Four decades after Atari, University of Utah alum Nolan Bushnell is ever an entrepreneur.
Spacewar! is the silent movie of video games; it is the crank telephone, the biplane, the paper fan—every beginning that now seems laughably and sweetly from another era. In the mid-1960s, when he was getting his bachelor’s degree in engineering at the University of Utah, Nolan Bushnell played Spacewar! every chance he got. This entailed 1) stuffing wadded-up paper into the lock of the computer room in the Merrill Engineering Building so the door wouldn’t click shut, and 2) sneaking in late at night with his friends, when no one else was using the expensive mainframe computers.
This was a time in the history of computers when only the lucky and geeky—either in academe or research labs—could play a game on a screen, and the few games that existed consisted of a smattering of white dots. The idea of a video game industry seemed as improbable then as the idea of a computer small enough to sit on your lap. But his time at the U convinced Bushnell that the people who figured out how to combine computers and fun were going to make a whole lot of money.
Bushnell had three things going for him: He had big ideas, he loved to tinker, and he was a born entrepreneur. When he was 10, he built a rocket ship out of a bottle, a roller skate, and some alcohol, an endeavor that produced a startling but brief ball of flame in his parents’ Clearfield, Utah, garage. Around that same time, he was known in the neighborhood as the kid who could fix your broken TV; he lured his customers in by charging only 50 cents for opening up the set, and he then inflated the price of the vacuum tubes to get it running again.
His father, a cement contractor, died when Nolan was 15, and the teen briefly ran the business. After high school, he enrolled at Utah State University and then transferred to the University of Utah in 1963. There was no computer science department at the U when he arrived (computer graphics pioneer David C. Evans BA’49 PhD’53 was hired in 1965 to start the program), so Bushnell BS’69 got his degree in electrical engineering. Retired electrical engineering professor Carl Durney remembers that Bushnell, the man who eventually helped launch an entire industry, was on academic probation nearly every quarter at the U but was “conscientious and dependable” as secretary of the student branch of the Institute of Electrical and Electronics Engineers.
Bushnell had always loved to play any kind of game, and during the summers when he was in college he worked on the midway at Lagoon amusement park, in Utah’s Davis County. After two summers, they made him manager of all the games. “It was my battlefield MBA,” he says now. When he was manning the booths, he learned how to convince customers to step right up and spend more money. As manager, he learned that if you streamlined the operation, using, say, four balls instead of six to knock down the pyramid of fake milk bottles, the park could make more dollars per hour. During his tenure there, he says, Lagoon’s midway games had the highest revenue-per-customer ratio in the country.
After the U, Bushnell went to work for the northern California electronics company Ampex, where he met Ted Dabney, a more seasoned engineer. Together, in their spare time, they created a video game called Computer Space, their version of Spacewar! They sold it to an arcade-game manufacturing company, Nutting Associates, which produced and distributed it in 1971—making it the first commercially sold, mass-produced video game in the world. It racked up $3 million in sales and made an appearance in the 1973 movie Soylent Green, as a symbol of the future. Still, it didn’t seem like the start of a revolution.
In the 2011 documentary film Something Ventured, Bushnell minces no words about his experience with Nutting: “These guys couldn’t find their butts with both hands. I said, ‘You know, I can run a company, and I won’t make any of the same mistakes these guys are doing.’ ” (Bushnell typically says what’s on his mind. Or, as venture capitalist Don Valentine says in the same documentary: “It takes a while to get used to Nolan.”)
Bushnell and Dabney decided to venture out on their own, and in 1972 they formally incorporated as Atari, named after a move in one of their favorite board games, Go!
The second arcade game they invented was Pong. Like Spacewar!, Pong wasn’t an original idea. Bushnell had seen a similar game called Odyssey, created by inventor Ralph Baer and produced by Magnavox, but, as Bushnell later said, “I didn’t think it was very clever.” So he asked his newly hired engineer Al Alcorn to make something better. (Magnavox later sued Atari; the case was settled out of court.)
Pong included a white square (the virtual ping pong ball), two vertical rectangles (the paddles), and a broken white line (the net). Unlike Odyssey, it included a score box and some squeaky, buzzy sounds. Bushnell and Alcorn then built a small wooden cabinet, attached a Laundromat-style coin box, and took it a few miles up the road to a Sunnyvale, California, bar called Andy Capp’s. The machine didn’t have a name on it, and there were no instructions. A few days later, they got a call from the bar: So many people had played the game, the coin box was jammed with $100 worth of quarters.
So the two engineers built 12 more Pongs. They sent 10 to other bars and one to the giant pinball manufacturer Bally. The company was kind of interested but wanted to see the profit reports first.
“They’ll think we’re lying. Shall we fudge the numbers?” is the way Atari veteran Curt Vendel describes Bushnell and Dabney’s reaction. Vendel, a computer games consultant who owns Legacy Engineering Group, runs the virtual atarimuseum.com and is the author of Atari Inc.: Business Is Fun. So they “skimmed off all the numbers” to make the profits look low enough to be believable, says Vendel. “And still Bally didn’t believe them.” Eventually, Atari itself ended up making and selling the game—a total of 38,000 worth of the arcade iterations and, later, 200,000 of the consumer version, Home Pong.
“I think the technology we developed at Atari made it possible for video games to develop maybe eight years faster than they would have,” Bushnell now says. He credits his engineering education at the U: “I understood not just the mathematics but the real world of how these circuits worked, so I could cut some corners.” It then became a matter of tricking the circuitry to go fast enough, he says, “and using parts way outside spec.” Thirteen years after graduating, Bushnell was awarded the Distinguished Alumnus Award, the highest honor bestowed by the U Alumni Association, in recognition of his accomplishments in the video-game industry.
If Spacewar! was the biplane of video games, Home Pong was the DC-3, available at last to everyone. In 1976, a year after Sears started selling Home Pong, Bushnell sold Atari to Warner Communications for $28 million. In 1977, Time magazine profiled him in a story called “The Hot New Rich.” By then, he owned a Mercedes, a 15-acre estate, a ski cabin, and a yacht, and he was divorced (and single again). That same year, he started Chuck E. Cheese’s Pizza Time Theater, with its arcades and relentless animatronics. Within five years, there were 200 of the restaurants in four countries. As Inc. magazine wrote in 2009, Bushnell “pretty much invented the whole cocky-young-entrepreneurial-genius pose.”
For all his derring-do and confidence, however, Bushnell’s journey since Chuck E. Cheese has been less spectacularly successful—at times beset by bad luck and bad timing. With the Great Video Game Crash of 1983, stocks in game companies plummeted, and Atari ended up dumping 14 truckloads of game cartridges and equipment into a landfill in New Mexico. By then, though, Bushnell had already left the company, his nine-year noncompete clause with Warner Communications was up, and he was ready to get to work on his new ideas. He started a business incubator called Catalyst Technologies and set about developing some forward-thinking products that made him a lot of money but never quite caught on.
There was ByVideo, a touch-screen electronic shopping system (sort of like online shopping before there was a widely used Internet). There was Axlon, which created AG Bear, a talking stuffed toy. There was Etak, a pre-GPS but not always reliable navigation system for cars that was the first to digitize the world’s maps. He sold Etak to Rupert Murdoch for $50 million.
And there was the Androbot. A fan of science fiction since he was a kid, Bushnell was convinced that personal robots could make life easier and more fun. At the 1983 Consumer Electronics Show in Las Vegas, he introduced Bob and Topo, the robots he thought would start this revolution. He had financed the R&D costs himself by taking out personal loans from the investment arm of Merrill Lynch, secured by his Chuck E. Cheese stock. He planned to pay the loans back when Merrill Lynch took Androbot public. Then Merrill Lynch changed its mind on the IPO, Chuck E. Cheese stock plummeted, and Bushnell was deeply in debt. By 1985, he owed Merrill Lynch $23 million.
The ordeal with Merrill Lynch lasted 15 years. By the time it was over, Bushnell had lost his two houses (including an $8 million one in Paris) and all his other assets, he was sued by Merrill Lynch over a $500,000 promissory note, and he lost his backers for his next project, a newfangled restaurant arcade called E2000. He ended up renting a house in Los Angeles and starting over.
“My wife has said she’ll leave me if I ever try another robot,” he says about Nancy Nino, whom he married in 1977. So he has turned his fertile brain to other projects, including the fusion of computers and learning, and he has launched two more companies, Brainrush and Anti-Aging Games.
“We believe we can teach kids 10 times faster,” Bushnell says, with typical bravado, about Brainrush. “We do this through thalamic engagement,” he says, referring to the thalamus, the brain region involved with attention, sensory information, and memory. “Essentially, what you want to do is make sure the person is totally engaged, so that their mind is finetuned to be focused on learning.”
In one game, for example, players master the location of the countries of South America by listening to the name of each country and then clicking on the map until they get it right several times in a row. With another, which is being tested on 100,000 school children, Bushnell guarantees, “Play 15 minutes a day for a month, and you’ll have a 2,000- word Spanish vocabulary.” The game itself creates the learning. There is no “exposition mode,” he says. “You put the kids right into test mode.”
Anti-Aging Games is designed to improve mental acuity. In the Pizza Game, for example, players are asked to remember a list of ingredients even during a distracting interlude where they try to click on colored balls. Bushnell says the game will be marketed largely to senior citizen facilities and through health-care professionals. His own mental acuity, he says, is doing well, and he gives credit in part to his eight children from his two marriages. “I’m trying to stay as current as I can, because I have all these kids, ages 18 to 42. …I can talk tech with any of my kids and generally stay ahead of them.”
He has also written his first book, Finding the Next Steve Jobs, a how-to (just published in February) about hiring and nurturing creative employees. Once upon a time, during the early days of Atari, Bushnell actually hired the real Steve Jobs, after Jobs had dropped out of Reed College. Later, after Jobs had left Atari, he came to Bushnell wondering if he would like to invest in a little home computer he and Steve Wozniak had come up with. But Bushnell and Atari had computer games on their minds, and turned Jobs down.
Bushnell isn’t one to dwell on the millions he might have made, or on failed ventures like his uWink Bistros. He opened three of the interactive entertainment restaurants with touch-screen terminals at each table, on which the diners (in the days before mobile handheld computers) could play video games with each other and watch short videos. But he was never able to franchise them. Then, too, there’s the uncertainty of whether the movie about his life, optioned by Paramount in 2008 and slated to be produced by and star Leonardo DiCaprio, will ever actually get produced.
Bushnell is never short of ideas for new products and companies, and he still likes to tinker. He has a small lab behind the garage of his Los Angeles home. It is filled with so many electronic parts, he says, “I basically could probably build the space shuttle if I had to.”
Four decades after Atari, and at age 70, he is still looking to create the next big thing.
—Elaine Jarvik is a Salt Lake City-based freelance writer and playwright and a frequent contributor to Continuum.