Warshaw always has prided himself on being fast. "I think of myself as a very quick person," he said. "During exams, I wanted to be the first one out of the class. You could freak out the class and ruin the curve by leaving early. It's a great tactic."
As the industry exploded, games were churned out in assembly-line fashion. Quality placed a distant third behind quantity and speed. Clever and witty games gave way to rip-offs, look-alikes and shoddy imitations. Many designers went along, cheerfully cranking out second-rate products. The money was there.
$40,000 Every Three Weeks
"Every three months, I'd hand in a game, and they'd give me a check for $40,000," recalled one former Atari designer. "How could I not like working there?"
There are numerous reasons offered for the swift collapse of the market, ranging from the general shoddiness of many games to the rise of MTV, the rock-video cable television channel.
Home computers, more sophisticated than the Atari-type games consoles, were thought to be the next medium for interactive entertainment. Industry experts expected home computers would generate a new wave of video computer game demand.
"The biggest surprise in retrospect is that the home computer game and software market never materialized to the extent expected," Kirby said.
Regardless, by the end of 1983, it was becoming obvious that the public's infatuation with video games had been sucked into the black hole of indifference. The novelty was never replaced with something more substantial.
But during the industry's peak years in 1982 and 1983, there were all sorts of ways to make money. "If you were at a start-up games company, you could also get stock," said Koble. "When you read in the New York Times that you're going to be worth $15 million, your whole perspective on life changes a little bit."
Conspicuous Consumption
Games designers became the most conspicuous of consumers. Some of them bought multimillion-dollar houses on the beach; indulged in Alfa Romeos and BMWs, sheltered their money in risky tax write-offs, lent money to relatives, acquired unusually acquisitive girlfriends (almost all of the designers were men) and became regulars at Club Med.
One designer went out and bought a million-dollar house on the eve of his company's initial public offering, which would have made him a millionaire. The offering was withdrawn when Atari reported lower-than-expected earnings--and the designer had to give up the house.
"The money has a way of running out very quickly," said Koble. "A lot of us are sadder but wiser."
Take Tod Frye. In 1982, he was struck by financial lightning. Frye was anointed by Atari to do the home video game version of Pac Man--the monstrously profitable arcade video game. Despite technical flaws, the home version of Pac Man was a Gargantuan hit.
Instant Millionaire?
"It's probably the world's most successful piece of software," boasted Frye. "Millions and millions of cartridges were sold."
Valley legend has it that the Pac Man cartridge turned Frye--then 25--into a millionaire. "Tod made a bundle," Warshaw said.
Frye declines to comment. But his earnings allowed him to collect antique jazz guitars and to acquire other items that struck his fancy.
Today, little remains.
He bought some land in New Mexico--but had to sell when the industry collapsed. "I bought an Alfa Romeo Spider convertible," he said, "but I got rid of it."
"I miss the money," he confessed. "I've been very broke before but I'm just now having to seek new sources of income."
His major regret?
"A lack of very conservative tax planning," he said. "Uncle Sam took a good chunk of it away. I didn't take the steps necessary to learn how to handle the assets I acquired. I didn't take the good advice when I got it."
Many designers who saw their net worth shrink to very manageable proportions are now trying to figure out what to do next.
Some, like Koble, have tried to stay in the business. Koble is now a designer with Bally Manufacturing Corp., which makes video arcade games. David Crane, the popular Activision Inc. designer who created the best-selling Pitfall video game, is still at his original firm.
Others have gotten what they call "real jobs" at companies like Hewlett-Packard Co. A handful remain at Atari, which was purchased from Warner Communications Inc. for virtually nothing by Jack Tramiel, former head of Commodore International Ltd. Still others, feeling that lightning can and will strike twice, have joined the legions of venture companies that dot Silicon Valley or are trying to become entrepreneurs themselves.
