Video Game Founder Trying to Bounce Back
Fresh out of a seven-year cooling off period, Nolan Bushnell is trying to get hot again.
The 42-year-old entrepreneur, who created the first commercial video game and founded the Atari Corp., has a new company and a new product line this year--computerized stuffed animals.
“I think fuzzies have always been in,” the gregarious Bushnell said as he fondled a computer-driven cat. “I just don’t think electronics with fuzzies has ever been in before.”
It has been nearly 13 years since Bushnell put up $250 to found Atari and installed the infant company’s first product, Pong, in a Sunnyvale, Calif., college bar called Andy Capp’s.
Less than 48 hours later, an irate bartender called Bushnell, claiming the game was broken. Actually it had been played so often by entranced patrons that the coin box was jammed with quarters.
Worth $15 Million
Within four years, Bushnell’s $250 investment was worth $15 million--his share in the $28-million sale price when Atari’s founding fathers turned their company over to Warner Communications.
As part of the deal, Bushnell promised not to build video games or do anything else that might constitute competition with Atari for seven years.
“I’ve been primarily involved in venture capital,” he said. “I enjoy it, but I really feel more fun to do something with computers.”
The most famous of his recent investments was Pizza Time Theater, a chain of restaurants that featured video games and singing, dancing robot-animals.
Pizza Time flew high during the nation’s brief flirtation with entertainment-dining, then sagged when the American family decided it would rather do its eating in less hectic surroundings.
“Pizza Time was an enormous success--for a while,” said Bushnell, who has since sold the chain.
During his exile from electronic entertainment, he said, “I was never bored. Was I frustrated? Yeah. I hate to stay out of a business I know and love.”
Bushnell’s discomfort, however, was nothing compared to that suffered by Warner Communications. Atari, which accounted for nearly two-thirds of Warner’s profits in 1981, began to skid at the end of the following year.
Sold Company
By 1984, faced with a flood of red ink and piled-up inventory, Warner virtually gave the video-game company away to Jack Tramiel, who had been ousted as head of Commodore International.
“I’m very proud of the Atari I left,” Bushnell said. “I’m somewhat disappointed in the Atari it turned out to be.”
Bushnell remained as Atari’s chairman for less than two years after its sale. Had he known then what he knew later, he claimed, “I wouldn’t have sold. I was very naive. I felt I’d stay at Atari forever under Warner’s umbrella.
“I think it’s very hard for an entrepreneur to work for another company. We disagreed on very basic issues. You can’t do lockstep over and over again.”
One of those fundamental differences, he said, was diversification. The Warner executives, according to Bushnell, wanted to stick with the proven winners and resisted the idea of experimentation.
“If Atari had had 50 products, they wouldn’t have had a problem. What if Coleco sold only Cabbage Patch dolls? They’d have no chance of survival. You’ve got to have diversity.”
The Petsters Bushnell is now promoting were “part of the old Atari business plan,” he said. “I always knew there were going to be electronic critters running around the house. But Warner thought it was a silly idea.”
Successful Ideas Stolen
Bushnell claims to be amused by people who worry that their brilliant idea will be stolen before they can implement it. “Good ideas you can’t give away,” he said. “They’re only stolen once they’re successful.”
On his Petster-promotion tour, Bushnell enjoys “playing with people’s minds,” by suggesting that real dogs and cats will become obsolete now that the improved, computerized versions are available.
“Some animals will get very defensive,” he said. “They’ll growl when they see them.”
The Catsters and Dogsters, set down on the floor, will wander around, nap, purr when petted and come when called--if they happen to be in the mood to hear the command. Their programming runs with a random set of numbers that ensures the pets will not do the same tricks in the same order over and over.
“They all have different personalities,” Bushnell said. “If my Petster and your Petster are in the living room together, they’ll be doing different things.”
Adults who want to get into more complex interactions can program the Catster to retrieve balls and play other games, Bushnell said. “But Catster is smart enough to know when he’s dealing with a kid. It’s an artichoke product--you can have fun with the outer leaves.”
The Bushnell product that tends to get the most attention at his press conferences doesn’t move around at all. A. G. Bear is a teddy bear with computerized innards that allow him to mimic the sound of anything said to him. A. G.’s responses are wordless, but sometimes extremely sympathetic in tone.
Figures Out Mood
“He tries to figure out, not the content of what you’re saying, but the mood and the appropriate response,” said Bushnell. “Kids think they understand what he says.
The bear will sell for under $40 and the Petsters for under $100, Bushnell said. The products will be available by the summer. Parents planning on giving one of the critters for Christmas, he claimed, should be on a waiting list by July or August.
The vision of a possible Cabbage Patch crisis next winter, with mothers battering each other in an attempt to get a Petster before the holidays, does not disturb Bushnell at all. “It’s actually my fantasy,” he said.
Bushnell grew up in Utah, where his father was a cement contractor. He had an early aptitude for both science and self-employment. “At 12 I was fixing TV sets and washing machines for neighbors,” he said. “It’s hard to get people to let a 12-year-old play with their televisions, but I was cheaper than anyone else around.”
He went to college during the turbulent ‘60s, majoring in engineering. He was not a student activist. “I was in Utah,” he said. “Nobody was a trouble maker in Utah.”
Bushnell applied for a job with Walt Disney, but settled for the computer-graphics department of Ampex, one of Sunnyvale’s high-tech corporations. In his spare time, he created computer games in his daughter’s bedroom.
Bushnell took his ideas to Nutting Associates, which made computer-operated games, and sold them the rights to Computer Space, which featured a fight between a spaceship and flying saucers. The game was a flop and Bushnell later concluded it was too complicated.
Something Simple
“You had to read the instructions,” he concluded. “To be successful, I had to come up with something so simple that any drunk in any bar could play.”
The answer was Pong, whose instructions simply said: “avoid missing ball for high score.” The table-tennis game was a huge success, but the strain of so much quick growth left Atari teetering on bankruptcy.
Enter Warner Communications, which was prepared to invest $100 million in Atari, but was not able to sustain the kind of energy and creativity the company had when it was in its infancy. Bushnell, although still chairman, reportedly visited his office less and less after the sale.
Profits peaked in 1982, then went into a nose dive that left Atari $539 million in the red the following year.
Most analysts have blamed Warner management for Atari’s woes, but in fact the video-game business turned out to be more of a fad than anyone had expected. At the recent annual toy fair in Manhattan, dolls dominated the displays and there was virtually no talk about computer games.
“You couldn’t say 1984 was the year for video games, but it’ll continue to be a category,” Bushnell said. “I believe anything in the entertainment field goes in cycles. Boredom is boredom.”
