Bushnell, Nolan

(1943-)
PlayNet Technologies

Overview

Nolan Bushnell is one of the most active entrepreneurs of his time. Nicknamed "King Pong" after the hugely successful table-tennis video game he invented in 1972, Bushnell has founded more than 20 companies, including Pizza Time Theaters and their most famous creation, Chuck E. Cheese. For all of his success in establishing companies, Bushnell had a spotty record of long-term corporate growth. Several of his companies failed and he earned a reputation for losing interest in those that did succeed. Despite this, he remained one of the great creative forces in Silicon Valley's competitive atmosphere.

Personal Life

Nolan Bushnell was born in Ogden, Utah in 1943. His father, a cement contractor, died when Bushnell was 15 years old. Bushnell stepped in to complete his father's remaining contracts, earning his first exposure to the business world. As a teenager, Bushnell worked part-time in an amusement park, eventually becoming a manager.

Bushnell had gotten his creative start several years earlier. As he told interviewer Tenaya Scheinman with The Tech Museum of Innovation, "The spark was ignited in Mrs. Cook's 3rd grade class when I was assigned to do the unit on electricity and got to play with the science box. I went home and started tinkering and never stopped." At times Bushnell's experiments ignited more than a few sparks. In the same interview, he told of the time that he nearly set his family home on fire with a liquid fuel rocket mounted on a roller skate.

Bushnell attended college at the University of Utah, where he earned an engineering degree in 1968. In college, he played tournament chess and tournament Go, a Japanese strategy game. Go would later play a key role in his professional life. He spent his rare free time playing with computers and was introduced to computer graphics by one of his professors. While he says he was a good high school student, he did not do as well in college. Between his budding business ventures, his job at the amusement park, and his fraternity, Bushnell's grades suffered.

Bushnell married twice and has eight children. He enjoys spending time with his children and he plans to spend time alone with each of them in Europe. Bushnell has given each of his children their own computer because he firmly believes in promoting computer literacy.

Career Details

Bushnell originally wanted to work for the Disney Company, because he considered it, in his words, "A cool place to work." Disney was not interested. Instead, he became the games manager with Lagoon Corporation inSalt Lake City. After two years, he moved to California and became an engineer in the Advanced Technologies section of Ampex Corporation. His keen interest in games grew when he learned of a game developed at MIT called Spacewar. The game was popular among engineering students, but Bushnell saw larger, commercial possibilities.

In 1971 he created his first game, Computer Space. It failed largely because it was too complex. Bushnell told New York Times Magazine, "All my friends loved it. But all my friends were engineers. The beer drinkers in the bars were baffled by it. I decided what was needed was a simpler game." That "simpler game" would be Pong.

He financed his research by leasing pinball machines and through consulting work. But he was unable to sell his idea to a single amusement company. Undaunted, Bushnell decided to form his own company to manufacture the game. With his partners, Ted Dabney and Larry Bryan, and an initial investment of $500, the company was launched under the name Syzygy. That name, however, was already taken and they eventually turned to one of Bushnell's favorite games, Go, for inspiration. The name they chose, Atari, means "prepare to be attacked" in Japanese—a smart choice considering the astounding success their Pong game would have.

Within two years, over 100,000 copies of Pong—an electronic version of table tennis—were sold, primarily for bars and nightclubs. The video game phenomenon was born. But Atari was unable to keep up Pong's popularity. Demand was so great that competitors quickly produced their own versions of the game, and counterfeit versions dotted the market. Other problems soon surfaced. The company was frequently short of cash, harming its ability to meet demand and to create other games. By 1974, Pong sales began to slide. Atari's follow up, a race car game called Gran Trak 10, was slow in development and took a long time to gain popular acceptance. In the meantime, the financial woes of the company continued to mount. Bushnell told Time magazine that "The machine was selling for $995 and costing $1,100 to build. We were shipping a $100 bill out the door with every unit."

Bushnell knew that Atari could survive only if it continued to build more and different products. He looked to arcade games and home video games. The company soon plunged into the home game market largely because, as Bushnell told Business Week, "(they) turned out to be ready first."

Once again, demand outstripped Atari's ability to supply, and Bushnell decided that his only option was to merge Atari with a larger company. In 1976 he sold Atari to Warner Communications for $28 million dollars. Bushnell agreed to stay with the company, but not for long. As he told Tenaya Scheinman, "I was exhausted. Atari was an all-consuming entity. And part of it was this chase for capital, this quest for payroll. So to sell the company was in some ways a relief. Literally I felt like I had lost it all almost every other month. It seemed like one crisis after another." He left the company after a bitter argument over the marketing of Atari's innovative, new computer system, a "programmable" video set-up that allowed users to change games by inserting different cartridges into the system.

Bushnell's next venture was Pizza Time Theaters. He developed the concept while still at Atari. At an industry show in 1974, he purchased an animal costume for $800. He brought it back to his engineers and asked them to make it sing and talk—his first move into robotics. When development on the new robotic entertainer—named Chuck E. Cheese—was completed, Atari was a part of Warner, who showed little enthusiasm for the project. Only one Pizza Time Theater was allowed to open. Bushnell believed that the idea had tremendous potential, so in 1978, he purchased the rights to the project from Warner and set out on his own.

Chronology: Nolan Bushnell

1943: Born.

1971: Debuted "Computer Space" video game.

1972: Founded Atari.

1972: "Pong" released.

1976: Sold Atari to Warner Communications.

1978: Opened Pizza Time Theaters (Chuck E. Cheese).

1981: Founded Catalyst Technologies.

1984: Resigned from Pizza Time.

1996: Joined Aristo International (now PlayNet Technologies).

Bushnell wanted his new company to rival McDonald's and Disneyland and he began to rapidly expand. The restaurants allowed customers to play video games, watch movies, or view a show put on by such robotic entertainers as Madame Oink, Harmony Howlette, or the proto-type Chuck E. Cheese while waiting for their food. In its first year of operation, Pizza Time earned $347,000. By 1982, revenues mounted to more than $99 million. But the good times were about to end. As the video game market collapsed, interest in Bushnell's restaurants faded. On top of that, the chain earned a reputation for poor food, bad service, and high prices. To stem the tide of financial losses, the robots were reprogrammed to appeal to a more adult crowd, but it was too late. Bushnell resigned in 1984 and soon afterwards Pizza Time Theaters filed for bankruptcy.

But Bushnell was not out of business. In 1981 he formed Catalyst Technologies, a company that gave financial and other support to start-up companies. It financed a number of ventures, including one called Androbot. Androbot attempted to develop robots for home use, and Bushnell predicted every home would have at least one by the year 2000. For a time, it seemed like Bushnell had gone on to the next "big thing." As John C. Dvorak wrote in Computer Shopper magazine, "Bushnell was a master of the media, and all the trade magazines were talking about Androbot, particular its TOPO and B.O.B products. The TOPO robot was essentially a remote-control robot that functioned on commands delivered by an Apple II computer. B.O.B. (Brains on Board) was supposed to function as an independent device and bop around the house all by itself." The enterprise failed. The robots often broke down and were too expensive for home use. Bushnell put the company up for sale in 1985.

But Bushnell continued to seek new opportunities. The internet's growth and possibilities prompted Bushnell to join with Aristo International in 1996. The idea was to develop interactive stands for hotels, bars, and restaurants that would allow patrons to play games (alone or in teams connected across the internet), send email, order concert tickets, or play digital recordings using either coins or charge cards. Aristo changed its name to PlayNet Technologies in 1998, and asked Bushnell to become its chairman. He declined, preferring to remain director of strategic planning.

Social and Economic Impact

Nolan Bushnell revolutionized the entertainment industry. With Pong, he brought arcade-style games into the home and paved the way for a number of other companies to design, build, and market video games for personal use. With Pizza Time Theaters, he took the video game concept a step further, combining it with his passion for robotics and food to create an entertainment experience for the entire family. While his early successes launched the video game revolution, Bushnell developed a reputation for losing interest in the companies he founded. As Bushnell told Tenaya Scheinman, "I've always got to force myself into completion. I really like being the guy with the machete hacking his way through the jungle never to go that way again. And it's nice to put the team together, get it running, get the structure in place, get finances working, then leave it and sort of pet it every once in a while."

Companies he founded, like Atari and Pizza Time Theaters, both went through hard times after he left them, but they survived under new management. Bushnell even took his children to Pizza Time after he left. As he told Joyce Gemperlein, "They say, you owned this and you sold it? That was really lame!"

Bushnell never lost his interest in children or in learning. Early in life, he wanted to be a teacher but his grades and other interests had always prevented that. Instead, he took on a project to reform the education system. His idea was to reinvent the schools, much as he reinvented home entertainment. He told Joyce Gemperlein, "I think that if properly structured, kids can learn at 200 to 300 times the current speed. So that they can go to school for a couple of hours in the morning and the rest of the time they can be working on projects, having fun." Bushnell believed this technological approach to education would be more important than biotechnology in the next century.

Sources of Information

Contact at: PlayNet Technologies
One Maritime Plaza, 29th Fl.
San Francisco, CA 94111
Business Phone: (415)217-3600

Bibliography

Dvorak, John C. "What Ever Happened to . . . Androbot?" Computer Shopper, July 1997.

Gemperlein, Joyce and Scheinman, Tenaya. "The Revolutionaries: An Interview with Nolan Bushnell." San Jose, CA: The Tech Museum of Innovation, 1997. Available from: http://www.thetech.org/revolutionaries/bushnell.

Martin, Richard, "Comebacks: Cooking Up Second Chances for Glory." Nation's Restaurant News, 23 September 1996.

Contemporary Newsmakers. Detroit: Gale Research, 1985.

"Nolan Bushnell." Gamespot, Inc, 1998. Available from http://www.gamespot.com.

"On Line with Nolan Bushnell." VARBUSINESS, July 1994.

"PlayNet Technologies 10-Q." Washington, DC: Securities and Exchange Commission, 1997. Available from http://www.sec.gov.