“Our claim always was that we’re the real Atari — the original Atari,” Dan Van Elderen of Atari Games told the journalist David Sheff. He had a case. When Warner Communications broke up Atari in 1984, the name and the home computers went to Jack Tramiel, but the engineers who had built Atari’s coin-ops stayed behind in the arcade division. As Atari Games they went on to make Gauntlet, Paperboy and Hard Drivin’. They also spent the end of the decade in court with Nintendo, after their Tengen label copied the chip that locked other publishers out of the NES.
Fast facts
- Formed: 1984, when Warner sold Atari’s home business to Tramiel and kept the coin-op division.
- Owners: Namco from 1985; Warner, Hide Nakajima and a group of employees from 1987; WMS Industries, the parent of Williams and Midway, from 1996.
- Headquarters: Milpitas, California.
- Arcade games: Marble Madness, Gauntlet, Paperboy, Hard Drivin’, S.T.U.N. Runner, Klax, Primal Rage, Area 51.
- Home label: Tengen, set up in 1987 because Atari Games could not sell home games under the Atari name.
- End: renamed Midway Games West in 1999; closed in 2003.
Out of the split
In July 1984 Warner sold Atari’s home computer and video game business to Tramiel and kept the coin-operated game division, Electronic Games reported. Tramiel’s company became Atari Corporation, and the two Ataris, in Van Elderen’s words, were “both of which don’t like each other”. The Atari entry tells the story of the split.
Warner did not keep the arcade company for long. Sheff tells how Masaya Nakamura of Namco, which had run Atari’s business in Japan, had already told his American manager, Hide Nakajima, that he wanted to buy Atari. Nakajima knew the Warner executives and got Atari Games for Namco for “a little over $10 million”, while Warner kept 40 percent. Namco got talented engineers, a factory in Ireland, some 230 staff and a company that was losing money. “We were buying the potential,” said Dennis Wood, Namco America’s lawyer. Gauntlet helped put the company back in shape. Nakamura and Nakajima argued over how to run it, and in 1987 Namco sold out to Warner, Nakajima and a group of employees. According to Sheff, Warner held roughly 80 percent and Nakajima and the employees 20 percent, and Nakajima left Namco’s board to run Atari Games from its headquarters in Milpitas.
The coin-ops
Gauntlet (1985) let up to four players explore a dungeon together, and in Britain it became a home computer hit through U.S. Gold, which signed it along with 720°. Computer and Video Games readers made U.S. Gold’s Gauntlet their Game of the Year for 1986. Paperboy went to Elite Systems, whose compilation adverts carried the line “Paperboy 1984 Atari Games, Inc.” Not every licence was a bargain. Elite’s Steve Wilcox recalled that one of Atari’s agents offered his company 720° for £50,000 up front, and Elite walked away.
Hard Drivin’ (1989) was a driving game drawn in solid polygons, built around how the car handled. ACE noted in January 1990 that Tengen had “concentrated their efforts on making the car handle like a true racing simulation”, and that it looked “very simple — basic geometric line drawings and blocky angular shaped vehicles on the road”. Squeezing it into home computers was hard work. For Domark’s conversions, Mike Day spent his first month optimising the polygon routines for the Spectrum version, which ran at five frames a second; Jürgen Friedrich, who wrote the Atari ST version, said the 16-bit versions ran at eight to ten frames a second, with more than 150 objects on screen. Friedrich expected to write the 16-bit versions of S.T.U.N. Runner next.
In the mid-1990s its arcade games included the fighting game Primal Rage and the light-gun game Area 51.
Tengen and Nintendo
Because Warner’s agreement with Tramiel stopped Atari Games from selling home video games under the Atari name, Nakajima, Wood, Van Elderen and Randy Broweleit set up a new company in 1987 to make games for the NES. Nakajima named it Tengen, after the centre point of a go board. Nintendo accepted it as a licensee, and the licence was signed in January 1988. Tengen’s first NES games, shown at the 1988 Consumer Electronics Show, were Pac-Man, RBI Baseball and Gauntlet.
Nintendo’s licence let it decide how many cartridges each publisher could have made, and in 1988, with chips in short supply, Tengen received a fraction of its orders. By then Atari Games was already working on a way round Nintendo’s lockout chip. By August 1988 it was making NES cartridges with its own chip, which its engineers called the Rabbit. On 12 December 1988 Atari Games sued Nintendo, accusing it of monopolising the market, and announced that it had built a key to “unlock the lock-out system”. Wood asked in a press release, “Who gave Arakawa, Lincoln, and Main the power to decide what software the American public can buy?” Compute!’s Gazette explained the case to its readers in April 1990: Nintendo cartridges had to contain a proprietary chip that only Nintendo made, and Tengen had found a way round it.
Nintendo countersued. In April 1989 Amazing Computing reported that it had filed a patent suit against Atari Games over “those cartridge clones that Atari Games is now manufacturing”. The courts found that Atari Games had not simply reverse-engineered the chip. Its lawyers had obtained a copy of Nintendo’s lockout program, the 10NES, from the US Copyright Office by stating that it was needed for a lawsuit, when no suit had been filed. “Atari lied to the Copyright Office in order to obtain the copyrighted 10NES program,” Judge Fern Smith wrote when she granted Nintendo a preliminary injunction in March 1991, and in 1992 the Court of Appeals for the Federal Circuit upheld it. The two companies settled in 1994.
Tetris was a second front. Atari Games held NES rights to the game through Mirrorsoft, but in March 1989 Nintendo signed for the console rights with the Soviet agency Elorg, and after Tengen shipped its NES Tetris that May, a preliminary injunction stopped it in June. ACE reported in January 1990 that Nintendo had “just won its long court battle with Tengen” over the game, and that “there is still another $100 million lawsuit between the two companies”. ACE described that suit as one over alleged patent infringement; Sheff gives $100 million as the damages Atari Games claimed in its monopoly suit of December 1988. The Tetris legal battles entry tells the full story.
While it fought Nintendo, Tengen was one of the few publishers supporting Atari Corporation’s handheld. In October 1990 ACE found software for the Lynx “very scarce” and reported that “Tengen is the only software developer really supporting the Lynx”, with conversions of Paperboy, Klax and Vindicators due before Christmas.
Time Warner, WMS and Midway
Time Warner took a controlling interest in Atari Games in 1994 and folded Tengen into its new Time Warner Interactive. In 1996 WMS Industries bought Atari Games. GamePro described it that June as “the arcade division of Time Warner Interactive” and “the group that created Primal Rage and Area 51”. Two years later WMS spun off Midway as an independent company.
In November 1999 Atari Games was renamed Midway Games West. Some of its people had been there since the 1970s: Edge reported in December 2002 that Ed Logg, whose career went back to Asteroids, still worked with “the same group of developers from the late ’70s — now known as Midway Games West”, and was finishing Dr Muto for the PlayStation 2, Xbox and GameCube. Midway closed the studio in February 2003. “Both Atari Games and the Midway Games West studio that inherited the company have closed their doors,” Edge wrote in 2005, as Midway’s San Diego studio remade Gauntlet as Gauntlet: Seven Sorrows.
The games outlived the company. In 2005 Elite Systems was selling Paperboy for mobile phones under a licence from Midway Games West. When Midway went bankrupt in 2009, most of its assets, the Atari Games catalogue among them, were sold to Warner Bros.
Sources
- David Sheff, Game Over (1993; GamePress edition, 1999), chapter 11, “The Big Sleep”: Van Elderen’s “the real Atari” and “both of which don’t like each other”; Nakamura and Nakajima; the purchase for “a little over $10 million”, Warner’s 40 percent, the 230 staff and the factory in Ireland, “We were buying the potential”; Gauntlet; the 1987 sale and the 80/20 split; Milpitas; the founding and naming of Tengen; the January 1988 licence and the first three games; the chip shortage; the Rabbit chip by August 1988; the Copyright Office affidavit; the suit of 12 December 1988 and its $100 million claim; Wood’s press release; Judge Smith’s March 1991 opinion.
- Electronic Games, October 1984, p. 13, “Ex-Commodore Pres. Tramiel Buys Atari”: Warner’s sale of the home business and retention of the coin-op division.
- Computer and Video Games’ Golden Joystick Awards for 1986, as set out in the Golden Joystick Awards entry: Gauntlet Game of the Year.
- CRASH issue 50, March 1988, p. 27: Elite’s Best of Elite advertisement, “Paperboy 1984 Atari Games, Inc.”
- Retro Gamer issue 13, 2005, Martyn Carroll, Elite Systems feature: Steve Wilcox on being offered 720° for £50,000.
- ACE issue 28, January 1990: Hard Drivin’ preview and the Domark programmers’ interview (Mike Day, Jürgen Friedrich, frame rates, S.T.U.N. Runner); the Nintendo–Tengen court news.
- ACE issue 37, October 1990: Tengen and the Lynx.
- Compute!’s Gazette, April 1990, p. 10: the proprietary chip, Tengen and the lawsuit.
- Amazing Computing, vol. 4 no. 4, April 1989: Nintendo’s patent suit against Atari Games over its cartridges.
- Atari Games Corp. v. Nintendo of America Inc., 975 F.2d 832 (Fed. Cir. 10 September 1992): the 10NES program obtained from the Copyright Office and the preliminary injunction upheld. https://law.justia.com/cases/federal/appellate-courts/F2/975/832/163650/
- GamePro, June 1996: WMS Industries acquires Atari Games, “the arcade division of Time Warner Interactive”.
- ST Format issue 82, May 1996: the sale of Atari Games to WMS Industries.
- Edge issue 117, December 2002: Ed Logg and Midway Games West, Dr Muto.
- Edge issue 149, May 2005: the closure of Atari Games and Midway Games West; Gauntlet: Seven Sorrows.
- ZXShed issue 1, 2005: Elite Systems advertisement, “Paperboy © Midway Games West Inc 1984-2004… used under licence by Elite Systems Ltd”.
- “Atari Games”, Wikipedia (web, secondary): the 1984 renaming and 1985 formation with Namco; Time Warner’s controlling interest and Time Warner Interactive in 1994; the 1994 settlement; the WMS purchase in April 1996; the Midway Games West name from 19 November 1999; closure on 7 February 2003; release years of the arcade games; the Warner Bros. sale of 2009. https://en.wikipedia.org/wiki/Atari_Games