WEBVTT - When E.T. the Extra-Terrestrial Tanked Atari 0:00:17.560 --> 0:00:21.479 Pushkin too quick. No, it's perfect push kid stop. You 0:00:21.600 --> 0:00:35.400 got it. 0:00:37.120 --> 0:00:40.280 Robert Smith, here is the big question for today's show. Yes, 0:00:40.640 --> 0:00:44.720 how did Atari essentially invent the video game industry, win 0:00:44.760 --> 0:00:46.960 the hearts of millions of young people in the nineteen 0:00:47.000 --> 0:00:50.640 seventies and then blow up entirely in the early nineteen 0:00:50.680 --> 0:00:53.120 eighties basically never to be heard from again. 0:00:53.200 --> 0:00:54.040 It's a great question. 0:00:54.680 --> 0:00:57.520 We are both of the age where we remember this personally. 0:00:57.600 --> 0:01:00.160 Yeah, I remember my dad coming home with one of 0:01:00.200 --> 0:01:03.400 the first Atari sets. It was like magic. 0:01:03.600 --> 0:01:04.480 What was it? 0:01:04.479 --> 0:01:06.840 It was Pong, which was a ping pong game, if 0:01:06.880 --> 0:01:09.919 you know what. Little paddles and you'd send a little 0:01:09.960 --> 0:01:14.560 electronic ball across the screen. And it was transformative because 0:01:14.560 --> 0:01:17.080 it was the first time you could actually interact with 0:01:17.080 --> 0:01:19.319 a television set which was sitting there in the center 0:01:19.319 --> 0:01:21.240 of your home. And to be clear, I was not 0:01:21.280 --> 0:01:24.400 an early adopter. I was not cool. Everybody had the 0:01:24.440 --> 0:01:25.199 Atari set. 0:01:25.319 --> 0:01:27.280 I'm a little younger than you, not to throw it 0:01:27.319 --> 0:01:29.520 in your face, but so for me, I don't remember Pong, 0:01:29.560 --> 0:01:32.840 but I remember the Atari twenty six hundred came to 0:01:32.840 --> 0:01:35.000 be called the twenty six hundred, which was like the 0:01:35.000 --> 0:01:37.240 first video game system like we know it today where 0:01:37.240 --> 0:01:39.240 you buy it and there's different cartridges. And this was, 0:01:39.600 --> 0:01:44.160 you know, the dominant video game in the early eighties. 0:01:44.400 --> 0:01:47.040 I loved it. I had Defender, had Journey, the game 0:01:47.120 --> 0:01:50.600 Journey like the band played it for hours, and so 0:01:50.680 --> 0:01:54.800 the big question is what happened. I'm Jacob Goldstein and 0:01:54.840 --> 0:01:57.480 I'm Robert Smith, and this is business history. What's it about? 0:01:57.560 --> 0:01:59.600 Jacob esterday Business Today? 0:01:59.640 --> 0:02:02.000 On the show, how a company can invent something that 0:02:02.120 --> 0:02:05.840 changes the future, changes all of culture and wind up 0:02:05.840 --> 0:02:08.680 in utter failure, like literally wind up having to bury 0:02:09.079 --> 0:02:13.079 hundreds of thousands of its own products, unsold video game 0:02:13.120 --> 0:02:15.800 cartridges in a landfill. 0:02:15.360 --> 0:02:16.079 In New Mexico. 0:02:16.240 --> 0:02:19.720 I feel like today's show is like walking through my childhood. 0:02:19.760 --> 0:02:22.959 We started with Atari, and our next step. 0:02:22.760 --> 0:02:26.080 Is an amusement park that I initially called the Lagoon 0:02:26.200 --> 0:02:29.240 in Utah, and you pointed out it is called Lagoon 0:02:29.560 --> 0:02:30.919 And you know this because. 0:02:31.080 --> 0:02:33.040 I grew up in Utah and went there once a 0:02:33.160 --> 0:02:36.440 year and it was the best day of the year. 0:02:36.680 --> 0:02:39.400 It's an amusement park, right, You play games, the rides, 0:02:39.480 --> 0:02:43.760 you eat a lot of fried salty foods. It was amazing, Robert. 0:02:43.560 --> 0:02:45.160 I guess you would have been going to Lagoon in 0:02:45.240 --> 0:02:48.840 the seventies. A few years earlier. It was this college 0:02:48.919 --> 0:02:53.480 kid named Nolan Bushnell who worked summers there on the Midway, 0:02:53.520 --> 0:02:56.240 like where there was games like whatever, guess the way 0:02:56.280 --> 0:02:58.840 to the guy and knock down the milk cans or whatever. 0:02:59.080 --> 0:03:00.839 And just in case you have an image of someone 0:03:00.880 --> 0:03:04.680 who's a carneye working the milk jug games, this was 0:03:04.720 --> 0:03:06.120 not Nolan Bushnell, but. 0:03:06.080 --> 0:03:10.800 He was a carneie genius. He became King of the Midway, 0:03:10.919 --> 0:03:13.840 was running running all the games when he was like 0:03:13.840 --> 0:03:17.880 twenty years old, because he was really good at getting 0:03:17.960 --> 0:03:20.919 people to spend their money on the games. Like one 0:03:20.960 --> 0:03:24.040 example he gave later that is dear to my heart 0:03:24.080 --> 0:03:26.720 is this. So there is that game where there's these 0:03:26.720 --> 0:03:29.799 like metal milk jugs. I guess it's like metal bottles, 0:03:30.440 --> 0:03:32.680 and there's whatever four of them or six of them, 0:03:32.720 --> 0:03:34.960 and they're stacked up and you have a like a 0:03:35.000 --> 0:03:37.760 softball or something. You throw it at it and try and. 0:03:37.680 --> 0:03:39.400 You're trying to win a stuffed animal. 0:03:39.480 --> 0:03:41.320 Yeah, maybe a giant stuffed animal or something if you 0:03:41.400 --> 0:03:45.120 knock down all the milk bottles, right, and it turns 0:03:45.160 --> 0:03:48.480 out He talked about this later that like half of 0:03:48.520 --> 0:03:51.240 the bottles are heavy and half of the bottles are light, 0:03:51.560 --> 0:03:54.160 and so if you put the light bodels on the bottom, 0:03:54.360 --> 0:03:56.320 it's really easy to knock them down, right, If you 0:03:56.320 --> 0:03:58.920 put the heavy bottles on the bottom, it's really hard 0:03:58.920 --> 0:04:02.320 to knock them down. Physics, And so he had this 0:04:02.440 --> 0:04:04.000 movie he would make when like a bunch of high 0:04:04.000 --> 0:04:06.040 school students would come. There'd be like, you know, the 0:04:06.520 --> 0:04:08.640 captain of the football team, and then like the water 0:04:08.720 --> 0:04:10.400 boy kind of trailing along behind. 0:04:10.720 --> 0:04:11.840 Okay, I was more of the water play. 0:04:12.760 --> 0:04:15.960 Obviously, he'd get the water boy to play, and he'd 0:04:16.000 --> 0:04:17.800 set it up the easy way so that it's really 0:04:17.840 --> 0:04:19.720 easy to knock him down. The water boy knocks him 0:04:19.720 --> 0:04:22.400 down and gets the big prize, and then the captain 0:04:22.440 --> 0:04:25.400 of the football team's like, oh, I'm definitely gonna just 0:04:25.560 --> 0:04:28.800 kill at this. But then Nolan Bush nowould set it 0:04:28.880 --> 0:04:31.520 up the hard way so that the you know, football 0:04:31.520 --> 0:04:33.120 player throws and they don't fall down. He's like, Okay, 0:04:33.160 --> 0:04:35.360 I'll try again. I'll try again, and he'd basically take 0:04:35.839 --> 0:04:38.360 all of the football player's money because he couldn't knock 0:04:38.400 --> 0:04:38.640 him down. 0:04:38.680 --> 0:04:42.320 He realized that games are psychology yeah, you know, it's 0:04:42.440 --> 0:04:45.280 storytelling in psychology, and this would of course come in useful. 0:04:45.560 --> 0:04:47.880 Yeah, and he had a real sense of fun, right, 0:04:48.000 --> 0:04:50.159 like this was fun for the water boy, not fun 0:04:50.200 --> 0:04:53.440 for the football player. But like he he loved a party, 0:04:53.680 --> 0:04:57.280 took a lot of drugs. He was studying electrical engineering 0:04:57.320 --> 0:05:00.000 in school, but it took him like seven years to graduate. 0:05:00.600 --> 0:05:04.599 Eventually he moves to Silicon Valley, not called Silicon Valley yet, 0:05:04.600 --> 0:05:06.440 but it's becoming that. Right, this is right where we 0:05:06.440 --> 0:05:08.800 were at the end of last week's show, and he's 0:05:08.800 --> 0:05:11.000 going to invent the video game industry, but he doesn't 0:05:11.000 --> 0:05:11.360 know it yet. 0:05:11.360 --> 0:05:14.520 So at the time, he works for a company called Ampex, 0:05:14.760 --> 0:05:16.720 famous for those of us in the radio business as 0:05:16.720 --> 0:05:18.600 the makers of magnetic tape. 0:05:18.720 --> 0:05:20.240 Did you use Ampex tape? 0:05:20.680 --> 0:05:23.440 Of course, my clauset's filled with its stillcitually it is 0:05:23.560 --> 0:05:28.279 actually can't get rid of them. But Ampex was notable, 0:05:28.320 --> 0:05:30.520 not just because it was an electronics company in the 0:05:30.560 --> 0:05:33.640 Bay Area, but because it had this policy that allowed 0:05:33.960 --> 0:05:37.800 their employees to basically take stuff home and tinker with it, 0:05:37.880 --> 0:05:40.159 you know, to come up with new ideas based on 0:05:40.160 --> 0:05:45.039 the equipment. And so Bushnell starts taking stuff home thinking 0:05:45.200 --> 0:05:47.280 about games. 0:05:47.400 --> 0:05:50.760 And in particular he's thinking about video games, or really 0:05:50.920 --> 0:05:53.839 video game because at this part in history, there's essentially 0:05:53.920 --> 0:05:57.680 one video game and it was created by these guys 0:05:57.720 --> 0:06:01.599 at MIT, of course MIT in the early sixties, to 0:06:01.680 --> 0:06:03.760 be run on, you know, a computer, which at that 0:06:03.800 --> 0:06:05.200 time was a big machine that you had at a 0:06:05.279 --> 0:06:07.920 university that costs hundreds of thousands of dollars. The game 0:06:08.000 --> 0:06:11.839 was called Space War exclamation mark. Great name for a game, 0:06:12.279 --> 0:06:17.480 and it was fun if you understood like Newtonian gravity, right, 0:06:17.520 --> 0:06:19.400 you like have a spaceship and there's a star and 0:06:19.440 --> 0:06:21.800 it's like I go around the Sun to get just 0:06:21.920 --> 0:06:24.000 the gravity goes into the square of the distance. Whatever. 0:06:24.279 --> 0:06:28.240 So he's thinking about Space War exclamation mark. And you 0:06:28.240 --> 0:06:30.240 know when he first played it in college, he played 0:06:30.279 --> 0:06:32.920 it at the university on this extremely expensive computer where 0:06:32.920 --> 0:06:36.040 it obviously wouldn't work anywhere else. It wouldn't work as 0:06:36.040 --> 0:06:37.760 a business because the computer was too expensive, and you 0:06:37.800 --> 0:06:39.680 just did it at night for fun. But by the 0:06:39.760 --> 0:06:42.800 time he's in Silicon Valley in the early seventies, you know, 0:06:43.200 --> 0:06:46.279 Moore's law, like we talked about last time, is cranking along. 0:06:46.520 --> 0:06:48.680 Computers are getting cheaper and cheaper and cheaper and faster 0:06:48.760 --> 0:06:51.360 and faster and faster. And he's like, oh, maybe now 0:06:51.400 --> 0:06:54.120 that technology has got to a place where I could 0:06:54.279 --> 0:06:57.560 make Space War on a machine that I could build 0:06:57.600 --> 0:06:59.719 cheaply enough to put it in a bar next to 0:06:59.760 --> 0:07:02.040 a pinball machine and get people to put corners in it. 0:07:02.240 --> 0:07:06.240 That's Bushnell's law, which is basically, if people have coins 0:07:06.400 --> 0:07:09.120 in a place of amusement, they will spend all the 0:07:09.160 --> 0:07:11.560 coins they have on something that's new and fun. 0:07:11.720 --> 0:07:15.280 Yes, And so he starts working with this other guy 0:07:15.440 --> 0:07:19.320 from Ampex, and you know, he buys a black and 0:07:19.360 --> 0:07:23.400 white TV at Goodwill and he actually, interestingly, he builds 0:07:23.880 --> 0:07:26.760 essentially a computer from the ground up, right, because he 0:07:26.880 --> 0:07:30.640 is optimizing for cheapness, right, he wants to build the 0:07:30.720 --> 0:07:33.840 cheapest functional machine he can. And he gets like a 0:07:33.840 --> 0:07:36.560 little coin slot like they have in pinball machines, has 0:07:36.600 --> 0:07:39.480 like a paint thinner can for the coins to go into, 0:07:39.520 --> 0:07:42.400 and they build a functional prototype of a game that 0:07:42.480 --> 0:07:45.120 is a lot like Space War and it looks like 0:07:45.680 --> 0:07:48.440 an arcade game, although there's not really any such thing 0:07:48.440 --> 0:07:50.120 as our kid gets at this point, but it's a. 0:07:50.080 --> 0:07:52.920 Box in the corner. It's next to the juke box. 0:07:52.960 --> 0:07:56.200 It stands up and it has yeah, and it has 0:07:56.320 --> 0:07:59.200 computer space on it, and you're like, oh, computers space. 0:07:59.240 --> 0:08:02.000 There's a screen, and there's controls, and there's a place 0:08:02.040 --> 0:08:04.280 to put coins. It right, the three things you need. 0:08:04.640 --> 0:08:08.200 They get this company to make fifteen hundred of the machines. Right, 0:08:08.240 --> 0:08:09.640 it's going to be a thing in the world. Now 0:08:09.640 --> 0:08:13.600 it gets out into the world, and and nobody really 0:08:13.640 --> 0:08:16.040 wants to play it, basically because it's not that fun. 0:08:16.240 --> 0:08:18.640 It seems it's it's violating one of the tenets you 0:08:18.720 --> 0:08:21.160 laid out in your made up Bushnell's law. 0:08:21.280 --> 0:08:23.040 Right, you had to have a lot of instructions to 0:08:23.040 --> 0:08:24.640 play it is the way I understand, Yeah, or at 0:08:24.720 --> 0:08:26.440 least like it helps if you understood physics. 0:08:26.480 --> 0:08:27.720 You know what I think about physics when. 0:08:27.600 --> 0:08:29.320 You're playing a video game, but not in a bar now. 0:08:29.400 --> 0:08:33.480 Yeah, And so you know what do you do in 0:08:33.680 --> 0:08:36.360 Silicon Valley if you make something and it's a failure, 0:08:37.120 --> 0:08:40.040 you start your own company, exactly right, and they call it, 0:08:40.079 --> 0:08:46.280 of course sissy g s y z y g. 0:08:46.400 --> 0:08:50.520 Y really going in on the astronomical theme, which you 0:08:50.520 --> 0:08:52.840 know SIGs win like the planet's lineup something. 0:08:52.960 --> 0:08:55.440 Yeah, so I think so clearly a bad name, hard 0:08:55.440 --> 0:08:57.480 to say, hard to spell, and kind of a lucky 0:08:57.520 --> 0:09:02.080 break for Nolan Bushnell. It's already taken by a candle 0:09:02.120 --> 0:09:06.240 maker up in Mendocino. So they go with another name Atari. 0:09:06.440 --> 0:09:08.160 And for those of you who have played the game Go, 0:09:08.679 --> 0:09:11.880 it's like check in chess. You say Atari when you 0:09:12.000 --> 0:09:14.320 I've almost surrounded someone's stone. 0:09:14.360 --> 0:09:15.959 You're saying this, like you play Go? Have you played? 0:09:16.080 --> 0:09:17.679 I have played? God? You never talked about this? 0:09:17.720 --> 0:09:19.800 Oh yeah, yeahah Taro, And I mean so much so that. 0:09:19.800 --> 0:09:23.000 It also has your Go game. It's okay, really yeah, 0:09:23.040 --> 0:09:25.320 it's okay. So now they have a company and a name. 0:09:25.880 --> 0:09:29.000 One key thing they're missing a game that people want 0:09:29.000 --> 0:09:29.360 to play. 0:09:29.440 --> 0:09:30.400 Yeah, minor thing. 0:09:30.640 --> 0:09:34.480 It's nineteen seventy two, and one day Bushnell hears about 0:09:34.520 --> 0:09:37.600 a thing happening at a hotel in I think Sunny Vale, 0:09:37.600 --> 0:09:41.480 somewhere in in Silicon Valley. Magnavox, the TV company, they're 0:09:41.480 --> 0:09:43.400 working on their own video game. This is actually going 0:09:43.440 --> 0:09:45.120 to be one not to put in a bar, but 0:09:45.200 --> 0:09:47.400 to play at home. Right. Their idea is they're going 0:09:47.440 --> 0:09:50.320 to have this machine that will help them sell more televisions. 0:09:50.520 --> 0:09:50.679 Yea. 0:09:50.880 --> 0:09:54.000 And so they have a prototype of this machine, and 0:09:54.440 --> 0:09:57.640 you know, there's like a special preview for insiders, and 0:09:57.720 --> 0:09:59.679 so Bushnell's like, I got to see this thing, and 0:09:59.720 --> 0:10:03.080 so he drives over there and he does not say 0:10:03.600 --> 0:10:06.920 I'm a competitor or no. He says, oh, yeah, I 0:10:06.960 --> 0:10:10.280 work at the Magnavox store whatever over down El Camino 0:10:10.400 --> 0:10:10.720 or whatever. 0:10:10.760 --> 0:10:11.840 It is. Corporate intrigue. 0:10:12.000 --> 0:10:14.000 It's easier to get away with a lie. I guess 0:10:14.040 --> 0:10:15.720 the nineteen seventy two, right, They're not gonna look him 0:10:15.760 --> 0:10:17.520 up on the internet. And he gets to go in 0:10:17.600 --> 0:10:22.040 and and see what this product is and it kind 0:10:22.040 --> 0:10:25.000 of sucks, so he's relieved, right It to him is 0:10:25.040 --> 0:10:27.520 clearly made by somebody who doesn't understand games. And one 0:10:27.520 --> 0:10:31.080 thing about bushnells he really understands games because they're just 0:10:31.120 --> 0:10:34.240 not that fun to play. But there is one game 0:10:34.440 --> 0:10:37.280 that has some spark of promise to him, and it's 0:10:37.360 --> 0:10:40.520 essentially like a simple tennis or ping pong game where 0:10:40.520 --> 0:10:43.800 there's like two rectangular sort of paddles or rackets and 0:10:43.800 --> 0:10:46.000 then like a square ball and it goes back and 0:10:46.040 --> 0:10:49.600 forth and there's two players, but there's no score in 0:10:49.640 --> 0:10:53.600 the game. There's no music like it's it's it's just 0:10:54.320 --> 0:10:56.880 a weak version, but that shows some promise to him, 0:10:57.480 --> 0:10:59.080 and for those of you who have played pong what 0:10:59.200 --> 0:11:02.840 he is about to develop. It does have this amazing 0:11:02.960 --> 0:11:08.320 sound doink, which is just so. 0:11:08.640 --> 0:11:10.680 Like I can hear it in my brain right now. 0:11:10.800 --> 0:11:18.360 Right. So Pushnell goes back to the office and there's 0:11:18.360 --> 0:11:20.520 this engineer who's just started that day, and he's like, 0:11:21.200 --> 0:11:23.360 you know, make this, make this kind of pingpong game, 0:11:23.360 --> 0:11:25.280 but make it fun, make it do all these fun things. 0:11:25.760 --> 0:11:28.920 And the engineer does a great job, and you know, 0:11:28.960 --> 0:11:31.360 a few weeks later, they have this prototype of an 0:11:31.480 --> 0:11:36.080 arcade style game that they call pong. They just want 0:11:36.120 --> 0:11:38.240 to see how it does, right, it's a prototype. So 0:11:39.200 --> 0:11:43.319 there's this bar nearby. It's called Andy Capps Tavern. 0:11:43.840 --> 0:11:46.719 Named after a cartoon character from the newspapers of the 0:11:46.800 --> 0:11:48.680 nineteen seventies. Too hard to explore. 0:11:48.679 --> 0:11:52.240 Its basically what we would call today an alcoholic a problem. Yes, 0:11:53.320 --> 0:11:55.600 and they say, can we just put this machine in 0:11:55.640 --> 0:11:57.760 the corner here at Andy Caps Tavern, like you know, 0:11:57.840 --> 0:11:59.920 like a pimball machine, And the guy at the bar 0:12:00.000 --> 0:12:02.280 says sure, and so they put the machine there and 0:12:02.320 --> 0:12:06.480 it's you know, it's really simple. It's called pong. It 0:12:06.559 --> 0:12:10.600 has two knobs, one for each player, and unlike computer space, 0:12:10.679 --> 0:12:17.160 it has beautiful simple instructions. Avoid missing ball for high score. 0:12:17.600 --> 0:12:20.640 That's it. Love it, just a few words, yeah, yeah, 0:12:20.720 --> 0:12:23.640 three plays for one quarter. They plug it in and 0:12:23.640 --> 0:12:26.840 they go back to the office, and a few days later, 0:12:26.920 --> 0:12:29.480 like three days later, they get a call from the bar, 0:12:30.240 --> 0:12:32.720 and the guy at the bar is calling him says, yeah, 0:12:32.760 --> 0:12:34.520 the machine's broken. I don't know what's going on. It's 0:12:34.520 --> 0:12:36.800 not working. I like whatever. It's a prototype, you know, 0:12:36.880 --> 0:12:39.080 it's a new kind of computer. Of course it's gonna break. 0:12:39.559 --> 0:12:41.959 Somebody from Atari goes down there to check it out, 0:12:42.559 --> 0:12:46.440 and it turns out it is broken because the coin 0:12:46.559 --> 0:12:49.640 box is full. It's broken because people have put too 0:12:49.720 --> 0:12:54.120 much money into the machine. It's too good. It's too good. Yeah, 0:12:54.160 --> 0:12:56.200 you know, Nolan Bush and out of his colleagues have 0:12:56.320 --> 0:13:00.160 built a machine that people just cannot help themselves put 0:13:00.280 --> 0:13:02.600 money into. We're gonna need a bigger coin You're gonna 0:13:02.600 --> 0:13:05.600 need a bigger box. People love to put quarters into 0:13:05.640 --> 0:13:06.120 a new thing. 0:13:06.280 --> 0:13:08.320 Well, to see the new technology and then tell everyone 0:13:08.360 --> 0:13:10.480 about it, right, That is the That's one of the 0:13:10.520 --> 0:13:13.560 first insights of the technology, and then it's gotta be 0:13:13.600 --> 0:13:16.199 worth playing a second time, which is what he also had. 0:13:16.240 --> 0:13:18.360 He had the two pieces. It's super fun. It's a 0:13:18.400 --> 0:13:22.680 new thing and it's super fun. Now he's got a scale, 0:13:23.160 --> 0:13:26.640 very classic startup problem. You have a thing, people want it. 0:13:26.679 --> 0:13:30.760 But remember he essentially stole the idea from Magnavox. By 0:13:30.800 --> 0:13:33.800 the way lawsuit, they said out of court whatever. Lots 0:13:33.800 --> 0:13:36.320 of people now you know it's Silicon Valley. People are 0:13:36.320 --> 0:13:39.040 coming by Andy Kapps Tavern, who are engineers who are like, 0:13:39.400 --> 0:13:41.640 we can do this. And so he's got to get 0:13:41.760 --> 0:13:43.959 video games out into the world fast. 0:13:44.200 --> 0:13:44.960 Gonna need money. 0:13:45.400 --> 0:13:48.640 He's gonna need money. Nobody's gonna give him money yet, Right, 0:13:48.679 --> 0:13:51.280 he's just some stoner with one video game in a bar. 0:13:52.280 --> 0:13:54.240 So he makes a move that has already come up 0:13:54.280 --> 0:13:55.480 a few times. 0:13:55.160 --> 0:13:59.400 On our young show, your favorite negative cash conversion cycle. 0:13:59.200 --> 0:14:02.120 The negative cash conversion cycle. He's able to sell games 0:14:02.480 --> 0:14:05.000 before he has to pay for the parts. So the 0:14:05.120 --> 0:14:08.800 parts to make a game cost atari like three hundred dollars. 0:14:09.000 --> 0:14:11.680 But crucially they don't have to pay for those parts 0:14:11.760 --> 0:14:14.240 unto right, they have like a month. So the parts 0:14:14.280 --> 0:14:16.439 come in Attaria doesn't have to pay anything. They put 0:14:16.480 --> 0:14:19.200 them together and sell the machine for nine hundred dollars, 0:14:19.400 --> 0:14:20.880 and then a few months later they have to pay 0:14:20.920 --> 0:14:23.880 three hundred but meanwhile they got the money from that machine. 0:14:23.920 --> 0:14:28.360 They're growing. They're often running now other problem, classic scale 0:14:28.400 --> 0:14:33.440 problem hiring. And then one day this like nineteen year 0:14:33.480 --> 0:14:36.320 old hippie kid walks in and he says he won't 0:14:36.440 --> 0:14:39.640 leave until they give him a job, and the receptionist 0:14:39.720 --> 0:14:42.840 calls the head engineer and she goes, yeah, we got 0:14:42.880 --> 0:14:44.720 a hippie kid in the lobby. Says he won't leave 0:14:44.760 --> 0:14:47.440 until we hire him. Should we call the cops or 0:14:47.520 --> 0:14:50.880 let him in? And the engineer says, bring him on in. 0:14:50.920 --> 0:14:54.200 It's nineteen seventies, a Silicon valley, and this guy wanders 0:14:54.240 --> 0:14:57.120 in and he is when if you tell a story 0:14:57.160 --> 0:14:57.880 like this, you know who it is. 0:14:57.920 --> 0:15:00.480 It's Steve Jobs. It's Steve Job. So fun, it's so 0:15:00.600 --> 0:15:06.920 delightful and perfectly. Steve Jobs is very good at his job, yes, 0:15:07.120 --> 0:15:11.200 and very unpleasant to wrqu with class unsurprising. He tells 0:15:11.400 --> 0:15:14.600 Bushnell that like everybody's soldering wrong, right, they're actually putting 0:15:14.600 --> 0:15:16.840 together the hardware, soldering the hardware He's probably right, and 0:15:16.880 --> 0:15:19.080 Bushnell was like, yeah, he was right. He keeps calling 0:15:19.120 --> 0:15:20.360 his manager a dumb shit. 0:15:20.520 --> 0:15:21.840 Probably was not. 0:15:21.920 --> 0:15:26.360 Kind, but not necessary. Bushnell winds up putting Jobs on 0:15:26.400 --> 0:15:30.120 the night shift, partly so he won't bother so many people, 0:15:30.200 --> 0:15:33.200 and partly because he knew that Jobs like to hang 0:15:33.240 --> 0:15:36.680 out at night with his buddy Steve Wozniak, who was 0:15:36.720 --> 0:15:40.000 a great engineer, would be great to have hanging around Atari, 0:15:40.080 --> 0:15:43.320 And in fact, Jobs and Wozniak helped to make Breakout 0:15:44.120 --> 0:15:46.440 a great a target. Remember Breakout, of course. 0:15:46.240 --> 0:15:47.960 You're trying to knock down the bricks in a wall. 0:15:48.240 --> 0:15:50.040 Still, games like that, when you got a little paddle 0:15:50.040 --> 0:15:50.760 at the bottom. 0:15:50.520 --> 0:15:52.080 End, there's a moment when it goes through the wall 0:15:52.080 --> 0:15:52.440 and then. 0:15:52.360 --> 0:15:57.680 Goes so good. So Jobs worked at Atari for a 0:15:57.720 --> 0:15:59.880 little while and then decided he wanted to go off 0:15:59.920 --> 0:16:04.640 to India to find his guru perfect and asked Atari 0:16:04.720 --> 0:16:07.520 to pay for the trip. Nobody, ever, said he lacked moxie, 0:16:07.840 --> 0:16:10.760 and wound up making a deal with Atari where they 0:16:11.120 --> 0:16:12.840 pay him to go part of the way there. There 0:16:13.240 --> 0:16:15.120 they had exported some games to Germany and there was 0:16:15.120 --> 0:16:16.800 some kind of problem with the games in Germany, and 0:16:16.800 --> 0:16:19.320 they're like, we'll send you to Germany to fix the 0:16:19.360 --> 0:16:20.840 games and then you can get the rest of the 0:16:20.840 --> 0:16:24.760 way to India from there. And that's what happened. And 0:16:24.880 --> 0:16:27.760 you know, the Germans said Jobs was terrible to work with, 0:16:28.160 --> 0:16:29.360 but he fixed the games. 0:16:29.720 --> 0:16:33.280 You know, there's an alternative history where we're carrying around 0:16:33.320 --> 0:16:34.800 Atari devices in our pocket. 0:16:34.840 --> 0:16:37.640 It's true. And you know, there is something, right, I 0:16:37.760 --> 0:16:40.720 was thinking about, like the link between Atarian Jobs and 0:16:40.720 --> 0:16:42.240 what did he learn there, and it felt like maybe 0:16:42.240 --> 0:16:45.760 a little overdetermined, but I do think you know, clearly 0:16:45.800 --> 0:16:50.120 he had this profound sense of aesthetics and of delight, right, 0:16:50.240 --> 0:16:53.360 Like think of the Macintosh, right, this breakthrough Apple machine 0:16:53.360 --> 0:16:56.160 in the eighties. It was round and instead of squares, 0:16:56.200 --> 0:16:58.120 it was rounded, and it costs them more money, but 0:16:58.160 --> 0:17:00.520 it was beautiful and it was fun and you were 0:17:00.600 --> 0:17:02.200 engaged with it like a game. 0:17:02.800 --> 0:17:04.879 It almost looked a little bit like an arcade game 0:17:04.920 --> 0:17:07.560 with the curves. Yeah, but more than that, I think 0:17:07.600 --> 0:17:10.040 that especially at Silicon Valley at the time when they 0:17:10.040 --> 0:17:12.600 were dealing in actual silicon right with him making chips 0:17:12.639 --> 0:17:15.840 for somebody, you're thinking about the future and the computers. 0:17:16.040 --> 0:17:18.480 You're not thinking about the psychology of the customer, because 0:17:18.480 --> 0:17:22.000 the customer was another electronics company, right, And so Atari 0:17:22.160 --> 0:17:24.240 and the strength of it was really the first time 0:17:24.280 --> 0:17:27.880 where they're just like, how will a regular human being 0:17:28.000 --> 0:17:31.199 who has no training whatsoever interact with technology? 0:17:31.359 --> 0:17:33.960 Yeah? Yeah, with a computer? Right, Like what they are 0:17:34.000 --> 0:17:38.200 making is going to become essentially the first widely adopted 0:17:38.240 --> 0:17:41.440 home computer, the first computer that ordinary people literally children 0:17:41.720 --> 0:17:44.080 can just plug in and turn on and interact with. 0:17:44.240 --> 0:17:47.359 But the inside Bushnel had is that it wasn't labeled 0:17:47.400 --> 0:17:49.200 a computer. Yeah, it was a fun game. 0:17:49.280 --> 0:17:55.440 Yeah Yeah. So Atari Now mid seventies, they're selling all 0:17:55.440 --> 0:17:59.160 the machines they can make. They're growing, they need more space, 0:17:59.960 --> 0:18:03.560 and so they rent an abandoned roller rink. They stencil 0:18:03.560 --> 0:18:05.919 Atari on the window, and they turn it into this 0:18:06.080 --> 0:18:08.120 office slash video game factory. 0:18:08.600 --> 0:18:10.879 I've been ten years older. I would have loved to 0:18:10.880 --> 0:18:12.800 have worked in a roller rink video game factor. 0:18:12.920 --> 0:18:17.040 Yes, everybody smoked weed. Yeah, there was a hot tub. 0:18:18.640 --> 0:18:20.840 There was a pool party where everybody ended up naked 0:18:20.840 --> 0:18:24.760 in the pool at Bushnell himself looked back on it 0:18:24.840 --> 0:18:28.040 later and said, if that isn't a horror show for 0:18:28.119 --> 0:18:32.000 any hr person today, I don't know what is, but 0:18:32.080 --> 0:18:35.080 it was the seventies. It was a weirdo startup. I'm 0:18:35.119 --> 0:18:37.560 guessing they didn't have an HR department. I don't know. 0:18:37.960 --> 0:18:41.040 This is a company that's making games, right, and so 0:18:42.000 --> 0:18:45.240 you need engineering brains, but you also need a sense 0:18:45.280 --> 0:18:49.840 of play, of fun, of freedom, right, and clearly Bushnell 0:18:50.080 --> 0:18:52.280 was deliberately trying to create that. 0:18:52.359 --> 0:18:57.160 You know, he had this culture that was free and creative. 0:18:57.200 --> 0:18:59.760 His office door was always open, and right next to 0:18:59.800 --> 0:19:03.480 that open door was a keg of beer. So Atari's 0:19:03.480 --> 0:19:05.960 doing well. You know, Pong is a huge hit, but 0:19:06.119 --> 0:19:10.679 Bushnell knows the big opportunity the hockey stick will be 0:19:10.920 --> 0:19:14.080 if they can make a home video game, you know, 0:19:14.160 --> 0:19:16.640 like Magnavox was trying to do, but that nobody has 0:19:16.680 --> 0:19:17.280 cracked yet. 0:19:17.840 --> 0:19:19.720 All they have to do is get rich people into 0:19:19.720 --> 0:19:22.520 a roller rink with a hot tub and some beer 0:19:22.600 --> 0:19:25.159 and it's all going to work out. Yeah, they need money, 0:19:25.240 --> 0:19:26.760 and in order to get money, he's going to have 0:19:26.800 --> 0:19:28.760 to convince people that this is going to be a 0:19:28.800 --> 0:19:29.760 global phenomenon. 0:19:29.920 --> 0:19:59.119 After the break, Okay, that's the end of the ads. 0:19:59.760 --> 0:20:00.840 We're going back to the show. 0:20:01.160 --> 0:20:02.680 Nineteen seventy four. 0:20:03.119 --> 0:20:06.320 Atari Nolan Bushnell has dreams of selling a version of 0:20:06.400 --> 0:20:08.680 pong that people can play at home. We know it's 0:20:08.680 --> 0:20:11.399