alternatehistory.com
1986 Videogame Rodeo Computer Roundup Event
The 1986 Videogame Rodeo Computer Roundup Event
—Now you're playing with power.
(Nintendo Entertainment System slogan upon launch in North America in 1985.)
The impact of the Big One on the videogames and computing industry was instantly and widely dramatic. The popular Nintendo Entertainment System (NES) saw several months of factory production either pile up or simply not built, as shipping had been disrupted and a great deal of it shifted to disaster relief supplies. The growing cries of "where's my Nintendo, mom!" would not only place a certain stress on the psyche of American parents but would also herald a dramatic shake-up in the computing industry. Indeed Nintendo's advertising through 1985 and 1986 and their careful positioning had paid off so well that when they couldn't meet demand… things began to change.
Nintendo Entertainment System
Sega also faced problems. Their North American launch of the Sega Master System had been planned for June 1986 and that was clearly no longer viable. However they rapidly came up with a new strategy, a Western European "soft launch" in smaller countries (serving as an indirect marketing campaign to the larger European countries) along with several other smaller markets like Australia and Brazil. Those much smaller markets could be supported from Japanese production in time for a fall launch and related costs such as marketing would also be much lower than a North American (supply constrained) launch. Sega was also forced to shelve their already planned advertising push in North America but that proved to be something of a blessing in disguise.
Sega Master System
NEC and Hudson Soft, long considering the lucrative console market, were confronted with problems as finances dried up with Japanese banks coming under investigation. Their Christmas 1987 plans were on hold and instead they were forced to begin looking for an additional partner. This also forced them to contemplate a complete redesign of their console as a delay past 1987 might leave them facing a new Sega or Nintendo console within only a year or two of launch. Instead Hudson Soft focused on third party game development such as their highly successful Bomberman game on the Nintendo Famicom (NES in America) and began planning for potential first party titles with the experience they were gaining.
In America, Commodore International and Atari Corporation had spent the last two years locked in a brutal struggle with the Commodore 64 & Amiga 1000 on one side, and the Atari 8-bit & ST computers on the other. Jack Tramiel had founded Commodore and had been forced out, he then bought up the consumer electronics side of Atari (and taken most of the good Commodore engineers) and mounted a vengeful attack on Commodore. This had taken a major toll on both companies in terms of finances. Their joint struggle over Amiga had only deepened Tramiel's understandable grudge with Commodore.
However Commodore thought there was opportunity there. The Atari 7800, although not doing great, had plenty of supply at hand. However the 7800 was something that Tramiel clearly had no interest in pushing, a huge potential missed opportunity against a briefly weaker NES and hard to understand given how key games had been for the C64's success. For the second time (partially spurred by Time's February 1986 Adios Amiga article and the loss of 53.2 million dollars in the fourth quarter of 1985) Commodore reached out to Apple executive Jean-Louis Gassée over taking the CEO position at Commodore and this time Gassée accepted, tired of internal fighting at Apple and wanting something different[1].
Atari 7800
A challenge was what he found, but he also discovered a way out of it: buy out Atari, consolidate the industry, and push the Atari 7800 (with perhaps a moderate redesign) against the NES. Of course Jack Tramiel would never sell, but this was the era of the leveraged buyout and Commodore International had a backer: Sun Microsystems. Sun had recently mounted an Initial Public Offering (IPO) on highly successful sales of their workstations but Sun was interested in expanding their footprint down from just workstations[2] (and gaining access to both Commodore & Atari's excellent distribution networks) and in the wild and wooly market of 1986 personal computers Commodore International was both cheap but potentially about to get more expensive, once Jean-Louis Gassée began righting the ship with the planned launch of the Commodore 74 (backwards compatible with the C64, unlike most of their line), a cheaper Amiga 500 model, and cancellation of all other computers aside from the Amiga 1000 and C64.
Jack Tramiel fought a good fight but his own mercurial personality worked against him in his public statements and his penchant for lowering prices of computers when not required was making stockholders (as had happened at Commodore) uneasy. In addition much of Commodore's top flight talent had followed Tramiel to Atari happily, but with Sun Microsystems and Jean-Louis Gassée (both highly respected in Silicon Valley, and Gassée loved by Apple engineers) in charge with—perhaps most importantly—the Commodore board paid off and out of any influence they had a new and safer option. The loss of much internal support finally convinced Tramiel that he was done and although forced out of a second company his payday might have helped make up for it.
[3]
So in late 1986 the complicated step-dance ended with Sun Microsystems and Commodore International merging to form Sun Commodore as well as mounting a takeover of Atari Corporation and the cheap acquisition of Atari Games from Namco to form a new first-party games studio[4]. Sun Commodore was therefore structured like so: Atari the console company (Atari 7800), Atari Games the development studio, the C64 & C74 low-end computers, the Amiga 500 & 1000 high-end computers, and Sun-number (e.g. Sun-1) workstations. Jean-Louis Gassée's main goal would to be simplification and stronger competition in the computing market, and to take advantage of the market opportunity open with the NES lacking supply.
The Christmas 1986 season in the United States was dominated by a barrage of Sun Commodore advertising for the Atari 7800. With turmoil at home Nintendo had been desperately trying to get NES's into America but were essentially filling the pent-up demand, not the new Christmas demand and so the Atari 7800 had a strong second place showing capturing some 35% of all sales in the fourth quarter. Sun Commodore's idea of pushing the 7800 harder than Atari had was strongly validated, and they moved forward with plans for a new console.[5]
The theoretical consolidation of the lower to mid markets in computers (theoretical in that virtually all the computers under Sun Commodore's belt were, in 1986, incompatible with each other) married to a workstation company made plenty of executives at Apple Computers and the IBM clone field sit up and take notice. The C64 was usually the best selling computer on the market in any given quarter and the potential of Sun Commodore as a company was clear.
Nintendo also paid attention, recognizing the global networks of the new Sun Commodore and the success of the Atari 7800 once it had some marketing muscle behind it. In many ways the Atari 7800 (originally released in 1984, after all) was unable to compete with the NES but the low price of the 7800 along with the ability of the 7800 to run ported C64 games and the monetary inducement to developers[6] to get those ports out saw a number released in time for Christmas including Ghosts & Goblins, Loderunner, and perhaps most importantly: Elite.
The low install base of the 7800 pre-Christmas '86 was actually working to Sun Commodore's advantage, as they had to sell a new controller for C64 games (packed in with 7800s once Sun Commodore owned Atari) and fragmenting the market was acceptable when so few were around before the holiday push.
Updated Atari 7800 Model[7]
Nintendo's weakness in computer games (as opposed to console games) had been considered by some outside observers to be a problem, looking forward to when they launched in Europe sometime in 1987 instead of 1986 as planned, and as they watched the sales numbers of those early C64 ports Nintendo seemed to agree with and resolved to find a way around their problem. Combined with looking for potential partners for their next console, Nintendo's search (much like NEC's) would eventually settle on a rather logical choice.
Sega too watched with wariness. The European/Brazil/Australia strategy was paying off in sales as every Sega Master System they shipped they sold, and in Europe there was soon a hefty premium on Master System's outside the official launch countries. As such they were very confident about their European strategy but, like virtually everyone, they had also believed—known, really—that the Atari 7800 was a dead system without even a modern (i.e. NES-style) controller. Sun Commodore had changed everything and the computer models under their broad roof were very popular in Europe. As with Nintendo, Sega was soon on the hunt for potential partners.
By the beginning of 1987 the shake-up of the videogame and computing industries was only beginning….
|||||
[1] He was offered the job IOTL and turned it down. ITTL the earthquake disrupts Apple CEO John Sculley's plan to remove Steve Jobs from a position of power (as the Japanese market was very important to Apple) and install Gassée. As Gassée is easily the most political of Apple executives he promptly makes a contingency plan, which seems validated when Sculley reorganizes Apple and Del Yocam (a notorious hardass, who would have reined in the freewheeling Gassée—and began to, IOTL, until Sculley folded like a cheap suit and fired Yocam) became COO.
Gassée's flaws (a love of high profit margins, lots of expensive research programs, willingness to let his engineers fly past deadlines) are things that the 1986-7 Sun Microsystems and Commodore/Atari/Amiga culture can potentially reign in.
[2] Sun Microsystems has always been fairly active in buying companies, starting in 1987 OTL. ITTL the greater turmoil caused by the earthquake is heavily effecting the "Workstation Wars" since Japan was a major customer and Jean-Louis Gassée is willing to be demoted in order to have the resources he needs to take on Apple, the console market, and MS-DOS & Windows vendors. Sun figures a broadening of their market is a good thing for the future. For a handful of people (hi Nicole) you've read a similar Sun Commodore merger story before, but heck I still love the idea.
[3] Sorry about the bad picture edit job.
[4] Atari Games IOTL was bought by some of the employees and became infamous as Tengen.
[5] The Atari 7800 consistently made quite a bit of money for Atari even on low sales, which makes it even stranger that ITTL & IOTL Tramiel never pushed it harder.
[6] This seems like a requirement to link.
[7] The "updated controller" ITTL is basically OTL's European Joypad. However (since you can't see them) ITTL it adds two shoulder buttons to give you four buttons to use with C64 games.
-----
I assume anything people don't know they can look up on the wild world of the internet but if there's anything in particular that's confusing let me know and I'll rewrite a little to clarify. In text links, at least in the above post, are all to Youtube and their wonderful collection of advertising videos.
—Now you're playing with power.
(Nintendo Entertainment System slogan upon launch in North America in 1985.)
The impact of the Big One on the videogames and computing industry was instantly and widely dramatic. The popular Nintendo Entertainment System (NES) saw several months of factory production either pile up or simply not built, as shipping had been disrupted and a great deal of it shifted to disaster relief supplies. The growing cries of "where's my Nintendo, mom!" would not only place a certain stress on the psyche of American parents but would also herald a dramatic shake-up in the computing industry. Indeed Nintendo's advertising through 1985 and 1986 and their careful positioning had paid off so well that when they couldn't meet demand… things began to change.
Nintendo Entertainment System
Sega also faced problems. Their North American launch of the Sega Master System had been planned for June 1986 and that was clearly no longer viable. However they rapidly came up with a new strategy, a Western European "soft launch" in smaller countries (serving as an indirect marketing campaign to the larger European countries) along with several other smaller markets like Australia and Brazil. Those much smaller markets could be supported from Japanese production in time for a fall launch and related costs such as marketing would also be much lower than a North American (supply constrained) launch. Sega was also forced to shelve their already planned advertising push in North America but that proved to be something of a blessing in disguise.
Sega Master System
NEC and Hudson Soft, long considering the lucrative console market, were confronted with problems as finances dried up with Japanese banks coming under investigation. Their Christmas 1987 plans were on hold and instead they were forced to begin looking for an additional partner. This also forced them to contemplate a complete redesign of their console as a delay past 1987 might leave them facing a new Sega or Nintendo console within only a year or two of launch. Instead Hudson Soft focused on third party game development such as their highly successful Bomberman game on the Nintendo Famicom (NES in America) and began planning for potential first party titles with the experience they were gaining.
In America, Commodore International and Atari Corporation had spent the last two years locked in a brutal struggle with the Commodore 64 & Amiga 1000 on one side, and the Atari 8-bit & ST computers on the other. Jack Tramiel had founded Commodore and had been forced out, he then bought up the consumer electronics side of Atari (and taken most of the good Commodore engineers) and mounted a vengeful attack on Commodore. This had taken a major toll on both companies in terms of finances. Their joint struggle over Amiga had only deepened Tramiel's understandable grudge with Commodore.
However Commodore thought there was opportunity there. The Atari 7800, although not doing great, had plenty of supply at hand. However the 7800 was something that Tramiel clearly had no interest in pushing, a huge potential missed opportunity against a briefly weaker NES and hard to understand given how key games had been for the C64's success. For the second time (partially spurred by Time's February 1986 Adios Amiga article and the loss of 53.2 million dollars in the fourth quarter of 1985) Commodore reached out to Apple executive Jean-Louis Gassée over taking the CEO position at Commodore and this time Gassée accepted, tired of internal fighting at Apple and wanting something different[1].
Atari 7800
A challenge was what he found, but he also discovered a way out of it: buy out Atari, consolidate the industry, and push the Atari 7800 (with perhaps a moderate redesign) against the NES. Of course Jack Tramiel would never sell, but this was the era of the leveraged buyout and Commodore International had a backer: Sun Microsystems. Sun had recently mounted an Initial Public Offering (IPO) on highly successful sales of their workstations but Sun was interested in expanding their footprint down from just workstations[2] (and gaining access to both Commodore & Atari's excellent distribution networks) and in the wild and wooly market of 1986 personal computers Commodore International was both cheap but potentially about to get more expensive, once Jean-Louis Gassée began righting the ship with the planned launch of the Commodore 74 (backwards compatible with the C64, unlike most of their line), a cheaper Amiga 500 model, and cancellation of all other computers aside from the Amiga 1000 and C64.
Jack Tramiel fought a good fight but his own mercurial personality worked against him in his public statements and his penchant for lowering prices of computers when not required was making stockholders (as had happened at Commodore) uneasy. In addition much of Commodore's top flight talent had followed Tramiel to Atari happily, but with Sun Microsystems and Jean-Louis Gassée (both highly respected in Silicon Valley, and Gassée loved by Apple engineers) in charge with—perhaps most importantly—the Commodore board paid off and out of any influence they had a new and safer option. The loss of much internal support finally convinced Tramiel that he was done and although forced out of a second company his payday might have helped make up for it.
So in late 1986 the complicated step-dance ended with Sun Microsystems and Commodore International merging to form Sun Commodore as well as mounting a takeover of Atari Corporation and the cheap acquisition of Atari Games from Namco to form a new first-party games studio[4]. Sun Commodore was therefore structured like so: Atari the console company (Atari 7800), Atari Games the development studio, the C64 & C74 low-end computers, the Amiga 500 & 1000 high-end computers, and Sun-number (e.g. Sun-1) workstations. Jean-Louis Gassée's main goal would to be simplification and stronger competition in the computing market, and to take advantage of the market opportunity open with the NES lacking supply.
The Christmas 1986 season in the United States was dominated by a barrage of Sun Commodore advertising for the Atari 7800. With turmoil at home Nintendo had been desperately trying to get NES's into America but were essentially filling the pent-up demand, not the new Christmas demand and so the Atari 7800 had a strong second place showing capturing some 35% of all sales in the fourth quarter. Sun Commodore's idea of pushing the 7800 harder than Atari had was strongly validated, and they moved forward with plans for a new console.[5]
The theoretical consolidation of the lower to mid markets in computers (theoretical in that virtually all the computers under Sun Commodore's belt were, in 1986, incompatible with each other) married to a workstation company made plenty of executives at Apple Computers and the IBM clone field sit up and take notice. The C64 was usually the best selling computer on the market in any given quarter and the potential of Sun Commodore as a company was clear.
Nintendo also paid attention, recognizing the global networks of the new Sun Commodore and the success of the Atari 7800 once it had some marketing muscle behind it. In many ways the Atari 7800 (originally released in 1984, after all) was unable to compete with the NES but the low price of the 7800 along with the ability of the 7800 to run ported C64 games and the monetary inducement to developers[6] to get those ports out saw a number released in time for Christmas including Ghosts & Goblins, Loderunner, and perhaps most importantly: Elite.
The low install base of the 7800 pre-Christmas '86 was actually working to Sun Commodore's advantage, as they had to sell a new controller for C64 games (packed in with 7800s once Sun Commodore owned Atari) and fragmenting the market was acceptable when so few were around before the holiday push.
Updated Atari 7800 Model[7]
Nintendo's weakness in computer games (as opposed to console games) had been considered by some outside observers to be a problem, looking forward to when they launched in Europe sometime in 1987 instead of 1986 as planned, and as they watched the sales numbers of those early C64 ports Nintendo seemed to agree with and resolved to find a way around their problem. Combined with looking for potential partners for their next console, Nintendo's search (much like NEC's) would eventually settle on a rather logical choice.
Sega too watched with wariness. The European/Brazil/Australia strategy was paying off in sales as every Sega Master System they shipped they sold, and in Europe there was soon a hefty premium on Master System's outside the official launch countries. As such they were very confident about their European strategy but, like virtually everyone, they had also believed—known, really—that the Atari 7800 was a dead system without even a modern (i.e. NES-style) controller. Sun Commodore had changed everything and the computer models under their broad roof were very popular in Europe. As with Nintendo, Sega was soon on the hunt for potential partners.
By the beginning of 1987 the shake-up of the videogame and computing industries was only beginning….
|||||
[1] He was offered the job IOTL and turned it down. ITTL the earthquake disrupts Apple CEO John Sculley's plan to remove Steve Jobs from a position of power (as the Japanese market was very important to Apple) and install Gassée. As Gassée is easily the most political of Apple executives he promptly makes a contingency plan, which seems validated when Sculley reorganizes Apple and Del Yocam (a notorious hardass, who would have reined in the freewheeling Gassée—and began to, IOTL, until Sculley folded like a cheap suit and fired Yocam) became COO.
Gassée's flaws (a love of high profit margins, lots of expensive research programs, willingness to let his engineers fly past deadlines) are things that the 1986-7 Sun Microsystems and Commodore/Atari/Amiga culture can potentially reign in.
[2] Sun Microsystems has always been fairly active in buying companies, starting in 1987 OTL. ITTL the greater turmoil caused by the earthquake is heavily effecting the "Workstation Wars" since Japan was a major customer and Jean-Louis Gassée is willing to be demoted in order to have the resources he needs to take on Apple, the console market, and MS-DOS & Windows vendors. Sun figures a broadening of their market is a good thing for the future. For a handful of people (hi Nicole) you've read a similar Sun Commodore merger story before, but heck I still love the idea.
[3] Sorry about the bad picture edit job.
[4] Atari Games IOTL was bought by some of the employees and became infamous as Tengen.
[5] The Atari 7800 consistently made quite a bit of money for Atari even on low sales, which makes it even stranger that ITTL & IOTL Tramiel never pushed it harder.
[6] This seems like a requirement to link.
[7] The "updated controller" ITTL is basically OTL's European Joypad. However (since you can't see them) ITTL it adds two shoulder buttons to give you four buttons to use with C64 games.
-----
I assume anything people don't know they can look up on the wild world of the internet but if there's anything in particular that's confusing let me know and I'll rewrite a little to clarify. In text links, at least in the above post, are all to Youtube and their wonderful collection of advertising videos.
- Electric Monk
- Word Count: 1.9k