STATUS UPDATE - 2/86 - CONFIDENTIAL!!! ARARI EYES & EARS ONLY.

- ACME show is next week; Friday thru Sunday; 3/7-3/9/86.
  	-Atari will show: Super Sprint, Gauntlet, Temple of Doom, Robo Soccer.
	-Van Elderen, Moore, Tacakichi, Weatherby, Turner, Drobny, Hally, Logg, 
	 Arita are going from Engineering.
	-They leave Thursday morning.
	-Nakamura and 2 Namco Engineers will attend the show.
- Tentative production quantities of Super Sprint have been agreed upon -
	see me if you really want to know...
- Beginning Monday the factory will stop building games for a 3-5 week period.
  12 employees will stay on full-time; 43 will be furloughed. This was a 
  tough decision, but I think it's wise; When Sales volume has peaks and
  valleys; the production volume has to follow - it hurts in the long term
  to keep the factory running and build to inventory. Apparently, the
  furlough package was well-received by manufacturing employees.
- We have purchased a new improved VTI package for custom I.C. layout.
  This gives us a standard-cell library based on 2-micron CMOS as
  well as gate array and full custom layout ablility. All the support tools
  are included too.
- Japanese Yen: dollar is weak; 6-12months ago was 250 yen to dollar; now 180
  yen to dollar. This is hurting PCB kit dealers in USA since profit margin
  has been erroded - thats good for us - less competition.
- Nintendo is expected to introduce Super Mario Bros. on their VS Coin-op
  system at ACME. Its been a HOT game in Japan on the Home computer and
  at the usual $200 Nintendo kit price, its expected to do very well in the
  USA. Nintendo apparently lost money last year in the US coin-op market,
  and is expected to pull out of the coin-op market entirely...within 12 months?
  They already have in Japan - they are concentrating on their VERY
  succesful Home Computer/game console.
- SEGA is expected to introduce 4 new games at ACME: Space Harrier (not really
  new), Major League Baseball, Quartet (4-player Gauntlet rip-off but not
  nearly as good); and one other.
- Bally Sente is expected to introduce a new game too...rumor has it that
  Owen Rubin is feverishly working on this one.
- Exidy is in Chap. 11 and with the president (Kaufman) recovering from
  illness, they do not appear to pose a threat.
- Data East seems to have fallen off their high horse (Kung-Fu etc); with
  not much to offer...maybe they have a surprise for us at the show. The
  strong yen will hurt them too since all their product is licensed from Japan.
- Williams will probably introduce the new Steve Ritchie Pinball game. Its
  supposed to be great. It was ready for AMOA, but they held off cause they
  had a very good pinball in production...The name High Speed is in my mind,
  thats either Ritchies, or the one they just finished. I have no idea what
  the production run on a good pinball is these days...maybe someone going
  to the show can pump Ritchie...
- Market still looks weak, but Atari is positioned VERY well with respect
  to the competition.
- Nakamura and troops will be here week of 3/10-3/14; expect tours and
  show n' tells; will be a good time to find out details about System I
  Cocktail implementation issues...IF we have our ducks lined up. Please
  think about questions, and how to present the questions clearly considering
  the language barrier.
 - Bob Stewert (Mfg. Mgr) will be bringing a group of 6-8 ace PCB techs
   thru for a tour... I would like to show them Gauntlet,Roadrunner,Thrasher 
   Labs. I would like to also go over the game development process 
   using Gauntlet as an example. 
 - let me know if VAX mail like this is sufficient, or if you would rather
   have a group meeting where questions/answers could be exchanged.