Marty Goldberg and Curt Vendel, Authors, Atari Inc.: Business is Fun

Recently, XBOX Entertainment Studios announced a documentary about Atari’s legendarily unsuccessful video game adaption of ET: The Extraterrestrial—and will also follow Fuel Entertainment’s excavation of a 100 acre landfill in New Mexico where an urban legend touts that Atari buried millions of copies of video game.

According to Wired, the urban legend dates back to 1983, when supposedly “Atari found itself with boatloads of unwanted copies of the reviled game and—again, according to legend—opted to simply bury them.”

The legend even has its own Wikipedia site.

But some people wonder what all the hype is about—including Marty Goldberg and Curt Vendel, who literally wrote the book on the video game company, Atari Inc.: Business is Fun. Their response to the legend has been noted in relation to the film’s announcement in various places, including PC Magazine and MSN.

We asked Marty Goldberg to tell us a little more about Atari—and why he and Vendel think the legend is a pure myth.

Tell us a bit about your book? What prompted you to write it?

We both have an insane love for the brand, the people behind it, and the history of it. Curt (who runs and the Atari Museum archive) and I (also part of the Atari Museum as well as the E2M archive and a writer and programmer in the industry) had been working on separate book efforts and decided to team up. Both of our research took the better part of a decade, so we had an awesome amount of material to cram into book format. We decided we really needed to do three books, one on each main Atari company (Atari Inc., Atari Corp., and Atari Games).

What is the status on the books on Atari Corp and Atari Games?

We’re only working on one book at a time, and we’re currently working to get the Atari Corp. book out sometime by Fall/Christmas ’14.

What role did Atari play in the development of the video game culture today?

Atari was synonymous with high technology and gaming during the 70s and first half of the 80s, to the point that even in politics those who promoted investment in a high tech infrastructure were referred to as “Atari Democrats.” Likewise because it was a subsidiary of media juggernaut Warner Communications, it was in position to pioneer a lot of the cross promotion and pop-culture influence that’s commonplace today (and is often wrongly attributed to Nintendo).

What led to Atari’s collapse?

The first Atari (Atari Inc. and the one this book is on) collapsed because of the greed of Warner Communications. It’s ironic that Warner provided both the golden years of the company and its downfall. By ’81 Atari was providing the bulk of Warner’s stock earnings and proved to be a cash cow. Every release for the 2600 was almost like giving Warner the ability to print its own money, and they made sure Atari’s management kept the focus on that. It pretty much resulted in a dual management at Atari that interfered with a lot of key decisions in favor of an ever growing stock value. Decisions like not having any real inventory control or communication on it to control production and track returns (even when Warner’s music wing had been calling for Atari to adopt the practice). Or say in the case of ET, which was actually forced on Atari by Warner chairman Steve Ross because he was trying to lure Spielberg over to Warner Bros. for his movies.

What about ET: The Extraterrestrial—was it as dismal a failure as everyone remembers? Why?

Yes, though it had little to do with Atari’s financial problems and downfall. Atari’s downfall was already well underway by the summer of ’82 and management was taking steps to conceal that by early fall. ET had the misfortune of being released after Thanksgiving (November 26-28), just before Atari’s infamous December 7 earnings report that sent the entire tech market into a tizzy and the consumer video game companies into a downward spiral throughout 1983.

By January ’83 there were already published reviews on how horrible the game was and how poorly it was being received by consumers. So it sort of became a symbol of Atari’s problems because of that timing, vs. anything to actually do with it.

And as stated, the game wasn’t Atari’s fault. Ross negotiated with Spielberg for the rights over a weekend party at his house in the Hamptons and sprung it on Atari. It had ridiculous concessions like a guarantee it would be out for Christmas ’82 and that Spielberg would make an insane amount of royalties regardless of sales. This was already in July of ’82 and normal game development took several months at that time. To get a game out for Christmas you’d need to have the game completed and over to the Production and Manufacturing departments in September to have the first shipments go out sometime in October in time to be distributed for Thanksgiving weekend (the start of the traditional Christmas shopping season). Spielberg requested Howard Scott Warshaw (the two had previously met during the development of Howard’s popular adaptation of Raiders of the Lost Ark) and Warshaw was given a little over a month to come up with a game concept, code/develop it, and debug it. In the end Spielberg also had final approval before it moved to manufacturing so it wasn’t like it was sent out the door without his knowledge. Howard did an incredible job with the time he had and also introduced the first startup screen on a console game (something only usually seen in arcade games and a handful of computer games at the time).

Are there millions of copies of unwanted ET cartridges in that landfill?

No. That was a myth that popped up in the 90s—it never existed at the time of the actual dumping. In fact, there’s zero coverage of that myth in the news reports at the time. As we covered in the book, the dumping was an emptying of stock and equipment Atari’s El Paso, Texas, manufacturing plant as it converted to become an automated plant, changed its focus to hardware manufacturing, and also became Atari’s main Service Center hub. The dumping consisted of a plethora of items from computers to consoles to a wide selection of games. And it only represented a minuscule amount of what Atari actually had on hand in its warehouses. (Again, El Paso was only a manufacturing plant and not a distribution center/warehouse). Save for the manufacturing plant in Puerto Rico, the main game manufacturing was moving over to the Taiwan plant. The makeover of the El Paso plant is what the automation (and letting go of half of the staff) was planned, and actually announced far earlier in the year. And most of this was actually in the articles of the time, including what was being buried (and the eyewitness accounts of what kids were pulling out before it was bulldozed and covered with concrete). Atari did have a lot of the warehouse stock (not ET specific) returned to Sunnyvale for disposal at one point.

Why did they choose to bury the cartridges? Was that the standard method of disposal then?

The burial of goods is a pretty standard practice in industries, and I believe is for tax purposes. Again though, it was a wide selection of game titles, consoles, and computer hardware.

How do you think the urban legend developed—and why?

Because it probably ties in better to the legend of that original Atari company and the individual “faults” people like to try to neatly point at as the main cause of its downfall. (I.E. the aforementioned “E.T. caused Atari’s downfall” false claim is one of many).  To this day people still have a problem understanding how a company that owned 80% of the consumer video game industry could fall so spectacularly and take the consumer gaming industry with it.

Have you contacted or been contacted by XBOX or the filmmakers?

Yes, we were contacted by the production company to possibly do interviews for the film and to discuss the project in general. I had a 25 or so minute call with Jonathan Chinn and wound up providing a few resources as well some possible direction. To date we have not been formally interviewed for the film nor do I know if any of the clarification or info we provided will be used. I doubt any of it will be, there wouldn’t be as much hoopla and entertainment surrounding a dig for an already solved mystery.

Knowing what’s actually down there, I’m hoping there’s even anything there that’s salvageable to make it worthwhile for the dig. The location is a landfill vs. a dump. Landfills are specifically designed to keep the degrading materials contained (starting with a bottom seal followed by alternating layers of the disposed materials and dirt not to mention the concrete caps that were poured on this one). So with nowhere to run off to what you most likely have is a toxic soup just sitting there. That’s why the dig itself was recently postponed while chemical testing is done to see if the dig can even be done without letting toxic materials escape.

Did you encounter a lot of friction with anyone from Atari or elsewhere in the industry when researching the book?

Pretty much the only friction has to be with Nolan Bushnell; everyone else was extremely happy to support the effort.

Here’s the thing: Curt and I are big fans of everything and everyone Atari. But in order to do this justice we had to take off the fan glasses and look at everything objectively to really try and get as close to what actually happened as possible. That meant trying to corroborate or disprove (i.e. vet) lots of long told stories—including Nolan’s. If a story turned out to be true, great; if not, then great as well. It was entirely neutral. [Goldberg and Vendel’s vetting process is described here.]

Unfortunately, during that process it lead to a lot of Nolan’s long told stories not passing the vetting process (either being completely uncorroborated, or simply being very embellished –”Nolan waxing philosophical” is how former Atarians Steve Bristow and Al Alcorn put it). Nolan has a lot to be proud of, and we’re certainly thankful to him and his role with starting Atari with Ted and everything he accomplished through Atari. We have no animosity towards him what so ever, but I can’t say the same about him since the release. There have been claims of everything from us “rewriting history” to being ringleaders collecting up everyone he’s ever screwed over to speak out against him. If anything, the vetting brought out what appears to be the fact that Atari’s history had been what was rewritten over generations and linked to one person’s personal PR efforts. And the people that are speaking out were doing so long before we contacted them to get their sides of the story (which we didn’t take at face value either; again we vetted everyone no exceptions).

Plus, the fact that we really wanted to make this book a testament to everyone that worked at the company directly contrasted with previous efforts that focused on Nolan and a select few to tell the history. That, combined with the fact that many of those long told stories that didn’t survive vetting are absent from the book, meant some people got the misconception that we never interviewed Nolan. Curt has in fact interviewed him many times since the 90s (and worked on several project with him). Likewise we sent him copies of the chapters on him to review and comment on (which he did not) plus gave him the opportunity to write a foreword (which he also declined). I also want to note that we sent out chapters for review to everyone we interviewed (specifically the chapters that contain the info that they provided or included them) as a last pass for accuracy. To give them a chance to review and say, “No, what I meant was this…” or “You have that wrong, this is what happened…” or “Yup, looks great!” They were all extremely happy to contribute (and excited to see their stories get out). In one case for example, it lead to a lot of last minute extra info coming out about one of Atari’s little known efforts (pinball), thanks to legendary pinball designer Steve Ritchie. Steve started his career in Atari’s Pinball Division as did legendary video game developer Eugene Jarvis (Robotron, Defender, the Cruis’n series).

What are some things you wrote about or discovered in writing the book that most people don’t know? Or things you most want people to know?

Besides wanting to get to the bottom of a lot of long told myths (the “E.T. burial” or who really did Breakout being only one of many), we really wanted to expose people to the early years of the company.

Most previous efforts usually start with Nolan and Ted’s efforts for Computer Space then jump to PONG and then skip a bunch of years to Home PONG and Breakout. There’s a lot that went on during those years, and it was in fact the time when the character of the company was formed—a prototypical atmosphere of today’s Silicon Valley companies if you will. (The irony in that is many of the people who worked at Atari Inc. are still in the tech industry today at these other companies.) A company that took in people from all walks of life and eccentricities (where else could a young, smelly and egotistical Steve Jobs had worked?) and really sought to do things to the beat of its own drum.

Another interesting tidbit people may not realize: all of the early game designers were electrical engineers. Microprocessors didn’t start being used in arcade video games until 1975, so until that time they weren’t microprocessor based—i.e. there was no software in them. They were what’s termed “discrete based state machines,” meaning they were single purpose “computers” who had all their game logic as circuitry. So one circuit put a paddle on the screen, another put a ball, another did calculations of motions, another did collision detection, etc. What that meant was you had these guys from a very technical discipline, electrical engineering, being asked to take this otherwise dry and practical skill set and create “fun.”

It wasn’t until the latter half of the 70s that you had a separation between hardware development and the game developers (i.e. people actually coding the game now that things were microprocessor based).But even then is was largely a one or two man show. Finally in the very early 80s (again at Atari Inc.) you had the addition of artists to help with the graphics and a move towards the more modern “development team” had begun.

You can purchase Atari Inc.: Business is Fun at Amazon.


We asked a follow-on question that was a bit off-focus from the rest of the interview. We took that question and its answer out of the flow of the interview for your convenience and include them here.

What were the primary design drivers for the Atari consoles subsequent to the 2600? (5200, 7800) Were the consoles successful from a consumer perspective?

Atari Inc. was very careful not to do a “replacement” to the 2600 (which is understandable given the importance of the 2600 related earnings to Atari Inc. and Warner Communications). So the 5200 was designed and placed as a higher end “compliment” to the 2600. That was also (I believe) the first console designed via consumer focus groups, who basically stated what they wanted in a new console at the time. From a consumer standpoint however, the 5200 was not as successful as Atari Inc. had expected. It was in fact only manufactured (in a four port and later two part model) for about a year and a half (Summer ’82 through February ’84) before being cancelled in favor of the forthcoming Atari 7800.

The Atari 7800 was not designed at Atari, it was by a company who had a contract with Warner Communications called GCC. GCC had started out in coin-op video games with mod kits for popular games including Atari’s Missile Command (they’re also the creator of Ms. Pac-Man). Atari Inc. tried suing them, and Warner intervened and instead took them on as a contractor. GCC wound up doing games for Atari for the 2600 and 5200, and then approached them (and Warner) with their proposal for a console/computer system they had planned out called Spring. Their design driver was to do the product they thought the 5200 should have been, since they felt it had been a travesty (especially since it was built off of what is essentially an Atari 400 computer yet it could not expand with any computer capabilities). GCC’s plans for their console would allow addition of a keyboard, computer peripherals via and expansion SIO port (Atari’s 8-bit computers of the time use a a special port that supports intelligent devices much like USB and “plug and play” today), high score storage, and other features. It was during this time (early 1983) that Nintendo approached Atari Inc. with the possibility of distributing the Famicom world wide as an Atari product. Atari’s engineers tried to evaluate both but Yamauchi’s ridiculous demands (Nintendo would be the only ones allowed to manufacture the console hardware and cartridges, Atari would just be able to slap a case and packaging on it. Atari also had to guarantee a large pre-determined amount of orders each year regardless of sales… and it had to be out right away for that Christmas ’83) made that hard. Plus when the whole Donkey Kong flap happened that June ’82 and delayed everything, Yamauchi walked away and decided Nintendo would go it alone (which didn’t work out until two years later). Atari’s engineers were split on the two consoles (again, neither was released yet so they were going purely by an engineering and coding perspective at that point). A good half of them felt GCC’s MARIA (the custom chip driving the 7800) was more powerful because it could handle far more software driven sprites. However MARIA wasn’t finished yet at the time. Regardless, the situation was settled for them by Yamauchi and Warner/Atari moved forward with GCC. 

Atari Inc. introduced the 7800 at the June ’84 CES and started test marketing it in the New York area (and according to store owners from the time involved in the test marketing it sold quite well).

Then in the beginning of July, Warner chairman Steve Ross came out with a fact he had been hiding from everyone. He had been trying to sell Atari Inc. outright, and failing to do so had sold the Consumer Division’s (that division handled all computer and console) assets to Jack Tramiel (formerly of Commodore). Warner retained the rest of the company, renaming it to Atari Games Inc., and eventually pairing it down to just the Coin Division (which was in turn sold to NAMCO and renamed Atari Games Corp.). Jack meanwhile folded the Consumer Division assets into his own company Tramel Technology Ltd (or TTL, which misspelled his last name on purpose so people pronounced it right), and then renamed TTL to Atari Corp.

As Jack and Atari Corp. tried to go through what they had inherited they found a mess because of the hastily way the split had occurred (in fact they were in litigation with Warner and Atari Games for several years after to decide who had what). They also discovered they didn’t actually own the 7800 – GCC did. Since GCC’s contract was with Warner, they felt Warner owed them the remaining money for the MARIA development costs and costs of the 10 launch titles. Meanwhile Warner felt if Jack wanted the 7800 he had to pay GCC for the costs. Jack had planned to release the 7800 that Christmas ’84 but negotiations went on until the spring of ’85 when Jack capitulated and paid GCC. Then he had to look to startup a home console division again and started trying to woo Epyx head Mike Katz away that August. He finally did it and when Mike started looking for more arcade titles during Sept./Oct to add to the 7800 launch he found a funny thing – just about all the then current “hot” titles (and the development studios themselves) had been snapped up by Nintendo for their Famicom in exclusive licenses. So he contact Epyx and other computer game companies and started licensing titles that formerly were only available on computers. The 7800 was re-introduced at the January ’86 CES and the back stock started shipping to retailers immediately. (All the expansion peripherals had been dropped in the interim).

By the June ’86 CES with the limited stock of 7800s selling out (only the original ’84 run was available until the new run of 7800s was completed) and Nintendo’s NES slowly expanding around the country (the original ’85 test marketing in New York was considered a bust by retailers, the ’86 Los Angeles testing was better, and then the console started taking off from there as it expanded around the US and generated buzz), joined by SEGA announcing they were releasing a console as well that Fall, the consumer electronics industry coverage was stating it looked like the home video game industry was being revived.

By the time the Christmas ’86 sales season was over, Nintendo came out on top in the US followed by the Atari 7800 and then the SEGA Master System in third. It pretty much stayed that way the rest of that generation, with Nintendo pulling far out in front here and the 7800 remaining a distant second. SEGA performing so poorly with the Master System here was in fact one of the reasons they initially approached Atari Corp. with releasing their next console (called the Mega Drive) in the U.S. The deal fell apart when Jack wanted world wide rights (except for Japan) and SEGA couldn’t agree. (SEGA of course eventually released it on their own here as the Genesis and in fact Mike Katz wound up spearheading that at SEGA as well).

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