1974: The Crunch Hits
While these variations on Pong were very interesting from a game design perspective, they were not as thrilling to the public or arcade operators are Atari had hoped. Sales were off, competition up, and Atari needed something new. Sensing the need for some serious innovative development away from the grind of company, Nolan Bushnell contracted with two ex-Ampex engineers, Steve Mayer and Larry Emmons at Cyan engineering, and created the Grass Valley Think Tank, an R&D lab for new Atari products.
Grass Valley was tasked with creating an all-new cabinet and control mechanism for video games. Gone were the simple buttons and potentiometers used for control of Pong games, and instead there would be a steering wheels, gear-shift, gas, and brake pedals to give the game a realistic feel. It was a tough assignment, and for Grass Valley, it was a rough entry into designing video games. Al Alcorn had to step in and fixed the flawed design before it could be sold.
The first project for the Grass Valley Think Tank was to finally create the racing game that Bally had contracted Atari created two years prior. However, this time the game would be for Atari itself, and Bushnell was hoping it would be a new direction away from Pong.
“We had built about 100 and they were badly engineered that they had to take them back. I came off of sabbatical and re-designed it.”lix - Al Alcorn
Besides the innovative cabinet and controls, the game included realistic (for the time) sound effects, and, in addition to the TTL logic, used ROM memory in the form of diodes to store graphics information.
“From the ‘Pong People’, New video game concept, big racing action, fantastic sound effects, worldwide market in millions!”
- Gran Trak 10 marketing flyer
The game is a race against the clock on a single track. There are no other cars on the track except the player. Oil slicks make the player’s car spin-out. The side of the track had to be avoided. Besides all the costly rework and delays for the game, an accounting error had Gran Trak 10 selling for $995, when it cost $1095 to manufacturelx. All of this led to the near financial collapse of the company. For the fiscal year of 1973-1974, Atari lost $500,000. Pong competition, Gran Trak 10, and a failed venture into Atari Japanlxi (sold off to Namco for $500,000) left the company near bankruptcy. Nolan Bushnell was forced to lay-off half of Atari’s staff, and rethink his next moves.
1974: Corporate Retreats
In dire need of new ideas, Nolan Bushnell started taking his key engineers on corporate retreats to relax and come up with and innovative ideas. These were not simple marketing brainstorms, but “assisted” technical and game design discussions. These sessions started at the local Holiday Inn, but soon moved out to Grass Valley, and later into the hot tub at Nolan’s house and into the one that he has installed in the engineering building.lxii
While these sessions were legendary for alcohol and marijuana consumption, those activities were not the focus. It was Bushnell’s attempt to get his engineering team to come up with new ideas to save the company and move it forward. Most of the best game and product ideas game from these sessions, including coin-ops and consumer products such as the home version of Pong. They also solidified the notion that the “laid back engineer” ruled the day at Atari in these early years.
The effect of this brainstorming could be seen in the games that Atari produced thereafter. The second half of 1974 showed a marked difference in game design from the first. Atari started with a redesigned version of Gran Trak 10 that fixed technical issues and added a second player. The game also offered the pinball-like feature of a free game for a high score. Gran Trak 20 featured two complete sets of controls (steering wheel, brake pedal, gas pedal, 4 speed gear shift) and offered operators more money per play (2 quarters for two players).
Double your pleasure... double your earnings! - Gran Trak 20 marketing flyer
The innovation continued into October with Pin-Pong -- a kind of pinball game with a patented “ball movement circuit”.
“In Pin-Pong a gravity algorithm accelerates the ball downward to give realistic pinball action on the screen”. - Pin-Pong marketing flyer
Atari finished out 1974 with two more games. One was their first light-gun game Qwak!, a duck hunting game that included a realistic-looking rifle, complete with an alarm that would sound if it was stolen -- plus the ability for the operator to set time limits, extended time and free games. The other was Touch Me, a screen-less coin-op game and precursor to the hand-held game Simon (incidentally created by Ralph Baer for Milton Bradley).
1974: The Rise Of Kee Games
While Atari continued to struggle, Kee games was operating at maximum efficiency. Joe Keenan, as it turned out, was not too bad at running an arcade games business. As well, Steve Bristow was designing up a storm. While Kee continued to copy Atari games (Formula K and Twin Racer were their answers to Gran Trak 10 and Gran Trak 20), they also started to design a few games of their own.
One of their first was Tank!, and what a first it turned out to be! The game featured two tanks battling it out on the playfield filled geometric shaped barriers. It was the same type of game that Atari would make famous in their Combat! cartridge for the VCS three years later. Steve Bristow designed the game and Lyle Rains finished it. It was one of the first games to use actual ROM to store graphics.
"I was working on it when I hired Lyle then I gave it to him and he finished it. A lot of the implementation was his, but the original idea was mine."lxiii - Steve Bristow
The importance of Tank! in the history of Atari cannot be understated. It was the game that saved Atari from bankruptcy in 1974. The game became so popular that the exclusivity agreements Atari demanded from distributors were thrown out the window. Everybody wanted it, and Atari made sure they got it. Bushnell’s cash flow problems at Atari were suddenly reversed. Atari and Kee merged at the end of 1974, and Joe Keenan became president of Atari, Steve Bristow became head of engineering and Al Alcorn became head of R&D. Atari was suddenly infused with new engineering and game design blood from Kee, like Lyle Rains. Nolan Bushnell also moved into a new role.
“I really became the CEO. I was still doing what I call game producing, but I was not doing any of the design. We would sit down in creative sessions and I would pretty much decide which games we would be doing, but I became less and less involved in the actual engineering.” - Nolan Bushnell
Atari ended 1974 on the same high they had just one year earlier. They had surmounted their cash flow problems and cemented engineering and game design as the most important parts of the company.