The Tramiels

[Rybags]

Freddie and the MMUs should be counted as part of the chipset, but they don't really change the end-user or even the programmer's experience for the most part.

 

They were made simply to reduce the component count, so aside from the 130XE banking, nothing much was new.

[Bryan]

Ah yes, we also got a HELP key (and more LED's and F-keys for a brief instant).

[Retro Rogue]

You can do all the R&D you want in a cave. If you don't release it, it didn't happen.

 

Oh hogwash, we have all the materials that document it happening and all the corresponding materials and such. Some were to the point of going in to production with Warner cockblocking it at the last minute and others simply never got out until the crash. You can't state "well they never did anything else and just released the same old thing" as if they sat on their asses and did nothing during all that and then state "well it doesn't count because we never saw the finished product on this" when shown they didn't just sit on their asses. Take the ostritch head out of the hole in the ground, otherwise it sounds childish.

[SpaceDice2010]

The contract that Amiga had with Atari was really a joke. Amiga was so cash strapped that they basically gave the company away with that agreement.

 

They did nothing of the sort. The contract was for Atari Inc. to gain royalty free rights to the chipset (all technical documents held in escrow until the planned meeting in late June) if something happened to Amiga in the interim, as Amiga also had several previous investors higher up the totem who would be divying it up in that case. There was never anything for ownership, as Dave Morse was clear from the beginning his ultimate goal was to build up Amiga to sell it off - which was why only access and licensing was arranged.

 

There were two issues at play at the time - 1. Negotiating the rights to the chip set while Atari was floating them capital or 2. Just paying Atari back the money if they couldn't agree on the terms for the chipset.

 

There was never any agreement on a payback, that was Dave's attempt at backing out, which they wound up settling it out of court with Commodore (since by that time Amiga was a part of Commodore) paying an undisclosed sum for that and several patent violations later.

 

I wouldn't say that Amiga "backed out" of any deal.

 

Of course they did. They lied and stated the Lorraine didn't work right and was scrapped, paid the money back to a befuddled John Ferrand who had just met with Dave earlier that month at CES and thought everything was ok. He even tried to talk Dave out of returning the money when he showed up at Atari Inc. at the end of the month stating they had no interest in screwing up any deals he may have and he (John) wasn't even authorized to accept any check. Then they further lied in court during their testimony by further trying to portray the Lorraine as not working and scrapped.

 

Atari was trying to take advantage of a cash strapped Amiga and Amiga found someone that actually wanted Amiga for more than just the chipset.

 

 

Nope. Sounds like you've been going by RJ Mical's missinformation. This was already covered in the other thread you said you read.

 

We talked to people on all four sides sides, including Commodore, Amiga, Atari Inc., and Atari Corp. people. That includes members of the Mickey team. We recovered internal email and directories of Atari Inc.'s mainframes, engineering logs, and paid for all copies of all the available federal court documents which includes full testimonies and copies of the original agreement in question signed that March for the bridge loan. A good $500 worth of court document copies actually, and that's just the expenses on those documents.

 

You mentioned in your PM to me that you talked to a few Commodore people a few years ago. The problem we found with the Commodore people is they could only go by what they were being fed by Amiga. I.E. any knowledge about the agreement with Atari Inc. was based only on what they were told by the Amiga people, which turned out to be a ruse to get Commodore to give them money quicker. Likewise unequivocally that everything RJ Mical's said on the subject has been fabrication, which matches up with his other statement that between facts and a good story he prefers a good story. He was never involved with any of the negotations and such, which is ironic considering he's been the person a lot of people later relied on for their info.

 

My main issue with all this is that I have yet to see a legally binding contract that Amiga signed saying that they would in fact deliver the chips. I have seen good faith contracts, but even that one imposes certain conditions that are still very murky. None would really hold up in a court.

[+wood_jl]

Fascinating discussion.

 

I know it was frustrating in the old days (I was there) that the upgrades didn't come [for the most part] for the 8-bit and for the ST they were waaaaay too-little/too-late.

 

But as modern retro systems, it's actually cool that they're all the same. With some RAM and a PAL console, I can finally run EVERYTHING. If they had 15 iterations of hardware, running an .ATR would be a whole lot less certain than mounting it with your device and smiling like you do. Likewise, a 1040STf runs most of what you throw at it.

[Retro Rogue]

My main issue with all this is that I have yet to see a legally binding contract that Amiga signed saying that they would in fact deliver the chips. I have seen good faith contracts, but even that one imposes certain conditions that are still very murky.

 

You're saying you paid for the federal court documents that contain the actual signed contract with full terms and payment conditions that were honored with the initial payment? Or are you simply going by the exploratory non-disclosure agreement contract up on Curt's site with your "analysis". I would think the latter, because the material you originlly posted was nowhere from any of the actual documents (in fact again it's from the commonly regurgitated hearsay) while the material you're questioning was taken verbatim from the contracts, other legal documents, and the court testimony all contained in the Federal records we paid for.

 

Once again, they signed a contract for intent of delivery of chips and technical documents put in escrow as collateral, with said contract and the resulting payment legally binding their intent to deliver said chips and sign a licensing agreement upon delivery. The contract is very explicit that if something happened in the interim (i.e. they imploded because of their financial prolems, or something else in relation to their not being able to follow through), Atari Inc. would gain access to said documents and their representative technology royalty free as the agreed upon collateral for the seed money. They tried to get out of said contract by interpreting it to state if they returned the money as a loan they could get out of it and further lied stating they couldn't get the chips to work (while at the same time selling themselve to Commodore based on said working technology), and intending to defraud Atari out of the contract stipulations on collateral. That's why they were sued for breach of contract, of which the court obviously found had merit enough to follow through with a trial which went on for 3 years.

 

None would really hold up in a court.

 

Yet the fact that the court found merit for it as a Federal case, that it went on for three years, and that Commodore settled out of court and paid Atari Corp. money as part of the settlement would state otherwise.

 

Everything was more than laid out in my previous post you quoted, it appears the issue is that you're confused on what the contract was about and what the grounds for breach of contract were about. It certainly was not just about "delivery of chips", they pushed back the deadline for Amiga twice and even (according to the sworn court testimony) were willing to push it back much further if it would help Dave, making the impending delivery a non-issue.

[carmel_andrews]

The Tramiels.....sounds like a pop group....like the carpenters or the everly brothers

[Bryan]

You can't state "well they never did anything else and just released the same old thing" as if they sat on their asses and did nothing during all that and then state "well it doesn't count because we never saw the finished product on this" when shown they didn't just sit on their asses. Take the ostritch head out of the hole in the ground, otherwise it sounds childish.

 

I guess you have no idea what I'm saying. All that engineering is of some little anecdotal interest to a few of us geeks some 30 years later. I guess it's no big deal that no one was ever able to buy any of it as long as you know there was a prototype out there somewhere. Yeah, that makes the C=128 and Apple IIgs seem much less important.

 

 

 

Let me also add: I understand why the Tramiels didn't invest much in the 8-bits since only a new product like the ST would have been competitive enough, but Warner had already fumbled the ball and was trying to jack the 8-bits up to Apple II prices when the C=64 snapped them back into reality.

Edited January 11, 2011 by Bryan

[SpaceDice2010]

This will be an interesting read when it all comes out. However, I really feel that Atari totally blew it by delaying the release of the 7800. Seriously. If that machine had come out nationwide when ready and had the support of Atari then the NES vs 7800 saga would have been much different. Instead it sat in a warehouse. My head is spinning and I am not sure who to blame for the 7800 delay. But it was a big blunder imho.

 

But, one thing that did not help Atari at all was the delays in 7800 games. Even if they could have scored some good licenses would it have really mattered when they couldn't make critical release dates on their software?

[Retro Rogue]

This will be an interesting read when it all comes out. However, I really feel that Atari totally blew it by delaying the release of the 7800. Seriously. If that machine had come out nationwide when ready and had the support of Atari then the NES vs 7800 saga would have been much different. Instead it sat in a warehouse. My head is spinning and I am not sure who to blame for the 7800 delay. But it was a big blunder imho.

 

If you mean Atari Corporation, they didn't blunder anything. It's been discussed at AtariAge many times already. GCC's deal was with Warner, not Atari Inc. As such it (like the Amiga deal and several others) stayed with Warner at the split. GCC was still owed for development of Maria and the 10 launch titles they did. Jack felt Warner should pay, Warner felt Jack should pay if he wanted the console, they haggled back and forth for 8 months until Jack finally sent a check for Maria to GCC in May. Then they started negotiating for the payment of the 10 launch titles, which was settled by August. At which point Jack began wooing Michael Katz from Epyx to come over and head up a video game division to relaunch the 7800. Katz said he would if it could be an electronic entertainment division instead (wanting to go in to other consumer entertainment devices than just consoles), he was on board by late October. Besides setting the $50 price point for that Christmas launch of the 2600jr and still selling regular 2600 console inventory, he began looking to license "hot titles" for the relaunch of the 7800. Only he found most were already exclusively snapped up by Nintendo at that point, which is what lead him to reach out to his previous game industry connections - computer games. Which is what lead to the formerly computer only games being released on the 7800 as well.

 

It's all covered in the 7800 Retrospective I did for RetroGamer magazine this past year if you feel like ordering a back issue from them.

 

But, one thing that did not help Atari at all was the delays in 7800 games. Even if they could have scored some good licenses would it have really mattered when they couldn't make critical release dates on their software?

 

Those were all already locked up as mentioned. Remember, by the mid 80's most of the hot arcade titles were coming out of Japan from Sega, Nintendo, Konami, etc. Atari Inc. in to Atari Corporation had almost a good 2 years with no licensing activity. Which meant by the time they were looking to license two of the major coin players were entering the consumer market here and keeping their IP to themselves, and the rest of the Japanese companies were snapped up by them. So Katz' only choice was to either turn to the estranged coin-op division Atari Games (who were still haggling with Atari Corp. over who owned what patents and other IP at that point), or look for other sources for games. Katz chose the latter for expediencies sake. I asked Katz if the fact that Nintendo had already locked up a lot of the titles set off any bells at that early time and he said no. Nobody in the consumer industry knew who they were or took them seriously at that point, because they hadn't done anything yet here. Even after December, they were just seen as another "johnny come lately" with a small unsuccessful New York testing. (The coverage of the Nintendo test launch in the Consumer Electronics Show press that January verified his outlook as has some of the people I've interviewed).

[toptenmaterial]

yeah but there's no way that the 7800's '86 release was quincidental. jack saw a resurgent console market and wanted in. and yes, the 7800 did do reasonably well but Nintendo owned the market by that point and the rest is history.

[Retro Rogue]

yeah but there's no way that the 7800's '86 release was quincidental.

 

That's exactly what it was, timing. He had intended on using the inhereted assets from Atari Consumer to help with the company finances the entire time. The negotiations for the 7800 went through May of '85 and then the 10 launch game were through August. He approached Katz then for restarting the 7800 as mentioned, he was on board in late October and they were ready to re-announce the 7800 at the January '86 CES and start shipping out the '84 backtstock then, which they did. This was all just explained.

 

jack saw a resurgent console market and wanted in.

 

Nope. As stated he was negotiating for the 7800 rights from August '84 on, already approaching Katz in August '85 after the rights were completed. It had *nothing* to do with a "resurgent market" or Nintendo, that's a myth. An oft repeated myth, but a myth nonetheless.

[toptenmaterial]

that's facinating

[SoulBlazer]

Interesting discussion going on here, and thanks for all involved in it.

 

It IS rather interesting to ask one big 'what if' question -- what if Jack had paid GCC for the 7800 and the launch games right away when he bought his half of Atari, rather then dicking around with Warner, and launched it as intended, in 1984? That two year head start would have been huge, especily if they could lock up some Japanese companies like Konami and Capcom for US rights before Nintendo got them. It's true nobody saw Nintendo as a threat probaly until sometime in 1987, but hindsight is 20/20.

[+wood_jl]

I'm more of a Tramiel admirer than hater; I'm glad he saved Atari long enough to put out several good machines. Obviously, Nintendo's exclusive licensing and retail agreements were hurtful to Nintendo's competitors.

 

But let's not forget that the Tramiels always were - for lack of a more euphemistically-pleasant term - cheap bastards. This is evident in many ways at Atari. It's obvious in the XE keyboards and creaky-cheap cases. It's obvious in the 130XE and XF551 motherboards. It's obvious in the ST sound chip and single-sided drives. It's obvious in the re-releasing of tons of OLD games for the XEGS (and 7800) rather than paying precious money to develop new titles. Tramiel's ways have always been on the cheap. Sometimes that works well (C64) and sometimes it doesn't. There's NO WAY IN HELL Tramiels were going to finance new original software to compete with Super Mario Brothers; it's not even relevant whether or not the 7800 was comparable. If the 7800 had twice the ability of the NES, they still wouldn't have paid for such software development. In the end, "Cheap didn't sell" (quote from an old critical article). It sold to me; I love the Atari stuff a whole bunch. Still it's a point.

Edited January 12, 2011 by wood_jl

[carmel_andrews]

Just to point out wood jl....nintendo's software development/publishing policies only worked to their advantage in the US and asian markets, it worked against them in europe (which is a very different market) and because nintendo weren't getting a look in at the european markets nintendo changed their policies on 3rd party software publishing/development, early 1991

[SpaceDice2010]

I guess my point was the haggling back and forth was a blunder. At the time the US video game market needed a next gen system and the head start that the 7800 would have had would have pretty much sealed the deal.

 

Haggling over the Maria. Negotiating over launch titles. Wooing Michael Katz. This all took valuable time. Apple bought Next and actually had a modern OS in developer's hands quicker than it took Atari to get a system that was already developed (and sitting in a warehouse) to market.

 

But, even IF Atari could have gotten the hot licenses they still had problems getting out the software that they either did release or plan on releasing on time. What good is a hot license if you can't get it out on time?

[toptenmaterial]

if the issue was acquiring the full rights to the 7800, couldn't jack have just released a different console in 85 based on the computer platform?

[+Stephen]

Which platform? The 8-bit line already had the 5200 and the ST series was far too expensive to make a console with.

[Retro Rogue]

I guess my point was the haggling back and forth was a blunder. At the time the US video game market needed a next gen system and the head start that the 7800 would have had would have pretty much sealed the deal.

 

I don't think you understand the financial situation he was in. He had no money when he took over. He had already invested his own money in to the company, did the majority of the Atari Consumer purchase under IOU's to Warner, and took on both the good and bad debt from Atari Inc. in the purchase. The good debt (money owed to Atari Inc.) was theoretically supposed be able to keep the new company afloat (which is why it was given to them) - only they couldn't collect it. In fact they had to get Warner to loan them money that September and by December were already talking to the press about the problems they had with collecting and stating they might use that fact to renegotiate their terms with Warner (since it was of course originally included as an asset in the valuation). That's precisely why they had to rely on the sizeable backstock of consoles and computers they inherited for incoming money during that time and started looking at getting the cost reduced 2600 out the door immediately that August. All this while trying to get their next gen computer out the door as well as make payroll, etc. It's simply amazing he was able to turn this all around to a profitable company and put it in the black (wiping out all debt) by '86/'87.

 

 

Apple bought Next and actually had a modern OS in developer's hands quicker than it took Atari to get a system that was already developed (and sitting in a warehouse) to market.

 

You must be doing that new "fuzzy math". August '84 to January '86 is 1 year five months. The development of OS X was not less than that, the OSX Server didn't appear until '99 and the public beta of the actual OS X didn't appear until late 2000. Likewise, much like the 7800, the OPENSTEP software that OSX Server had been based off of *was already developed*. (The actual OSX beta used the then still in development Aqua UI). Unlike the 7800 however, with Next and OSX there was no question as to who owned what or owed anybody for production costs.

 

But, even IF Atari could have gotten the hot licenses they still had problems getting out the software that they either did release or plan on releasing on time. What good is a hot license if you can't get it out on time?

 

Every company misses release dates for titles at some point, I'm not sure what that has to do with the above. Doing a search, I see nothing in the press that states this as an ongoing problem or a reason for the 7800's eventual 3rd placement. I do however see the actual titles being released being mentioned as an issue when compared against the titles available on the other consoles.

Edited January 12, 2011 by wgungfu

[SoulBlazer]

No money to get the 7800 launched in 1984, huh? I guess that answers my question that I posted in my last note. Its ironic that if they had gotten it out, the money earned (probaly) would have wiped out most of that debt!

 

Makes you wonder what Warner would have done with Atari if Tramiel hadn't wanted to buy it or they didn't want to sell to him. Would they have closed the entire company?

[toptenmaterial]

No money to get the 7800 launched in 1984, huh? I guess that answers my question that I posted in my last note. Its ironic that if they had gotten it out, the money earned (probaly) would have wiped out most of that debt!

 

Makes you wonder what Warner would have done with Atari if Tramiel hadn't wanted to buy it or they didn't want to sell to him. Would they have closed the entire company?

yes. warner viewed atari as a money pit and wanted to wash their hands of it after running it into the ground. the stuff that I've read on these boards suggests that morgan well on his way to creating a leaner, meaner atari, but then wb just panicked and pulled the plug.

[Retro Rogue]

yes. warner viewed atari as a money pit and wanted to wash their hands of it after running it into the ground. the stuff that I've read on these boards suggests that morgan well on his way to creating a leaner, meaner atari, but then wb just panicked and pulled the plug.

 

 

Here's the lawsuit regarding NATCO, that also gives a definition of what NATCO was and how far along it got. Far enough that Atari employees had signed on board and felt there was enough grounds for a lawsuit over the sale of Consumer to Tramiel.

[toptenmaterial]

yes. warner viewed atari as a money pit and wanted to wash their hands of it after running it into the ground. the stuff that I've read on these boards suggests that morgan well on his way to creating a leaner, meaner atari, but then wb just panicked and pulled the plug.

 

 

Here's the lawsuit regarding NATCO, that also gives a definition of what NATCO was and how far along it got. Far enough that Atari employees had signed on board and felt there was enough grounds for a lawsuit over the sale of Consumer to Tramiel.

Thanks, I'll check this out. Hey not to get too off topic, but would the tramiels never entered if atari distributed the NES/famicon?

[Retro Rogue]

Thanks, I'll check this out. Hey not to get too off topic, but would the tramiels never entered if atari distributed the NES/famicon?

 

I really don't think it would have been a factor, you could literally fill in the blank with 7800, NES, or any other 8-bit late gen console, and it would have been the same effect on the actual causes of Atari Inc.'s demise - nothing. Regardless, when they approached Atari and were in negotiations with them they had yet to even finish or release the Famicom in Japan. They were extremely small fish in the consumer electronics industry outside of Japan. A lot of people apply hindsite to what the NES became in '87 onwards vs. what it actually was before.

Edited January 13, 2011 by wgungfu