The Tramiels

[SpaceDice2010]

 

 

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.

 

 

 

I have to strongly disagree with you on this one. It is true that the deal with Next did result in his own departure. Even Amelio admits that. He also says that if he had the chance to do it over again that he would do the same thing.

 

Apple never really had a "good" CEO. If Sculley had only stayed the five years he was suppose to then he would have left the company as a hero. Spindler was just plain horrible and year after year he made decisions that pretty much buried the company. In fact the last 6-12 months of his tenure all he really did was channel stuff with products that no one really wanted, filled warehouses with the same products, and spent most of his time trying to find a buyer for Apple. At the same time that Apple's board was drawing up a compensation package for Amelio they were also seriously considering an offer to be bought out by Sun at $23 a share when Apple was trading in the low $30 range. That is how confident they were of Apple' financial position when Amelio came in. Pretty sad.

 

Now, I am not a big fan of Amelio at all. I think what he did at National was highly overrated. In fact at one point during his reign I bought $25k worth of Apple stock at something like $14 just because the reporters were saying that if the company was broken up it in parts it would be worth something like $18 a share. What can I say, I was and still am an Apple fanboy at heart. I will say that was the best investment I ever made in my life though.

 

What did Amelio do for Apple, here we go -

 

1. He increased the cash that Apple had to work with. When taking over Apple the company has less than six months of cash on hand was burning through it. When Jobs took over he was handed a company that has a multi-billion reserve of cash. One of the ways he did this was via some sale of bond/stock offering that normally requires executive to travel around the country selling it much like an IPO. At the time, I believe it was in October, it was just not feasible for the execs to be on the road in such a crisis. Apple did what had never been done before and sold it via a conference call and oversold it. Even Jobs praises him as the only one that could pull that off.

 

2. Product Quality - At the beginning of his term Apple was at the bottom in terms of quality. At the end of his term Apple was near the top again.

 

3. Sales forecasting. Under Spindler it was a mess. There was no real system in place. At the end of Gil's reign they actually had a good system in place for forecasting what products would sell. Obviously Amelio realized there was a problem when he wrote off over 1 bil (pre-tax) of product from Spindler's reign that no one wanted.

 

4. OS Strategy - He knew there was a problem and brought in Hancock, who was more than capable to run R&D. Instead up dumping more money on Copland he axed it and decided to use what parts of it they could in updates. 8, 9 etc. And of all the choices for a new OS - Be, NT, Next, Solaris; Next was the best choice.

 

5. Newton - Rather than go with the $5k Newton, he went against what his engineers said was possible and went with a sub $2k Newton. In fact under Amelio Newton actually turned a profit and was spun off from the company for a possible sale.

 

6. Products - Towards the end of his tenure he actually got a grip on the products that Apple was offering and had a focus on products that consumers wanted. The PB 1400 is one example. The G3 was almost ready to go.

 

I am sure I am missing a few things. But, to say that Amelio didn't lay a foundation for Job is not correct. Sure, under Amelio the company lost the most money in the history of a CEO in such a short time. Most of that was the write downs from the Spindler reign of terror. He also took the company's break even point down an additional 2 bil in sales per year. There was quite a cost on the bottom line to do that as well. It was true that under Amelio execs did some channel stuffing, something that Amelio was adamantly against. This had a negative impact on the bottom line. Amelio early on went against his gut feeling for his choice of COO. This cost him dearly.

 

So what did Jobs walk into when he took over? He took over a company that had enough cash in the bank, a company that could be profitable on 2 bil less a year in sales, a company that had an OS strategy, had some good products in the pipeline, was rated high in quality again, and a company that could, for the first time in a long time, actually forecast sales with some degree of accuracy. Oh! And Amelio was already working on a store that sold direct to consumers.

 

Jobs still inherited a fragmented company. But that was something that was an Apple curse from almost day one. Just go back in time and look at how the Apple II, Lisa, and Mac camps were setup and even the sales vs. R&D battles.

 

The top line (profit) of the company always lags the bottom (operations). Would Apple have been profitable during those times that Jobs was so proud of the profit he was able to obtain if Amelio was there? Probably. Would Apple be what Apple is today if Amelio stayed? Absolutely not. Apple got a big break on the Ipod and I for one and really glad that they did. Buying Apple stock at $14 a share is something I don't regret. If it weren't for Jobs return I am sure that I would have sold it at some point. But, I kinda think Jobs is cool so I kept it.

[Curt Vendel]

This was shot in 2002 or 2003 for BBS Documentary. Haven't lived in Staten Island for almost 10 years... I'm about 75 miles north of Manhattan.

 

 

Curt

 

Hi, wgungfu, I'm really into all the work that you're doing, uncovering all of these things about Atari history. I just saw Curt Vendel's video & wondered if he was still living in Staten Island. I presume that you work with him, from the context of your posts. I live about 30 minutes away, and would absolutely be inclined to help out, particularly with the organization of technical  documents, and the retrieval & documentation of data from the backups of the company's minicomputers. Please have him contact me, if he is still in the NY/NJ area. Thanks!

[Curt Vendel]

In the 1990's Apple stretched its line out to ridiculous proportions with numerous overlapping products that both confused consumers and caused a drop in their sales and nearly put the company out of business. If it wasn't for the merger with NeXT and the bringing back of Jobs which drastically streamlined the product line, introduced the iMac line, unfortunately killed the Newton which was a huge money-losing product, though as cool as it was. With that we saw the OS X Server emerge and with it Apple's rebirth.

 

Meanwhile Atari and Amiga were feeling immense pressure and saw their coming demise in the computer fields. Atari did have an opportunity with its MicroFalcon line, but with a crunch on cash it reverted back to video gaming solely, though dropping the Lynx I feel was a very bad decision, the design could've continued to have been improved and evolved.

 

Amiga was facing its own issues...

 

A lot of the problems steamed from the fact that Windows was introduced in 1990 and PC's suddenly became very usable and with Netbeui and Windows for Workgroups, PC's were suddenly becoming very inexpensive LAN centric systems no longer requiring expensive Novell servers.

 

 

Curt

 

 

 

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.

 

 

 

I have to strongly disagree with you on this one. It is true that the deal with Next did result in his own departure. Even Amelio admits that. He also says that if he had the chance to do it over again that he would do the same thing.

 

Apple never really had a "good" CEO. If Sculley had only stayed the five years he was suppose to then he would have left the company as a hero. Spindler was just plain horrible and year after year he made decisions that pretty much buried the company. In fact the last 6-12 months of his tenure all he really did was channel stuff with products that no one really wanted, filled warehouses with the same products, and spent most of his time trying to find a buyer for Apple. At the same time that Apple's board was drawing up a compensation package for Amelio they were also seriously considering an offer to be bought out by Sun at $23 a share when Apple was trading in the low $30 range. That is how confident they were of Apple' financial position when Amelio came in. Pretty sad.

 

Now, I am not a big fan of Amelio at all. I think what he did at National was highly overrated. In fact at one point during his reign I bought $25k worth of Apple stock at something like $14 just because the reporters were saying that if the company was broken up it in parts it would be worth something like $18 a share. What can I say, I was and still am an Apple fanboy at heart. I will say that was the best investment I ever made in my life though.

 

What did Amelio do for Apple, here we go -

 

1. He increased the cash that Apple had to work with. When taking over Apple the company has less than six months of cash on hand was burning through it. When Jobs took over he was handed a company that has a multi-billion reserve of cash. One of the ways he did this was via some sale of bond/stock offering that normally requires executive to travel around the country selling it much like an IPO. At the time, I believe it was in October, it was just not feasible for the execs to be on the road in such a crisis. Apple did what had never been done before and sold it via a conference call and oversold it. Even Jobs praises him as the only one that could pull that off.

 

2. Product Quality - At the beginning of his term Apple was at the bottom in terms of quality. At the end of his term Apple was near the top again.

 

3. Sales forecasting. Under Spindler it was a mess. There was no real system in place. At the end of Gil's reign they actually had a good system in place for forecasting what products would sell. Obviously Amelio realized there was a problem when he wrote off over 1 bil (pre-tax) of product from Spindler's reign that no one wanted.

 

4. OS Strategy - He knew there was a problem and brought in Hancock, who was more than capable to run R&D. Instead up dumping more money on Copland he axed it and decided to use what parts of it they could in updates. 8, 9 etc. And of all the choices for a new OS - Be, NT, Next, Solaris; Next was the best choice.

 

5. Newton - Rather than go with the $5k Newton, he went against what his engineers said was possible and went with a sub $2k Newton. In fact under Amelio Newton actually turned a profit and was spun off from the company for a possible sale.

 

6. Products - Towards the end of his tenure he actually got a grip on the products that Apple was offering and had a focus on products that consumers wanted. The PB 1400 is one example. The G3 was almost ready to go.

 

I am sure I am missing a few things. But, to say that Amelio didn't lay a foundation for Job is not correct. Sure, under Amelio the company lost the most money in the history of a CEO in such a short time. Most of that was the write downs from the Spindler reign of terror. He also took the company's break even point down close the 2 bil in sales per year. There was quite a cost on the bottom line to do that as well.

 

So what did Jobs walk into when he took over? He took over a company that had enough cash in the bank, a company that could be profitable on 2 bil less a year in sales, a company that had an OS strategy, had some good products in the pipeline, was rated high in quality again, and a company that could, for the first time in a long time, actually forecast sales with some degree of accuracy. Oh! And Amelio was already working on a store that sold direct to consumers.

 

Jobs still inherited a fragmented company. But that was something that was an Apple curse from almost day one.

 

The top line (profit) of the company always lags the bottom (operations). Would Apple have been profitable during those times that Jobs was so proud of the profit he was able to obtain if Amelio was there? Probably. Would Apple be what Apple is today if Amelio stayed? Absolutely not. Apple got a big break on the Ipod and I for one and really glad that they did. Buying Apple stock at $14 a share is something I don;t regret.

[SpaceDice2010]

The main problem as I see it is that Atari pretty much seemed to be cash crunched as well almost all the time.

[kool kitty89]

Has anyone ever done a time line month/year of when A7800 games were released?

 

As I said, you can have the hottest titles in the world, but if you don't get them out in time for the holidays it doesn't matter. As I said, who cares if they didn't get the hot titles, they most likely would have missed release dates even if they did.

 

As an example look at the promised titles for 1987 (a critical year) and what was actually released before Christmas.

It's more than that though: you need games, you need to have at least a fair chunk of hot titles among those (be it new/exclusive games or arcade/computer licenses), you need them out at the right time at the right quantity, and you need people to know they're being released (and more than that if they're new/unique/exclusive games opposed to well-known licensed/arcade stuff).

You can't overlook any of that, and all has to be tempered by available funding. (the biggest issues with Atari Corp was funds, not only for advertising, but for software development... especially since they didn't manage to get any significant amount of licensed 3rd party publisher interest -Activision was among the few that did and even then it was only for a couple games)

 

And you're right about '87 being a critical year... '87 and '88 were the most critical years for 7800 sales and they sold nearly 3 million consoles in the US alone in those 2 years (roughly 2.7 of the 3.7 some million sold in the US from '86 through '90 -and by 1990 sales had dropped below 100k from the >600k of '89 and well over 1M in '88)

 

 

Honestly I'd say the lack of funds to push big marketing and some commissioned software in general (and of course Nintendo locking out almost everything Japanese arcade wise -let alone JP 3rd parties- and Sega shoring up most of the rest of their own arcade stuff) were the major limits of Atari Corp, and things got worse once Nintendo's influence pushed US 3rd parties to comply to their limiting licensing terms. 1986 was when Atari Corp could have cut in a strong enough niche on the US market to compete with Nintendo, but they lacked the funding to mange that in terms of mass-marketing in addition to other disadvantages. (such early popularity and notability on the mass market should have critically increased interest from 3rd party publishers for licensing deals -not sure what Atari Corps policies on that were at the time though) Sega had that chance and more so had the in-house software development and funding to directly fight Nintendo, but they screwed up with the execution. (Atari managed surprisingly well without such luxuries, at least up to '89 when Katz and Jack both left)

 

 

 

 

 

 

Meanwhile Atari and Amiga were feeling immense pressure and saw their coming demise in the computer fields. Atari did have an opportunity with its MicroFalcon line, but with a crunch on cash it reverted back to video gaming solely, though dropping the Lynx I feel was a very bad decision, the design could've continued to have been improved and evolved.

Yeah, that's something I was really surprised by... I'd thought the Lynx WAS supported alongside the Jaguar ... as that made sense (both video game system -even potential to have some sort of neat tine-in interconnectivity with the Jag like Nintendo later did with the GBA+GC), and was pretty shocked when I discovered that was cut along with the ST line. From the revenue figures I've seen on the Lynx http://www.blackwellpublishing.com/grant/docs/11Videogames.pdf it seems to have been relatively stable from 1990 through '92, though without knowing the operational costs of managing the Lynx it's hard to know for sure if those were profitable figures (if they were consistently profitable there's no reason they should have dropped it... or the ST line for that matter -but I'd gotten the impression that the ST/computers were failing to be profitable either) For that matter I don't think the Jag ended up producing a net profit after all R&D, distribution, and marketing costs were accounted for, so that made it an even worse gamble. (in the short term, dropping the other products may have even hurt the jag more than helped as all they had to ride on was investor interest from the Jag hype in '93 and lingering sales of remaining computer/lynx/etc stock, and there didn't end up being any long term anyway... The Jag hype -including the test market- and resulting investor support does seem to have been critical in successfully completing ongoing litigation -especially with Sega- that ended up quite favorable, but that may not have been mutually exclusive with supporting the Lynx, or even the computers)

 

They'd obviously long lost anything but a small niche market in North America, but the ST and Amiga were still quite notable in Europe in the early 90s, and hell with hindsight Commodore clearly collapsed before Atari Corp did, so they could even have capitalized on that in spite of the mounting problems of PC competition in Europe. (CBM even screwed up with getting out a good lower-cost mid-range system in the A1200 compared to the Falcon -CBM had a better array of high-end or more workstation class machines from the earlier 3000 to the newer 4000 but that was a separate bracket of the market and not what made the ST or Amiga big in Europe-, but of course the Falcon was ripped from the market much sooner, so we'll never know what would have happened)

 

From what I know about Jack and Katz's management style at Atari Corp, it definitely seems like they wouldn't have made those sort of calls as Sam did in '92/93... then again, if Jack and Katz (or at least someone reasonably similar in capabilities) had never left in '89, Atari Corp probably wouldn't have been in that situation in the first place.

 

 

 

A lot of the problems steamed from the fact that Windows was introduced in 1990 and PC's suddenly became very usable and with Netbeui and Windows for Workgroups, PC's were suddenly becoming very inexpensive LAN centric systems no longer requiring expensive Novell servers.

You mean Win3.x was launched in '90... the first really useful version of MS Windows. Prior to that you had GEM and OS/2 available on PC, though the former ran on top of DRDOS/CP/M which didn't really mesh with PC/MSDOS until relatively late releases from what I understand -and versions running directly on top of MS/PCDOS. OTOH OS/2 remained a significantly more powerful and useful OS in general through contemporary windows releases but MS seemed to drive market share far more, especially at the common consumer level. (more so with win9x even against WARP -part of it may have been limited by IBM's size and bureaucratic overhead that had also limited later competition in the PC market in general)

 

Then again, if Digital Research had agreed to the CP/M deal with IBM, things would have been very different on the PC OS front from the beginning. (and DR would have been far stronger in general, with the backing of IBM to stave off Apple litigation over GEM )

[toptenmaterial]

We sure love an underdog, don't we?

[HiroProX]

Morgan would have done far better, if only he had been given a reasonable amount of time.

 

But I have to admit, best thing out of the Tramiel years was the ST/XE styling. It was a pretty bold style that to me ranks second only to the XL styling.

[high voltage]

I own Windows 1 for PC, which has a date of 1985.

[UNIXcoffee928]

This was shot in 2002 or 2003 for BBS Documentary.     Haven't lived in Staten Island for almost 10 years...   I'm about 75 miles north of Manhattan.

 

Curt

 

Hi, wgungfu, I'm really into all the work that you're doing, uncovering all of these things about Atari history. I just saw Curt Vendel's video & wondered if he was still living in Staten Island. I presume that you work with him, from the context of your posts. I live about 30 minutes away, and would absolutely be inclined to help out, particularly with the organization of technical  documents, and the retrieval & documentation of data from the backups of the company's minicomputers. Please have him contact me, if he is still in the NY/NJ area. Thanks!

Oh, I see, Carmel, New York. That's about 50 miles away from me. I'd be interested in getting together, that's not too bad of a drive. Are you guys planing to make a book, or a multi-part documentary? Can you tell us more about the museum, itself... is it ever open to visitors?

 

I kind of get the impression that you could definitely use a hand. Your website has a lot of great stuff on it, but many of the links are broken, due to age... particularly the "SWEAT Development Kit", which everyone should have, especially since it was fully documented. You seem to have an enormous amount of Atari stuff, and it kinda seems like you are a bit overwhelmed with how exactly to get the information out... I think that I could help a lot.

 

I also get this impression, since there is only one youtube video of you talking about the museum, and as it turns out, it is nearly 10 years old. I have another local (offline) Atari guy that can probably help out, too.

 

Your Atari Museum should be a Very Big Thing, but it seems like it is extremely under-represented... particularly on youtube. I have a full recording studio, and a recently acquired '060 Amiga 4000T Video Toaster Flier setup... we could easily put together some great video material for your museum. PM me.

[SpaceDice2010]

The one thing I keep hearing over and over again is lack of funds. I find it hard to believe that Atari could only get 3 games on the market for the whole of 1989 for the 7800. This was my point. Even if they had the hottest titles, would three hot titles make the 7800 a must have system. And the whole business model of selling gales for $10-$15. What was Atari's Gross Profit Margins?

[Retro Rogue]

The one thing I keep hearing over and over again is lack of funds.

 

Which is a fact. Though you appear to be running the timeline together, the lack of funds I discussed were in regards to after the initial formation of Atari Corp. in the '84-'86 period.

 

Regardless, the electronic entertainment group was a very small group with very little resources. And when I say small, I mean Tom Sloper was the sole producer during '86-87, and farming out contracts for development of said games. And as Tom states "The company "structure" was basically a bunch of little independent kingdoms. Every interdepartmental request was a negotiation."

 

I find it hard to believe that Atari could only get 3 games on the market for the whole of 1989 for the 7800. This was my point.

 

Your point? There's a point? This is your third try at reaching for a point on this - first it was there was no games on shelves, then it was no new games, and now it's only three games in 1989.

 

Incidentally, '89 is when Katz left and the electronic entertainment group shifted gears towards the Lynx. So it's not surprising some of the titles (unannounced) under contract may have been pushed over to a '90 release. That's also why the '90 titles are a bit harder to find.

 

Even if they had the hottest titles, would three hot titles make the 7800 a must have system.

 

What a complete warping of things. The "hot titles" had to do with the early life of the console, i.e. hot titles needed to be there earlier in the life of the system which would of course bring more income, more "hot titles" and a larger library. "Hot titles" in 1989, when the system was already on the way down, would of course have no real effect. And this continuing harping on "hot titles" not being important is just coming off as silly. I didn't invent the notion, those were Mike Katz's own words and insight when I interviewed him. Mike Katz - the man responsible for the 70's handheld game industry at Mattel, all of Coleco's licensing for Colecovision including Donkey Kong, Epyx's growth during it's heyday of the early through mid 80's, and all the foundation for the Genesis' growth during the early 90's including creating the relationship between EA and Sega for it's ubiquitous sports titles - most importantly Madden. Sorry, I'm going to take his insight and explanation a little more serious than your multiple attempts at reaching for a point on this. And again you're showing why you're probably not CEO of a video game console company.

 

 

And the whole business model of selling gales for $10-$15. What was Atari's Gross Profit Margins?

 

 

Yes, because undercutting the competition was something I've never heard of before with Jack Tramiel. What's with him doing that, so unlike him.

 

In 1986 the NES was around $140 at the time, the SMS at $130, while the 7800 was at $80. NES games were going for about $25 at well for the time, so $10-$15 for titles (the launch titles of which were already produced) seems about a comparable cut.

Edited January 17, 2011 by wgungfu

[DracIsBack]

So when's the Tramiel book coming out? A much less documented part of Atari's history, don't you think Curt and Marty ....

 

... best get a move on ....

 

 

[Bryan]

But I have to admit, best thing out of the Tramiel years was the ST/XE styling. It was a pretty bold style that to me ranks second only to the XL styling.

Yeah, it just needed a little more plastic behind it.

[SpaceDice2010]

Maybe I am missing something. But how can any video game system be a success when the company that produces it only gets out three games in a year? Okay. Katz quit that year. A company that was dedicated to succeeding in a marketplace would have found a way to get product on store shelves. Think about it - Atari didn't have a huge budget for advertising, so they were not exposed to the magazines at the time in any meaningful way via advertising. To add to that, at most they got maybe three reviews of their games in the magazines at the time for the whole year. And God only knows when those games came out. Maybe in the middle of summer? Is Nintendo to blame for this?

 

My point is that not having the hot titles is not the only reason that the Atari 7800 did not succeed in the marketplace. Looking at Atari's history I think it can pretty much be safely assumed that Atari was a cash strapped company. In other threads you hear Curt say that because of Atari's cash flow they could not... And they were not able to... And it prevented them from...

 

As far as Tramiel selling at bargain basement prices, just because it worked at Commodore doesn't mean it can be repeated at a much smaller company like Atari.

 

Curt pretty much summed up Apple's problem's - too many products that no one wanted. I am beginning to feel that at the core of Atari's problem was it was just a company in too many markets that it could not afford to be in. When it finally had one product line it was just the wrong product as the Jag was a machine that was a pain to develop for. Was the fact that the Jag didn't have access to the hottest titles the reason that failed? Or was it something else? Should we blame Nintendo for the Jag as well?

[SpaceDice2010]

wgungfu,

 

I promise you I am done talking about Atari history. I just find it hard to believe in the history of Atari under Tramiel nothing was ever their fault. Blame is always passed to someone or something else. I will end by saying that I feel Atari's failure was due to trying to implement a business model that worked under Commodore on a much smaller Atari.

 

Lloyd

[Retro Rogue]

Maybe I am missing something. But how can any video game system be a success when the company that produces it only gets out three games in a year?

 

Over generalizing again. That was the single year I see that happening, and again as stated it was on the way down and they were shifting efforts to the Lynx. Jack was out by '87-'88, turning over CEO to his son Sam and just remaining on the board. That's when a lot of the decline and questionable business decisions started happening. '89 is also when the Federated deal started coming back to bite them, costing them a lot of money on the heels of launching the Lynx and Portfolio which included major promotional campaigns. There was also the Stacy, TT030, 1040STE, and PC-compats from the computer group. You also had the electronic entertainment group splitting resources on the 2600, 7800 and XEGS to which they showed about 40 new titles combined for 1989 at that January CES. 1989 is also when the lawsuit against Nintendo for it's practices started - to which Atari specifically stated they felt the inability to get good titles because of the licensing lockout and studio lockout, was the major reason for the performance of the 7800 on the market.

 

Incidentally there were six planned titles for '89 and four released (not three, I missed Xenophobe).

 

Think about it - Atari didn't have a huge budget for advertising, so they were not exposed to the magazines at the time in any meaningful way via advertising.

 

They advertised in magazines, comic books, television, etc. - all the usual channels of the time. In fact Curt's previously posted the number spent on advertising and promotion, which were much more than people had thought.

 

 

add to that, at most they got maybe three reviews of their games in the magazines at the time for the whole year. And God only knows when those games came out. Maybe in the middle of summer? Is Nintendo to blame for this?

 

Once again going off on a tangent. Nintendo is to blame for most of the important titles being locked up for the first few years of the console's launch. Something they point blank felt was responsible for them not being able to get the foothold they needed to succeed. They are also completely to blame for the lockout of development studios who weren't allowed to be contracted for Atari's own title development or even to release their own third party titles because of Nintendo's stipulations. If you developed for the NES, you didn't develop for anywhere else. This was only lifted after the '89 lawsuit.

 

My point is that not having the hot titles is not the only reason that the Atari 7800 did not succeed in the marketplace.

 

I don't recall it being the only reason, but it is the major portion of it. Once again, I'm going by the people who actually worked there as opposed to your tangential theorizing. Spending more on advertising when the system has games that don't appeal as much as those on the NES and SMS, and in a time period where it's obvious the system is becoming less and less relevant on the market, isn't going to help the matter. Especially when said money is more importantly needed in newer products and their marketing. Likewise they were complete aware of the coming market shift to 16-bit consoles - they were approached by Sega in '87-'88 to do the Genesis and were already working on their own 68000 based console as well in fact. The 7800 was a lost cause by that point, pumping more in to it would have just been bad business and a waste of money.

 

Looking at Atari's history I think it can pretty much be safely assumed that Atari was a cash strapped company. In other threads you hear Curt say that because of Atari's cash flow they could not... And they were not able to... And it prevented them from...

 

Where? And which Atari? We're talking about Atari Corporation here. What he stated in relation to this subject was "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. " This is all in the '84-'86 time period I mentioned, and in no way conflicts with what I stated went on then. Curt is my research partner, we have access to the same material (and so much that we haven't even begun to share and that hasn't even begun to be data mined through his vast archives) and are on the same page on things. So I don't see what you're getting at by trying to bring him up as some sort of backup on your theory. Nobody stated money wasn't an issue, I already shared how the electronic entertainment group (as with all the divisions) was on it's own as far as development and such and minimally staffed.

 

Likewise, Katz also stated for instance that no "hot titles" was the major reason he was against the release of the XEGS as well.

 

As far as Tramiel selling at bargain basement prices, just because it worked at Commodore doesn't mean it can be repeated at a much smaller company like Atari.

 

Irrelevant. You asked why that was done, I gave the answer. Whether or not it worked can be chalked up to a number of different reasons. And it did work on a number of Atari Corp.'s products, the undercutting had a significant effect. Once again, the major issue - and the one that prompted them to do the lawsuit in '89 (because as stated the 7800 was already considered on the way down by then) were the inability to gain access to the hot arcade titles and hot development studios. When you have the kind of money that generates, then you have the money to start investing in your own development of original console exclusive titles. That's how it works in the game industry. When you don't have that kind of money coming in, then you nickle and dime it and go with the lowest common denominator and get wanna be original titles like "Midnight Mutants" and "Scrapyard Dog".

 

 

Was the fact that the Jag didn't have access to the hottest titles the reason that failed? Or was it something else? Should we blame Nintendo for the Jag as well?

 

Completely different system and time period, completely different market. There were a multitude of reasons for the Jag's lack of success, and certainly their inability to get decent titles people wanted on it was a major factor as well. But sarcastically throwing up "should we blame Nintendo for the Jag as well" as if to try and invalidate the 7800 issue with Nintendo is simply a childish attempt at reaching for straws. Sam handled the Jag poorly, they handled their game developer relationship poorly, they also released the console before it had all the bugs out and proper development tools, and they did not anticipate the generation shift with the Sony PlayStation and then failed to adapt properly when that shift happened - their intended planning had been to compete against and jump past the Genesis/Super Nintendo. Sam even mismanaged the lawsuit they won against Sega which included access to a number of Sega's titles to port over - the ones that were brought over the developers simply ported over the standard Genesis 68000 version instead of taking advantage of the system's multi-processor architecture and advanced graphics capabilities. Likewise the money from the suit, instead of being reinvested wound up with JTS with the merger. But I don't want to turn this in to a Jag tangent, that's already been adequately discussed by Gorf over in the Jaguar forum.

 

And seriously, this is begging to take up too much of my time going in repeated circles on these issues when they're all well solved and non-issues.

[Retro Rogue]

wgungfu,

 

I promise you I am done talking about Atari history. I just find it hard to believe in the history of Atari under Tramiel nothing was ever their fault. Blame is always passed to someone or something else. I will end by saying that I feel Atari's failure was due to trying to implement a business model that worked under Commodore on a much smaller Atari.

 

Lloyd

 

I don't recall saying nothing was ever their fault. I do recall saying that things traditionally attributed to them by Atari fans in the past turned out not to be the case. But there's still plenty of bad decisions on their end to go around, just as with any business. And Jack's business model *did* work, it did get them out of the red and in to the black as stated. The marked and tracked downfall began when he stepped down to just the board position leaving the CEO and Presidency to Sam. That's when you see a lot of the infrastructure he built up start to go, and the mishandling of the computer and console lines across the board.

 

Likewise again, this discussion was about what was behind the 7800's failure to capture the market. Nintendo's lockout of titles and development studios played the major part of that, enough for them to launch the lawsuit. Atari Corp. had no game development group to speak of (that was Atari Inc.'s forte), and had none of their own home grown properties to work with save titles that were considered a bit dusty by that time. Plus most of the licensed titles from the '84 line were also available on the NES. That's again what forced them to get computer titles and fill in with whatever licenses they managed to pick up, done by whoever they could get to contract to.

[DracIsBack]

They advertised in magazines, comic books, television, etc. - all the usual channels of the time. In fact Curt's previously posted the number spent on advertising and promotion, which were much more than people had thought.

 

One ad venue often overlooked as retail advertising. When you see a video game in a BEST BUY flyer, it's almost never something that has appeared there because BEST BUY put it in out of the goodness of their heart. The manufacturer paid for it ... often as much or more than a print ad in a magazine. The reason is two-fold: the circulation numbers are often quite a bit higher than print pubs and because it's easier to measure the result. "Sales increased 10X in Best Buy the week that we ran the ad in their flyer ..."

[kool kitty89]

But I have to admit, best thing out of the Tramiel years was the ST/XE styling. It was a pretty bold style that to me ranks second only to the XL styling.

Yeah, it just needed a little more plastic behind it.

I know Curt hates the XE styling, but I rather like it... not enough black in the computer line in general though. (one reason I really like the 600 prototype case more than the later XLs released)

I think I like the 400's styling the best though, not so much the color scheme, but nice sleek faceted/tapered look. (also love that photomaip curt made a while back morphing a 400 into a 5200-like console) http://www.atariage.com/forums/topic/121484-why-did-atari-ditch-the-5200/page__st__250__p__1871880#entry1871880

[svenski]

I know Curt hates the XE styling, but I rather like it... not enough black in the computer line in general though. (one reason I really like the 600 prototype case more than the later XLs released)

I think I like the 400's styling the best though, not so much the color scheme, but nice sleek faceted/tapered look.

 

Yeah, the 400 certainly has a timeless charm about it.

[carmel_andrews]

Atari buying out federated was a bad move...It smacked of tramiel trying to rekindle his commodore days (remembering that commodore had 2 stabs at their own distribution retail network (once during the calculator/pet days and the other attempt just before they released the c64...according to the commodore book home computer wars)

 

Also I don't think the atari/nintendo lawsuit had anything to do with nintendo dropping or reviewing their 3rd party software Publishing/development policy in early 1991, the major factor in nintendo reviewing that policy was due largely to the MMC (monopolies and mergers commision, now called the competition commision) in the UK finding against nintendo (and sega to a minor degree) regarding that particular policy and that it transgressed both EU and UK law (as it was tantament to operating a cartel, since nintendo was the only company that manufactured nintendo approved software/games for their systems, which meant nintendo controlled the price of software for their systems), also nintendo sort of knew that it's initial/original policy on 3rd party software publishing/development only worked in their favour in the US and Asian markets and they knew that if they were serious about market presence in europe they had to change their policy (which as i said, was done early 1991)

 

And as i recall correctly (and it's quoted in the book 'phoenix, the fall and rise of home videogames'), Atari actually lost the lawsuit against nintendo, since nintendo correctly countered with the fact that atari competed too cheaply and also they miss-calculated their market, so i can't see why nintendo would change the policy on 3rd party software development/publishing when atari's arguments in court went largely unfounded and basically lost the case

[Retro Rogue]

Also I don't think the atari/nintendo lawsuit had anything to do with nintendo dropping or reviewing their 3rd party software Publishing/development policy in early 1991, the major factor in nintendo reviewing that policy was due largely to the MMC (monopolies and mergers commision, now called the competition commision) in the UK finding against nintendo (and sega to a minor degree) regarding that particular policy and that it transgressed both EU and UK law (as it was tantament to operating a cartel, since nintendo was the only company that manufactured nintendo approved software/games for their systems, which meant nintendo controlled the price of software for their systems), also nintendo sort of knew that it's initial/original policy on 3rd party software publishing/development only worked in their favour in the US and Asian markets and they knew that if they were serious about market presence in europe they had to change their policy (which as i said, was done early 1991)

 

Sorry Carmel, but the Atari suit finished in 1992, and it also had to do with monopolistic charges. The MMC investigation didn't occur until 1994, with findings presented in 1995. And it was in regards to pricing policies.

 

And as i recall correctly (and it's quoted in the book 'phoenix, the fall and rise of home videogames'), Atari actually lost the lawsuit against nintendo, since nintendo correctly countered with the fact that atari competed too cheaply and also they miss-calculated their market, so i can't see why nintendo would change the policy on 3rd party software development/publishing when atari's arguments in court went largely unfounded and basically lost the case

 

Just because it's in a book doesn't make it fact. That timeline and your claim is wrong. The result of the trial in 1992 was a partial loss and for the following reason:

 

"Atari estimated its resulting losses at $160 million over five years. Nintendo said any losses Atari suffered stemmed from its underestimation of the domestic market and its delay in producing a state-of-the-art computer system. Deadlock on 2 Issues.

 

The jury issued a partial verdict two weeks ago. It said Nintendo had monopoly power in the United States, which is not by itself illegal, but had not been shown to have an intent to monopolize. It deadlocked on two other questions: whether the exclusive-rights contracts were an unreasonable restraint of trade and whether Nintendo had illegally maintained a monopoly through exclusive or restrictive practices. "

 

That's why the jury's partial verdict was interpreted as "failed to decide whether some of Nintendo's practices were monopolistic. But the jury concluded that none of the practices had harmed Atari, once the dominant company in the market. " The fact that Atari's lawyers didn't prove Nintendo intended to monopolize - and therefore do willful harm to Atari Corp., which is what they had to show. Having monopoly power by itself is not illegal in the US, and Atari's lawyers failed to show the jury that Nintendo didn't reach it's monopolistic position simply because it was a better competitor, which in turn failed to show it's direct impact on Atari's losses. That's also why they were then deadlocked on the restraint of trade and restrictive practices - which also would have been key towards the intent of the suit. That in turn ultimately then lead the Judge to take the partial decision and dismissing the suit.

 

Historically, we all know how restrictive the policies were and what the actual impact was. But that of course has little impact to what needs to be done in court to show this under the law, which is what the lawyers Atari Corp. used failed to do properly. That type of thing happens all the time in all types of courts, from small claims to Federal. And does things like let obviously guilty parties go free on technicalities or poorly run prosecution. Probably happens more often in criminal courts actually.

Edited January 18, 2011 by wgungfu

[kool kitty89]

Historically, we all know how restrictive the policies were and what the actual impact was. But that of course has little impact to what needs to be done in court to show this under the law, which is what the lawyers Atari Corp. used failed to do properly. That type of thing happens all the time in all types of courts, from small claims to Federal. And does things like let obviously guilty parties go free on technicalities or poorly run prosecution. Probably happens more often in criminal courts actually.

The very fact one had more monetary resources to throw at it would skew things in that regard... they got railroaded, or close to it. (perhaps not that extreme) Hell, you've got cases where the "little guy" wins but is still ruined by the legal fees. (iirc that's what happened with Bleem) Or other cases more like DRI when pushed in litigation against larger/better funded companies.

 

Didn't something similar happen with the antitrust suit from Atari Games/Tengen?

 

What's kind of sad is that Nintend is STILL enforcing some of those same policies in some of their markets. (namely with DS game production from what I understand -not the exclusivity contracts, but the control over manufacturing -I think that may have been the case for the N64 too)

 

 

 

I wonder if they'd have had a stronger case if there was joint support among several grieving parties rather than just Corp... AGames case was a bit separate (and tied to a counter suit from the lockout clone thing iirc) though that wouldn't have necessarily barred some sort of support or organization between the 2 (at least for supporting evidence).

Or support from Sega for that matter, but I don't think Sega ever sued Nintendo on those grounds.

Edited January 18, 2011 by kool kitty89

[oky2000]

Warner were clueless at selling computers.

 

Exactly, the 400,600xl,800,800xl,1200xl had the SAME (as far as for use in games is concerned) audio/video capabilities which were getting too long in the tooth once the 'bugs' of other machines were being found and the only advantage was which of the 256 colours you selected for your 4 colour games! Atari Warner made one chipset in Dec 79 and that's it....they did bugger all else and the 68000 workstations would have made the Amiga 1000 look as much of a bargain as the Sinclair machines were in 1982! lol

 

Atari however sold the wrong machine, the ST is a through and through 16bit replacement for the PET, probably what Shiraz was working on before he left. The ST is a better Mac than the Mac but for games....well the poor 68000 was getting hammered trying to soft scroll AND playback samples AND imitate a blitter chip. As soon as the ST RAM prices went up (and the ST back up to £399 from £299) at the same time as Commodore dropped the A500 from £499 to £399 it was game over for the ST really. The reality was Amiga games were 90% compromised with ST development first anyway but ho hum marketing and word of mouth and HAM scans of naked ladies got us all wanting Amigas

 

Jaguar killed Atari, just as CD32 killed Commodore. Had either of those companies invested in a usable £400-500 alternative in 1993 to the rubbish £1000 286 PCs being shoved in our faces AND embraced the internet and CD-ROM drives with open arms it would be Apple that died with their overpriced underpowered w*nk of the mid 90s

Edited January 18, 2011 by oky2000

[atarian63]

Warner were clueless at selling computers.

 

Exactly, the 400,600xl,800,800xl,1200xl had the SAME (as far as for use in games is concerned) audio/video capabilities which were getting too long in the tooth once the 'bugs' of other machines were being found and the only advantage was which of the 256 colours you selected for your 4 colour games! Atari Warner made one chipset in Dec 79 and that's it....they did bugger all else and the 68000 workstations would have made the Amiga 1000 look as much of a bargain as the Sinclair machines were in 1982! lol

 

Atari however sold the wrong machine, the ST is a through and through 16bit replacement for the PET, probably what Shiraz was working on before he left. The ST is a better Mac than the Mac but for games....well the poor 68000 was getting hammered trying to soft scroll AND playback samples AND imitate a blitter chip. As soon as the ST RAM prices went up (and the ST back up to £399 from £299) at the same time as Commodore dropped the A500 from £499 to £399 it was game over for the ST really. The reality was Amiga games were 90% compromised with ST development first anyway but ho hum marketing and word of mouth and HAM scans of naked ladies got us all wanting Amigas

 

Jaguar killed Atari, just as CD32 killed Commodore. Had either of those companies invested in a usable £400-500 alternative in 1993 to the rubbish £1000 286 PCs being shoved in our faces AND embraced the internet and CD-ROM drives with open arms it would be Apple that died with their overpriced underpowered w*nk of the mid 90s

In the US Amiga almost killed Commodore or at least the A1000 did as it was so very overpriced and somewhat incomplete and not ready at launch, ST had them on the run at two to one for the first few years, it wasnt until they decide to take the "jack" approach and sell it cheap, and ST were picking up in EU so supplies were down here and ST's were hard to get.

Atari did however out last them