All Your Base Are Belong to Us: How Fifty Years of Videogames Conquered Pop Culture (8 page)

Bushnell, who rolled into the office much later, initially blanched at Quinn’s request for exclusivity—even though Sears was the only game in town. Since no other companies were buying, Alcorn packed up the prototype of the home unit in a big protective case and
traveled to Chicago. There, he looked like a gawking tourist as he regarded the foreboding 110-story Sears Tower, then the world’s tallest building. That particular stop of the Atari dog and pony show didn’t go well at all. The wooden box and its mass of wires was plagued by interference problems during the demonstration. A nervous, sweating Alcorn had to take the assembly apart and do some emergency mending right on the spot. One of the creaky old executives from the Deep South frowned upon the mass of wires inside the prototype. “Son,” he asked Alcorn, “how you gonna get that dang bird’s nest of wires in there to hook up to a silicone chip?”

“Silicone?” thought Alcorn. “It’s
silicon
. If this is what we’re up against, there’s no hope.” But Quinn was still game, more enthused than ever, despite the demonstration’s glitches. He immediately contacted Bushnell.

“If we go with this, how many can you give us?” asked Quinn.

Bushnell barely skipped a beat. “I can get you seventy-five thousand units.”

“That’s not enough,” said Quinn, explaining that Sears cut a wide swath with its nine hundred retail stores. Additionally, there would be an enormous number of sales generated through its popular catalog. Sears would throw in free advertising to sweeten the deal. “But we still want exclusivity for one year.”

Bushnell’s eyes widened. He salivated. Exclusivity no longer mattered. They had one shot, and that one shot was Sears. “So, how many?”

“Not seventy-five thousand. One hundred and fifty thousand.”

Bushnell was enthusiastic, but he kept his cool. Inside, his synapses were firing like he was about to have sex with the most beautiful woman on earth, maybe even Darlene. Soon, though, he had qualms. He thought, “How in the world can I produce so many thousands of consoles with nearly no capital?” It was then that Quinn went from savior to hero. He said Sears itself would help with
the manufacturing. Later, Quinn again stepped up to make an early video in Sears’s TV studio, advertising the machine, with a female quiz show host bearing the juvenile moniker of Ima Douche; Quinn himself was a game show contestant. The video was a smash with retailers, so much so that Sears held a place for the console in their coveted catalog, even though it was past their deadline for including a brand-new, full-color page for the merchandise. Said one Sears wag to Alcorn in the company cafeteria, “You know the last time—the only time—we held up the catalog? That was with Marvin Glass slot car racing. We had fifty thousand of them. And none of them—not one—worked.” The pressure was on.

Tom Quinn had made an audacious, ambitious gamble. If he failed, he would be without a job—and he would likely have a hard time finding another. Bushnell had bet it all too, but he wasn’t about to worry, at least not publicly or in meetings. For Bushnell it was more guts than business acumen. Bushnell told everyone that Sears would be Atari’s savior. And he claimed Atari was going to make big money for Sears as well.

Even before the console was released, the very thought of Home Pong had people lining up at Sears stores—just to put their names on a waiting list. Atari was, in the parlance of
The Jeffersons
, movin’ on up. Home Pong was a fast-selling holiday phenomenon. By the end of 1975, Atari had raked in $40 million in sales from the rabid fans who bought more than 150,000 consoles. And that was just from one retail entity, Sears. Pong was a bona-fide cultural phenomenon, and was even part of an Al Franken skit on the seventh episode of the hottest show on TV,
Saturday Night Live
. It was also the only arcade game a young Barack Obama ever played.

Bushnell had created not one, but two revolutions in gaming. When Pong emerged, it started the arcade revolution. Suddenly, the arcade machine was an essential accoutrement in every bar and
bowling alley. Pong was more popular than pinball. Not only was it the first arcade game to make money, it was
so
exciting to play. The heart rate increased just as the on-screen ball sped up. As you stood there, your spastic body moved so much, it was like a workout in itself. People would plan to go out to the local bar just to play Pong. So Pong sold booze for the mom-and-pop tavern. When a few more iconic games, like Space Invaders and Pac-Man, were released, the smarter moms and pops started video arcades, which became as essential to American culture as the movie theater.

With arcades established, Atari went on to prove that an at-home market existed too. Pong in the home made people forget TV programs for a while because Pong was its own TV program, one
you
could direct. Higinbotham had proved there was consumer curiosity for games. Baer proved the working concept could be made on an assembly line. But Bushnell had made games into a viable commercial enterprise.

As he saw the phenomenon grow, Bushnell certainly wanted to manufacture more variations of Home Pong. And there were other games to publish, and bigger, better consoles to make. The world was his own to control, just like a Pong machine. And since he’d made that world, he knew how to win every game. But Bushnell needed more money to make Atari bigger.

Today, you can turn over a flat rock in the Silicon Valley and a hundred venture capitalists will slither out. Back in the seventies, one man was pretty much the only game in town. Enter Don Valentine, a dour, plaid shirt–wearing venture capitalist who looked like an all-American astronaut. The smart, slow-speaking Valentine had short hair, a no-nonsense attitude, and always chose his words carefully. By 1967, Valentine was already something of a legend in the Silicon Valley, having cofounded National Semiconductor after a successful career in marketing at Fairchild Semiconductor. The
1972 start-up of Capital Management (today called Sequoia Capital) allowed Valentine, an inquisitive man who had many interests, to branch out beyond the magic material that is used for microprocessor chips and transistors. The company’s tagline said it all: “The entrepreneurs behind the entrepreneurs.” Ironically, Valentine was thrifty bordering on being cheap. He drove a practical Mercedes diesel station wagon, and when the Atari kids visited his mansion, they had to wear sweaters because the heat had been turned down. When his family spent extra cash on a customized license plate, Valentine chided them for wasting money.

Bushnell met repeatedly with Valentine, stating that Sears’s exclusivity would end in late 1976. Then, they could sell Home Pong to, well, everywhere, to the multitudes and beyond. The sky was the limit, said the Atari boss. Bushnell also made it clear that Atari had amassed $3 million in profits in 1975. Atari was ready to break out, said Bushnell, if only the capital were there for infrastructure like a new factory to produce a new generation of consoles—consoles that could play more than just a tennis game.

Valentine was fair, but prone to anger. He had a fit when, on the day before closing the venture capital deal, Bushnell asked for twice as much money because Atari’s net worth had skyrocketed. But when Valentine saw the numbers prepared by Atari’s legal and business team, he agreed to the extra cash. He even showed up with a car full of champagne. Valentine being Valentine, it certainly wasn’t Dom Pérignon.

Because Valentine was in, everyone from Time, Inc., to Fidelity Investments came on board. In Atari’s coffers was a total of more than $4 million with which to make interactive entertainment even better than it already was. It was a heady, adventurous time indeed. The floors of Atari buzzed with the energy of Santa’s workshop—with the aroma of pot thrown in to add a Cheech and Chong essence
to the mix. Workers roller-skated or skateboarded from place to place. Employees’ dogs were brought to the offices as barking companions who got them through crunch time. Workers would play with the dogs like they were kids again. But the sense of childlike wonder wouldn’t last very long at all.

They were sweating like pigs in the ninety-five-degree weather, driving a convoy of fourteen trucks through the middle of what’s called the Friendliest Place on Earth by the optimistic chamber of commerce in Alamogordo, New Mexico. In late September 1983, Alamogordo was a family values kind of town with a bizarre bent, a place where you could buy a red nautical dress—for your miniature dog. Maybe the streak of strangeness came from its history. Alamogordo also has the dubious distinction of being the place where the first A-bomb was tested. As they convoyed, the eighteen-wheelers passed a nearby camp at Bonito Lake, a small zoo, and a pistachio nut grove. Outside of town on Highway 54, they readied for business. Amid the heavy heat of the desert, its gnarly scrub bushes, and the occasional noisy rattlesnake, the heavy equipment crawled into the Alamogordo
landfill. Reporters were kept away. So were the local townspeople. What was thrown in the dump and unceremoniously buried in the desert and then poured over with concrete epitomized all that was wrong with Atari. Atari was trying to bury their failure and with it, one of the most foolish, most expensive videogame licensing deals of all time.

Two years before, in 1981, Warner Bros. CEO Steve Ross had made a deal with Steven Spielberg regarding an E.T.: the Extra-Terrestrial videogame. Ross, whose empathy served his salesmanship well, loved movies more than anything, especially movies that made him money. Although he liked and even played games, it was in the film industry that his true loyalties lay. Spielberg would be assured of $23 million in royalties just to sign on the dotted line. If the game did well, he would receive even more. If the game tanked, the director would be off the hook. Spielberg looked up to Ross as the ultimate father figure, so much that he filmed a short, expensive homage for his sixty-fifth birthday. It starred Spielberg, Quincy Jones, Chevy Chase, Clint Eastwood, and the top Warner movie executives, as hobos. Very much like Frank Capra’s
It’s a Wonderful Life
(which was Ross’s favorite movie), the film pointed out, George Bailey style, how bad off Ross’s pals and associates would have been without their magnanimous CEO. Spielberg and Ross would have done anything for each other, and the Atari licensing contract for the E.T. game looked an awful lot like a case of one hand washing the other—at the expense of the videogame company’s future.

Because the E.T.: the Extra-Terrestrial game deadline was nearly impossible to meet, Atari designer Howard Warshaw was between a rock and a hard place. If the game had been on the shelves in tandem with the movie’s summer release, it might have fared better, even though it was a buggy game with poor graphics and audio. As it stood, the
E.T
. phenomenon was waning when the cartridge premiered in late 1982. Atari manufactured four million cartridges. Only 1.5 million were sold, and that may be a liberal estimate when
coupled with the fact that many of the games were returned due to their overwhelmingly crappy quality. Eventually, the games hit bargain bins for 10 cents each, and even then, few bought them. So millions of E.T. game cartridges were unceremoniously dumped, crushed, and buried in Alamogordo. From plastic dust they were born and to plastic dust and desert sand they returned.

In 1975 that plastic hadn’t been worthless at all. It was precious gold to the principals of Atari, and it would only become more valuable as the decade progressed. Atari’s arcade business was still thriving, and Home Pong exceeded sales expectations, and demand exceeded supply. Alcorn hired an unkempt and unshaven Steve Jobs, who in turn asked his best friend, the diffident genius Steve Wozniak, for help with what would be one of Atari’s most popular additions to its ever expanding library. Without telling Alcorn, Bushnell asked Jobs to help him streamline the innards of a brick-breaking arcade game called Breakout. Bushnell wanted to save money because the chips used in each arcade machine were still pricey at the time. He coaxed the brazen, odoriferous Jobs with $750 and a $100 bonus for each chip removed from the prototype. Wozniak, who worked with Jobs simply because it was fun, was fascinated by the challenge and didn’t sleep at all while he worked on it. In less than three days, he cut the chip number from seventy to twenty. Alcorn was amazed by this miracle of engineering. But he was also pissed off at Bushnell, who was doing what he always did, throwing a lot of utter crap against the wall to see what would stick—without Alcorn’s approval.