The Ultimate History of Video Games: From Pong to Pokémon and Beyond—The Story Behind the Craze That Touched Our Lives and Changed the World

by Steven Kent

  As one of the company’s original employees, Al Alcorn was caught in a tough position. He had been with the company since 1972 and helped develop its most successful products—Pong, Home Pong, and the Video Computer System. His name still carried weight at Atari, but he did not like the direction in which the company was headed.

  As far as Alcorn was concerned, things had changed since Warner Communications took control. Under Bushnell, Atari was an engineering company. The leadership took risks and pioneered new technologies. When Ray Kassar replaced Bushnell as president, Atari became a marketing company. Instead of developing new technologies, Kassar preferred to push existing ideas to their fullest. Alcorn wanted to begin work on the next generation of home video-game hardware, but Kassar didn’t even want to consider an alternative to the VCS.

  Toward the end of 1978, Alcorn assembled a team of engineers and began designing a game console called Cosmos. Unlike the VCS, Cosmos did not plug into a television set. It had a light-emitting diode display. Both systems played games stored on cartridges, but Cosmos’s tiny cartridges had no electronics, simply a four-by-five inch mylar transparency that cost so little to manufacture that the entire cartridges could retail for $10.

  Alcorn’s team included two new engineers. Harry Jenkins, who had just graduated from Stanford University, and Roger Hector, a project designer who had done some impressive work in the coin-op division. Both were assigned to work directly under Alcorn on the project.

  The perception was that Al was given a group of people to “play with.” Harry Jenkins and Roger Hector were fresh hires. There was probably a bit of envy around the company because they did not have to actually deliver projects on time or budget but were more on a research and development–bent.

  —Steve Bristow

  Borrowing a page from Odyssey, the Cosmos used overlays to improve the look of its games. Cosmos’s overlays, however, were among the most impressive technologies ever created by Atari engineers.

  Atari negotiated a deal with a bank for access to patents belonging to Holosonics, a bankrupt corporation that controlled most of the world’s patents for holograms—a technology for creating three-dimensional images using lasers. Alcorn brought in two specialists, Steve McGrew and Ken Haynes, to develop a process for mass-producing holograms that could be used with his game.

  McGrew developed a process for creating holograms on mylar. In later years, Haynes expanded the technology for other uses, such as placing 3D pictures on credit cards.

  Alcorn used their mylar technology to create an impressive array of 3D holographic overlays for the Cosmos.

  One of the first games developed for the system was similar to Steve Russell’s Spacewar—an outer-space dogfight in which two small ships battled. The game took place in empty space with no obstructions, but the holographic overlay created an extremely elaborate backdrop with whirling 3D asteroids. The overlay did not affect the game. The ships could not interact with the backdrop, but the visual effects were spectacular.

  Before beginning the project, Alcorn asked Ray Kassar for permission to create a new stand-alone game system. According to Alcorn, Kassar seemed uninterested but did not object. By the middle of 1980, Alcorn and his team had completed a working prototype. When they showed it to marketing, they were told that the department had no interest in selling anything other than the VCS.

  By this time, sales were up over a billion dollars. Everybody was fighting the idea of trying to get a new product out. You’ve got to realize that marketing had sold out [of the VCS] by April for the entire year. So the marketing department’s only job was telling people, “I’m sorry, we’re sold out.”

  All of a sudden, here comes Alcorn with a challenge: “Let’s get to work and let’s sell a new product.” Why would they want to do that?

  So here I am with this new product idea. Marketing didn’t want to have anything to do with it. Manufacturing said they were too busy building VCSs to build a new product.

  I said, “Put that in writing.” I then found a manufacturing place outside that could do a better job for less money.

  —Al Alcorn

  Alcorn, Jenkins, and Hector had invested too much time in Cosmos to abandon it. Other engineers advised them to simply walk away from the project, but Alcorn decided to market the unit himself. He asked for space to show Cosmos at Atari’s booth during the 1980 Winter Consumer Electronics Show in the Las Vegas Convention Center. Amazingly, the marketing department said yes.

  By this time, Mattel and Bally had entered the market with newer, more powerful consoles, but no one seemed to care. The VCS had more games and a much larger installed base. A constant stream of buyers from toy stores and department stores flowed through the Atari booth. While they were there, several buyers stopped by the Cosmos table, where Alcorn, Hector, and Jenkins demonstrated the console themselves. The holographic overlays attracted a lot of attention.

  A few months later, Alcorn, Hector, and Jenkins manned a similar display at the Toy Fair in New York City. Having learned from his failure to sell Home Pong on the floor of the show, Alcorn also set up a suite for private meetings. Among the visitors to the booth was Al Nilsen, the new toy buyer for JC Penney.

  The first time I saw Cosmos was at Toy Fair. I had heard the big deal about the hologram nature of it.

  From what I remember, I wanted to see more because they were only showing one very small demo game with it. That was the last that I ever heard about the product.

  —Al Nilsen, former toy buyer, JC Penney

  Harry, Roger, and I went to the winter CES in Vegas. We managed to get a part in the Atari booth, and we sold our product. We couldn’t get any marketing guys to sell our product; we had to run the booth ourselves.

  We were at Toy Fair in New York a month later. This time we had the proper suite and the proper way to do it. And I think we had about a quarter million of them sold. Ray Kassar still wouldn’t build them.

  I got it as far as I could. I had Cosmos tooled and sold, and there was nothing but Ray Kassar that could stop Cosmos from happening.

  Then he said, “No. We’re not going to do it.”

  —Al Alcorn

  Although the response to Cosmos was not even remotely close to the response to the VCS, several buyers decided to gamble on the system. Alcorn returned to California from the Toy Fair with orders for 250,000 units. When he told Kassar that he wanted to begin manufacturing, Kassar derailed his plans. Despite the impressive number of orders, Kassar did not want to manufacture a game system that would compete with the VCS. Cosmos was never manufactured.

  Alcorn and Hector long claimed that Kassar refused to manufacture the Cosmos because it represented competition for the VCS, but some of the people who tried the game console disagree. There were questions about the play value of its games.

  Cosmos was an attempt to do tomorrow’s tech today. The holograms were only window dressing. The play action and the interest level proved to be very low. It was a cosmetic advance and a game-play setback.

  It was one of those things that looks like an advance, but it really isn’t.

  —Arnie Katz, the first full-time video-game journalist, Electronic Games

  Kassar’s decision to mothball Cosmos infuriated Alcorn, and he left the company. He hoped to receive the same retirement benefits that Bushnell, Williams, and Keenan were enjoying. According to Alcorn, being put “on the beach” by Manny Gerard meant receiving an expense account, a monthly check, and a company car.

  At that point I realized that if they were going to refuse this product, they weren’t going to do any new products. And they never did. Atari developed several new products, but none of them ever appeared until after Ray left the company.

  So I said to myself, “All I do is develop new product that never comes out. Why would I want to be there?” I was getting huge bonuses, six-figure bonuses, but I just said, “Good-bye, I’m out of here.”

  —Al Alcorn

  Alcorn’s plans, however, nearly d
id not come to pass. According to Warner Communications, Alcorn was not entitled to the same retirement package as Bushnell and Keenan. Warner attorneys claimed that Alcorn had negotiated his severance separate from the other board members and that he was not entitled to the same bonus-pool compensation.

  By this time, Atari controlled 75 percent of the lucrative home video-game market and VCS sales were nearing $2 billion per year. The 1 percent of a bonus pool that Bushnell and Keenan received represented a substantial income. The case went to court.

  When we bought the company, everybody was represented by the same counsel except Al. He had separate counsel. I still remember those guys reading every page. The documentation doesn’t have Al’s name on it.

  Al’s suit was that somehow the documents were wrong. Warner settled with him for other reasons, but I believe to the tips of my toes that he was wrong.

  The issue at hand was that the other guys kept 1 percent of the bonus pool. I think that’s what it was about. Atari suddenly becomes this money gusher that got to be worth a goddamned shit load of money. I mean, that’s the issue in a nutshell.

  Afterward, I said this to him, “Al, I know you believe you are right, and as surely as you believe you are right, I believe you are wrong.” There was nothing personal in that. We had a fundamental disagreement about the facts, and we’ll all go to hell without knowing any more about it.

  —Manny Gerard, former executive, Warner Communications

  Warner settled and Alcorn, Atari’s first full-time engineer, retired “to the beach.”

  Golden Age Begins

  In 1978, Cinematronics released Space Wars, a coin-operated arcade version of Steve Russell’s computer game that improved on the original by incorporating vector graphics.* Cinematronics was founded by Jim Pierce, Dennis Parte, and Gary Garrison in El Cajon, California, in 1975. Over the next few years, Parte and Garrison sold most of their shares in the business to Tom “Papa” Stroud.1 Cinematronics and its games went fairly unnoticed until MIT graduate Larry Rosenthal joined the company. Rosenthal, who had done his master’s thesis on Spacewar, the game created by MIT’s Tech Model Railroad Club, had created a processor powerful and economical enough to run a full-scale version of the PDP Computer classic in an arcade machine. He convinced Stroud and Pierce to manufacture a game based on Spacewar using his processing technology. Appropriately enough, the game was called Space Wars.

  Rosenthal’s vector graphics technology gave him several advantages over designers using raster-scan screens. Images drawn with vector graphics can have sharp edges and crisp shapes. At the time, most raster-scan games had crude shapes—cars looked like rectangles, and people and animals looked like doodles. By contrast, vector graphics enabled designers to create fairly elaborate line art with stark contrast. Early vector-graphics hardware could not generate colors, so many companies placed colored plastic overlays on their games to create the illusion of color.

  Feeling that he was not being paid enough for his innovations, Rosenthal left Cinematronics and tried to take his processing technology with him. Pierce and Stroud sued. The case was settled with Rosenthal selling his technology back to the company.

  Vector graphics also enabled Cinematronics’ game designers to animate more independent objects simultaneously than their competitors. Thanks to his vector-beam technology, the first game from Rosenthal’s designer had forty independent objects at a time. Most raster-scan games had fewer than ten moving objects on a single screen.

  After Space Wars, Cinematronics released a few more games that tapped into the science-fiction mania created by George Lucas’s Star Wars movies. Star Castle, for instance, featured a Death Star–like space fortress with a giant cannon. Players flew tiny spaceships around the fortress, pecking away at its shields until they created a hole deep enough to destroy the fortress by shooting deep into its heart.

  In 1981, Cinematronics released Tail Gunner, the first video game to feature three-dimensional animated objects.* In this game, players used a small chrome-plated joystick to target a gun in the rear of a large spaceship. The game was played from the first-person perspective—the player looked directly through the gunning station window, rather than over the shoulder of a character in the game. Because of the 3D effects, enemy fighters could turn and fly away rather than simply pass the ship.

  Cinematronics emerged as one of the more successful companies in the wake of the Space Invaders phenomena. The company’s biggest hit, however, would come with another innovative technology.

  The Golden Days of Atari Coin-Op

  In 1980, an Atari engineer named Howie Delman created a powerful vector-graphics generator for coin-op games. The first game that used his hardware was Lunar Lander—a game based on a common exercise in physics classes that was adapted for arcade use by Rich Moore. In this game, players had to dock a lunar lander on the moon, using limited fuel and dealing with a realistic simulation of the physics of lunar gravity. In order to succeed, players had to conserve fuel by using their thrusters as little as possible.

  To dress up their game, Atari engineers created a massive two-handled lever for controlling the lander’s booster engines. Springs on the lever made it snap back in place when it was released. Unfortunately, some younger players got their faces too close to the lever, resulting in complaints about children being hit in the face when the lever snapped back in place.

  Though Lunar Lander was never particularly successful, its vector-graphics generator was the impetus of Atari’s most successful coin-operated game. Lyle Rains, vice president of the coin-operated games division, had an idea for a game in which players cleared an area of space by shooting asteroids flying around a small ship.

  Rains described his idea to programmer Ed Logg and suggested that the asteroids should repeatedly get smaller when the ship shot them. Logg, who held a master’s degree in math from Stanford University, thought he could expand the idea into a working game. He had recently completed the game Super Breakout and wanted to start his next project.

  Lyle Rains called me into his office and said, “I have this idea for a game in which you shoot asteroids.” He said we needed something that keeps players from doing nothing, so I suggested throwing a saucer out to keep the player alert.

  I said, “Sure, I’ll go do that.” So I went up and started the project.

  I wanted high resolution. If you tried to put a little ship like the ship in Asteroids up on standard resolution, it would look like garbage; you couldn’t tell what it was. Part of the deal I had with Lyle was that I’d go vector because, at the time, its high resolution was 1024 × 768, and at that resolution, the game would look nice.

  —Ed Logg

  Within one week, Logg had a preliminary version of Asteroids running on his workstation. Within six weeks, the game was nearly complete. It featured the same basic control scheme as Computer Space and Space Wars. Players directed a small spaceship with five buttons—rotate left, rotate right, thruster rockets, fire, and hyperspace. When players jumped into hyperspace, they reappeared in a randomly selected spot on the screen or the ship blew up if they were hit by an asteroid or UFO while coming out of hyperspace.

  The game began with a small spaceship in the center of the screen. Asteroids began floating toward the ship from every direction. Players had to rotate and move the ship to avoid getting bombarded, while shooting the advancing rocks into dust.

  Asteroids had two classes of UFOs—large, slow-moving ones that fired a few wild shots while crossing the screen, and small, speedy ones shooting smart bullets that homed in on the player’s ship. Around Atari, the saucers were known as Mr. Bill and Sluggo (after characters in a series of Clay Nation skits on the NBC comedy show Saturday Night Live), but when the nicknames were mentioned in an interview, a lawyer from NBC sent Atari a cease-and-desist order.

  Players received 200 points for destroying large UFOs and 1,000 points for shooting small ones. Like Space Invaders, Asteroids rewarded players with extended lives at regular int
ervals.

  The audience for coin-operated games had matured along with the industry in the seven years since Nolan Bushnell first created Computer Space. People were not intimidated by the controls in Cinematronics’ remake of Space Wars, and they flocked to Asteroids.

  In the beginning, most players lasted less than one minute per quarter. When players learned to maneuver and shoot, they could make their games last for hours. One teenager set the world’s endurance record for Asteroids when he played a game for more than 36 hours. He earned so many free ships while playing that he was able to leave the game running and take breaks for meals.

  Atari sold more than 70,000 Asteroids machines in the United States. The game did not do as well in Europe and Asia, however. Only about 30,000 units were sold overseas.

  Logg’s fellow designers later nicknamed him “Golden Boy” because of his long string of hits.

  Inside Atari Coin-Op

  The culture within Atari’s coin-operated games division encouraged individuality. The quiet ones in the group were Ed Logg and Lyle Rains. Logg did not smoke, drink, or take drugs. He earned the respect of other department members by creating the most successful games. His string of hits included Super Breakout, Asteroids, Centipede, Gauntlet, and Steel Talons.

  Like Logg, Lyle Rains was generally serious in nature but able to adjust to working with the wilder members of the division. According to some coin-op engineers, Rains never lost track of his executive status. Some programmers considered him guarded. One of the departmental jokes involved Rain’s administrative assistant, an Asian woman from Hawaii who pronounced his name “Wyle Wains.”