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By the January CES show in 1979, Atari had preliminary prototypes of its two new computers, the Atari 400 and Atari 800. With the Apple II, TRS-80 and Commodore PET already released, and with the market for personal computers still an unknown quantity, many people within Atari questioned this move. However, Ray Kassar was adamant that Atari get into the computer business as soon as possible.
In a Spring 1979 newsletter to employees, Ray Kassar explained to Atari employees about the 400 and 800, and the marketplace they would be entering.
"1979 will be a year of new product introductions. The most ambitious of these new products is our new line of personal computers, the Atari 400 and Atari 800. The entry into this marketplace is a significant challenge to all of us. The market is very competitive and the quality and product performance standard very high." cv
-Ray Kassar Q1 report to employees, Spring 1979
The good news was that Jay Miner, Joe Decuir, 'The Fantastic Four', and the rest of the team who had designed the Atari computer line had done an exemplary job.
"It is hard to overstate what a feat these machines were. Based largely on the Apple, they were designed to do everything the Apple could do, and then some. As it turned out, the machines were so far ahead of their time, Atari ended up having no clear idea just what to do with them." cvi
- John Anderson, Creative Computing
However, while the hardware of the computers was outstanding, the software situation was not. Since Warner was in the record business it viewed software for the computers the same way it viewed LPs and song publishing: Warner wanted to control it all.
Warner wanted to build every application, and threatened to sue anyone who would dare make software for the Atari computers. This flew in the face of the rest of the computer industry, and started the 400 and 800 off on a shaky footing compared to the competition, which had no such restrictions.
"The big difference was Warner Communications against Steve Jobs. Warner could never win that one. I don't know if I could have, but I wouldn't have made the same mistakes Warner did. The main problem that allowed Apple to dominate was, in fact, not technology but business strategy. Steve was out evangelizing to software developers to build software for their machines. Our strategy with the video games was that we basically wanted to give away the hardware and make money on the software. That called for a quasi-closed system.
Warner thought that was the right way to do the computers business, too. So they said, 'Not only are we not going to help third-party developers, we're going to sue you if you use our operating environment.' So everybody that wanted to get into the software business supported Apple over Atari. So basically Warner drove the coffin nail in the Atari 800, despite it having a clearly superior chipset, a better operating environment... We had a lot of innovations in the Atari 800 that became standard later on." cvii
- Nolan Bushnell
Even after Bushnell was gone, the remaining team begged Kassar to open up the Atari computer line to independent developers, and open-up the machines to allow for third party peripherals. For several years Atari refused to even provide documentation to owners of the computers about their internals.
"All of us on the project strongly urged senior management to make the Atari 400/800 an open design and publish the operating system and hardware manuals. We felt this was essential to making the computer successful because it would encourage outside development and allow much more software to be developed than Atari could ever produce. Unfortunately, management decided to make it a closed system. A few years later that decision was reversed and the entire listing to the OS was published, but Atari didn't make any effort to sanitize the comments. So, you'll see comments in the listing like, 'I hope this works!'" cviii
- Alan Miller
Even with their "open hardware" limitations, the Atari computers were still feature-filled and powerful. Atari worked feverishly to prepare the line for a November release. Part of Atari's strategy was to return to one of their old stand-bys that had supported them from the beginning of the consumer era: Sears.
To make it into the Sears catalog for the 1979 Christmas season, Atari sent hand-built 400 and 800 units to Sears on August 29, 1979 so they could be considered "shipped" for the Sears deadline. cix
"The first official small shipment of the 400/800 was on August 29th 1979. These were hand built pilot run units to Sears that needed to be in stock by Sept. 1 so they could be placed in the big fall catalog. The units were placed in the Sears warehouse and then immediately returned to Atari after the "in stock" requirement had been meet." cx
- Jerry Jessop
Atari's plan was to create a new market for the 400/800 by calling them "Home Computers". It wanted to take away the "hacker" mystique of the devices and make them accessible to the mass market. This flew in the face of research at the time that suggested the market for home computers would not mature for several years. cxi
"We believe that the Atari computers are different because from word one they were developed to take away whatever apprehensions a first time user might have and help him or her feel good about interfacing with our product. With Atari computers, you don't have to stop and think before you use them. Of course, more and more of the younger generation are learning to program and work with more sophisticated applications, and they will have the capability of doing so with our product." cxii
-Conrad Jutson, Atari Computer Division VP of sales and marketing
"Conrad Jutson was an extremely thoughtful, erudite gentleman with twenty years in consumer electronics, most recently in the stereo field. His experience in that industry revealed a clear understanding of the computer as the central console in a components-oriented system. As it turned out, he and Atari were a little ahead of their time." cxiii
- Michael S. Tomczyk
The first advertisements for the Atari computers appeared in magazines such as Byte in November 1979 (which, at the time, described itself as a "small systems" magazine.) The 400 was priced at $549, the 800 at $999. cxiv
However, despite Atari's efforts to separate the computers from the company's popular video games, some of the first reviews (while positive) still mentioned the connection. It was a reputation Atari's computers could never really shake.
"With the introduction of the Atari line of computers we are seeing a third generation of microcomputer -- not just from the hardware end but also from a marketing approach. These computers are slightly cheaper than those of the previous generation. The major difference is in the configuration and the application for which the systems were designed. A recent article in Computing described the Atari computers as hybrids -- a cross between a video game and a small computer." cxv
- John Victor, Compute! magazine
Because the machines were closed, Atari had to develop all the games and applications for the computers in-house. To do this, the company started ramping up applications developers throughout 1979. Since many of the VCS programmers were disgruntled with their situation, they saw greener pastures with the more powerful and exciting computer line.
However, with the loss of the Fantastic Four, the VCS division was not ready to let them all jump ship just yet. One of the first programmers to make the switch was a recently hired war/strategy game designer named Chris Crawford.
"On September 4, 1979 I began my career as a professional game designer at Atari. The new Atari Home Computer System (HCS) with two models, the 400 and 800, was just coming out, and all the game designers wanted to work on those machines. Management therefore ordered that everybody who wanted to work on the home computers must first complete one on the game machine." cxvi
- Chris Crawford
Crawford had been hired to make VCS games, but his first and only, Wizard, was never released. Crawford said, "It didn't fit well into the product line." cxvii
Since Crawford had already designed a few computer games as a freelancer for the IBM 1130, Commodore PET, Tandy and Apple computers, it was not too much of a jump for him to get to work on software for the Atari 8-bit computer line.
However, without the proper documentation, he and other software programmers for Atari had to piece together information about the innards of the machine before they could make many usable programs.
Even with an emphasis on internal software, the early selection for the computers was rather meager. There were some productivity packages like Atari Accountant, BASIC and Atari Word Processor. However, coming from the premier name in video games, the entertainment software left much to be desired. The meager selection of early game titles for the computers included Basketball and Chess.
"...they didn't want the 800 to be seen as just a game machine; they wanted to compete with the Apple II" cxviii
- Doug Neubauer