Atari and the Business of Video Games: Crash Course Games #4 Video Lecture | Basics and Evolution of Games - Gaming

Hi, I’m Andre Meadows, this is Crash Course Games,
and today we’re going to get down to business.
Specifically, the business of video games.
Until the 1970s, computer and video games
were created by individuals with access to expensive,
difficult to use computers that were frequently
housed in institutions like universities.
The general public wasn’t playing video games, and the number of people making games was miniscule.
But there was a community of students and academics who did play early video games on university computers,
and some of them envisioned a world where
video games could reach a wide audience,
and at the same time be very, very profitable.
Now, if you’ve seen any of our Crash Course
History series, you know we usually don’t
go in for so-called “great man” history.
The idea that individuals can shift the course
of history is, in most cases, false.
But, in the case of Video Game history, a guy named Nolan Bushnell really did manage to change everything.
[Theme Music]
Nolan Bushnell got interested in computers in the 1960s while he was a student at the University of Utah.
The school was an important center of computer
graphics research at the time,
and while Bushnell was there, he came across a PDP-1 that played Steve “Slug” Russell’s Spacewar! (exclamation point)
Bushnell loved the game, and he loved working
with the computers that ran the game.
He played Spacewar! a lot so he could learn all he could about computers and programming languages.
Incidentally, Bushnell also worked as a barker
on the midway at an amusement park,
where his job was to convince people to spend their money on playing games like the ring toss.
It was his amusement park experience
coupled with his knowledge of technology
that helped him birth an industry.
After college he created a prototype for his
own game called Computer Space,
which shared a lot of gameplay similarities with our old favorite, Spacewar! (exclamation point)
Bushnell partnered with Nutting & Associates, a company that manufactured coin operated bar trivia games,
to produce a commercial version of Computer Space.
It didn’t go that great.
Although they put the game in an amazing looking
space age fiberglass cabinet,
they only only sold around 1000 copies of
the game.
That’s less copies than Wii music. If you
don’t know what Wii Music is, my point exactly.
Bushnell squarely blamed Computer Space’s failure on Nutting & Associated, and decided to form his own company.
He and a partner came up with the princely
sum of $500, and after trying out the name
Syzygy. Syzygy? Syzygy?
It has the distinction of being hard to pronounce
AND spell.
He named the company Atari instead.
Thank goodness.
They took the name from the ancient Japanese
strategy game, Go.
Apparently, the word Atari refers to a situation
where one player’s piece is in danger of
being captured on the next turn.
Some players would speak the word aloud at this point, kind of like saying “check” during a chess game.
It turns out though, actually saying Atari
during a game is considered kind of rude,
and something an inexperienced player would do;
something that would be frowned on by the 'real' players.
How rude.
That’s kind of fitting, though.
As we’ll see here in a minute, Nolan Bushnell’s Atari was definitely a newcomer in the entertainment industry,
and he wasn’t above being rude, and disrupting
the traditional players in the game.
Atari moved into a small warehouse, and hired
a handful of employees.
One of these employees would turn out to be
a crucial early asset to the company.
Let’s go to the Thought Bubble.
Al Alcorn was an early hire.
He was a computer scientist and mechanical
engineer,
and Bushnell tasked him with creating Atari’s
first game.
While Bushnell was enthusiastic about computers
and electronics,
he needed someone with more engineering experience
to design the games.
Bushnell assigned Alcorn to create a table
tennis simulation, and in a week and a half,
Alcorn delivered a hand-wired version of the
game that became Pong.
The game was rough and incomplete and seemingly
built with stuff from around the house.
The onscreen white bars that represented players’
paddles were placeholders,
intended to be replaced with fancy graphics
that looked like human players.
The cabinet was cobbled together out of spare
parts, with an off the shelf TV for a monitor,
and a bread pan to collect the quarters.
Bushnell, foreshadowing a habit of rushing products to market, thought all those half-measures were just fine,
and they installed the game in a local bar
for playtesting. It was an immediate success.
According to video game historian David Ellis, the bar started attracting patrons who only wanted to play Pong.
The game was so popular that at one point
the prototype machine stopped working because
there were too many quarters in the bread
pan.
Atari moved Pong into mass production, and despite some manufacturing hiccups, the game was a success.
But Atari’s success bred competition.
Within a year of Pong’s release other major gaming companies in the US began making knock-offs of it.
Companies that had built their businesses on carnival games and electro mechanical games like pinball machines,
and that dumb skill claw game, suddenly jumped
into the video game business.
Williams had Paddle Ball, Chicago Coin had
Olympic TV Hockey, Sega had Hockey TV,
Taito had Pro Hockey, and Brunswick had Astro
Hockey.
All of these looked and played like Pong,
and these clones cut into Atari’s business.
Thanks, Thought Bubble.
So how did this happen?
Well, according to video game historian Steven Kent, the company failed to apply for patents before releasing the game,
which allowed competitors to enter the market
with very similar games.
In addition to stiff competition, Atari ran into trouble with distributors of coin-operated games.
At the time, the industry was controlled only a handful of game distributors in each region of the country,
and each of these distributors wanted an exclusive
contract to sell Atari products in their area.
Bushnell wanted to sell games to all the distributors, but Atari had already signed a bunch of these contracts.
So, in a move that some might see unethical,
he hired his neighbor to run a new company,
Kee Games, which produced clones of Atari
games with different names.
This allowed Bushnell to sell Atari game machines
to one distributor and Kee games to another,
increasing sales without violating his contracts.
Eventually this deception was found out, but luckily, by that time Atari’s games were so popular,
and generated so much money for distributors
that they overlooked the contract violations.
This was the beginning of the end for the
exclusive distribution contract,
and it paved the way for Arcade games to become
national hits, rather than regional phenomena.
For much of the 1970’s, Atari continued to produce hit after hit for the coin-operated game industry.
In 1974 they created Gotcha, an early maze
game like Pac-man.
And Atari struck gold in 1976 with a variant of
Pong called Breakout. OK. It’s time to LEVEL UP.
So this is Breakout which is really cool to
play.
Hopefully, I’m better at this than I was
at Spacewar!
As you can see this is the Atari 2600 home
version of Breakout not the arcade version.
And I’m playing it on a Ouya controller so if I don’t do well I’m going to blame the controller.
I would be much better if I had the Atari
controller in my hand. Let’s go with that.
Alright here we go, so you have a paddle at
the bottom and eventually you will start the game.
And when you start the game a little ball or block
comes down. Oh, and I already missed it.
Now what’s interesting about this game is
the story behind it.
You see Nolan Bushnell asked an employee to specifically make this game,
that employee that he asked, was this guy, you might have heard of him, his name is Steve Jobs.
So Steve actually asked his friend, to help
him do this game.
His friend being Steve Wozniak - some good
company to have.
Wozniak actually finished making the game
in four days. They called it the Four Day Wonder.
It’s going to take me four days to hit one
of these balls.
Breakout actually influenced other game designers
like Tomohiro Nishikado,
the creator of Space Invaders, he said he wouldn’t have made that game if it wasn’t for Breakout.
Steve Jobs and Steve Wozniak went on to make
this little company called Apple in 1976,
and Steve Wozniak has even said that his designs and influence on the Apple II came from working on Breakout.
So, you have this little bouncing ball, rainbow
breaking game to thank for the Apple Company,
the Apple II, and the vision of Wozniak.
Alright, I think I’m done with Breakout.
I did the best I could with it.
I really recommend playing this game.
It’s a fun game but play the arcade or play
it with an old school Atari controller.
To really get the feel of how it was to play
this game back in the 70’s.
Now, if Atari’s pioneering commercialization
of video games was the company’s only contribution
to the history of video games, we might have
still done a whole episode on it.
But Atari was also vital to the other major
change video games underwent in the 1970’s.
Atari’s next step toward dominating the hearts
and wallets of consumers was a home invasion.
They started making video games people could
play at home.
After Pong’s initial arcade success, Atari
produced a home version of the game that consumers
could play on their home televisions.
They sold these games through Sears, and they
sold a lot of them.
It became clear that the gaming frontier was
in consumers’ living rooms.
In 1977 Atari released the Atari 2600 in all
its simulated wood-grain glory.
The console didn’t see immediate success,
largely due to it’s high price
-- $199 that’s about $777 when you
adjust it for inflation --
and the fact that there were only about 10
games available at launch.
But technologically, the Atari 2600 was miles
ahead of the competition.
While there were other home video consoles
on the market that had a few games built in,
Atari’s real innovation with the 2600 was
the interchangeable game cartridge.
Interchangeable games meant that players could buy and play new games without replacing the entire console.
And that meant lots of cartridge sales for
Atari.
This move into the home made games more accessible
and a larger part of our everyday life.
The success of the Atari 2600 spawned the
console wars of the second part of the 1970’s
and wormed its way into the popular culture.
You can see the Atari 2600 in movies, like
Airplane, Blade Runner, and of course E.T.
But we’ll get to that later.
The company would continue to dominate the
industry throughout the 70’s and into the 80’s,
creating classics like Centipede, Tempest, and Pitfall until the great video game crash of the 1980’s.
Atari isn’t dead, the company continues
on today, and still produces games.
But Nolan Bushnell is no longer involved,
and it isn’t anything like the innovative,
disruptive, and for a while, dominant force
that it once was.
Thanks for watching, I’ll see you next week,
and just one more time - ATARI!
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