I think now I understand why the NES beat the 7800

[Mili]

Actually, yes. Yes it would.

 

 

Off topic but could you please not post in purple? Your posts look like those lame Geronimo Stilton books.

 

Stay on topic then, and don't worry about the colour of my text.

[desiv]

This thread is one of the reasons I love this forum..

 

note: I only read posts that actually contained the word "whistles" in them.

(I still can't believe people were posting non-whistle related arguments in this thread? Really? )

 

desiv

[Retro Rogue]

Actually, Kassar was the reason the Atari Nintendo deal didn't happen. He was upset that Coleco ported Donkey Kong to the Adam computer.

 

 

That's not correct. After Kassar's departure that August, in September representatives of Atari, Nintendo, and Coleco met at Warner to hash everything out. The Famicom deal was still on the table. However when Morgan came in he froze all projects for his own evaluation of the company. Yamauchi decided not to wait any longer (having originally wanted to have the licensing deal for a Christmas release) and instead had Arakawa press forward on their own, working on a redesign of the Famicom in 1984 for American release. What was called the AVS.

[Greg2600]

That's right, Kassar was initially angry but Nintendo convinced him to stay with the deal. His ouster ended that deal, as Morgan, who had no clue about video games, paused everything. Frankly, even if they had stayed with the deal, it's questionable whether Atari would have had the capital to complete it. Atari would have had to buy the PC boards of the Famicom, as well as large quantities of several games. Not to mention the advertising costs. When the NES debuted in 1985, Nintendo gave a no risk deal to retailers. Nintendo paid for the displays, advertising, and offered to take back any unsold games.

[Curt Vendel]

If we went by that analogy, the 5200 cartridges should've still been selling like hotcakes in 1986...

 

It was games and Nintendo was locking in all of the hottest licenses and putting software companies in exclusive 2 years agreements to publish games. Atari essentially got locked out of having developers to do games for the 7800 and licenses for hot new titles... though I have always wondered why Atari didn't license games from Atari Games Corp. They could've had Marble Madness, Peter Pack Rat, Skull & Crossbones just to start with.

 

Sega on the other hand had Afterburner, Outrun, Altered Beast, Golden Axe and so many more titles of its own that had not been brought to the home console market yet, so its Master System had plenty of games available initially.

 

 

Curt

 

Nah, I think it was because of the cartridges. I mean, look at the size of the things compared to a 7800 cart. Bigger is better, right?

[Curt Vendel]

Actually, with Kassar's ouster... while Warner hired Morgan, he would not start at the position for 2 months, so there was no deal making going on between Atari and Nintendo and Nintendo grew tired of the lack of progress and decided to begin working on how it could directly sell in the United States.

 

It wasn't so much Nintendo "gave" a no risk deal... they actually had to. When the NES was shown to video game wary dealers, they actually pushed back and told Nintendo to add more to it then just video games, this is why it had Rob the robot and the light gun... note how support for Rob dropped quickly there after. Nintendo had to fund the merchandising to get the presence in retailers, it was the only way they would gamble on giving up floor and shelf space to what they had felt was now a dead sales category - video games.

 

 

Curt

 

That's right, Kassar was initially angry but Nintendo convinced him to stay with the deal. His ouster ended that deal, as Morgan, who had no clue about video games, paused everything. Frankly, even if they had stayed with the deal, it's questionable whether Atari would have had the capital to complete it. Atari would have had to buy the PC boards of the Famicom, as well as large quantities of several games. Not to mention the advertising costs. When the NES debuted in 1985, Nintendo gave a no risk deal to retailers. Nintendo paid for the displays, advertising, and offered to take back any unsold games.

[SpaceDice2010]

though I have always wondered why Atari didn't license games from Atari Games Corp. They could've had Marble Madness, Peter Pack Rat, Skull & Crossbones just to start with.

 

 

 

Did those two companies have a good relationship? I was under the impression that they had a bad relationship after Warner's breakup.

[Curt Vendel]

Actually Tramiel crutched quite a bit on Warner for additional cash and reworking of its debt, he actually threatened publicly many times that if he couldn't make Atari profittable, he'd just walk away and that scared the heck out of Warner. So while Games Corp was by that time bought by Namco, Warner still held some stock and also Games had to license the Atari name and Logo from Atari Corporation, so Tramiel would've had leverage to get some sweetheart licensing deals from Games for some of the arcade titles and who knows, maybe he could've nudged a bit on some Namco titles as well, but who knows...

 

 

Curt

 

though I have always wondered why Atari didn't license games from Atari Games Corp. They could've had Marble Madness, Peter Pack Rat, Skull & Crossbones just to start with.

 

 

 

Did those two companies have a good relationship? I was under the impression that they had a bad relationship after Warner's breakup.

[kool kitty89]

Bigger is better, right?

Riiiiight.

What's really weird is that, unlike the 5200 (which was mostly bulked up by empty plastic -or 400 bulked up by the aluminum castings), the TG-16 was bulked up by a physically larger motherboard internally as well as RF shielding and a larger case.

 

Bulking it up might not have been a bad idea marketing wise (given how truly tiny it was and how certain things were necessary to change for the US), but doing so in a more useful way (ie mainly for RF shielding and adding AV out along with at least 1 more controller port -maybe integrating the full 5-port multitap for deluxe models), but that's not what happened.

Also, had they launched it in Europe, the original small form factor probably would have been preferable, especially for regions where no (or much lighter) RF shielding was needed. (even more ironic they ditched Europe given the more open market competition, wealth of more open 3rd parties, and given how the smaller European countries would have catered much better to the marketing strategies that worked in Japan but failed in the US)

 

 

 

 

 

Console sales were not so bad as many thinks - they manage to sell about 3750000 in total.

 

Uborg, Is that right? 3,750,000? I not saying, I'm asking. That is many times more than I would have expected. I wonder what the cost of production was compared to sale price. Morgan

 

That was a figure Curt Vendel quoted from official Atari docs quite recently and is ONLY sales in North America. I would love to know what the European sales figures were.

Actually, I thought the full tally (after returns) was actually closer to 3.77 million, not 3.75, and for just the US, not all of North America. (albeit Canada -not sure if it was even released in Mexico- probably wouldn't account for a huge chunk of sales, but perhaps enough to push it above 4 million in NA)

 

 

 

 

 

 

Actually, Kassar was the reason the Atari Nintendo deal didn't happen. He was upset that Coleco ported Donkey Kong to the Adam computer.

 

 

That's not correct. After Kassar's departure that August, in September representatives of Atari, Nintendo, and Coleco met at Warner to hash everything out. The Famicom deal was still on the table. However when Morgan came in he froze all projects for his own evaluation of the company. Yamauchi decided not to wait any longer (having originally wanted to have the licensing deal for a Christmas release) and instead had Arakawa press forward on their own, working on a redesign of the Famicom in 1984 for American release. What was called the AVS.

Interesting, I hadn't heard of that particular detail before (just that Nintendo opted out around the time Morgan came in).

 

Given how much longer Nintendo struggled to bring it to market, it might not have been a bad idea to keep waiting on Atari... except it wasn't even a sure thing (with the 7800 and all), and the sloppy management of the mid '84 split probably would have been enough to make Nintendo drop it anyway. (unless a binding contract had already been established)

 

 

 

 

 

 

 

 

 

If we went by that analogy, the 5200 cartridges should've still been selling like hotcakes in 1986...

I think that remark was somewhat sarcastic to begin with, but from a practical sense, it really could have been a notable point... not necessarily the full size alone, but the styling and such.

In the 5200's case, the carts are certainly much larger than the VCS/7800 (let alone A8's), but they do look more impressive and pretty damn cool... other than the annoying lack of end labels. (better looking than NES carts too for that matter -Tengen's were pretty slick though) The plain famicom carts would probably have been a bad idea too (sort of cheap looking), though they probably could have restyled them without bulking them up like that, or at least not substantially increasing the size like they did. (maybe just switching to a more stylized cart design with nicer feeling gray plastic as the NES carts used -black might have been nice, but they seemed to push for gray at the time) Sega certainly did worse from their not-ideal but much nicer looking SG-1000/SMS carts to the western SMS carts with an extremely plain look with no art -not even monochrome- (and weak box art until '88 -nice blockbuster style cases though) and no end labels on top of that. (the general shape was a bit unappealing as well... Sega did many times better on all accounts with the MD/Genesis carts from shape to styling to art, end labels, etc)

 

As for the 5200 not selling in '86, that's sort of a silly/sarcastic remark to make at that given it was pulled back in '84... I mean if they had pushed forward with the cost-reduced models and better controllers rather than the 7800, maybe it could have done OK in the mid/late 80s (in spite of the shaky start -though it doesn't seem to have done too bad compared to the CV and IV in direct competition -2600 was obviously going to sell better for a while more even if the 5200 had been ideally cost effective and compatible more like the 7800). Hell, if the 7800 hadn't already been getting significant press, software development, test marketing, and production/parts already (and the 5200 not been discontinued concurrently), maybe Tramiel would have even considered pushing forward with that instead. (especially given the headaches over the 7800 deal -and mess in general from Warner's sloppy transition with the split)

 

 

It was games and Nintendo was locking in all of the hottest licenses and putting software companies in exclusive 2 years agreements to publish games. Atari essentially got locked out of having developers to do games for the 7800 and licenses for hot new titles... though I have always wondered why Atari didn't license games from Atari Games Corp. They could've had Marble Madness, Peter Pack Rat, Skull & Crossbones just to start with.

Yeah, I think that's been well established... Nintendo got it right on a number of areas and with some critical advantages to push too. Success in Japan (and corresponding leverage and support of 3rd parties -as well as added funds), smart marketing tie-ins and advertising in general, necessary killer apps, some ~3 years of trying to push it on the US market and get a good understanding of what was truly needed in the market. (a lot of trial and error it seems too)

And then they got established and expanded leverage to US developers as well, enforcing restrictive anti-competitive licensing agreements and gettign away with it by being the market leader. (at least until Sega pushed through with strong marketing in the early 90s -not sure if Katz's campaign got started before Christmas of '89 -I know when he got there they were still going with "we bring the arcade experience home", but the new campaign was definitely there by 1990)

 

Sega on the other hand had Afterburner, Outrun, Altered Beast, Golden Axe and so many more titles of its own that had not been brought to the home console market yet, so its Master System had plenty of games available initially.

Yeah, and they had the budget to compete with Nintendo too, but it seems they didn't have a good understanding of the US home market as such (probably a good understanding of the Arcade market, but that's a different beast), again that's one thing Nintendo's 2/3 years of attempted US market entry probably had a huge impact on. (I think Tonka shifted things for the better to a fair extent -at least box/packaging art looked a lot nicer and ads also seemed to get better by '88, but not nearly as good as with the later internal build-up of SoA after Katz joined -plus by '88 it was already a huge up-ill battle with Nintendo owning >70% of the market share -and Sega apparently well behind Atari Corp in spite of the latter's limited software and advertising budgets, though it seems Katz did wonders with what he had as well as drawing on the established brand name -and catering to the budget market, especially with the 2600 but even with the 7800 to some extent)

 

Apparently things didn't go that way in Europe as Sega ended up partnering with a very good distributor and Nintendo pretty much screwed up with mediocre distribution/marketing as well as a somewhat late release (very late in the UK at least), plus there was the computer market tempering things further and ensuring that Nintendo would not be getting the sort of leverage they had in Japan or North America on any front. (Arcades were apparently stronger in Europe too, so Sega had a bigger selling point, Sega catered better to some EU-specific stuff including Soccer games, and the graphics seemed to be a bigger selling point too -probably pushed further by the popular home computers offering contrasting perspectives, especially with the SMS looking closer to the ST and to a lesser extent Amiga graphics and the NES more like the C64 to some extent -sound was a separate issue entirely though )

 

 

Actually, with Kassar's ouster... while Warner hired Morgan, he would not start at the position for 2 months, so there was no deal making going on between Atari and Nintendo and Nintendo grew tired of the lack of progress and decided to begin working on how it could directly sell in the United States.

 

It wasn't so much Nintendo "gave" a no risk deal... they actually had to. When the NES was shown to video game wary dealers, they actually pushed back and told Nintendo to add more to it then just video games, this is why it had Rob the robot and the light gun... note how support for Rob dropped quickly there after. Nintendo had to fund the merchandising to get the presence in retailers, it was the only way they would gamble on giving up floor and shelf space to what they had felt was now a dead sales category - video games.

They seemed to learn pretty quickly how to tactfully manage gimmicks... ROB didn't seem to hold popularity (and was also fairly costly), but the Zapper was kept as a standard feature of all but the lowest-end sets for almost the entirety of the NES's life, and others were added like the power pad standard in the late 80s/early 90 "Power Set". (and with 3 different standard pack-in games/multicarts -aside from special/late bundles- with plain SMB in the control deck pack, SMB+Duck Hunt with the Zapper, and SBM+DH+World Class Track Meet with the Power Set)

 

 

 

 

 

 

 

 

Actually Tramiel crutched quite a bit on Warner for additional cash and reworking of its debt, he actually threatened publicly many times that if he couldn't make Atari profittable, he'd just walk away and that scared the heck out of Warner. So while Games Corp was by that time bought by Namco, Warner still held some stock and also Games had to license the Atari name and Logo from Atari Corporation, so Tramiel would've had leverage to get some sweetheart licensing deals from Games for some of the arcade titles and who knows, maybe he could've nudged a bit on some Namco titles as well, but who knows...

Not to mention relations between Games and Corp could have been a lot smoother without the bad blood/conflict related to drawn-out litigation over licensing/IP rights to older AInc arcade games and such.

 

Hmm, was AGames getting their 6502s and POKEYs used in later arcade games from Atari Corp (or some of those components at least), or were those all separate stock?

Edited January 16, 2011 by kool kitty89

[Linndrum]

Maybe the whistle is symbolic. Cause the thing that ruins the 7800 for me is the goddamn lack of a decent built-in sound synth. Other than that I love it. The chunky Double Dragon is one of my favorites. I love the look of it.

Edited January 18, 2011 by Linndrum

[kool kitty89]

Maybe the whistle is symbolic. Cause the thing that ruins the 7800 for me is the goddamn lack of a decent built-in sound synth. Other than that I love it. The chunky Double Dragon is one of my favorites. I love the look of it.

So you like the C64 version too?

[spiffyone]

There were whistles in a slew of Master System games, iirc. Wonder Boy in Monster Land or Dragon's Trap comes to mind. Didn't help Sega...outside of the PAL regions that is.

 

Wouldn't have helped Atari at all. Sadly. If a golf playing ninja couldn't help Atari, what could?

 

Wanna know the real difference between the NES and 7800 (and SMS)?

 

Nintendo had R&D1 (Metroid, Kid Icarus) and EAD (Super Mario, Legend of Zelda), Sega had arcade offerings from the team that became AM2 to draw from (Space Harrier, Outrun) as well as the team that became AM7 (Shinobi, Phantasy Star), and Atari had...well...not much, really. That was a big problem; take away Nintendo's exclusive (and illegal) contracts with 3rd parties and they still had great internal dev teams. Hell, it was Nintendo games that really sold people on NES. The 3rd party stuff was just icing on the cake, really.

 

So, okay, Nintendo had the exclusive 3rd party support. Couldn't do much about that at the time. But Sega made the best of it. Sega had to support their platform with internally developed games. And, yes, Sega had that arcade pedigree to draw from, but they also had console exclusive IPs that they created like Alex Kidd, Phantasy Star, etc. That at the very least gravitated some eyeballs, particularly in the PAL markets, towards Master System. These were offerings that "fit" what home console gamers wanted at the time: something "new".

 

Nintendo had Super Mario, Legend of Zelda, Metroid, etc. Sega had Alex Kidd, Phantasy Star, and, later, Sonic.

 

What did Atari Corp. have?

 

Atari didn't really have the internal dev teams that were needed to get it over the hump of not having the 3rd party support Nintendo had. And, apparently, Tramiel wanted that but didn't want to pay people for that work if what that dev said is true. So, really, the belt tightening Tramiel did during this era proved to be the downfall of the 7800. Didn't he lay off some of the internal console dev personnel? If so, that was not a good long term move.

 

It wasn't until later that we got things like Scrapyard Dog, Midnight Mutants, and Ninja Golf, but by then it was much too late. Why did it take until '89/90 to have such games? Because there weren't teams at Atari Corp. to make such games. Hell, iirc, these games were developed by outside teams contracted by Atari. That was a BIG problem.

 

And, of course, there was the stupidity of the XEGS (which I maintain is NOT a game console and I don't give a damn what anyone says: it was a repackaged personal computer regardless of how Atari marketed it). Yes, it was a pretty shrewd move in that it got rid of older stock, but that again points out the issue with Tramiel: he was a good short term thinker, but not long term. XEGS helped get rid of older XE hardware and software, but it created market confusion and took away what little money they invested in marketing the 7800. It says a lot, btw, that Atari had a heavier marketing emphasis behind 2600 Jr. than 7800, which played 2600 games. Again, good term short move, but how much did it mess up the long term viability of the company in the game console market?

[kool kitty89]

There were whistles in a slew of Master System games, iirc. Wonder Boy in Monster Land or Dragon's Trap comes to mind. Didn't help Sega...outside of the PAL regions that is.

 

Wouldn't have helped Atari at all. Sadly. If a golf playing ninja couldn't help Atari, what could?

By that logic, that's still not proven as you'd need Ninja Golf pack-in with the 7800. And that's aside from the fact it wasn't released until 1990... Had it actually been a pack-in back in '87 or even '88, that would have been pretty substantial though. (good looking, unique, fun to play, sound is so so but acceptable) But it came when the 7800 was already heavily declined heavily in market share, that and Katz wasn't managing the marketing anymore either.

 

 

EDIT:

And don't forget the lack of joypads in the US! Those should have been pack-in standard as soon as they were released. (relegating the proline controllers to optional accessories)

 

 

Nintendo had R&D1 (Metroid, Kid Icarus) and EAD (Super Mario, Legend of Zelda), Sega had arcade offerings from the team that became AM2 to draw from (Space Harrier, Outrun) as well as the team that became AM7 (Shinobi, Phantasy Star), and Atari had...well...not much, really. That was a big problem; take away Nintendo's exclusive (and illegal) contracts with 3rd parties and they still had great internal dev teams. Hell, it was Nintendo games that really sold people on NES. The 3rd party stuff was just icing on the cake, really.

Yes, Atari corp lacked Atari Inc's console developers (retained much of the computer staff though) and the arcade developers went to Atari Games (with which Corp had a fairly shaky relationship), and they had limited funding and debt to work through on top of that (for the first few years at least) and a correspondlingly tight budget.

 

Even without internal development, had Atari had the funding, they could have afforded to commission far more game and perhaps even form defacto 2nd party bonds with certain publishers/developers. In fact, that WAS one way around Nintendo's restrictive licensing/exclusivity, it was per publisher, not per developer, and some larger houses used proxies (like Konami's Ultra or Acclaim's LJN) to bypass Nintendo limitations: so by extension to that Atari could potentially have even set-up licensing/royalties contracts with 3rd parties but still published all the games under the Atari label, thus avoiding conflicts with Nintendo releases. (royalty stuff would also have been far more attractive early on than commissions due to the lack of pocket money to invest as such) I wonder if Atari Corp actually did do that for some cases, I'm not sure. (not talking just royalties for licensing the game, but actually having a 3rd party port a game or have a unique game that would normally be published by said 3rd party, but instead using Atari Corp by proxy with royalties)

Also a shame they weren't in good relations with Atari Games, they could have been a fairly powerful 2nd party. (not just Atari Games arcade stuff, but other unique/licensed games that Tengen was pushing)

 

OTOH they also probably could have reached out more to European computer developers, especially for the EU market, but also for expanding the US library. (some games may not have catered that well and others would have been unknown, but there were a lot of quality games coming out of Europe and a lot of developers not bowing to Nintendo -and even those who were in conflict could still potentially publish by proxy)

 

 

So those probably would have been the best missed opportunities under the restricted circumstances Atari Corp faced in the late 80s. ('89 and early 90s was a different story in general as they had weaker management and started on a downward path to ruin around the time Jack left -and Katz as well, aside form the end of the 7800 there was the decline in the ST and problematic successors/evolution of the line, total lack of a successor to the 7800 -a 4th gen console- with huge gap to the jaguar's release, problematic management of the Lynx, etc, etc)

 

And, of course, there was the stupidity of the XEGS (which I maintain is NOT a game console and I don't give a damn what anyone says: it was a repackaged personal computer regardless of how Atari marketed it). Yes, it was a pretty shrewd move in that it got rid of older stock, but that again points out the issue with Tramiel: he was a good short term thinker, but not long term. XEGS helped get rid of older XE hardware and software, but it created market confusion and took away what little money they invested in marketing the 7800. It says a lot, btw, that Atari had a heavier marketing emphasis behind 2600 Jr. than 7800, which played 2600 games. Again, good term short move, but how much did it mess up the long term viability of the company in the game console market?

Katz didn't like the XEGS, but it was pushed into the role of consumer oriented entry-level computer and apparently pressed the 65XE into the new form factor to garner more interest. Honestly it probably would have been a lot better to release a gaming bundle version of the 65XE and leave it at that. (less confusion for the consumer, more streamlines production, etc) Maybe modify the motherboard to make the cart slot easier to use. (top a la 400/800/600/800XL or side a la ST/1200XL)

 

For 1987 an ST derived game system could have made more sense, but also might have been jumping the gun on that. (internal plans for an ST based game system were more towards '89, but maybe something in '87 could have been practical as a higher-end game console based on the ST -at least if the BLiTTER was available and the stripped down everything else to bare bones with none of the computer specific features, modified memory map to support a wide address for cart ROM and stripped to 128k of work RAM, some sort of decent sound chip -even the super low-end YM2413, etc -by computer specific stuff I mean the Floppy controller, ACIAs, 6301 -perhaps use direct parallel controller ports-, floppy/HDD DMA logic, maybe YM2149 -or retain it for joyport I/O and with a simplified/modified GLU used )

 

 

Actually, using the computers could have been smart as, so long as they were relatively prudent about certain design aspects (to allow stripping down to console specs) they could have kept relatively efficient parallel R&D for console and computer hardware development. (and also facilitate backwards compatible successors for consoles and computers as such while promoting cross-platform game development)

Edited January 19, 2011 by kool kitty89

[Lynxpro]

In my next homebrew I'll try and work a whistle in there just for Atari Joe .

 

 

How about interactivity with the ROB? Just because Nintendo never found anything useful for it doesn't mean the Atari homebrew community couldn't...

[Lynxpro]

 

 

It was games and Nintendo was locking in all of the hottest licenses and putting software companies in exclusive 2 years agreements to publish games. Atari essentially got locked out of having developers to do games for the 7800 and licenses for hot new titles... though I have always wondered why Atari didn't license games from Atari Games Corp. They could've had Marble Madness, Peter Pack Rat, Skull & Crossbones just to start with.

 

Sega on the other hand had Afterburner, Outrun, Altered Beast, Golden Axe and so many more titles of its own that had not been brought to the home console market yet, so its Master System had plenty of games available initially.

 

 

I was so mad when I learned Atari Corp. hadn't acquired Atari Games prior to the release of the 7800. My friends and I thought for sure that Atari would clean Nintendo's clock with games like Gauntlet. We were so disappointed when Gauntlet appeared on the NES by the "mysterious" company named Tengen. It made the rest of them so mad that they had their parents buy the NES for them and I was the only one who had the 7800. It was so disappointing because we all had had 2600s for years and we had borrowed each others games for years.

 

Once I learned that Atari Games was still a separate company, I began pestering Atari Corp. to license the Atari Games Corp. titles. I think I sent them a letter once a week requesting them to do so.

 

As for the Atari Games Corp., had they lived up to the contractual agreement with Nintendo, they would've been restricted from publishing their titles for the 7800 regardless since most of their titles were already licensed for the NES.

 

 

Actually Tramiel crutched quite a bit on Warner for additional cash and reworking of its debt, he actually threatened publicly many times that if he couldn't make Atari profittable, he'd just walk away and that scared the heck out of Warner. So while Games Corp was by that time bought by Namco, Warner still held some stock and also Games had to license the Atari name and Logo from Atari Corporation, so Tramiel would've had leverage to get some sweetheart licensing deals from Games for some of the arcade titles and who knows, maybe he could've nudged a bit on some Namco titles as well, but who knows...

 

That doesn't seem right about Atari Games Corp. having to license the "Atari" name and logo. I thought they had worldwide exclusive rights to the name and logo for use solely in arcades and Atari Corp. had worldwide exclusive rights for computers and home video games... [not counting Ataritel]. That's how it was always explained after the Tramiel acquisition. I guess it complicates matters if one wanted to market "Atari Games" t-shirts. I'd assume you'd only have to secure a licensing deal with Warner Bros. Interactive...

[kool kitty89]

I was so mad when I learned Atari Corp. hadn't acquired Atari Games prior to the release of the 7800. My friends and I thought for sure that Atari would clean Nintendo's clock with games like Gauntlet. We were so disappointed when Gauntlet appeared on the NES by the "mysterious" company named Tengen. It made the rest of them so mad that they had their parents buy the NES for them and I was the only one who had the 7800. It was so disappointing because we all had had 2600s for years and we had borrowed each others games for years.

That sounds a bit odd. You were really keeping up with events in such detail back then? (most people -even atari fans- didn't really understand the actual fact of Atari Games being a separate company or Atari Corp being a totally different company than any previous "Atari") Nintendo was a nobody on the consumer hardware market in the US until spring of 1986 anyway, they weren't big news nationwide until that fall/winter and even then only people who actually took interested in the industry.

What about Sega? They'd have been just as prominent at the time as a competitor.

 

And it was Warner that screwed things up with the split. Separating the coin-op division wasn't the critically problematic thing, it was how Warner managed the whole thing and also ruined Morgan's carefully laid plans for reorganization.

Marty made some interesting comments on this recently:

However, as I said above, they didn't sell the company, they liquidated its assets and sold off parts of those (the consumer properties) to TTL (which then became Atari Corp)

 

Consumer Division. That included the IP, manufacturing, distribution, and Consumer related buildings.

 

 

while laying off 100% of Atari staff. (Warner then hired much of the arcade staff to the new Atari Games Corp and Tramiel began interviews on hiring for Atari Corp -in addition to retaining the existing TTL staff)

 

No, AFAIK the Coin people were never touched. They simply took everyone involved in the Coin portion of Atari Inc. and spun them off as Atari Games Corp.

 

The really bad part isn't even the sale or liquidation, but the absolutely horribly way Warner handled it... and the timing on top of all that. Warner made no notification of a possible sale to any Atari Inc staff (even Morgan) until literally minutes before the final documents were being signed and they brought Morgan in to finalize everything. On top of that the deal went through over 4th of July vacation, so you had staff coming back from a long weekend with no idea what the hell was going on and not understanding that the company they'd worked for effectively no longer existed and that Warner had laid off everyone.

 

Yes, not to mention putting the have a job/don't have a job on Jack's head because it was either you're going to the new Atari Corporation or you're looking for employment elsewhere. Which when I talked to Leonard he stated how they all felt horrible about it going in. Knowing they were going to have to do that with a bulk of the Atari Inc. people.

 

And most of the people didn't have a clue after that July 4th weekend that they were laid off because of how Warner handled it - no announcement to the employees, no nothing. They thought they were returning to work at Atari Inc. busines as usual with no idea the buildings, assets, etc. now belonged to TTL. Warner just let everything sit there and put it in Jack's lap for a transition, simply handing over the keys. Literally everything - employees, buildings, ongoing contracts, etc., etc. Which is why Jack and company had to spend the entire rest of the month of July going over what they all inherited, and who they were going to hire over. (Jack and company literally had people helping tally everthing down to the last refrigerator). People came in after that weekend only to find complete anarchy and people being called in to interviews. And now as far as they knew, Jack had taken over Atari Inc. and was now their boss because of the way Warner handled it. The first few days until Jack started locking down all the consumer buildings (including warehouses) were madness, people were driving up and loading up U-Hauls and vans full of stuff. Likewise a number of people started wiping out their directories on the mainframe.

 

 

With a reasonably prudent, organized, and proactive transitional plan, Warner probably could have avoided the mess that resulted in mid 1984 (and lingers for months). Sure, some things would still have been changed or lost due to the split, but it could have been far less harmful than it was. (if they really wanted to maintain reasonable stability, they probably should have not only notified upper management of a possible sale weeks/months in advance, but set up a more gradual transition to Atari Corp, depending on what Tramiel would agree to -ideally it seems like it would have been very good for Morgan to stay on in management, perhaps under Tramiel, at least until things got smoothed out)

 

Ideally there should have been some form of normal transition - where all assets are mapped out, employees are explained the situation so they have time to start looking for jobs elsewhere, and a clear explination of how the Inc. assets are being split. As it was because of how Warner did it, Atari Corp and Atari Games were in litigation for years after arguing who owned what patents and such.

-------------

 

 

But anyway, I don't think having AGames onboard (for licensing arcade ports) would have made a huge difference. Atari Games was not the arcade giant that AInc had been and Arcade games weren't the strongest driver of sales in the late 80s anyway. (Tengen was a pretty minor player in the 3rd gen console market, at least once you stripped out all licensed ports -namely Namco stuff) Albeit, perhaps AGames could have been useful for developing console specific games as well. (their arcade games were fairly notable nevertheless and would certainly have helped the limited library Atari had on the 7800 -the ST was getting pretty good 3rd party support by comparison-)

 

The bigger problem is that Atari Corp hadn't taken on any of the former console game programming staff, though they did take most of the computer/game related staff. Now, that's in part due to TTL/ACorp's management decisions, but more to do with the lack of a balanced or well-planned transition from AInc to corp. (the same reason they also lost a lot of powerful engineering staff, didn't go into the exiting Advanced Technology prototypes, etc, etc) Note that Morgan would likely have had to lay off more AInc staff as reorganization progressed, but it would have been far more orderly vs the anarchy caused by Warner's management of the split.

 

It also created a good deal of friction with AGames that lasted for years, and of course forced the delays with the 7800's release. (a properly handled transition could have meant the 7800 having almost no delay among other things)

 

 

 

 

 

Once I learned that Atari Games was still a separate company, I began pestering Atari Corp. to license the Atari Games Corp. titles. I think I sent them a letter once a week requesting them to do so.

As for the Atari Games Corp., had they lived up to the contractual agreement with Nintendo, they would've been restricted from publishing their titles for the 7800 regardless since most of their titles were already licensed for the NES.

Yes, publishing, but not developing. They could have published under different labels or licensed the games to others to publish. (like Atari Corp) That's the same loophole NEC and Sega used for bringing over some Japanese games from "locked out" developers. (though NEC screwed up by not pushing nearly as hard as they could -they probably had potential to be the Sony of the 4th generation with the vertical integration and megacorp clout if they'd invested proprly and established the proper management/marketing for the western divisions)

 

 

Atari Inc and Warner had been a real mess, with the major problems surfacing in 1982 and deepening in '83. Morgan's arrival helped a lot with the exception of the hold on operations that delayed or canceled many major products in late '83. The change in management was badly needed though, but it's just a shame that he made that move and also that it took until mid 1983 for Atari Inc to get the lead management it needed. (had Kassar been replaced back in mid '82, they might have been able to head off the problems much sooner) OTOH, it's a shame a man like Kassar was put in charge in the first place (rather than someone with experience and skills well suited to the consumer/entertainment market and preferably with a decent general understanding of the electronics/computer markets as well -or at least advisory staff to provide such insight). He was at least a lot better than Bushnell as far as smart business decisions went. Of course, Warner's own dual management and bureaucracy screwed things up well beyond what Kassar was doing. (he formally turned down ET after Universal asked too much, but Warner went ahead with their own deal with Spielberg...)

So, not only should Atari Inc have gotten a better president/CEO, but Warner probably should have made it a largely autonomous spin-off company (with controlling interest) rather than a direct subsidiary of Warner.

 

 

Actually Tramiel crutched quite a bit on Warner for additional cash and reworking of its debt, he actually threatened publicly many times that if he couldn't make Atari profittable, he'd just walk away and that scared the heck out of Warner. So while Games Corp was by that time bought by Namco, Warner still held some stock and also Games had to license the Atari name and Logo from Atari Corporation, so Tramiel would've had leverage to get some sweetheart licensing deals from Games for some of the arcade titles and who knows, maybe he could've nudged a bit on some Namco titles as well, but who knows...

 

That doesn't seem right about Atari Games Corp. having to license the "Atari" name and logo. I thought they had worldwide exclusive rights to the name and logo for use solely in arcades and Atari Corp. had worldwide exclusive rights for computers and home video games... [not counting Ataritel]. That's how it was always explained after the Tramiel acquisition. I guess it complicates matters if one wanted to market "Atari Games" t-shirts. I'd assume you'd only have to secure a licensing deal with Warner Bros. Interactive...

Yes, Marty made a post about that too:

 

Additionally, when Jack purchased Atari Consumer, he also purchased rights to the Atari brand and logo for consumer usage as well. Atari Games was allowed to use it in coin-op only, and it must have the word "Games" appended to the logo. Hence, there was no way for them to enter consumer market as Atari Games and release the 7800, nor was Warner looking for them to enter the consumer market. Warner had just got done dropping all consumer operations to Tramiel. Atari Games did enter the consumer market under Namco's leadership in 1987 though, via it's subsidiary Tengen, which was created for that purpose to get around the agreement.

 

 

 

 

 

 

 

 

And back to Tramiel buying AGames, it couldn't be done unless Warner was willing to part with it for more promisary notes:

I don't think you understand the financial situation he was in. He had no money when he took over. He had already invested his own money in to the company, did the majority of the Atari Consumer purchase under IOU's to Warner, and took on both the good and bad debt from Atari Inc. in the purchase. The good debt (money owed to Atari Inc.) was theoretically supposed be able to keep the new company afloat (which is why it was given to them) - only they couldn't collect it. In fact they had to get Warner to loan them money that September and by December were already talking to the press about the problems they had with collecting and stating they might use that fact to renegotiate their terms with Warner (since it was of course originally included as an asset in the valuation). That's precisely why they had to rely on the sizeable backstock of consoles and computers they inherited for incoming money during that time and started looking at getting the cost reduced 2600 out the door immediately that August. All this while trying to get their next gen computer out the door as well as make payroll, etc. It's simply amazing he was able to turn this all around to a profitable company and put it in the black (wiping out all debt) by '86/'87.

 

 

 

 

 

And another good post on the topic of the overall situation surrounding the split:

Morgan himself was still leaning the company down out of necessity as well, right?

 

Yes, there were mass layoffs at the beginning of June as part of Morgan's announced plans:

http://www.nytimes.c...ome-office.html

 

 

That is true. But as an actual CEO of my own company I can say that I would never do what Warner did.

 

Are you the CEO of a multi-billion dollar company? Are you answering to shareholders about over 50% profit loss, and 400 million in losses alone just that 2nd quarter of '84? Losses coming from your former chief source of profit, that had been on a downward spiral since December of '82? And did you just get done staving off a hostile takeover, to which you had to pay out big time to avoid?

 

I don't disagree with their decision to do something with Atari, I disagree with how it wound up being handled during the end of the process. The decision to sell wasn't done hurridly, they actually hired a firm to evaluate their (Warner's) situation in that January and they're the ones that recommended selling Atari and several other subsidiaries. Warner had been on an acquisition spree through the 70's and it was catching up with them. Per the firm's recommendation it had begun looking for possible buyers. I can't say that Morgan didn't know about it, because he didn't live in a bubble - the press knew Warner was in talks with Philips and others. That was however for the entire company, which conceivably would still allow Morgan to proceed as planned. What he was not aware of was the actual splitting of the company and the immediate sale of Consumer to Jack. He stated he had no idea of that until he walked in to the boardroom to sign the papers. Even Jack had been caught off guard for the whole thing. They had been in talks in May that fell through and then he gets a call the very end of June (days before they started the weekend long negotiations) asking if he's still interested.

 

Warner had way more resources than Tramiel did. If they thought for a second that Tramiel could turn Atari around they should have looked inside themselves and see what was preventing them from doing the same.

 

He didn't turn Atari around, Atari Inc. collapsed and was liquidated. He took the Consumer Division and folded it in to his company Tramel Technologies Ltd. (TTL) to form Atari Corporation. As part of the no money down deal he also took on Atari Inc.'s debt (which was chiefly from it's consumer operations), so Warner could get it off the books. Likewise as part of the deal, Warner took stock in the new company (not majority), just in case he managed to make things work with Atari Corporation. It was a win-win for them.

 

Warner selling Atari was a haste decision imho.

 

They didn't sell Atari. They sold a division because they couldn't get anyone to buy the entire thing on their terms. What they wound up doing was paring Atari Inc. down to the original Coin-Op format it was when they first entered talks to buying it, and then spun that off with Namco as Atari Games. The corporate entity Atari Inc. itself existed for about two years after for legal purposes (lawsuits, collection attempts, etc.)

 

The fact that the president of Atari was not even aware of it breaks about every business rule I have ever learned.

 

I certainly agree there, but it's unethical but not illegal. It wouldn't be the first or last time a parent company does things without consulting the CEO of a subsidiary.

 

Sure, Warner was a publicly traded company and they had to look out for the share holders. Look at Apple. It was Amelio that basically said no to a deal with Sun when Apple was in trouble. Sure, he wanted the job of CEO. But he also felt that there was nothing that Apple couldn't do that they couldn't do if Sun bought them out. He was right. Even though Apple lost a ton of money under Amelio he still set the foundation for a strong company.

 

You've got to be kidding. Amelio's reign was one of the worst in the history of the company and a point to it's complete lack of foundation. In fact the first thing Jobs had to do was completely reorganize Amelio's "foundation". And instead of an outside takeover, Amelio unknowingly set up for an inside one with the purchase of NeXT - and his own forced departure. That's pure boneheadness. Nothing done under Amelio's reign had impact on the future of Apple other than the purchase of NeXT which allowed his replacement to come in. He simply wanted access to a next generation OS, and instead got a next generation Apple via his replacement.

 

As far as my other two points. It's not rocket science that if you don't have product (games) on the shelf during holiday time you are in trouble.

 

Which they did. The only time I'm aware of shortage issues with the 7800 was during the initial stages of the relaunching (January '86 through that Summer) when they were relying primarily on '84 backstock until manufacturing operations started up again. During that time stores were selling out of all 7800 stock. It was completely resolved by September and the big Christmas season showdown.

 

As I said, who cares if they didn't get the hot titles.

 

Which is why you're probably not CEO of a video game console company.

Edited February 5, 2011 by kool kitty89

[Lynxpro]

That sounds a bit odd. You were really keeping up with events in such detail back then? (most people -even atari fans- didn't really understand the actual fact of Atari Games being a separate company or Atari Corp being a totally different company than any previous "Atari") Nintendo was a nobody on the consumer hardware market in the US until spring of 1986 anyway, they weren't big news nationwide until that fall/winter and even then only people who actually took interested in the industry.

What about Sega? They'd have been just as prominent at the time as a competitor.

 

 

I was a big time Atari fan as a kid. That and Star Wars. After its publication, I was checking out Infoworld's Guide to the Atari book weekly from the local library and from that I became rather fixated on the nearly-unreleased 7800 and the Mindlink system. I also had Zap the Rise and Fall of Atari. Since my parents were looking at buying a computer for me, I was doing research on it so we were purchasing the Antic, Analog, and Atari Explorer magazines in order to keep up with news about what Atari was doing and especially with the ST. Sending letters to Atari Customer Service prior to the re-launch of the 7800 would land you a letter response stating Atari Corp. had no plans of releasing it. Imagine my surprise when the Sears catalog came with the 7800 prominently featured in it.

 

I learned the shocking news of Atari Games still being a separate company when Analog magazine had a write-up of some of the issues that had been going on there and some clashes with Namco's management. That and the fact that "Tengen" was releasing Atari Games arcade titles on the NES and none of them were heading to "Atari's" own console.

 

I also joined the local Atari computer user's group after my parents bought me the 1040ST after it was released. When my group of friends learned that Atari Games was still a separate company and thus our favorite arcade games were heading to the NES, they all got NES systems. I had my trusty 7800 but I also bought a used NES with Christmas money which I later sold in order to buy the Lynx when it first debuted. I should note that in the rocky 1984 period, most of my friends families bought Commodore 64s since they were receiving better support from the mass merchants than the Atari 8-bit line at the time. I had tried to get my parents [and my grandmother] to go to one of the real estate/vacation/time share seminars in order to get a free 800XL in 84 but they didn't go. It seemed like every one of those time share companies were giving away "free" computers back then. My aunt went to one and got a TI 99/4A for my cousins. When my grandmother finally decided to go to one, instead of the 800XL, she got the Commodore Plus4. That was terrible. My dad opted to skip the 8-bits and hold out for the 16-bit computers. The 1040ST was ideal especially since at the time it appeared Commodore was in a downward spiral and the Amiga 1000 wasn't really selling well due to its rather high price in comparison to the ST line; they didn't turn around until the Amiga 500 the following year.

 

So yeah, I guess you could say I wasn't the usual pre-teen Atari user back then...

Edited February 5, 2011 by Lynxpro

[SpaceDice2010]

Actually Tramiel crutched quite a bit on Warner for additional cash and reworking of its debt, he actually threatened publicly many times that if he couldn't make Atari profittable, he'd just walk away and that scared the heck out of Warner. So while Games Corp was by that time bought by Namco, Warner still held some stock and also Games had to license the Atari name and Logo from Atari Corporation, so Tramiel would've had leverage to get some sweetheart licensing deals from Games for some of the arcade titles and who knows, maybe he could've nudged a bit on some Namco titles as well, but who knows...

 

 

Curt

 

though I have always wondered why Atari didn't license games from Atari Games Corp. They could've had Marble Madness, Peter Pack Rat, Skull & Crossbones just to start with.

 

 

 

Did those two companies have a good relationship? I was under the impression that they had a bad relationship after Warner's breakup.

 

Actually didn't Atari Games get 70,000 shares for games they licensed to Atari Corp? Exactly what games were these? It was a combination for 2600, 7800, Lynx etc.

[kool kitty89]

Actually didn't Atari Games get 70,000 shares for games they licensed to Atari Corp? Exactly what games were these? It was a combination for 2600, 7800, Lynx etc.

I thought they were all ST and Lynx licenses and included Hard Drivin, STUN Runner, Steel Talons, and a few others. (there was a list posted in one of the threads a while back -I think it was more than just the 3D games, but I forget the details)

 

It was a later deal that came after Time Warner had a controlling share of Atari Games iirc, but before they folded the Tenden label into TWI. (none of the games were ported by Atari Games/Tengen staff, all were handled by Atari Corp staff and outsourced development -I think mainly the latter)

[DracIsBack]

Actually didn't Atari Games get 70,000 shares for games they licensed to Atari Corp? Exactly what games were these? It was a combination for 2600, 7800, Lynx etc.

 

There's a note in one of the annual reports that they gave them shares in lieu of payment (which was overdue).

[SpaceDice2010]

I remember reading an annual report that they did pay in shares for money due, but can't recall what the exact titles were.

 

"

March 29: Atari Games acquired 70,000 shares of Atari Corp. Common Stock as royalty payment for the publishing by Atari Corp. of versions of Atari Games games on Lynx (18 titles), ST (3 titles), 7800 (5 titles), and 2600 (1 title) through December 31, 1993."

 

From this website -

http://mcurrent.name/atarihistory/atari-jts.html

 

It looks reliable as it seems he is going by annual reports etc.

 

Wonder what the 5 7800 titles would be?

[DracIsBack]

Wonder what the 5 7800 titles would be?

 

Klax (found and released)

Pit Fighter (early version found and released)

Steel Talons (rumoured but not found)

Road Riot 4WD?

Toki?

 

Thanks for sharing the link. I've not seen that before. Good nuggets in there light dates.

 

This was the one where Electrocop 7800 was shown:

 

January 12-16: Atari (Entertainment) featured the slightly-redesigned Lynx at the Winter CES in Las Vegas. Atari also promoted: 6 new games for the 7800, and support for the 1040 STe and the Portfolio.

Edited February 14, 2011 by DracIsBack

[8th lutz]

 

Klax (found and released)

Pit Fighter (early version found and released)

Steel Talons (rumoured but not found)

Road Riot 4WD?

Toki?

 

Thanks for sharing the link. I've not seen that before. Good nuggets in there light dates.

 

This was the one where Electrocop 7800 was shown:

 

January 12-16: Atari (Entertainment) featured the slightly-redesigned Lynx at the Winter CES in Las Vegas. Atari also promoted: 6 new games for the 7800, and support for the 1040 STe and the Portfolio.

You forgot about Ramport. It could have been one of the 5 games. Besides a prototype of it was found, there was an internal document on the game in May 1993. Atari got away with paying $50,000 out of $60,000 for the game.

Edited February 14, 2011 by 8th lutz

[The_Laird]

The 5th would have been Rampart as Toki was licensed from Fabtek along with Raiden and Cabal.

[DracIsBack]

You forgot about Ramport. It could have been one of the 5 games. Besides a prototype of it was found, there was an internal document on the game in May 1993. Atari got away with paying $50,000 out of $60,000 for the game.

 

I knew there was one I was missing. hope a more advanced build of that is found. The one that's out there now is pretty useless. Kinda like the GATO prototype.