Entertainment is not a fad, but repetition does not make for good entertainment.
Thoughts -- ranging from bitter to constructive -- on layoffs at Atari in 1984.
Two executives, Skip Paul and John Farrand, are added as mail users mid-discussion. Their addition is well-intentioned, but I wonder if this thread would have been longer if that did not happen.
LATELY THERE'S BEEN SOME CONFUSION OVER THE "ORGANIZATIONAL ADJUSTMENTS" THAT WE'VE BEEN EXPERIENCING HERE AT ATARI. LET'S PUT IT ALL INTO PERSPECTIVE ... AT THE END OF 1983, ATARI ANNOUNCED LOSSES OF OVER 500 MILLION DOLLARS. THERE WAS SOME TALK THAT THESE LOSSES WERE ACTUALLY CARRIED ON THE BOOKS OVER SEVERAL PRECEDING QUARTERS, AND THAT MR. MORGAN WAS SIMPLY GIVEN A FRESH START. THE FACT REMAINS THAT ATARI HAS BEEN, AND STILL IS, LOSING AN ENORMOUS AMOUNT OF MONEY, ENOUGH TO MAKE ANY COCAINE IMPORTER'S HEAD SPIN. THE HOME COMPUTER MARKET HAS FALLEN FLAT ON IT'S FACE. PEOPLE FINALLY REALIZED THAT THEY DIDN'T NEED A HOME COMPUTER FOR ANYTHING EXCEPT PLAYING GAMES. MOST OF THE PERCIEVED NEED FOR A HOME COMPUTER COULD ONLY BE ATTRIBUTED TO MARKETING HYPE. THE GAME CARTRIDGE MARKET HASN'T BEEN DOING MUCH BETTER. WE ALL HEARD ABOUT THE BIG HOLE IN THE GROUND WHERE THEY BURIED THOUSANDS UPON THOUSANDS OF "DEFECTIVE" CARTRIDGES. WHAT ACTUALLY HAPPENED WAS THAT OUR TOP MANAGEMENT "EXPERTS" OVERESTIMATED THE CARTRIDGE MARKET BY SEVERAL MILLION UNITS. MEANWHILE, SYNERTEK AND STEVIE-BOY ARE LAUGHING ALL THE WAY TO THE BANK $$$. AND THEN THERE'S THE COIN-OP MARKET. LET'S STOP KIDDING OURSELVES. SOME OF US WORK 10, MAYBE 12 HOURS A DAY ON GAMES WHERE THE BEST WE CAN REALISTICALLY HOPE FOR IS A TOTAL PRODUCTION OF 5000 UNITS. THAT WORKS OUT TO SOME VERY MEAGER BONUS-SPLITS, FRIENDS. FEW SIGNIFICANT CHANGES HAVE BEEN MADE TO RECTIFY THE SITUATION FACING ATARI: WARNER REPLACED MR. KASSAR WITH A CIGARETTE EXECUTIVE. UNFORTUNATELY FOR MR. MORGAN, HIGH-TECH ELECTRONICS IS A HIGHLY DYNAMIC AND VOLATILE BUSINESS TO BE IN: THE MORTALITY RATE FOR HIGH-TECH START-UPS IS VERY HIGH COMPARED TO OTHER INDUSTRIES. MR. MORGAN'S EXPERIENCE LIES IN THE VERY STABLE AND WELL-ENTRENCHED TOBBACO INDUSTRY: IT'S A REPLACEMENT MARKET WITH TEENAGERS REPLACING THE LUNG-CANCERED OLDSTERS. CIGGIES AND GAMES ARE SORT OF THE SAME... LITTLE SQUARE BOXES THAT TEENIES GET HOOKED ON. WHAT THIS ALL BOILS DOWN TO FROM AN "ENGINEERING" POINT-OF-VIEW IS THAT IT'S PROBABLY TIME TO GET ON THE VAX AND UPDATE THE RESUME. AND CONSIDERING THAT THE REST OF THE INDUSTRY IS NOW IN THE 16-BIT AND 32-BIT WORLD, IT MIGHT BE A GOOD IDEA TO ENROLL IN A FEW GRADUATE COURSES. ( HOWARD SAMS JUST DOESN'T CUT IT ANYMORE ). FOR THOSE OF US WHO ARE RECIEVING BONUS-SLPITS, IT MAKES SENSE TO GET LAYED OFF RATHER THAN QUIT, BECAUSE IF YOU GET LAYED OFF, YOU ARE LEGALLY ENTITLED TO ALL BONUS MONEY THAT YOU WOULD HAVE GOTTEN HAD YOUR EMPLOYMENT CONTINUED AT ATARI. ... HOWEVER, THINGS MAY GET SO BAD HERE IN THE NEAR FUTURE THAT IT WILL BE BETTER JUST TO QUIT ...
REMEMBER WHAT AESOP SAID ABOUT SOUR GRAPES ANYONE WHO LISTENS TO THAT GIBBERISH IS A FOOL! CAROLE (I'M STAYING) JUNIOR
I agree with the sour grapes analogy. Pete's attitude is like pollution: it stinks and it can spread. Jack Ritter
Franusic has some valid points. However, what Atari does not need right now are quitters. I've seen Atari make many mistakes and I am sure that I will see many more, but, Atari is a large corporation and it is good to remember that Large corportations may stumble, but they seldom fall. There will be plenty of time to decide to quit if Atari really shows signs of colapsing. It is true that things are not what they used to be. Games are not as popular as before. The markets are glutted, both Consumer and Coin-op. That glutting cannot go on forever, however. There is a product lifetime which, once past, even the best products (for their time) cannot be sold. When the video game companies (Atari included) can no longer dump their excess inventories of old games (hopefully this will not take more that a year,) then new games can begin to go back on the market in a controlled fassion. When that time comes, we must be prepared with some VERY GOOD, VERY ORIGINAL products. Entertainment is not a fad, but repetition does not make for good entertainment. The game industry must stop cloning the old games. We must come up with original concepts. It does not necessarily mean creating bold advances in technology. It means taking bold advances in our imagination. If we can achieve that, then a games sucess is assured. John Seghers Consumer Software
There are 2 new users on the systems. Now if you have a beef, wanna stand on a soap box, feel like sending congrats for a job well done or whatever, you will be heard by someone who can make a difference. Don't feel intimidated. These guys are intrested in hearing your input. They wanna know what's happening; that sort of stuff. John Farrand can be addressed as KIM::FARRAND and Skip Paul can be addressed as KIM::PAUL. They get JUNK mail too. ds
The Bubble Bursts From 1979 to 1982 Atari's growth was exponential. The money was flowing in and we were the darling of the business community. A group of congressmen who saw High-Tech as the answer to the country's economic woes adopted our name. Ray Kasar's picture was on the cover of most the major magazines in the country. There is a problem with exponential growth. If Atari's sales doubled every year our sales would have been $1 trillion by 1990 and $1 quadrillion by the year 2000. A little common sense would have indicated that that kind of growth could not be sustained and, I suppose, if you had asked our planners they would have agreed that a leveling off would be inevitable. We all seemed to be a bit too busy to worry about that at the time. In ancient Greece, a general who received bad news was allowed to kill the messenger. History does not record how reliable the mail was in those days but the temptation to minimize the bad news must have been overwhelming. If the newspaper accounts are any indication we had a very similar problem here. If a market forecast had indicated that the industry would be in the state it is in now the forecaster would have been replaced by someone with " a better attitude". This approach guarantees surprises. I think it is obvious that video games were a fad and that the fad is over. There are, however, two kinds of fads. These are exemplified by the Frisbee and the hoola hoop. In the late fifties the hoola hoop exploded on the scene with a force that is legendary to this day. For about two years everybody had to have a hoola hoop. How many hoola hoops do you see today? None. The fad ran it's course and returned to oblivion. The Frisbee, however, suffered a different fate. If gained in popularity slowly at first and then reached explosive popularity later. I'm sure Wham-o doesn't sell as many Frisbees now as it did in the late sixties but the Frisbee is now part of the standard repertoire of picnic supplies and kids still play with them. Is the video game a hoola hoop or is it a Frisbee? For all our sakes I hope it is a Frisbee. What's in the Future? Other then examining the entrails of a chicken, there seems to be no reliable method of predicting where this industry is going to go. Coin-op can make a profit and survive on what we sell to arcades. There is shake out in the arcade business right now so that avenue has dried up. This should only be temporary. The really big bucks come from street locations sales. This market seems to have vanished. Coin-op is addressing that situation and time will tell if the street market can be revived or not. I hope so, but I also think it would be unwise to count on it. We should view street sales as icing on the cake and the arcade business as our main course. Page 2 There are a couple of indications that the arcade business is going to stay around a while. Our operations end is making money. This is at a time when other arcades are losing money. Our arcades bring in the latest games. Many or our competitors do not. National surveys indicate that collections are down and I believe it is a direct result of player boredom with old games. A player survey in Play Meter magazine indicated that players will pay 1 dollar for 4 tokens at an arcade that has new games rather then get 10 tokens for a dollar at an arcade that does not. This magazine is read by almost all operators and perhaps the message will start to sink in. We have other evidence that new games generate revenue for the operator. We currently have several games on field test. The collections reports that I've read indicate that these games are earning about $100 more a week than field test games did last year. This could mean that our games are very strong or it could mean that the game playing populace is starving for new games. I believe it is a combination of both. Survival of the fittest indicates that those operator who invest in new games will survive the shake out. This trait will be selected for and we can look for reasonably level sales from these operators. Many well meaning operators are suffering a serious cash flow problem at this time. They want to buy new games but they can't. I think Atari should help them out. In the early days of the automobile the car companies realized that the customer is willing to borrow to get a new car. General Motors set up and still runs the GMAC which lends money to new car buyers. GMAC is a profit center itself and has helped GM make a great deal of money in the process. This system could work for us. Federal banking laws have been relaxed a bit lately and it may be easier to do this then it has in the past. Perhaps a cooperative venture with an established institution will serve. Thoughts on the Lay Offs I personally feel very bad about those who have lost their job recently. It is a shame that some other way couldn't have been found. I realize that a great deal of budget cutting was done before any lay off occurred. I only hope that in this chronic belt tightening we don't risk breaking off at the middle. If we are not well poised for the future, we risk repeating our mistakes. There are new markets to enter. If Atari is moving we increase our chances of hitting a moving target. I feel that new games are important. I also feel that we should be ready to create the next era in entertainment.
Mar 23, 1984