Al Alcorn knew he was being wooed. Nolan Bushnell, the tall, brash, young engineer from Alcorn’s work-study days at Ampex, had shown up at Alcorn’s Sunnyvale office. Bushnell was driving a new blue station wagon. “It’s a company car,” he said with feigned nonchalance. He offered to drive Alcorn, recently hired as an associate engineer at Ampex, to see the “game on a TV screen” that Bushnell and Ted Dabney had developed at their new startup company.

The two men drove to an office in Mountain View, near the highway. The space was large, about 10,000 square feet, and looked like a cross between an electronics lab and an assembly warehouse. Oscilloscopes and lab benches filled one area. Half-built cabinets and screen with wires protruding from them sat in another.

Bushnell walked with Alcorn to a sinuous, six-foot-tall fiberglass cabinet with a screen at eye level. Bushnell was proud of what he called its “spacey-looking” shape. He had designed it in modeling clay, and Dabney had found a swimming pool manufacturer willing to cast the design in brightly colored fiberglass. The cabinet housed a shoot-em-up-in-outer-space fantasy game called Computer Space. But Alcorn paid the lovely cabinet no attention, aside from noting the vague stink of the fiberglass. He thought the most interesting feature of this, the first videostygame he had ever seen, was Bushnell and Dabney’s decision to use an off-the-shelf television set as a screen. Had they asked him, he would have said that the thirteen-inch black-and-white General Electric model with balky wiring would be most useful for starting fires.

Watching Bushnell demonstrate the game, Alcorn grew excited. Computer Space was based on an iconic game called Spacewar!, written in 1963 by an informal group at MIT led by Steve Russell. Across the country, programmers played and constantly modified Spacewar! on time-sharing machines in fledgling computer science departments. Most technical people who saw Spacewar! were entranced by its computing implications: it demonstrated that a computer could draw on a screen, calculate trajectories, and detect when a ship was hit.

But Alcorn knew that there was no computer inside Bushnell and Dabney’s Computer Space, even if the promotional literature bragged of a “Computer (Brain Box).” Computers were far too expensive to use in a scenario like this one. Something else must be controlling the patterns and movement on the screen. Alcorn wanted to know what.

He opened the cabinet, glanced at the wiring, and fell in love. Bushnell and Dabney had tweaked the dedicated logic circuits within the wiring of the television so that they could produce the same effects as the time-sharing computer in the original Spacewar! game. “A very, very clever trick,” Alcorn called it. Without a computer, without software, without a frame buffer, a microprocessor, or even memory chips beyond a few flip-flops, Bushnell and Dabney had made a dot appear and move on the screen. Even to Alcorn, who had repaired televisions since he was a teenager and was now working on high-resolution displays at Ampex, the trick seemed “almost impossible.”

about the author

Leslie Berlin is Project Historian for the Silicon Valley Archives at Stanford University. She has been a “Prototype” columnist for the New York Times, a Fellow at the Center for Advanced Studies in the Behavioral Sciences, and a member of the advisory committee to the Lemelson Center for the Study of Invention and Innovation at the Smithsonian’s National Museum of American History.

Alcorn had a gush of questions. Bushnell waited for him to calm down. Then he offered Alcorn a job at $1,000 per month and 10 percent of the startup company that he and Dabney had each kicked in $350 to launch. Bushnell and Dabney called their company Syzygy (a word that refers to the alignment of three celestial bodies) but soon renamed it Atari, after discovering that another company had incorporated under the name Syzygy. In Bushnell and Dabney’s favorite game, Go, “Atari” means roughly the same thing as “Check” in chess. Or, as Bushnell later chose to define it, “Atari means you are about to be engulfed.”

Syzygy, the soon-to-be Atari, designed games for manufacturers such as the pinball giant Bally to manufacture and sell. Syzygy had designed Computer Space, Bushnell explained, but a small operation called Nutting Associates, which owned the office in which they were standing, was manufacturing it. Bushnell and Dabney’s chutzpah impressed Alcorn almost as much as the electronic trick. He had never known anyone who had left a job at a big company to start a new business, as Bushnell and Dabney had left Ampex. (Memorex had spun out of Ampex in 1961, before Alcorn’s time there.) The move felt right, though, he thought—another way in which young, bright people were writing new rules for themselves in the wake of the 1960s. Then again, the salary Bushnell was offering was a 17 percent cut from Alcorn’s Ampex paycheck. The 10 percent ownership stake, he figured, was worthless since Atari would probably fail.

Alcorn’s then girlfriend (and future wife), Katie, encouraged him to “take a chance on a flyer.” After all, they had no kids and no mortgage. And if, as Alcorn predicted, Syzygy/Atari failed, he would find another job at one of the many businesses in and around Mountain View that were hiring electrical engineers.

In the end, Alcorn, the careful adventurer, decided that he “had nothing to lose” by joining Bushnell and Dabney. “Life is short,” he thought. It was time to create his own chances.

A Few Misdirections

When Alcorn reported to work at Atari’s newly rented offices on Scott Boulevard in Sunnyvale, he learned that Bushnell’s entrepreneurial risk taking that had so impressed him was a sham. Though it was true that Bushnell had launched the startup company with Dabney, he had done so with a safety net that Alcorn did not have: he was a full-time salaried employee at Nutting Associates, the company that licensed and built Computer Space. Bushnell’s salary was higher than what he had earned at Ampex—and on top of it, he had negotiated licensing fees from Nutting as an independent contractor.

Bushnell had told his wife that he would be running his own company within two years of coming to California. He decided to consider the Nutting job “kind of a rounding error” that he could “edit out of conversations” when he talked about his new videogame business. “Entrepreneur” sounded “more glamorous,” he later explained when asked why he had not told Alcorn about his job with Nutting. Appearances mattered to Bushnell; his first hire at Atari was a receptionist, his children’s seventeen-year-old babysitter, whom he told to place all callers on hold with a promise to “see if Mr. Bushnell or Mr. Dabney was available,” even if the men were right in front of her. Years later, he would call his early success in business “a matter of being enthusiastic and glib.”

Alcorn soon learned about a second misdirection. Bushnell and Dabney had built Computer Space using spare Ampex parts. Before Alcorn had joined Atari, he had asked if the cofounders had offered the game to Ampex, which likely had rights to it. Bushnell had assured him that Ampex had turned down the offer. Now Alcorn learned that Bushnell had never offered Computer Space to Ampex. (“I may have told Al that I did [approach Ampex],” Bushnell told me. Bushnell’s boss, Kurt Wallace, who would have been the one to receive the licensing offer at Ampex, told me that no such offer was made.)

Soon Bushnell misled Alcorn a third time, though  Alcorn would not know it for weeks. Bushnell told his new engineer to build a Ping-Pong game for a contract with General Electric. He described how he wanted the game to look, specifying details down to the line dividing the screen and the rectangular paddles on either side. The game needed to be cheap, he said, and ideally, it would contain no more than 20 chips. It needed to use the clever video-positioning technique that Alcorn so admired.

Alcorn, determined to impress General Electric, drove to a department store on El Camino Real and bought its best black-and-white television. Back at the office, he designed segmented paddles, with each segment sending the ball careening back at a different angle. The sync generator inside the television, he discovered, already contained certain tones, and with a bit of manipulation, he came up with a satisfying pong sound when the ball hit the paddle. He configured the game so that play would speed up after a few rallies. He decided not to try to fix a bug that kept the paddles from reaching the top of the screen, since it meant that a ball could slip above or below even the most skilled player’s reach, making for a more challenging game. When Alcorn went to the founders for additional ideas, Bushnell pushed for sounds of crowds cheering for good shots. Dabney suggested boos and jeers for misses. It was a perfect encapsulation of the differences in the two men: Bushnell all enthusiasm, Dabney more guarded.

After only three months, Alcorn had a working prototype of the game, which either he or Bushnell named Pong. (When asked in 2016 who had come up with the name, Alcorn and Bushnell each pointed at the other.) Alcorn thought the game played well, but he worried that he had failed in his assignment. With more than 70 chips, rather than the 20 Bushnell had requested, there was no way the game would meet General Electric’s specifications.

Telling Bushnell that Pong was finished but too complex, Alcorn offered to redesign it. Bushnell suggested that they play. He had played the game while Alcorn was developing it, but this time, he grew increasingly excited with each rally. Pong was a “great game,” he declared. The phrase had a specific meaning for Bushnell: easy to learn but hard to master. When Alcorn again worried aloud that General Electric might reject the game due to its high chip count, Bushnell seemed to smile to himself.

Then he let Alcorn in on a secret: there was no General Electric contract. Bushnell had lied. Pong was an in-house exercise that Bushnell had thought would help Alcorn master the video-positioning trick.

Alcorn was surprised but not angry. He would feel the same way three years later when he learned that Bushnell had been able to describe the Ping-Pong game he wanted in such fine detail because he was describing a table tennis game sold by Magnavox for its Odyssey system. In essence, he had assigned Alcorn to reproduce the Magnavox game. “It’s like the movie The Producers, you know?” Alcorn reminisced years later. “We’re going to steal this idea from Magnavox, but it’s a turkey so what’s the problem? [But] all of a sudden it’s a success.” (Magnavox later sued Atari for patent infringement, eventually settling out of court.)

Bushnell’s misdirections and exaggerations freed Alcorn to achieve technical feats he otherwise would have talked himself out of attempting. “‘It can’t be done! You don’t want to do that!’: I used to say that a lot in my life,” Alcorn later explained. “I fortunately had Nolan to goad me into doing it anyway.” Alcorn, who had the technical skills to build just about anything but was not a dreamer as a young man, needed someone like Bushnell to spark and channel his talent. Bushnell recorded so many new ideas every day that little sheets of paper covered in his scrawled hand-writing regularly dropped from his pockets.

And Bushnell, with his nearly limitless imagination and more limited technical ability, needed Alcorn to help realize his visions. “Nolan is a dreamer,” Alcorn says. “I get the dirty end of the stick and have to make these things happen.”

Pong Overfloweth

Far from the elegant sculpted fiberglass that encased Computer Space, Pong’s cabinet was a simple wooden box painted orange, with two silver knobs to control the on-screen paddles. A metal panel with P-O-N-G on the front offered the only nod to aesthetics. Onto the side of the box, Dabney welded a coin slot of the sort used in Laundromats and kiddie rides.

Alcorn connected the prototype board to the black-and-white television, shoved the entire contraption into Dabney’s cabinet, and drove with the founders to a nearby bar. Andy Capp’s Tavern was dim, smoky, and, like many bars in Sunnyvale in the summer of 1972, notable only for cheap beer and pinball machines. Bushnell and Dabney knew the owner. Atari ran a small side business servicing pinball machines for a percentage of the take, and Andy Capp’s was a customer.

The three Atari employees plunked Pong down on a decorative barrel. It was not much to look at, particularly next to the slickly packaged, blinging and flashing pinball machines and the beautiful Computer Space Bushnell had convinced the bar owner to put on the floor.

Nonetheless, two guys soon separated themselves from the crowd of muttonchopped men at the pinball machines and began inspecting Pong. After a minute, one man dropped a quarter into the coin box.

The prototype Pong had no directions, but the players figured it out. They seemed to enjoy their few minutes of playing, their heads pushed together in front of the screen.

When the game ended, they did not put in another quarter. They walked away.

Bushnell stood up. He had to go talk to those guys, he said. He wanted to know how they’d liked the game. Alcorn followed him across the bar.

Bushnell said hello to Pong’s first-ever paying customers and then, nodding toward the game and keeping his voice neutral, asked, “What do you think of that?”

“Oh, yeah. I’ve played these things before,” one player replied. “I know the guys who built these things.”

No one corrected him. There was some satisfaction in having built a game so cool that people were pretending to have a connection to it. “Watching people play your game,” Bushnell later explained, “is like getting a standing ovation.”

About a week later, the bar’s manager called Alcorn. There was something wrong with the Pong machine. Alcorn drove over in his secondhand ’63 Cadillac Fleetwood and was greeted inside the bar by a small group of Pong fans. Explaining that he would need to play a few games to diagnose the problem, Alcorn bent to unlock the coin box so he could throw the inside switch that would grant unlimited free games.

As soon as he pulled the door open, he saw the quarters. Coins had filled the coffee can that served as a coin box and overflowed onto the wooden floor of the cabinet. There had to be $100 in quarters. Pong had not been starting because the coin box was too full to trip the start mechanism.

Alcorn swept up Atari’s half of the take and handed the manager the balance and a business card. “Next time this happens, you call me at home right away. I can always fix this one,” Alcorn promised. His immediate solution was to replace the coffee can with a larger receptacle: a milk carton.

The next step was to build a few more prototype machines and send them to other bars for testing before deciding on the exact features to include in the final version of the game. Dabney found a local shop, P. S. Hurlbut in Santa Clara, to build a freestanding tall cabinet to house the game’s screen and components. Alcorn drove over to Andy Capp’s to get a clearer sense of the demands Pong faced. He counted the coins that had been deposited through the coin slot. If each quarter represented 20 or 30 turns of a knob, Pong needed a potentiometer that could rotate a million times in three months without failing. He set about to find one.

Bushnell, meanwhile, worried about game play. He told Alcorn that the game needed instructions. Alcorn thought that was absurd. The players at Andy Capp’s had figured it out, hadn’t they? But again he decided to play along. He wrote three commands to appear on the game’s faceplate:

• Deposit quarter

• Ball will serve automatically

• Avoid missing ball for high score

Within a few weeks, 10 bars had Pong games. Alcorn, Bushnell, and Dabney were confident that they had built machines that could survive semi-intoxicated players with sloshing beer cups, but they had underestimated the abuse that the games would face. Players chucked pool balls at the cabinets, figuring that if a certain spot were hit just right, the reward would be a free game. The machines shorted out when they were shaken, or even just played often, because quarters would fall on the printed circuit board under the coin mechanism.

Even well-intentioned bar owners broke the Pongs. The owners were accustomed to pinball machines with mechanical relays, flippers, and lights that could be fixed with a screwdriver or a file. If a Pong machine was not loud enough or the screen not bright enough, the bar owners would open the back and start looking for something to adjust. More often than not, they settled on an appealingly accessible dial—and began turning, not realizing it was the game’s external power supply. Every prototype came back to Atari with the power blown. Despite the problems, the Pong machines brought in some $150 per week, roughly three to five times as much as the typical pinball machine. The game was simultaneously intuitive (turn knob, move paddle) and astonishing in 1972, when most Americans had only seen screens display images sent from a broadcast network or projected from slides or a reel of film. Pong was different. It was interactive, viewer-commanded television. Bushnell would grow accustomed to people asking how the television networks sensed that Pong’s knobs had been rotated.

Alcorn began hearing stories of lines outside the bars at nine in the morning—not to drink but to play what Alcorn sometimes called “this stupid Pong game.” In Berkeley, Steve Bristow, an engineering student who had done the same Ampex rotation program as Alcorn (and who had helped build Computer Space using Ampex parts) worked part-time for Atari, maintaining pinball machines and collecting Atari’s weekly take.

He began to fear for his safety after Pong was installed at a bar on his route and his canvas bags earmarked for Atari swelled to hold some $1,000 in quarters. When the police refused to issue him a gun permit, he scared up a novel mode of protection: the hatchet he had used in a previous job roofing houses. He gave his wife the hatchet to carry while he walked behind her with the heavy money bags. “Even in Berkeley, people would part for a crazy woman with hatchet,” he said with satisfaction.

The success of the prototype Pongs lit a fire under Bushnell and Dabney. “We got hit in the ass by lightning with Pong. Holey moley!” Alcorn says. Atari rushed into large-scale manufacturing.

The Rift

Bushnell had never run a company, but he possessed a number of gifts that would serve him well as an executive. He carried himself like a leader. “I expect one day to be working for him,” his Ampex boss had written on Bushnell’s evaluation. Bushnell’s monumental enthusiasm, which led one early videogame journalist to call him “about the most excited person I’ve ever seen over the age of six when it came to describing a new game,” would also inspire customers and Atari employees. Bushnell loved games of all sorts; he even created them out of everyday circumstances. One former Atari employee says, “If there were two flies on the wall, Nolan would be betting on which fly would take off before the other one.”

But Bushnell was alone. He had no mentors, no venture capitalist backing him, no business school professors or consultants watching over his shoulder. There were no videogame industry leaders to ask for help or analysts to measure Atari’s performance against its competitors’. Atari had an attorney who had helped with the incorporation but did not seem useful for much more. Dabney knew no more about business than Bushnell, and Alcorn knew even less.

So Bushnell read books. He consumed business tomes in the same way he had once devoured guides to chess and Go, looking for classic strategies and unexpected moves. He read about how to name companies and how to find customers. In essence, he decided that if videogames could be a big business, then business could be played like a big game. He needed to unravel the motivations of all the players: the employees, the customers, the suppliers, the banks that granted Atari $2.5 million in lines of credit at usurious rates.

Bushnell put this gamesmanship into practice almost immediately. He talked suppliers into giving Atari between 30 and 60 days to pay for the televisions, chips, harnesses, and cabinetry inside Pong. At the same time, he insisted that Atari’s customers, game distributors who were buying the machines as fast as Atari could build them, pay on delivery. With Pongs selling for roughly $1,100 and costing roughly $600 to build, it was a classic bootstrapping operation: the high gross margin allowed Atari to self-finance its growth. To save the time and expense of posting job openings, Bushnell and Dabney hired manufacturing employees out of the lobby of a nearby unemployment office and from a training center whose president brought in a few students and suggested, “You wanna hire these guys.”

Some 7,000 Pong games were sold in six months—not Bushnell’s 100 per day, but impressive nonetheless. Most Pong games ended up in bars or arcades. But airports, hotels, and high-end department stores that never would have considered a pool table or pinball machine also hosted the game, prized for its relative quiet, novelty, and cutting-edge feel.

Atari moved its manufacturing operations to an abandoned roller skating rink in Santa Clara. Alcorn, the head of engineering, was working on new games along with his small team of engineers, some of whom were drawn to the company because it was one of the few places doing computer graphics work with no connection to the military. The war in Vietnam was still raging, and there were also mounting concerns about President Nixon’s involvement in the break-in at Democratic National Committee headquarters at the Watergate office complex.

Steve Bristow, the former ax-wielding Berkeley student and an excellent engineer, had come to work full-time at Atari as soon as he received his degree. Alcorn and Bristow wore their hair and beards long and their pants bell-bottomed, but they saw themselves as professionals in a sophisticated engineering operation. When their workdays ended, they went home to their families.

That kind of professionalism could seem unusual at Atari. Pong was born into an industry already censured, or even banned, by polite society. The game was classed with pinball machines, and in 1972, pinball was still illegal in New York and had only recently been legalized in Chicago. Pinball machines were considered games of chance with a “payout” in the form of a free game: a small step removed from gambling. Even as the occasional Pong sneaked into a nice lounge, the seedy feel of sticky bar stools and dingy pool halls hung over the videogame industry. The first major profile of Bushnell, written by Alcorn’s fraternity brother Bob Wieder, appeared in the skin magazine Oui. Alcorn had a gun pulled on him by a distributor who claimed that Pong was encroaching on his territory. At one trade show where Atari displayed its games, another product on offer was “The Duke,” “the First, Original, And All New Adult Movie Machine.” For a quarter, a patron could step into a phone-booth-like cabinet (designed for “ease of cleaning”), shut the door behind him, and watch a short 8mm film in privacy.

One man was quietly unhappy within the frenzy that was Atari: cofounder Ted Dabney. He felt overlooked and underappreciated. Bushnell referred only to himself as Atari’s founder, as if Dabney had not been there since the beginning. Bushnell patented the video-positioning technique that so impressed Alcorn without informing Dabney or including his name on the application. Dabney felt that the ideas behind the technique were at least as much his as Bushnell’s. Bushnell asked him to take a low-level job without direct reports and kept him out of important meetings.

In March 1973, Bushnell called Alcorn into his office. Dabney was there. With Alcorn looking on, Bushnell began hurling basic questions at Dabney, who ran manufacturing. What are our run rates? What’s the total manufacturing capacity? How does this week’s performance compare to last week’s? Last month’s?

Alcorn was surprised and heartbroken to see that Dabney had no answers. “That was a very sad moment. I really loved Ted,” Alcorn recalled years later. (“I engineered that epiphany on Al’s part,” Bushnell says with satisfaction.)

Dabney left Atari that month. He says he quit. Bushnell says he was fired. Either way, once the severance paperwork was signed, Dabney disappeared from Atari history. Until recently, almost every interview and article about the company identified Bushnell as Atari’s sole founder.

From TROUBLEMAKERS: SILICON VALLEY’S COMING OF AGE by Leslie Berlin. Copyright © 2017 by Leslie Berlin. Reprinted by permission of Simon & Schuster, Inc.

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