If Warner held on a little longer

[8th lutz]

The basic underlying problem, as I see it, is that Warner management was woefully inept. And it wasn't just Atari that was suffering, either. The entire umbrella was faring poorly. Although we can look back with distain at some of Atari Corp's decisions, I don't think that there would have been an Atari at all anymore if Warner had held on. Their only alternative (short of sacking a whole bunch of people) would be to close up shop for good.

 

Some positive things happened during the years of Atari Corp. Atari returned to profitability, amazingly.

 

My biggest question is this: when did things start to go south for Atari Corp?

It depends. Financial standpoints says a different year than making bad choices did for Atari Corp.

I am guessing things started to turn south for Atari Corp in the late 1980's from a financial standpoint. I am saying 1989 to 1991 time period.

 

Jack stepped away for Atari Corp in the late 1980's when his son Sam took over. Sam mad things a financial mess for Atari Corp.The same time frame the Atari St sales were slipping in Europe. The 7800 sales started to slip in 1989 for North America based what info Curt Vendel reported years ago. Atari 2600 was slipping in 1989 also for North America.

 

I think it was in 1988 that Sega approached Atari Corp with releasing the Sega Genesis for North America, but Jack also wanted the Europe rights to the system also. Sega walked away from that deal as a result. That outcome seemed worse than Atari Corp releasing the XEGS in 1987. The XEGS didn't have the success as the 2600 and the 7800 did in North America for Atari Corp and Atari Corp Discontinued it in 1989. The thing is didn't hurt the future of company.

 

Jack hurt Atari Corp long term with wanting more than the North America rights of the Sega Genesis. I am bringing that up because of how successful the Sega Genesis was in North America.

Edited May 8, 2013 by 8th lutz

[S1500]

So Atari had first crack at the NES, AND the Genesis? And turned it down?

 

You ever make a really bad decision and then die to regret it? Heh

[8th lutz]

So Atari had first crack at the NES, AND the Genesis? And turned it down?

 

You ever make a really bad decision and then die to regret it? Heh

The Genesis decision Atari Corp did also caused Atari Corp. to lose their President of the video game division, Michael Katz to Sega. Atari Corp.'s video game division didn't recover from that.

 

Atari did turn both down, but you were not completely correct. Retro Rogue has mentioned in the past and in this thread that Atari Inc. and Atari corp. weren't the same company. The Atari that turned down the Genesis was not the same Atari that Turned down the Nes based on the history of Atari based on the fact Atari Corp. actually started out as Tramel Technology LTD. that was found found by Jack Tramiel. When Jack acquired Atari, Tramel Technology LTD.was renamed Atari corp.

 

Tramel Technology LTD. had no dealings with the Nes since it was completed different company. Jack got a rid of all the people of Atari Inc. that he acquired basically he got the computer and the home Video Game divisions. Tramiel got the Inventory of Atari Inc.'s home divisions and wanted to use the Atari name since he acquired 2/3rd of Atari Inc.

 

All this means the Atari of 1988 had no dealing of Nintendo in 1983 since it was two entirely different companies despite using the name Atari.

[Retro Rogue]

The Genesis decision Atari Corp did also caused Atari Corp. to lose their President of the video game division, Michael Katz to Sega. Atari Corp.'s video game division didn't recover from that.

 

Actually, Mike retired when he left Atari Corp. SEGA went and asked him to come out of retirement.

 

Jack got a rid of all the people of Atari Inc. that he acquired basically he got the computer and the home Video Game divisions.

 

That's something we'll be covering in greater detail in the beginning of the second book, which is actually a long told myth. Jack didn't fire all those people, he actually hired people. The people weren't part of the deal, they were still all Warner employees (which is also why anyone let go received their last checks from Warner, same with anyone who had severance packages). Jack got the facilities, IP, and brand name and then had to review and hire people over. The poor way it was coordinated by Warner though, the way it was essentially turnkey for the facilities, and how fast everything happened in general, the bulk of the people had no idea they weren't part of the new Atari Corp. - which was where the perception that Jack was firing all these people came from.

 

The day of the sale, you basically immediately had two companies - Atari Games, Inc. (the renamed Atari Inc.) and Atari Corporation. Atari Games, Inc. (not to be confused with the spin-off of Atari Games, Corp. formed that January) consisted of all the original Atari Inc. management (including James Morgan for a very brief time, since he took a "vacation" and never came back), and operations and divisions that didn't go to Jack - that includes Atari Coin Division, Ataritel, and a number of other operations. Still a subsidiary of Warner Communications, all the employees were actually still under that. Jack had his son Leonard and several others do a whirlwind interview process of people from the original Consumer Division and other divisions (including coin) to see who they wanted to hire over to Atari Corp. Those that weren't were either kept at Atari Games Corp. or let go. And make no mistake, it weighed heavy on Jack, Sam, and Leonard because they knew the bulk of the people they weren't hiring over were simply going to be let go by Warner.

[toptenmaterial]

@Retro Rogue: From what you and others have said in previous threads, Atari Corp did have a period of time where they flourished. Could they have continued to do so if they kept their product line a bit leaner (1 8-bit computer, one 16-bit computer and one console at a time)?

[atari5200dude82]

Very Interesting information. Some information i never knew about Atari inc., and Atari corp. Thanks guys for the Info. That sucks Atari sort of got dismantle thru the years.

[Retro Rogue]

@Retro Rogue: From what you and others have said in previous threads, Atari Corp did have a period of time where they flourished. Could they have continued to do so if they kept their product line a bit leaner (1 8-bit computer, one 16-bit computer and one console at a time)?

 

Honestly, I don't think that would have helped. I honestly think it was a question of vision and direction, and with Jack "retiring" to just be chairman of the board, it looks like (going by what happened) a lot of that was lost.

 

BTW, we just uncovered more documentation regarding the 7800 and Jack. Not only did he still intend on releasing the 7800 that Christmas '84 alongside the Jr., but he upped the number from Atari Inc.'s original deal with GCC. The downside for GCC was that he wanted to dot he 7800 at $50.

 

Regarding the Genesis, Kieran has an interesting article that covers Atari Corp.'s Chicago office and it's plans to code for the Genesis when it was going to be an Atari Corp. product in North America.

 

http://www.revivalgamer.com/index.php/k2/item/292-atari-mega-drive

 

The part about the naming though is speculative until it can be verified by additional sources.

[NIKON]

In my humble opinion, It would not have mattered at all who had Atari and the 7800 and how long they wanted to hang in there...what everyone here is missing is that the public was fed up with arcade ports and re hash and all the "me too" games from the 2600.

The 7800 was too little too late for the party.

 

I am not discounting bad management decisions as being partly responsible for the problems with Atari but even if there were good management decisions the events would have folded out the same way anyway.

 

From what I have read over the years.. the USA is the only country that had a video game crash...the rest of the world hardly even knew it was happening here.

 

At that time there were too many consoles and it became a diluted market. Nintendo did there homework....and then reaped the rewards of that homework at a time when there was way too much pride and turmoil going on in the states over what was going to happen, who ran what , and so forth at Atari and the rest of the console market.

 

Back in those days there was too much too fast and the public just decided to just ignore it all....sort of a shoot yourself in the foot scenario.

[Magic Knight]

Atari should have done one of these!

 

 

Useless as F.., but its the marketing inspitration that the kids pointed to in the shops...

Edited October 17, 2013 by Magic Knight

[Andromeda Stardust]

RIP Rob the Robot.

 

Interesting as I was not aware of Atari dealings with Sega. It makes sense though. Many of the unlicensed Tengen NES games became licensed Sega Genesis titles. I dunno if that's related or just a matter of "Sega does what Nintendon't."

 

SMS and NES were on a level playing field far as audio/video goes (even if the architecture was totally different - an aesthetic that also contributed to the 16-bit consoles having similar but very different feel), whereas the 7800 kind of mess up by shoehorning backwards compatibility with the 2600, despite the fact I wouldn't even consider getting one if it wasn't b/c. It even had the same wonky rectangular pixels whereas NES and SMS were nice and square. IMO Pokey should have been built into every 7800, with the TIA used only for legacy 2600 games and possibly additional sound effect channels for the 7800.

 

Every Atari system ever made after the 2600 was much weaker than the competition:

 

5200 < 7800 < NES & SMS

Jaguar < Saturn < N64 & PS1

 

Not that weakness matters, however. 7800 and Jag IMO could have been great if Atari and 3rd parties had made more and better games. Here's some Nintendo consoles that were awesomer and more popular than their more powerful brethren:

 

CPU Performance (flip the less than sign to greater than for game sales and awesomeness)

 

Game boy monochrome < Lynx & Game Gear

DS < PSP

3DS < Vita

Wii < PS3 & 360

 

Wii-U ???

 

By default, the Wii-U is currently selling infinitely better than PS4 and Xbox One (currently stuck at zero sales because their unreleased)

Edited October 17, 2013 by stardust4ever

[Magic Knight]

From what I have read over the years.. the USA is the only country that had a video game crash...the rest of the world hardly even knew it was happening here.

Certainly in the UK, the crash wasnt that noticed. Most were looking at the 8 bit micro race which was booming as Nintendo and sega were launching their 8 bit consoles. Until the 16 bit versions came out there wasnt a lot of transition to these 8 bit consoles as the differences were not worth switching over to.

 

RIP Rob the Robot. .........

 

 

Interesting as I was not aware of Atari dealings with Sega. It makes sense though. Many of the unlicensed Tengen NES games became licensed Sega Genesis titles. I dunno if that's related or just a matter of "Sega does what Nintendon't."

 

Got to love the little fella!

 

Nintendo, Amiga technologies and now Sega passed up - Jack cant go it alone!

 

Hope he wasnt holding out for a deal with Magnavox!

Edited October 17, 2013 by Magic Knight

[atarian63]

Atari should have done one of these!

 

R.O.B.-The-Robot-Image.jpg

 

Useless as F.., but its the marketing inspitration that the kids pointed to in the shops...

Actually for all the praise Nintendo gets here I was around selling this stuff the the initial release and nintendo was far from a lock during Christmas 86,my store customers laughed at gyro mite and the stupid robot also at the high price.we sold one unit and had to dump the demo for a loss.I will run counter to what most are saying and say that 7800 would have been a big hit had they gotten some top shelf games.customers wanted the backward compatibility with 2600 as we'll People knew about it and asked for it all the way till it's rerelease in later 86" . Edited October 17, 2013 by atarian63

[Goochman]

Atari was quickly losing access to new arcade hits which in turn made the 7800 titles look less than steller. Im surprised Nintendo jumped on top of Sega as their arcade games were some of the best/newest, but Nintendo SMB sealed the deal.

 

After Games/Corp were separated long term Atari didnt have a chance unless they created their own game making department since they didnt have access to most of the latest hit titles.

[Retro Rogue]

Certainly in the UK, the crash wasnt that noticed. Most were looking at the 8 bit micro race which was booming as Nintendo and sega were launching their 8 bit consoles. Until the 16 bit versions came out there wasnt a lot of transition to these 8 bit consoles as the differences were not worth switching over to.

 

Got to love the little fella!

 

Nintendo, Amiga technologies and now Sega passed up - Jack cant go it alone!

 

Hope he wasnt holding out for a deal with Magnavox!

 

Nintendo and Amiga were Warner (Atari Inc.), not Jack (Atari Corp.) And Jack didn't pass up Sega, Sega passed on Jack's final offer.

[Ransom]

Wow, that Genesis bit is a revelation. So Atari (in one form or the other) was in negotiations for the distribution rights for what would become the top-selling machines of two different videogame generations, but in neither case did it turn out that way. Very interesting stuff.

[desiv]

In my humble opinion, It would not have mattered at all who had Atari and the 7800 and how long they wanted to hang in there...what everyone here is missing is that the public was fed up with arcade ports and re hash and all the "me too" games from the 2600.

The 7800 was too little too late for the party.

Kind of, but I'm not sure it's that simple..

I mean, really, Mario was just a variation (albeit a good one) of Arcade side scrollers... Kind of a "Jump Bug meets Pitfall" (OK, that's not a great analogy, but off the top of my head.. )

 

But it was all about the games, and Nintendo did a better job of controlling content and minimizing the bad games, while pushing the console games...

 

I don't think the public was fed up with Arcade ports. They still wanted them.. There are plenty on the NES.. A LOT of the early NES games were Arcade ports..

It's just that they wanted more and better content.

And.. Scrapyard Dog is no Super Mario..

 

desiv

[H.E.R.O.]

It's amazing how many times systems got offered for whatever reason to another company that got shot down. The one you never hear much is Nintendo turning down Coleco to sell Colecovision in Japan because Nintendo wanted a price 10% above cost and Coleco wanted Nintendo to pay them 10% off retail.

[Lynxpro]

That's a little backwards, and you're also talking about two different companies (Atari Inc. and Atari Corp.) Nintendo had a chance to pair with Atari Inc. and they walked away when it became apparent their ridiculous deadline could not be met because of change in leadership at Atari and a product/dev freeze. Sega had a chance to pair with Atari Corp. and they walked away when Jack wanted world wide (excluding Japan) rights instead of just North America.

 

As for the original question of what would have happened, the 7800 is a small factor in it. What the larger factor would have been was Jim Morgan's planned reorganization of Atari Inc. (think streamlining) into NATCO. Jettisoning non-profitable assets and divisions, and getting rid of half the employees would have given it more of a fighting chance to survive.

 

 

And NATCO [aka, re-organized Atari Inc, New Atari Technology Company] releasing the 7800 nationwide with no competition for Christmas 1984 would've meant the system would've been a massive success. Long time 2600 owners were looking to upgrade but they didn't bite with the 5200 because it wasn't natively backward compatible then, it was expensive, and the controllers had a bad reputation. The 7800 "fixed" all of that despite having much less RAM and POKEY-less audio [without it being included inside cartridges]. And NATCO would've had the 7800 because Warner would've paid GCC for it and there wouldn't have been any ownership issues.

 

NATCO would've kept the arcade division so what later became Atari Games Corp - in our time line - would've remained in-house and their later awesome arcade titles would've been exclusive [or at least delayed for a year or more before going to competing systems through AtariSoft] to the 7800. We would've had Gauntlet, Gauntlet II, Paperboy, 720 Degrees, Marble Madness, most likely ports of the Atari Star Wars arcade games [since Parker Bros. had thrown in the towel], Indiana Jones & the Temple of Doom, Road Runner, Toobin', Batman, Namco's Rolling Thunder, Namco's Pac Land and Pac Mania, APB, Namco's RBI Baseball, arcade Tetris, Xybots, Cyberball, Tournament Cyberball, Super Sprint and Championship Sprint, Rampart, Roadblasters, STUN Runner, Blasteroids, Pit Fighter, Primal Rage, etc. all on the 7800 and successor systems.

 

The remaining third party developers would've signed up for the 7800.

 

Nintendo wouldn't have stood a chance against NATCO. The NES would be as forgotten as their AVS was. The Sega Master System would've still remained a botched launch thanks to Tonka. And Colecovision and Intellivision were threw. NATCO would've probably salvaged the deal with Amiga too so that chipset would've been available for a more advanced system in 1985. There's absolutely no chance Nintendo - even with Super Mario Bros. - would've been a success. All of the Japanese companies would've become 7800 third party developers or they would've licensed the titles to other American or European software houses.

 

And an Atari-brandless Trammel Technologies would've ended up buying something like Mindset and folded because of not only a lack of a distribution system but no manufacturing plants too. And just imagine what NATCO would've done to a Commodore lacking the Amiga.

 

Our time line sucks in comparison.

[Lynxpro]

The basic underlying problem, as I see it, is that Warner management was woefully inept. And it wasn't just Atari that was suffering, either. The entire umbrella was faring poorly. Although we can look back with distain at some of Atari Corp's decisions, I don't think that there would have been an Atari at all anymore if Warner had held on. Their only alternative (short of sacking a whole bunch of people) would be to close up shop for good.

 

Some positive things happened during the years of Atari Corp. Atari returned to profitability, amazingly.

 

My biggest question is this: when did things start to go south for Atari Corp?

 

 

(Man, I hate this new posting/quoting system)

 

1987-88 when Commodore turned the Amiga around with the Amiga 500. You had the Reagan Administration's sanctions against Japanese DRAM and you also had Atari Corp [ahem, Jack Tramiel] hoodwinked into purchasing the Federated Group which ended up costing them something like $200 million after all of the losses.

 

And whoever said above the 7800 was weaker in comparison to the SMS doesn't know the sales figures. The 7800 outsold the SMS in North America. Sega was the #3 until the Genesis.

 

The XEGS also wasn't technically a failure. Atari Corp. released it in the hopes of aping some of the success the Tramiels had with the Commodore 64 aiming it at parents who wanted to purchase a game system that was also a computer at heart. It was also a last ditch effort to convince the American third party computer software companies not to dump the A8 computer line. At the time, those companies were scapegoating A8 as the cause of all software piracy and they were dumping the platform to make an example to everyone else. Atari Corp. gave them an opportunity to release titles on cartridge format - for the XEGS primarily - as an alternative to the much easier [yet cheaper to producer] means of end user copying, that being floppy disk media.

 

So Atari Corp at the time was aiming the 2600 at the price minded consumers, the 7800 at consumers who wanted a "pro" gaming system, and the XEGS at families who wanted their Jr. to also use a computer in addition to a game system. That's the explanation for marketing multiple systems at the time.

 

What Tramiel can be blamed for - in terms of the 7800 - is not releasing the HSC which Atari Inc. had previously promised. Hell, even the Mindlink System would've sold well too. And I guess failing to contract with GCC to produce the Atari Inc. promised 7800 adapter for the existing 5200 owners too...

 

 

 

 

 

 

Edited October 18, 2013 by Lynxpro

[Andromeda Stardust]

 

NATCO would've kept the arcade division so what later became Atari Games Corp - in our time line - would've remained in-house and their later awesome arcade titles would've been exclusive [or at least delayed for a year or more before going to competing systems through AtariSoft] to the 7800. We would've had Gauntlet, Gauntlet II, Paperboy, 720 Degrees, Marble Madness, most likely ports of the Atari Star Wars arcade games [since Parker Bros. had thrown in the towel], Indiana Jones & the Temple of Doom, Road Runner, Toobin', Batman, Namco's Rolling Thunder, Namco's Pac Land and Pac Mania, APB, Namco's RBI Baseball, arcade Tetris, Xybots, Cyberball, Tournament Cyberball, Super Sprint and Championship Sprint, Rampart, Roadblasters, STUN Runner, Blasteroids, Pit Fighter, Primal Rage, etc. all on the 7800 and successor systems.

Our time line sucks in comparison.

Many of those titles were released on NES under the unlicensed Tengen line. Additionally, I have Famicom PacLand.

Edited October 18, 2013 by stardust4ever

[atarian63]

He is saying they never would have been released as nes would have failed

[H.E.R.O.]

Is there any idea how Jack's sons were received as bosses by Atari employees? Jack obviously had the rep of being a "boss from hell" but I've never heard anything regarding Leonard and Sam (wasn't there a third son? His name escapes me but I think he worked in engineering).

[Jaynz]

As for the video crash if 1984, keep in mind that as far as the US distributors were concerned, Atari was the video game industry. When the 2600 became effectively obsolete, gamers were indeed ready to move on, but retailers like Children's Palace had stockpiled HUGE amounts of 2600 games, some of them going all the way back to the 1978 launch. They really didn't understand what was going on, so when the Atari 2600 posted a really bad year, the toy 'industry' threw up its arms, declared video games 'finally dead' (which is what they were hoping for for years now) and liquidated absolutely everything. This caused a further panic with Intellivision and Colecovision to produce their computer line (which was seen as immune from the sell-off), draining their resources and shutting them down as well. In 1984, though, demand for video games in the US actually went UP substantially... it was just that the 2600 was now past its prime.

 

In Europe the market simply moved on to microcomputers for a few years (which still do well there), and Japan had something big coming just around the corner. The Atari 2600 didn't tank the markets there as it did here.

[Ransom]

They really didn't understand what was going on, so when the Atari 2600 posted a really bad year, the toy 'industry' threw up its arms, declared video games 'finally dead' (which is what they were hoping for for years now) and liquidated absolutely everything.

 

That's what struck me as so weird at the time. I was pretty young then, but I couldn't figure out why video games kept being compared to pet rocks and beanbag chairs as just the latest fad. Even today I wish I understood why so many journalists and retailers saw video games as a fad rather than as a lasting new entertainment platform, like movies, radio, and TV. I mean, heck, video games had been in popular culture for more than a decade by the time of the crash!

[Jaynz]

Because journalists at the time and a lot of the people who ran the toy industry did not understand the concept as a medium. To the toy industry (which is what controlled video gaming at the time), the Atari 2600 was just another pet rock, Rubik's Cube, Simon, or UNO deck. And even though the Atari 2600 was dominant on the shelves for six years, it never got accepted by these guys as anything more than 'the next fad' - one they really wanted to kill dead to make way for the NEXT fad. The people running the companies were two generations removed from their market and it showed.

 

What saved video games in the US was NOT just the launch of the Nintendo, which certainly helped, but was the rise of stores like Software Etc., which took some of the control of the market OUT of the hands of the toy industry and into its own niche. It was really had to say that 'no one wants video games' when the little game shop across the aisle was outselling Sears' entire toy department in 1985... and it did.