Saturday, 2 April 2011

Game Over. Continue?

In the 80s, playing a videogame at home in the UK often meant using a microcomputer. The Commodore 64, the ZX Spectrum and the BBC Micro were all popular among parents for being multi-purpose. Instead of buying a console dedicated solely to games, so the thinking went, why not buy one that could perform multiple tasks and even educate your children.

In America, things were a bit different. While they had microcomputers and educational games, the market was dominated by Atari. Along with other companies like Intellivision and Coleco, they focused on consoles that could only play games.

For a while this strategy worked well and Atari products were popular. At the turn of the 80s Atari’s wood-finish consoles were synonymous with home gaming. But a few years later number of problems began to surface. First and perhaps most disastrously, the financial success of videogames was growing into a bubble. The market became saturated with consoles and games of varying quality, while at the same time their market share was being threatened by the rise of personal computers.

The crash started with two high-profile failures. Pac Man was one of the most popular and successful arcade games of all time, so making a port for the Atari 2600 would seem like a fool-proof money maker. Unfortunately the Atari 2600 was not powerful enough to run the arcade version, so the game had to be downgraded in order for it to run on the home console. The game did not look very good, but wasn’t terrible for Atari standards. However, it was marketed as differing only “slightly from the original”.

Atari made 12 million Pac Man cartridges, assuming that every one of the estimated ten million people who still used their consoles would buy a copy and that two million more would buy a console to play the game. They eventually sold seven million copies, more than any other Atari 2600 game. This meant the game was a retail success, but a financial and critical failure.

For a while Atari could cite the sales of Pac Man to spin the game as a success. Not so for the next high profile disaster for the company. In mid 1982, Atari won the rights to make a console game based on Steven Spielberg’s E.T. The movie was massive, so how could they go wrong?

Eager to have the game out in time for Christmas, Atari allowed only six weeks for development. Due to the popularity of the movie and the then-novelty of a videogame based on a film, initial sales were good. Critics were scathing, however, and players began to return their copies in frustration. Again Atari had made too many cartridges and the bulk went unsold or were returned. The Christmas sales profits were eaten up by the licence fee (around $25 million) and E.T. ended up making a loss for Atari of $100 million. It is commonly referred to as one of the worst games ever made. A million unsold copies of E.T. are rumoured to be buried in a massive landfill in New Mexico, crushed and encased in concrete along with other Atari products.

Atari games now had a reputation for low quality. In 1983 Atari lost over $500 million and the market for videogame consoles collapsed. The stock value of Atari’s parent company, Warner Communications, dropped 35% after Atari announced a cut in predicted revenue increases in late 1982. Warner wiped it’s hands of Atari and chopped up and sold the company in 1984.

During the bubble, Atari had launched a massively ambitious project. Spanning four games and coming with comics made by DC, Swordquest was a new type of game that mixed puzzles with action and an epic story. Each game was filled with clues to a riddle and the reward for solving the riddle was real treasure. The prize for the lucky winner of first game, Earthworld, was the "Talisman of Penultimate Truth," an amulet of solid 18crt gold embedded with diamonds and birthstones representing the Zodiac. Fireworld, the next instalment, rewarded the winner of the contest with the "Chalice of Light," a cup made of platinum and gold and decorated with precious stones.

The third game, Waterworld, was cancelled when the bubble burst. The remaining prizes – a crown, a “philosopher’s stone” and the grand prize of a sword – had already been made, but no one knows what happened to them. The man who bought the consumer division of Atari after the crash was Commodore’s former owner and founder, Jack Tramiel. According to rumour he still owns the remaining treasure, including the sword – valued to be worth $50,000 at the time.

Jack Tramiel is a colourful figure. A survivor of Auschwitz, he was a tough Polish immigrant with a reputation in the industry for being a “monster”. Tramiel was contemptuous of computers for schools and famously said, “We need to build computers for the masses, not the classes". But it was the reliance on multi-purpose computers – that were bought by schools as well as homes – rather than game-dedicated consoles that spared Europe from the North American crash.

Tramiel had played his own part in the crash while at Commodore, engaging in a ruthless and petty price war with a rival that ended with his resignation from his own company. His leadership of Atari Corp in particular has come under criticism for his tough management practices and short-sightedness (how often those two go together). Under Tramiel, Atari was understaffed and overworked, but they managed to release the successful Atari ST personal computer in 1985. After putting out a few lackluster game consoles, Atari closed in 1996.

‘Understaffed and overworked’ soon became the unspoken mantra of videogame development. Today, videogames are made under call centre-style working conditions of gruelling unpaid overtime known as ‘crunching’. The ‘crunch’ is the period of time, maybe three months, when the deadline looms and much work has to be done. Workers go without pay on barely any sleep to get the game finished in time. Crunching has now become standardised to the point of being scheduled in advance.

The kind of hubris that crippled Atari was still detectable in the videogames industry 25 years later. As Lehman Bros. collapsed many influential figures in the videogame world claimed that the industry was “recession-proof”. Videogames still rake in enormous profits, but the question isn’t if the bubble will burst, but when.


Phil Knight said...

Excellent post. Fast food outlets like Subway and Domino's think they're recession-proof too, but anything that is either a)organised on the grand scale or b)irrelevant to real human needs is doomed in the medium to long term.

Anyway you can all look forward to my post where I expose the conspiracy between the programmers of "Daley Thompson's Decathlon", and the makers of Kempston joysticks.

Giovanni Tiso said...

I had the Atary 2600 *and* later the Atari ST, which was a truly perplexing machine. I played ET on the former. On the latter, I kept a detailed database of the films and books I was consuming at a prodigious rate (by my current standard), something I devised for the benefit of my own posterity but that of course I later discovered couldn't be migrated when I moved on to DOS based machines.

In other words: Atari taught me everything I know about obsolescence.

"Anyway you can all look forward to my post where I expose the conspiracy between the programmers of "Daley Thompson's Decathlon", and the makers of Kempston joysticks."


W. Kasper said...

If you've ever been unfortunate enough to clean out an office, the amount of outdated, cumbersome computer tat is haunting if not shocking - whole rooms filled to the door with the stuff. My school had a huge room of junk - relics of our recent 'future' before we'd even left the place. You can hardly give it away, so god knows how much of this glut crap ends up polluting third world slums.

J_W said...

"glut crap" - what a great expresssion.

A lot of it does end up in India and China whose poor underclass fillet old computers and mobile phones for rare elements.

I'd say anyone who hasn't been addicted to a computer game at some stage or other hasn't got a clue about the first law of digital media - it's wasting!

W. Kasper said...

Thanks to 'vertical integration', we can now focus all our life-wasting on the internet!

Anonymous said...

This is obviously a very well-researched post, so I won't take too much issue with the veracity of what it says. However, parts of it do seem like simplifications. From what I remember, the Atari console was very popular in the UK and the Commodore 64 was massive in the States. Also, by the end of the 80s, weren't consoles making a major comeback on both sides of the Atlantic, thanks to Nintendo and Sega?

Anyway, great post. More like this, please.

Oliver said...

You're quite right, of course. The post was big enough already so qualifying everything and noting these overlaps that you mention would have ballooned the size of it. But it's true, consoles and microcomputers were popular on both sides of the Atlantic - just lopsidedly popular.

And yes, Nintendo revitalised the console market, but that's a story for another post!

Ess Jay said...

I'd been waiting to see when videogames would make an appearance on here. The '80s of course mark the beginning of the modern videogame and the genesis of pretty much the biggest current youth leisure pursuit, for good or ill.

They were also a time when the UK had an absolutely world beating homegrown videogames industry that subsequently stumbled in the late '90s and is decimated today, with massive braindrain to Canada.

Hubris and bad management toppled a lot of them, and the infamous documentary on Imagine software illustrates perfectly the madness of a bunch of slimy eels feeding vampirically off of naive yet supremely talented well... children - as that was what many of the best games programmers were in those days.

It's also interesting that a lot of the scum from that era has risen to the top today. One delightful character in particular actually pulled the exact same expensive bauble as non-existent competition prize trick as mentioned in this article. He also reportedly ripped off several of his young developers and then fled to America where he flaunted his supposed management nous to become a respected industry guru - during which he made a living by being a patent troll and destroying the livelihoods of anyone using certain words in their game titles - a situation which is only now unravelling in the courts as we speak, and continued until only months ago despite his one time company not having released a game for twenty years now.

carl said...

thanks for that link ess seem to know your stuff...would you like to contribute a post yourself?

Oliver said...

@Ess Jay

The word "edgy" should be given a new meaning to describe his shenanegans.

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