obviously hoping to duplicate the sort of excitement Apple had become so adept at evoking, Commodore rented New York’s Lincoln Center to put on a show the likes of which they never had before and never would again. The black-tie event sported an open bar stocked to the nines, waiters wandering through the crowd with plates of hors d’oeuvres, a laser show, a three-piece classical-music trio, and — no, really — a ballerina twirling across the stage. The Los Gatos team were all there, crammed awkwardly into rented tuxedos. Bob Pariseau, the traditional master of ceremonies of Amiga demos since the days when the Amiga Lorraine was just a tangled mass of wires and breadboards, once again narrated the proceedings, looking like a stage magician in his tux and long ponytail. The rabbit he pulled out of his hat for the occasion was perhaps the only computer in the world at that time that could have managed not to be overshadowed by all the pomp and circumstance. The crowd erupted into spontaneous applause on several occasions: when, thanks to HAM mode, the Amiga showed all 4096 colors onscreen at once; when the Amiga played a bit of “Smoke on the Water” in an appropriately distorted electric-guitar tone; when it talked in male and female voices; when that old favorite, Boing, showed up yet again. The evening concluded with Andy Warhol coming onstage to digitize and manipulate the image of Debbie Harry of Blondie fame, creating an end result reminiscent of his famous Marilyn Diptych of 1962. The Amiga, everyone had to agree, made for one hell of a show.

The Amiga enjoyed the best press of its career in the immediate aftermath of that Lincoln Center premiere, ironically well before anyone could actually buy one. Byte magazine, whose editorial voice was easily the most respected in the industry, devoted a luxurious 13 pages to a detailed technical preview of the machine, pronouncing it “the most advanced and innovative personal computer today.” Creative Computing, the industry’s most venerable and (often) most visionary publication, was even more effusive in its praise. The Amiga was not just a new computer but “a new communications medium — a dream machine, a new medium of expression” that the reviewer pronounced literally indescribable in print. Writing for Computer Gaming World, Jon Freeman pronounced that “anything your favorite computer can do, the Amiga can do better. And faster. And in stereo.”

Freeman published his games through Electronic Arts, and in writing his article on the machine was very much toeing his publisher’s line. By far the new computer’s most enthusiastic and stalwart supporter, who had followed it with interest since well before the Commodore acquisition, was EA. Trip Hawkins, still nursing his dream of EA software titles lined up on the shelf of every hipster aesthete alongside the music albums they were consciously packaged to evoke, just got right away what the Amiga could mean for computerized entertainment. For him it was the Great White Hope for an industry suffering through its first real downturn ever and struggling to understand just what had gone wrong. Receiving their first prototypes many months before the Lincoln Center premiere, EA had worked hand-in-hand with Los Gatos to refine the machine and get a jump start on writing software for it.

Thus much of the earliest software available for the Amiga came from EA, including ports of old favorites like Archon and Seven Cities of Gold as well as new titles destined to become Amiga icons: DeluxePaint, Arcticfox, Marble Madness. In the immediate wake of the Amiga’s release, while most publishers were adopting a wait-and-see position on the new machine, EA offered full-throated support via splashy multi-page editorials that ran in just about every publication in the industry.

The Amiga will revolutionize the home-computer industry. It’s the first home machine that has everything you want and need for all the major uses of a home computer, including entertainment, education, and productivity. The software we’re developing for the Amiga will blow your socks off. We think the Amiga, with its incomparable power, sound, and graphics, will give Electronic Arts and the entire industry a very bright future.

We believe that one day soon the home computer will be as important as radio, stereo, and television are today.

But so far, the computer’s promise has been hard to see. Software has been severely limited by the abstract, blocky shapes and rinky-dink sound reproduction of most home computers. Only a handful of pioneers have been able to appreciate the possibilities. But then, popular opinion once held that television was only useful for civil-defense communications.

The Amiga is advancing our medium on all fronts. For the first time, a personal computer is providing the visual and aural quality our sophisticated eyes and ears demand. Compared to the Amiga, using some other home computers is like watching black-and-white television with the sound turned off.

For the first time, software developers have the tools they need to fulfill the promise of home computing.

Two years ago, we said, “We See Farther.” Now Farther is here.

With praise like that, how could anything go wrong?

Well, anything could, and for a while there it seemed like just about everything did. After the premiere and the rapturous press it generated, much momentum was squandered as Commodore struggled to put the finishing touches on the Amiga and get the machine, so much more complicated than anything the company had built or supported before, into production. It wasn’t until November that one could hope to walk into a store and walk out with a new Amiga. Commodore’s advertising campaign that started up then was as unfocused as a confetti cannon. In lieu of a coherent argument for what the Amiga represented and why it mattered, Commodore gave the public black-and-white footage of the Baby Boom Generation and tired rhetoric about keeping up with the Joneses. Commodore had somehow decided that the best way to sell the most futuristic, technologically advanced computer on the market was to evoke… nostalgia.

Just why did EA seem to understand what the Amiga represented so much better than Commodore themselves? Why was EA so much better at selling Commodore’s computer than Commodore? EA unhesitatingly and unreservedly laid out a compelling case for the Amiga as a revolutionary technology for home entertainment. Meanwhile Commodore hedged their bets everywhere — except in the Amiga’s most obvious application as a game machine, from which they ran terrified.

Then, within weeks of the Amiga’s arrival in stores, Commodore’s advertising disappeared completely. The reason was a pretty basic one: Commodore simply couldn’t afford to pay for it anymore. The previous year had been so disastrous that they were suddenly teetering on the verge of bankruptcy.

After that magical year of 1983, when Commodore had briefly become a billion-dollar company and briefly been even bigger than Apple, there had been little but bad news on the financial front. 1984 had marked a gradual cooling of the excitement surrounding home computers. That was a problem for many companies, but few more so than Commodore: Commodore represented fully 60 percent of the home-computer hardware market by that point, and had long since axed all of their more expensive machines. For them 1984 brought the failure of the eminently fail-worthy Plus/4, an alarming buildup of Commodore 64 inventories, and a disappointing Christmas that failed to come close to the previous one. And yet their troubles were only just beginning.

In 1985 a slowing home-computer market turned into a collapsing home-computer market. Suddenly Commodore was posting massive losses, to the tune of almost $200 million in 1985 alone. Their mounting debt amounted to about the same figure. By the beginning of 1986 their unsold inventory amounted to almost half a billion dollars, and layoffs had halved their workforce from 7000 to 3500. Not only was Commodore forced to effectively give up on advertising the Amiga in the mainstream media, but they didn’t even go to the biggest party in their own industry, Winter CES, in January of 1986; they simply couldn’t afford to. Ahoy! magazine pronounced Commodore’s absence akin to “Russia resigning from the Soviet Bloc, Sly leaving the Family Stone.”

Most of the people who bought home computers in 1982 and 1983 had bailed out quickly once they realized how limited their machines really were, while the remainder already had their Commodores 64s, thank you very much. And the rest of the population, the ones who were supposed to keep buying and buying for years to come, simply weren’t interested anymore. What was Commodore supposed to do, saddled as they were with bloat like the massive West Chester campus that Jack Tramiel had bought for them at the height of 1983’s success, which they hadn’t been able to even begin to fill even then?

That was a question that lots of bankers were now asking themselves because Commodore had now fallen into default of their debt obligations. The financial community wasn’t inclined to take very much on faith when it to came to this company to which an air of the fly-by-night had always clung even in its glory years. Thus it came down to a hard-headed calculus. Was their best bet to demand their payments, forcing Commodore into bankruptcy and liquidation and giving the loaners a chance to recoup what they could? Or would it be better to wait and see if things looked likely to turn around? For agonizing weeks they held Commodore’s future in their hands while the Wall Street Journal and business pages around the world speculated on the over-under of the company being forced to fold. At last, in March of 1986, a deal was reached: Commodore would get another loan package worth $135 million with which to service their existing debt and fund their efforts to turn things around. It amounted to a lease on life of about one year.

The doors would stay open for the time being, but Commodore was now known far and wide — not least to potential Amiga buyers — as a company teetering on the edge of a financial cliff. And even if you decided it was worth risking such a major purchase from a company that looked very likely to leave the Amiga an orphan, you still had to find someplace to actually buy one. Therein lies a tale in itself.

There were two entirely separate distribution channels for computers in the mid-1980s: the network of specialized dealers, who offered service, advice, and support along with computers to their customers; and the mass merchants, big-box stores like Sears and Toys ‘R’ Us and the big consumer-electronics chains, who sold computers alongside televisions and washing machines and offered little to nothing in the way of support, competing instead almost entirely on the basis of price. Commodore under Jack Tramiel had pioneered the latter form of distribution with the VIC-20, the first truly mass-market home computer. Most people were happy to buy a relatively cheap machine, especially one meant for casual home use, through a big-box store. Those spending more money, and especially those buying a machine for use in business, preferred to safeguard their investment by going through a dealer. Thus Apple, IBM, and the many makers of IBM clones like Compaq continued to sell their more expensive machines through dealers. Commodore and Atari, makers of cheaper, home-oriented machines, sold theirs through the mass market.

Now, however, Commodore found themselves with a more expensive machine and no dealer network through which to sell it, a last little poison pill left to them by Jack Tramiel. One might say that Commodore was forced to start again from scratch — except that it was actually worse than that. In late 1982 Tramiel had destroyed what was left of Commodore’s dealer network when he dumped the successor to the VIC-20, the Commodore 64, into the mass-market channel as well, just weeks after promising his long-suffering dealers that he would do no such thing. That betrayal had put many of his dealers out of business, leaving the rest to sign on with other brands whilst saying, “Never again.” New Commodore CEO Marshall Smith was honestly trying in his stolid, conservative, steel-industry way to remove the whiff of disreputability that had always clung to the company under Tramiel. But the memories of most potential dealers were still too long, no matter how impressive the machine Commodore now had to offer them. The result was that many major American cities now sported, at best, just one or two places where you could walk in and buy an Amiga. It was a crippling disadvantage.

And so the Amiga’s early customers would largely come down to the hacker hardcore, who saw the Amiga for the revolutionary technology that it was and just couldn’t not have one, in spite of it all. The early issues of Amazing Computing, the first techie magazine to devote itself to the Amiga, have some of the flavor of the early issues of Byte. Hackers probed at the machine’s many mysteries — like this unexplained “HAM mode” that was supposed to allow one to do magical things — and published their findings for others to build upon. Given by Commodore no way to expand the Amiga beyond 512 K, they figured out how to roll their own memory expansions; ditto for hard drives. Faced with a dearth of commercial software, a fellow named Fred Fish started curating disks full of the best free software and distributing them at cost to dealers to pass on to customers; the Fred Fish Collection would eventually reach over 1100 disks. A fellow named Tim Jenison devised a digitizer and started distributing disks full of incredible full-color photographs. A fellow named Eric Graham wrote a 3-D modeller and ray tracer and started passing around a jaw-dropping animation called The Juggler that, when played in computer-shop windows, quite possibly sold more Amigas than all of Commodore’s own promotional efforts combined. User groups were formed all over the country, congregations of the Amiga faithful meeting in churches and the back rooms of public libraries. It was the last great flowering of the spirit of ’75 that had spawned the PC industry in the first place. Indeed, legendary Homebrew Computer Club member John Draper, the “Captain Crunch” who had taught Steve Wozniak and Steve Jobs how to phone phreak and wrote the first practical Apple II word processor amongst other achievements, was a prominent early Amiga user. He figured out the vagaries of Intuition long before Commodore’s official documentation arrived, publishing code samples and technical tutorials, some of which were included on Fred Fish Disk #1. If the Amiga was destined to remain a cult computer, it was going to be one heck of an interesting cult.

Still, hackers with the requisite pioneering spirit and $2000 worth of disposable income weren’t in infinite supply. Sales were sluggish, if perhaps better than one might expect in light of the perfect storm of problems against which the Amiga struggled. Commodore sold about 140,000 Amigas in the first eighteen months — most in North America, some in Europe, where the machine was introduced at last only in June of 1986. As Britain’s Commodore User wryly put it, “the Amiga didn’t exactly blow the world away.”

While Commodore would have much preferred to compare the Amiga to the Macintosh, their image as a maker of low-end home computers was hard to shake. Thus the most common point of comparison in the press became Jack Tramiel’s new Atari ST line, whose earliest days in North America were far from perfect in their own right. The vast majority of the early STs shipped to Europe; of the 50,000 STs sold during the first three months, only about 10,000 were sold in North America. Like the Amiga, the ST was hobbled in North America by a sparse and shabby dealer network; even fewer dealers wanted anything to do with Jack Tramiel’s new Atari than were willing to get onboard again with the now Tramiel-less Commodore. In January Tramiel, true to his old Commodore 64 playbook, dumped the ST into the mass market. But even then distribution continued to be a problem. Most of the retailers who had filled their warehouses with Commodore 64s a couple of years ago were very skeptical of any new machines, no matter how impressive, given the moribund state of home computers in general.

Despite it all, Atari’s marketers proved to be very adept at conjuring a sense of excitement out of all proportion to the ST’s actual sales. For months it was conventional wisdom that the ST was trouncing the Amiga, outselling it by a margin of about three to one. But in September of 1986 the game was suddenly up. Preparatory to making a first IPO of 15 percent of their stock, Atari was forced to publish a prospectus detailing their actual sales numbers. They had, it turned out, sold only about 150,000 STs to that date, 90,000 of them in Europe. It seemed the Amiga was actually slightly outselling the ST in North America, although neither platform’s numbers were exactly breathtaking. Certainly the ST’s sales were a far cry from the millions per year Jack Tramiel had confidently predicted just before its launch. The much-vaunted return of the new, lean-and-mean Atari to slim profitability in 1986 was down at least as much to a modest nostalgia-driven revival of their videogame consoles, which sold cheap but could be made even cheaper, as it was to the new ST line. Likewise, Commodore’s new 8-bit 128 model was outselling the Amiga and ST combined by a factor of at least four to one, while the old 64 was continuing to sell even better than the 128.

Yet perception, as a wise someone once said, is often reality. Nowhere is that more clearly illustrated than in the way software publishers responded to the Amiga and the ST. Makers of games and other home-oriented software were already supporting quite a number of platforms. Many were understandably reluctant to add two more. Better to choose the likely winner of the 68000 Wars and support only that one. Buying into the conventional wisdom just like everyone else, most — with Electronic Arts the glaring exception — hitched their wagon to the Atari ST, which seemed to many of them the most logical likely successor to the Commodore 64. The relative positions of Commodore and Atari seemed to have neatly reversed themselves. A few years ago Atari had offered Jay Miner’s 8-bit line of computers, more technologically impressive than anything else in the industry but a bit on the expensive side and dogged by poor or nonexistent marketing. Commodore under Jack Tramiel had come along to  trounce the Ataris with the Commodore 64, simple in design where the Ataris were baroque and in consequence much cheaper to make and sell. Now, with Tramiel in charge of Atari and Miner working with Commodore, history looked about to repeat itself in mirror image. The ST’s cause was helped by its being a more immediately accessible, understandable machine; the paradigm shift represented by the Amiga with its complex multitasking operating system placed many new demands on programmers, while the ST could pretty much be programmed like a super-Commodore 64.

Thus during 1986 many major game projects were begun on the ST rather than the Amiga, many older games ported to the ST but not the Amiga. The Amiga, despite the slim sales advantage it enjoyed at the moment, was threatened with a runaway chain reaction. As the industry was finally coming to understand, software availability was the single most important factor in most customers’ decision of which platform to buy into. These early commitments to the ST by so many publishers would result in more games and applications on the shop shelves for the ST, which would in turn result in more ST buyers, which would in turn encourage yet more software publishers to cast their lot with the ST, which would… you get the picture. Thus by the end of 1986 the mounting frustration and anger the Amiga faithful felt toward Commodore was mixed with more than a tinge of outright fear. How could Commodore, owners not only of the superior machine but the better-selling machine, have passively allowed Atari to control the narrative for so long? Nowhere was that frustration, anger, and fear more keenly felt than amongst the remnants of the old Amiga, Incorporated, in Los Gatos.

The team that had built the Amiga was gradually dispersing. David Morse, the man who had co-founded the company and so brilliantly jinked and weaved his way around Atari to bring it to a safe harbor at Commodore, was gone even before the Lincoln Center show, judging his work with Amiga essentially done and finding the life of a mere administrator to be less than enticing. Commodore installed a manager of their own at Los Gatos. Friction between the East and West Coast branches began to build from there. In December of 1985 R.J. Mical and Carl Sassenrath both left. Many others threatened to do so. They had to be begged and cajoled to stay at least long enough to properly finish the Amiga’s operating system, which had been released in a very imperfect state.

As the months passed and it became clear that the Amiga wasn’t becoming the mass-market sensation they’d so confidently expected, the folks at Los Gatos knew exactly who to blame. They regarded Commodore’s mishandling of the Amiga as nothing less than a personal betrayal. Someone printed up tee-shirts that they claimed to have found at Commodore’s marketing department: “Ready? Fire! Aim!” was printed on them. West Chester in turn saw Los Gatos as an arrogant bunch of youngsters who thought they were too cool for school. For evidence of just how far relations between Commodore and the Amiga old guard had deteriorated already by the spring of 1986, we need only look to the third revision of the operating system (version 1.2), which was being finished at that time. The Amiga folks had a habit of embedding secret messages into their software, little Easter eggs activated via obscure key sequences. Mostly these were the sort of things you might expect from talented young men a bit full of themselves: “INTUITION by =RJ Mical= Software Artist Deluxe”; “Carl  EXEC Sassenrath reminds: All things are in Flux!”; “Brought to you by not a mere Wizard, but the Wizard Extraordinaire: Dale Luck.” In the aftermath of version 1.2’s release, however, word quickly spread through the Amiga community of an uglier message: “We made Amiga, They f−−−−− it up.” It didn’t take long for word to get back to West Chester; nor was it hard for them to guess who the “they” represented. It only hardened West Chester’s perception of Los Gatos as an undisciplined romper room full of immature and ungrateful prima donnas. In June of 1986 West Chester, apparently judging the operating system to be good enough for now, brought the axe down. A whole swathe of people were cut, including Bob Pariseau, the very face of Amiga at so many presentations and trade shows.

By year’s end Los Gatos was down from a high of 80 people to just 13, Jay Miner and Dale Luck the only leftovers among the core figures we’ve met in the course of these articles. Attending a developer’s conference at about that time, Amazing Computing reported that the hostility between the Los Gatos and West Chester people was now “almost palpable,” even in this public setting. This could only end one way. In March of 1987, with the lease running out on that wonderful Los Gatos campus, Commodore’s brief-lived West Coast branch was shuttered, the few remaining employees given predictably unenticing offers to move to West Chester, which they predictably refused.

The old guard held an “Amiga Wake” to mark the end of their part in the Amiga story. It was almost exactly five years to the day after Larry Kaplan had called up Jay Miner to ask if he knew any lawyers, and just days after Commodore and Atari had finally settled their long legal battle brought on by the events that followed. The theme of the party, complete with a casket at the center of the room, might easily convince one that this was a requiem not just for the team that had built the Amiga but for the dream of the Amiga itself. Given the Amiga’s commercial fortunes at that instant, it’s very possible that many who attended  believed that to be exactly what it was. In actuality, though, the Amiga was just about to get a new lease on life in the form of two new models much more intelligently packaged, marketed, and, most of all, priced. The Atari ST also had brighter days ahead of it. Ironically, both platforms were destined to enjoy the best of their glory days not in North America, the continent they’d been built to conquer, but rather an ocean away in Europe. While the 68000 Wars had so far turned out to be more a slap-fight between two commercial pygmies than the titanic battle anticipated in the press, both of the principal combatants were just getting started.

(Sources: On the Edge by Brian Bagnall; Compute! of August 1985, September 1985, December 1985, and January 1987; Byte of August 1985, October 1985, and January 1987; Compute!’s Gazette of September 1985, November 1985, December 1985, and October 1986; InfoWorld of August 5 1985; Ahoy! of September 1985 and April 1986; Computer Gaming World of September/October 1985; Info of September/October 1985 and December/January 1986; Creative Computing of September 1985; New York Magazine of May 13 1985; New York Times of August 22 1985; Commodore User of June 1986; Amazing Computing of June 1986, January 1987, March 1987, and June 1987; Fortune of January 6 1986; PC Magazine of January 14, 1986; Commodore Magazine of May 1987; Atari ST User of November 1986. Whew!)

 
 

Tags: , , ,