Millennium Time Capsule/AC2000.BIN/disks/ac2_disk/the.end/dthomas.txt

Text File | 1996-10-17 | 15KB | 235 lines

Don Thomas "UpFront" STR Focus

                     Did you hear anyone say "Goodbye"?



by Donald A. Thomas, Jr. (10/4/96)

It's odd to imagine an institution, which was as big and as powerful as Atari
once was, to have been shut down in recent days. The real amazement for me is
that it was all accomplished without a measurable flinch from within or
outside the gaming industry. I can understand that gamers wanted to push Pong
out the door early in the timeline. I can appreciate that the classics such
as Missile Command and Asteroids do not push 32-bit and 64-bit systems to any
technological limits. I know all these things intellectually, but the heart
cannot face the truth that the world and the corporate machine known as Atari
could not find an amicable way to co¬exist.
On Tuesday, July 30, 1996, Atari Corporation took each and every share of
it's company (ATC), wrapped them all in a tight bundle and presented them to
JTS Corporation; a maker and distributor of hard disk drives. On Wednesday,
the shares were traded under the symbol of JTS. Within a few weeks, the
remaining staff of Atari that were not dismissed or did not resign, moved to
JTS' headquarters in San Jose, California. The three people were assigned to
different areas of the building and all that really remains of the Atari
namesake is a Santa Clara warehouse full of unsold Jaguar and Lynx products.

It was only as long ago as mid '95 that Atari executives and staff believed
things were finally taking a better turn. Wal*Mart had agreed to place Jaguar
game systems in 400 of their Superstores across the country. Largely based on
this promise of new hope and the opportunities that open when such deals are
made, Atari invested heavily in the product and mechanisms required to serve
the Wal*Mart chain. But the philosophical beliefs of the Atari decision
makers that great products never need advertising or promotions, put the
Wal*Mart deal straight into a tailspin. With money tied up in the product on
shelves as well as the costs to distribute them to get there, not much was
left to saturate any marketplace with advertising. While parents rushed into
stores to get their kids Saturns or PlayStations, the few that picked up the
Jaguar were chastised by disappointed children on Christmas day.

In an effort to salvage the pending Wal*Mart situation, desperate attempts to
run infomercials across the country were activated. The programs were
professionally produced by experts in the infomercial industry and designed
to permit Atari to run slightly different offers in different markets. In
spite of the relatively low cost of running infomercials, the cost to produce
them and support them is very high. The results were disappointing. Of the
few thousand people who actually placed orders, many of them returned their
purchases after the Holidays. The kids wanted what they saw on TV during the
day! They wanted what their friends had! They wanted what the magazines were
raving about!

In early 1996, Wal*Mart began returning all remaining inventory of Jaguar
products. After reversing an "advertising allowance" Atari was obligated to
accept, the net benefit Atari realized was an overflowing warehouse of
inventory in semi-crushed boxes and with firmly affixed price and security
tags. Unable to find a retailer willing to help distribute the numbers
required to stay afloat, Atari virtually discontinued operations and traded
any remaining cash to JTS in exchange for a graceful way to exit the
industry's back door.
Now that JTS has "absorbed" Atari, it really doesn't know what to do with the
bulk of machines Atari hoped to sell. It's difficult to liquidate them. Even
at liquidation prices, consumers expect a minimal level of support which JTS
has no means to offer. The hundreds of calls they receive from consumers that
track them down each week are answered to the best ability of one person.
Inquiries with regard to licensing Atari classic favorites for other
applications such as handheld games are handled by Mr. John Skruch who was
with Atari for over 13 years.

In spite of Nintendo's claim that their newest game system is the first 64-
bit game system on the market, Atari Corporation actually introduced the
first 64-bit system just before Christmas in 1993. Since Atari couldn't
afford to launch the system nationwide, the system was introduced in the New
York and San Francisco markets first. Beating the 32-bit systems to the punch
(Saturn/PlayStation), Atari enjoyed moderate success with the Jaguar system
and managed to lure shallow promises from third-party companies to support
the system. Unfortunately, programmers grossly underestimated the time
required to develop 64-bit games. The jump from 8-bit and 16-bit was wider
than anticipated. In addition, Atari was already spread thin monetarily, but
were required to finance almost every title that was in development.

After the initial launch, it took Atari almost a year before an assortment of
games began to hit store shelves. Even then, having missed the '94 Holiday
Season, many of the planned titles were de-accelerated to minimize problems
caused by rushing things too fast. Consumers were not happy and retailers
were equally dismayed. The few ads that Atari was able to place in magazines
were often stating incorrect release dates because that information changed
almost every day although magazines deadline their issues up to 120 days in
advance.
It was in 1983 that Warner Communications handed Jack Tramiel the reins of
Atari. By this time, Atari was often categorized as a household name, but few
households wanted to spend much money on new software and the systems were
lasting forever. No one needed to buy new ones. That, combined with Warner's
obscene spending, amounted to a *daily loss* of over $2 million. Atari was
physically spread all over the Silicon Valley with personnel and equipment in
literally 80 separate buildings; not considering international offices and
manufacturing facilities. Mr. Tramiel took only the home consumer branch of
Atari and forced Warner to deal with the arcade division separately. Within a
few years, Jack took the company public, introduced an innovative new line of
affordable 16-bit computers and released the 7800 video game system.

To accomplish these miracles for Atari, Jack implemented his "business is
war" policies. While people who publicly quoted his statement often felt that
policy meant being extremely aggressive in the marketplace, the meaning
actually had closer ties to Tramiel's experience as a concentration camp
survivor. Of the 80 buildings in Sunnyvale, Santa Clara and Milpitas, almost
every one of them were amputated from Atari's body of liabilities. The
people, the work, the heritage, the history were fired or liquidated. Those
who survived were unsympathetically required to fill in the gaps and while
most tried, few actually found a way to be successfully do what a dozen
people before them did. Atop the mountain, Jack pressed with an iron thumb.
All Fed/Ex mailings were required to be pre-approved by one of a handful of
people. "Unsigned" purchase orders went unpaid regardless of the urgencies
that inspired their creation. Employees found themselves spending valuable
time trying to find ways around the system to accomplish their jobs. Many of
them lost their jobs for bending the rules or never finding a way to make
things work. As horrible as it all sounds, it actually was the only way to
protect Atari as a company and give it a chance to survive, as it did and did
very well.

Jack's introduction of the 16-bit computer was initially hearty in the United
States but it went extremely well in Europe. Europeans were not accustomed to
"affordable" technology and although the Atari computers were not IBM
compatible, it didn't matter because people could afford them. Jacks' private
laugh was that the computers were sold at prices much higher in Europe than
Americans were willing to pay. As a result, most of the machines made were
being shipped to European destinations to capture the higher margin. This
enraged the people in the United States that had been Atari loyalists. While
waiting months for stores to take delivery domestically, international
magazines were touting ample supplies. Those in the know within the U.S.
became dismayed. The remainder never knew Atari was slowly abandoning the
value of Atari's name recognition as it became easier and easier to forget,
some assuming Atari had long filed for bankruptcy.

On a technical level, Atari 16-bit computers were designed beyond their time.
For less than $1,000, consumers could enjoy "multimedia" before the phrase
was ever really widely used. The icon-based working environment proceeded
Windows popularity although the essential attributes of the two environments
were very similar. MIDI was built-in and became an instant hit in the high-
end music industry. Tasks were activated and manipulated with a mouse and the
system accepted industry standard peripherals such as printers, modems and
diskettes.

With all the genius that went into the technology of the machines, very
little of equivalent genius went into the promoting and marketing the
machines. Mr. Tramiel was the founder of Commodore Business Machines. When he
introduced the PET computer in 1977, Jack discovered he didn't have to call a
single publication. Instead they all flocked to his door demanding an
opportunity to see the product. News magazines. Science Journals. Business
newsletters. Newspaper reporters. They were all there with microphone, camera
and pen in hand. And they kept coming back. Adding a switch, announcing a new
4K application or signing a new retailer were all big stories the press
wanted to handle.

Today, a new video game announcement may generate a request from any of the
dozens of gaming magazines for a press release, but a lot of costly work has
to be done to assure fair or better coverage. Editorial people are literally
swamped with technical news. Samples are mailed regularly to their attention.
Faxes fly in through the phone lines and e-mail jams up their hard drives. It
takes a lot to grab their attention.
While Atari retained hopes to be successful with the Jaguar, Atari's
marketing people were fighting established standards in the industry with
severe handicaps. Since cartridges (the Jaguar was/is primarily a cartridge-
based system) were so expensive, editorial people were required to return
them before new ones would be sent. Editorial people like to assign review
projects. So finding cartridges they sent out was not always easy to do.
Additionally, reviewers often love their work because they get to keep what
they write about.

Regardless, the few magazines willing to cover Atari products were more often
turned away because of a lack of programmable cartridges or any number of
other indecisive barriers. In-store signs and posters were sometimes created,
but many retail chains charge premiums to manufacturers that want to display
them. Some direct mail campaigns were implemented, but Atari often could not
afford to keep those things being advertised on schedule. Therefore, the
advertisements were published and distributed, but the product was not
available. Clearly, Jack's experience with the world beating a path to the
door of a company making a better mousetrap no longer applied. The world had
revolved a few times beneath him and he never noticed. The tactics used to
successfully sell Commodore computers were simply antiquated notions from the
past. Meanwhile, Sony launches the PlayStation with over $500 million in
marketing funds. Today, the PlayStation is considered the most successful
next-generation gaming machine throughout the world. Sony bought the market.
Tramiel's Atari never learned how to do that. Actually, they never could
afford it anyway.

After the 1990's got underway, Europe as well as the rest of the world,
discovered that IBM-compatible computers were becoming more powerful and more
affordable. The world always did want computers at home just like in the
office and companies like Dell and Gateway exemplified the industry's trend
toward home-based office computers. As a result, companies like Commodore,
Atari and Next couldn't compete any longer. While the dedicated user base of
each of them felt abandoned by these companies having to leave the computer
market, the inevitable prevailed. Commodore jumped ship, Next changed
business goals completely and Atari invested what they had left in the Jaguar
game system. Even today, Apple is kicking and screaming. As good as Apple was
at creating a huge niche for themselves, they focused more heavily on
education. When kids grow up and get jobs, they want business machines. IBM
was always the business standard.

When one examines the history of Atari, an appreciation can grow for how many
businesses and people were a part of the game over the years. Chuck E. Cheese
Pizza was started by Atari's founder, Mr. Nolan Bushnell. Apple Computer was
born in a garage by ex-Atari employees. Activision was founded by Ace Atari
programmers. The list goes on and on. But for some pathetic reason Atari's
final days came and went with no tribute, no fanfare and no dignified
farewells. Why? Where did all the talent go? Where are all the archives?
Where are the vaults?  Where are the unpublished games and where are the
originals of those that were? Why has no company stepped forward to adopt the
remaining attributes Atari has to offer? Where are the creditors? What has
happened to all the properties and sites? Where are the databases, warranty
cards, promotional items, notes on meetings, unanswered mail? Who owns P.O.
Box 61657? Who goes to work in Atari's old offices? Where do consumers have
their systems fixed? Who is publishing new games? Who still sells Atari
products? Why are there still a lot of people talking about Atari on-line?

I'm an ex-Atari employee and proud to have been. I'm still an Atari devotee
and proud to be. To me, these are questions which all deserve an answer, but
who will ask them?  The best people to ask these questions are those who have
exposure to the public. If you believe Atari left us without saying goodbye,
contact Dateline at [e-mail]. If you REALLY believe, then send this
article to 10 of your friends in e-mail. AND if YOU REALLY, REALLY believe,
mail a few to newspapers or other news programs. A letter in your own words
would be great!  I'd spend money for a thorough retrospect on Atari. Wouldn't
you?

Wouldn't it at least be nice to say "Goodbye"?

--Don Thomas
   [e-mail]
    Permission is granted to freely reprint this article in it's entirety
                    provided the author is duly credited.