Game Over. Start Again? – Part 3

…and Burn

Late 1984 and 1985 belonged to the home computer market, and the handful of software makers that had survived the crash. But the industry wasn’t dormant. In 1983, Nintendo had made a splash in its native Japan with the Famicom game console – short for Family Computer. Vastly ahead of anything in the American market with its processing power, the Famicom seemed like a shoo-in for the American market until the crash happened. Nintendo initially approached Atari to market the Famicom in the western hemisphere, and at first, it seemed like a done deal – both sides were eager to join forces.

Then one of the biggest decisions in the entire history of the business of video games took place, signaling the rise of one company and the fall of the other – and all because of a misunderstanding.

At a 1984 Consumer Electronics Show, Atari and Nintendo were close to inking the Famicom distribution pact. Very close. As a show of good faith, Atari had received rights to translate Nintendo’s games for the U.S. home computer market, and the future looked bright – until Atari executives noticed a new version of Donkey Kong running on an Adam computer at Coleco’s booth. Infuriated, they confronted their counterparts at Nintendo, who threatened to yank the home console rights out from under Coleco. By the time the misunderstanding was settled, there had been a changing of the corporate guard at Atari, and the deal was off. Nintendo was on its own, and by the time it made it to market with the American version of Famicom – now called the Nintendo Entertainment System – U.S. investors and consumers had turned a cold shoulder toward the video game business.

Through a series of brilliant marketing maneuvers, such as including a remote-controlled robot called R.O.B. with the system and selling the resulting package as a toy, Nintendo broke into the market and kick-started a renaissance of the game industry. But it wasn’t about to let another crash begin: Nintendo clamped down on licensing and manufacturing rights, forcing anyone wishing to make games for the NES come to Nintendo to have the cartridges manufactured. Anyone circumventing the built-in security features which would allow only licensed software to run was swiftly and aggressively sued, including an Atari subsidiary, Tengen, which battled with Nintendo over the cartridge rights to a simple Russian puzzle game called Tetris. Nintendo won the battle, and the rest – including Tengen – was history.

Nintendo’s strict licensing deals were scrutinized in 1990 under American antitrust laws, but nothing came of the allegations. Nintendo made a third-party software market possible by having the power of veto over content, but keeping competition alive. By trying to quash the third-party software industry altogether, Atari overreached itself – and ran into courts sympathetic to startup companies, which arguably wouldn’t have affected Atari’s hardware business.

The crash only happened once – because the lessons of the crash were quickly and painfully learned. But that’s not to say that another shakeout won’t occur – in 2001, Sega got out of the hardware business and itself became a third-party software house making games for its former competitors – and another crash may happen again, and become just another part of the cycle.

Game Over. Continue?

Many of the players who started the industry on its way have stayed with it. Others have gratefully taken their seat on the sidelines, focusing their attentions on other ventures.

Ralph Baer, creator of the Odyssey and now in his 80s, still consults and invents – and defends his past patents fiercely. He recently donated the still-working Brown Box prototype of the Odyssey, along with its light gun, to the Smithsonian Institute for a display of the works of American inventors. Both devices are still functioning – and both are dripping with post-it notes and other attached paperwork from the dozens of court cases in which the patents of Baer, Sanders Associates, and Magnavox were challenged . . . in most cases, unsuccessfully. Baer later created the electronic game Simon, and his orbit briefly intersected with the world of video games again when he devised a simple black & white digital camera for arcade games in 1982; instead of entering their initials, players’ photos would identify them on the high score table. The test of the prototype was successful in an actual arcade – but was scrapped when a player at the test site dropped his pants and entered a photo of the full moon on the high score list. The only use made of Baer’s camera was to digitize the faces of the rock group Journey for an arcade game based on their album art. If this technology sounds familiar from recent memory, think of the Game Boy Camera – or the more recent Eye Toy for the Playstation 2.

After being put out to pasture by Warner Bros., Nolan Bushnell still received substantial bonuses from Atari, but he didn’t retire immediately. Toward the end of his Atari tenure, Bushnell had cooked up plans for a family-friendly arcade attached to a pizza parlor populated by robotic characters. As he had assigned Atari engineers to work on the robotics end of his project, Bushnell’s Chuck E. Cheese characters technically belonged to Atari, but he bought the rights to the characters and the technology back and set about creating a franchise. Eventually, due to mismanagement and the earliest rumbles crash of the video game industry (with which Chuck E. Cheese was intimately connected), the chain went bankrupt and was acquired by rival Showbiz Pizza Place; despite Showbiz already having its own set of characters, it adopted Chuck E. Cheese as its mascot. Bushnell also founded Sente, a company focusing on arcade games, literally hours after a non-compete clause of his old Atari contract expired in 1984. Sente ended up being bought by Midway in the wake of the crash; Midway also now owned Sega’s U.S. arcade operation. Bushnell later returned to Atari in the late 1980s, lending his name and endorsement to a few of the company’s final games for the Atari 2600 – even though he didn’t write a single line of code, and was at most a conceptual contributor. Bushnell was last involved in an Internet startup, uWink.com, which aimed to put online gaming kiosks in public places. uWink barely survived the dot-com crash, setting its plans back somewhat.

Atari itself was sold by Warner Bros. in two pieces; the home computer and home game divisions were sold to former Commodore executive Jack Tramiel in the mid 1980s, and Tramiel promptly put the game operation on ice to focus on computers. The arcade side of Atari’s operation was bought by Midway, though it kept the name Atari Games until the late 90s, after which it became Midway Games West. That division closed its doors earlier this year in a round of Midway cutbacks. Under the Tramiel regime, Atari launched the well-received ST computers, and even tried to get a piece of Nintendo’s action by launching two final game consoles – the Atari 7800 and Atari Jaguar – in the late 80s. Neither console made much of a dent; the 7800’s ability to play gamers’ libraries of Atari 2600 games without an adapter module wasn’t enough of a selling point when Nintendo had arcade-perfect games like Super Mario Bros. and Mike Tyson’s Punch-Out! in the stores. Tramiel eventually sold Atari to a hard drive manufacturer, practically swapping what was left of the legendary company for a seat on the executive board. The Atari properties were subsequently sold to Hasbro Interactive, and when that division of the famous toymaker folded in 2001, Atari and its intellectual properties were bought by Infogrames, a PC and console game manufacturer. Earlier this year, Infogrames abandoned its old name and NYSE symbol, adopting the Atari name for all of its products; the Atari name and logo now grace such modern games as Enter The Matrix. In recent years, Infogrames/Atari has also been mining its past catalog, resulting in such products as the PC compilation Atari: The 80 Classic Games and a dandy stand-alone game packaged as an original Atari 2600 controller.

Other industry veterans, like Mattel Electronics executive Michael Katz, migrated from Mattel to Coleco to Epyx to Atari to Sony, fighting the corporate battle through every era of the industry, both before and after the crash. Mattel’s own console, Intellivision, underwent a surprising series of handoffs, with many of the original Mattel Electronics programmers staying with the system and keeping it alive through the late 1980s, creating new games and finally putting previously unreleased titles on the market, often by mail order. Some of those same programmers, who called themselves the Blue Sky Rangers, still form a collective known today as Intellivision Productions, re-releasing compilations of emulated Intellivision classics for the PC, Playstation 2, Xbox and Playstation, as well as a new 25-in-1 standalone game which connects to any TV with audio/video jacks.

Many of the industry’s alumni gather every August in Las Vegas for the Classic Gaming Expo, a two-day event celebrating the bygone video game classics and their creators. Devoted fans flock to the event annually, bargaining fiercely at the “retrogaming” hobby’s toughest (and potentially most rewarding) swap meet, trying to complete collections, listen to the old war stories of the programming heroes who created their favorites, and catching a glimpse of rare hardware and software in a well-guarded museum section. Other exhibits, such as Videotopia, tour the country with a well-stocked “arcade” of classic 1970s and 1980s coin-operated games. And on online auction sites such as eBay, real live working Atari 2600s, Intellivisions, Colecovisions and other more obscure systems (and their software) are never in short supply, often ringing up seemingly ridiculous sale prices fueled by the intangible market commodity of childhood memories. As consoles such as the Sega Genesis, Super Nintendo and Dreamcast fade into unsupported obscurity, the definition of “retro” is constantly being reevaluated, redefined, and often argued over passionately.

Another subject of heated contention is whether a more recent craze, emulator software which runs classic games on modern computers without the need for additional hardware, is as good as the real thing – or even if it is legal when it deals with the fruits of companies like Exidy and Sente that vanished off the radar during the crash. Numerous companies are also reasserting their copyrights with the realization that there’s still consumer interest: witness the new Midway’s Arcade Treasures compilation for the Xbox, PS2 and Gamecube, Activision’s Anthology of precisely-translated Atari 2600 games translated for the PS2, and Namco’s recent stand-alone 5-in-1 Arcade Classics unit and yet another iteration of Pac-Man, now in multiplayer form for the Gamecube. Namco and pioneering Japanese arcade giant Taito have even conspired to re-release a near-exact reproduction of the original 1978 Space Invaders arcade game for its 25th anniversary – though the changing times have dictated a 50-cent-per-game charge instead of just a quarter.

And all this because there are still people who’d prefer a quick round with the original Atari than the latest Xbox blockbuster – even though some of the people who launched those early games are still driving the video game industry today, and the same cycles recur throughout the industry’s history. Someone will always be up against the wall for bringing mature content into what is still, in some circles, viewed as an entertainment form aimed squarely at children (and in this respect, the ratings system adopted in the 1990s is in danger of becoming just as ineffectual and oft-ignored as the Comics Code). There will always be eyebrow-raising, envelope-pushing marketing, and there will always be promises that your new game console will have full computer functionality. And there’s always the danger that a long stretch of games which fail to capture the public imagination could lead to another shakedown, separating the industry players from the masters of the game willing to stick it out through lean times.

But there’ll always be someone saying “I have a new idea” as well – something so seemingly off-the-wall that nobody understands how the public at large could find it fun.

Something like two squares and a straight line batting a “ball” around a screen.