story of pong

Presented as part of Game On
6 March 2008
52 mins

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Pong designer Al Alcorn talks about how a small team of young engineers set out to create video games and invented the first smash hit game.

Al Alcorn: Thank you for coming here, and thank you for having me. It's a pleasure to be in Australia, in Melbourne. It's a beautiful city. And it's a beautiful museum installation. The idea of having a museum dedicated to the moving image is really neat. I think it's great, and I'm glad to be a part of it.

The whole thing, that really wasn't the plan. The plan, how Pong came about, really was a way to just make some money. But I think I wanted to talk a little bit, at first, about why did we do it.

There were a lot of people out there with a lot more money and a lot better position to be able to make something like this, but didn't. For example, Magnavox: the first home video game was a game called Magnavox Odyssey. It was an analog game. It was actually introduced in 1972. And it didn't do very well. It was very similar to Pong, but it was analog. And why didn't they dominate the marketplace? Why didn't they do that?

And indeed, I was working at Ampex at the time, the company that invented video tape recording, audio tape recording. Why didn't they do something like this? This was a weird thing. And why didn't the people who made coin-op arcade devices, like pinball machines, why didn't they do something like that? And all those companies I talked about, except for Ampex, were in Chicago or New York. Why on the West Coast? Why California? So, I want to talk about that a little bit and give you some, hopefully, interesting background on where that came from.

So, there's a picture of me in the background. I was precocious. That's me. That's my friend, Tony. That's a bottle of sulphuric acid. These are chemicals. These were the good old days, the last of the good old days. This was about, probably, 1964, where you could do this and get away with it. Chemistry was fun. We blew things up, and we were precocious. I had an account at Van Waters and Rogers, the chemical supply house, so we could buy anything. And we did.

And I can't say too much about it, but we were actually interviewed by the police department in Daly City for making a very large hole that surprised even us how big it was. And we did rockets and stuff like that. So there was a part of me that didn't like it. "Question authority" was kind of the watchword of the day. Yeah. We were doing photography, all kinds of fun things.

So, I grew up in San Francisco. I'm actually from a Pioneer, California, family, oddly enough. Very rare. And I played football in high school, and that actually got me into college. That was very important. I was actually quite a good football player, played against OJ Simpson. I was all-state, whatnot. And I did not get a scholarship, but I did get into Cal Berkeley. The Berkeley campus, Cal Berkeley is one of the finest institutions in the world. We came from pretty poor backgrounds, so we didn't have a lot of money to go do any of this. But you see, we didn't cost much at the time.

Most people are too young to remember, but this was '66, the '60s. This was a time when the Vietnam War was going on. I, sadly, had more than one friend that went off into the military and was killed in Vietnam, a very tragic and unfortunate war. So there was a lot of people that did not want to go to that thing and protested it a great deal. And Berkeley was kind of the hub of people saying no to this war, so I was kind of in the middle of that.

Oh, yeah. Also, when I grew up in San Francisco, across the street, my neighbor had a TV repair shop. And I just liked with the chemistry. I liked electronics. I was the youngest person to ever take a correspondence course from RCA in radio-television repair, and I was in junior high school, which I was about 13, 14 years old. And I was actually fixing televisions for a little extra spending money, which was really good, because this was back when televisions were vacuum tubes. Many of you were too young to ever remember that.

But it was great, because when I got to Cal, again, we didn't have any money as a family, so I got a job fixing TVs on campus. And actually, for a kid that age, I was one of the better TV repair guys. Back in those days, you'd have a guy, the outside man, he'd go into the home and try to fix a set by replacing tubes. And half the time, that didn't work, so we had to bring the set in. And the inside man had to be able to fix anything. It took years of experience. And I was an inside man, so it was good money.

And so I worked my way through college, and it wasn't painful, but I can at least say I worked my way through college and paid my own way.

But because of that, I had a pretty keen understanding on how televisions worked--not from an engineering perspective, but from a practical standpoint, which paid off later on. And Berkeley in the '60s--and I'll show you some of that stuff--I, of course, got my degree in electrical engineering and computer science.

I wanted to be an analog engineer. And analog engineering was more fun to me than digital electronics, but they taught us digital electronics. If you're going to go to Cal and get a degree in computer science, you had to know this stuff. So, OK, I learned about digital stuff. But I really wanted to do analog amplifiers, stuff like that, audio amplifiers--I had built my own hi-fi, that kind of stuff.

So, at Berkeley, in the '60s, there all of a sudden became all of this tension. People don't talk about it that much anymore, but we were very vociferously protesting the war. And one of the things that was very formative was a thing called People's Park. There was a park off of campus, about a city block, that the university owned, and it was just an open field. And in the spirit of the Hippie commune movement at the time, the local people, the street people, had taken it over and turned it into a commune park, where it was free food, and everybody just had a great old time.

And the city didn't like this. The university was upset because it was their land, and they wanted to either make a soccer field or a parking lot out of it. And all the students said, "No, no, no. Just leave it a park. Just leave it that way." And the actual quote from the chancellor was, "Well, we will not sneak in the night and take the park away from you."

So, one night, the police sneaked in in the night and put a big fence around it and surrounded it with military. And so I was an amateur photographer, and still am, at that time, so I took some pictures of this thing. I was very much involved in protesting that. And there was a book published, and I got some of my photographs in that book, which I'll show you.

So that was the book. That's a scene from People's Park. That's not my photo. That's a scene. That's one of my photos of People's Park. You can see the way people dressed. I don't know if you can read the signs on there or not, but it was free stuff, made free food--some of it good, some of it not so good. I didn't eat much of it; I didn't want to get sick.

Then the protest occurred. That's a photograph, one of my favorite ones. The soldier was a National Guard. It was not a US military. It was like a state National Guard. But they had them sharpen their bayonets. They were actually pretty nice people.

Tragically, there was one police organization, called the Alameda County Sheriff's Deputies. You had to realize, back at that time, this was a huge division in culture that was going on. There were the young people who hated the war, didn't trust the government, learned not to respect authority. And then there were our parents that trusted the government, were very patriotic, and did what they were told. And so there was this huge tension.

And the Alameda County Sheriff's Deputies viewed these Hippies as some bad thing on society, and they were going to rid the city of Hippies. Well, there were a lot of Hippies in Berkeley, and it was a big job if they're going to do that. So you see this kind of conflict. There was one Alameda County sheriff's deputy that actually shot many people, and I actually photographed one of these shootings, witnessed a guy who almost got killed. So it was more than fun and games. And I also ate a lot of tear gas. A lot of fun.

So, in the midst of all this, I got tired of working at the big university. Berkeley's like a factory. It's 15, 20, 30, 000 people. It's huge. And I thought I'd go to do a work-study program. And I recommend that to any of you young people going to college, that before you graduate, if you can get to work at a company in the real world for six months, split your time in the university and a job, that's very productive because you learn a lot that way. And you learned about what it was like to be an engineer, so when I went back, it really helped.

So I learned. I got a job at Ampex doing video engineering. And video, at the time, was a very analog device. But I wound up doing it with digital circuits because it was more effective and cheaper, and I was good at it because I learned it at Berkeley. All the old engineers didn't know anything about digital circuits, so actually, hey, I was pretty handy with this stuff.

And at Ampex, I learned about the process of design and engineering, release, and how you actually build and ship things. The team, these people at the bottom are the people that later became the principals, the people that started Atari. It spun out of Ampex.

So, Nolan Bushnell was another engineer at Ampex. Young guy. And he had worked at an amusement park in Salt Lake City. He went to the University of Utah. University of Utah was interesting for a couple of things. One, there was a big amusement park nearby, so he worked there and understood the coin-op entertainment business and how much money could be made. And secondly, it was the world's leading center of computer graphics, the first graphical computer.

Today, you probably can't imagine not having computers driving displays. But back in those days, computers, all they did was print out reams of paper, numbers on paper. That was it. And so, to actually have a computer talking to a display screen was quite unique.

Downstairs, there's a copy of a prototype of a PDP-1 computer from the '60s, and it has a round display on it, so it was one of the very first. And of course, the very first thing they got happening when there was this, somebody wrote a game, a video game. And it was Steve Russell back at MIT that actually wrote a game called Spacewar.

And Nolan saw that game, and he put the two and two together: "Ah! I can make a game that people might want to play for fun, and put it in an arcade next to a pinball machine and make money." Nolan wasn't the best engineer in the world, but he was a hell of an entrepreneur. He just really knew entrepreneurship.

So, Nolan started this company, and we called it Syzygy. It's a real word. It's the last S in the dictionary. It's the alignment of planets in an orbit. If any of you kids play hangman, it's a great word in hangman because it's got all the vowels, three Ys in it. No one will ever guess it, OK?

[laughter]

Al: And unfortunately, we couldn't use the name Syzygy. Somebody else had already used it. So our second-best choice was Atari. That was our second choice.

Nolan hired me. He paid me $1, 000 a month salary, and I got 10 percent of the stock in the company, called Atari, or Syzygy. It became Atari. And the idea was to go build a video game, try to do this. And I said, "What the heck."

This is actually the building where we started Syzygy. This picture was taken a couple years ago. The people in there have no idea that's where Atari got started. They're selling sharpening devices for tools. When I told the lady there, "Did you know Atari got started?" "No, I never knew that." But Silicon Valley, things evolve, and you're run over. There's no history on this stuff.

So, what happened, Nolan gave me an exercise. Where did Pong come from? Before I even talk about that, so all the stuff I talked about, when we quit Ampex to do this, it was not a common thing. Today, people say, "Oh, I want to be an entrepreneur. I'm going to start a company." That was not done back in those days. People did not start companies. It was a very crazy thing to do.

And in fact, when we quit, the president of Ampex called us in and talked to us and said, "Boys, you're leaving a good job here." You realize, back in those days, you worked at a company like Ampex or General Electric, and you stayed there your whole career. And when you got 65, they gave you a gold watch and a pension and a handshake, and you were retired, and that was your life. And today, you people, young people growing up, will probably do a dozen different jobs in your life. You'll be changing.

But this was the time when it was just the crux. So, for us to quit and start a company, with no business experience, never having done it before, we were all young--I was 24--was really an adventure. I mean, it was really almost reckless. But remember, we were back in the '60s. We were back in a time when the Cold War was going on. Russia had missiles aimed at us. We had missiles aimed at them. They were building fallout shelters. We knew not to trust the government. They had lied to us about Vietnam and all that. But our parents, they still believed it.

And so we said, "Oh, what the heck. What could go wrong?" I mean, we had no great wealth. We were all pretty poor. So, why not do this and start it, and if it fails, which it probably would--most startup companies fail--we go back at Ampex. They'll take us back. We didn't make them mad or anything. They just thought we were crazy.

So, we start the thing, and I'm sitting there with just a few guys--Nolan, Ted, me--in that office. And Nolan hired his babysitter, Cynthia, as a secretary. And when someone would call--Nolan would be right there, it was so small--she'd say, "I'll go see if I can find him. He's on the phone." We'd make them wait a minute and make it look like it was a big company.

[laughter]

Al: Nolan wanted me to get up to speed. He thought the game was going to be something very complex, like Spacewar would be the game people would play. But I had never done a video game. No one had before, except for Nolan. They had this game called Computer Space.

So he told me that he had a contract from General Electric to do a consumer home video game, which means it would have to be very, very cheap. And he described the simplest game he could thing of: one moving spot, two paddles, score, Pong. But he didn't tell me that it was just an exercise, he was going to throw it away. He figured if he told me that, I wouldn't work very hard at it. So he lied to me.

But because of that, I put this thing together, in about three months. And I added things like speed-up and sound and reflection. It played pretty well. And Nolan said, "Well, hey, that's not so bad. Maybe we can try it out."

Now, we had a route of pinball machines. We had about 25 pinball machines that Nolan owned. We had different bars and places around the city we can put them in, so we had a place to test this thing. The reason Pong was more playable and plays well: I added speed-up of the ball as you played it.

Nolan's motto was, "The game should be easy to play, but difficult to master." There was also some features in it, because I was very unhappy. I was failing on this project, I thought. I had 75 chips in it, and to be a consumer game, you had to have maybe 10. So it was like, "Gee, I'm not doing very well at this." Nolan didn't seem too concerned about it. And by the way, nobody from General Electric ever called or came by or wrote us a letter. It never occurred to me that this was not happening. But hey, I was working on this thing. I was busy working on it.

One of the things that happened was, when I did the paddles, the paddles didn't go up all the way. It was a defect in the circuit. They actually didn't go up all the way. Well, that turned out to be great because, if the paddles had, two players could play it forever, and the game would never end, and we'd never make any money, and it would be a failure. So that gap at the top actually saved the game and made it good. We left it that way. My motto was: "If you can't fix it, call it a feature."

[laughter]

Al: So, by this time, it was like, "Gee, this plays pretty well." So Nolan said, "Let's go put it on location and see if anybody will play it." Now, you've got to understand, this is an odd game. You have to have two people to play it. You can't play it with one person. There's very few games, if any, before or since, that ever did that.

So we put it out at a place called Andy Capp's Tavern. This is now called Rooster T. Feathers. It's a bar there on El Camino Real, in downtown Sunnyvale. Here's the machine. We put it in a box. Now, you'll notice, this is the first prototype. The electronics are this rat's nest of stuff back there, which was meant to just be a crude, cheap prototype. You can barely move it before it would break.

And notice that that's a television set. That cost $75 at the drugstore, black and white television set. In those days, you could buy a monitor from Motorola for $500, and they were these horrible things they had at airports that were green and didn't work. Because I used to fix TVs, I knew how to take the back off, clip clip clip, and I turned it into--there was a ground connection, audio, and picture.

And so that was the display. We put some cardboard around it. To change the sound volume, you had to reach around with your arm to get the knob up. But hey, it was in a box. We built this box in a weekend.

You'll notice it says "Pong." And you'll notice there's no instructions. There's a coin box and two knobs. Now, what are the chances somebody would go play this thing? There was nothing like it before, no instructions. So we took it to Andy Capp's Tavern one night, put it on a barrel top, because it was a tabletop game, and got a beer, sat back and watched and see what happens. [laughs]

It was sitting next to pinball machines, and some people started playing it, like, "Wow, that's pretty awesome." Put a quarter in. Gee, a real quarter. And Nolan went over and asked him, "What do you think of that?" "Oh, yeah. I've played these things before, " the guy says. "I know the buys who built these things." Oh, really. Oh, OK. All right.

[laughter]

Al: Oh, the next slides may not be appropriate, but basically, people asked, "What was the computer, what was the program in Pong?" There was no computer. The computers, microprocessors did not exist. The smallest computer in those days were boxes about yay big and cost $2, 000, and so that was impossible.

This is basically how video works. I don't want to get too detailed. But what Pong is electronically is a logical circuit with a crystal oscillator and dividers and counters, and out comes the ball signal. The sounds come sneaking out of there. Basically, it's just a bunch of logic. It's a machine that just plays Pong. A lot of people, a lot of young engineers have trouble imagining how you could build something without a computer chip. And so, that's how.

So, well, what happened was, within a week or two, the play started picking up on that machine. We had no advertising, nothing. This was one machine sitting there. And in about two weeks, the thing broke. Well, judging from the way it was built, you could see, it didn't surprise me at all that it stopped working. So I came down to the location to go see what was wrong with it. And I opened up the coin box to get a free play, give myself a free game, and the thing was full of quarters, and the quarters just gushed out on the floor.

So I picked them up, put them in my pocket, and told the owner of the place, Bill Geddes, I said, "Hey, I can fix this when it happens again. Just give me a call right away. It's easy to fix." I went and told Nolan the next day, "Something weird happened. [laughs] All these quarters came out of this machine." And Nolan was like, "Wow, that's pretty amazing."

Now, at the time, Nolan had a contract. To get going, we had $500 of capital, no venture capital money, no equity whatsoever. That's not a way to start a company. But we had a bunch of pinball machines that Nolan had got from Nutting Associates money, the Computer Space money. And we got a contract from Bally. Bally Corporation was the big, dominant coin-op game manufacturer at the time. And Nolan promised he would build them a pinball machine and a video game.

Now, all of a sudden, we knew that Pong could really be a hit, and the last thing Nolan wanted to do was give it to Bally. But we were supposed to be an engineering firm, not build something. Our deal was just to get royalty checks for engineering designs. But Nolan now had to convince us we ought to be in manufacturing. And he had to convince Bally they didn't really want Pong, they wanted something else. And he did. He pulled it off. It was amazing. We argued with him. Nolan and I had a lot of arguments about this stuff.

Let's see what the next foil is. Oh, yeah. So that rat's nest of wires turned into a logic board like this. This is actually an original Pong logic board. You can see, there's a power supply. There's the switch between a score. It stops at a score of 11 or 15. And these chips cost about 50 cents apiece, and a $75 black and white TV set, and we used a bread pan for coins. So the thing cost us, to build, maybe $500.

The thing was so hot demand that the operators, the distributors, we sold them for $1, 300 apiece, and they would pay us cash up-front. We got the people who sold us the parts to give us 90-day credit. We didn't have to pay our bill for 90 days. So we were able to turn the parts back into Pong machines in 30 days, and so we just retained earnings. So it's one way to fund a company. I don't recommend it. It's kind of risky. But that's how we did it.

I mean, in those days, the coin-operated business was considered to be the dominion of the mob, the bad guys, people trying to force you to operate a machine. We were not the mob, but the banks wouldn't give us any money because they figured, "Oh, that's criminal activity." No, it's not. So we had to deal with this.

But that was the original Pong. Here's the advertising sheet. This is what they call the tear sheet. It's Syzygy. The name still persisted for a while. You look at the one downstairs, you'll see "Syzygy" in the corner over here. And this one does have instructions. There's our Scott Boulevard address. One-year computer warranty. If we only had a computer, it would have been better.

[laughter]

Al: I mean, it's all nonsense. It's just a cheap piece of paper, and that was it. And we sold about 3, 000 of those things as fast as we could make them.

This is the team, one of the rare, old photographs. There's me. I had more hair. There's Nolan, discreetly, with a polka-dot shirt. There's a brand new Pong machine. That's Ted Dabney, one of the partners at Ampex, who unfortunately didn't work out. He had to leave early. And there's our first financial officer, who actually wound up stealing from us.

[laughter]

Al: And you can see, he's wearing a suit and tie. He was gone shortly after that picture was taken. So, anyway, that's one of the rare, early photographs. So, yeah.

Oh, yeah. There were many, many forgeries. So now, all the other coin-op companies, my God. Here they are. "Who's this Atari company? And what's going on with this Pong?" So they all wanted to copy our stuff. So they just get that circuit board that you saw. They didn't know how it worked, but they'd get copies of the circuit board, put parts in them, and boom, they were selling Pong machines. And we couldn't stop them. I mean, we could go sue them, but we didn't have any money to go hire an attorney to sue them, so we just tried to out-produce them.

There were probably 12, 000 Pong machines made, or generic Pong machines. We sold about 3, 000 of them. We did all right. But what we could do that they couldn't do was we had the next game, and we knew what we were doing. So we were like the advanced development and research for the rest of the coin-op business. We'd put a game out, they'd copy it. They got pretty good at copying, pretty fast. I had some fun later on trying to get them to stop the copies.

So then, the problem became: what next? All of a sudden, within the first year--again, with no investment money, from a standing start, early 20s, no business experience--we had $3 million in sales in our first year. I mean, to me, the idea of a million dollars, in any context at all that I had something to do with, was absolutely foreign, coming out of Berkeley in the '60s, anarchist. Yeah. It was amazing.

So this was fun. This was like a ride: "Let's see how far this goes." Someone's going to come in and say, "It's over. You're done. Get out of here."

[laughter]

Al: So we just figured we'd go how far to go. So now, the problem was we now had other games out: Gotcha. We had Space Race. We had Football. You'll see some of them downstairs. But for me, it got boring. I have a short attention span. Nolan has a much shorter one. And so I wanted to do something else, and Nolan wanted to drive me to do other stuff.

I mean, Nolan was crazy. He said, "This is going to be a huge industry. It's going to be millions of dollars, maybe a billion dollars." I said, "Nolan, get out of here. This is nonsense. The audacity to think you're going to do something like that from nothing. Sure, Nolan, I'll go along with the gag." And so we had these wars, and Nolan would demand this stuff. And I would say, "We don't have any money to do this. We have no manufacturing capacity."

There it is. This is one of the more interesting documents I managed to save. Can you hear me? This is a memo to engineering--that's me--from Nolan Bushnell. You'll notice it's on Syzygy company letterhead. This is dated August 1973. We were already named Atari by that time, but we had bought so much letterhead, internally, we used Syzygy because we had the paper there.

And so I'll read it: "In accordance with a concise business plan, the following is the charter for engineering." Now, first off, we didn't have a business plan, and it certainly wasn't concise. There wasn't any such thing. This is the closest it ever got to it. This was just an order, because Nolan and I were arguing about what to do next.

So he said, "I will have a minimum of four acceptable, production-ready machines by December 31st." This was like, what, four months from now? "In excess of the production needs." Whoa! "Have a design and manufacturing for a Chicago-style coin door." Remember that box on the side of the Pong machine? That was a disaster. And our Chicago competitors, Bally, they had metal stamping, rolling coils, and they could do that. We couldn't do do anything in that industry, so we had a hell of a time getting proper coin handling. It took us a long time to get that fixed.

"Have sufficient staff"--this is very key--"that at least one engineer can be assigned to emergency projects without upsetting major schedules." Because Nolan kept interrupting. He had a shorter attention span than I did. He'd go into engineering. If he didn't like the product going on, he'd change it without telling me.

And I stopped him. I actually had a pager installed, so when he went into engineering, it'd page me, and I'd walk behind him, and he's say, "Back to what I told you to do." Because Nolan, nothing would get out. If you change the project every month, when it takes four months to do a new design, nothing would ever come out. So we kind of had this little tension going on.

"Have a custom-installed, 20-player Gotcha for the..." This was the amusement park show. This would have been a project that would have taken six months to do and 10 engineers. And for a trade show, I just refused to do that.

"Packaging for Dr. Pong." Nolan had this idea of putting it in doctors' offices. So, especially for kids, and you were waiting, you could play this thing, and the doctor could pay for it and pay a lot of money for it. That never worked.

[laughter]

Al: Now, item six is an interesting one. Item six: "Packaging and a printed circuit board for a color-modulated consumer Pong." That's a home game. That's an industry. Number six is "Create a consumer industry."

[laughter]

Al: Seven: "Develop staff to provide game documentation and manuals, parts catalog." Well, that's a good idea. I mean, after about two or three games, it got pretty confusing of where the parts went and what they were. And we had, again, no business experience. Why have documentation if you're just building Pong? Everything is Pong. But when you're build more than one product... So that was probably not a bad idea, and we did that.

And then, "Design a booth for the November MOA, " the trade show. Design our own booth for a trade show, in all the spare time and money. "Every effort should be made to develop adequate staffing to handle this workload. Statements concerning our manufacturing capacity are inapplicable to the above design schedule."

So, I sent a memo back. And I don't have it anymore. It said, "To Nolan, from engineering. Is the fact that we have no money a reason not to do this?" And he wrote on the memo, big words, "No, " and sent it back to me. So I figured, my attitude was, "You know what? I'm going to take this one here. We'll do some of the other ones. But this was fun, and I'm going to see how far we get before they pull the plug on us." Because the audacity to design a consumer--that took money. You had to design a semiconductor chip. So that was kind of the tension that went on.

And by the way, Steve Jobs worked for us about this time. And Steve was watching Nolan and the interaction between me and engineering. And Nolan would not take any prisoners, would not take no for an answer. You could see this. So that sort of affected how Apple got its way.

So I handed off coin-op, the arcade stuff, to my other engineer friend, Steve Bristow, and I went off and tried to do a custom chip. Now, people do custom chips now. It's not that uncommon. Back then, it was at the transistor level. Semiconductor companies did custom chips, not engineers, not individual people. What the heck. We did it.

And in fact, I remember, when we got the first chip back, it was like, "Oh my God." I mean, was this going to work or not? It had to work. We had 50, 000 bucks wrapped up into this project so far. And if it didn't work, we wouldn't go out of business, but it was going to hurt us. The chip worked. It was like, "Wow!" I remember. It felt like when a dog chases a car, what happens if the dog catches the car?

[laughter]

Al: Now that we got this thing to work, we had no plans to sell it. Today, oh, I know somebody over here. We didn't know anybody outside of Silicon Valley. So we said "Gee, it's a consumer product. Sears and Roebuck, that's a big consumer company. They've got that big building in Chicago. Let's call Chicago." And we cold called Sears and we got the right buyer.

We got lucky, extremely lucky, thank you. Tom Quinn, he knew about the product, he was selling the Magnavox Odyssey game. Magnavox wouldn't let him sell it in the stores, they were terrible at marketing. We told him we had a better game. He shows up, he says "Sounds interesting. Next time I'm in California I'll stop in and see you guys." Three days later, he was on our doorstep at eight o'clock in the morning. Now, we weren't there until about nine or 10 o'clock. We were kind of lazy.

He had a suit and tie, we didn't. This is really upscale for me here. [laughter] He was kind of stunned but hey, we had this thing. He went along with the gag. He asked us how many we could build, we said "75, 000". No one had ever asked us this before. He gave us an order for 150, 000. We were sole sourced to Sears, and we didn't want to do that. We wanted to have other customers. We took it to the toy fair in New York to try to sell it to all the other retailers, like Macy's. The big department stores.

All the buyers from the department stores came by the booth and saw this thing. We did not sell one Pong machine. Here sat the product that was going to be the hit of the next three years; a year later they were going to be scrambling to get it. Not one buyer would pick it up. Very interesting. Just because people don't get it. When you do something that's truly revolutionary, and unique, people are going to say it's a bad idea and it's a really stupid thing.

Chances are it is. But, sometimes, it isn't. Just because people say it's a stupid idea doesn't always mean it is. It probably is, but it may not necessarily be. So that was, I think, a very telling moment. We went to the toy fair, nobody took us to dinner, nobody bought anything. We had a lot of free time in New York City. So here is the consumer Pong prototype, which good Lord willing will be here. No, not this one, another one I'll show you. This is; remember the rat's nest of wire for the original Pong. This is like three times as much stuff because this represented the chip.

This was actually how the chip logic was going to be done. It had to be a different kind of logic. We did this whole thing with three guys. Harold Lee was kind of a counterculture hippie Hell's Angel that had a doctorate in chip design. Interesting guy, very colorful. He did the logic. My latest schematic, my wife would wire wrap it. She's much better than I. And then I would debug the parts of it that were made, then he would lay it on the chip on the midnight shift at the chip design terminal we got on loan from a semiconductor company.

We didn't have the plastic case. The plastic case was the hardest thing, I didn't realize that. This was a piece of wood made to look like it. This is the actual unit. This is down in the bottom here, and this is the unit we actually took to Sears and got them convinced to buy it. There's a story about that, I'll tell it now. This thing was built to plug into a TV set, and you'd play it on channel three and you'd actually see the game. We were at the Sears Tower in Chicago on the 37th floor, and all the Vice Presidents were there.

They're making the final decision to buy this thing or not. I'm supposed to do the demo, and I try to get it to work, and it doesn't work. I find out that they're broadcasting on top of the Sears Tower with a TV antenna from channel three. I go "Oh my God", I've got to open the bottom up. I've got to tip this thing over, and the sales guy is doing a song and dance while I open this up and re-tune the modulators in here somewhere to channel four. I get it to work.

I'm like "Oh God" and I'm stressed out. So I do the game, I play it, and they're like "OK." And Karl Lindt, the Vice President of the division, whose previous claim to fame; this was midwest America; was the air conditioned electric blanket. Not technical. He looked at me and he said "Now Mr. Alcorn, you're telling me that you're going to take all this rats nest of wire and you're going to put it on a piece of silicone the size of your little finger?"

"Yes sir."

"How are you going to solder the wires to it?"

I didn't know what to say at that point. I said "Well come on out and we'll show you how." So eventually we got it to work. That was the plastic case. Notice it doesn't say Atari on it. That says Telegames. That was the brand name for Sears, and that's one of the production versions. It worked. We risked the whole company, and that was a hit product. Then it became clear that we needed to make a cartridge game because all of the games were dedicated chips.

That cost too much money. So a thing called the Atari VCS. The 2600. Some of you may have heard of this. That was the first real successful cartridge game, it wasn't the only one. As I said, other companies were stealing our designs, making stuff for other people. National Semiconductor was a big one. John Ellis was their chief hardware engineer of the division. It's no fun working for National, we were a lot more fun to work for. We stole John from National and so he did a good job making the stuff work.

The FCC was a big issue. I'm not going to go into there. The Magnavox patent was a big issue. Remember we copied the Magnavox Odyssey game. You'll see downstairs there is a Magnavox Odyssey game. It's a very simple representation of Pong, a precursor of it. It's analog, it doesn't play very well, but we kind of stole the idea by accident. It wasn't supposed to be a hit but it became a hit. Kinda like the movie The Producers.

There we are, they sent us a letter. So we settled that lawsuit and in 1977 we introduced the VCS to the world at the Consumer Electronics Show. It was quite, quite, quite a moment. This is the prototype of the cartridge game that, good Lord willing, will be here today, displayed. It's a bad shot, the electronics are behind there, there's a power supply, there's a microprocessor emulator. These are joysticks from our arcade machines.

We had yet to make the consumer versions of those things. So, that became a huge product. That product was the defining product. That became the one that really launched the cartridge game industry. We sold millions and millions of those things, Atari got sold to Warner Communications in 1977. At one point they had $2 billion a year in sales by 1980, that product. There's stories about how much fun it was to work at Atari. We did not take ourselves seriously.

We were young, we goofed off all the time. We obviously worked hard because we did great stuff but we didn't take ourselves that seriously. In the middle of the sale to Warner, a photograph appeared in the business press of Nolan. That's Nolan, that's somebody else in the hot tub. [laughter] We actually held a board meeting in the hot tub once. The attorney wouldn't get in, he kept getting his paperwork wet, but we had a great time.

Whoops. Uh-oh. AAAAAH! [laughter] I hit too many buttons. I'm almost done here. Help me. I think I'm done anyway. We're just about over. That's it, the conclusion. There we go. Yeah, great, timing is perfect. Thank you. So, my point is Atari really was a product of its time, its culture, the '60s. We bet the company every year, which not every company does.

Not a wise idea, but it was sure exciting, much more fun than just making money. We weren't afraid of failure. Very interesting point guys, if you're going to do something in a creative organization, the way to measure creativity is by your failures. If you can't have a failure, then you better not try to be creative.

You're going to fail about two or three times, if you're really good, for every success. Except Pixar seems to have nothing but successes. But the average Hollywood movie has two flops for every hit. You make lots of mistakes, and it lets you learn fast. Nobody ever got fired because of a failure. We didn't take ourselves seriously, and we had fun. Once again my motto on this whole thing was "avoid missing ball for high score." On the original Pong you'll see down there. Pretty good words of advice. That's it. Thank you very much.

[applause]

Interviewer: Will you take some questions?

Al: Yeah.

Interviewer: Now, we've got a little bit of time for some questions. We have a roving mic coming around. Would anyone like to ask Al a question?

Audience Member: In regards to the original Pong, as you designed it, was there any actual written or machine code or was it all just chips? I couldn't understand that part.

Al: I admit, it is incredibly confusing. It's hard to imagine a time, this was 1972. The only thing you could get that looked like a computer was a minicomputer in a box. So there was no code. There's no machine code, no assembly. There's no nothing. It's just a machine that generates Pong. Generates a video game. It's hard to imagine, giving talks with young engineers, you're probably an engineer.

They have trouble conceiving of a product that doesn't have a microprocessor. Microprocessors are so cheap, they're in everything. There could be a dozen of them in your car. But back then, in 1970s cars, there weren't any. I don't really write software anyway, so I couldn't have done it if I had to. Any other questions?

Audience Member: How many games of Pong did you play at your time at Atari, in your life?

Al: How many games of Pong did I play? I played a lot because I had to make it work. In fact, on the consumer, the home Pong, the early chips had a bug in it. When you'd hit the paddle a certain time, at a certain spot, and a certain sound could screw the game up. So me and the other engineer had to play this thing incessantly for like a day solid to get it to do it with a siliscope hooked up to it to find out what was going on. For a while I was pretty good at it. It was fun being the best Pong player in the world for a while. I could go to parties and I'd beat everybody. But it didn't last very long?

Audience Member: Do you still play games today?

Al: A little bit. What I really like to do is create new things. What I like to do is apply technology to an existing marketplace. That's where the money is made. It's fun. Look, there was a coin operated game business, with pinball machines out there, that had been going along for a long time. All of a sudden we interjected this new digital technology. This was the first digital device people ever got their hands on. No one cared that it was digital, it just was a new technology that allowed a new form of entertainment. It changed the industry, disrupted the industry to a "fare thee well". Look what's happened to it now, it's huge.

That's what I like to do. Since then I've worked on; in 1995 I started a company called Silicon Gaming, that made a slot machine for Las Vegas that was multimedia, hard disk based. I worked at Apple. I was a Fellow in '86 through '91 and worked on something called MPEG, the beginnings of MPEG and QuickTime. That's been disruptive. That's what I like to do. To me, that's my fun, to go out there and to build a product that when you go to the current they go "Oh my God, this changes everything. You shouldn't do this!" and I go "I'm on the right track now." That's how I get fun.

Audience Member: Now you mentioned the idea behind the VCS was because hardware is too expensive. Did you realize at that stage that you would make more money from selling software via cartridge than you would ever from selling individual hardware boxes? Was that the thinking?

Al: Yep. The investment required to build a new custom chip for every game was very, very high and time consuming. It was not that profitable, whereas the cartridge business was clearly the way to go. To give you a perspective, we had a 6502 microprocessor in there, a custom chip called Stella which you'll see the wire map downstairs for in a day or two. We had a chip that had 128 bytes of memory in it. 128 bytes.

Try to buy a chip with 128 bytes of memory in it. The program was stored on a read-only memory chip, that was two kbytes, maybe four kbytes. That was the game. And the games played well. One of the things you learned that is not intuitive, is to really be creative requires constraints. If you don't have constraints on you, it's very hard to be creative. It doesn't seem obvious. There had never been a more constrained system to program for than the VCS. It only did two lines of video at the time.

So the program was all in machine code, and you had to keep track of the clock. You had like 400 clock ticks and you'd better be finished with that part of the program or the screen would scramble. You had to keep track of "Oh, time for vertical sync! End of the frame." That was all in software. It was a real hard thing to program for. But, once you wrote the program, it was real cheap to copy and make. So yeah, it did quite well. We knew the cartridge game was the way to go.

Audience Member: You know how it started as two player. How long did it take to develop into the one player game versus the computer?

Al: How long did it take to do which?

Audience Member: To make Pong into a one player game.

Al: I don't think we ever did. Pong and the one player game.

Audience Member: Well people have made it.

Al: Well yeah, I didn't do it. Pong, I'll tell you a story about that. We got a letter later on, once Warner owned us and we were making all this money. A letter from the noted heart surgeon Dr. Debaki. It was to the Chairman of the Board of Warner Communications in New York. It basically said that Americans are physically a wreck, they don't get enough exercise, and video games are detrimental to the health of Americans. "Why don't you make a video game that makes people go exercise, and work out?" So that letter went to the President of the division of Atari, to the President of Consumer Division, and copied it to me.

I then replied in a short letter, and copied everybody at once. It said "You don't get it. Pong was designed so you could participate in athletics while maintaining a firm grip on a can of beer."


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