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The 68000 Wars, Part 6: The Unraveling

Commodore International’s roots are in manufacturing, not computing. They’re used to making and selling all kinds of things, from calculators to watches to office furniture. Computers just happen to be a profitable sideline they stumbled into. Commodore International isn’t really a computer company; they’re a company that happens to make computers. They have no grand vision of computing in the future; Commodore International merely wants to make products that sell. Right now, the products they’re set up to sell happen to be computers and video games. Next year, they might be bicycles or fax machines.

The top execs at Commodore International don’t really understand why so many people love the Amiga. You see, to them, it’s as if customers were falling in love with a dishwasher or a brand of paper towels. Why would anybody love a computer? It’s just a chunk of hardware that we sell, fer cryin’ out loud.

— Amiga columnist “The Bandito,” Amazing Computing, January 1994

Commodore has never been known for their ability to arouse public support. They have never been noted for their ability to turn lemons into lemonade. But, they have been known to take a bad situation and create a disaster. At least there is some satisfaction in noting their consistency.

— Don Hicks, managing editor, Amazing Computing, July 1994

In the summer of 1992, loyal users of the Commodore Amiga finally heard a piece of news they had been anxiously awaiting for half a decade. At long last, Commodore was about to release new Amiga models sporting a whole new set of custom chips. The new models would, in other words, finally do more than tinker at the edges of the aging technology which had been created by the employees of little Amiga, Incorporated between 1982 and 1985. It was all way overdue, but, as they say, better late than never.

The story of just how this new chipset managed to arrive so astonishingly late is a classic Commodore tale of managerial incompetence, neglect, and greed, against which the company’s overtaxed, understaffed engineering teams could only hope to fight a rearguard action.



Commodore’s management had not woken up to the need to significantly improve the Amiga until the summer of 1988, after much of its technological lead over its contemporaries running MS-DOS and MacOS had already been squandered. Nevertheless, the engineers began with high hopes for what they called the “Advanced Amiga Architecture,” or the “AAA” chipset. It was to push the machine’s maximum screen resolution from 640 X 400 to 1024 X 768, while pushing its palette of available colors from 4096 to 16.8 million. The blitter and other pieces of custom hardware which made the machine so adept at 2D animation would be retained and vastly improved, even as the current implementation of planar graphics would be joined by “chunky-graphics” modes which were more suitable for 3D animation. Further, the new chips would, at the user’s discretion, do away with the flicker-prone interlaced video signal that the current Amiga used for vertical resolutions above 200 pixels, which made the machine ideal for desktop-video applications but annoyed the heck out of anyone trying to do anything else with it. And it would now boast eight instead of four separate sound channels, each of which would now offer 16-bit resolution — i.e., the same quality as an audio CD.

All of this was to be ready to go in a new Amiga model by the end of 1990. Had Commodore been able to meet that time table and release said model at a reasonable price point, it would have marked almost as dramatic an advance over the current state of the art in multimedia personal computing as had the original Amiga 1000 back in 1985.

Sadly, though, no plan at Commodore could long survive contact with management’s fundamental cluelessness. By this point, the research-and-development budget had been slashed to barely half what it had been when the company’s only products were simple 8-bit computers like the Commodore 64. Often only one engineer at a time was assigned to each of the three core AAA chips, and said engineer was more often than not young and inexperienced, because who else would work 80-hour weeks at the salaries Commodore paid? Throw in a complete lack of day-to-day oversight or management coordination, and you had a recipe for endless wheel-spinning. AAA fell behind schedule, then fell further behind, then fell behind some more.

Some fifteen months after the AAA project had begun, Commodore started a second chip-set project, which they initially called “AA.” The designation was a baseball metaphor rather than an acronym; the “AAA” league in American baseball is the top division short of the major leagues, while the “AA” league is one rung further down. As the name would indicate, then, the AA chipset was envisioned as a more modest evolution of the Amiga’s architecture, an intermediate step between the original chipset and AAA. Like the latter, AA would offer 16.8 million colors — of which 256 could be onscreen at once without restrictions, more with some trade-offs —  but only at a maximum non-interlaced resolution of 640 X 480, or 800 X 600 in interlace mode. Meanwhile the current sound system would be left entirely alone. On paper, even these improvements moved the Amiga some distance beyond the existing Wintel VGA standard — but then again, that world of technology wasn’t standing still either. Much depended on getting the AA chips out quickly.

But “quick” was an adjective which seldom applied to Commodore. First planned for release on roughly the same time scale that had once been envisioned for the AAA chipset, AA too fell badly beyond schedule, not least because the tiny engineering team was now forced to split their energies between the two projects. It wasn’t until the fall of 1992 that AA, now renamed to the “Advanced Graphics Architecture,” or “AGA,” made its belated appearance. That is to say, the stopgap solution to the Amiga’s encroaching obsolescence arrived fully two years after the comprehensive solution to the problem ought to have shipped. Such was life at Commodore.

Rather than putting the Amiga out in front of the competition, AGA at this late date could only move it into a position of rough parity with the majority of the so-called “Super VGA” graphics cards which had become fairly commonplace in the Wintel world over the preceding year or so. And with graphics technology evolving quickly in the consumer space to meet the demands of CD-ROM and full-motion video, even the Amiga’s parity wouldn’t last for long. The Amiga, the erstwhile pioneer of multimedia computing, was now undeniably playing catch-up against the rest of the industry.

The Amiga 4000

AGA arrived inside two new models which evoked immediate memories of the Amiga 2000 and 500 from 1987, the most successful products in the platform’s history. Like the old Amiga 2000, the new Amiga 4000 was the “professional” machine, shipping in a big case full of expansion slots, with 4 MB of standard memory, a large hard drive, and a 68040 processor running at 25 MHz, all for a street price of around $2600. Like the old Amiga 500, the Amiga 1200 was the “home” model, shipping in an all-in-one-case form factor without room for internal expansion, with 2 MB of standard memory, a floppy drive only, and a 68020 processor running at 14 MHz, all for a price of about $600.

The two models were concrete manifestations of what a geographically bifurcated computing platform the Amiga had become by the early 1990s. In effect, the Amiga 4000 was to be the new face of Amiga computing in North America; ditto the Amiga 1200 in Europe. Commodore would make only scattered, desultory attempts to sell each model outside of its natural market.



Although the Amiga 500 had once enjoyed some measure of success in the United States as a games machine and general-purpose home computer, those days were long gone by 1992. That year, MS-DOS and Windows accounted for 87 percent of all American computer-game sales and the Macintosh for 9 percent, while the Amiga was lumped rudely into the 4 percent labeled simply “other.” Small wonder that very few American games publishers still gave any consideration to the platform at all; what games were still available for the Amiga in North America must usually be acquired by mail order, often as pricey imports from foreign climes. Then, too, most of the other areas where the Amiga had once been a player, and as often as not a pioneer — computer-based art and animation, 3D modeling, music production, etc. — had also fallen by the wayside, with most of the slack for such artsy endeavors being picked up by the Macintosh.

The story of Eric Graham was depressingly typical of the trend. Back in 1986, Graham had created a stunning ray-traced 3D animation called The Juggler on the Amiga; it became a staple of shop windows, filling at least some of the gap left by Commodore’s inept marketing. User demand had then led him to create Sculpt 3D, one of the first two practical 3D modeling applications for a consumer-class personal computer, and release it through the publisher Byte by Byte in mid-1987. (The other claimant to the status of absolute first of the breed ran on the Amiga as well; it was called Videoscape 3D, and was released virtually simultaneously with Sculpt 3D). But by 1989 the latest Macintosh models had also become powerful enough to support Graham’s software. Therefore Byte by Byte and Graham decided to jump to that platform, which already boasted a much larger user base who tended to be willing to pay higher prices for their software. Orphaned on the Amiga, the Sculpt 3D line continued on the Mac until 1996. Thanks to it and many other products, the Mac took over the lead in the burgeoning field of 3D modeling. And as went 3D modeling, so went a dozen other arenas of digital creativity.

The one place where the Amiga’s toehold did prove unshakeable was desktop video, where its otherwise loathed interlaced graphics modes were loved for the way they let the machine sync up with the analog video-production equipment typical of the time: televisions, VCRs, camcorders, etc. From the very beginning, both professionals and a fair number of dedicated amateurs used Amigas for titling, special effects, color correction, fades and wipes, and other forms of post-production work. Amigas were used by countless television stations to display programming information and do titling overlays, and found their way onto the sets of such television and film productions as Amazing Stories, Max Headroom, and Robocop 2. Even as the Amiga was fading in many other areas, video production on the platform got an enormous boost in December of 1990, when an innovative little Kansan company called NewTek released the Video Toaster, a combination of hardware and software which NewTek advertised, with less hyperbole than you might imagine, as an “all-in-one broadcast studio in a box” — just add one Amiga. Now the Amiga’s production credits got more impressive still: Babylon 5, seaQuest DSV, Quantum Leap, Jurassic Park, sports-arena Jumbotrons all over the country. Amiga models dating from the 1980s would remain fixtures in countless local television stations until well after the millennium, when the transition from analog to digital transmission finally forced their retirement.

Ironically, this whole usage scenario stemmed from what was essentially an accidental artifact of the Amiga’s design; Jay Miner, the original machine’s lead hardware designer, had envisioned its ability to mix and match with other video sources not as a means of inexpensive video post-production but rather as a way of overlaying interactive game graphics onto the output from an attached laser-disc accessory, a technique that was briefly en vogue in videogame arcades. Nonetheless, the capability was truly a godsend, the only thing keeping the platform alive at all in North America.

On the other hand, though, it was hard not to lament a straitening of the platform’s old spirit of expansive, experimental creativity across many fields. As far as the market was concerned, the Amiga was steadily morphing from a general-purpose computer into a piece of niche technology for a vertical market. By the early 1990s, most of the remaining North American Amiga magazines had become all but indistinguishable from any other dryly technical trade journal serving a rigidly specialized readership. In a telling sign of the times, it was almost universally agreed that early sales of the Amiga 4000, which were rather disappointing even by Commodore’s recent standards, were hampered by the fact that it initially didn’t work with the Video Toaster. (An updated “Video Toaster 4000” wouldn’t finally arrive until a year after the Amiga 4000 itself.) Many users now considered the Amiga little more than a necessary piece of plumbing for the Video Toaster. NewTek and others sold turnkey systems that barely even mentioned the name “Commodore Amiga.” Some store owners whispered that they could actually sell a lot more Video Toaster systems that way. After all, Commodore was known to most of their customers only as the company that had made those “toy computers” back in the 1980s; in the world of professional video and film production, that sort of name recognition was worth less than no name recognition at all.

In Europe, meanwhile, the nature of the baggage that came attached to the Commodore name perhaps wasn’t all that different in the broad strokes, but it did carry more positive overtones. In sheer number of units sold, the Amiga had always been vastly more successful in Europe than in North America, and that trend accelerated dramatically in the 1990s. Across the pond, it enjoyed all the mass-market acceptance it lacked in its home country. It was particularly dominant in Britain and West Germany, two of the three biggest economies in Europe. Here, the Amiga was nothing more nor less than a great games machine. The sturdy all-in-one-case design of the Amiga 500 and, now, the Amiga 1200 placed it on a continuum with the likes of the Sinclair Spectrum and the Commodore 64. There was a lot more money to be made selling computers to millions of eager European teenagers than to thousands of sober American professionals, whatever the wildly different price tags of the individual machines. Europe was accounting for as much as 88 percent of Commodore’s annual revenues by the early 1990s.

And yet here as well the picture was less rosy than it might first appear. While Commodore sold almost 2 million Amigas in Europe during 1991 and 1992, sales were trending in the wrong direction by the end of that period. Nintendo and Sega were now moving into Europe with their newest console systems, and Microsoft Windows as well was fast gaining traction. Thus it comes as no surprise that the Amiga 1200, which first shipped in December of 1992, a few months after the Amiga 4000, was greeted with sighs of relief by Commodore’s European subsidiaries, followed by much nervous trepidation. Was the new model enough of an improvement to reverse the trend of declining sales and steal a march on the competition once again? Sega especially had now become a major player in Europe, selling videogame consoles which were both cheaper and easier to operate than an Amiga 1200, lacking as they did any pretense of being full-fledged computers.

If Commodore was facing a murky future on two continents, they could take some consolation in the fact that their old arch-rival Atari was, as usual, even worse off. The Atari Lynx, the handheld game console which Jack Tramiel had bilked Epyx out of for a song, was now the company’s one reasonably reliable source of revenue; it would sell almost 3 million units between 1989 and 1994. The Atari ST, the computer line which had caused such a stir when it had beat the original Amiga into stores back in 1985 but had been playing second fiddle ever since, offered up its swansong in 1992 in the form of the Falcon, a would-be powerhouse which, as always, lagged just a little bit behind the latest Amiga models’ capabilities. Even in Europe, where Atari, like Commodore, had a much stronger brand than in North America, the Falcon sold hardly at all. The whole ST line would soon be discontinued, leaving it unclear how Atari intended to survive after the Lynx faded into history. Already in 1992, their annual sales fell to $127 million — barely a seventh those of Commodore.

Still, everything was in flux, and it was an open question whether Commodore could continue to sell Amigas in Europe at the pace to which they had become accustomed. One persistent question dogging the Amiga 1200 was that of compatibility. Although the new chipset was designed to be as compatible as possible with the old, in practice many of the most popular old Amiga games didn’t work right on the new machine. This reality could give pause to any potential upgrader with a substantial library of existing games and no desire to keep two Amigas around the house. If your favorite old games weren’t going to work on the new machine anyway, why not try something completely different, like those much more robust and professional-looking Windows computers the local stores had just started selling, or one of those new-fangled videogame consoles?



The compatibility problems were emblematic of the way that the Amiga, while certainly not an antique like the 8-bit generation of computers, wasn’t entirely modern either. MacOS and Windows isolated their software environment from changing hardware by not allowing applications to have direct access to the bare metal of the computer; everything had to be passed through the operating system, which in turn relied on the drivers provided by hardware manufacturers to ensure that the same program worked the same way on a multitude of configurations. AmigaOS provided the same services, and its technical manuals as well asked applications to function this way — but, crucially, it didn’t require that they do so. European game programmers in particular had a habit of using AmigaOS only as a bootstrap. Doing so was more efficient than doing things the “correct” way; most of the audiovisually striking games which made the Amiga’s reputation would have been simply impossible using “proper” programming techniques. Yet it created a brittle software ecosystem which was ill-suited for the long term. Already before 1992 Amiga gamers had had to contend with software that didn’t work on machines with more than 512 K of memory, or with a hard drive attached, or with or without a certain minor revision of the custom chips, or any number of other vagaries of configuration. With the advent of the AGA chipset, such problems really came home to roost.

An American Amiga 1200. In the context of American computing circa 1992, it looked like a bizarrely antediluvian gadget. “Real” computers just weren’t sold in this style of all-in-one case anymore, with peripherals dangling messily off the side. It looked like a chintzy toy to Americans, whatever the capabilities hidden inside. A telling detail: notice the two blank keys on the keyboard, which were stamped with characters only in some continental European markets that needed them. Rather than tool up to produce more than one physical keyboard layout, Commodore just let them sit there in all their pointlessness on the American machines. Can you imagine Apple or IBM, or any other reputable computer maker, doing this? To Americans, and to an increasing number of Europeans as well, the Amiga 1200 just seemed… cheap.

Back in 1985, AmigaOS had been the very first consumer-oriented operating system to boast full-fledged preemptive multitasking, something that neither MacOS nor Microsoft Windows could yet lay claim to even in 1992; they were still forced to rely on cooperative multitasking, which placed them at the mercy of individual applications’ willingness to voluntarily cede time to others. Yet the usefulness of AmigaOS’s multitasking was limited by its lack of memory protection. Thanks to this lack, any individual program on the system could write, intentionally or unintentionally, all over the memory allocated to another; system crashes were a sad fact of life for the Amiga power user. AmigaOS also lacked a virtual-memory system that would have allowed more applications to run than the physical memory could support. In these respects and others — most notably its graphical interface, which still evinced nothing like the usability of Windows, much less the smooth elegance of the Macintosh desktop — AmigaOS lagged behind its rivals.

It is true that MacOS, dating as it did from roughly the same period in the evolution of the personal computer, was struggling with similar issues: trying to implement some form of multitasking where none at all had existed originally, kludging in support for virtual memory and some form of rudimentary memory protection. The difference was that MacOS was evolving, however imperfectly. While AmigaOS 3.0, which debuted with the AGA machines, did offer some welcome improvements in terms of cosmetics, it did nothing to address the operating system’s core failings. It’s doubtful whether anyone in Commodore’s upper management even knew enough about computers to realize they existed.

This quality of having one foot in each of two different computing eras dogged the platform in yet more ways. The very architectural approach of the Amiga — that of an ultra-efficient machine built around a set of tightly coupled custom chips — had become passé as Wintel and to a large extent even the Macintosh had embraced modular architectures where almost everything could live on swappable cards, letting users mix and match capabilities and upgrade their machines piecemeal rather than all at once. One might even say that it was down almost as much to the Amiga’s architectural philosophy as it was to Commodore’s incompetence that the machine had had such a devil of a time getting itself upgraded.

And yet the problems involved in upgrading the custom chips were as nothing compared to the gravest of all the existential threats facing the Amiga. It was common knowledge in the industry by 1992 that Motorola was winding down further development of the 68000 line, the CPUs at the heart of all Amigas. Indeed, Apple, whose Macintosh used the same CPUs, had seen the writing on the wall as early as the beginning of 1990, and had started projects to port MacOS to other architectures, using software emulation as a way to retain compatibility with legacy applications. In 1991, they settled on the PowerPC, a CPU developed by an unlikely consortium of Apple, IBM, and Motorola, as the future of the Macintosh. The first of the so-called “Power Macs” would debut in March of 1994. The whole transition would come to constitute one of the more remarkable sleights of hand in all computing history; the emulation layer combined with the ported version of MacOS would work so seamlessly that many users would never fully grasp what was really happening at all.

But Commodore, alas, was in no position to follow suit, even had they had the foresight to realize what a ticking time bomb the end of the 68000 line truly was. AmigaOS’s more easygoing attitude toward the software it enabled meant that any transition must be fraught with far more pain for the user, and Commodore had nothing like the resources Apple had to throw at the problem in any case. But of course, the thoroughgoing, eternal incompetence of Commodore’s management prevented them from even seeing the problem, much less doing anything about it. While everyone was obliviously rearranging the deck chairs on the S.S. Amiga, it was barreling down on an iceberg as wide as the horizon. The reality was that the Amiga as a computing platform now had a built-in expiration date. After the 68060, the planned swansong of the 68000 family, was released by Motorola in 1994, the Amiga would literally have nowhere left to go.

As it was, though, Commodore’s financial collapse became the more immediate cause that brought about the end of the Amiga as a vital computing platform. So, we should have a look at what happened to drive Commodore from a profitable enterprise, still flirting with annual revenues of $1 billion, to bankruptcy and dissolution in the span of less than two years.



During the early months of 1993, an initial batch of encouraging reports, stating that the Amiga 1200 had been well-received in Europe, was overshadowed by an indelibly Commodorian tale of making lemons out of lemonade. It turned out that they had announced the Amiga 1200 too early, then shipped it too late and in too small quantities the previous Christmas. Consumers had chosen to forgo the Amiga 500 and 600 — the latter being a recently introduced ultra-low-end model — out of the not-unreasonable belief that the generation of Amiga technology these models represented would soon be hopelessly obsolete. Finding the new model unavailable, they’d bought nothing at all — or, more likely, bought something from a competitor like Sega instead. The result was a disastrous Christmas season: Commodore didn’t yet have the new computers everybody wanted, and couldn’t sell the old computers they did have, which they’d inexplicably manufactured and stockpiled as if they’d had no inkling that the Amiga 1200 was coming. They lost $21.9 million in the quarter that was traditionally their strongest by far.

Scant supplies of the Amiga 1200 continued to devastate overall Amiga sales well after Christmas, leaving one to wonder why on earth Commodore hadn’t tooled up to manufacture sufficient quantities of a machine they had hoped and believed would be a big hit, for once with some justification. In the first quarter of 1993, Commodore lost a whopping $177.6 million on sales of just $120.9 million, thanks to a massive write-down of their inventory of older Amiga models piling up in warehouses. Unit sales of Amigas dropped by 25 percent from the same quarter of the previous year; Amiga revenues dropped by 45 percent, thanks to deep price cuts instituted to try to move all those moribund 500s and 600s. Commodore’s share price plunged to around $2.75, down from $11 a year before, $20 the year before that. Wall Street estimated that the whole company was now worth only $30 million after its liabilities had been subtracted — a drop of one full order of magnitude in the span of a year.

If anything, Wall Street’s valuation was generous. Commodore was now dragging behind them $115.3 million in debt. In light of this, combined with their longstanding reputation for being ethically challenged in all sorts of ways, the credit agencies considered them to be too poor a risk for any new loans. Already they were desperately pursuing “debt restructuring” with their major lenders, promising them, with little to back it up, that the next Christmas season would make everything right as rain again. Such hopes looked even more unfounded in light of the fact that Commodore was now making deep cuts to their engineering and marketing staffs — i.e., the only people who might be able to get them out of this mess. Certainly the AAA chipset, still officially an ongoing project, looked farther away than ever now, two and a half years after it was supposed to have hit the streets.

The Amiga CD32

It was for these reasons that the announcement of the Amiga CD32, the last major product introduction in Commodore’s long and checkered history, came as such a surprise to everyone in mid-1993. CD32 was perhaps the first comprehensively, unadulteratedly smart product Commodore had released since the Amiga 2000 and 500 back in 1987. It was as clever a leveraging of their dwindling assets as anyone could ask for. Rather than another computer, it was a games console, built around a double-speed CD-ROM drive. Commodore had tried something similar before, with the CDTV unit of two and a half years earlier, only to watch it go down in flames. For once, though, they had learned from their mistakes.

CDTV had been a member of an amorphously defined class of CD-based multimedia appliances for the living room — see also the Philips CD-I, the 3DO console, and the Tandy VIS — which had all been or would soon become dismal failures. Upon seeing such gadgets demonstrated, consumers, unimpressed by ponderous encyclopedias that were harder to use and less complete than the ones already on their bookshelves, trip-planning software that was less intuitive than the atlases already in their glove boxes, and grainy film clips that made their VCRs look high-fidelity, all gave vent to the same plaintive question: “But what good is it really?” The only CD-based console which was doing well was, not coincidentally, the only one which could give a clear, unequivocal answer to this question. The Sega Genesis with CD add-on was good for playing videogames, full stop.

Commodore followed Sega’s lead with the CD32. It too looked, acted, and played like a videogame console — the most impressive one on the market, with specifications far outshining the Sega CD. Whereas Commodore had deliberately obscured the CDTV’s technological connection to the Amiga, they trumpeted it with the CD32, capitalizing on the name’s association with superb games. At heart, the CD32 was just a repackaged Amiga 1200, in the same way that the CDTV had been a repackaged Amiga 500. Yet this wasn’t a problem at all. For all that it was a little underwhelming in the world of computers, the AGA chipset was audiovisually superior to anything the console world could offer up, while the 32-bit 68020 that served as the CD32’s brain gave it much more raw horsepower. Meanwhile the fact that at heart it was just an Amiga in a new form factor gave it a huge leg up with publishers and developers; almost any given Amiga game could be ported to the CD32 in a week or two. Throw in a price tag of less than $400 (about $200 less than the going price of a “real” Amiga 1200, if you could find one), and, for the first time in years, Commodore had a thoroughly compelling new product, with a measure of natural appeal to people who weren’t already members of the Amiga cult. Thanks to the walled-garden model of software distribution that was the norm in the console world, Commodore stood to make money not only on every CD32 sold but also from a licensing fee of $3 on every individual game sold for the console. If the CD32 really took off, it could turn into one heck of a cash cow. If only Commodore could have released it six months earlier, or have managed to remain financially solvent for six months longer, it might even have saved them.

As it was, the CD32 made a noble last stand for a company that had long made ignobility its calling card. Released in September of 1993 in Europe, it generated some real excitement, thanks not least to a surprisingly large stable of launch titles, fruit of that ease of porting games from the “real” Amiga models. Commodore sold CD32s as fast as they could make them that Christmas — which was unfortunately nowhere near as fast as they might have liked, thanks to their current financial straits. Nevertheless, in those European stores where CD32s were on-hand to compete with the Sega CD, the former often outsold the latter by a margin of four to one. Over 50,000 CD32s were sold in December alone.

The Atari Jaguar. There was some mockery, perhaps justifiable, of its “Jetsons” design aesthetic.

Ironically, Atari’s last act took much the same form as Commodore’s. In November of 1993, following a horrific third quarter in which they had lost $17.6 million on sales of just $4.4 million, they released a game console of their own, called the Jaguar, in North America. In keeping with the tradition dating back to 1985, it was cheaper than Commodore’s take on the same concept — its street price was under $250 — but not quite as powerful, lacking a CD-ROM drive. Suffering from a poor selection of games, as well as reliability problems and outright hardware bugs, the Jaguar faced an uphill climb; Atari shipped less than 20,000 of them in 1993. Nevertheless, the Tramiel clan confidently predicted that they would sell 500,000 units in 1994, and at least some people bought into the hype, sending Atari’s stock soaring to almost $15 even as Commodore’s continued to plummet.

For the reality was, the rapid unraveling of all other facets of Commodore’s business had rendered the question of the CD32’s success moot. The remaining employees who worked at the sprawling campus in West Chester, Pennsylvania, purchased a decade before when the VIC-20 and 64 were flying off shelves and Jack “Business is War” Tramiel was stomping his rival home-computer makers into dust, felt like dwarfs wandering through the ancient ruins of giants. Once there had been more than 600 employees here; now there were about 50. There was 10,000 square feet of space per employee in a facility where it cost $8000 per day just to keep the lights on. You could wander for hours through the deserted warehouses, shuttered production lines, and empty research labs without seeing another living soul. Commodore was trying to lease some of it out for an attractive rent of $4 per square foot, but, as with with most of their computers, nobody seemed all that interested. The executive staff, not wanting the stigma of having gone down with the ship on their resumes, were starting to jump for shore. Commodore’s chief financial officer threw up his hands and quit in the summer of 1993; the company’s president followed in the fall.

Apart from the CD32, for which they lacked the resources to manufacture enough units to meet demand, virtually none of the hardware piled up in Commodore’s European warehouses was selling at all anymore. In the third quarter of 1993, they lost $9.7 million, followed by $8 million in the fourth quarter, on sales of just $70 million. After a second disastrous Christmas in a row, it could only be a question of time.

In a way, it was the small things rather than the eye-popping financial figures which drove the point home. For example, the April 1994 edition of the New York World of Commodore show, for years already a shadow of its old vibrant self, was cancelled entirely due to lack of interest. And the Army and Air Force Exchange, which served as a storefront to American military personnel at bases all over the world, kicked Commodore off its list of suppliers because they weren’t paying their bills. It’s by a thousand little cuts like this one, each representing another sales opportunity lost, that a consumer-electronics company dies. At the Winter Consumer Electronics Show in January of 1994, at which Commodore did manage a tepid presence, their own head of marketing told people straight out that the Amiga had no future as a general-purpose computer; Commodore’s only remaining prospects, he said, lay with the American vertical market of video production and the European mass market of videogame consoles. But they didn’t have the money to continue building the hardware these markets were demanding, and no bank was willing to lend them any.

The proverbial straw which broke the camel’s back was a dodgy third-party patent relating to a commonplace programming technique used to keep a mouse pointer separate from the rest of the screen. Commodore had failed to pay the patent fee for years, the patent holder eventually sued, and in April of 1994 the court levied an injunction preventing Commodore from doing any more business at all in the United States until they paid up. The sum in question was a relatively modest $2.5 million, but Commodore simply didn’t have the money to give.

On April 29, 1994, in a briefly matter-of-fact press release, Commodore announced that they were going out of business: “The company plans to transfer its assets to unidentified trustees for the benefit of its creditors. This is the initial phase of an orderly voluntary liquidation.” And just like that, a company which had dominated consumer computing in the United States and much of Europe for a good part of the previous decade and a half was no more. The business press and the American public showed barely a flicker of interest; most of them had assumed that Commodore was already long out of business. European gamers reacted with shock and panic — few had realized how bad things had gotten for Commodore — but there was nothing to be done.

Thus it was that Atari, despite being chronically ill for a much longer period of time, managed to outlive Commodore in the end. Still, this isn’t to say that their own situation at the time of Commodore’s collapse was a terribly good one. When the reality hit home that the Jaguar probably wasn’t going to be a sustainable gaming platform at all, much less sell 500,000 units in 1994 alone, their stock plunged back down to less than $1 per share. In the aftermath, Atari limped on as little more than a patent troll, surviving by extracting judgments from other videogame makers, most notably Sega, for infringing on dubious intellectual property dating back to the 1970s. This proved to be an ironically more profitable endeavor for them than that of actually selling computers or game consoles. On July 30, 1996, the Tramiels finally cashed out, agreeing to merge the remnants of their company with JT Storage, a maker of hard disks, who saw some lingering value in the trademarks and the patents. It was a liquidation in all but name; only three Atari employees transitioned to the “merged” entity, which continued under the same old name of JT Storage.

And so disappeared the storied name of Atari and that of Tramiel simultaneously from the technology industry. Even as the trade magazines were publishing eulogies to the former, few were sorry to see the latter go, what with their long history of lawsuits, dirty dealing, and abundant bad faith. Jack Tramiel had purchased Atari in 1984 out of the belief that creating another phenomenon like the Commodore 64 — or for that matter the Atari VCS — would be easy. But the twelve years that followed were destined always to remain a footnote to his one extraordinary success, a cautionary tale about the dangers of conflating lucky timing and tactical opportunism with long-term strategic genius.

Even so, the fact does remain that the Commodore 64 brought affordable computing to millions of people all over the world. For that every one of those millions owes Jack Tramiel, who died in 2012, a certain debt of gratitude. Perhaps the kindest thing we can do for him is to end his eulogy there.



The story of the Amiga after the death of Commodore is long, confusing, and largely if not entirely dispiriting; for all these reasons, I’d rather not dwell on it at length here. Its most positive aspect is the surprisingly long commercial half-life the platform enjoyed in Europe, over the course of which game developers still found a receptive if slowly dwindling market ready to buy their wares. The last glossy newsstand magazine devoted to the Amiga, the British Amiga Active, didn’t publish its last issue until the rather astonishingly late date of November of 2001.

The Amiga technology itself first passed into the hands of a German PC maker known as Escom, who actually started manufacturing new Amiga 1200s for a time. In 1996, however, Escom themselves went bankrupt. The American PC maker Gateway 2000 became the last major company to bother with the aging technology when they bought it at the Escom bankruptcy auction. Afterward, though, they apparently had second thoughts; they did nothing whatsoever with it before selling it onward at a loss. From there, it passed into other, even less sure hands, selling always at a discount. There are still various projects bearing the Amiga name today, and I suspect they will continue until the generation who fell in love with the platform in its heyday have all expired. But these are little more than hobbyist endeavors, selling their products in minuscule numbers to customer motivated more by their nostalgic attachment to the Amiga name than by any practical need. It’s far from clear what the idea of an “Amiga computer” should even mean in 2020.

When the hardcore of the Amiga hardcore aren’t dreaming quixotically of the platform’s world-conquering return, they’re picking through the rubble of the past, trying to figure out where it all went wrong. Among a long roll call of petty incompetents in Commodore’s executive suites, two clear super-villains emerge: Irving Gould, Commodore’s chairman since the mid-1960s, and Mehdi Ali, his final hand-picked chief executive. Their mismanagement in the latter days of the company was so egregious that some have put it down to evil genius rather than idiocy. The typical hypothesis says that these two realized at some point in the very early 1990s that Commodore’s days were likely numbered, and that they could get more out of the company for themselves by running it into the ground than they could by trying to keep it alive. I usually have little time for such conspiracy theories; as far as I’m concerned, a good rule of thumb for life in general is never to attribute to evil intent what can just as easily be chalked up to good old human stupidity. In this case, though, there’s some circumstantial evidence lending at least a bit of weight to the theory.

The first and perhaps most telling piece of evidence is the two men’s ridiculously exorbitant salaries, even as their company was collapsing around them. In 1993, Mehdi Ali took home $2 million, making him the fourth highest-paid executive in the entire technology sector. Irving Gould earned $1.75 million that year — seventh on the list. Why were these men paying themselves as if they ran a thriving company when the reality was so very much the opposite? One can’t help but suspect that Gould at least, who owned 19 percent of Commodore’s stock, was trying to offset his losses on the one field by raising his personal salary on the other.

And then there’s the way that Gould, an enormously rich man whose personal net worth was much higher than that of all of Commodore by the end, was so weirdly niggardly in helping his company out of its financial jam. While he did loan fully $17.4 million back to Commodore, the operative word here is indeed “loan”: he structured his cash injections to ensure that he would be first in line to get his money back if and when the company went bankrupt, and stopped throwing good money after bad as soon as the threshold of the collateral it could offer up in exchange was exceeded. One can’t help but wonder what might have become of the CD32 if he’d been willing to go all-in to try to turn it into a success.

Of course, this is all rank speculation, which will quickly become libelous if I continue much further down this road. Suffice to say that questionable ethics were always an indelible part of Commodore. Born in scandal, the company would quite likely have ended in scandal as well if anyone in authority had been bothered enough by its anticlimactic bankruptcy to look further. I’d love to see what a savvy financial journalist could make of Commodore’s history. But, alas, I have neither the skill nor the resources for such a project, and the story is of little interest to the mainstream journalists of today. The era is past, the bodies are buried, and there are newer and bigger outrages to fill our newspapers.



Instead, then, I’ll conclude with two brief eulogies to mark the end of the Amiga’s role in this ongoing history. Rather than eulogizing in my own words, I’m going to use those of a true Amiga zealot: the anonymous figure known as “The Bandito,” whose “Roomers” columns in the magazine Amazing Computing were filled with cogent insights and nitty-gritty financial details every month. (For that reason, they’ve been invaluable sources for this series of articles.)

Jay Miner, the gentle genius, in 1990. In interviews like the one to which this photo was attached, he always seemed a little befuddled by the praise and love which Amiga users lavished upon him.

First, to Jay Miner, the canonical “father of the Amiga,” who died of the kidney disease he had been battling for most of his life on June 20, 1994, at age 62. If a machine can reflect the personality of a man, the Amiga certainly reflected his:

Jay was not only the inventive genius who designed the custom chips behind the Atari 800 and the Amiga, he also designed many more electronic devices, including a new pacemaker that allows the user to set their own heart rate (which allows them to participate in strenuous activities once denied to them). Jay was not only a brilliant engineer, he was a kind, gentle, and unassuming man who won the hearts of Amiga fans everywhere he went. Jay was continually amazed and impressed at what people had done with his creations, and he loved more than anything to see the joy people obtained from the Amiga.

We love you, Jay, for all the gifts that you have given to us, and all the fruits of your genius that you have shared with us. Rest in peace.

And now a last word on the Amiga itself, from the very last “Roomers” column, written by someone who had been there from the beginning:

The Amiga has left an indelible mark on the history of computing. [It] stands as a shining example of excellent hardware design. Its capabilities foreshadowed the directions of the entire computer industry: thousands of colors, multiple screen resolutions, multitasking, high-quality sound, fast animation, video capability, and more. It was the beauty and elegance of the hardware that sold the Amiga to so many millions of people. The Amiga sold despite Commodore’s neglect, despite their bumbling and almost criminal marketing programs. Developers wrote brilliantly for this amazing piece of hardware, creating software that even amazed the creators of the hardware. The Amiga heralded the change that’s even now transforming the television industry, with inexpensive CGI and video editing making for a whole new type of television program.

Amiga game software also changed the face of entertainment software. Electronic Arts launched themselves headlong into 16-bit entertainment software with their Amiga software line, which helped propel them into the $500 million giant they are today. Cinemaware’s Defender of the Crown showed people what computer entertainment could look like: real pictures, not blocky collections of pixels. For a while, the Amiga was the entertainment-software machine to have.

In light of all these accomplishments, the story of the Amiga really isn’t the tragedy of missed opportunities and unrealized potential that it’s so often framed as. The very design that made it able to do so many incredible things at such an early date — its tightly coupled custom chips, its groundbreaking but lightweight operating system — made it hard for the platform to evolve in the same ways that the less imaginative, less efficient, but modular Wintel and MacOS architectures ultimately did. While it lasted, however, it gave the world a sneak preview of its future, inspiring thousands who would go on to do good work on other platforms. We are all more or less the heirs to the vision embodied in the original Amiga Lorraine, whether we ever used a real Amiga or not. The platform’s most long-lived and effective marketing slogan, “Only Amiga Makes it Possible,” is of course no longer true. It is true, though, that the Amiga made many things possible first. May it stand forever in the annals of computing history alongside the original Apple Macintosh as one of the two most visionary computers of its generation. For without these two computers — one of them, alas, more celebrated than the other — the digital world that we know today would be a very different place.

(Sources: the books Commodore: The Final Years by Brian Bagnall and my own The Future Was Here; Amazing Computing of November 1992, December 1992, January 1993, February 1993, March 1993, April 1993, May 1993, June 1993, July 1993, September 1993, October 1993, November 1993, December 1993, January 1994, February 1994, March 1994, April 1994, May 1994, June 1994, July 1994, August 1994, September 1994, October 1994, and February 1995; Byte of January 1993; Amiga User International of June 1988; Electronic Gaming Monthly of June 1995; Next Generation of December 1996. My thanks to Eric Graham for corresponding with me about The Juggler and Sculpt 3D years ago when I was writing my book on the Amiga.

Those wishing to read about the Commodore story from the perspective of the engineers in the trenches, who so often accomplished great things in less than ideal conditions, should turn to Brian Bagnall’s full “Commodore Trilogy”: A Company on the Edge, The Amiga Years, and The Final Years.)

 

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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 marquee 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…)

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

 

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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 the 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 Electronics Arts the glaring exception — staked 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!)

 
 

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The 68000 Wars, Part 2: Jack Is Back!

Jack Tramiel, the computer executive most likely to be compared to Darth Vader. I wonder why?

Jack Tramiel, the computer executive most likely to be compared to Darth Vader. I wonder why?

In letting the March 31, 1984, deadline slip away without signing a licensing agreement with Atari, David Morse was taking a crazy risk. If he couldn’t find some way of scraping together $500,000 plus interest to repay Atari’s loan, Atari could walk away with the Amiga chipset for nothing, and Amiga would almost certainly go bust. All activity at Amiga therefore centered on getting the Lorraine ready for the Summer Consumer Electronic Show in Chicago, scheduled to begin on June 3. Summer CES was to be Amiga’s Hail Mary, their last chance to interest somebody — anybody — in what they had to offer enough to plunk down over half a million dollars just for openers, just to keep Atari from making the whole point moot.

By the time Summer CES arrived the Lorraine was a much more refined contraption than the one they had shown at Winter CES back in January, if still a long, long way from being a finished computer. Jay Miner’s custom chips had now been miniaturized and stamped into silicon, improving the machine’s reliability as much as it reduced its size. The Lorraine’s longstanding identity crisis was also now largely a thing of the past, the videogame crash and the example of the Macintosh having convinced everyone that what it ultimately needed to be was a computer, not a game console. Programmers like Carl Sassenrath, Dale Luck, and R.J. Mical had thus already started work on a proper operating system. Amiga’s computer was planned to be capable of doing everything the Mac could, but in spectacular color and with multitasking. That dream was, however, still a long way from fruition; the Lorraine could still be controlled only via a connected Sage IV workstation.

Led by software head Bob Pariseau as master of ceremonies, Amiga put on the best show they possibly could inside their invitation-only booth at Summer CES. The speech-synthesis library the software folks had put together was a big crowd-pleaser; spectators delighted in shouting out off-the-cuff phrases for the Lorraine to repeat, in either a male or female voice. But their hands-down favorite once again proved to be Boing, now dramatically enhanced: the ball now bounced side to side instead of just up and down, and a dramatic coup de grâce had been added in the form of sampled booms that moved from speaker to speaker to create a realistic soundscape. This impressive demonstration of Paula’s stereo-sound capabilities leaked beyond the confines of Amiga’s closed booth and out onto the crowded show floor, causing attendees to look around in alarm for the source of the noise.

Whatever the merits of their new-and-improved dog-and-pony show, Amiga also improved their credibility enormously by demonstrating that their chipset could work as actual computer chips and, indeed, simply by having survived and returned to CES once again. A bevy of industry heavyweights traipsed through Amiga’s booth that June: Sony, Hewlett Packard, Philips, Silicon Graphics, Apple. (Steve Jobs, ever the minimalist, allegedly scoffed at the Lorraine as over-engineered, containing too much fancy hardware for its own good.) The quantity and quality of Amiga’s write-ups in the trade press also increased significantly. Compute!, the biggest general-interest computing magazine in the country, raved that the Lorraine was “possibly the most advanced personal computer ever,” “the beginning of a completely new generation,” and “enough to make an IBM PC look like a four-function calculator.” Still, Amiga left the show without the thing they needed most: a viable alternative to Atari. With just a few weeks to go, their future looked grim. And then Commodore called.

To understand the reasons behind that phone call, we have to return to January 13, 1984, the day of that mysterious board meeting at Commodore that outraged their CEO Jack Tramiel so egregiously as to send him storming out of the building and burning rubber out of the parking lot, never to return. In his noncommittal statements to the press immediately after the divorce was made official, Tramiel said he planned to take some time to consider his next move. For now, he and his wife were going to spend a year traveling the world, to make up for all the vacations they had skipped over the course of his long career.

At the time that he said it, he seems to have meant it. He and wife Helen made it as far as Sri Lanka by April. But by that point he’d already had all he could take of the life of leisure. He and Helen returned to the United States so Jack could start a new venture to be called simply Tramel Technology. (The spelling of the name was changed to reflect the proper pronunciation of Tramiel’s last name; most Americans’ habit of mispronouncing the last syllable had always driven him crazy.) His plan was to scrape together funding and a team and build the mass-market successor to the Commodore 64. In the process, he hoped to stick it to Commodore and especially to its chairman, with whom he had always had a — to put it mildly — fraught relationship. Business had always been war to Tramiel, but now this war was personal.

To get Tramel Technology off the ground, he needed people, and almost all of the people he knew and had confidence in still worked at Commodore. Tramiel therefore started blatantly poaching his old favorites. That April and May at Commodore were marked by a mass exodus, as suddenly seemingly every other employee was quitting, all headed to the same place. Jack’s son Sam was the first; many felt it was likely Jack’s desire to turn Commodore into the Tramiel family business that had precipitated his departure in the first place. Then Tony Takai, the mastermind of Commodore’s Japanese branch; John Feagans, who was supposed to be finishing up the built-in software for Commodore’s new Plus/4 computer; Neil Harris, programmer of many of the most popular VIC-20 games; Ira Velinsky, a production designer; Lloyd “Red” Taylor, a president of technology; Bernie Witter, a vice president of finance; Sam Chin, a manager of finance; Joe Spiteri and David Carlone, manufacturing experts; Gregg Pratt, a vice president of operations. The most devastating defectors of all were Commodore’s head of engineering Shiraz Shivji and three of his key hardware engineers: Arthur Morgan, John Heonig, and Douglas Renn.

Shiraz Shivji, Jack Tramiel's favorite engineer during his post-Commodore years.

Shiraz Shivji, Jack Tramiel’s favorite engineer of his post-Commodore years.

The mass exodus amounted to a humiliating vote of no-confidence in Irving Gould’s hand-picked successor to Tramiel, a former steel executive named Marshall Smith who was as bland as his name. The loss of engineering talent in particular left Commodore, who had already been in a difficult situation, even worse off. As Commodore’s big new machine for 1984, the Plus/4, amply demonstrated, there just wasn’t a whole lot left to be done with the 8-bit technology that had gotten Commodore this far. Trouble was, their engineers had experience with very little else. Tramiel had always kept Commodore’s engineering staff to the bare minimum, a fact which largely explains why they had nothing compelling in the pipeline now beyond the underwhelming Plus/4 and its even less impressive little brother the Commodore 16. And now, having lost four more key people… well, the situation didn’t look good.

And that was what made Amiga so attractive. At first Commodore, like Atari before them, envisioned simply licensing the Amiga chipset, in the process quite probably — again like Atari — using Amiga’s position of weakness to extort from them a ridiculously good deal. But within days of opening negotiations their thinking began to change. Here was not only a fantastic chipset but an equally fantastic group of software and hardware engineers, intimately familiar with exactly the sort of next-generation 16-bit technology with which Commodore’s own remaining engineers were so conspicuously unacquainted. Why not buy Amiga outright?

On June 29, David Morse walked unexpectedly into the lobby of Atari’s headquarters and requested to see his primary point of contact there, one John Farrand. Farrand already had an inkling that something was up; Morse had been dodging his calls and finding excuses to avoid face-to-face meetings for the last two weeks. Still, he wasn’t prepared for what happened next. Morse told him that he was here to pay back the $500,000, plus interest, and sever their business relationship. He then proceeded to practically shove a check into the hands of a very confused and, soon, very irate John Farrand. Two minutes later he was gone.

The check had of course come from Commodore, given as a gesture of good faith in their negotiations with Amiga and, more practically, to keep Atari from walking away with the technology they’d now decided they’d very much like to have for themselves. Six weeks later negotiations between Commodore and Amiga ended with the purchase by the former of the latter for $27 million. David Morse had his miracle. His investors and employees got a nice payday in return for their faith. And, most importantly, his brilliant young team would get the chance to turn Miner’s chipset into a real computer all their own, designed — for the most part — their way.

It’s worth dwelling for just a moment here on the sheer audacity of the feat Morse had just pulled off. Backed against the wall by an Atari that smelled blood in the water, he had taken their money, used it to finish the chipset and the Lorraine well enough to get him a deal with their arch-rival, then paid Atari back and walked away. It all added up to a long con worthy of The Sting. No wonder Atari, who had gotten as far as starting to design the motherboard for the game console destined to house the chipset, was pissed. And yet the Atari that would soon seek its revenge would not be the same Atari as the one he had negotiated with in March. Confused yet? To understand we must, once again, backtrack just slightly.

Atari may have been a relative Goliath in contrast to Amiga’s David in early 1984, but that’s not to say that they were financially healthy. Far from it. The previous year had been a disastrous one, marked by losses of over half a billion thanks to the Great Videogame Crash. CEO Ray Kassar had left under a cloud of accusations of insider trading, mismanagement, and general incompetence; no one turns faster on a wonder boy than Wall Street. Now his successor, a once and future cigarette mogul named James Morgan, was struggling to staunch the bleeding by laying off employees and closing offices almost by the week. Parent company Warner Communications, figuring that the videogame bubble was well and truly burst, just wanted to be rid of Atari as quickly and painlessly as possible.

Jack Tramiel, meanwhile, was becoming a regular presence in Silicon Valley, looking for facilities and technologies he could buy to get Tramel Technology off the ground. In fact, he was one of the many who visited Amiga during this period, although negotiations didn’t get very far. Then one day in June he got a call from a Warner executive, asking if he’d be interested in taking Atari off their hands.

A deal was reached in remarkably little time. Tramiel would buy not the company Atari itself but the assets of its home-computer and game-console divisions; he had no interest in its other branch, standup arcade games. Said assets included property, trademarks and copyrights, equipment, product inventories, and, not least, employees. He would pay, astonishingly, nothing upfront for it all, instead agreeing to $240 million in long-term notes and giving Warner a 32 percent stake in Tramel Technology. Warner literally sold the company — or, perhaps better said, gave away the company — out from under Morgan, who was talking new products and turnaround plans one day and arrived the next to be told to clear out his executive suite to make room for Tramiel. On July 1, just two days after Morse had given back that $500,000, the biggest chunk of Atari, a company which just a couple of years before had been the fastest growing in the history of American business, became the possession of tiny Tramel Technology, which was still being run at the time out of a vacant apartment in a dodgy neighborhood. Within days Tramiel renamed Tramel Technology to Atari Corporation. For years to come there would be two Ataris: Tramiel’s Atari Corporation, maker of home computers and game consoles, and Atari Games, maker of standup arcade games. It would take quite some time to disentangle the two; even the headquarters building would be shared for some time to come.

Legal trouble between Commodore and Jack Tramiel’s new Atari started immediately. Commodore fired the first salvo, suing Shiraz Shivji and his fellow engineers. When they had decamped to join Tramiel, Commodore claimed, they had taken with them a whole raft of technical documents under the guise of “personal goods.” A court injunction issued at Commodore’s request effectively barred them from doing any work at all for Tramiel, paralyzing his plans to start working on a new computer for several weeks. Shivji and company eventually returned a set of backup tapes taken from Commodore engineering’s in-house central server, full of schematics and other documents. Perhaps tellingly in light of the computer they would soon begin to build, many of the documents related to the Commodore 900, a prototyped but never manufactured Unix workstation to be built around the 16-bit Zilog Z8000 CPU.

Sam and Leonard Tramiel, who would play a larger and larger role in the running of Atari as time went on.

Sam and Leonard Tramiel, who would play a larger and larger role in the running of Atari as time went on.

If Tramiel was looking for a way to get revenge, he was soon to find what looked like a pretty good opportunity. Whilst going through files of documents in early August, Jack’s son Leonard discovered the Amiga agreement, complete with the $500,000 cashed check from Atari to Amiga, and brought it to his father’s attention. Jack Tramiel, who had long made a practice of treating the courts as merely another field of battle in keeping with his “business is war” philosophy, thought they just might have something. But it wasn’t immediately obvious to whom the cancelled contract should belong: to Atari Games (i.e., the coin-op people), to Warner, or to his own new Atari Corporation. Some hasty negotiating secured him clear title; Warner didn’t seem to know anything about the old agreement or what it might have meant for Atari’s future had it gone off according to plan. On August 13, as Commodore and Amiga were signing the contracts and putting the bow on the Amiga acquisition and as Shivji’s engineers were starting up work again on what was now to be the next-generation Atari computer, Atari filed suit against Amiga and against David Morse personally in Santa Clara Superior Court, alleging contract fraud. In their first motion they sought a legal injunction while the case was resolved that would have stopped the work of Commodore’s newly minted Amiga division in its tracks, and for a much longer period of time than Commodore’s more straightforward suit against Shivji and company.

Thankfully for Commodore, they didn’t get the injunction. However, the legal battle thus sparked would drag on for more than two-and-a-half years. In early 1985 Atari expanded their suit dramatically, adding Commodore, who had of course been footing the legal bill for Amiga and Morse’s defense anyway, as co-defendants — alleging them in effect to have been co-conspirators with Morse and Amiga in the fraud. They also added on a bunch of patent claims, one very important one in particular relating back to a patent Atari held on the old Atari 400 and 800 designs that Jay Miner had been responsible for in the late 1970s; those designs did indeed share a lot of attributes with the chipset he had developed at Amiga. For this sin Miner personally was added to the suit as yet another co-defendant. The whole thing was finally wrapped up only in March of 1987, in a sealed settlement whose full details have never come to light. Scuttlebutt of then and now, though, would have it that Commodore came out on the losing end, forced to pay Atari’s legal costs and some amount of additional restitution — although, again, exactly how much remains unknown.

What to make of this? A careful analysis of that March 1984 document shows that Morse and Amiga abode entirely by the letter of the agreement, that they were perfectly within their rights to return Atari’s loan to them and walk away from any further business arrangements. Atari’s argument rather lay in the spirit of the deal. At its heart is a single line in the agreement to which Morse signed his name that could easily be overlooked as boilerplate, a throwaway amidst all the carefully constructed legalese: “Amiga and Atari agree to negotiate in good faith regarding the license agreement.”

Atari’s contention, which is difficult to deny, was that Morse had at no time been acting in good faith from the moment he put pen to paper on the agreement. The agreement had rather been a desperate gambit to secure enough operating capital to keep Amiga in business for a few more months and find another suitor — nothing more, nothing less. Morse had stalled and obfuscated and dissembled for almost three months, whilst he sought that better suitor. Atari alleged that he had even verbally agreed to a “will not sell to” list of companies not allowed to acquire Amiga under any circumstances even as he was negotiating with one of the most prominent entries on that list, Commodore. And when he had forced a check into Farrand’s hands to terminate the relationship, they claimed, he had done so with the shabby excuse that the chips didn’t work properly, even though the whole world had seen them in action just a few weeks before at Summer CES. No, there wasn’t a whole lot of “good faith” going on there.

That said, the ethics of Morse’s actions, or lack thereof, strike me as far from cut and dried. It’s hard for me to get too morally outraged about Morse screwing over a company that was manifestly bent on screwing him in his position of weakness by saddling him with a terrible licensing proposal, an absurd deadline, and legal leverage that effectively destroyed any hope he might have had to get a reasonable, fair licensing agreement out of them. The letter of intent he felt compelled to sign reads more like an ultimatum than a starting point for negotiations. John Farrand as well as others from Atari claimed in court that they had had no intention of exercising their legal right to go into escrow to build the Amiga chipset without paying anything else at all for it had Morse not delivered that loan repayment in the nick of time. Still, these claims must be read skeptically, especially given Atari’s own desperate business position. Certainly Morse would have been an irresponsible executive indeed to base the fate of his company on their word. If Atari had really wished to acquire the chipset and make an equitable, money-making deal for both parties, they could best have achieved that by not opening negotiations with an absurd three-week deadline that put Morse over a barrel from day one.

That, anyway, is my view. Opinions of others who have studied the issue can and do vary. I would merely caution to consider the full picture anyone eager to read too much into the fact that Atari by relative consensus won this legal battle in the end. Even leaving aside the fact that legal right does not always correspond to moral right, we should remember that other issues eventually got bound up into the case. It strikes me particularly that Atari had quite a strong argument to make for Jay Miner having violated their patents, which covered display hardware uncomfortably similar to that in the Amiga chipset, even down to a graphics co-processor very similar in form and function to the so-called “copper” housed inside Agnus. Without knowing more about the contents of the final settlement, I really can’t say more than that.

As the court battle began, the effort to build the computer that would become known as the Atari ST was also heating up. Shivji had initially been enamored with an oddball series of CPUs from National Semiconductor called the NS32000s, the first fully 32-bit CPUs to hit the industry. When they proved less impressive in reality than they were on paper, however, he quickly shifted to the Motorola 68000 that was already found in the Apple Lisa and Macintosh and the Amiga Lorraine. Generally described as a 16-bit chip, the 68000 was in some ways a hybrid 16- and 32-bit design, a fact which gave the new computer its name: “ST” stands for “Sixteen/Thirty-two Bit.” Shivji had had a very good idea even before Tramiel’s acquisition of Atari of just what he wanted to build:

There was going to be a windowing system, it was going to have bitmapped graphics, we knew roughly speaking what the [screen] resolutions were going to be, and so on. All those parameters were decided before the takeover. The idea was an advanced computer, 16/32-bit, good graphics, good sound, MIDI, the whole thing. A fun computer — but with the latest software technology.

Jack Tramiel and his sons descended on Atari and began with brutal efficiency to separate the wheat from the chaff. Huge numbers of employees got the axe from this company that had already been wracked by layoff after layoff over the past year. The latest victims were often announced impersonally by reading from a list of names in a group meeting, sometimes on the basis of impressions culled from an interview lasting all of five minutes. The bottom line was simple: who could help in an all-out effort to build a sophisticated new computer from the ground up in a matter of months? Those judged wanting in the skills and dedication that would be required were gone. Tramiel sold the equipment, even the desks they had left behind to make quick cash to throw into the ST development effort. With Amiga’s computer and who knew what else in the offing from other companies, speed was his priority. He expected his engineers, starting in August with virtually nothing other than Shivji’s rough design parameters, to build him a prototype ready to be demonstrated at the next CES show in January.

Decent graphics capabilities had to be a priority for the type of computer Shivji envisioned. Therefore the hardware engineers spent much of their time on a custom video chip that would support resolutions of up to 640 X 400, albeit only in black and white; the low-resolution mode of 320 X 200 that would be more typically used by games would allow up to 16 colors onscreen at one time from a palette of 512. That chip aside, to save time and money they would use off-the-shelf components as much as possible, such as a three-voice General Instrument sound chip that had already found a home in the popular Apple II Mockingboard sound card as well as various videogame consoles and standup arcade games. The ST’s most unusual feature would prove to be the built-in MIDI interface that let it control a MIDI-enabled synthesizer without the need for additional hardware, a strange luxury indeed for Tramiel to allow, given that he was famous for demanding that his machines contain only the hardware that absolutely had to be there in the name of keeping production costs down. (For a possible clue to why the MIDI interface was allowed, we can look to a typical ST product demonstration. Pitchmen made a habit of somewhat disingenuously playing MIDI music on the ST that was actually produced by a synthesizer under the table. It was easy — intentionally easy, many suspected — for an observer to miss the mention of the MIDI interface and think the ST was generating the music internally.) And of course in the wake of the Macintosh the ST simply had to ship with a mouse and an operating system to support it.

It was this latter that presented by far the biggest problem. While the fairly conservative hardware of the ST could be put together relatively quickly, writing a modern, GUI-based operating system for the new computer represented a herculean task. Apple, for instance, had spent years on the Macintosh’s operating system, and when the Mac was released it was still riddled with bugs and frustrations. This time around Tramiel wouldn’t be able to just slap an archaic-but-paid-for old PET BASIC ROM into the thing, as he had in the case of the Commodore 64. He needed a real operating system. Quickly. Where to get it?

He found his solution in a very surprising place: at Digital Research, whose CP/M was busily losing its last bits of business-computing market-share to Microsoft’s juggernaut MS-DOS. Digital had adopted an if-you-can’t-beat-em-join-em mentality in response. They were hard at work developing a complete Mac-like window manager that could run on top of MS-DOS or CP/M. It was called GEM, the “Graphical Environment Manager.” GEM was merely one of a whole range of similar shells that were appearing by 1985, struggling with varying degrees of failure to bring that Mac magic to the bland beige world of the IBM clones. Also among them was Microsoft’s original Windows 1.0 — another product that Tramiel briefly considered licensing for the ST. Digital got the nod because they were willing to license both GEM and a CP/M layer to run underneath it fairly cheap, always music to Jack Tramiel’s ears. The only problem was that it all currently ran only on Intel processors, not the 68000.

The small Atari team that temporarily immigrated to Digital Research's Monterey headquarters to adopt GEM to the ST.

The small Atari team that temporarily immigrated to Digital Research’s Monterey headquarters to adapt GEM to the ST.

As Shivji and his engineers pieced the hardware together, some dozen of Atari’s top software stars migrated about 70 miles down the California coast from Silicon Valley to the surfer’s paradise of Monterey, home of Digital Research. Working with wire-wrapped prototype hardware that often flaked out for reasons having nothing to do with the software it ran, dealing with the condescension of many on the Digital staff who looked down on their backgrounds as mostly games programmers, wrestling with Digital’s Intel source code that was itself still under development and thus changing constantly, the Atari people managed in a scant few months to port enough of CP/M and GEM to the ST to give Atari something to show on the five prototype machines that Tramiel unveiled at CES in Las Vegas that January. Shivji:

The really exciting thing was that in five months we actually showed the product at CES with real chips, with real PCBs, with real monitors, with real plastic. Five months previous to that there was nothing that existed. You’re talking about tooling for plastic, you’re talking about getting an enormous software task done. And when we went to CES, 85 percent of the machine was done. We had windows, we had all kinds of stuff. People were looking for the VAX that was running all this stuff.

Tramiel was positively gloating at the show, reveling in the new ST and in Atari’s new motto: “Power Without the Price.” Atari erected a series of billboards along the freeway leading from the airport to the Vegas Strip, like the famous Burma-Shave signs of old.

PCjr, $599: IBM, Is This Price Right?

Macintosh, $2195: Does Apple Need This Big A Bite?

Atari Thinks They’re Out Of Sight

Welcome To Atari Country — Regards, Jack

The trade journalists, desperate for a machine to revive the slowing home-computer revolution and with it the various publications they wrote for, ate it up. The ST — or, as the press affectionately dubbed it, the “Jackintosh” — stole the show. “At a glance,” raved Compute! magazine, “it’s hard to tell a GEM screen from a Mac screen” — except for the ST’s color graphics, of course. And one other difference was very clear: an ST with 512 K of memory and monitor would retail for less than $1000 —  less than one-third the cost of an equivalent Macintosh.

Rhapsodic press or no, Tramiel’s Atari very nearly went out of business in the months after that CES show. The Atari game consoles as well as the Atari 8-bit line of home computers were all but dead as commercial propositions, killed by the Great Videogame Crash and the Commodore 64 respectively. Thus virtually no money was coming in. You can only keep a multinational corporation in business so long by selling its old office furniture. The software team in Monterey, meanwhile, had to deal with a major crisis when they realized that CP/M just wasn’t going to work properly as the underpinning of GEM on the ST. They ended up porting and completing an abandoned Digital project to create GEMDOS, or, as it would become more popularly known, TOS: the “Tramiel Operating System.” With their software now the last hold-up to getting the ST into production and Tramiel breathing down their necks, the pressure on them was tremendous. Landon Dyer, one of the software team, delivers an anecdote that’s classic Jack Tramiel:

Jack Tramiel called a meeting. We didn’t often meet with him, and it was a big deal. He started by saying, “I hear you are unhappy.” Think of a deep, authoritarian voice, a lot like Darth Vader, and the same attitude, pretty much.

Sorry, Jack, things aren’t going all that hot. We tried to look humble, but we probably just came across as tired.

“I don’t understand why you are unhappy,” he rumbled. “You should be very happy; I am paying your salary. I am the one who is unhappy. The software is late. Why is it so late?”

Young and idealistic, I piped up: “You know, I don’t think we’re in this for the money. I think we just want to ship the best computer we can –”

Jack shut me down. “Then you won’t mind if I cut your salary in half?”

I got the message. He didn’t even have to use the Force.

Somehow they got it done. STs started rolling down production lines in June of 1985. The very first units went on sale not in the United States, where there were some hang-ups acquiring FCC certification, but rather West Germany. It was just as well, underscoring as it did Tramiel’s oft-repeated vision of the ST as an international computing platform. Indeed, the ST would go on to become a major success in West Germany and elsewhere in Europe, not only as a home computer and gaming platform but also as an affordable small-business computer, a market it would not manage to penetrate to any appreciable degree in its home country. Initial sales on both continents were gratifying, and the press largely continued to gush.

The Atari 520ST, first of a number of computers in the line.

The Atari 520ST, first of a number of computers in the line.

The praise was by no means undeserved. If the ST showed a few rough edges, inevitable products of its rushed development on a shoestring budget, it was more notable for everything it did well. A group of very smart, practical people put it together, ending up with a very sweet little computer for the money. Certainly GEM worked far, far better than a hasty port from a completely different architecture had any right to — arguably better, in fact, than Amiga’s soon-to-be-released homegrown equivalent, the Workbench. The ST really was exactly what Jack Tramiel had claimed it would be: a ridiculous amount of computing power for the price. That made it easier to forgive this “Jackintosh’s” failings in comparison to a real Macintosh, like its squat all-in-one-box case — no Tramiel computer was ever likely to win the sorts of design awards that Apple products routinely scooped up by the fistful even then — and materials and workmanship that weren’t quite on the same par with the Mac as were the ST’s raw specs. The historical legacy of the ST as we remember it today is kind of a tragic one in that it has little to do with the machine’s own considerable merits. The tragedy of the ST would be to be merely a very good machine, whereas its two 68000-based points of habitual comparison, the Apple Macintosh and the Commodore Amiga, together pioneered the very paradigm of computing and, one might even say, of living that we know today.

Speaking of which: just where was Commodore in the midst of all this? That’s a question many in the press were asking. Commodore had made an appearance at that January 1985 CES, but only to show off a new 8-bit computer, the last they would ever make: the Commodore 128. An odd, Frankenstein’s monster hybrid of a computer, it seemed a summary of the last ten years of 8-bit development crammed into one machine, sporting both of the microprocessors that made the PC revolution, the Zilog Z-80 and the MOS 6502 (the latter was slightly modified and re-badged the 8502). Between them they allowed for three independent operating modes: CP/M, a 99.9 percent compatible Commodore 64 mode, and the machine’s unique new 128 mode. This latter addressed most of the 64’s most notable failings, including its lack of an 80-column display, its atrocious BASIC that gave access to none of the machine’s graphics or sound capabilities (the 128’s BASIC 7.0 in contrast was amongst the best 8-bit BASICs ever released), and its absurdly slow disk drives (the 128 transferred data at six or seven times the speed of the 64). Despite being thoroughly overshadowed by the ST in CES show reports, the 128 would go on to considerable commercial success, to the tune of some 4 million units sold over the next four years.

Still, it was obvious to even contemporary observers that the Commodore 128 represented the past, the culmination of the line that had begun back in 1977 with the Commodore PET. What about the future? What about Amiga? While Tramiel and his sons trumpeted their plans for the ST line to anyone who would listen, Commodore was weirdly silent about goings-on inside its new division. The press largely had to make do with rumor and innuendo: Commodore had sent large numbers of prototypes to a number of major software developers, most notably Electronic Arts; the graphics had gotten even better since those CES shows; Commodore was planning a major announcement for tomorrow, next week, next month. The Amiga computer became the computer industry’s unicorn, oft-discussed but seldom glimpsed. This, of course, only increased its mystique. How would it compare to the Jackintosh and the Macintosh? What would it do? How much would it cost? What would it, ultimately, be? And just why the hell was it taking so long? A month after Atari started shipping STs — that machine had gone from a back-of-a-napkin proposal to production in far less time than it had taken Commodore to merely finish their own 68000-based computer — people would at long last start to get some answers.

(Sources: On the Edge by Brian Bagnall; New York Times of July 3 1984, August 21 1984, and August 29 1984; Montreal Gazette of July 12 1984 and July 14 1984; Compute! of August 1984, February 1985, March 1985, April 1985, July 1985, August 1985, and October 1985; STart of Summer 1988; InfoWorld of September 17 1984 and December 17 1984; Wall Street Journal of March 25 1984; Philadelphia Inquirer of April 19 1985. Landon Dyer’s terrific memories of working as part of Atari’s GEM team can be found on his blog as a part 1 and a part 2. Finally, Marty Goldberg’s once again shared a lot of insights and information on the legal battle between Atari and Commodore, including some extracts from actual court transcripts, although once again our conclusions about it are quite different. Regardless, my heartfelt thanks to him! Most of the pictures in this article come from STart magazine’s history of the ST, as referenced above.)

 

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The 68000 Wars, Part 1: Lorraine

This is what a revolutionary technology looks like. In very early 1986 Tim Jenison, founder of NewTek, began distributing these full-color digitized photographs, the first of their kind ever to be seen on a PC screen, to Amiga software exchanges. The age of multimedia computing had arrived.

This is what a revolutionary technology looks like. In very early 1986 Tim Jenison, founder of NewTek, began distributing these full-color digitized photographs, the first of their kind ever to be seen on a PC screen, to Amiga public-domain software exchanges. The age of multimedia computing had arrived.

The Amiga was the damnedest computer. A riddle wrapped in a mystery inside an enigma, then all crammed into a plastic case; that was the Amiga. I wrote a book about the thing, and I’m still not sure I can make sense of all of its complications and contradictions.

The Amiga was a great computer when it made its debut in 1985, better by far than anything else on the market. At its heart was the wonderchip of the era, the Motorola 68000, the same CPU found in the Apple Macintosh and the Atari ST. But what made the Amiga special was the stuff found around the 68000: three custom chips with the unforgettable names of Paula, Denise, and Agnus. Together they gave the Amiga the best graphics and sound in the industry by a veritable order of magnitude. And by relieving the 68000 of a huge chunk of the burden for generating graphics and sound as well as performing many other tasks, such as disk access, they let the Amiga dazzle while also running rings around the competition in real-world performance by virtually any test you cared to name. It all added up not just to incremental improvement but rather to that rarest thing in any field of endeavor: a generational leap.

Guru Meditation

The Amiga, especially in its original 1985 incarnation, was a terrible computer. The operating system that shipped with it was painfully buggy. If you could manage to use the machine for just an hour or two without it inexplicably running out of memory and crashing you were doing well. Other glitches were bizarrely entertaining if they didn’t happen to you personally, such as the mysterious “date virus” that could start to spread through all your disks, setting the timestamp on every file to sometime in the year 65,000 and slowing the system to a crawl. (No, this “virus” wasn’t actual malware, just a weird bug.) Of course, software could be and to a large extent eventually was fixed. Other problems were more intractable. There was, for instance, the machine’s use of interlaced video for its higher resolution modes, which caused those marvelous graphics to flicker horribly in most color combinations. Baffled users who felt like their swollen eyeballs were about to pop right out of their heads after a few hours of trying to work like this could expect to be greeted with a lot of technical explanations of why it was happening and suggestions for changing their onscreen color palettes to try to minimize it. Certainly anyone who picked up an Amiga expecting an experience similar to the famously easy-to-use Macintosh was in for a disappointment. Despite the Amiga’s sporting a superficially similar mouse-and-windows interface, users hoping to get serious work or play done on the Amiga would need to educate themselves on such technical minutiae as the difference between “chip” and “fast” memory and learn what a program’s “stack” was and how to set it manually. Even on a good day the Amiga always felt like a house of cards ready to be blown over by the first breath of wind. When the breeze came, the user was left staring at an inscrutable “Guru Meditation Error” and a bunch of intimidating numbers. Sometimes the Amiga could seem positively designed to confound.

The Amiga anticipated the future, marked the beginning of a new era. It pointed forward to the way we live and compute today. I titled my book on the machine The Future Was Here for a reason. That aforementioned generational leap in graphics and sound was the most significant in the history of the personal computer in that it made the Amiga not just a new computer but something qualitatively new under the sun: the world’s first multimedia PC. With an Amiga you could for the first time store and play back in an aesthetically pleasing way imagery and sound captured from the real world, and combine and manipulate and interact with it within the digital environment inside the computer. This changed everything about the way we compute, the way we play, and eventually the way we live, making possible everything from the World Wide Web to the iPod, iPad, and iPhone. Almost as significantly, the Amiga pioneered multitasking on a PC, another feature enabled largely by that magnificent hardware that was able to stretch the 68000 so much farther than other computers. There is considerable psychological research today that indicates that, for better or for worse, multitasking has literally changed the way we think, changed our brains — not a bad claim to fame for any commercial gadget. When you listen to music whilst Skyping on-and-off with a friend whilst trying to get that term paper finished whilst looking for a new pair of shoes on Amazon, you are what the Amiga wrought.

The Amiga was stuck in the past way of doing things, thus marking the end of an era as well as the beginning of one. It was the punctuation mark at the end of the wild-and-wooly first decade of the American PC, the last time an American company would dare to release a brand new machine that was completely incompatible with what had come before. Its hardware design reflected the past as much as the future. Those custom chips, coupled together and to the 68000 so tightly that not a cycle was wasted, were a beautiful piece of high-wire engineering created by a bare handful of brilliant individuals. If a computer can be a work of art, the Amiga certainly qualified. Yet its design was also an evolutionary dead end; the custom chips and all the rest were all but impossible to pull apart and improve without breaking all of the software that had come before. The future would lie with modular, expandable design frameworks like those employed by the IBM PC and its clones, open hardware (and software) standards that were nowhere near as sexy or as elegant but that could grow and improve with time.

The Amiga was a great success, the last such before the Wintel hegemony expanded to dominate home computing like it already did business by the mid-1980s. Its gaming legacy is amongst the richest of any platform ever, including some fifteen years worth of titles that, especially during the first half of that period, broke boundaries at every turn and expanded the very notion of what a computer game could be. I won’t even begin to list here the groundbreaking classics that were born on the Amiga; suffice to say that they’ll be featuring in this blog for years to come. The Amiga was so popular a gaming platform in Europe that it survived many years after the death of its corporate parent Commodore, a phenomenon unprecedented in consumer computing. The last of the many glossy newsstand magazines devoted to it, Britain’s Amiga Active, didn’t cease publication until November of 2001, well over seven years after the platform became an orphan. It would prove to be just as long-lived in its other major niche of video-production workstation. Thanks to their unique ability to blend their own visuals with analog video signals — enabled, ironically, by those very same interlaced video modes that drove so many users crazy — Amigas could be found in the back rooms of small cable stations and video producers into the 2000s. Only the great changeover to digital HD broadcasting finally and definitively put an end to the Amiga’s career in this realm.

The Amiga was a bitter failure, one of the great might-have-beens of computer history. In 1985 so many expected it to become so much more than just another game machine or even “just” the pioneer of the whole new field of desktop video, forerunner of the YouTube generation. The Amiga, believed its early adopters, was so much better — not just technically better but conceptually better — than what was already out there that it was surely destined to conquer the world. After all, business-software heavy hitters like WordPerfect, Borland, Ashton-Tate, and Lotus knew a good thing when they saw it, were already porting their applications to it. And yet in the end only WordPerfect came through, for a while, and, while the Amiga did change the world in the long term, its innovations were refined and made into everyday life by Apple and Microsoft rather than the Amiga itself. The vast majority of heirs to the Amiga’s legacy today — a number which includes virtually every citizen of the developed world — have no idea a computer called the Amiga ever existed.

That’s just a sample of the contradictions awaiting any writer who tries to seriously tackle the Amiga as a subject. And there’s also another, more ironic sort of difficulty to be confronted: the sheer love the Amiga generated on the part of so many who had one. The Amiga, I must confess, was my own first computing love. Since that day in 1994 when I gave in and bought my first Wintel machine, I’ve been platform-agnostic. Linux and Apple zealots and Microsoft apologists all leave me cold, leave me wondering how people can get so passionate about any platform not called Amiga. Of course I’m smart enough to realize that none of this is really all that important, that a gadget is just that, a means to an end. I even recognize that, had the Amiga not come along when it did to pioneer a new paradigm for computing, something else would have. That’s just how history works. But still, there was something special about the Amiga for those of us who were there, something going far beyond even a hacker’s typical love for his first computer.

To say Amiga users had — still have — a reputation for zealotry hardly begins to state the case. General-computing magazines from the late 1980s until well into the 1990s learned to expect a deluge of hate mail from Amiga users every time they published an article that dared say an unfavorable word about the platform — or, worse, and as inevitably happened more and more frequently as time went on and the Amiga faded further from prominence, that didn’t mention it at all. Prominent mainstream columnist John C. Dvorak liked to say that, whereas Mac users were just arrogant and self-righteous, Amiga users were actively delusional. There are still folks out there clinging to their 25-year-old Amigas, patched together with the proverbial duct tape and baling wire, as their primary computing platform. A disturbing number of them are still waiting for the day when the Amiga shall rise again and take over the world, even as it’s hard to understand what a modern Amiga should even be or why it should exist in a world that long since incorporated all of the platform’s best ideas into slicker, simpler gadgets.

Every good cult needs an origin myth, and the Cult of Amiga is no exception. Beginning already in the machine’s North American heyday of the late 1980s, High Priest R.J. Mical, developer of the Amiga’s Intuition library of GUI widgets as well as other critical pieces of its software infrastructure, began traveling to trade shows and conventions telling in an unabashedly sentimental way the story of those earliest days, when the Amiga was being developed by a tiny independent company, itself called simply Amiga, Incorporated.

We were trying to find people that had fire, that had spirit, that had a dream they were trying to accomplish. Carl Sassenrath, the guy that did the Exec for the machine, it was his lifelong dream to do a multitasking operating system that would be a work of art, that would be a thing of beauty. Dale Luck, the guy that did the graphics, this was his undying dream since he was in college to do this incredible graphics stuff.

We were looking for people with that kind of passion, that kind of spirit. More than anything else, the thing that we were looking for was people who were trying to make a mark on the world, not just in the industry but on the world in general. We were looking for people that really wanted to make a statement, that really wanted to do an incredibly great thing, not just someone who was looking for a job.

Yes. Well. While idealism certainly has its place in the Amiga story, the story is also a very down-to-earth tale of competition inside Silicon Valley. It begins in 1982 with an old friend of ours: Larry Kaplan, one of the Fantastic Four game programmers from Atari who founded Activision along with Jim Levy.

Activison was flying high in 1982, the Fantastic Four provided in Kaplan’s own words with “limousine service, company cars, and a private chef” on top of a base salary of $150,000. Yet Kaplan, who is often described by others as the very apotheosis of “the grass is always greener,” was restless. He had the idea to form another company, one all his own this time, to enter the booming Atari VCS market. One day in early 1982 he called up an old colleague of his from the Atari days: Jay Miner, who had designed the Atari VCS’s display chip, then gone on to design the chipset at the heart of the Atari 400 and 800 home computers. Kaplan, along with two others of the Fantastic Four, had written the operating system and BASIC language implementation for those machines. He thus knew Miner well. Knowing the vagaries of business and starting his own company somewhat less well than he knew Miner and programming, his initial query was a simple one: “I’d like to start a company. Do you know any lawyers?”

Miner, who had left Atari at around the same time as the Fantastic Four out of a similar disgust with new CEO Ray Kassar, had also left Silicon Valley to move to Freeport, Texas, where he worked for a small semiconductor company called Zymos, designing chips for pacemakers and other medical devices. Miner said that, no, he wasn’t particularly well-acquainted with any lawyers, good or otherwise, but that his boss, Zymos founder Bert Braddock, had a pretty good head for business. He made the introduction, and Kaplan and Braddock hit it off. The plan that Kaplan presented to him was to combine hardware and software in the booming home videogame space, offering hardware to improve on the Atari VCS’s decidedly limited capabilities along with game cartridges that took advantage of the additional gadgetry. Such a scheme was hardly original to him; confronted with the VCS’s enormous popularity and equally enormous limitations, others were already working the same space. For example, two other former Atari engineers, Bob Brown and Craig Nelson, had already formed Starpath to develop a “Supercharger” hardware expansion for the VCS as well as games to play with it. (Starpath would go on to merge with the newly renamed Epyx — née Automated Simulations — and write games like Summer Games.)

Nevertheless, Braddock sensed a potentially fruitful partnership in the offing for a maker of chips like his Zymos. He found Kaplan some investors in nearby oil-rich Houston to put up the first $1 million or so to get the company off the ground. He also found and recruited one Dave Morse, a vice president of marketing at Tonka Toys, to join Kaplan, believing him to be exactly the savvy business mind and shrewd negotiator the venture needed. An informal agreement was reached amongst the group: Morse would run the new company; Kaplan would write the games; Miner (working under contract, being still employed by Zymos) would design the ancillary hardware; and Zymos would manufacture the hardware and the game cartridges. Somewhere at the back of everyone’s mind was the idea that, if they were successful with their games and add-on gadgets, they might just be able to take the next step: to make a complete original game console of their own, the successor to the Atari VCS that Ray Kassar’s Atari didn’t seem all that interested in seriously pursuing.

In June of 1982, Kaplan announced to his shocked colleagues at Activision that he was moving on to do his own thing; the bridges he thus burnt have never been mended to this day. He and Morse opened a small office in Santa Clara, California, for their new company, which Kaplan named Hi-Toro. Morse and Braddock — truly a sugar daddy to die for for a fledgling corporation — beat the bushes over the months that followed for additional financing, with success to the tune of another $5 million or so. The majority were dentists and other members of the medical establishment, thanks to Braddock’s connections in that field. They knew little to nothing about computer technology, but knew very well that videogames were hot, and were eager to get in on the ground floor of another Atari.

And then the squirrely Larry Kaplan nearly undid the whole thing. He called Atari founder Nolan Bushnell that October to talk up his new company, hoping to convince him to join Hi-Toro as chairman of the board; a name like his would confer instant legitimacy. Instead the hunter became the hunted. Bushnell, who was legendary for the buckets of charm at his fingertips, convinced Kaplan to come to him, convinced him they could start a new videogame company to rival Atari together, without Zymos or Morse or Miner. Just like that, Kaplan tendered his second shocking resignation of 1982. In the end, as Kaplan later put it, “Nolan, of course, flaked out,” leaving him high and dry, if quite possibly deservedly so. He would end up completing the circle by going back to Atari before the year was up, but that gig ended when the Great Videogame Crash of 1983 hit. Widely regarded as too untrustworthy to be worth the trouble inside the industry by that point, Kaplan’s career never recovered. On the plus side, he was able to cash out his Activision stock following that company’s IPO, making him quite a wealthy man and making future work largely optional anyway — not the worst of petards for a modern-day Claudius.

Dave Morse, meanwhile, was also left high and dry, with a company and an office and lots of financing but nobody to design his products. He asked Jay Miner to leave Zymos and join him full-time at Hi-Toro, to help fill the vacuum left by Kaplan’s departure. Miner, who had been nursing for some time now a dream of doing a game console and/or a computer based around the new Motorola 68000 and who saw Hi-Toro as just possibly his one and only chance to do that, agreed — so long as he could bring his beloved cockapoo Mitchy with him to the office every day.

One of the first things to go after Kaplan left was the company name he had come up with. Everyone Morse and Miner spoke to agreed that “Hi-Toro” was a terrible name that made one think of nothing so much as lawn mowers. Morse therefore started flipping through a dictionary one day, looking for something that would come before Apple and Atari in corporate directories. He hit upon the Spanish word for “friend”: “amigo.” That had a nice ring to it, especially with “user-friendliness” being one of the buzzwords of the era. But the feminine version of the word — “amiga” — sounded even better, friendly and elegant maybe even a little bit sexy. Miner by his own later admission was ambivalent about the new name, but everyone Morse spoke to seemed very taken with it, so he let it go. Thus did Hi-Toro become Amiga.

Of course, Morse and Miner couldn’t do all the work by themselves. Over the months that followed they assembled a team whose names would go down in hacker lore. An old colleague from Atari who had worked with Miner on the VCS as well as the 400 and 800, Joe Decuir, came in under a temporary contract to help Miner start work on a new set of custom chips. A few other young hardware engineers were hired as full-time employees. Morse hired one Bob Bob Pariseau to put together a software team; he became essentially the equivalent of Jay Miner on that side of the house. The software people would soon grow to outnumber the hardware people. Among their ranks were now-legendary Amiga names like R.J. Mical, Dale Luck, and Carl Sassenrath.

The folks who came to work at Amiga were almost universally young and largely inexperienced. While tarring them with the clichéd “dreamers and misfits” label may be going too far, it is true that their backgrounds were more diverse than the Silicon Valley norm; Mical, for instance, was a failed English major who had recently spent nine months backpacking his way around the world. While their youthful idealism would do much to give the eventual Amiga computer its character, there was also a very practical reason that Morse had to fill his office with all these bright young sparks: what with financing getting harder and harder to come by as the videogame industry began to go distinctly soft, he simply couldn’t afford to pay for more experienced hands. Amiga’s financial difficulties provided the opportunity of a lifetime to a bunch of folks that may have struggled to get in the door in even the most junior of positions at someplace like Apple, IBM, or Microsoft.

The glaring exception to the demographic rule at Amiga was Jay Miner himself. Creative, bleeding-edge engineering is normally a young person’s game. Miner, however, was fully 50 years old when he created his masterpiece, the Amiga chipset. He’d been designing circuits already twenty years before the microprocessor even existed and well before some of his colleagues around the office were even born. Thanks perhaps to intermittent but chronic kidney problems that would eventually kill him at age 62, he looked and in some ways acted even older than his years, favoring quiet, contemplative hobbies like cultivating bonsai trees and carving model airplanes out of balsa wood. Adjectives like “fatherly” rival “soft-spoken” and “wise” in popularity when people who knew him remember him today. While the higher-strung Dave Morse became the face Amiga showed to the outside world, Miner set the internal tone, tolerating and even encouraging the cheerful insanity that was life inside the Amiga offices. Miner:

The great things about working on the Amiga? Number one I was allowed to take my dog to work, and that set the tone for the whole atmosphere of the place. It was more than just companionship with Mitchy — the fact that she was there meant that the other people wouldn’t be too critical of some of those we hired, who were quite frankly weird. There were guys coming to work in purple tights and pink bunny slippers. Dale Luck looked like your average off-the-street homeless hippy with long hair and was pretty laid-back. In fact the whole group was pretty laid-back. I wasn’t about to say anything — I knew talent when I saw it and even Parasseau who spread the word was a bit weird in a lot of ways. The job gets done and that’s all that matters. I didn’t care how solutions came about even if people were working at home.

The question of just what this group was working on, and when, is a harder question to answer than you might expect. When we use the word “Amiga” to refer to this era, we could be talking about any of three possibilities. Firstly, there’s Amiga the company, which during its early months put well over half of its personnel and resources into games and add-ons for the old Atari VCS rather than revolutionary new technology. Then there’s the Amiga chipset being designed by Miner and his team. And finally there’s a completed game console and/or computer to incorporate the chipset. Making sense of this tangle is complicated by revisionist retellings, which tend to find grand plans and coherent narratives where none actually existed. So, let’s take a careful look at each of these Amigas, one at a time.

The Amiga Joyboard

The Amiga Joyboard

Kaplan’s original plan had envisioned Hi-Toro/Amiga as a maker first and foremost of cartridges and hardware add-ons for the VCS, with a whole new console possibly to follow if things went gangbusters. These plans got reprioritized somewhat when Kaplan left and Miner came aboard with his eagerness to do a console and/or computer, but they were by no means entirely discarded. Thus Amiga did indeed create a handful of original games over the course of 1983, along with joysticks and other hardware. By far the most innovative and best-remembered of these products was something called the Joyboard: a large, flat slab of plastic on which the player stood and leaned side to side and front to back to control a game in lieu of a joystick. Amiga packaged a skiing game, Mogul Maniac, with the Joyboard, and developed at least two more — a surfing game called Surf’s Up and a pattern-matching exercise called Off Your Rocker — that never saw release. The Joyboard and its companion products have been frequently characterized as little more than elaborate ruses designed to keep the real Amiga project under wraps. In reality, though, Morse had high commercial hopes for this side of his company; he was in fact depending on these products to fund the other side of the operation. He spent quite lavishly to give the Joyboard a splashy introduction at the New York Toy Fair in February of 1983, and briefly hired former Olympic skier Suzy Chaffee — better known to a generation of Americans as “Suzy Chapstick” thanks to her long-running endorsement of that brand — to serve as spokesperson. His plans were undone by the Great Videogame Crash. The peripherals and games all failed miserably, precipitating a financial crisis at Amiga to which I’ll return shortly.

The chips were always Jay Miner’s babies. Known in the early days as Portia, Daphne, and Agnus, later iterations would see Portia renamed to Paula and Daphne to Denise. Combined with a 68000, they offered unprecedented audiovisual capabilities, including a palette of 4096 colors and four-channel stereo sound. Their most innovative features were the so-called “copper” and “blitter” housed inside Agnus. The former, which could also be found in a less advanced version in Miner’s previous Atari 400 and 800, could run short programs independent of the CPU to change the display setup on the fly in response to the perpetually repainting electron gun behind the television or monitor reaching certain points in its cycle. This opened the door to a whole universe of visual trickery. The blitter, meanwhile, could be programmed to copy blocks of memory from place to place at lightning speeds, and in the process perform transformations and combinations on the data  — once again, independent of the CPU. It was a miracle worker in the realm of fast animation. While not programmable in the same sense as the copper and the blitter, Denise autonomously handled the task of actually painting the display, while Paula could autonomously play back up to four sound samples or waveforms at a time, and also independently handle input and output to disk. (This is the briefest of technical summaries of the Amiga chipset. For a detailed description of the chipset’s internal workings as well as many important aspects of its host platform’s history that I’ll never get to in this game-focused blog, I point you again to my own book on the subject.)

Amiga’s ultimate vision for their chipset — whether in the form of a game console, a computer, a standup arcade game, or all three — is the most difficult part of all their tangled skein of intentionality to unravel, and the one most subject to revisionist history. Amiga fanatics of later years, desperate to have their platform accepted as a “serious” computer like the IBM PC or Apple Macintosh, became rather ashamed of its origins in the videogame industry. This has occasionally led them to say that the Amiga was always secretly intended to be a computer, that the videogame plans were just there to fool the investors and keep the money flowing. In truth, there’s good reason to question whether there was any real long-term plan at all. Miner noted in later interviews that the company was quite split on the subject, with — ironically in light of his later status of Amiga High Priest — R.J. Mical on the “investors’ side,” pushing for a low-cost game console, while others like Dale Luck and Carl Sassenrath wanted an Amiga computer. Miner himself claimed to have envisioned a console that could be expanded into a real computer with the addition of an optional keyboard and disk drive. (Amiga also had similar plans for the Atari VCS in the form of something to be called the Amiga Power Module, yet another project killed by the videogame collapse.) Dave Morse, who died in 2007, is not on record at all on the subject. One suspects that he was simply in wait-and-see mode through much of 1983.

What is clear is that the first Amiga machine to be shown to the public wasn’t so much a prototype of a real or potential computer or game console as the most minimalist possible frame to show off the capabilities of the Amiga chipset. Named after Morse’s wife, the Amiga Lorraine began to come together in the dying days of 1983, in a mad scramble leading up to the Winter Consumer Electronics Show that was scheduled to begin on January 4. Any mad scientist would have been proud to lay claim to the contraption. Miner and his team built their chipset, destined eventually to be miniaturized and etched into silicon, out of off-the-shelf electronics components, creating a pile of breadboards large enough to fill a kitchen table, linked together by a spaghetti-like tangle of wires, often precariously held in place with simple alligator clips. It had no keyboard or other input method; the software team wrote programs for it on a workstation-class 68000-based computer called the Sage IV, then uploaded them to the Lorraine and ran them via a cabled connection. The whole mess was a nightmare to maintain, with wires constantly falling off, pieces overheating, or circuits shorting out seemingly at random. But when it worked it provided the first tangible demonstration of Miner’s extraordinary design. Amiga accordingly packed it all up and transported it — very carefully! — to Las Vegas for its coming-out party at Winter CES.

R.J. Mical and Dale Luck, amongst others, had worked feverishly to create a handful of demos to show off in a private corner of Amiga’s CES booth, open only by invitation to hand-selected members of the press and industry. The hit of the bunch, written by Mical and Luck at the show itself in one feverish all-night hacking session fueled by “a six pack of warm beer,” was a huge, checked soccer ball that bounced up and down, prototype of one of the most famous computerized demos of all time. The bouncing soccer ball — the “boing” ball — would soon become the unofficial symbol of Amiga.


Boing and the other demos were impressive, but the hardware was obviously still in a very rough state, still a long, long way away from any sort of salable product. Many observers were frankly skeptical whether this mass of breadboards and wires even could be turned into the three chips Amiga promised, and if so whether those chips could, complicated as they must inevitably be, be cost-effectively manufactured. Two obvious applications of the chipset, to a new videogame console or to standup arcade games, were facing a gale-force headwind following the Great Videogame Crash of the previous year. Nobody wanted anything to do with that market anymore. And introducing yet another incompatible computer into the market, no matter how impressive its hardware, looked like a high-risk proposition as well. Thus most visitors were impressed but carefully noncommittal. Was there really a place for Amiga’s admittedly extraordinary technology? That was the question. Tellingly, of the glossy magazines, only Creative Computing bothered to write about Lorraine in any real detail, excitedly declaring it to have “the most amazing graphics and sound that will ever have been offered in the consumer market.” (Just to show that prescience isn’t always an either/or proposition, the same journalist, John J. Anderson, noted how important it would be to make sure any eventual Amiga computer was compatible with the IBM PCjr, which was sure to take over the industry.)

Thus Amiga’s coming-out party is best characterized as having mixed results on the whole, leading to lots of impressed observers but no new investors. And that was a big, big problem because Amiga was quickly running out of money. With the VCS products having not only failed to sell but also absorbed millions in their own right to develop, Amiga’s financial picture was getting more desperate by the week. One thing was becoming clear: there was no way they were going to be able to secure the investment needed to turn the Lorraine into a completed computer — or a completed anything else — and market it themselves. It seemed that they had three options: license the technology to someone else with deeper pockets, sell themselves outright to someone else, or go quietly out of business. As the founders mortgaged their houses to make payroll and Morse begged his creditors for loan extensions, the only company that seemed seriously interested in the Amiga chipset was the one Jay Miner would least prefer to get in bed with once again: Atari.

An Atari old-timer named Mike Albaugh had first visited Amiga well before the CES show, in November of 1983. He was given an overview of the as-yet-extant-on-paper-only chipset’s features and, knowing very well the capabilities of Jay Miner, expressed cautious interest. After their first tangible glimpse of the chipset’s capabilities at CES, Atari got serious about acquiring this incredible technology from a company that seemed all but at their mercy, desperate to make a deal that would let them stay alive a little longer. With no other realistic options on the table, Dave Morse negotiated with Atari as best he could from his position of weakness. Atari had no interest in buying a completed machine, whether of the game-console or computer variety. They just wanted that wonderful chipset. The preliminary letter of intent that Amiga and Atari signed on March 7, 1984, reflects this.

That same letter of intent, and the $500,000 that Atari transferred to Amiga as part of it, would lead to a legal imbroglio lasting years. The specifics that the letter contained, as well as — equally importantly — what it did not contain, remain persistently misunderstood to this day. Thankfully, the original agreement has been preserved and made available online by Atari historians Marty Goldberg and Curt Vendel. I’ve taken the time to parse this document closely, and also enlisted the aid of a couple of acquaintances with better legal and financial minds than my own. Because it’s so critical to the story of Amiga, and because it’s been so widely misunderstood and misconstrued, I think it’s worth taking a moment here to look fairly closely at its specifics.

The document outlines a proposed arrangement granting Atari exclusive license to the chipset for use in home videogame consoles and standup arcade games, in perpetuity from the time that the finalized agreement is signed. The proposal also grants Atari a nonexclusive license to use the chips in a personal computer, subject to the restriction that Atari may first offer an add-on kit to turn a game console using the chips into a full-blown computer in June of 1985, and a standalone computer using the chips only in March of 1986. Before and continuing after Atari makes their computer using the chips, Amiga may make one of their own, but may only sell it through specialized computer dealers, not mass merchandisers like Sears or Toys ‘R’ Us. Atari, conversely, will be restricted to the mass merchandisers. The obvious intention here is to target Amiga’s products to the high-end, professional market, Atari’s to gamers and casual users. Atari will pay Amiga a royalty of $2 per computer or game console containing the chipset sold, $15 per standup arcade videogame. Note that the terms I’ve just described are only a proposal pending a finalized license agreement, without legal force — unless certain things happen to automatically trigger their going into effect, which I’ll get to momentarily.

Now let’s look at the parts of the document that do have immediate legal force. Amiga being starved for cash and still needing to do considerable work to complete the chipset, Atari will give Amiga an immediate “loan” of $500,000, albeit one which they never really expect to see paid back; again, I’ll explain why momentarily. Atari will then continue to give Amiga more loans on a milestone basis: $1 million when a finalized licensing agreement is signed; $500,000 when each of the three chips is completed and delivered to Atari ready for manufacturing. And here’s where things get tricky: once all of the chips are delivered and a licensing agreement is in place, Amiga’s outstanding loan obligations will be converted into a purchase by Atari of $3 million worth of Amiga stock. If, on the other hand, a finalized licensing agreement has not been signed by March 31 — just three weeks from the date of this preliminary agreement — Amiga will be expected to pay back the $500,000 to Atari by June 30, plus interest of 120 percent of the current Bank of America prime rate, assuming some other deal is not negotiated in the interim. If Amiga cannot or will not do so, the proposed licensing agreement outlined above will automatically go into effect as a legally binding contract, with the one very significant change that Atari will not need to pay any royalties at all — the license “shall be fully paid in exchange for cancellation of the loan.” The Amiga chipset thus serves as collateral for the loan, its blueprints and technical specifications being held in escrow by a neutral third party (the Bank of America).

There are plenty of other technicalities — for instance, Atari will be allowed to bill Amiga for their time and other resources if Amiga fails to complete the chipset, thus forcing Atari’s engineers to finish the job — but I believe I’ve covered the salient points here. (Those deeply interested or skeptical of my conclusions may want to look at a more detailed summary I prepared, or, best of all, just have a look at the original.) Looking at the contract, what jumps out first is that it wasn’t a particularly good deal for Amiga. To pay a mere $2 per console or computer sold when the chipset being paid for must be the component that literally makes that console or computer what it is seems shabby indeed. For Atari it would have represented the steal of the century. Why would Morse sign such an awful deal?

The obvious answer must of course be that he was desperate. While it’s perhaps dangerous to ascribe too much motivation to a dead man who never publicly commented on the subject, circumstantial evidence would seem to characterize this agreement as the wind-up to a final Hail Mary, a way to secure a quick $500,000 for the here and now, to keep the lights on a little longer and hope for a miracle. Morse did not sign a final licensing agreement by March 31, a very risky move indeed, as it gave Atari the right to automatically start using Amiga’s chipset, without having to pay Amiga another cent, if Morse couldn’t negotiate some other arrangement with them or find some way to pay back the $500,000 plus interest before June 30. Carl Sassenrath once described Morse as “my model for how to be cool in business.” Truly he must have had nerves of steel. And, incredibly, he would get his miracle.

(Sources: On the Edge by Brian Bagnall. Amiga User International of June 1988 and March 1993. Info of January/February 1987 and July/August 1988. Creative Computing of April 1984. Amazing  Computing, premiere issue. InfoWorld of July 12 1982. Commander of August 1983. Scott Stilphen’s interview with Larry Kaplan on the 2600 Connection website. Thanks also to Marty Goldberg for patiently corresponding with me and giving me Atari’s perspective, although I believe his conclusions about the Amiga/Atari negotiations and particularly his reading of the March 7 1984 agreement to be in error. And yeah, there’s my own book too…)

 
 

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