Takes on Defense Giants : Perceptronics Bets on Video Game for Army
The video game made by Perceptronics doesn’t take quarters, but the company is hoping it will bring in a lot of money nevertheless.
The game is a table-top device that helps gunners--real ones in the military, not kids--learn how to blow up armored tanks. It costs $35,000.
Real tanks use expensive fuel and real shells cost money. So the U.S. Army uses the sophisticated video game--with flashing lights, scoreboard and all--for training. Prototype models are already in barracks recreation rooms, and the Army is considering buying millions of dollars worth of the games.
For that contract, however, Perceptronics is competing against defense giants such as General Electric and General Dynamics, the Army says.
Worked for Pentagon
A small, Woodland Hills-based research and development consultant, Perceptronics has worked for the Pentagon for years, preparing strategy papers and product concepts.
Now, the company hopes to gain recognition for its products--such as the tank gunnery trainer, equipment that puts maps on mobile video monitors and a textbook for trade schools that is accompanied by a laser videodisk.
The company predicts that its revenues, which remained under the $4-million mark through the 1970s, will hit $23 million for the fiscal year ending March 31, in part because of product sales.
One stock trader described Perceptronics as a “brainy” company, and other analysts offered similar appraisals. “A lot of the stuff they do is way beyond my comprehension,” said James J. Atkinson, who used to trade the stock for Sutro & Co.’s Westlake Village office. “And that’s the stuff they talk about.”
Human Engineering
At the heart of the company’s research is human engineering, the relationship between people and mechanical devices. The company was founded in 1970 by Chief Executive Gershon Weltman and President Amos Freedy, both of whom have doctoral degrees in the field. They met when they were studying at UCLA.
Perceptronics is trying to help computers think like people, developing applications for artificial intelligence by which computers solve problems using logic and reasoning, Weltman said. Perceptronics also sees itself helping people adapt to computers, developing military software to be “user friendly,” he said.
Weltman said the company intends to grow with non-military projects, such as the video textbook, but that its emphasis will continue to be on work for the armed forces. For instance, Perceptronics is banking on its table-top tank gunnery trainer to replace the huge, multimillion-dollar simulators the Army now is using.
The base of the trainer, which Perceptronics makes, is a box-like device with a scope for the player and controls for aiming and shooting. A regular Japanese-made TV monitor sits on top so others in the room can see what is happening. A home videodisk player is situated at its side to provide the picture and sound.
Soviet Tanks Filmed
Films of Soviet tanks made by Perceptronics from across the East German border are visible either on the monitor or through an eyepiece. A booming voice recorded on the videodisk shouts commands like, “Soviet T-62 tank. Fire!”
Shots are fired from a button on the hand grip, and are represented by little flashes. Direct hits, accompanied by sound effects of explosions, blank out the screen, simulating blinding light. Shots are registered along with misses on a digital scoreboard that is part of the base.
While the simulators attempt to duplicate the interior of a tank, Perceptronics’ trainers only try to match the feel of a tank’s controls and the view from its sights. Weltman argues that a trainer need only simulate those sensations, a view he presented to the Senate Armed Services Committee four years ago.
But the Army plans to stick with its elaborate simulators, and use the trainers just as a secondary tool, according to Col. Robert E. Spurrier, director of devices management for the Army Training Support Center at Ft. Eustis, Va. He said the Perceptronics trainer cannot duplicate the intensity of battle situations the way a computer-based simulator can.
Spurrier said the Army tried using regular, less expensive arcade-type video games to do the job of Perceptronics’ trainers. But the Army found the arcade video games were not adequate for teaching identification of enemy tanks because they used only animated tanks, Spurrier said.
The simulators used by the Army are made by General Electric at its Simulation and Control Systems Department in Daytona Beach, Fla. The room-sized devices can simulate up to 20 targets at a time and can simulate night or day, smoke or fog.
A General Electric spokesman said the division also is preparing a proposal for trainers like the ones Perceptronics makes. Because the simulators are so expensive, the Army cannot buy as many as it would like, and must keep training sessions on the devices brief. Hence the need for relatively inexpensive trainers, Spurrier said.
He said Perceptronics is the only bidder with prototypes in use by the Army. But, Spurrier said, General Electric may have an advantage in winning the contract for trainers because it also makes the more complex simulators. A decision will be made next month, he said.
Analysts say that if Perceptronics does get the contract, which they expect to be worth several million dollars, the company could be catapulted into the big leagues.
‘They’ll Take It’
“If the Army feels they’ve perfected their product, they’ll take it, even over a General Dynamics,” said Fred Fair, a senior vice president at Raymond James & Associates, a St. Petersburg, Fla., brokerage. “If they do, Perceptronics will fly.”
Perceptronics’ shift of emphasis from research to production is based on management’s belief that profits will be higher in manufacturing, Weltman said.
The company’s other products include the James Bond-style mapping system for the military, which also uses a videodisk. The system is similar to ones developed for cars, although those store information on magnetic tape. Perceptronics’ system, meant for military vehicles, enables the driver to instantly have a detailed map appear on a small round screen on the control panel.
Perceptronics’ main non-military product is called ActionCode. It enables someone reading a textbook to get an expanded audio-visual explanation of a lesson on a television screen by pressing a pen-like device on the appropriate textbook page.
For the company’s last fiscal year, which ended March 31, Perceptronics recorded sales of $15.7 million, a 102% increase from the previous year.
Net income for the latest fiscal year was $345,821, up from a loss of $1.2 million the previous year. The company attributed the loss to research costs for the new products.
Training and simulations bring in nearly half of Perceptronics’ revenues. The rest is split among an artificial intelligence division, the aviation and weapons systems group and a military software unit.
Perceptronics employs 225 people. About half of them work in three buildings at Warner Center in Woodland Hills, and 25 in the corporate headquarters. The rest are in offices in Washington and Ann Arbor, Mich. The company also has interests in two Israeli military-simulator manufacturers.
