Who Invented the Computer? Nolan Bushnell and Atari
Who Invented the Computer? This is the thirty-seventh installment in our ongoing series.
In August 1972, a pickup truck stopped in front of Andy Capp's Tavern in Sunnyvale, Calif. Two men exited the vehicle and unloaded a large box-shaped device that consisted of a small television screen, two rotating knobs and a coin box attached to the side.
Stamped on the front plate of the device in bold was the word "Pong." Below that word in smaller print were three lines of simple instructions: "Deposit Quarter, Ball will serve automatically, Avoid missing ball for high score."
Once inside, the men wrestled the device into an empty space between a jukebox and a pinball machine then left. Unbeknownst to them, their simple machine would one day be widely lauded as the cornerstone of a $180 billion industry. Video games have changed a lot since then, but the industry has never faltered.
While attending the University of Utah in the 1960s, electrical engineering student Nolan Bushnell enjoyed playing the historic "Spacewar!" game on the school's mainframe. He also had a working knowledge of electro-mechanical games learned during his part-time job at a local arcade. His dream was to one day create pizza parlors filled with such games.
In 1969, Bushnell partnered with another electrical engineer, Ted Dabney, to form Syzygy Corporation with the goal of creating a "Spacewar!" clone. The duo did develop a game called "Computer Space" that they ensconced inside a fiberglass cabinet with a coin box affixed to the side.
Syzygy did manage to place about 150 "Computer Space" games in bars and taverns. Unfortunately, the game controls were too complex for most patrons to enjoy playing.
Undeterred, Bushnell and Dabney continued trying to create a game so simple "that any drunk at any bar could play." Learning that Syzygy was also the name of a local hippie commune, they changed the name of their company to Atari, after a move in the ancient Japanese board game "Go."
A Driving Game ... or Not
In 1969 Bushnell inked a contract to develop a driving video game for Bally Manufacturing, a pinball and slot machine manufacturer that was starting to produce electronic games.
To help produce the driving game, Atari hired Allan Alcorn an electrical engineer with a computer science background. Because Alcorn lacked experience with video games, Bushnell assigned him a false project as a way to introduce him to the field.
Alcorn was told Atari had a deal with General Electric to create a simple game that consisted of "one moving spot, two paddles, and digits for keeping score." Alcorn had no idea that his project was a throwaway.
To Bushnell's surprise, Alcorn not only built the game, but greatly improved it by adding sound and diversifying gameplay. By dividing the paddles into eight small segments each, he enabled players to hit the ball back at different angles based on which section of the paddle it struck. He also made the ball bounce faster the longer the game continued.
Alcorn designed his game to play on a second-hand TV screen that he placed inside a wooden cabinet. With the OK from the owner of a local watering hole, he placed the machine for a trial run.
Too Many Quarters
Three days later, the tavern owner called and told Alcorn to "get over here and fix your damned contraption, it doesn't work anymore." Alcorn zipped over and began trying to figure out the problem. To his amazement, when he opened the coin box, hundreds of quarters poured out — the game was unplayable because the coin box was so full it couldn't accept any more quarters.
Not only were patrons playing the game, but according to the owner, people were coming to the tavern just to play the game and even lining up before opening time. Thrilled, Bushnell immediately flew to Chicago to meet with Bally and pitch Pong as a replacement for the driving game they originally ordered.
At first Bally was interested in the game, but eventually declined the offer. Bushnell, who had become convinced that there would be more profit potential for Atari if they manufactured "Pong" themselves, took the decision in stride.
The Atari team began hiring anyone they could find to build game cabinets and on Nov. 29, 1972, Pong was officially released into bars, arcade parlors, convenience stores and any other place that would accept the machine. Returns on the game were fantastic. It was estimated that each machine earned between $35 and $40 per day.
By 1973, Atari was teaming with foreign partners to introduce the game to other countries. Pong was now a world-wide sensation.
Home Gaming Systems and Magnavox's Millions
Atari eventually reduced Pong's inner workings from a printed circuit board down to a small chip enabling the company to manufacture small gaming systems for in home use.
In 1975, they granted Sears a one-year license to sell Pong under the name "Tele-games." The Christmas Season was a success with 150,000 consoles sold. Pong was now the first ever commercially successful home video game.
Realizing Atari could be more profitable manufacturing and selling the game on their own, Bushnell declined to renew Sears' license and, one year later, released a home console under the title, "Atari Pong." The system was a huge success and the Atari team was riding high.
Unfortunately, in his haste to market — and monetize — the game, Bushnell failed to patent it. Within months other companies were offering their own versions of Pong consoles.
Although Bushnell failed to bother with patents, the Magnavox Corporation had not and its lawyers were coming hard. The company had created, patented and sold the home videogaming console, "Magnavox Odyssey" in 1972 and although the Odyssey wasn't a commercial success, all of the games on the console were just basically table tennis with different screen attachments. Magnavox filed suit against Atari and all other companies selling Pong knockoffs.
Magnavox would eventually win more than $100 million in lawsuits and settlements concerning the Odyssey patent. Atari was lucky — they settled for $1.5 million and granted Magnavox access to all Atari technology until June 1977.
Atari would continue expanding its market share by creating a number of iconic games including: "Centipede," "Dig-Dug," and the hugely popular, "Space Invaders" among others and in the process set the foundations for today's immensely valuable gaming industry and in the process directly contributing to the rapid increase in computing power.
Bushnell's efforts in creating and marketing Pong gave the gaming industry an essential aphorism that all successful game designers follow. It's called Bushnell's Law: "The best video games are easy to learn but difficult to master."
Atari would be sold to Warner Broadcasting in late 1976. Bushnell would use his $15 million payout to finally achieve his dream: a chain of pizza joints designed especially for children and filled with electronic games. Chuck E. Cheese had its grand opening in the Spring of 1977.
Although Bushnell did have an amazing career, he did miss out on one little opportunity. In 1975 Steve Jobs offered him a one-third equity stake in the budding company Apple, Inc. for $50,000. Bushnell turned the offer down and in later years frequently said, "I was so smart, I said no. It's kind of fun to think about that when I'm not crying."