Back in 1978, I was admitted to Northwestern Polytechnical University.

Chapter 291 Atari Gets Caught in the Crossfire and Senses Crisis
Sunnyvale, California, Atari headquarters.

"Bushnell, in Boston, a brand new home video game console and cartridges have appeared."

Nolan Bushnell looked up at the person who walked in: "So what? Do you think they can shake our market?"

Nolan Bushnell was born in 1943 into a middle-class family in Utah. From a young age, he enjoyed tinkering with various inventions. After graduating from college in 1968, he did not join the Disney Company that he had hoped for, but instead went to a company that developed video and audio recording equipment. There, he met Ted Dabney, and the two hit it off immediately, sharing similar interests and exchanging their brilliant ideas.

In 1972, the two founded Atari at Bushnell's home. The name is derived from the Go term "to capture," which simply means that they were just one move away from winning.

They developed their first commercially successful video game, Pong, which earned them their first fortune. Later, due to intense competition in the arcade market, they shifted their focus to home video game consoles and even secured investment from Warner Bros. From then on, Atari began its glorious journey.

Atari is now the market leader, holding over 80% of the market share! Even WarnerMedia's stock price is closely tied to them; if anything unexpected happens to them, WarnerMedia's stock price will plummet.

Unfortunately, his former partner, Dabni, left the company after receiving $250,000 from the sale of his shares. Now, standing in front of him was Howard Scott Warsaw, a development engineer from Atari.

This guy is a real pro. He can do whatever the company asks for without delay. At the same time, he keeps a close eye on the market, and when he discovers any new developments, he comes to Bushnell to discuss them as soon as possible.

Clearly, Bushnell was unaware of the crisis.

"We haven't bought their game console yet, but according to some media reports, this Oriental game console has excellent performance, exquisite graphics, and a rich selection of games..."

"What content?" Bushnell was intrigued. If he could find any potentially infringing content in the other party's game, he would sue them in court!
Bushnell was very concerned about this. After all, when Atari was just starting out, many of its ideas were copied from others. After being discovered, it began to restrain itself. In recent years, however, as they have focused on originality, a large number of products that copied their games have appeared. Atari's legal department has been going all out to crack down on these copycat products.

Warsaw shook his head: "No, this game is their original creation, and the content is very wholesome, with no violence or pornography. It's perfect for children aged 6 to 14, and even young people enjoy it..."

The target audience for home video game consoles is actually the children at home. Older children will choose to play arcade games outside. Over the years, news of parents criticizing the content of these games has become commonplace, with sexually explicit and violent content causing dissatisfaction among many people.

But without these things, how can we attract people?

At this point, Bushnell frowned: "Immediately get the marketing department to buy back the game cartridges and consoles, then we'll study their approach and create a similar game!"

"Imitation?"

"That's right, since theirs is free of pornography and violence, yet still manages to attract people, then of course we should copy it!"

"Ok."

Boom boom boom!
Footsteps sounded.

"Report! We've already bought a set on the market!"

The marketing department acted quickly, fully demonstrating the efficiency of Atari, a mature and monopolistic company.

The game console was plugged into the office TV, and after the static on the screen, it started to clear up.

The moment Warsaw saw the image, his expression turned serious.

The scene is incredibly vibrant! Although he didn't count them precisely, there are definitely more than 64 colors in the picture!
This performance is something Atari's game consoles can't match!
Their graphics display uses 8-bit units and only has 2KB of video memory. Therefore, such a game console can only store a maximum of 64 colors. The graphics in front of us are so colorful, at least four times that of theirs!
Putting aside the game itself, the hardware is already far inferior!

"This resolution is amazing! I can barely see any jagged edges on the graphics!" Bushnell exclaimed in surprise. "Shut down! Let's take it apart and see what kind of hardware this machine uses!"

Atari makes game consoles, but they don't manufacture chips. Fortunately, Silicon Valley can supply all kinds of chips; they can get whatever they want. Now...

With the screwdriver spinning rapidly, the game console's cover was quickly removed, revealing a dazzling array of circuit boards inside. However, Warsaw immediately recognized the main chip among them.

Huaxin No. 1, the square character of the East, this important chip is produced by the East. Moreover, unlike the ordinary two-sided pin lead method, this chip is square-shaped with pins all around. There are probably seventy or eighty pins in total, which is enough to show how powerful the chip is!

The atmosphere in the office instantly fell silent.

"Go to Silicon Valley immediately and find the most advanced chip manufacturing companies to see if they have similar chips! Damn it, we have to finish the R&D and mass-produce them before Christmas!"

They can make up for their software shortcomings by copying others, but if they fall behind in hardware, they're completely behind, and they have to catch up as soon as possible!

If the East can produce this kind of chip, then the United States should have it too, and it should be even better!

Warsaw took a deep breath: "I'm afraid it will be very difficult!"

"why?"

"If Intel has fallen behind, what company can be stronger than Intel?"

They originally thought that Intel's decline would only affect the computer industry, but unexpectedly, disaster struck them while they were sitting at home!
Silicon Valley.

The past few days have been overcast, which has put people in a bad mood. Grove has also been getting increasingly angry. He keeps pushing for progress, wanting the 386 to be finished within a month. This is clearly beyond their actual capabilities. Even if they became tireless machines, they still couldn't design it.

On this day, Grove had just arrived at the company and hadn't even started his inspection when he was stopped by the pretty receptionist.

"Mr. Grove, someone is looking for you."

"Who goes there? Unless you're here to buy chips, I won't see you."

"They are indeed here to buy chips."

"Really? Have them come to my office!"

Grove walked into the office, sat down, and looked at the person who came in through the door. It was actually... an old acquaintance?
"Bushnell, what brings you here? Warsaw, it's been a long time!"

At this moment, Grove was filled with excitement. How come he hadn't thought of that!
Game consoles of this era are still using 8-bit processors, which are outdated. It's definitely time to transition to 16-bit. Our own 286 processor is absolutely the best choice for their game consoles! Even if we can't break into the PC market, surely we can with game consoles?

With Atari's market share, Intel's 286 processor could easily sell for several million units, right? This order saved Intel!

only……

Is the price acceptable to the other party?
Home game consoles are generally priced at one or two hundred dollars, since they are for entertainment, while the processors themselves cost three or four hundred dollars!

High-end, high-end gaming console!
In that instant, Grove had already imagined many scenarios, but unfortunately, they were all wrong.

"Grove, my friend, we have come for help."

"Tell me! We, Intel, are the largest chip company in Silicon Valley. We can definitely help you."

"We... need an advanced graphics display chip, with a resolution of 320x240, 16-bit color depth, and a refresh rate exceeding 30 Hz... Grove, are our requests reasonable?"

Grove's eyes widened: "We manufacture general-purpose processors, and you're asking us for display chips?"

Are you going to the water company to pay your electricity bill?

"Yes, it's about the display chip. For game consoles, content development isn't difficult; all you need is a cartridge. However, upgrading the game console requires advanced chips. Currently, our game consoles use the most advanced chips from Silicon Valley, but they still can't meet the requirements. So, we hope to come to your company for a look."

"Upgrade your game console? You're the industry leader, your consoles should be the best, why would you need an upgrade?" "Yes, we thought we were the leader, but then a brand new console suddenly appeared, its performance far surpassing ours..." Bushnell sighed, "So, we hope to purchase advanced display chips from you. You should have the capability to develop them, right?"

Grove sighed inwardly. If it were before, they would definitely have agreed, but now... they had to focus all their efforts on developing the 386, which was related to Intel's future. So, they decided to forget about the game console-specific display chip.

"Sorry, Intel doesn't have that research direction at the moment. But you could try our 286 processor. This 16-bit processor can take your game console's performance to the next level..."

Selling 286!

Warsaw shook his head: "No, no, we need a dedicated image control chip, not a general-purpose chip. As for the processor, an eight-bit one is enough."

The central processing unit (CPU) is mainly responsible for calculating various actions, while the image control chip (ICC) is responsible for rendering various images. To improve the quality of images, the performance of the ICC must be increased!

Unexpectedly, Intel also refused to help. In that case... who else can we turn to for help?
“Let’s go.” Bushnell stood up, his eyes filled with dejection.

"Gentlemen, shall we talk some more?"

"No need, you're all busy too. After all, you're not having an easy time either, given the suppression by Eastern technology."

"Wait, are you facing a challenge from the East?"

"Yes."

After seeing Bushnell off, Grove finally managed a rare smile.

Great, fantastic! It would have been really frustrating if those Easterners had continued developing Loongson. But they've turned their attention to gaming consoles, giving Intel a chance to catch up. We need to hurry and try to catch up with Loongson!
Back in the car, Warsaw asked with a complicated expression, "Bushnell, where do we go next?"

“Boston, find Pacific Trading Company!” Bushnell said firmly.

"Looking for them? What for?"

"Let's talk about cooperation!"

Bushnell believed that nothing was off-limits for negotiation, after all, it was all business. If he couldn't negotiate well himself, he could always get Warner Bros. to negotiate!

Just when Huaxin FC was showing signs of rising, they were acquired!

Boston.

In the blink of an eye, half a month has passed, and the queues at the entrance of Pacific Trading Company have not diminished at all, but have even become more intense. People start queuing before dawn every day, and by the morning, the end of the queue stretches out into the street!
Northwestern Polytechnical University is already operating at full capacity, but it still can't keep up with the huge demand here.

Third floor, office.

“President Yang, we’ve already started shipping game consoles by plane, but we still can’t keep up with the demand!” Daisy, Yang Duo’er’s trusted assistant who was transferred from Europe, said, “Production in the East hasn’t kept up either. After all, nobody realized it would be this popular.”

"Yes, this was just a trial run. I didn't expect it to be so popular. But... don't worry, production capacity over there will steadily increase. We expect to produce two million units before Christmas, which is enough for us to capture the market."

At $199 each, two million units, that's four hundred million dollars! A fantastic start for the US office!

Yang Duo'er was very happy.

Liangzi is in charge of research and development, while I am in charge of production. Although the couple doesn't see each other often, Liangzi won't like someone who follows him around. I have to be able to help Liangzi's career a lot!
“If we want to sell two million units, one store won’t be enough. So, should we open branches in different states or find distributors?” Daisy asked.

Their store is mainly used to expand brand awareness. With so many people queuing outside, they can only sell one or two thousand units a day. To reach the level of a million units, they need to expand their reach.

Boom boom boom!
"Come in!"

"Mr. Yang, two people have come downstairs. They say they are from Atari and want to discuss cooperation with you."

Yang Duo'er nodded: "Okay, let them in."

Daisy stood up to say goodbye, but Yang Duo'er kept her there: "In the future, I may go to Europe or the East. You will be in charge of staying here. Today's confrontation with the game console giant, you watch from the sidelines and learn a lot."

"Yes."

Bushnell and Warsaw walked in with mixed feelings. They saw a long line of people buying game consoles, and what surprised them most was that some people had flown in from other states, bought the consoles, and then flew back.

This kind of scenario only happened when Atari released their first game, and it hasn't happened since. In recent years, everyone has been saying that the game market is saturated, but in reality, it's clearly the game console technology that needs to be improved!

These Eastern game consoles are truly a love-hate relationship!

"Please have a seat, both of you. You are industry giants and role models for us. We look forward to your guidance during this visit."

No matter how fiercely they fight behind the scenes, on the surface they must still be amicable! The kind of scene where shrewish women yell in the street is too low-class.

Daisy deftly poured coffee while observing and learning. Lillian was already capable of handling things on her own, and Daisy needed to grow quickly as well.

"We're not here to offer advice, we're here to collaborate. Your Huaxin FC and the accompanying Mario game are truly ingenious!" Bushnell said. "However, you clearly have limited production capacity and can't supply the goods. Could you let us act as your distributor? Atari will be responsible for production and sales, and you just need to take the money."

Just now, Daisy was talking about insufficient production capacity and sales channels, and the other party came to discuss this issue. It seems that the other party is a very experienced businessman!

Daisy put down her coffee, stood aside, and continued to listen.

"I'm afraid this won't work."

"why?"

"Because our Pacific Trading Company is responsible for sales, our goods are produced by upstream suppliers. We have no right to hand over production to others. As for sales... Atari has also penetrated the market into various shopping malls. It seems that we don't need to go through you to supply goods to shopping malls, right?"

Back when Nintendo entered the US market, it couldn't actually sell its products, so it had to partner with Atari. However, before the cooperation agreement was finalized, Atari went bankrupt, leaving Nintendo to sell on its own. As a result, the market was in a vacancy, and the product became a huge hit.

Now that the reputation of Eastern game consoles has been established, there is no need to seek cooperation with Atari anymore. Cooperation is only possible when there is an equal footing. Atari is so high and mighty that any so-called cooperation would actually just mean being acquired.

"Moreover, we are afraid of antitrust investigations."

Bushnell's face darkened.

“Ms. Yang, you should know that we are backed by Warner Music Group. In the American entertainment industry, Warner Music Group is a giant. Offending them…”

“We only sell home computers and don’t deal with the entertainment industry,” Yang Duo’er said. “Mr. Bushnell, you should know that not long ago, Intel in Silicon Valley wanted to sue a university in the East, but it all came to nothing. So… we are not afraid of fair business competition, nor are we afraid of malicious means. You just said that you came here to discuss cooperation, but now, I am very disappointed.”

"Could you sell us the Huaxin No. 1 chip inside?" Warsaw asked.

Yang Duo'er smiled and said, "This gentleman speaks so kindly. It's not impossible for you to purchase chips, but... the production capacity over there is limited, and I'm afraid it won't be able to supply them. After Christmas, when the production capacity becomes available, you can have as many as you want."

The Christmas market is something we absolutely cannot let slip away!
(End of this chapter)