1 00:00:02,524 --> 00:00:03,655 Keith: Looking at the multi-billion dollar 2 00:00:03,699 --> 00:00:05,875 video game industry today. 3 00:00:05,918 --> 00:00:08,399 Manny: It's a major entertainment industry 4 00:00:08,443 --> 00:00:10,010 bigger than the movie business. 5 00:00:11,533 --> 00:00:13,143 Keith: I don't think anyone could have imagined that 6 00:00:13,187 --> 00:00:15,058 coming from such humble origin. 7 00:00:15,102 --> 00:00:17,147 Ralph Baer archival demo: Okay, one to nothing. 8 00:00:17,191 --> 00:00:19,323 Mark Baer: Ralph Baer built this little machine 9 00:00:19,367 --> 00:00:21,891 in his basement, that changed the world. 10 00:00:21,934 --> 00:00:24,067 Nolan: Ralph claims that he invented Pong . 11 00:00:24,111 --> 00:00:25,329 He didn't. 12 00:00:25,373 --> 00:00:27,070 Alsaid, this patent is . 13 00:00:27,114 --> 00:00:28,941 Keith: It was really a free for all. 14 00:00:28,985 --> 00:00:30,334 - There was a lot of pot. 15 00:00:30,378 --> 00:00:32,032 - This is how we put out games, huh? 16 00:00:32,075 --> 00:00:34,295 - There were all these stories about sex in the Atari hot tub. 17 00:00:34,338 --> 00:00:37,254 Keith: It was sex, drugs, and video games. 18 00:00:37,298 --> 00:00:40,475 Jeff: Atari went from being just a hippie-dippie company to, 19 00:00:40,518 --> 00:00:42,085 we were making money. 20 00:00:42,129 --> 00:00:45,262 - Nolan Bushnell, you are an acknowledged visionary. 21 00:00:45,306 --> 00:00:48,091 - I was young and dumb, never run a company before. 22 00:00:48,135 --> 00:00:49,571 Manny: Everybody had the same reaction, 23 00:00:49,614 --> 00:00:51,051 what the 's Nolan talking about? 24 00:00:51,094 --> 00:00:52,661 What is he talking about? 25 00:00:52,704 --> 00:00:56,360 - There were a lot of powerful characters butting heads. 26 00:00:56,404 --> 00:00:58,319 Michael Fischer: Sega was David fighting Goliath. 27 00:00:58,362 --> 00:00:59,276 We took Nintendo on. 28 00:01:01,626 --> 00:01:04,499 - I used to get nasty letters from Howard Lincoln. 29 00:01:04,542 --> 00:01:07,023 - It was just a great fight between two companies. 30 00:01:07,067 --> 00:01:08,111 Trip: It was always personal. 31 00:01:08,155 --> 00:01:09,025 - They were a bully. 32 00:01:10,940 --> 00:01:12,550 Phillips: There was nothing like the rollercoaster ride 33 00:01:12,594 --> 00:01:14,552 of early video games. 34 00:01:14,596 --> 00:01:17,729 Steve: The video game frontier was wild. 35 00:01:17,773 --> 00:01:19,644 - Well, it was the wild west. 36 00:01:30,786 --> 00:01:32,222 Nolan: When I was in engineering school, 37 00:01:32,266 --> 00:01:35,399 I started working at an amusement park, 38 00:01:35,443 --> 00:01:36,922 in the games department. 39 00:01:36,966 --> 00:01:38,576 Carny: How about you, sir, take a chance, 40 00:01:38,620 --> 00:01:42,014 three for a dime, win a beautiful prize. 41 00:01:42,058 --> 00:01:45,366 - So that sort of qualifies me as a carny. 42 00:01:52,938 --> 00:01:54,244 Carny: Well hurry, hurry, hurry, 43 00:01:54,288 --> 00:01:56,028 who's going to take another chance? 44 00:01:56,072 --> 00:01:59,684 Nolan: I got a good cross section of what people liked, 45 00:01:59,728 --> 00:02:03,558 what they were willing to pay, and how often they'd play it. 46 00:02:03,601 --> 00:02:05,777 What it was really focused on 47 00:02:05,821 --> 00:02:09,825 is getting people to play over and over and over again. 48 00:02:09,868 --> 00:02:11,566 Even though they lose. 49 00:02:11,609 --> 00:02:13,307 Carny: Missed again, how about another chance? 50 00:02:13,350 --> 00:02:15,874 Nolan: And when you're convincing other people 51 00:02:15,918 --> 00:02:18,834 that they can win, you convince yourself. 52 00:02:18,877 --> 00:02:21,619 So, over time, you realize 53 00:02:21,663 --> 00:02:24,840 that the future is actually quite manipulable, 54 00:02:24,883 --> 00:02:27,669 with just force of will. 55 00:02:27,712 --> 00:02:29,497 Henry: Through this experience, 56 00:02:29,540 --> 00:02:32,413 Nolan Bushnell understood games as sort of an industry. 57 00:02:32,456 --> 00:02:33,979 And then, he just so happened 58 00:02:34,023 --> 00:02:36,243 to be an undergraduate at the very university 59 00:02:36,286 --> 00:02:38,636 that was the center, Ground Zero, 60 00:02:38,680 --> 00:02:40,377 for development of computer graphics. 61 00:02:42,858 --> 00:02:43,946 Nolan: I was an engineering student 62 00:02:43,989 --> 00:02:45,948 at the University of Utah, 63 00:02:45,991 --> 00:02:48,168 and there I played a game called Space War . 64 00:02:50,474 --> 00:02:54,217 Space War was a rocket ship against rocket ship, 65 00:02:54,261 --> 00:02:55,827 two-player game, 66 00:02:55,871 --> 00:02:58,352 it had a gravity field around a sun, 67 00:02:58,395 --> 00:03:01,050 and you basically could fire missiles at each other. 68 00:03:02,269 --> 00:03:03,922 And I was mesmerized by it. 69 00:03:05,141 --> 00:03:06,447 - Nolan's goal was to 70 00:03:06,490 --> 00:03:08,057 put a coin slot on that 71 00:03:08,100 --> 00:03:10,320 and put it in the arcade. 72 00:03:10,364 --> 00:03:13,584 The only problem was you need a million dollar machine. 73 00:03:13,628 --> 00:03:17,545 Nolan: Space War was played on the million-dollar computer, 74 00:03:17,588 --> 00:03:20,287 and the economics of the coin op business said, 75 00:03:20,330 --> 00:03:23,246 the maximum you could charge was about 25 cents 76 00:03:23,290 --> 00:03:24,856 for three minutes. 77 00:03:24,900 --> 00:03:25,509 Archival Arcade News Story: Look what you get 78 00:03:25,553 --> 00:03:26,815 for your money! 79 00:03:26,858 --> 00:03:28,425 If you like that sort of thing. 80 00:03:28,469 --> 00:03:31,254 Nolan: You just can't make the numbers work. 81 00:03:31,298 --> 00:03:35,127 And I said, you know, someday. 82 00:03:35,171 --> 00:03:38,174 Archival News: Across the bay with its spiderweb of bridges, 83 00:03:38,218 --> 00:03:42,483 the pinnacles of San Francisco catching the afternoon sun. 84 00:03:42,526 --> 00:03:44,267 Nolan: After I got my engineering degree, 85 00:03:44,311 --> 00:03:47,270 I got a job at Ampex in the middle of Silicon Valley. 86 00:03:48,793 --> 00:03:50,447 At the time, 87 00:03:50,491 --> 00:03:52,841 Silicon Valley was more known for prune orchards, 88 00:03:52,884 --> 00:03:54,843 than for technology. 89 00:03:54,886 --> 00:03:57,759 Archival News: Miles and miles of fragrant orchards, 90 00:03:57,802 --> 00:04:00,631 spreading in a vista of never-ending loveliness. 91 00:04:02,067 --> 00:04:04,418 Al: There was no consumer electronics going on 92 00:04:04,461 --> 00:04:05,941 in the valley, to my knowledge. 93 00:04:05,984 --> 00:04:07,682 At all. 94 00:04:07,725 --> 00:04:10,511 It was really semiconductor companies 95 00:04:10,554 --> 00:04:12,817 and aerospace military companies. 96 00:04:14,558 --> 00:04:18,258 Nolan: Ampex was white shirt, black tie. 97 00:04:18,301 --> 00:04:19,476 Very stuffy. 98 00:04:20,738 --> 00:04:22,174 It was the '70s, 99 00:04:22,218 --> 00:04:25,177 and we all had our hippie costumes. 100 00:04:25,221 --> 00:04:28,877 So I wasn't particularly excited to work for Ampex. 101 00:04:28,920 --> 00:04:31,358 But, my office mate, Ted Dabney, 102 00:04:31,401 --> 00:04:36,101 was probably one of the best engineers Ampex had. 103 00:04:36,145 --> 00:04:40,802 nd remember, Space War simmered in the back of my head. 104 00:04:40,845 --> 00:04:45,328 Well, I blinked, and one day, the cost of MSI chips 105 00:04:45,372 --> 00:04:49,550 went from $2.80 a piece to fifteen cents. 106 00:04:49,593 --> 00:04:52,379 And when I saw that price drop, I said, 107 00:04:52,422 --> 00:04:56,513 now's the time to build a Space War clone. 108 00:04:56,557 --> 00:04:58,428 And that was Computer Space. 109 00:05:02,127 --> 00:05:04,260 The circuit was coming along nicely. 110 00:05:04,304 --> 00:05:08,482 But, when it came to a cabinet, I thought, this is Space game. 111 00:05:10,135 --> 00:05:14,444 So, I modeled this spacey looking thing 112 00:05:14,488 --> 00:05:19,580 and Ted found a fiberglass boat manufacturer to scale it up. 113 00:05:19,623 --> 00:05:21,669 Owen: It was a very futuristic fiberglass cabinet 114 00:05:21,712 --> 00:05:25,368 which was really amazing, sparkly colors. 115 00:05:25,412 --> 00:05:27,675 It looked like a kind of a deco rocket ship. 116 00:05:30,330 --> 00:05:32,027 Nolan: Next to college campuses, 117 00:05:32,070 --> 00:05:35,857 Computer Space earned extremely well. 118 00:05:35,900 --> 00:05:40,252 But, put it in a working man's bar, earned nothing. 119 00:05:40,296 --> 00:05:41,645 Owen: It had all these buttons 120 00:05:41,689 --> 00:05:43,299 and you know, people couldn't get it. 121 00:05:43,343 --> 00:05:44,605 They didn't understand how to play it, you know. 122 00:05:44,648 --> 00:05:47,651 Geeks could get it, 'cause they're used to computers. 123 00:05:47,695 --> 00:05:49,914 Nolan: It was very disappointing. 124 00:05:49,958 --> 00:05:53,744 That was when I learned that the core axiom 125 00:05:53,788 --> 00:05:57,400 of good games is: easy to learn, 126 00:05:57,444 --> 00:05:58,749 difficult to master. 127 00:06:00,490 --> 00:06:03,014 Well, not for a femtosecond 128 00:06:03,058 --> 00:06:05,974 did I think that I was going to go back to Ampex. 129 00:06:06,017 --> 00:06:09,847 So, I decided to go off and start a company with Ted 130 00:06:09,891 --> 00:06:11,719 and eventually, we called it Atari. 131 00:06:17,681 --> 00:06:19,117 My first hire was 132 00:06:19,161 --> 00:06:22,512 a big bear of a man named Al Alcorn. 133 00:06:22,556 --> 00:06:27,865 He was a brilliant, brilliant man and an anarchist. 134 00:06:27,909 --> 00:06:29,867 Al: I figured it would fail in about a year 135 00:06:29,911 --> 00:06:33,044 and I'd go back to work at Ampex, that was my plan. 136 00:06:33,088 --> 00:06:36,570 So, I show up to work and said, what are you gonna do? 137 00:06:36,613 --> 00:06:38,833 Nolan: The very first day Al started, 138 00:06:38,876 --> 00:06:41,401 I assigned him a simple training mission. 139 00:06:45,056 --> 00:06:47,276 Al: Nolan described a tennis game 140 00:06:47,319 --> 00:06:50,453 with one moving spot, score digits, 141 00:06:50,497 --> 00:06:53,238 a net, and two paddles. 142 00:06:53,282 --> 00:06:55,458 So, it was just the simplest possible game 143 00:06:55,502 --> 00:06:57,329 you could ever do. 144 00:06:57,373 --> 00:06:59,027 I understood what it was to be. 145 00:06:59,070 --> 00:07:01,638 Whether it would sell or not, I assumed it wouldn't. 146 00:07:01,682 --> 00:07:03,988 - I think he had it done in a week. 147 00:07:04,032 --> 00:07:06,556 And that turned out, of course, to be Pong. 148 00:07:11,866 --> 00:07:14,259 Mark: When my dad, Ralph, first saw Pong , 149 00:07:14,303 --> 00:07:19,003 he did recognize that it was a derivative product 150 00:07:19,047 --> 00:07:22,093 from what he had come up with before. 151 00:07:22,137 --> 00:07:23,268 Jim: You know, it was always pretty obvious 152 00:07:23,312 --> 00:07:24,835 that my father had started this stuff, 153 00:07:24,879 --> 00:07:28,012 and this is his idea, gone. 154 00:07:33,453 --> 00:07:35,367 - One of the most important people in this industry 155 00:07:35,411 --> 00:07:36,847 was Ralph Baer, of course. 156 00:07:36,891 --> 00:07:38,675 - Whip out your handy dandy 157 00:07:38,719 --> 00:07:40,285 sweet tooth scrubber! 158 00:07:40,329 --> 00:07:41,896 Jim: He was always thinking of ways 159 00:07:41,939 --> 00:07:44,376 to use whatever was around to do other things. 160 00:07:44,420 --> 00:07:46,030 - And that included things like, for example, 161 00:07:46,074 --> 00:07:48,076 action games that we all know. 162 00:07:48,119 --> 00:07:50,208 - Hopefully, we'll have some fun here. 163 00:07:50,252 --> 00:07:51,949 And if you all gather round, 164 00:07:51,993 --> 00:07:54,212 we will play a game of Ping Pong together. 165 00:07:56,040 --> 00:07:57,172 Here we go... up... 166 00:07:58,216 --> 00:07:59,914 and down. 167 00:07:59,957 --> 00:08:01,219 And up, he's getting tricky. 168 00:08:03,091 --> 00:08:05,876 - Did I steal Ralph Baer's idea? 169 00:08:05,920 --> 00:08:07,443 Yes, and no. 170 00:08:07,487 --> 00:08:09,663 Ralph Baer: A one, two, three. 171 00:08:09,706 --> 00:08:12,448 Nolan: I thought it was just barely a game. 172 00:08:12,492 --> 00:08:13,710 - And what we've built 173 00:08:13,754 --> 00:08:15,799 we call the All Purpose Box. 174 00:08:15,843 --> 00:08:17,888 The plug-in modules will cover 175 00:08:17,932 --> 00:08:21,370 a variety of applications such as TV gaming. 176 00:08:21,413 --> 00:08:24,112 Henry: There's no doubt, that Ralph Baer invented 177 00:08:24,155 --> 00:08:28,246 the home television game console, no doubt. 178 00:08:28,290 --> 00:08:30,640 So, I think he's kind of an interesting guy. 179 00:08:32,555 --> 00:08:35,166 Jim: He was born in 1922 in Germany, 180 00:08:35,210 --> 00:08:36,559 during the rise of Hitler. 181 00:08:38,213 --> 00:08:39,867 My father made it out of Germany, 182 00:08:39,910 --> 00:08:41,564 just in the nick of time, six months before Kristallnacht. 183 00:08:43,392 --> 00:08:47,265 Most of the Baer family perishes in concentration camps. 184 00:08:48,615 --> 00:08:50,791 Mark: But Ralph settled in New York 185 00:08:50,834 --> 00:08:53,097 and he was a radio technician. 186 00:08:53,141 --> 00:08:55,622 He just had a knack for the technical. 187 00:08:59,582 --> 00:09:01,758 On the 1st of September 1966, 188 00:09:01,802 --> 00:09:04,065 my dad was sitting down at the Port Authority building 189 00:09:04,108 --> 00:09:07,242 in New York and he had had ideas of using television 190 00:09:07,285 --> 00:09:10,462 for more than just a passive machine for years. 191 00:09:10,506 --> 00:09:11,899 But it was at that time, 192 00:09:11,942 --> 00:09:14,684 he sat down, and he wrote it all down. 193 00:09:14,728 --> 00:09:17,295 It was an eureka moment. 194 00:09:17,339 --> 00:09:20,472 - Ralph really was pioneering in the way of understanding 195 00:09:20,516 --> 00:09:22,562 how broadly you could use the TV 196 00:09:22,605 --> 00:09:24,389 for something other than passive viewing. 197 00:09:24,433 --> 00:09:26,304 - With this box, 198 00:09:26,348 --> 00:09:30,395 when the commercial comes on, push the button, 199 00:09:30,439 --> 00:09:33,921 a tape recorder starts, the TV set is recorded. 200 00:09:33,964 --> 00:09:35,444 - His vision was that everybody already had this TV, 201 00:09:35,487 --> 00:09:36,880 they could do more with it. 202 00:09:36,924 --> 00:09:38,360 - And next morning, you can't remember 203 00:09:38,403 --> 00:09:39,666 the station on which you saw this thing 204 00:09:39,709 --> 00:09:42,625 you really wanted to go out and buy... 205 00:09:42,669 --> 00:09:45,193 - One of the really novel things that it could do was 206 00:09:45,236 --> 00:09:46,760 impulse buying. 207 00:09:46,803 --> 00:09:48,457 - I go ahead and push the appropriate number, 208 00:09:48,500 --> 00:09:50,677 dial my 800 number on the telephone, 209 00:09:50,720 --> 00:09:53,288 and lo and behold, my order is placed 210 00:09:53,331 --> 00:09:54,985 in a rather painless way. 211 00:09:55,029 --> 00:09:58,119 Mark: It was Amazon Circa 1969. 212 00:10:00,382 --> 00:10:02,079 The company he was working for at the time, 213 00:10:02,123 --> 00:10:05,213 Sanders and Associates, was a defense contractor. 214 00:10:08,999 --> 00:10:11,567 Jim: He got Sanders to let him build a lab. 215 00:10:13,569 --> 00:10:15,963 He just said, I have this idea and let me play with it. 216 00:10:17,573 --> 00:10:19,009 Mark: Back in those days, 217 00:10:19,053 --> 00:10:20,837 you could just pull people off the line. 218 00:10:20,881 --> 00:10:22,317 So, he pulled a couple of guys, 219 00:10:22,360 --> 00:10:24,972 he said he had a secret room up on the sixth floor, 220 00:10:25,015 --> 00:10:28,236 and he's starting to tinker with television games. 221 00:10:28,279 --> 00:10:31,326 - So he had his own area with a couple of people 222 00:10:31,369 --> 00:10:32,675 who worked for him, 223 00:10:32,719 --> 00:10:34,808 and essentially did everything on his own 224 00:10:34,851 --> 00:10:36,548 to develop the Brown Box. 225 00:10:37,811 --> 00:10:39,639 Mark: The original Brown Box prototype 226 00:10:39,682 --> 00:10:41,597 did many, many things. 227 00:10:43,033 --> 00:10:46,036 Ping Pong ultimately was the one that really ca on. 228 00:10:47,690 --> 00:10:48,865 Jim: My father brought home one of the prototypes 229 00:10:48,909 --> 00:10:50,388 and my brother and I played it. 230 00:10:50,432 --> 00:10:51,955 We were the first kids to play video games. 231 00:10:51,999 --> 00:10:55,393 And we had the first video game parties and I won. 232 00:10:55,437 --> 00:10:58,527 - I think the record's clear that he lost all of the time. 233 00:10:58,570 --> 00:11:01,008 - I defeated my brother, regardless of what he says. 234 00:11:04,533 --> 00:11:06,013 Mark: But Sanders management decided, 235 00:11:06,056 --> 00:11:08,493 we are not a consumer electronics company. 236 00:11:08,537 --> 00:11:10,278 We're not going to build this. 237 00:11:10,321 --> 00:11:12,106 Jim: Sanders was looking for a licensee, 238 00:11:12,149 --> 00:11:13,107 'cause they were not in the business 239 00:11:13,150 --> 00:11:14,848 of doing consumer products. 240 00:11:14,891 --> 00:11:16,937 Mark: And he finally sits down with Magnavox 241 00:11:16,980 --> 00:11:18,503 and they produced a commercial product 242 00:11:18,547 --> 00:11:20,375 called the Magnavox Odyssey. 243 00:11:22,769 --> 00:11:26,642 The first-line Odyssey was a black and white console 244 00:11:26,686 --> 00:11:28,122 and it had two separate apparatus 245 00:11:28,165 --> 00:11:29,863 where you control the spots. 246 00:11:31,778 --> 00:11:33,344 You couldn't project things on your screen 247 00:11:33,388 --> 00:11:35,564 without having a supercomputer. 248 00:11:35,607 --> 00:11:38,175 So, what they did is they made plastic sheets 249 00:11:38,219 --> 00:11:40,090 and it would look like a tennis court. 250 00:11:41,613 --> 00:11:46,227 Odyssey was shown in 1972 in Silicon Valley. 251 00:11:46,270 --> 00:11:47,750 It was a demo. 252 00:11:47,794 --> 00:11:49,360 There were a lot of people who came, 253 00:11:49,404 --> 00:11:52,015 including people, in other businesses. 254 00:11:52,059 --> 00:11:53,234 Henry: Nolan Bushnell definitely saw 255 00:11:53,277 --> 00:11:55,149 the Magnavox Odyssey there. 256 00:11:55,192 --> 00:11:58,282 He signed the guest ledger and he was there. 257 00:11:58,326 --> 00:12:01,895 - I had heard there was a video game 258 00:12:01,938 --> 00:12:05,986 being displayed and I thought that's my area, 259 00:12:06,029 --> 00:12:10,207 who has the affront to do a video game? 260 00:12:10,251 --> 00:12:13,558 But I was unimpressed from the minute I saw it. 261 00:12:13,602 --> 00:12:14,908 It was fuzzy. 262 00:12:14,951 --> 00:12:17,519 The gameplay was funny, 263 00:12:17,562 --> 00:12:20,696 because you had control of the ball after you hit it. 264 00:12:20,740 --> 00:12:23,003 It had no score, it had no sound. 265 00:12:23,046 --> 00:12:26,354 To me, it was an incomplete project. 266 00:12:26,397 --> 00:12:28,182 So I improved upon it. 267 00:12:28,225 --> 00:12:31,794 I made it functional, and I made it better. 268 00:12:31,838 --> 00:12:35,058 The thought that it was going to cause me some problems 269 00:12:35,102 --> 00:12:36,059 didn't even enter my mind. 270 00:12:43,763 --> 00:12:45,329 I was unimpressed. 271 00:12:45,373 --> 00:12:48,376 And I said, let's make this game and fix it. 272 00:12:49,899 --> 00:12:56,253 It was meant as an exercise, and so, I assigned it to Al. 273 00:12:56,297 --> 00:13:00,257 I went to the blackboard and drew out what we wanted 274 00:13:00,301 --> 00:13:01,955 and he says, okay, I can do that. 275 00:13:03,217 --> 00:13:04,261 - We got it to work 276 00:13:04,305 --> 00:13:05,306 but it was terrible, 277 00:13:05,349 --> 00:13:06,960 it was clearly no fun, 278 00:13:07,003 --> 00:13:08,570 'cause it was either too fast 279 00:13:08,613 --> 00:13:09,832 and you couldn't get the hang of it 280 00:13:09,876 --> 00:13:12,095 or it was too slow and it was boring. 281 00:13:12,139 --> 00:13:15,185 - Al Alcorn looked at what the Odysseygame was 282 00:13:15,229 --> 00:13:18,667 and found ways to make it a more compelling experience. 283 00:13:18,710 --> 00:13:20,060 Nolan: The first thing we had to do is make sure 284 00:13:20,103 --> 00:13:23,237 that the game had an offense 285 00:13:23,280 --> 00:13:25,500 and that was created by the angle 286 00:13:25,543 --> 00:13:27,241 that the ball left the paddle 287 00:13:27,284 --> 00:13:30,635 be dependent on where on the paddle it hit. 288 00:13:30,679 --> 00:13:33,160 That's when we decided that we would increase 289 00:13:33,203 --> 00:13:35,727 the ball speed after x number of volleys. 290 00:13:37,251 --> 00:13:39,688 - And he says, oh, it's got to have sound. 291 00:13:39,731 --> 00:13:41,168 I said, okay, I'll be right back, 292 00:13:41,211 --> 00:13:42,909 and I poked around and found some sounds 293 00:13:42,952 --> 00:13:44,693 that were already in the sync generator 294 00:13:44,736 --> 00:13:45,737 and put them out. 295 00:13:47,304 --> 00:13:48,828 Since then, there have been articles written 296 00:13:48,871 --> 00:13:50,525 about how brilliant the sound was, 297 00:13:50,568 --> 00:13:53,354 which I think is hilarious. 298 00:13:53,397 --> 00:13:57,488 Nolan: In probably three weeks, it became so fun, 299 00:13:57,532 --> 00:13:59,621 we were staying after work to play the damn thing. 300 00:14:00,883 --> 00:14:02,580 Al: At some point, Nolan and Ted said, 301 00:14:02,624 --> 00:14:04,713 that's pretty good, let's put it in a box 302 00:14:04,756 --> 00:14:07,237 and put it on location at Andy Capp's Tavern. 303 00:14:07,281 --> 00:14:09,152 And just see what the public thinks of it. 304 00:14:10,501 --> 00:14:13,417 - It was a peanut shell on the floor beer bar. 305 00:14:13,461 --> 00:14:16,856 You know, and it had a bunch of games in the back. 306 00:14:16,899 --> 00:14:18,248 Three days later, 307 00:14:18,292 --> 00:14:20,468 we got a service call. 308 00:14:20,511 --> 00:14:22,383 And so, we thought, oh, geez, 309 00:14:22,426 --> 00:14:24,385 we've got a reliability problem. 310 00:14:24,428 --> 00:14:26,517 - So, I went over there to my surprise, 311 00:14:26,561 --> 00:14:30,826 when I opened the coin box, all these quarters gushed out. 312 00:14:30,870 --> 00:14:33,176 It wasn't broken, it was just so full of quarters 313 00:14:33,220 --> 00:14:35,483 it wouldn't take any more. 314 00:14:35,526 --> 00:14:37,137 - People were waiting for the bar to open 315 00:14:37,180 --> 00:14:38,660 o they'd come in and play Pong. 316 00:14:38,703 --> 00:14:41,402 They were playing it all day. 317 00:14:41,445 --> 00:14:43,926 Al: I remember sitting at Andy Capp's Tavern 318 00:14:43,970 --> 00:14:46,102 and Nolan basically says, 319 00:14:46,146 --> 00:14:48,104 we're gonna be in the manufacturing business. 320 00:14:48,148 --> 00:14:50,715 And Ted and I said, "No way, we're engineers, 321 00:14:50,759 --> 00:14:53,153 we don't know anything about manufacturing!" 322 00:14:58,071 --> 00:14:59,115 - I said, you know, 323 00:14:59,159 --> 00:15:01,901 I think we can sell these things. 324 00:15:01,944 --> 00:15:05,600 We had enough money, 300 bucks, 325 00:15:05,643 --> 00:15:08,951 to buy the parts for 12 units. 326 00:15:08,995 --> 00:15:11,214 And literally, in three weeks, 327 00:15:11,258 --> 00:15:15,653 we built the 12 and sold them all for a thousand bucks. 328 00:15:17,742 --> 00:15:19,135 I went to Al and I said, 329 00:15:19,179 --> 00:15:22,312 you know, we've got to ramp up, two hundred a day. 330 00:15:22,356 --> 00:15:24,227 He says, you've lost your mind, Nolan. 331 00:15:24,271 --> 00:15:27,187 - Insane. Whenever I see a new idea, 332 00:15:27,230 --> 00:15:29,667 I immediately think of all the reasons it can't work. 333 00:15:29,711 --> 00:15:30,755 I'm a pessimist. 334 00:15:30,799 --> 00:15:32,453 - But I'm an optimist 335 00:15:32,496 --> 00:15:35,717 and I really do believe, if you think you can do it, 336 00:15:35,760 --> 00:15:36,631 it will get that way. 337 00:15:38,285 --> 00:15:40,461 - We had no experience, we had no employees, 338 00:15:40,504 --> 00:15:42,550 we had no money, we had no space. 339 00:15:44,117 --> 00:15:47,207 Nolan: We rented an old defunct skating rink. 340 00:15:47,250 --> 00:15:50,340 That was our manufacturing facility. 341 00:15:50,384 --> 00:15:52,734 Al: But, how do you hire people? 342 00:15:52,777 --> 00:15:53,909 The only thing that occurred to us 343 00:15:53,953 --> 00:15:55,389 is just go to the unemployment office 344 00:15:55,432 --> 00:15:58,522 and get people and uh, what could go wrong? 345 00:15:58,566 --> 00:16:01,525 - I didn't realize that all these people were derelicts 346 00:16:01,569 --> 00:16:03,614 and of course, we didn't have security. 347 00:16:03,658 --> 00:16:05,790 - It was crazy time. 348 00:16:05,834 --> 00:16:08,445 Nolan: But, piece by piece by piece, 349 00:16:08,489 --> 00:16:11,579 we actually started to know what we were doing. 350 00:16:17,324 --> 00:16:19,195 Atari Archival: Here is where it all takes place. 351 00:16:19,239 --> 00:16:21,154 The Atari engineering building 352 00:16:21,197 --> 00:16:23,939 in its bucolic surroundings in picturesque Sunnyvale, 353 00:16:23,983 --> 00:16:26,028 staffed by a group of technical people 354 00:16:26,072 --> 00:16:29,858 who are truly outstanding in their field. 355 00:16:29,901 --> 00:16:31,773 Ed: I walked into Atari 356 00:16:31,816 --> 00:16:37,344 and I saw a bunch of people having just a blast working. 357 00:16:37,387 --> 00:16:39,172 They were excited about what they were doing. 358 00:16:39,215 --> 00:16:42,349 They were my age. It was just exciting as heck. 359 00:16:45,091 --> 00:16:46,788 Elaine: It wasn't like work. 360 00:16:46,831 --> 00:16:50,357 We had rock and roll music blasting through the factory, 361 00:16:55,101 --> 00:16:56,319 which was totally awesome. 362 00:16:56,363 --> 00:16:58,887 I remember Steve Miller, the Moody Blues. 363 00:17:07,113 --> 00:17:10,290 Nolan: We felt we could hire anyone, 364 00:17:10,333 --> 00:17:12,118 no matter how strange they were. 365 00:17:16,774 --> 00:17:18,515 Atari Archival: Fully factory condition 366 00:17:18,559 --> 00:17:21,214 with genuine Atari parts stolen direct from the Atari factory. 367 00:17:21,257 --> 00:17:22,780 Nolan: I wrote a manifesto 368 00:17:22,824 --> 00:17:26,915 that encapsulated the values of our company. 369 00:17:26,958 --> 00:17:31,398 We wanted to treat everyone as equally as we possibly could. 370 00:17:31,441 --> 00:17:33,791 For example, I wouldn't allow 371 00:17:33,835 --> 00:17:36,446 reserved parking spaces for the executives. 372 00:17:38,187 --> 00:17:40,363 We don't care how you dress, 373 00:17:40,407 --> 00:17:43,062 we don't care when you come to work, 374 00:17:43,105 --> 00:17:45,803 we don't care if you come to work; 375 00:17:45,847 --> 00:17:47,936 get your job done, and everything's fine. 376 00:17:49,459 --> 00:17:50,895 We had this attitude of; 377 00:17:50,939 --> 00:17:54,073 people were adults and free to do as they wished. 378 00:17:54,116 --> 00:17:56,031 - We were young horny engineers 379 00:17:56,075 --> 00:17:58,947 and we'd ogle and there was funny banter. 380 00:17:58,990 --> 00:18:00,514 Elaine: I remember one girl, 381 00:18:00,557 --> 00:18:03,430 made bikini tops out of leather that some people wore, 382 00:18:03,473 --> 00:18:04,735 but you didn't wear bikini bottoms, 383 00:18:04,779 --> 00:18:05,649 that was uncalled for. 384 00:18:08,130 --> 00:18:11,916 - Did a lot of people go home together, absolutely. 385 00:18:11,960 --> 00:18:14,005 - But it was the '70s, 386 00:18:14,049 --> 00:18:17,357 and that was part of American culture in the '70s. 387 00:18:17,400 --> 00:18:20,229 I think it's difficult to look at that 388 00:18:20,273 --> 00:18:22,144 through today's lens, 389 00:18:22,188 --> 00:18:23,885 because it was a very different era. 390 00:18:23,928 --> 00:18:25,104 Archival News: What do we want? 391 00:18:25,147 --> 00:18:26,279 - ERA! - When do we want it? 392 00:18:26,322 --> 00:18:28,019 - Now! 393 00:18:28,063 --> 00:18:30,761 Nancy: The '70s were really the birth of feminism, 394 00:18:30,805 --> 00:18:34,156 and Atari led the way in all that. 395 00:18:34,200 --> 00:18:37,464 Atari had an equal pay for equal work policy. 396 00:18:37,507 --> 00:18:38,987 Elaine: I never thought 397 00:18:39,030 --> 00:18:40,989 the women or men were treated any different. 398 00:18:41,032 --> 00:18:43,687 And I had like 48 people working for me one time 399 00:18:43,731 --> 00:18:45,341 and nobody treated me any different, 400 00:18:45,385 --> 00:18:46,995 because I was a woman. 401 00:18:47,038 --> 00:18:51,391 - There was also this whole idea of hot tub culture. 402 00:18:54,437 --> 00:18:57,397 Something that through the lens of today 403 00:18:57,440 --> 00:19:00,443 probably looks a little bit promiscuous. 404 00:19:00,487 --> 00:19:02,445 People would get naked and get into the hot tub 405 00:19:02,489 --> 00:19:03,490 at the end of a party. 406 00:19:03,533 --> 00:19:06,623 I mean, it was kind of normal. 407 00:19:06,667 --> 00:19:09,626 - I think it was a woman who installed it. 408 00:19:11,062 --> 00:19:12,542 Loni: I was in charge of picking out colors 409 00:19:12,586 --> 00:19:13,848 for all the different parts 410 00:19:13,891 --> 00:19:16,981 and that included the tiles for the hot tub, 411 00:19:17,025 --> 00:19:18,853 which were a blue and orange. 412 00:19:18,896 --> 00:19:21,856 They had the Atari logo on the back wall. 413 00:19:21,899 --> 00:19:24,772 - I remember the day Nolan and I decided 414 00:19:24,815 --> 00:19:27,296 we're going to break the hot tub in. 415 00:19:27,340 --> 00:19:28,254 Owen: There were times where it was locked 416 00:19:28,297 --> 00:19:29,298 and people were in it, 417 00:19:29,342 --> 00:19:30,734 so you can use your imagination 418 00:19:30,778 --> 00:19:32,127 what might've been going on in the hot tub room. 419 00:19:32,171 --> 00:19:33,650 - I was never in that hot tub. 420 00:19:33,694 --> 00:19:35,304 Other hot tubs, but not that one. 421 00:19:35,348 --> 00:19:37,176 - We actually had a board meeting one time 422 00:19:37,219 --> 00:19:38,568 in the hot tub. 423 00:19:38,612 --> 00:19:39,439 We didn't think about it. 424 00:19:44,400 --> 00:19:45,227 Atari Archival: One more! 425 00:19:46,707 --> 00:19:48,448 Now he's really eating cornflakes! 426 00:19:48,491 --> 00:19:50,711 Hup, two, three, four! 427 00:19:52,234 --> 00:19:54,889 Elaine: The Atari, to me, kind of set the standards 428 00:19:54,932 --> 00:19:57,065 for how to have a fun company. 429 00:19:59,720 --> 00:20:02,549 - Every two weeks, if we met quota, 430 00:20:02,592 --> 00:20:05,508 there was a beer bust with free pizza and beer. 431 00:20:06,901 --> 00:20:08,555 - By this time, we were pretty well known 432 00:20:08,598 --> 00:20:12,080 as the most fun place to work in Silicon Valley. 433 00:20:12,123 --> 00:20:13,603 Trip: We were hearing stories about Atari, 434 00:20:13,647 --> 00:20:15,301 I mean, it had kind of a legendary culture. 435 00:20:15,344 --> 00:20:17,346 They're all doing dope on the assembly line. 436 00:20:19,174 --> 00:20:22,438 Nolan was probably high a good chunk of the time too. 437 00:20:22,482 --> 00:20:25,528 - There was a funny smell to the air. 438 00:20:25,572 --> 00:20:26,660 Atari Employee Archival: This is how we put out games, huh? 439 00:20:28,183 --> 00:20:30,359 Engineering in action! 440 00:20:30,403 --> 00:20:32,187 Elaine: There was a lot of pot. 441 00:20:32,231 --> 00:20:33,710 - So, I don't know if you know the name, Rolling Papers, 442 00:20:33,754 --> 00:20:35,669 it was S.D. Modiano, right. 443 00:20:35,712 --> 00:20:38,237 So, anybody in the company could use the pager 444 00:20:38,280 --> 00:20:39,977 to page the whole building. And you would hear... 445 00:20:40,021 --> 00:20:41,065 Atari Employee Archival: S.D. Modiano to the upstairs 446 00:20:41,109 --> 00:20:41,979 conference room, please. 447 00:20:44,199 --> 00:20:45,940 - And that was the key that anybody wanted to go out 448 00:20:45,983 --> 00:20:47,724 and smoke a joint. 449 00:20:47,768 --> 00:20:50,118 Jeff: I remember the day they said, don't smoke pot 450 00:20:50,161 --> 00:20:52,294 in front of the building. 451 00:20:52,338 --> 00:20:55,732 Just go out back, and so we did. 452 00:20:55,776 --> 00:20:58,996 It was a great place to work. 453 00:21:00,171 --> 00:21:01,738 I would do it all over again. 454 00:21:01,782 --> 00:21:04,219 Absolutely, without the drugs. 455 00:21:11,792 --> 00:21:13,228 Odyssey Commercial: What does your family do 456 00:21:13,272 --> 00:21:15,709 on those stay-indoors rainy afternoons? 457 00:21:15,752 --> 00:21:18,407 Or on those cold, blustery winter days? 458 00:21:19,800 --> 00:21:21,671 Entertain themselves with Odyssey ! 459 00:21:23,151 --> 00:21:26,633 Mark: Odyssey finally came to market in 1972. 460 00:21:26,676 --> 00:21:27,851 It took a while. 461 00:21:27,895 --> 00:21:29,549 Magnavox did drag their feet. 462 00:21:37,383 --> 00:21:39,210 Henry: By the time it did come out, 463 00:21:39,254 --> 00:21:41,125 the technology underneath the hood 464 00:21:41,169 --> 00:21:44,825 was no longer as current as it could have been. 465 00:21:44,868 --> 00:21:47,784 Mark: They sold 'bout 350,000 of these units. 466 00:21:47,828 --> 00:21:51,005 Pretty good sales, but it certainly didn't blow up. 467 00:21:51,048 --> 00:21:52,354 Henry: The Magnavox Odyssey was not a failure, 468 00:21:52,398 --> 00:21:54,356 but it was not a great success. 469 00:21:54,400 --> 00:21:56,663 A part of that was Magnavox. 470 00:21:56,706 --> 00:21:58,317 Magnavox TV Commercial: Want to save $50 471 00:21:58,360 --> 00:22:00,710 and solve two gift problems at once? 472 00:22:00,754 --> 00:22:02,886 Get Odyssey by Magnavox. 473 00:22:02,930 --> 00:22:05,062 - Ralph would have liked to have seen it marketed better. 474 00:22:05,106 --> 00:22:08,718 Magnavox TV Commercial: This $99.95 value is only $49.95 475 00:22:08,762 --> 00:22:12,156 when you buy any Magnavox TV, 17 inches or larger. 476 00:22:12,200 --> 00:22:13,288 Henry: Magnavox made televisions 477 00:22:13,332 --> 00:22:14,855 and many people assumed 478 00:22:14,898 --> 00:22:16,291 they would need a Magnavox television 479 00:22:16,335 --> 00:22:18,206 to operate this device. 480 00:22:18,249 --> 00:22:21,165 - They limited the potential, my father was very annoyed. 481 00:22:21,209 --> 00:22:24,865 agnavox TV Commercial: Odyssey, now at your Magnavox dealer. 482 00:22:24,908 --> 00:22:28,390 - I think Ralph thought they had compromised too much. 483 00:22:28,434 --> 00:22:30,958 So, it didn't get out into the consciousness of the nation 484 00:22:31,001 --> 00:22:33,134 the way that something novel might get out today. 485 00:22:34,831 --> 00:22:37,225 I think Ralph felt a little bit neglected 486 00:22:37,268 --> 00:22:39,401 and left in the dust. 487 00:22:39,445 --> 00:22:42,361 Keith: And he felt that Magnavox should have been doing more, 488 00:22:42,404 --> 00:22:44,624 and he pushed them to call their lawyers. 489 00:22:55,591 --> 00:22:58,159 Nolan: Pong was a phenomenon. 490 00:22:58,202 --> 00:23:00,683 So, sales were easy. 491 00:23:00,727 --> 00:23:03,947 The distributors would say, send me 10, send me 10, 492 00:23:03,991 --> 00:23:07,168 and all of a sudden, I had a backlog of 4,000 units. 493 00:23:08,648 --> 00:23:10,867 The problem was that anybody could climb 494 00:23:10,911 --> 00:23:12,695 into the business. 495 00:23:12,739 --> 00:23:15,306 - Everybody was copying our machine. 496 00:23:15,350 --> 00:23:18,092 But in those days, we didn't think much of patents. 497 00:23:18,135 --> 00:23:20,094 Nolan: Because in the video game business, 498 00:23:20,137 --> 00:23:22,705 technology is moving so quickly 499 00:23:22,749 --> 00:23:24,446 we always had better things to do 500 00:23:24,490 --> 00:23:27,057 with our time than patent litigation. 501 00:23:27,101 --> 00:23:29,103 Henry: Atari's commitment to innovation was so great, 502 00:23:29,146 --> 00:23:30,452 that they really weren't concerned 503 00:23:30,496 --> 00:23:33,324 about controlling the industry. 504 00:23:33,368 --> 00:23:37,241 Nolan: We had a strategy of just doing better 505 00:23:37,285 --> 00:23:39,853 and better and better. 506 00:23:39,896 --> 00:23:42,812 And so, from Pong, we went to Pong Doubles, 507 00:23:42,856 --> 00:23:46,381 and Quadra Pong and then Space Race . 508 00:23:46,425 --> 00:23:47,817 We just kept them coming. 509 00:23:51,386 --> 00:23:52,909 Elaine: There was Tank , 510 00:23:52,953 --> 00:23:55,390 which ended up being a really big game for us. 511 00:23:56,870 --> 00:23:59,481 Ed: Gotcha, Night Driver . 512 00:23:59,525 --> 00:24:02,441 Sprint , a great driving game, a lot of fun, 513 00:24:02,484 --> 00:24:03,746 it had nothing to do with reality. 514 00:24:05,705 --> 00:24:08,882 Nolan: I had a game that wanted built called Breakout , 515 00:24:08,925 --> 00:24:10,536 which is a ball and paddle game, 516 00:24:10,579 --> 00:24:13,321 and none of my engineers wanted to do it. 517 00:24:13,364 --> 00:24:15,671 But one day, a guy came into the lobby and said, 518 00:24:15,715 --> 00:24:17,847 I'm not leaving until you hire me. 519 00:24:17,891 --> 00:24:22,765 He was, scruffy, ill-kempt, and brash. 520 00:24:22,809 --> 00:24:23,897 It was Steve Jobs. 521 00:24:25,768 --> 00:24:29,337 I asked Steve to do Breakout on the night shift 522 00:24:29,380 --> 00:24:32,775 because I knew, if Steve was on the night shift, 523 00:24:32,819 --> 00:24:35,169 Steve Wozniak would come over after work 524 00:24:35,212 --> 00:24:36,649 at Hewlett Packard. 525 00:24:36,692 --> 00:24:37,998 And I knew that the two of them 526 00:24:38,041 --> 00:24:39,608 could get this game knocked out 527 00:24:39,652 --> 00:24:41,262 in really good time. 528 00:24:41,305 --> 00:24:42,306 And they did. 529 00:24:45,222 --> 00:24:47,094 Steve Wozniak: We both stayed up all night long, 530 00:24:47,137 --> 00:24:48,617 four nights in a row. 531 00:24:48,661 --> 00:24:51,315 We both got mononucleosis from it. 532 00:24:51,359 --> 00:24:53,013 We were really stressing ourselves, 533 00:24:53,056 --> 00:24:55,711 but we felt we actually did design it. 534 00:24:55,755 --> 00:24:58,714 Nolan: They ended up getting a $5,000 bonus. 535 00:24:58,758 --> 00:25:01,630 Twenty years later, Wozniak was sitting in my kitchen 536 00:25:01,674 --> 00:25:04,198 and I said, hey, you know, when you got that bonus, 537 00:25:04,241 --> 00:25:05,242 what did you do with it? 538 00:25:05,286 --> 00:25:07,506 $2,500? 539 00:25:07,549 --> 00:25:12,119 He shook his head and he says, Steve did it to me again. 540 00:25:12,162 --> 00:25:15,731 Steve had told Wozniak that it was a $500 bonus. 541 00:25:15,775 --> 00:25:18,429 And so, he gave him 250 and kept the rest for himself. 542 00:25:20,910 --> 00:25:22,999 Steve did break out 543 00:25:23,043 --> 00:25:26,873 and then got this idea to do a personal computer. 544 00:25:26,916 --> 00:25:29,005 And he came to me and said, 545 00:25:29,049 --> 00:25:32,182 do you want a third of Apple Computer for $50,000? 546 00:25:32,226 --> 00:25:34,228 And I turned it down, 547 00:25:34,271 --> 00:25:36,578 which I've subsequently regretted. 548 00:25:37,840 --> 00:25:38,972 Just a little. 549 00:25:39,015 --> 00:25:39,973 TV Reporter: Nolan Bushnell, 550 00:25:40,016 --> 00:25:42,323 you are an acknowledged visionary 551 00:25:42,366 --> 00:25:43,803 in this part of the world. 552 00:25:43,846 --> 00:25:48,155 Did even you foresee what Pongwould bring? 553 00:25:48,198 --> 00:25:49,765 - Well, I'm not sure that I thought 554 00:25:49,809 --> 00:25:51,593 it was going to be quite this big this quickly. 555 00:25:54,378 --> 00:25:56,946 We had talked about a home version 556 00:25:56,990 --> 00:25:59,035 of our stuff a lot, 557 00:25:59,079 --> 00:26:01,255 but the economics of our technology 558 00:26:01,298 --> 00:26:02,473 couldn't allow it. 559 00:26:04,998 --> 00:26:07,522 was to put everythinge on a single piece of silicon, 560 00:26:07,566 --> 00:26:08,741 a custom chip. 561 00:26:08,784 --> 00:26:10,264 - But Al came into me and said, 562 00:26:10,307 --> 00:26:12,179 I've just found some new technology. 563 00:26:12,222 --> 00:26:14,224 And so, all of a sudden, 564 00:26:14,268 --> 00:26:18,315 the opportunity of putting Pongon chip was real. 565 00:26:21,362 --> 00:26:24,800 It was a small little console, two knobs. 566 00:26:24,844 --> 00:26:25,801 And it was cute. 567 00:26:27,847 --> 00:26:30,893 I think we ended up building about 180,000. 568 00:26:32,591 --> 00:26:33,548 Sold every one of them. 569 00:26:43,950 --> 00:26:46,039 - At this point, Ralph Baer is still the company man 570 00:26:46,082 --> 00:26:48,650 at Sanders Associates, coming up with new inventions, 571 00:26:48,694 --> 00:26:51,000 but the phenomenal success of home Pong 572 00:26:51,044 --> 00:26:53,046 would not escape his attentions. 573 00:26:53,089 --> 00:26:55,265 - A lot of people, made a lot of money 574 00:26:55,309 --> 00:26:56,789 off of Dad's inventions. 575 00:26:58,051 --> 00:26:59,966 - You wanna score, Bill? 576 00:27:00,009 --> 00:27:01,663 Mark: Did it annoy him 577 00:27:01,707 --> 00:27:03,143 that other people took credit for his work? 578 00:27:03,186 --> 00:27:05,536 I mean, as it would anybody. 579 00:27:05,580 --> 00:27:06,450 Ralph Baer: Get closer than that, 580 00:27:06,494 --> 00:27:08,278 make it a little faster. 581 00:27:08,322 --> 00:27:10,672 Bob: It was very important to him that people understood 582 00:27:10,716 --> 00:27:12,195 that it was his idea originally. 583 00:27:14,328 --> 00:27:16,678 - It's clear that Ralph Baer was the designer 584 00:27:16,722 --> 00:27:18,245 of the first working game. 585 00:27:19,986 --> 00:27:22,684 Nolan: I never had a problem with Ralph 586 00:27:22,728 --> 00:27:26,557 until he started claiming that he invented Pong . 587 00:27:26,601 --> 00:27:29,386 He invented Odyssey and it was very different than Pong . 588 00:27:31,084 --> 00:27:34,043 - Nolan Bushnell is claiming that he invented video gaming 589 00:27:34,087 --> 00:27:36,698 and my father did resent someone trying to steal the credit. 590 00:27:40,006 --> 00:27:43,226 Mark: If Ralph had truly been a great promoter, 591 00:27:43,270 --> 00:27:45,533 self-aggrandizing kind of guy, 592 00:27:45,576 --> 00:27:47,100 yeah, he would have gotten a lot more recognition, 593 00:27:47,143 --> 00:27:48,536 probably got a lot more money 594 00:27:48,579 --> 00:27:50,843 and had a lot more people behind him, 595 00:27:50,886 --> 00:27:53,193 but that just wasn't him. 596 00:27:53,236 --> 00:27:55,108 Jim: Ralph Baer is the father of video games. 597 00:27:57,545 --> 00:28:00,548 - The father of video games is a construct 598 00:28:00,591 --> 00:28:04,813 that I kind of think is specious. 599 00:28:04,857 --> 00:28:09,775 I don't feel any animosity to Ralph, whatsoever. 600 00:28:09,818 --> 00:28:12,908 I think he was a brilliant analog engineer 601 00:28:12,952 --> 00:28:15,345 that did some very, very good work. 602 00:28:17,043 --> 00:28:19,219 But in terms of commercial success, 603 00:28:19,262 --> 00:28:20,916 it's me, period. 604 00:28:22,396 --> 00:28:24,180 I think I had at the right time, 605 00:28:24,224 --> 00:28:26,269 the right place, technical skills, 606 00:28:26,313 --> 00:28:28,576 and the business smarts to launch an industry. 607 00:28:30,709 --> 00:28:33,189 Owen: Ralph got that you could play a game on a TV. 608 00:28:33,233 --> 00:28:34,625 Nolan figured out how to make it fun. 609 00:28:37,019 --> 00:28:38,542 Henry: It wouldn't surprise me one bit 610 00:28:38,586 --> 00:28:41,937 if Ralph agitated Magnavox executives 611 00:28:41,981 --> 00:28:43,460 that they needed to go after Atari. 612 00:28:45,114 --> 00:28:46,812 Mark: It might've been the 1970's, 613 00:28:46,855 --> 00:28:49,989 but business is business and if there's money to be made, 614 00:28:50,032 --> 00:28:52,078 they went after the infringers. 615 00:28:52,121 --> 00:28:54,254 - Nolan Bushnell and the people at Atari 616 00:28:54,297 --> 00:28:57,387 were more focused on coming up with new and exciting ideas 617 00:28:57,431 --> 00:28:59,781 to stay ahead of the audience 618 00:28:59,825 --> 00:29:02,653 than they were trying to protect the ideas of games. 619 00:29:02,697 --> 00:29:05,961 But Ralph Baer felt very differently about patents. 620 00:29:06,005 --> 00:29:09,486 Ralph Baer was an engineer, and engineers live on patents. 621 00:29:09,530 --> 00:29:12,881 - Ralph Baer and Magnavox sent us a letter 622 00:29:12,925 --> 00:29:15,710 noticing that they had a patent on the whole thing 623 00:29:15,754 --> 00:29:19,801 and wanted us to stop making them, you know. 624 00:29:19,845 --> 00:29:21,411 Nolan: I thought it was specious, 625 00:29:21,455 --> 00:29:25,807 because their technology was different as cheese and chalk. 626 00:29:25,851 --> 00:29:26,852 Al: Oh, when I read that letter, 627 00:29:26,895 --> 00:29:28,723 I said, this patent is 628 00:29:28,767 --> 00:29:30,333 because the patent was very broad. 629 00:29:30,377 --> 00:29:31,813 - And the reason it could be broad 630 00:29:31,857 --> 00:29:33,641 was because it was the first one that was out there. 631 00:29:33,684 --> 00:29:35,469 It was definitive. 632 00:29:35,512 --> 00:29:37,819 Nolan: They were asserting that a spot 633 00:29:37,863 --> 00:29:41,083 colliding with another spot on a video screen 634 00:29:41,127 --> 00:29:42,693 was protected by their patents. 635 00:29:46,306 --> 00:29:48,482 Bob: Ralph was extremely good at keeping notes. 636 00:29:48,525 --> 00:29:50,049 He wrote everything down, 637 00:29:50,092 --> 00:29:52,094 which actually was great in the end, 638 00:29:52,138 --> 00:29:53,835 because there's no way 639 00:29:53,879 --> 00:29:55,794 that he would have been able to have the success that he did 640 00:29:55,837 --> 00:29:57,883 had he not done so. 641 00:29:57,926 --> 00:29:59,188 Jim: He could come up with an idea 642 00:29:59,232 --> 00:30:00,842 and write it down in the form of disclosures 643 00:30:00,886 --> 00:30:03,627 that the lawyers can translate directly into the forms. 644 00:30:03,671 --> 00:30:05,281 He got very good at that. 645 00:30:05,325 --> 00:30:08,850 - That helped enormously for patent enforcement. 646 00:30:08,894 --> 00:30:10,286 - Our attorney's saying, 647 00:30:10,330 --> 00:30:12,071 we could fight them, we could win. 648 00:30:12,114 --> 00:30:14,203 And Nolan said, fine, how much would that cost. 649 00:30:14,247 --> 00:30:17,859 Oh, at least a million dollars. 650 00:30:17,903 --> 00:30:21,341 Nolan: I didn't want to spend a lot of time litigating it. 651 00:30:21,384 --> 00:30:24,953 And so, I agreed to a paid up license, 652 00:30:24,997 --> 00:30:26,694 - Ironically, this settlement 653 00:30:26,737 --> 00:30:29,523 was one of the keys to Atari's success. 654 00:30:31,046 --> 00:30:34,702 Nolan: Here's the trick, I decided that we would settle, 655 00:30:34,745 --> 00:30:37,748 but only for a de minimis amount of money. 656 00:30:37,792 --> 00:30:39,489 And in our settlement, 657 00:30:39,533 --> 00:30:41,840 I required them to go after our competitors. 658 00:30:43,667 --> 00:30:47,889 Mark: So Magnavox sued all of the players of the day. 659 00:30:47,933 --> 00:30:50,065 Nolan: It was going to weaken our competitors 660 00:30:50,109 --> 00:30:51,937 and it was strengthening me. 661 00:30:51,980 --> 00:30:53,982 No harm, no foul. 662 00:30:54,026 --> 00:30:55,854 And so, I wasn't that concerned 663 00:30:55,897 --> 00:30:58,682 about the Sanders Magnavox lawsuit, 664 00:30:58,726 --> 00:31:01,163 because I knew I had other things up my sleeve. 665 00:31:09,955 --> 00:31:11,913 Henry: In the beginning of the home console, 666 00:31:11,957 --> 00:31:13,959 the machine played one game. 667 00:31:14,002 --> 00:31:15,395 Ralph Baer: Missed it, one up. 668 00:31:15,438 --> 00:31:17,092 Henry: The next step would be, 669 00:31:17,136 --> 00:31:19,486 what about a machine that can play multiple games? 670 00:31:29,409 --> 00:31:32,673 Al: We had a research group up in Grass Valley. 671 00:31:32,716 --> 00:31:34,457 And we had given them the task 672 00:31:34,501 --> 00:31:37,112 of designing this system. 673 00:31:37,156 --> 00:31:38,331 Nolan: Everything that was up there 674 00:31:38,374 --> 00:31:39,810 was a little bit hush hush. 675 00:31:41,421 --> 00:31:43,075 - They were like our secret group, we called them. 676 00:31:45,991 --> 00:31:48,080 Nolan: They worked together like a fine Swiss watch. 677 00:31:48,123 --> 00:31:50,647 I mean, it was a dream team. 678 00:31:50,691 --> 00:31:52,693 Joe: I was hired because I could write a game 679 00:31:52,736 --> 00:31:54,477 and design chips 680 00:31:54,521 --> 00:31:56,523 and without knowing what my mission was, 681 00:31:56,566 --> 00:31:58,481 my mission was to help prove 682 00:31:58,525 --> 00:32:02,094 that a programmable design would work. 683 00:32:02,137 --> 00:32:04,835 Al: The Grass Valley group had developed this prototype, 684 00:32:04,879 --> 00:32:07,490 for this home cartridge-based video game 685 00:32:07,534 --> 00:32:11,712 that was called the Atari VCS, or the 2600. 686 00:32:11,755 --> 00:32:14,758 Nolan: It was a great prototype. 687 00:32:14,802 --> 00:32:18,197 The problem was, we just didn't have enough capital 688 00:32:18,240 --> 00:32:21,417 to bring it into the market the correct way. 689 00:32:21,461 --> 00:32:23,419 - And so, they looked for a buyer 690 00:32:23,463 --> 00:32:25,334 in the entertainment space. 691 00:32:25,378 --> 00:32:26,335 Atari Archival: It is my privilege 692 00:32:26,379 --> 00:32:28,990 to invite you inside Atari. 693 00:32:29,034 --> 00:32:30,818 During the next few minutes, I will show you 694 00:32:30,861 --> 00:32:33,081 why this is such an exciting company, 695 00:32:33,125 --> 00:32:36,476 and tell you about some of our plans for the future. 696 00:32:36,519 --> 00:32:38,304 Elaine: Bankers and everybody started coming through 697 00:32:38,347 --> 00:32:40,262 and so the company tried to clean us up 698 00:32:40,306 --> 00:32:42,395 and make it a little bit more corporate, 699 00:32:42,438 --> 00:32:44,049 giving us a little bit better dress code 700 00:32:44,092 --> 00:32:47,487 and no bare midriffs. 701 00:32:47,530 --> 00:32:50,969 Nolan: We talked to Intel, National Semiconductor, 702 00:32:51,012 --> 00:32:53,406 the Silicon Valley neighbors, really. 703 00:32:53,449 --> 00:32:54,929 Nobody saw it. 704 00:32:54,973 --> 00:32:57,453 And then we got introduced to Warner. 705 00:33:00,413 --> 00:33:01,718 Manny: I got a call one day, 706 00:33:01,762 --> 00:33:04,286 would you be interested in a fast growing 707 00:33:04,330 --> 00:33:06,985 technology based entertainment company? 708 00:33:07,028 --> 00:33:09,378 And those words sounded good, so I said, yes. 709 00:33:09,422 --> 00:33:12,338 And that was my introduction to Atari. 710 00:33:13,861 --> 00:33:16,995 They showed me early prototypes of the 2600, 711 00:33:17,038 --> 00:33:19,867 which was a programmable video game. 712 00:33:19,910 --> 00:33:22,174 It was an "Aha" moment for me. 713 00:33:22,217 --> 00:33:25,438 I said, I have seen the future and it's called the 2600. 714 00:33:26,917 --> 00:33:29,137 I said, this is a big deal. 715 00:33:29,181 --> 00:33:31,400 Al: We had a flash meeting at Nolan's house 716 00:33:31,444 --> 00:33:33,054 in the hot tub and he said, 717 00:33:33,098 --> 00:33:35,230 Warner's offered 28 million dollars 718 00:33:35,274 --> 00:33:37,015 to buy the company. 719 00:33:37,058 --> 00:33:39,843 Holy Moly, this was just mind-blowing. 720 00:33:39,887 --> 00:33:41,323 - I thought, all of a sudden, 721 00:33:41,367 --> 00:33:43,499 I've got a bigger sandbox I can play in. 722 00:33:45,545 --> 00:33:47,416 Al: It was wonderful in the beginning. 723 00:33:48,939 --> 00:33:50,376 But it was a very strange marriage, 724 00:33:50,419 --> 00:33:52,508 because this is a very conservative 725 00:33:52,552 --> 00:33:54,815 East Coast classic public company, 726 00:33:54,858 --> 00:33:56,425 and we were not. 727 00:33:56,469 --> 00:33:59,037 Atari Archival: The snake eats the gun. 728 00:34:02,692 --> 00:34:04,868 And the snake gets one segment longer. 729 00:34:07,045 --> 00:34:08,611 It's a bug shooter! 730 00:34:08,655 --> 00:34:11,788 Manny: I remember writing a memo that said, 731 00:34:11,832 --> 00:34:15,183 the problem here is these guys are all a little out of control 732 00:34:15,227 --> 00:34:16,663 and if we give them too much money, 733 00:34:16,706 --> 00:34:18,099 I don't know how I'm going to control them. 734 00:34:18,143 --> 00:34:19,187 Daniel: Why? 735 00:34:19,231 --> 00:34:20,232 - Why? 736 00:34:31,721 --> 00:34:35,029 Nolan: I don't believe there was understanding 737 00:34:35,073 --> 00:34:39,729 on the part of Warner management of how fast tech moves 738 00:34:39,773 --> 00:34:42,776 and that a breakthrough piece of technology today 739 00:34:42,819 --> 00:34:45,126 is trash in three years. 740 00:34:45,170 --> 00:34:48,782 And I felt that we needed to start work immediately 741 00:34:48,825 --> 00:34:51,915 on the replacement for the VCS. 742 00:34:51,959 --> 00:34:54,744 Manny: I think it was 1978, 743 00:34:54,788 --> 00:34:57,182 we used to have budget meetings in New York in December. 744 00:34:57,225 --> 00:34:59,053 And you'd have all the Warner people in the room, 745 00:34:59,097 --> 00:35:00,315 and all the company people in the room, 746 00:35:00,359 --> 00:35:02,143 and this is for every division. 747 00:35:02,187 --> 00:35:04,363 And at some point, Nolan said... 748 00:35:04,406 --> 00:35:05,842 - We've got to start immediately 749 00:35:05,886 --> 00:35:09,368 on the next generation of the VCS. 750 00:35:09,411 --> 00:35:11,587 Manny: Get rid of all the inventory, it's over. 751 00:35:13,285 --> 00:35:15,809 - And they said, we just bought this! 752 00:35:15,852 --> 00:35:17,463 Why would we do that? 753 00:35:17,506 --> 00:35:20,683 Well, it wasn't new technology. 754 00:35:20,727 --> 00:35:24,992 I mean, the VCS only had 128 bytes of RAM, 755 00:35:25,035 --> 00:35:27,168 that's nothing. 756 00:35:27,212 --> 00:35:31,129 I wanted to sell as many VCS' as quickly as possible 757 00:35:31,172 --> 00:35:32,956 and then move on to new technology. 758 00:35:34,915 --> 00:35:37,396 - I mean, the Atari people were looking at me 759 00:35:37,439 --> 00:35:39,354 like I'm supposed to know what this is all about, 760 00:35:39,398 --> 00:35:41,878 and everybody had the same reaction, 761 00:35:41,922 --> 00:35:43,315 what the 's Nolan talking about? 762 00:35:43,358 --> 00:35:45,273 What is he talking about! 763 00:35:45,317 --> 00:35:47,188 I got called into Steve Ross' office, 764 00:35:47,232 --> 00:35:49,234 who's the CEO of the company, the next morning 765 00:35:49,277 --> 00:35:51,497 and Steve was kind of panicky. 766 00:35:51,540 --> 00:35:53,890 He said, the guy you bought the company from, 767 00:35:53,934 --> 00:35:57,024 has just told him, it's all over but the shouting. 768 00:35:57,067 --> 00:35:59,548 But I said, Steve, you don't know what you're talking about. 769 00:35:59,592 --> 00:36:03,378 In my opinion, on December 26th, there will not be a 2600 770 00:36:03,422 --> 00:36:06,207 on any shelf in any store in America. 771 00:36:06,251 --> 00:36:07,513 And if that is true, 772 00:36:07,556 --> 00:36:09,471 this business is about to take off. 773 00:36:09,515 --> 00:36:11,647 And by the way, if it's not true, we're . 774 00:36:14,476 --> 00:36:17,349 And of course, it was a feeding frenzy. 775 00:36:17,392 --> 00:36:19,438 It was the hottest product in America. 776 00:36:19,481 --> 00:36:21,527 Woman on PA: Attention, shoppers! 777 00:36:21,570 --> 00:36:23,485 The new Atari cartridge game is in! 778 00:36:23,529 --> 00:36:26,401 - You can get nine cartridges, 187 games. 779 00:36:26,445 --> 00:36:27,794 - Ooh, I'd like an Atari. 780 00:36:27,837 --> 00:36:29,970 - Sorry, only our demonstrator's left. 781 00:36:30,013 --> 00:36:31,014 - Mine! 782 00:36:31,058 --> 00:36:32,190 - No, George. 783 00:36:32,233 --> 00:36:33,278 Mine! 784 00:36:35,280 --> 00:36:36,846 Keith: Atari took off like a rocket. 785 00:36:36,890 --> 00:36:39,153 It was the faster growing company 786 00:36:39,197 --> 00:36:41,590 in the history of the United States at that point. 787 00:36:41,634 --> 00:36:45,072 Manny: In that six-month period after we bought Atari, 788 00:36:45,115 --> 00:36:47,553 the consumer division started to take off. 789 00:36:47,596 --> 00:36:49,511 - Three years ago, the video ga industry 790 00:36:49,555 --> 00:36:51,600 was practically unknown. 791 00:36:51,644 --> 00:36:53,776 Now it's producing one of the hottest consumer items 792 00:36:53,820 --> 00:36:56,257 of the Christmas season. 793 00:36:56,301 --> 00:36:59,042 Manny: The 2600 was one of the great businesses. 794 00:36:59,086 --> 00:37:00,653 It was an amazing business. 795 00:37:02,176 --> 00:37:06,528 Nolan: Manny was able to nurse two years more 796 00:37:06,572 --> 00:37:08,965 than I would've ever guessed. 797 00:37:09,009 --> 00:37:11,185 But that doesn't say that I wasn't right. 798 00:37:11,229 --> 00:37:12,099 - Of course I was right. 799 00:37:13,448 --> 00:37:15,276 - Manny was right, he called it right. 800 00:37:16,669 --> 00:37:19,628 - I wasn't wrong about it, maybe by two years. 801 00:37:21,282 --> 00:37:24,677 - There were definitely clashes between Nolan and Manny. 802 00:37:24,720 --> 00:37:27,767 Manny: It was a freewheeling wild place, 803 00:37:27,810 --> 00:37:29,682 and the company was growing, 804 00:37:29,725 --> 00:37:32,337 but I don't think you can run a company 805 00:37:32,380 --> 00:37:34,382 making money hand over fist in the wild west. 806 00:37:35,818 --> 00:37:37,864 I think honestly, it was just hard 807 00:37:37,907 --> 00:37:39,822 for Nolan to let go. 808 00:37:39,866 --> 00:37:42,216 - Piece by piece by piece, 809 00:37:42,260 --> 00:37:46,307 there was a disillusionment setting in, 810 00:37:46,351 --> 00:37:50,442 this wasn't my company anymore, and I wasn't the chief architect 811 00:37:50,485 --> 00:37:53,271 and PT Barnum and Disney of this. 812 00:37:54,750 --> 00:37:59,364 - I have vivid memories of screaming board meetings. 813 00:37:59,407 --> 00:38:04,978 Nolan had vehement disagreement with the direction of things. 814 00:38:05,021 --> 00:38:06,849 Manny: Well, it's not that he was a pain in the ass, 815 00:38:06,893 --> 00:38:09,112 which he was, at times. 816 00:38:09,156 --> 00:38:11,898 But Nolan has 100 ideas a minute 817 00:38:11,941 --> 00:38:14,335 and he believes they're all wonderful, 818 00:38:14,379 --> 00:38:15,728 and they're not. 819 00:38:15,771 --> 00:38:18,470 There are sometimes soso really good ones, 820 00:38:18,513 --> 00:38:21,124 but he loves them all because they're all his children. 821 00:38:21,168 --> 00:38:23,475 He was not meant to manage an enterprise 822 00:38:23,518 --> 00:38:27,000 as big as this one became, period, end of comment. 823 00:38:27,043 --> 00:38:28,741 - Ah, screw 'em. 824 00:38:28,784 --> 00:38:31,134 Manny: My mission was to find adult supervision. 825 00:38:33,833 --> 00:38:38,359 Nolan: Warner had a relationship with a guy named Ray Kassar. 826 00:38:38,403 --> 00:38:40,970 They said, this guy might be the perfect guy 827 00:38:41,014 --> 00:38:42,711 for head of consumer division. 828 00:38:42,755 --> 00:38:43,886 Manny: And we hired him. 829 00:38:43,930 --> 00:38:46,585 'Cause Ray had the kind of background, 830 00:38:46,628 --> 00:38:49,675 in terms of just general business that made sense to me. 831 00:38:49,718 --> 00:38:51,459 - Those of us in the lab 832 00:38:51,503 --> 00:38:54,332 could see that it was not going in good directions. 833 00:38:55,681 --> 00:38:59,467 Nolan was moved out of day-to-day operations, 834 00:38:59,511 --> 00:39:02,340 promoted, quote unquote, to "Chairman of the Board." 835 00:39:03,689 --> 00:39:05,038 Owen: I don't know how Ray Kassar was picked 836 00:39:05,081 --> 00:39:06,518 to be put in charge of it. 837 00:39:06,561 --> 00:39:09,738 He didn't understand the video game industry at all. 838 00:39:09,782 --> 00:39:14,003 Joe: Ray came from being the CEO of a fabric company. 839 00:39:14,047 --> 00:39:16,876 - Ray just didn't seem to get it at all. 840 00:39:16,919 --> 00:39:19,357 Manny: Let me explain Atari engineers to you; 841 00:39:19,400 --> 00:39:21,533 one day I was in the engineering building 842 00:39:21,576 --> 00:39:24,579 in the men's room, standing at a urinal, 843 00:39:24,623 --> 00:39:28,278 and I saw a pair of bare feet next to me 844 00:39:28,322 --> 00:39:30,585 and it was a guy standing there in a bathing suit. 845 00:39:30,629 --> 00:39:32,239 I walked out, I said, "Who was that?" 846 00:39:32,282 --> 00:39:35,024 Oh, that's so and so, he doesn't like clothes, okay, 847 00:39:35,068 --> 00:39:36,504 but that's how you manage engineers. 848 00:39:36,548 --> 00:39:37,853 Nolan got that. 849 00:39:37,897 --> 00:39:39,072 I mean, even I got that. 850 00:39:40,421 --> 00:39:43,337 But that never made Ray comfortable. 851 00:39:43,381 --> 00:39:45,992 I've reflected a lot on the mistakes we made at Atari, 852 00:39:46,035 --> 00:39:48,081 'cause we made some big ones. 853 00:39:48,124 --> 00:39:50,866 But the biggest one I think Ray made was, 854 00:39:50,910 --> 00:39:52,607 there was a complete disconnect. 855 00:39:52,651 --> 00:39:55,349 They didn't like him, he wasn't one of them. 856 00:39:55,393 --> 00:39:58,352 - Uuuuuh, I believe the saying is, Ray Kassar was an ass. 857 00:39:59,875 --> 00:40:02,791 Nolan: Ray wanted to have an executive dining room, 858 00:40:02,835 --> 00:40:05,620 reserved parking spots for the executives, 859 00:40:05,664 --> 00:40:08,275 which was just against the DNA of the company. 860 00:40:09,798 --> 00:40:11,321 - Good afternoon, Atari sales. 861 00:40:11,365 --> 00:40:14,107 Nolan: I mean, it all just felt bad to me. 862 00:40:14,150 --> 00:40:15,978 - My group in marketing services 863 00:40:16,022 --> 00:40:18,633 is responsible to achieve maximum visibility 864 00:40:18,677 --> 00:40:19,982 for video games. 865 00:40:20,026 --> 00:40:21,897 - We must take into consideration 866 00:40:21,941 --> 00:40:25,031 the ease of comprehending the objective of the game. 867 00:40:25,074 --> 00:40:26,467 Loni: It was unpleasant. 868 00:40:26,511 --> 00:40:29,339 They were trying to make Atari more like New York, 869 00:40:29,383 --> 00:40:31,385 like a corporate Wall Street company. 870 00:40:31,429 --> 00:40:33,474 - What we've just shown you are some of the programs 871 00:40:33,518 --> 00:40:36,477 that prepare us at Atari for our future growth. 872 00:40:36,521 --> 00:40:39,088 To maintain that growth, we will continue to expand 873 00:40:39,132 --> 00:40:41,177 our advertising programs. 874 00:40:41,221 --> 00:40:44,659 Nolan: There was increasingly an us versus them mentality. 875 00:40:46,269 --> 00:40:50,404 Ray thought that I was an out-of-control lunatic 876 00:40:50,448 --> 00:40:52,275 and I thought he was a pompous . 877 00:40:53,929 --> 00:40:57,019 He was single-handedly dismantling 878 00:40:57,063 --> 00:40:58,281 the corporate culture. 879 00:40:59,979 --> 00:41:05,419 The company as it had become, was not fun anymore. 880 00:41:05,463 --> 00:41:10,380 - Nolan said, we want to be out, and we did, 881 00:41:10,424 --> 00:41:12,513 because at that point, we were beyond the pale, 882 00:41:12,557 --> 00:41:14,472 and we were glad to. 883 00:41:14,515 --> 00:41:15,864 - I said, I quit. 884 00:41:15,908 --> 00:41:17,083 And they said, no, you're fired. 885 00:41:20,521 --> 00:41:23,176 Loni: You kind of felt like dad got kicked out of the house. 886 00:41:23,219 --> 00:41:25,918 That's kind of how it felt, and you don't really know why, 887 00:41:25,961 --> 00:41:28,050 because no one really knew why. 888 00:41:28,094 --> 00:41:29,399 Owen: It was sad to see him go, 889 00:41:29,443 --> 00:41:30,749 'cause as far as we're concerned, 890 00:41:30,792 --> 00:41:33,186 he was the father of it as well. 891 00:41:33,229 --> 00:41:36,798 Elaine: It was like part of our family was ripped away. 892 00:41:36,842 --> 00:41:39,105 - But pretty soon, the rug was going to be pulled out 893 00:41:39,148 --> 00:41:40,367 from under all of them. 894 00:41:50,029 --> 00:41:51,291 News Archival: This symphony of electronic noises 895 00:41:51,334 --> 00:41:53,554 is the music of money. 896 00:41:53,598 --> 00:41:55,121 Nearly 3 billion dollars 897 00:41:55,164 --> 00:41:58,211 were stuffed into video games last year. 898 00:41:58,254 --> 00:41:59,255 News Archival: This year, as if to prove 899 00:41:59,299 --> 00:42:01,170 they are not a passing fad, 900 00:42:01,214 --> 00:42:04,739 five and a half million video game consoles will be sold. 901 00:42:04,783 --> 00:42:07,742 - The early '80s was the golden age 902 00:42:07,786 --> 00:42:09,527 of the video game business. 903 00:42:09,570 --> 00:42:11,659 - The home video game market was exploding, 904 00:42:11,703 --> 00:42:13,269 but it was really the arcade game market 905 00:42:13,313 --> 00:42:14,227 that was driving it. 906 00:42:15,794 --> 00:42:19,014 That's where the big hit games came from 907 00:42:19,058 --> 00:42:22,061 and Atari had a slew of them and other companies as well. 908 00:42:22,104 --> 00:42:23,541 Howard Phillips: All these really great games 909 00:42:23,584 --> 00:42:25,586 that were so different from one another. 910 00:42:25,630 --> 00:42:27,632 Asteroids. 911 00:42:27,675 --> 00:42:28,502 Elaine: Centipede . 912 00:42:29,982 --> 00:42:30,852 Owen: Tempest . 913 00:42:31,940 --> 00:42:33,420 Galaga. 914 00:42:33,463 --> 00:42:35,291 Ed: Missile Command . 915 00:42:35,335 --> 00:42:37,293 Battlezone has to be in that group. 916 00:42:38,599 --> 00:42:40,079 Owen: Defender . 917 00:42:40,122 --> 00:42:41,384 Joust. 918 00:42:41,428 --> 00:42:42,647 Ed: Dig Dug . 919 00:42:42,690 --> 00:42:43,909 And obviously Donkey Kong . 920 00:42:47,434 --> 00:42:48,391 Keith: One of the earliest games 921 00:42:48,435 --> 00:42:50,219 that cemented video games 922 00:42:50,263 --> 00:42:52,613 as a lasting medium was Space Invaders . 923 00:42:54,310 --> 00:42:57,096 - Space invaders was a successful arcade game 924 00:42:57,139 --> 00:42:58,140 that Atari didn't write. 925 00:43:00,055 --> 00:43:02,623 Manny: Space Invaders was a phenomenon in the arcades. 926 00:43:02,667 --> 00:43:05,321 And, I moseyed over one day to the engineering building, 927 00:43:05,365 --> 00:43:07,672 and all the engineers are playing a coin op version 928 00:43:07,715 --> 00:43:08,586 of Space Invaders. 929 00:43:10,109 --> 00:43:11,632 And I immediately walked back across the street 930 00:43:11,676 --> 00:43:13,242 to Ray Kassar's office and I said, 931 00:43:13,286 --> 00:43:15,375 Ray, here's what I want, take that Space Invaders, 932 00:43:15,418 --> 00:43:17,377 and build a consumer version of that game 933 00:43:17,420 --> 00:43:20,641 and license the name from them, pay them. 934 00:43:20,685 --> 00:43:23,209 And if you can't license the name, steal the game play. 935 00:43:23,252 --> 00:43:25,341 I don't care, but I want that game. 936 00:43:28,040 --> 00:43:30,085 When we introduced the cartridge, 937 00:43:30,129 --> 00:43:33,698 that blew the 2600 into the next universe. 938 00:43:35,482 --> 00:43:37,615 Reporter: The hypnotic appeal of electronically destroying 939 00:43:37,658 --> 00:43:39,442 enemy invaders, led to one of the biggest 940 00:43:39,486 --> 00:43:41,923 and fastest toy industry booms in history. 941 00:43:43,316 --> 00:43:45,579 Joe: Space Invaders was successful 942 00:43:45,623 --> 00:43:49,104 because the VCS was capable of displaying that game 943 00:43:49,148 --> 00:43:50,845 as it was presented in the arcade world. 944 00:43:55,633 --> 00:43:57,635 Henry: Arcade technology was more robust 945 00:43:57,678 --> 00:43:59,288 than what you could put in your living room. 946 00:44:00,986 --> 00:44:03,553 Pac Man was a big hit in the arcade, 947 00:44:03,597 --> 00:44:05,468 but you played it on the 2600. 948 00:44:05,512 --> 00:44:08,341 And it just didn't seem like quite the same game. 949 00:44:08,384 --> 00:44:11,561 It just didn't have what the game gave you 950 00:44:11,605 --> 00:44:12,780 in an arcade. 951 00:44:16,175 --> 00:44:18,656 Owen: Pac Man has to have all these ghosts running around 952 00:44:18,699 --> 00:44:20,353 and your player and you can go anywhere 953 00:44:20,396 --> 00:44:22,398 and these little tiny dots that the graphics system 954 00:44:22,442 --> 00:44:23,965 wasn't capable of drawing. 955 00:44:25,488 --> 00:44:27,708 Joe: And it got a reputation for what people call 956 00:44:27,752 --> 00:44:28,666 flicker man. 957 00:44:30,450 --> 00:44:34,367 - The Atari 2600 had a huge amount of compromises in it. 958 00:44:34,410 --> 00:44:37,718 It was a very primitive system for the time. 959 00:44:37,762 --> 00:44:39,851 David: The Atari 2600 was still alive 960 00:44:39,894 --> 00:44:41,635 ten years after its launch 961 00:44:41,679 --> 00:44:43,550 so that technology was pretty old, 962 00:44:43,593 --> 00:44:46,335 and the rest of the world was catching up. 963 00:44:46,379 --> 00:44:49,295 Coming up with better and faster hardware. 964 00:44:49,338 --> 00:44:52,646 Atari was still riding the old dinosaur, 965 00:44:52,690 --> 00:44:55,214 when they could have been innovating new hardware. 966 00:44:57,477 --> 00:45:00,741 Virtually every game we made on the 2600, 967 00:45:00,785 --> 00:45:03,309 we had to come up with some programming technique 968 00:45:03,352 --> 00:45:06,704 that made it do something it was never intended to do. 969 00:45:06,747 --> 00:45:09,141 - We expected this thing to sell well for 2 or 3 years, 970 00:45:09,184 --> 00:45:11,447 it sold well for a dozen 971 00:45:11,491 --> 00:45:13,406 because the programmers turned out to be 972 00:45:13,449 --> 00:45:16,148 a lot smarter than we expected them to be. 973 00:45:22,937 --> 00:45:25,157 - I'm David Crane, C-R-A-N-E. 974 00:45:25,200 --> 00:45:27,507 - Larry Kaplan, K-A-P-L-A-N. 975 00:45:27,550 --> 00:45:28,769 - Al Miller. 976 00:45:28,813 --> 00:45:29,857 Reporter: M-I-L-L-E-R. 977 00:45:29,901 --> 00:45:31,772 - Yes. - Bob Whitehead. 978 00:45:31,816 --> 00:45:33,861 David: I was part of a group of four guys 979 00:45:33,905 --> 00:45:38,518 that said, wait a minute, of the top 20 selling games, 980 00:45:38,561 --> 00:45:40,520 two thirds of them were designed by the four of us. 981 00:45:42,261 --> 00:45:44,742 Well, we sat across from Ray Kassar and said, 982 00:45:44,785 --> 00:45:47,527 games that we made, made you $60,000,000 last year 983 00:45:47,570 --> 00:45:49,964 and we're getting, $24,000 salaries, 984 00:45:50,008 --> 00:45:51,792 doesn't seem to be equitable. 985 00:45:51,836 --> 00:45:53,272 We'd just like to have a piece, 986 00:45:53,315 --> 00:45:56,754 just something, a royalty, a bonus. 987 00:45:56,797 --> 00:45:59,626 And Ray looked at us across his desk and said, 988 00:45:59,669 --> 00:46:01,497 these are Atari products. 989 00:46:01,541 --> 00:46:03,064 The guy down on the assembly line 990 00:46:03,108 --> 00:46:04,500 is as important to the game as you are 991 00:46:04,544 --> 00:46:05,980 because if he didn't put them together, 992 00:46:06,024 --> 00:46:08,026 you wouldn't be able to sell any. 993 00:46:08,069 --> 00:46:10,202 - At Atari, we don't really like to talk about 994 00:46:10,245 --> 00:46:11,812 who designed what... Bryant Gumbel: Why not? 995 00:46:11,856 --> 00:46:13,683 - Well, because we like to 996 00:46:13,727 --> 00:46:15,424 make the game the superstar as opposed to the programmer. 997 00:46:15,468 --> 00:46:18,123 - Why shouldn't you get credit if you designed the game? 998 00:46:18,166 --> 00:46:21,691 - Well, because it is a corporate product, okay. 999 00:46:21,735 --> 00:46:23,258 These are games by Atari, 1000 00:46:23,302 --> 00:46:25,347 so it keeps more of a corporate image, 1001 00:46:25,391 --> 00:46:26,827 you're buying Atari products. 1002 00:46:26,871 --> 00:46:29,090 - At that point, we knew it was over at Atari. 1003 00:46:29,134 --> 00:46:30,831 Reporter: Were the four of you at Atari 1004 00:46:30,875 --> 00:46:33,094 when you decided to strike out? 1005 00:46:33,138 --> 00:46:36,054 - Yes, we worked together designing games, 1006 00:46:36,097 --> 00:46:39,361 and decided that we wanted to go off 1007 00:46:39,405 --> 00:46:41,407 and try something on our own. 1008 00:46:41,450 --> 00:46:43,148 David: We decided we're going to go out 1009 00:46:43,191 --> 00:46:46,325 and produce, manufacture, and publish our own games 1010 00:46:46,368 --> 00:46:49,067 and that is how we ended up founding Activision. 1011 00:46:50,633 --> 00:46:52,505 But Atari had a monopoly. 1012 00:46:52,548 --> 00:46:55,725 The only cartridges that would work on the Atari console 1013 00:46:55,769 --> 00:46:57,423 were Atari cartridges. 1014 00:46:57,466 --> 00:46:59,904 - Atari kept their first machine as a black box, 1015 00:46:59,947 --> 00:47:01,688 they didn't tell anybody how it worked, 1016 00:47:01,731 --> 00:47:04,560 and they didn't really welcome third party developers 1017 00:47:04,604 --> 00:47:06,780 to make something that would work on the platform. 1018 00:47:06,824 --> 00:47:08,434 David: So before we could make a game, 1019 00:47:08,477 --> 00:47:11,089 we had to reverse engineer the 2600 1020 00:47:11,132 --> 00:47:12,830 and that's something that I did, 1021 00:47:12,873 --> 00:47:14,527 in the spare bedroom of my apartment. 1022 00:47:20,315 --> 00:47:22,796 For years, I had been trying to put 1023 00:47:22,840 --> 00:47:26,147 a little running man into a video game. 1024 00:47:26,191 --> 00:47:30,195 But the Atari 2600 was not designed to do that. 1025 00:47:30,238 --> 00:47:33,459 And I said, I am going to do this if it kills me. 1026 00:47:34,939 --> 00:47:36,941 - I was lost in the jungle with Pitfall Harry. 1027 00:47:36,984 --> 00:47:40,422 Surrounded by giant scorpions and man-eating crocodiles. 1028 00:47:40,466 --> 00:47:41,989 Commercial: If you haven't met Pitfall Harry, 1029 00:47:42,033 --> 00:47:43,599 you're missing the year's most incredible 1030 00:47:43,643 --> 00:47:45,166 video game adventure, 1031 00:47:45,210 --> 00:47:47,690 Pitfall for the Atari 2600 and Intellevision. 1032 00:47:47,734 --> 00:47:49,605 Designed by David Crane, for Activision. 1033 00:47:50,955 --> 00:47:52,739 David: I believe that Activision sold about 1034 00:47:52,782 --> 00:47:55,437 four and a half million copies of Pitfall , 1035 00:47:55,481 --> 00:47:58,614 generating around $50,000,000 in wholesale revenues. 1036 00:47:59,833 --> 00:48:01,574 - Just like that... 1037 00:48:01,617 --> 00:48:03,576 David: Not everyone knows that was one of Jack Black's 1038 00:48:03,619 --> 00:48:05,883 first commercial appearances. 1039 00:48:05,926 --> 00:48:07,493 He was only 12 at the time, I think. 1040 00:48:09,016 --> 00:48:12,846 Nolan: I knew that the long arm of Atari 1041 00:48:12,890 --> 00:48:15,153 would soon come and try to put them out of business legally, 1042 00:48:18,330 --> 00:48:19,853 just because that's who they were. 1043 00:48:21,159 --> 00:48:23,465 David: We had good lawyers and we were told 1044 00:48:23,509 --> 00:48:24,858 they're going to sue you. 1045 00:48:24,902 --> 00:48:26,599 They don't have any grounds to sue you, 1046 00:48:26,642 --> 00:48:29,036 but yes, Atari sued us. 1047 00:48:29,080 --> 00:48:33,214 - They were sued for theft of trade secrets. 1048 00:48:33,258 --> 00:48:36,043 David: They just assumed that we had stolen 1049 00:48:36,087 --> 00:48:37,479 intellectual property. 1050 00:48:37,523 --> 00:48:39,699 And we hadn't done anything like that. 1051 00:48:39,742 --> 00:48:42,658 - I don't remember the issues, but yes, we didn't win. 1052 00:48:42,702 --> 00:48:45,313 David: Once the lawsuit was settled with Atari, 1053 00:48:45,357 --> 00:48:47,750 it was clear that making video games 1054 00:48:47,794 --> 00:48:50,579 for someone else's console was something that could be done. 1055 00:48:52,146 --> 00:48:54,888 Thus what we did was create the third party video game 1056 00:48:54,932 --> 00:48:57,891 software publishing business we know today. 1057 00:48:57,935 --> 00:49:00,676 - Anybody could make a cartridge for the 2600 1058 00:49:00,720 --> 00:49:04,898 and it was what killed the company. 1059 00:49:10,034 --> 00:49:12,819 deo Computer System... 1060 00:49:12,862 --> 00:49:15,082 Starmaster by Activision. 1061 00:49:22,437 --> 00:49:24,657 Joe: After that Activision lawsuit, 1062 00:49:24,700 --> 00:49:26,659 dozens of companies got into the business. 1063 00:49:28,095 --> 00:49:30,184 David: Overnight, there were 30 companies 1064 00:49:30,228 --> 00:49:33,361 making video games for the Atari 2600 system. 1065 00:49:33,405 --> 00:49:35,450 They were all just young startups 1066 00:49:35,494 --> 00:49:37,626 picking programmers off the street. 1067 00:49:37,670 --> 00:49:39,063 - People who could knock these things out 1068 00:49:39,106 --> 00:49:41,891 could make a huge profit selling junk. 1069 00:49:41,935 --> 00:49:43,458 David: Games like Lost Luggage... 1070 00:49:45,417 --> 00:49:46,374 even Quaker Oats 1071 00:49:47,723 --> 00:49:49,421 started making Atari 2600 games. 1072 00:49:51,423 --> 00:49:53,816 Manny: There was the fabled Custer's Revenge, 1073 00:49:53,860 --> 00:49:57,385 which was essentially raping Indian women. 1074 00:49:57,429 --> 00:49:59,213 That's basically what it was. 1075 00:49:59,257 --> 00:50:04,523 Now, we're making a game for kids with the 2600 1076 00:50:04,566 --> 00:50:08,048 and we have no control, forget the quality, 1077 00:50:08,092 --> 00:50:10,659 the content of this stuff was out of control. 1078 00:50:12,313 --> 00:50:14,011 - Now Atari had it stinkers, like ET. 1079 00:50:19,799 --> 00:50:23,455 avid: ET , the Atari 2600 game, is widely considered 1080 00:50:23,498 --> 00:50:24,717 to be the worst game ever made. 1081 00:50:26,327 --> 00:50:28,155 News Reporter: Steven Spielberg, who directed the movie, 1082 00:50:28,199 --> 00:50:31,637 insisted the game be programmed to follow the movie plot. 1083 00:50:33,465 --> 00:50:35,293 Manny: Steve Ross was the chairman and CEO 1084 00:50:35,336 --> 00:50:37,034 of Warner Communications, 1085 00:50:37,077 --> 00:50:39,601 and he was wooing Steven Spielberg. 1086 00:50:39,645 --> 00:50:42,213 He liked him, they liked each other. 1087 00:50:42,256 --> 00:50:44,519 I don't remember the numbers, but it was a guarantee 1088 00:50:44,563 --> 00:50:46,304 that was north of 20 million dollars 1089 00:50:46,347 --> 00:50:47,914 for this cartridge. 1090 00:50:47,957 --> 00:50:49,046 We were crazed. 1091 00:50:53,572 --> 00:50:55,095 David: But it had to be out by Christmas 1092 00:50:55,139 --> 00:50:58,403 and by the time that deal was signed, 1093 00:50:58,446 --> 00:51:01,145 there were six weeks left to make the game. 1094 00:51:01,188 --> 00:51:02,755 Atari ET Game Commercial: The video game 1095 00:51:02,798 --> 00:51:05,584 that lets you help ET get home. 1096 00:51:05,627 --> 00:51:07,368 Just in time for Christmas. 1097 00:51:09,109 --> 00:51:11,764 Happy Holidays from Atari. 1098 00:51:11,807 --> 00:51:15,289 - It was doomed to fail from the moment you told them 1099 00:51:15,333 --> 00:51:17,509 you got 15 minutes to make a cartridge. 1100 00:51:17,552 --> 00:51:19,032 So do the best you can. 1101 00:51:22,557 --> 00:51:24,037 David: The first screen, you moved the joystick, 1102 00:51:24,081 --> 00:51:25,299 he falls in a pit. 1103 00:51:25,343 --> 00:51:26,257 Game over. 1104 00:51:28,085 --> 00:51:29,956 I mean, I'm a game expert, and I couldn't get the guy 1105 00:51:29,999 --> 00:51:30,826 out of the pit either. 1106 00:51:32,480 --> 00:51:33,394 Manny: It was terrible. 1107 00:51:35,092 --> 00:51:39,183 - It sold like gangbusters for a week, 1108 00:51:39,226 --> 00:51:41,402 and then they started being returned. 1109 00:51:41,446 --> 00:51:43,274 - And there was this urban legend 1110 00:51:43,317 --> 00:51:47,713 that millions of ET cartridges had been buried in the desert. 1111 00:51:47,756 --> 00:51:50,324 It's a great story, except it wasn't true. 1112 00:51:51,891 --> 00:51:55,851 Jeff: At the time, the factory in El Paso was closing 1113 00:51:55,895 --> 00:51:59,072 and they just took everything wholesale out of there, 1114 00:51:59,116 --> 00:52:04,077 it wasn't just ET's, it was 400's, 800's, parts. 1115 00:52:04,121 --> 00:52:06,079 They couldn't let it on the market 1116 00:52:06,123 --> 00:52:07,385 and so they just put it in a landfill. 1117 00:52:11,084 --> 00:52:13,782 David: Regardless, ET was a very poor business decision 1118 00:52:13,826 --> 00:52:16,394 and cost millions and millions and millions of dollars. 1119 00:52:16,437 --> 00:52:18,526 - There may be trouble in Toyland, 1120 00:52:18,570 --> 00:52:20,137 at least in the video games division. 1121 00:52:20,180 --> 00:52:21,399 News Archival: Warner Communications, 1122 00:52:21,442 --> 00:52:24,097 the parent company that owns Atari, 1123 00:52:24,141 --> 00:52:26,404 has been having major problems since Christmas. 1124 00:52:27,796 --> 00:52:30,973 Manny: On December 7th, I remember I got a call, 1125 00:52:31,017 --> 00:52:35,152 the CFO said, we're gonna fall below the estimates by 30%. 1126 00:52:35,195 --> 00:52:37,458 And that was the beginning 1127 00:52:37,502 --> 00:52:40,418 of this sort of unraveling, if you will. 1128 00:52:42,159 --> 00:52:44,596 News Archival: The problem is an overabundance of competition. 1129 00:52:44,639 --> 00:52:46,511 Atari was once one of three companies 1130 00:52:46,554 --> 00:52:47,512 in this business. 1131 00:52:47,555 --> 00:52:48,817 - This year we have about 1132 00:52:48,861 --> 00:52:50,558 25 companies selling cartridges. 1133 00:52:52,169 --> 00:52:54,693 Manny: The ability for third parties 1134 00:52:54,736 --> 00:52:56,999 to make software was where Atari died. 1135 00:52:58,653 --> 00:53:01,526 If we could ever have solved the third party software, 1136 00:53:01,569 --> 00:53:03,005 we'd have been fine. 1137 00:53:03,049 --> 00:53:05,617 - A lot of people think that it was bad software, 1138 00:53:05,660 --> 00:53:08,010 this, and that, wasn't that at all. 1139 00:53:08,054 --> 00:53:10,665 They tried to put 15 million units 1140 00:53:10,709 --> 00:53:13,625 into the market that was saturated. 1141 00:53:13,668 --> 00:53:16,105 And that's what caused the collapse... 1142 00:53:16,149 --> 00:53:17,498 News Archival: Warner Communications 1143 00:53:17,542 --> 00:53:19,065 down one and a quarter points today, 1144 00:53:19,108 --> 00:53:20,893 sixteen and three quarter points yesterday. 1145 00:53:20,936 --> 00:53:22,634 Newsreader: Atari, Inc. is laying off 1146 00:53:22,677 --> 00:53:24,853 1,700 employees in California. 1147 00:53:27,291 --> 00:53:29,597 - Atari had to lay off massive numbers of people 1148 00:53:29,641 --> 00:53:32,034 and eventually had to sell the consumer division. 1149 00:53:32,078 --> 00:53:33,514 - It got sold, it got split in two. 1150 00:53:34,820 --> 00:53:35,690 - Atari was gone. 1151 00:53:41,609 --> 00:53:43,307 - I felt Atari was my baby. 1152 00:53:43,350 --> 00:53:44,569 It was my heritage. 1153 00:53:45,831 --> 00:53:48,355 It was really sad to see it die. 1154 00:53:48,399 --> 00:53:52,272 Jeff: It was the best place you could ever hope to work. 1155 00:53:52,316 --> 00:53:55,493 I found myself walking the halls 1156 00:53:55,536 --> 00:54:00,237 of this empty building, and pouf! 1157 00:54:00,280 --> 00:54:01,455 Everybody was gone. 1158 00:54:05,111 --> 00:54:07,461 Manny: I've read some things now, when Nolan says, 1159 00:54:07,505 --> 00:54:08,680 the worst thing we ever did 1160 00:54:08,723 --> 00:54:10,203 was sell it to Warner Communications. 1161 00:54:10,247 --> 00:54:11,770 That's just stupid. 1162 00:54:11,813 --> 00:54:13,859 - I can remember in 1983, Manny saying, 1163 00:54:13,902 --> 00:54:15,643 well, the video game business is over. 1164 00:54:17,079 --> 00:54:20,735 I think it's the only time in the history of business, 1165 00:54:20,779 --> 00:54:23,260 where the market leader abandoned their business. 1166 00:54:25,436 --> 00:54:28,917 And I've often kicked myself for not going out, raising money 1167 00:54:28,961 --> 00:54:31,572 and taking it back over. 1168 00:54:31,616 --> 00:54:34,401 Nancy: Nolan really predicted exactly what happened. 1169 00:54:34,445 --> 00:54:35,881 So it was sad. 1170 00:54:37,404 --> 00:54:38,840 Nolan: I just sort of shook my head 1171 00:54:38,884 --> 00:54:41,147 and clucked my tongue and said: 1172 00:54:41,190 --> 00:54:42,104 Too bad. 1173 00:54:43,671 --> 00:54:45,020 Keith: People thought that the end of Atari 1174 00:54:45,064 --> 00:54:47,240 meant the end of the video game industry. 1175 00:54:47,284 --> 00:54:49,329 But it turned out that they were wrong. 1176 00:54:58,164 --> 00:54:59,861 News Archival: Suddenly, surprising as it may seem,s, 1177 00:54:59,905 --> 00:55:01,950 the video game industry is in trouble. 1178 00:55:03,387 --> 00:55:05,737 Trip: In 1983, there was a big decline in the market, 1179 00:55:05,780 --> 00:55:08,566 triggered by the implosion of Atari. 1180 00:55:08,609 --> 00:55:10,132 News Archival: Warner Communications, 1181 00:55:10,176 --> 00:55:11,612 which lost half a billion dollars last year, 1182 00:55:11,656 --> 00:55:13,353 on its Atari division, has had enough. 1183 00:55:13,397 --> 00:55:14,920 It's selling Atari 1184 00:55:14,963 --> 00:55:16,704 and getting out of video games and computers. 1185 00:55:16,748 --> 00:55:20,360 - After Atari crashed, the video game industry was dead. 1186 00:55:20,404 --> 00:55:22,493 - As Warner's goes, so does the industry? 1187 00:55:22,536 --> 00:55:23,798 - I think that's true. 1188 00:55:23,842 --> 00:55:25,539 Howard: It was dead as a doornail. 1189 00:55:25,583 --> 00:55:28,368 News Archival: Are video game addicts losing their addiction? 1190 00:55:28,412 --> 00:55:30,979 Is the home video game concept just a fad? 1191 00:55:31,023 --> 00:55:32,894 Howard: The media concluded home video games 1192 00:55:32,938 --> 00:55:34,374 were a passing fashion. 1193 00:55:34,418 --> 00:55:35,854 Analyst: The video game industry 1194 00:55:35,897 --> 00:55:38,857 is now becoming very much like hula hoops. 1195 00:55:38,900 --> 00:55:41,990 Owen: People stopped buying and down it went. 1196 00:55:42,034 --> 00:55:44,993 - EA Sports first products are coming out in 1983, 1197 00:55:45,037 --> 00:55:46,691 and our sales people were saying, 1198 00:55:46,734 --> 00:55:47,648 who do we sell these to? 1199 00:55:54,307 --> 00:55:56,440 - At the same time that there was this collapse 1200 00:55:56,483 --> 00:55:57,354 in the United States, 1201 00:55:59,051 --> 00:56:02,402 the home video game market in Japan was red hot 1202 00:56:02,446 --> 00:56:04,230 with the introduction of Nintendo's 1203 00:56:04,273 --> 00:56:06,406 Family Computer System or Famicom. 1204 00:56:09,278 --> 00:56:12,281 Howard Phillips: The Famicom came out in 1983, 1205 00:56:12,325 --> 00:56:15,241 and in Japan, it was a huge success. 1206 00:56:15,284 --> 00:56:17,765 But in the US market, we weren't ready for it yet 1207 00:56:17,809 --> 00:56:19,898 because the retailers were too burned. 1208 00:56:21,160 --> 00:56:22,596 That left us kind of in a quandary. 1209 00:56:22,640 --> 00:56:24,250 What do we do? 1210 00:56:24,293 --> 00:56:26,339 And the answer was, we wait. 1211 00:56:27,688 --> 00:56:28,994 Howard Lincoln: So we made sure 1212 00:56:29,037 --> 00:56:30,691 that when we introduced our product, 1213 00:56:30,735 --> 00:56:33,128 we could convince retailers to take it. 1214 00:56:34,565 --> 00:56:37,176 Howard Phillips: Eventually, In 1985, 1215 00:56:37,219 --> 00:56:39,831 Nintendo came out with the Entertainment System. 1216 00:56:39,874 --> 00:56:41,659 NES Commercial: Will you be the one to witness 1217 00:56:41,702 --> 00:56:44,836 the birth of the incredible Nintendo Entertainment System? 1218 00:56:44,879 --> 00:56:47,578 The one to play with Rob, the extraordinary video robot. 1219 00:56:47,621 --> 00:56:48,579 Batteries not included. 1220 00:56:49,971 --> 00:56:51,843 Greg: They launched it as a robot. 1221 00:56:51,886 --> 00:56:53,453 Bill White: Rob the Robot. 1222 00:56:53,497 --> 00:56:55,629 Rob the Robot was an accessory that worked 1223 00:56:55,673 --> 00:56:57,544 with the Nintendo Entertainment System. 1224 00:56:57,588 --> 00:57:00,939 In reality, it was, you know, the Trojan horse. 1225 00:57:00,982 --> 00:57:04,203 Gail: We all now know the robot wasn't that fantastic. 1226 00:57:04,246 --> 00:57:05,596 Howard Phillips: But it allowed Nintendo 1227 00:57:05,639 --> 00:57:07,511 to go to the retailers and say, 1228 00:57:07,554 --> 00:57:09,338 come on and talk to us, 1229 00:57:09,382 --> 00:57:11,428 we got this new cool thing, it's not a video game system 1230 00:57:11,471 --> 00:57:14,126 but an entertainment system that uses technology 1231 00:57:14,169 --> 00:57:15,997 and all these things. 1232 00:57:16,041 --> 00:57:17,521 NES Commercial: The Nintendo Entertainment System 1233 00:57:17,564 --> 00:57:20,001 comes with Rob, zapper, control deck, 1234 00:57:20,045 --> 00:57:23,048 two controllers, gyromite and Duck Hunt. 1235 00:57:23,091 --> 00:57:24,223 Howard Lincoln: We knew all along 1236 00:57:24,266 --> 00:57:25,572 that once it was successful, 1237 00:57:25,616 --> 00:57:27,618 Rob the Robot would hit the dust. 1238 00:57:30,403 --> 00:57:32,753 Before we introduced the NES, 1239 00:57:32,797 --> 00:57:36,888 Nintendo was strictly a coin operated video game company. 1240 00:57:36,931 --> 00:57:39,412 And one of its great hits was Donkey Kong . 1241 00:57:44,983 --> 00:57:47,289 - Nintendo really focused on making games 1242 00:57:47,333 --> 00:57:51,076 that were deep and interesting and compelling 1243 00:57:51,119 --> 00:57:54,775 and because they had this wunderkind there. 1244 00:57:54,819 --> 00:57:56,734 Howard Lincoln: Donkey Kong was created 1245 00:57:56,777 --> 00:58:01,869 by a very young employee, Shigeru Miyamoto. 1246 00:58:01,913 --> 00:58:04,176 An artist by trade, it turned out 1247 00:58:04,219 --> 00:58:06,657 that he was a creative genius. 1248 00:58:10,791 --> 00:58:12,445 In the game, there's a little guy 1249 00:58:12,489 --> 00:58:15,840 with a mustache and a red hat who is dodging balls 1250 00:58:15,883 --> 00:58:17,450 that are being thrown by a gorilla. 1251 00:58:20,061 --> 00:58:22,934 We had to come up with a name for this character 1252 00:58:22,977 --> 00:58:27,765 and somebody remembered the name of our landlord, Mario Segale. 1253 00:58:29,897 --> 00:58:33,031 So we decided that we would call this character Mario. 1254 00:58:33,074 --> 00:58:35,903 And Mr. Miyamoto loved it and so he started 1255 00:58:35,947 --> 00:58:38,079 creating Mario games. 1256 00:58:38,123 --> 00:58:39,733 Mario Commercial: Mario! Mario! 1257 00:58:39,777 --> 00:58:41,779 Mario! Mario! Mario! 1258 00:58:41,822 --> 00:58:43,781 Howard Lincoln: There is no substitute for great games, 1259 00:58:43,824 --> 00:58:45,696 that's the key to this business. 1260 00:58:45,739 --> 00:58:49,134 And without question, the game that made Nintendo, 1261 00:58:49,177 --> 00:58:51,571 both in the United States and around the world, 1262 00:58:51,615 --> 00:58:53,268 was Super Mario Bros . 1263 00:59:01,668 --> 00:59:03,583 Gail Tilden: Many people think of Mr. Miyamoto 1264 00:59:03,627 --> 00:59:05,019 as kind of like 1265 00:59:05,063 --> 00:59:07,456 the Steven Spielberg of video games. 1266 00:59:11,243 --> 00:59:12,897 Howard Phillips: It's a little bit hallucinogenic. 1267 00:59:12,940 --> 00:59:14,638 I think if you think about Mario Brothers; 1268 00:59:17,989 --> 00:59:19,947 the fact that he put that on the screen, 1269 00:59:19,991 --> 00:59:23,298 it's testimony to his kind of creative comfort level, 1270 00:59:23,342 --> 00:59:25,344 that he was willing to express himself 1271 00:59:25,387 --> 00:59:28,347 with such random weird stuff. 1272 00:59:28,390 --> 00:59:30,654 And, he distilled it down into just a little scenario 1273 00:59:30,697 --> 00:59:33,221 within the game that just made it so cat nippy. 1274 00:59:41,229 --> 00:59:42,840 News Archival: This year, kids and their parents 1275 00:59:42,883 --> 00:59:45,625 will spend more than three billion dollars 1276 00:59:45,669 --> 00:59:48,628 on video games and game cartridges. 1277 00:59:48,672 --> 00:59:52,153 Almost 9 out of 10 of those dollars on Nintendo. 1278 00:59:53,981 --> 00:59:57,637 Gail: Pretty quickly we realized video games weren't dead, 1279 00:59:57,681 --> 00:59:59,857 and kids were still loving playing them. 1280 01:00:02,250 --> 01:00:03,077 Bill: Sales took off. 1281 01:00:04,949 --> 01:00:06,385 Howard Lincoln: People were clamoring for the product 1282 01:00:06,428 --> 01:00:08,822 and we couldn't keep it on retail shelves. 1283 01:00:08,866 --> 01:00:09,954 - Volleyball? 1284 01:00:09,997 --> 01:00:10,868 Salesman: Sold out. 1285 01:00:12,043 --> 01:00:13,348 Mike Tyson's sold out. 1286 01:00:14,698 --> 01:00:16,090 - Everything is sold out? 1287 01:00:16,134 --> 01:00:17,222 Salesman: Everything is sold out, yes. 1288 01:00:18,440 --> 01:00:22,140 - By 1986, we knew that we had 1289 01:00:22,183 --> 01:00:23,445 a mega hit on our hands. 1290 01:00:27,362 --> 01:00:29,408 Gail: But, about the time that we were 1291 01:00:29,451 --> 01:00:33,412 in full launch of the NES, there was another 1292 01:00:33,455 --> 01:00:36,545 Japanese company that was making video games. 1293 01:00:36,589 --> 01:00:39,374 TV Commercial: Sega! 1294 01:00:39,418 --> 01:00:41,681 News Archival: The game businesses' giant Nintendo 1295 01:00:41,725 --> 01:00:44,989 is no longer the only game in town. 1296 01:00:45,032 --> 01:00:47,731 Howard Lincoln: We certainly knew of Sega. 1297 01:00:47,774 --> 01:00:50,255 Sega introduced a home video game system 1298 01:00:50,298 --> 01:00:51,822 in competition with Nintendo. 1299 01:00:54,085 --> 01:00:56,827 - The Sega Master System was an 8 bit system 1300 01:00:56,870 --> 01:01:00,526 and it was not very successful against Nintendo in any market. 1301 01:01:00,569 --> 01:01:03,572 - The Sega Master system was rolling back the clock, 1302 01:01:03,616 --> 01:01:05,400 because here's these games in the arcade that look cool. 1303 01:01:08,926 --> 01:01:10,231 But then when you see them on the home system, 1304 01:01:10,275 --> 01:01:11,363 they just looked crappy. 1305 01:01:13,887 --> 01:01:16,760 So, nobody thought that Nintendo could ever be unseated 1306 01:01:16,803 --> 01:01:18,196 by somebody like Sega. 1307 01:01:22,853 --> 01:01:26,595 We were riding that rocket ship of growth, 1308 01:01:26,639 --> 01:01:27,945 nobodyhought it was going to end. 1309 01:01:36,823 --> 01:01:38,999 Tom: I was in Hawaii. 1310 01:01:39,043 --> 01:01:43,177 I had most recently been CEO of Universal Matchbox 1311 01:01:43,221 --> 01:01:45,832 and we had sold the company to Tyco. 1312 01:01:45,876 --> 01:01:49,183 So I was unemployed, on a beach in Hawaii with my family. 1313 01:01:52,752 --> 01:01:54,667 And all of a sudden, Hayao Nakayama, 1314 01:01:54,711 --> 01:02:00,629 the CEO of Sega of Japan, appears in his suit and tie 1315 01:02:00,673 --> 01:02:02,588 and starts talking to me about Sega. 1316 01:02:04,242 --> 01:02:06,113 I wanted to know how the hell he found me 1317 01:02:06,157 --> 01:02:08,333 and second of all, what are you doing here? 1318 01:02:09,813 --> 01:02:13,207 Well, he wanted me to come back to Japan with him 1319 01:02:13,251 --> 01:02:16,036 and look at what 16-bit technology could do 1320 01:02:16,080 --> 01:02:17,472 for the video game industry. 1321 01:02:20,258 --> 01:02:23,478 Mike: Every system up until then had been 8-bit technology. 1322 01:02:23,522 --> 01:02:25,045 - The last thing I thought I was going to do 1323 01:02:25,089 --> 01:02:26,873 was enter the video game market. 1324 01:02:26,917 --> 01:02:30,616 But when I saw 16-bit, I actually was blown away. 1325 01:02:31,965 --> 01:02:35,752 16-bit was so different, so dramatically better. 1326 01:02:35,795 --> 01:02:37,014 I joined the company. 1327 01:02:40,408 --> 01:02:43,324 Mike: Tom Kalinske was this superstar hotshot executive 1328 01:02:43,368 --> 01:02:45,805 from the toy industry, and we couldn't believe 1329 01:02:45,849 --> 01:02:47,502 that he would join a little company like ours. 1330 01:02:48,721 --> 01:02:50,462 Tom: I thought there was a chance 1331 01:02:50,505 --> 01:02:52,420 of at least grabbing some market share from Nintendo. 1332 01:02:53,944 --> 01:02:57,948 Shinobu: When Sega decided to launch 16-bit Sega Genesis , 1333 01:02:57,991 --> 01:03:00,864 Nintendo was very formidable 1334 01:03:00,907 --> 01:03:05,259 and Tom Kalinske often called this, David and Goliath. 1335 01:03:05,303 --> 01:03:06,391 Sega Commercial: What's the hottest 1336 01:03:06,434 --> 01:03:07,958 16-bit video game system? 1337 01:03:08,001 --> 01:03:11,483 With true arcade games, great graphics, real challenge, 1338 01:03:11,526 --> 01:03:14,268 stereo sound, and the hottest library too? 1339 01:03:14,312 --> 01:03:15,922 Genesis from Sega. 1340 01:03:15,966 --> 01:03:18,533 Genesis , the new generation in video games. 1341 01:03:24,931 --> 01:03:27,194 Howard Lincoln: By the end of 1986, 1342 01:03:27,238 --> 01:03:30,154 Nintendo had essentially 100 percent 1343 01:03:30,197 --> 01:03:32,939 of the home video game market in the United States. 1344 01:03:32,983 --> 01:03:34,898 Howard Phillips: But Nintendo didn't want to just 1345 01:03:34,941 --> 01:03:37,335 make a platform that like early Atari's 1346 01:03:37,378 --> 01:03:40,729 could just be crushed by bad product and shovel ware. 1347 01:03:40,773 --> 01:03:42,993 - So we had to figure out some way 1348 01:03:43,036 --> 01:03:46,605 to keep bad games, or games that we did not control, 1349 01:03:46,648 --> 01:03:47,519 off our system. 1350 01:03:49,826 --> 01:03:51,740 Trip: They wanted to control everything. 1351 01:03:51,784 --> 01:03:54,439 And they wanted to be able to approve games in advance 1352 01:03:54,482 --> 01:03:55,875 and approve the final version 1353 01:03:55,919 --> 01:03:57,877 after they would personally test it. 1354 01:03:57,921 --> 01:04:00,793 It was really a financially challenging model. 1355 01:04:00,837 --> 01:04:02,534 - Nintendo's response was to come down 1356 01:04:02,577 --> 01:04:04,144 with an iron fist. 1357 01:04:04,188 --> 01:04:06,973 They controlled the market from top to bottom. 1358 01:04:07,017 --> 01:04:08,366 News Archival: The FTC is still investigating 1359 01:04:08,409 --> 01:04:10,803 charges Nintendo has unfairly monopolized 1360 01:04:10,847 --> 01:04:12,544 the highly lucrative software end 1361 01:04:12,587 --> 01:04:13,850 of the video game market. 1362 01:04:15,155 --> 01:04:16,809 - They did care what the titles were and they-- 1363 01:04:16,853 --> 01:04:18,506 and they were very strict about it. 1364 01:04:18,550 --> 01:04:20,117 They were a bully. 1365 01:04:20,160 --> 01:04:22,423 - I don't perceive myself as a bully. 1366 01:04:22,467 --> 01:04:24,382 I don't think that Nintendo was ever a bully. 1367 01:04:25,731 --> 01:04:27,559 And it worked in the sense that 1368 01:04:27,602 --> 01:04:30,083 the home video game business didn't collapse, 1369 01:04:30,127 --> 01:04:32,259 in fact it arose. 1370 01:04:32,303 --> 01:04:34,479 - We haven't done anything wrong here. 1371 01:04:34,522 --> 01:04:36,916 What we've done in the last three and a half years 1372 01:04:36,960 --> 01:04:41,094 is to single-handedly recreate a dead industry. 1373 01:04:41,138 --> 01:04:44,402 We have resurrected the home video game business. 1374 01:04:44,445 --> 01:04:46,926 Tom: A lot of the third parties really resented 1375 01:04:46,970 --> 01:04:50,103 how Nintendo had ordered them around. 1376 01:04:50,147 --> 01:04:52,018 And it was clear we needed the support 1377 01:04:52,062 --> 01:04:55,500 of important third parties, and one of the most important 1378 01:04:55,543 --> 01:04:57,545 that I could see was Electronic Arts. 1379 01:04:59,983 --> 01:05:02,594 Trip: The part of the industry that I helped pioneer 1380 01:05:02,637 --> 01:05:06,598 was video game publishing as we know it today. 1381 01:05:06,641 --> 01:05:08,426 It was pretty much an amateur operation 1382 01:05:08,469 --> 01:05:10,515 until I launched Electronic Arts. 1383 01:05:11,820 --> 01:05:13,344 I began to take Sega seriously 1384 01:05:13,387 --> 01:05:15,476 when I heard rumors that they had a 16-bit machine. 1385 01:05:16,782 --> 01:05:18,218 We thought, wow, we could really 1386 01:05:18,262 --> 01:05:20,438 make some great games for this. 1387 01:05:20,481 --> 01:05:22,309 And I thought, you know, why don't we just 1388 01:05:22,353 --> 01:05:24,007 figure out for ourselves, 1389 01:05:24,050 --> 01:05:25,922 how to make games for this machine, 1390 01:05:25,965 --> 01:05:28,011 and then, we don't have to be bound 1391 01:05:28,054 --> 01:05:29,186 by an onerous license agreement. 1392 01:05:31,318 --> 01:05:35,061 Tom: I'd heard from my staff that EA had reverse-engineered 1393 01:05:35,105 --> 01:05:38,282 the Genesis system and they were planning 1394 01:05:38,325 --> 01:05:41,981 to release games on the Sega Genesis system 1395 01:05:42,025 --> 01:05:44,636 without paying royalty to us. 1396 01:05:44,679 --> 01:05:46,812 And I thought that was wrong. 1397 01:05:46,855 --> 01:05:51,338 So, I went to EA and had a rather unfriendly meeting 1398 01:05:51,382 --> 01:05:53,906 with Trip Hawkins. 1399 01:05:53,950 --> 01:05:55,603 Trip: Tom was actually very useful 1400 01:05:55,647 --> 01:06:00,173 because he's a good, reasonable, articulate American businessman. 1401 01:06:00,217 --> 01:06:02,567 - He may not remember this, but I asked him, 1402 01:06:02,610 --> 01:06:05,222 I said, Trip, did your mother ever teach you 1403 01:06:05,265 --> 01:06:07,876 the difference between right and wrong? 1404 01:06:07,920 --> 01:06:10,053 And he got quite upset over that. 1405 01:06:10,096 --> 01:06:13,621 - Sega said to him, you work with us, together 1406 01:06:13,665 --> 01:06:16,537 to beat Nintendo, and Trip liked that idea. 1407 01:06:16,581 --> 01:06:18,148 - And we worked out a license agreement 1408 01:06:18,191 --> 01:06:19,279 that turned out to be a win-win. 1409 01:06:25,590 --> 01:06:28,071 Tom: The EA breakthrough helped us convince 1410 01:06:28,114 --> 01:06:30,029 other third party developers 1411 01:06:30,073 --> 01:06:33,772 to take the battle with Nintendo and just tell them, 1412 01:06:33,815 --> 01:06:36,122 they were going to publish on Sega Genesis. 1413 01:06:36,166 --> 01:06:38,037 And Nintendo wasn't happy about it. 1414 01:06:38,081 --> 01:06:40,822 They were so stuck in their ways, 1415 01:06:40,866 --> 01:06:43,564 it made it somewhat easy for us to take them on. 1416 01:06:45,479 --> 01:06:47,742 But we needed a character 1417 01:06:47,786 --> 01:06:50,093 who could compete effectively with Mario. 1418 01:06:54,010 --> 01:06:56,925 Shinobu: As Nintendo often said, the name of the game 1419 01:06:56,969 --> 01:06:58,710 is the game. 1420 01:06:58,753 --> 01:07:01,626 One game can change the fate of the company. 1421 01:07:01,669 --> 01:07:05,760 If I have to mention only one reason 1422 01:07:05,804 --> 01:07:09,938 why Sega succeeded, it is Sonic the Hedgehog. 1423 01:07:16,075 --> 01:07:19,296 Tom: When I finally got a chance to see the actual game, 1424 01:07:19,339 --> 01:07:20,210 I was blown away. 1425 01:07:21,950 --> 01:07:24,518 It showed off the graphics of the Genesis system, 1426 01:07:24,562 --> 01:07:26,042 it showed off the speed. 1427 01:07:28,696 --> 01:07:30,742 I wasn't sure it could ever be 1428 01:07:30,785 --> 01:07:32,918 as successful as Mario was, 1429 01:07:32,961 --> 01:07:35,399 but by god, we were going to try to make it such. 1430 01:07:39,403 --> 01:07:43,276 I knew that instead of going directly against Nintendo, 1431 01:07:43,320 --> 01:07:44,843 we had to do something different. 1432 01:07:46,105 --> 01:07:48,629 So, my basic philosophy was, alright, 1433 01:07:48,673 --> 01:07:52,198 we're going to leave them the 9- to 12-year-old boy, 1434 01:07:52,242 --> 01:07:54,766 and we're going to go after an older age group. 1435 01:07:54,809 --> 01:07:57,029 File Footage Sot: 16-bit marketplace, we believe, 1436 01:07:57,073 --> 01:07:59,814 is a much more sophisticated marketplace 1437 01:07:59,858 --> 01:08:02,208 and we're directing this towards the teenager 1438 01:08:02,252 --> 01:08:04,428 and the young adult. 1439 01:08:04,471 --> 01:08:06,212 Mike: Nintendo was the game system 1440 01:08:06,256 --> 01:08:08,084 your parents wanted you to play. 1441 01:08:08,127 --> 01:08:10,521 This was the one that your kind of devious uncle 1442 01:08:10,564 --> 01:08:12,000 would let you play. 1443 01:08:12,044 --> 01:08:13,393 Tom: And then, in terms of our marketing, 1444 01:08:13,437 --> 01:08:14,742 we took Nintendo on. 1445 01:08:14,786 --> 01:08:16,266 We made fun of them. 1446 01:08:16,309 --> 01:08:18,572 Sega Commercial: Genesis does, Genesis does. 1447 01:08:18,616 --> 01:08:21,619 Genesis does, Genesis does. 1448 01:08:21,662 --> 01:08:23,142 What Nintendon't. 1449 01:08:23,186 --> 01:08:26,841 - Sega does what Nintendo don't, or something. 1450 01:08:26,885 --> 01:08:28,843 I thought it was kind of funny, quite frankly. 1451 01:08:28,887 --> 01:08:31,194 - We also moved to the famous scream. 1452 01:08:31,237 --> 01:08:32,891 Sega Commercials: Sega! Sega! Sega! 1453 01:08:32,934 --> 01:08:34,284 - Sega! 1454 01:08:34,327 --> 01:08:36,677 I started taking my kids to school in the morning 1455 01:08:36,721 --> 01:08:39,898 and when our car would pull up, the girls would yell, Sega! 1456 01:08:39,941 --> 01:08:41,204 Back at me. 1457 01:08:41,247 --> 01:08:42,161 And I thought, wow, I've even got the girls 1458 01:08:42,205 --> 01:08:43,641 yelling Sega, this is great. 1459 01:08:48,994 --> 01:08:51,779 Diane: We had a goal to beat Nintendo. 1460 01:08:51,823 --> 01:08:54,652 Every time something came up and it was a hurdle, 1461 01:08:54,695 --> 01:08:58,438 it was like, what would we need to do to beat Nintendo? 1462 01:09:00,136 --> 01:09:01,441 Gail: They came in with an attack, 1463 01:09:01,485 --> 01:09:03,878 that Mario was a dumpy old plumber 1464 01:09:03,922 --> 01:09:08,448 and they had something that was faster, 1465 01:09:08,492 --> 01:09:11,843 cooler and, you know, you can't just turn around and say, 1466 01:09:11,886 --> 01:09:13,410 oh, no, Mario's cooler. 1467 01:09:13,453 --> 01:09:14,976 - They were an easy target. 1468 01:09:15,020 --> 01:09:17,022 We knew they wouldn't respond, so you could be nimble 1469 01:09:17,065 --> 01:09:18,371 and sort of run around them. 1470 01:09:18,415 --> 01:09:21,200 Sega Commercial: 1471 01:09:21,244 --> 01:09:24,638 - They were in your face in terms of their commercials 1472 01:09:24,682 --> 01:09:26,379 and marketing. 1473 01:09:26,423 --> 01:09:27,728 Sega Commercials: Sonic 2 fits easily into any tacklebox. 1474 01:09:27,772 --> 01:09:29,121 Act now. 1475 01:09:29,165 --> 01:09:31,079 The Sega Genesis has Blast Processing, 1476 01:09:31,123 --> 01:09:32,994 Super Nintendo doesn't. 1477 01:09:33,038 --> 01:09:35,823 Tom: I used to get nasty letters from Howard Lincoln, 1478 01:09:35,867 --> 01:09:38,522 to cease and desist our advertising. 1479 01:09:38,565 --> 01:09:41,438 - I don't think we took anything like that seriously 1480 01:09:41,481 --> 01:09:43,179 until they started gaining market share... 1481 01:09:45,268 --> 01:09:46,921 Then, we did take it seriously. 1482 01:09:54,233 --> 01:09:55,452 Tom: The work environment at Sega 1483 01:09:55,495 --> 01:09:58,237 was really a lot of fun. 1484 01:09:58,281 --> 01:10:01,240 We were one of those companies that had the ping pong table 1485 01:10:01,284 --> 01:10:03,982 and we were shooting Nerf things at each other. 1486 01:10:05,679 --> 01:10:08,987 In that sense, we were a throwback to the Atari days. 1487 01:10:10,510 --> 01:10:14,122 - We were a wild bunch of different types of characters. 1488 01:10:16,951 --> 01:10:18,126 Bill: Nintendo, on the other hand, 1489 01:10:18,170 --> 01:10:19,650 was lean and mean. 1490 01:10:19,693 --> 01:10:21,260 We were conservative. 1491 01:10:21,304 --> 01:10:23,001 Trip: Nintendo was run like an army. 1492 01:10:23,044 --> 01:10:24,394 - Listen up! 1493 01:10:24,437 --> 01:10:25,612 You have to take your oral examination, 1494 01:10:25,656 --> 01:10:26,874 you have to take your oral test. 1495 01:10:26,918 --> 01:10:28,615 - And Sega was run more like a dude ranch. 1496 01:10:28,659 --> 01:10:30,356 - I don't think there's any clearer way 1497 01:10:30,400 --> 01:10:33,185 of showing the difference between the Nintendo attitude 1498 01:10:33,229 --> 01:10:35,361 and the Sega attitude than Mortal Kombat . 1499 01:10:35,405 --> 01:10:38,016 Mortal Kombat Ad: Mortal Kombat! 1500 01:10:46,894 --> 01:10:48,418 Howard Phillips: Mortal Kombat was a game 1501 01:10:48,461 --> 01:10:50,724 designed to appeal to the older interests 1502 01:10:50,768 --> 01:10:52,552 of a teenage boy. 1503 01:10:52,596 --> 01:10:53,901 Man 1: If you knock her out two times, 1504 01:10:53,945 --> 01:10:54,815 then you get to kill her. 1505 01:10:57,731 --> 01:10:59,603 Man 2: Kids love blood and guts 1506 01:10:59,646 --> 01:11:01,300 and it makes it something exciting. 1507 01:11:01,344 --> 01:11:02,562 Howard Phillips: It had pretty gratuitous violence. 1508 01:11:05,130 --> 01:11:06,697 - Taking out hearts and ripping heads off. 1509 01:11:08,568 --> 01:11:10,222 Howard Lincoln: Blood was flowing freely. 1510 01:11:12,093 --> 01:11:13,486 Reporter: Heads are yanked off with their spines attached. 1511 01:11:15,096 --> 01:11:16,402 Consumer: You take a guy's head off, 1512 01:11:16,446 --> 01:11:17,621 that's what the kids want out there. 1513 01:11:19,362 --> 01:11:20,537 Greg: You laugh today 1514 01:11:20,580 --> 01:11:21,668 and say, well, what, why is everybody get 1515 01:11:21,712 --> 01:11:22,582 so upset about this? 1516 01:11:24,454 --> 01:11:26,194 The problem was, it was the first game 1517 01:11:26,238 --> 01:11:27,065 that has blood in it. 1518 01:11:28,458 --> 01:11:30,938 - The publisher Acclaim, decided to publish 1519 01:11:30,982 --> 01:11:35,247 for both Sega Genesis and the Nintendo Super NES. 1520 01:11:35,291 --> 01:11:37,162 Greg: And, when we told Howard Lincoln, 1521 01:11:37,205 --> 01:11:39,425 they actually went into a deep review and said, 1522 01:11:39,469 --> 01:11:41,601 hmm, I don't know if it's going to fit for their system. 1523 01:11:41,645 --> 01:11:43,081 - We were very concerned 1524 01:11:43,124 --> 01:11:45,866 with the type of content of the games. 1525 01:11:45,910 --> 01:11:48,304 We had our own internal guidelines 1526 01:11:48,347 --> 01:11:51,307 for what was acceptable, and we concluded 1527 01:11:51,350 --> 01:11:55,789 that we could not allow blood on the Nintendo version. 1528 01:11:55,833 --> 01:11:57,269 Greg: Howard said, you have to make the blood green. 1529 01:11:59,140 --> 01:12:00,968 So we said, sure, we'll make the blood green. 1530 01:12:01,012 --> 01:12:02,622 Is that what you want, Howard? 1531 01:12:02,666 --> 01:12:03,493 We'll make the blood green. 1532 01:12:05,233 --> 01:12:07,018 Tom: Everybody knew it was silly 1533 01:12:07,061 --> 01:12:10,761 and I thought what Nintendo was doing was censorship. 1534 01:12:10,804 --> 01:12:12,632 Mike: At Sega, it was the statement that, 1535 01:12:12,676 --> 01:12:17,115 hey, we're going to let you see the red blood and they're not. 1536 01:12:17,158 --> 01:12:20,553 - Super Nintendo has a more tame version of Mortal Kombat. 1537 01:12:20,597 --> 01:12:24,165 But some believe the company's effort to sanitize the game 1538 01:12:24,209 --> 01:12:26,516 will kill off most of its sales. 1539 01:12:26,559 --> 01:12:29,257 - We clearly got branded as the cool machine. 1540 01:12:29,301 --> 01:12:31,825 And that was something that Sega had never been before. 1541 01:12:31,869 --> 01:12:33,566 - We've had three times as many orders 1542 01:12:33,610 --> 01:12:35,046 for the Sega version as we have the Super Nintendo version. 1543 01:12:36,787 --> 01:12:38,310 Greg: It was much more successful on the Sega system 1544 01:12:38,354 --> 01:12:40,834 and made Sega a much more successful company 1545 01:12:40,878 --> 01:12:43,576 during that period of time than Nintendo. 1546 01:12:43,620 --> 01:12:44,664 - They cleaned our clock. 1547 01:12:47,972 --> 01:12:49,887 Bill White: Mortal Kombat created quite a fever 1548 01:12:49,930 --> 01:12:51,976 in the marketplace from a sales standpoint, 1549 01:12:52,019 --> 01:12:53,891 but it also created quite a bit of publicity; 1550 01:12:53,934 --> 01:12:55,327 from parents. 1551 01:12:55,371 --> 01:12:56,850 - Absolutely, I'm concerned. 1552 01:12:56,894 --> 01:12:59,505 - I am concerned because it directly affects 1553 01:12:59,549 --> 01:13:01,115 the behavior of my children. 1554 01:13:01,159 --> 01:13:02,726 - I am very concerned, 1555 01:13:02,769 --> 01:13:05,381 and there is one tape in particular 1556 01:13:05,424 --> 01:13:06,643 that I understand is very violent. 1557 01:13:06,686 --> 01:13:08,601 It's called Mortal Kombat . 1558 01:13:08,645 --> 01:13:10,951 Bill: Ultimately, that reached a point of discussion 1559 01:13:10,995 --> 01:13:13,693 where Congress decided to take a look at game violence. 1560 01:13:16,609 --> 01:13:18,829 Lieberman: I think it's time to draw the line. 1561 01:13:18,872 --> 01:13:23,486 I know that one place parents want us to draw the line 1562 01:13:23,529 --> 01:13:26,358 is with violence in video games. 1563 01:13:26,402 --> 01:13:29,274 Howard Lincoln: Sen. Lieberman and his committee 1564 01:13:29,317 --> 01:13:32,625 decided to look into home video game violence. 1565 01:13:32,669 --> 01:13:34,497 - What you're about to see 1566 01:13:34,540 --> 01:13:37,848 are scenes from the most violent new video games. 1567 01:13:37,891 --> 01:13:39,240 First we have Mortal Kombat ... 1568 01:13:44,332 --> 01:13:47,727 - It is a sick, disgusting video game in my judgement. 1569 01:13:47,771 --> 01:13:49,860 Shame on the people that produce that trash. 1570 01:13:51,557 --> 01:13:54,517 Tom: They thought this was warping the minds of children 1571 01:13:54,560 --> 01:13:57,041 and there should be government controls 1572 01:13:57,084 --> 01:14:00,218 put over what kind of games should be brought out 1573 01:14:00,261 --> 01:14:01,828 into the marketplace. 1574 01:14:01,872 --> 01:14:04,309 - If you don't do something about it, we will. 1575 01:14:04,352 --> 01:14:05,702 - The decision was made to send me, 1576 01:14:05,745 --> 01:14:08,400 although I'd only been at Sega for a few months. 1577 01:14:08,444 --> 01:14:11,142 But I did have the benefit of having multiple years 1578 01:14:11,185 --> 01:14:12,622 at Nintendo. 1579 01:14:12,665 --> 01:14:15,842 - We decided to send Bill White to represent Sega 1580 01:14:15,886 --> 01:14:19,411 because Bill had worked for Howard. 1581 01:14:19,455 --> 01:14:22,893 And we thought this was gonna really get under Howard's skin. 1582 01:14:22,936 --> 01:14:26,200 - I can't sit here and allow you to be told 1583 01:14:26,244 --> 01:14:28,376 that somehow the video game business 1584 01:14:28,420 --> 01:14:32,555 has been transformed today from children to adults. 1585 01:14:32,598 --> 01:14:34,208 It hasn't been. 1586 01:14:34,252 --> 01:14:36,080 And Mr. White, who is a former Nintendo employee, 1587 01:14:36,123 --> 01:14:38,604 knows the demographics as well as I do. 1588 01:14:38,648 --> 01:14:41,651 Gail: Howard was actually an attorney by practice. 1589 01:14:41,694 --> 01:14:45,393 So, I don't know that it was a very fair setup for Bill. 1590 01:14:45,437 --> 01:14:48,396 I think he got kind of thrown to the wolves. 1591 01:14:48,440 --> 01:14:50,660 - Small children bought this at Toys R Us, 1592 01:14:50,703 --> 01:14:52,270 and he knows that as well as I do. 1593 01:14:54,228 --> 01:14:57,536 Bill: Nintendo basically took the side of the senators. 1594 01:14:57,580 --> 01:15:00,104 Tom: Howard Lincoln presented Nintendo 1595 01:15:00,147 --> 01:15:02,280 as being the perfect company. 1596 01:15:02,323 --> 01:15:06,632 He pretended to be literally saint-like. 1597 01:15:06,676 --> 01:15:09,592 But then Bill White pulls out a rifle. 1598 01:15:09,635 --> 01:15:11,681 - A rapid fire machine gun. 1599 01:15:11,724 --> 01:15:12,899 - And said, what are you talking about? 1600 01:15:12,943 --> 01:15:14,814 Look at this rifle you guys have. 1601 01:15:14,858 --> 01:15:16,512 - That uses the same technology 1602 01:15:16,555 --> 01:15:18,775 to our understanding with several games available. 1603 01:15:18,818 --> 01:15:20,951 And they have no rating on that product 1604 01:15:20,994 --> 01:15:22,518 to suggest that product's for adults. 1605 01:15:22,561 --> 01:15:23,780 Lieberman: Nintendo produces that, you say? 1606 01:15:23,823 --> 01:15:25,216 - Yes... LIEBERMAN: Yeah. 1607 01:15:25,259 --> 01:15:27,131 I must say, to me, that looks like a-- 1608 01:15:27,174 --> 01:15:28,915 looks like a weapon 1609 01:15:28,959 --> 01:15:31,918 Tom: We tried to dissuade the senators from this viewpoint 1610 01:15:31,962 --> 01:15:34,486 that everybody who played video games was a child. 1611 01:15:34,530 --> 01:15:36,401 And that just wasn't the case. 1612 01:15:36,444 --> 01:15:38,359 - The average Sega Genesis user 1613 01:15:38,403 --> 01:15:42,363 is almost 19 years old, and fewer than 30 percent 1614 01:15:42,407 --> 01:15:44,104 are under age 13. 1615 01:15:44,148 --> 01:15:45,628 - They all thought it was little kids 1616 01:15:45,671 --> 01:15:47,412 playing at home with their moms. 1617 01:15:47,455 --> 01:15:48,718 And it wasn't. 1618 01:15:48,761 --> 01:15:50,023 Lieberman: Thank you, Mr. Lincoln. 1619 01:15:50,067 --> 01:15:51,895 You're not perfect, but you're-- 1620 01:15:51,938 --> 01:15:54,462 you've been a damn sight better than the competition. 1621 01:15:54,506 --> 01:15:57,074 I find the course of behavior by Sega 1622 01:15:57,117 --> 01:15:59,380 the most objectionable here in these games 1623 01:15:59,424 --> 01:16:00,860 that we're talking about. 1624 01:16:00,904 --> 01:16:02,514 - It was not a good day for Sega. 1625 01:16:04,342 --> 01:16:07,127 Tom: I was quite angry with Howard over his performance. 1626 01:16:07,171 --> 01:16:09,956 So we had a few nasty comments back and forth. 1627 01:16:10,000 --> 01:16:11,958 - I sent him a poem. 1628 01:16:12,002 --> 01:16:13,830 Roses are red, violets are blue. 1629 01:16:13,873 --> 01:16:16,659 You had a bad day, Tom, bo-hoo-hoo. 1630 01:16:19,052 --> 01:16:21,359 Howard Lincoln: But there was a growing concern 1631 01:16:21,402 --> 01:16:24,797 that the senate hearings would have a negative impact 1632 01:16:24,841 --> 01:16:28,192 on sales of home video games. 1633 01:16:28,235 --> 01:16:30,629 Tom: Because of the negative publicity, 1634 01:16:30,673 --> 01:16:34,502 we were very concerned about a crash occurring again. 1635 01:16:34,546 --> 01:16:36,287 Bill: Ultimately though, it was in Nintendo's 1636 01:16:36,330 --> 01:16:38,245 best interest and Sega's best interest 1637 01:16:38,289 --> 01:16:40,160 to develop a rating system 1638 01:16:40,204 --> 01:16:42,162 that allowed the consumer parents to choose 1639 01:16:42,206 --> 01:16:44,121 which games were right for their children. 1640 01:16:44,164 --> 01:16:45,513 Howard Phillips: It helped establish 1641 01:16:45,557 --> 01:16:47,037 that there's different types of games 1642 01:16:47,080 --> 01:16:49,387 that are appropriate for different ages 1643 01:16:49,430 --> 01:16:51,258 or for people of different tastes, 1644 01:16:51,302 --> 01:16:53,826 and ratings really codified that for the whole industry. 1645 01:16:53,870 --> 01:16:54,914 So, it was a great thing. 1646 01:16:56,786 --> 01:16:59,658 Tom: The video game market actually grew substantially. 1647 01:16:59,702 --> 01:17:01,529 It actually helped us broaden the market 1648 01:17:01,573 --> 01:17:03,662 to go after the older age audience 1649 01:17:03,706 --> 01:17:05,098 who now said, "Oh, yeah, 1650 01:17:05,142 --> 01:17:06,709 there's stuff here in this video game business 1651 01:17:06,752 --> 01:17:09,059 that appeals to us as well". 1652 01:17:14,630 --> 01:17:16,632 Anchor: It won't be long before budding young actors, 1653 01:17:16,675 --> 01:17:18,677 who used to dream of going to Hollywood, 1654 01:17:18,721 --> 01:17:20,853 will dream of going to Silicon Valley. 1655 01:17:20,897 --> 01:17:22,855 Howard Phillips: The future with CD-ROM technology 1656 01:17:22,899 --> 01:17:24,291 means the kind of production qualities 1657 01:17:24,335 --> 01:17:26,554 that you're used to seeing in films. 1658 01:17:28,382 --> 01:17:30,123 Mike: In the early '90s, it was very clear 1659 01:17:30,167 --> 01:17:31,995 that CD ROM was going to be the direction 1660 01:17:32,038 --> 01:17:33,170 of games in the future. 1661 01:17:35,476 --> 01:17:39,002 - You could make a video game look like a television program 1662 01:17:39,045 --> 01:17:42,483 with photorealistic images and full motion video. 1663 01:17:42,527 --> 01:17:46,226 - Cartridges were costing like $45. 1664 01:17:46,270 --> 01:17:48,881 But with a CD-ROM, you could have all that data 1665 01:17:48,925 --> 01:17:51,710 for a $1.80 at the time. 1666 01:17:51,754 --> 01:17:54,757 Tom: We'd heard that Nintendo was going to work with Sony 1667 01:17:54,800 --> 01:17:57,498 on developing the next video game system 1668 01:17:57,542 --> 01:18:00,458 using Sony Optical Disc technology. 1669 01:18:00,501 --> 01:18:02,939 Mike: When we heard that Sony was partnering with Nintendo, 1670 01:18:02,982 --> 01:18:04,723 it sounded like calamity. 1671 01:18:04,767 --> 01:18:07,813 How could Sega compete with those two giants together? 1672 01:18:07,857 --> 01:18:09,815 I was actually at the Consumer Electronics Show 1673 01:18:09,859 --> 01:18:11,774 in Las Vegas when we were all expecting 1674 01:18:11,817 --> 01:18:14,864 to hear the joint announcement from Sony and Nintendo. 1675 01:18:14,907 --> 01:18:16,735 - I think there was the expectation 1676 01:18:16,779 --> 01:18:19,390 that we were going to do something with Sony. 1677 01:18:19,433 --> 01:18:22,698 But Nintendo made a business decision. 1678 01:18:22,741 --> 01:18:25,483 I recall announcing that decision 1679 01:18:25,526 --> 01:18:27,485 and I knew it was a shocker. 1680 01:18:27,528 --> 01:18:29,182 - Howard Lincoln surprised the world 1681 01:18:29,226 --> 01:18:31,881 by saying that they were going to use 1682 01:18:31,924 --> 01:18:35,406 Philips Optical Disc technology and not Sony, 1683 01:18:35,449 --> 01:18:36,973 and they apparently had not told Sony this 1684 01:18:37,016 --> 01:18:38,583 before the presentation. 1685 01:18:38,626 --> 01:18:40,803 So the Sony executives were furious. 1686 01:18:40,846 --> 01:18:42,761 - And it was a total, "What the ", moment. 1687 01:18:42,805 --> 01:18:44,720 Sony was really left with its pants down. 1688 01:18:46,243 --> 01:18:47,635 You gotta think that made it personal 1689 01:18:47,679 --> 01:18:49,637 for Sony at that point. 1690 01:18:49,681 --> 01:18:52,249 In Japanese culture, it was incredible humiliation 1691 01:18:52,292 --> 01:18:55,208 for this iconic national brand like Sony 1692 01:18:55,252 --> 01:18:57,515 to be left at the altar by Nintendo. 1693 01:18:57,558 --> 01:18:59,125 - And so, rather than work with someone else 1694 01:18:59,169 --> 01:19:01,258 as a third party content provider, 1695 01:19:01,301 --> 01:19:02,781 they were intent on 1696 01:19:02,825 --> 01:19:04,130 developing their own platform 1697 01:19:04,174 --> 01:19:05,958 that they could control from the very beginning. 1698 01:19:06,002 --> 01:19:08,265 - We may have poked a sleeping dragon. 1699 01:19:08,308 --> 01:19:10,180 We poked a lot of dragons. 1700 01:19:10,223 --> 01:19:12,225 - It may seem like a footnote in history 1701 01:19:12,269 --> 01:19:13,923 for everyone except the game geeks, 1702 01:19:13,966 --> 01:19:15,707 but it really was a turning point 1703 01:19:15,751 --> 01:19:17,535 in the entire industry's development. 1704 01:19:17,578 --> 01:19:19,537 That was like Waterloo for our industry. 1705 01:19:19,580 --> 01:19:20,494 History would never be the same. 1706 01:19:26,849 --> 01:19:28,111 Howard Phillips: Sony did a very smart job 1707 01:19:28,154 --> 01:19:29,677 of entering the market. 1708 01:19:31,636 --> 01:19:35,074 Diane: We knew for a fact that Sony was bringing out 1709 01:19:35,118 --> 01:19:38,991 a system that could really hurt us badly. 1710 01:19:49,915 --> 01:19:51,743 Male Announcer: The games are ready! 1711 01:19:51,787 --> 01:19:52,744 Are you? 1712 01:19:55,181 --> 01:19:57,444 - When we heard rumors from the development community 1713 01:19:57,488 --> 01:19:59,620 about how powerful PlayStation was going to be... 1714 01:20:01,448 --> 01:20:05,931 particularly about how rich and fast the 3D graphics were, 1715 01:20:05,975 --> 01:20:08,542 we just assumed that it would be a super high-end system. 1716 01:20:10,109 --> 01:20:11,632 I mean, if you think about it, 1717 01:20:11,676 --> 01:20:13,678 a lot of Sony's consumer electronics products 1718 01:20:13,721 --> 01:20:16,289 were very expensive systems. 1719 01:20:16,333 --> 01:20:18,509 - We had heard that the Sony system 1720 01:20:18,552 --> 01:20:21,294 was gonna be a $500 priced system. 1721 01:20:21,338 --> 01:20:23,122 And we didn't think that would be successful, 1722 01:20:23,166 --> 01:20:25,385 because we knew price was so important 1723 01:20:25,429 --> 01:20:27,605 in the video game industry. 1724 01:20:27,648 --> 01:20:29,128 - Nintendo wasn't terribly concerned. 1725 01:20:29,172 --> 01:20:31,261 They thought, yeah, if they're at 500 bucks, 1726 01:20:31,304 --> 01:20:32,653 that's a problem for them. 1727 01:20:32,697 --> 01:20:34,133 Steve: There was a lot of talk about 1728 01:20:34,177 --> 01:20:36,396 what the price point was going to be. 1729 01:20:36,440 --> 01:20:39,965 It started out at 499, and then we convinced them 1730 01:20:40,009 --> 01:20:42,272 that it needed to be substantially lower, 1731 01:20:42,315 --> 01:20:44,622 and they were all set to do it at 399. 1732 01:20:44,665 --> 01:20:46,667 Trip: I think Nintendo probably thought to themselves, 1733 01:20:46,711 --> 01:20:49,235 well, shoot, if they want to be really aggressive, 1734 01:20:49,279 --> 01:20:52,499 they'll offer it at 399, but that's still too high. 1735 01:20:52,543 --> 01:20:54,806 - We agitated for a long period of time 1736 01:20:54,850 --> 01:20:56,764 that it needed to be a lower price point 1737 01:20:56,808 --> 01:20:59,680 right up until the day of the announcement. 1738 01:20:59,724 --> 01:21:01,508 Trip: I was there in the room 1739 01:21:01,552 --> 01:21:03,815 when the PlayStation was introduced. 1740 01:21:03,859 --> 01:21:05,904 - I'm going to ask 1741 01:21:05,948 --> 01:21:07,863 Sony Computer Entertainment President of America, 1742 01:21:07,906 --> 01:21:12,476 Steve Race to join me for a brief presentation. 1743 01:21:15,696 --> 01:21:18,351 - I had a speech prepared 1744 01:21:18,395 --> 01:21:21,224 but I threw it away and just said... 1745 01:21:21,267 --> 01:21:22,921 299. 1746 01:21:27,839 --> 01:21:31,712 Trip: He said, 299, and there was a gasp. 1747 01:21:31,756 --> 01:21:33,149 - And that was the shortest speech 1748 01:21:33,192 --> 01:21:36,021 in the history of Western business, I think. 1749 01:21:36,065 --> 01:21:37,849 - Oh, . 1750 01:21:37,893 --> 01:21:39,285 Oh, . 1751 01:21:39,329 --> 01:21:40,547 - We wanted them to say, oh, . 1752 01:21:40,591 --> 01:21:41,897 We wanted them to know they're in trouble, 1753 01:21:41,940 --> 01:21:43,246 that we're here to play. 1754 01:21:43,289 --> 01:21:46,423 - We never saw a price point like that coming. 1755 01:21:46,466 --> 01:21:48,338 There was panic in the office. 1756 01:21:48,381 --> 01:21:49,469 - No! 1757 01:21:49,513 --> 01:21:51,515 - We knew we were in for a battle. 1758 01:21:51,558 --> 01:21:54,344 - They changed the whole nature of the business. 1759 01:21:54,387 --> 01:21:56,520 Sony ends up being a real disruptor. 1760 01:21:56,563 --> 01:22:00,263 - Sony eliminated Sega from being a hardware competitor 1761 01:22:00,306 --> 01:22:02,918 and it marginalized Nintendo. 1762 01:22:02,961 --> 01:22:05,094 Man In Sony Commercial: Hey, plumber boy, mustache man, 1763 01:22:05,137 --> 01:22:07,357 your worst nightmare has arrived. 1764 01:22:07,400 --> 01:22:09,228 I got a little surprise for you here! 1765 01:22:09,272 --> 01:22:12,623 3D, lush organic environments. 1766 01:22:12,666 --> 01:22:14,103 How's that make you feel, buddy? 1767 01:22:14,146 --> 01:22:16,975 Feel a little like your days are numbered? 1768 01:22:17,019 --> 01:22:19,282 - Nintendo kind of bumped along the bottom 1769 01:22:19,325 --> 01:22:21,240 for a number of years. 1770 01:22:21,284 --> 01:22:24,461 - Nintendo was eventually able to come back and fight. 1771 01:22:24,504 --> 01:22:26,811 But, for Sega, it was the end. 1772 01:22:26,854 --> 01:22:30,380 Shinobu: Sega fought very fiercely, of course, 1773 01:22:30,423 --> 01:22:32,512 we can't give up, but eventually, 1774 01:22:32,556 --> 01:22:34,166 our loss was very obvious. 1775 01:22:34,210 --> 01:22:37,561 - It was the death knell of Sega. 1776 01:22:37,604 --> 01:22:41,347 - The decisions started to revert back to Japan 1777 01:22:41,391 --> 01:22:43,523 and I was being ordered to do things 1778 01:22:43,567 --> 01:22:45,351 that I didn't agree with, 1779 01:22:45,395 --> 01:22:48,354 and I was tired of not being able to make my own decisions 1780 01:22:48,398 --> 01:22:51,096 for Sega America, and about that time, 1781 01:22:51,140 --> 01:22:52,793 I resigned from Sega. 1782 01:22:55,622 --> 01:22:57,624 Howard: When I heard that Tom had retired, 1783 01:22:57,668 --> 01:23:00,714 I sent him a letter. 1784 01:23:00,758 --> 01:23:02,673 - "Dear Tom, I was saddened to learn 1785 01:23:02,716 --> 01:23:04,327 that you are leaving Sega." 1786 01:23:04,370 --> 01:23:06,938 - "You've done a great job over the last 6 years..." 1787 01:23:06,982 --> 01:23:09,462 Both Together: "...dramatically increasing Sega's market share, 1788 01:23:09,506 --> 01:23:11,073 at our expense." 1789 01:23:11,116 --> 01:23:12,900 - "Let me wish you the very best of luck 1790 01:23:12,944 --> 01:23:14,685 in your new venture." 1791 01:23:14,728 --> 01:23:17,427 - "All my best, Sincerely, Howard Lincoln, 1792 01:23:17,470 --> 01:23:20,082 Chairman, Nintendo of America." 1793 01:23:20,125 --> 01:23:22,127 - I was really touched by this letter. 1794 01:23:22,171 --> 01:23:25,087 - I felt it was the appropriate message 1795 01:23:25,130 --> 01:23:27,785 to send to a worthy competitor. 1796 01:23:27,828 --> 01:23:29,656 I never considered it personal. 1797 01:23:29,700 --> 01:23:32,181 It was just a great fight between two companies. 1798 01:23:32,224 --> 01:23:35,575 Hats off to Tom Kalinske, he did a great job, 1799 01:23:35,619 --> 01:23:37,360 it was a great fight. 1800 01:23:37,403 --> 01:23:40,754 At the end of the day, we had better games 1801 01:23:40,798 --> 01:23:42,408 and deeper pockets. 1802 01:23:45,890 --> 01:23:47,892 Mark: It's incredible to think 1803 01:23:47,935 --> 01:23:50,547 that Ralph Baer toiled away in his basement, 1804 01:23:50,590 --> 01:23:53,071 and his intent was not to be in record books. 1805 01:23:53,115 --> 01:23:54,855 He just wanted to build something cool. 1806 01:23:54,899 --> 01:23:56,248 He just wanted to have fun, 1807 01:23:56,292 --> 01:23:59,034 and it turned out to be something. 1808 01:23:59,077 --> 01:24:01,558 Ralph was not recognized for a long time, 1809 01:24:01,601 --> 01:24:03,690 but his idea has blossomed 1810 01:24:03,734 --> 01:24:06,693 into a hundred billion dollar industry. 1811 01:24:06,737 --> 01:24:09,087 Why would you not be happy about that? 1812 01:24:09,131 --> 01:24:10,132 Ralph Baer: There's a horizontal knob here 1813 01:24:10,175 --> 01:24:11,785 as you can see. 1814 01:24:11,829 --> 01:24:12,873 Trip: When you're doing something 1815 01:24:12,917 --> 01:24:15,093 truly out of passion, 1816 01:24:15,137 --> 01:24:19,489 purely driven by your desire and your sincere belief 1817 01:24:19,532 --> 01:24:22,666 in a dream, and you don't really know yet 1818 01:24:22,709 --> 01:24:24,189 what's gonna happen, 1819 01:24:24,233 --> 01:24:27,018 and then it works, there's just no better feeling. 1820 01:24:28,367 --> 01:24:30,065 David: Now there are millions of people 1821 01:24:30,108 --> 01:24:31,675 working in the video game business, 1822 01:24:31,718 --> 01:24:35,679 and I'm proud of the fact that we created an industry. 1823 01:24:35,722 --> 01:24:38,725 Nancy: Everybody was creating something brand new. 1824 01:24:38,769 --> 01:24:40,075 It was the future. 1825 01:24:40,118 --> 01:24:43,730 And so, you just felt it in the air. 1826 01:24:43,774 --> 01:24:47,299 It was, you know, Camelot. 1827 01:24:47,343 --> 01:24:50,041 Tom: We had real entrepreneurs, real entrepreneurial people 1828 01:24:50,085 --> 01:24:52,435 looking for the next great thing 1829 01:24:52,478 --> 01:24:56,352 and really pushing the envelope in game development. 1830 01:24:56,395 --> 01:24:59,572 Nolan's day was really the wild west. 1831 01:25:01,226 --> 01:25:03,446 Nancy: Nolan likes to say that he doesn't spend his life 1832 01:25:03,489 --> 01:25:05,839 looking in the rear view mirror. 1833 01:25:05,883 --> 01:25:08,364 Nolan: Thinking about how sad I am over Atari 1834 01:25:08,407 --> 01:25:11,062 being screwed up by idiots is not nearly as important 1835 01:25:11,106 --> 01:25:13,847 as new innovative product. 1836 01:25:13,891 --> 01:25:17,286 Ideas are actually the cheap part. 1837 01:25:17,329 --> 01:25:20,680 Any idiot who's ever had a shower's had a good idea. 1838 01:25:20,724 --> 01:25:23,379 It's the people that get out and work on it that matter. 1839 01:25:25,076 --> 01:25:29,602 I believe the best life is when you work hard, play hard. 1840 01:25:29,646 --> 01:25:33,432 Whatever you do, do it with the volume turned up.