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Sex Drugs & Video Games
  • July 30, 2012 : 14:07
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“Darlene” was the project name for Atari’s breakthrough home version of Pong for TV sets. While the Magnavox Odyssey was the first home console, Pong got a huge boost from a giant distribution deal with Sears, the great American department store chain. The pairing of Sears and Atari perfectly symbolized the transition from the old titans to the next generation of start-ups burgeoning in Silicon Valley.

Bushnell showed up for his first meeting wearing his usual jeans and shirt, only to find the Sears executives in suits and ties. For the next meeting, Bushnell showed up in a suit and tie, but the Sears guys were awkwardly dressed down in jeans. During a visit by Sears representatives to Atari’s production plant, the teams broke the ice by riding around the conveyor belts in cardboard boxes.

The unlikely but dynamic pairing paid off. The home version of Pong became a runaway smash. By the end of the holidays in 1975, Atari topped more than $40 million in sales. That success didn’t come without a price. Bushnell split with his original partner, Ted Dabney. (“His ego was blowing out of proportion,” Dabney later said about Bushnell. “He started doing really stupid things.”) Ralph Baer, creator of the Odyssey, sued Atari for allegedly stealing the idea for Pong. Atari settled out of court, with Bushnell maintaining that he had merely improved on a poorly executed idea. “I absolutely did see the Odyssey game,” he said, “and I didn’t think it was very clever.”

Baer, now 90, is still bitter. Reached at his home in New Hampshire, he says of Bushnell that “whenever he’s confronted with reality he takes off into some never-never land of imagined sequences that were drilled into his head by his lawyers. They never leave his cranium no matter how many times you quietly and politely explain the error.”

With the lawsuit behind him, Bushnell wasn’t dominating just the new home video game market—he was ruling arcades. Building on the success of Pong, Atari cranked out such hits as Tank, Indy 800 and Shark Jaws, based on Steven Spielberg’s hit film. To build a single-player brick-breaking game called Breakout, Bushnell tapped a gifted young hippie on his team, Steve Jobs.

Just 20 years old at the time, Jobs had been dropping acid, fasting, studying Eastern mysticism and working as a phone phreaker, manipulating phone systems to make free long-distance calls (including prank calls to the Vatican). Impressed by Jobs’s out-of-the-box thinking, Bushnell made him a technician. Bushnell offered him a bonus if he could use as few of the costly computer chips as possible when making Breakout. Jobs hit up a friend at Hewlett-Packard, Steve Wozniak, to help him with the machine.

“Atari was getting all kinds of attention by then for having started the video game revolution with games like Pong,” Wozniak later recalled. “Bushnell, well, he was just larger than life. Steve said it was a blast to work for him.” Three months later (or four days, by Wozniak’s account), the two Steves completed the game, which quickly became one of Atari’s most successful hits, a classic. Then Jobs went to Bushnell with a breakout offer of his own: to invest in the personal computer company he and Wozniak were starting.

For $50,000, Jobs said, Bushnell could own one third of Apple. Bushnell, however, was so busy with his own success (in addition to launching a series of Atari computers) that he passed. “Like an idiot I basically turned it down for the right reason,” he recalls. But as Apple exploded, Bushnell saw the creative business approach he had nurtured at Atari go wider in the Valley. “Jobs and Wozniak carried that corporate culture to Apple,” he says. “That’s when the ties came off.”

In 1976, another hot tub meeting at Bushnell’s spawned Atari’s ultimate conquest—the home video game that would pave the way for the consoles that dominate our living rooms today. Code-named Stella, the Atari Video Computer System became better known as the Atari 2600. By exploiting innovations in chip technology, Atari could create an interchangeable console that, unlike home Pong, could run a variety of games on cartridges.

To pull this off, the 33-year-old Bushnell needed more money to cover the cost of production. With an ego to match his creativity, he wasn’t satisfied merely to have launched the video game business. He wanted to rule its future before the chance slipped away. “I had a huge opportunity to dominate an industry, and if I didn’t fulfill the destiny of the video game business, then somebody else would,” he says.

He knew exactly what he needed to do: sell.

With video games taking over a new generation, Warner Communications, the parent company of the movie and music behemoths, wanted to cash in. The corporation sent a private jet to pick up Bushnell and his team and bring them to New York City for a meeting. When Bushnell and his band of hippie geniuses climbed onboard, they saw a familiar face in the corner—Clint Eastwood, whom Warner was flying to New York with his girlfriend for a premiere. Kicking back in the jet alongside the Hollywood superstar, Bushnell thought, I can get used to this.

 Warner put the gamers up on the top floor of the Waldorf-Astoria with a pool table and a grand piano and brought them along with Eastwood to see the film. This time Bushnell wore a suit to the meeting. The execs told him, “We think this is wonderful, and we want you to be the architect of the technology future at Warner.” Four years earlier, Bushnell had launched his video game start-up. Now, in 1976, he was selling the company for $28 million.

Bushnell remained Atari’s chairman and pocketed an estimated $15 million on the deal. He treated himself to a new home: a mansion formerly owned by the family behind the Folger Coffee Company. His moving in symbolized in many ways the arrival of a new generation of American moguls, the computer geeks who could build an empire on a chip and a dream. He also had his own private jet and a yacht named Pong.

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read more: entertainment, Gaming, sex, video games, issue july 2012

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