> Dear VG&CE:
> I'm a 16-year-old video-game player and was wondering if you could
> shed light on the first "Golden Age" of video games, the time when Atari
> was king. What ever happened to this company? How did they lose their
> position in the business to what it is today? Thanks, and I also wanted
> to write to tell you what a fantastic job you guys are doing!
> --Debbie Debs Rainsalot, CA
> MR. VIDEO GUY RESPONDS:
> Upon losing millions by the end of 1983, Atari was sold by its
> parent, Warner Communications, and, thus, the Golden Age of video games
> came to an abrupt end. Supposedly, this "crash" came due to Americans'
> waning interest in playing video-games with blocky graphics and dinky
> sound. Nintendo revived the industry in 1985, through careful marketing
> and keen observation of what went wrong the first time around. This is
> the "truth" according to many, including VG&CE's Arnie "Mr. Video-Gaming
> Know-It-All" Katz.
> Don't believe any of this for a second, Deb. This textbook fairy tale
> is the biggest perpetrated lie in video-gaming today. How could Atari
> Inc., one of the top American corporations in the early 80's, be deemed a
> financial loser even though its losses didn't come close to overcoming its
> past profits, taking inflation into account as well? Why did Warner act
> uncharacteristically jittery about these losses? Couldn't one of the
> world's biggest media conglomerates absorb Atari's losses for a lot longer
> than they actually did? Consider the smaller company NEC and their
> TurboGraphX-16. In the book ZAP! -- THE RISE AND FALL OF ATARI,
> mismanagement is blamed for the video-game giant's demise. But even if
> this were the case (which is dubious), why didn't Warner execs just ax the
> boneheads in charge of Atari and replace them? And who says mismanagement
> itself justifies the dismantling of an entire industry? Look at the
> American auto industry. I know what you're thinking..."Whoa, Mr. Video
> Guy has gone off the deep end because of his bitterness from not getting a
> promotion where he works." Yet before you write me off as another
> conspiracy paranoic, ask yourself these questions:
> (1) Who would've benefited from Atari's death?
> (2) Who could've pulled it off?
> (3) Who could've covered it up? Who?
> Atari didn't die, Miss Debs. It was killed -- by NINTENDO. Some
> facts: From the late 1970's to early 80's, Atari dominated the coin-op
> scene. Clearly, the beginning of the video-game industry was not only
> American invented but influenced, too. The only stride that the Japanese
> made during these times was Space Invaders, but they were still too busy
> hawking pachinko, their lame-o answer to pinball. Eventually, it was
> clear to the Japanese entertainment industry that America, along with the
> rest of the world, would never be hip to Japanese pop music and Akira
> Kurosawa flicks. Already the masters of consumer electronic gadgetry.,
> they, naturally, wanted to produce a cultural export. After all,
> America's most profitable export is its culture, in the form of bad
> movies, dumb TV shows, and tone-deaf pop songs. How else do you explain
> Jerry Lewis and the French?
> There was only one avenue left for Japanese entertainment to try
> pervading; video-games. But one thing stood in their way, Atari. Not eve
> n the American companies Mattel and Coleco could topple Atari's grip.
> Competing coin-op game makers also failed to break the company's equally
> tight hold in the arcades, among them Sega. So, you see, Debbie, lots of
> companies on both fronts wanted Atari dead.
> Let us now SPECULATE the events that might have occurred leading up to
> that tragic day in 1983...
> * - Japan's #1 cheesy LCD "card" game maker Nintendo (overconfident by the
> success of their Donkey Kong coin-op and sequels) forms a secret
> alliance with Japan's #1 coin-op game company Sega (producers of
> pretty looking but quickly boring-to-play arcade games) to look at the
> possibility of unseating Atari in the video-game marketplace.
> * - Atari sells over five million units of Pac-Man for their 2600 unit.
> Sears declares the cartridge the second fastest selling item they've
> ever carried. Seeing how Atari is so powerful that it can literally
> slap together an atrociously bad arcade translation and make nearly a
> billion dollars unsettles the Nintendo/Sega alliance. Prompted also
> by the fact that Mattel's superior Intellivision still isn't taking
> off (despite TV endorsements by boring George Plimpton and what
> Nintendo/Sega feels is its excellent pad controllers), they decide to
> back off for now.
> * - (Late 1982) Nintendo cohorts with Coleco to bring Donkey Kong to the
> former leather company's new ColecoVision system, and Sega
> contributes their equally bland Turbo. Despite much fanfare and
> moderate consumer interest, the system only does slightly better than
> mediocre. The Atari 2600, primitive as it is, still manages to
> maintain its majority share in the industry. The Nintendo/Sega
> alliance seems to be going nowhere.
> * - (Middle 1983) Atari reports losses in the millions since its
> ownership under Warner Communications. This is not unusual
> considering that the early years of the Reagan era were a time of
> recession for most American businesses. To bring them out of this
> slump, Atari has big plans for the 5200 and even bigger ones for the
> still-on-the-drawing-board 7800, which promises to outperform all
> video-game systems.
> * - In a desperate move, the Nintendo/Sega alliance makes a deal with
> Warner Communications: Sell off the consumer division of Atari to an
> idiot who would likely run it to the ground. In return, the alliance
> would insure that its powerful lobbyists would petition Congressmen to
> lighten up on antitrust laws barring Warner from acquiring or merging
> with other media companies. This should be a cinch to do, considering
> the Reagan administration's "free trade" and "hands off" policy
> regarding business. Executives at Warner, preferring to control one
> big pie rather than having to worry about several pies, accepts the
> deal.
> * - (Late 1983) Warner publicly announces the financial losses of Atari
> for the year and states misgivings about the video-game business.
> Among their statements is that America is tiring of video games. The
> mass media jumps on the bandwagon, adding that Atari's games are
> "blocky looking" and "dinky sounding", too. Atari stock plummets.
> * - Warner announces the sale of Atari's home division to Jack "The Patsy"
> Tramiel. Tramiel, the mastermind behind the Commodore Vic-20 fiasco,
> declares that the new Atari, Atari Corp., will be in the business of
> selling computers which everyone can afford. He fails to add,
> however, that hardly anyone will want them.
> * - Warner retains the coin-op division of Atari, renaming it Atari Games.
> Two years later, in keeping to their agreement with the Nintendo/Sega
> alliance , they sell it for a killing to the Japanese company Namco,
> the inventors of Pac-Man.
> * - In the same year, Nintendo introduces the NES. After "careful
> evaluation of the previous market", they state that the time is right
> for a new generation of video games. Among the NES' selling points
> are Robbie the Robot and its pad controllers, which are essentially
> improved versions of the Intellivision's.
> * - Having accomplished their mutual goal, Nintendo and Sega cease their
> alliance. It's agreed that Sega will stick to the arcade coin-op
> industry , where it has become #1 after Atari's demise, and stay out
> of the consumer market. Likewise, Nintendo promises to concentrate
> only on home video-gaming and keep out of the arcade scene, except for
> an occasional, badly produced coin-op such as Super Mario Bros. and
> Rad Racer that will only be available for play in kiddie "pizza-time
> theater" restaurants.
> * - Jack Tramiel nearly runs Atari Corp. into the ground, thanks to his
> purchase of the Federated electronic stores and saying stupid, already
> known facts such as Apple computers being "too expensive" and IBM
> systems as "inefficient".
> * - The temptation for Sega is too strong, and so they ally themselves
> with Tonka Toys and jointly enter the home market with the Sega Master
> System, sparking a blood feud with their former ally that continues to
> this day. This venture fails, but Sega is even more determined to "do
> it all".
> * - (1988) Warner Communications merges with Time Inc., forming the Time
> Warner company. The new company acquires controlling interest in
> Atlantic Records. Time Warner is responsible for the Batman motion
> picture and its inevitable, upcoming sequels.
> * - In the January 9th, 1992 issue of Rolling Stone (with Michael Jackson
> on the cover trying to look like a man) there's an article on Sigeru
> Miyamoto, the twisted genius behind Nintendo's "Mario" games. David
> Sheff writes, "...Japanese software, such as books, movies and
> recordings, has had little impact outside Japan. The exception is
> video games. One Japanese writer. ..has noted that Nintendo is
> Japan's largest cultural export, 'bigger than Akira Kurosawa.'"
> Ever wondered how Nintendo got off so easily in their recent court
> settlement with California's Attorney General? Killing off Atari was by
> no means easy for Nintendo, but they did it. Thus, having their sentence
> reduced to a paltry $5 rebate plan couldn't have been that difficult for
> them to do. And look at their past court cases against Tengen, the home
> division of Atari Games, and their attempts to acquire the Seattle
> Mariners.
> Also, why has Sega -- like their trademark mascot, Sonic the Hedgehog
> been such an annoying, arrogant pest to Nintendo? Because they're
> aggressive competitors? Right. They're still resentful over their former
> pact because they felt they got the raw end of the deal.
> The one thing that didn't go as planned for Nintendo and Sega was that
> Atari didn't die completely. Today, Atari Corp. would probably be
> nonexistant if it weren't for the Lynx, originally designed by Epyx, which
> has turned out to be their lifesaver for the time being. Otherwise, the
> Nintendo/Sega alliance pulled off the perfect coup. Software support has
> always been a problem for Atari Corp.'s hardware since the company doesn't
> have the resources of an arcade division. "Divide and conquer" as the
> saying goes.
> I'm not the only one who knows of this insidious plot. I suspect that
> Arnie Katz and the Game "Bill Kunkel" Doctor know it as well, have known
> about it all along, and are keeping mum. However, I doubt they're doing
> this because they're covering up for Nintendo and Sega. Rather, they
> might've been warned to keep their mouths shut by the perpetrators. You
> have to remember that in the latter years of Electronic Games (just before
> the magazine was retitled Computer Entertainment), Katz and the Doc were
> mysteriously absent from its pages, for reasons they care not to
> elaborate. Had they discovered the truth and already knew of Nintendo's
> plans as early as 1984?
> I'll bet Steve "Arnie Katz Lookalike-and-Wannabee" Harris of
> Electronic Gaming Monthly knows a lot about all of this, too. His
> magazine has been bankrolled by Japanese investment from the very start
> (when it was originally Electronic Game Player). Ever noticed how Harris
> and Quarterman are a lot like Katz and the Doc in terms of concept, though
> radically different in style? I doubt this is coincidence rather than by
> design.
> Another whom I believe knows a lot more than he's willing to tell is
> Howard "TV Weatherman Dress-Alike" Phillips, the former Nintendo
> spokesperson who left his position for a conspiciously ambiguous role with
> Lucasfilm Games. Did he learn the truth, too, and decide to get out for
> his own safety, thus, depriving Nester someone to be a sidekick for? A
> while ago, I got a phone call from someone who sounded suspiciously
> familiar:
> "V-Video Guy! Listen -- you've got to get out! You're way over your
> head!"
> "Who is this? Howard?? Is this Howard Phillips?!"
> "Didn't you read the ***damn business section today?? They got the
> ****ing California Attorney General?! The ****ing Attorney General of
> California!! Not even Larry Flynt's ****ing lawyers can protect you!
> I'm warning you as a colleague -- just drop it if you know what's
> ***damn ****ing good for you!!"
> Well, I'm not going to drop it, Howard (or whoever you are). The
> assassination of Atari was the single most horrible event for an entire
> generation of video-gaming. It tore the heart out from what promised to
> be a new age of electronic entertainment - - never mind that it had
> primitive graphics and anemic sound. It robbed the dreams of those who
> were the first to put their hands around a joystick. And, by golly, you
> can be sure that I'm going to keep at it -- till all the files and other
> relevant papers that are locked away in some big government building
> sort-of-place are released so that the video-gaming public can decide for
> themselves what really happened on that fateful day in 1983.
> So there you have it, Debbie. The TRUTH. Now you know why
> video-gaming is in the state it is. And why movies and pop music have
> especially sucked lately. I'll tell you, every day I wonder how safe it
> is to live in the U.S. of A. when even our own video games are dripping
> with corruption and greed. Oh, and thanks for the kind words. We at
> VG&CE always strive to do our best for readers like you!
