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Ultimate Gamer: Tell
me about Atari's present position in the market.
Sam Tramiel: We see
ourselves as being one of the major players on the hardware
side and in software as well. Not just the Jaguar but the PC platform as well,
with CD-ROM and diskette software.
Ultimate Gamer: I know
Tempest2000 is being released for the PC. Can you tell me
what you'll be doing with that? It was one of the best titles for the Jaguar.
Sam Tramiel: It sold
very well. One famous analyst got a blister on his thumb from playing it!
It's a great game. It'll soon be out on PC, and there'll be a big promotion on
it.
Ultimate Gamer: What
other Jaguar products will be making it to the PC?
Sam Tramiel: Highlander
will be coming out; there'll be three different games in the Highlander
series coming out on Jaguar and PC. Flip-Out, a Jaguar game, will come
out on the PC.
Ultimate Gamer: There's
an interesting trend we've noticed. We just visited Digital Pictures,
and they don't feel confident putting any support toward any of these console
systems. But
they feel more confident in the PC than anything else. As a matter of fact, all
their products have
sold better on PC than any other platform.
Sam Tramiel: Let's
face it, it's a huge marketplace. You'd be a fool not to pay attention to it.
On the new console side, it's relatively small. There are only hundreds of
thousands.
Ultimate Gamer: At
least they're making 32-bit and above. Install bases are low for everyone.
Sam Tramiel: Exactly, so peopole
are opening their eyes and saying, "We can't ignore this PC
market; it's gigantic. We should be selling out software there."
Ultimate Gamer: Currently the
Jaguar platform has a higher installed base than the Saturn.
Sam Tramiel: Higher than Saturn
but definitely less than 3DO...a lot less than 3DO.
Ultimate Gamer: I'm
told Saturns are selling at a rate of about 700 units nationally per week.
Sam Tramiel: That might be true.
We're a little higher than that. Our big push right now is for
Christmastime. In the summer you don't sell much hardware.
Ultimate Gamer: So this incredibly
explensive Sega system is obviously not cleaning up. You're
ahead of them now. Do you think that some of what you said at E3 is starting to
come true?
Sam Tramiel: We're positive we're
correct: The consumer will not spend that much money on
a dedicated game machine. They just won't. When the Christmas market comes
alive, you'll be
paying $149 for a Jaguar, not $400 for a Playstation.
UG: Do you think that sometimes
people forget that $400 is what someone in, say, the Midwest
takes home in a week?
ST: In Silicon Valley, it's the
same thing also.
UG: Will Atari be doing any price
promotions besides just the regular "low price" of the system?
Any trade-in type things?
ST: No. We've found that people
are reluctant to trade things in on systems today. This goes back
to The Atari Computer lab. We offered people a trade-in: Send in your Commodore
64 or your
old Atari computer, and buy a new ST computer. The answers from hte market study
were,
"No, we won't do that anymore. Our software bases are too valuable to do
that."
UG: I know that you've done a lot
of different promotions, free controllers, free games...
ST: ...and we'll be doing that all
the time.
UG: Could there be another crash?
ST: I don't think that you can
call these things crashes, even the so-called crash in 1983-'84.
It wasn't a crash. That generation of machine had sold its limit. The Atari 2600
sold almost 30
million units. And that was saturation for the marketplace. And then the next
generation took-off.
Between the NES and the 16-bit market there wasn't a big lull, because 16-bit
moved in as 8-bit
moved out. It was rather a smooth move. Between 16-bit and on the next
generation of 32-,
64-bit, there's a lot of confusion in the marketplace. The marketplace is still
there, all those who
play video games. The question is where are they going to play it? On their
existing systems or
with new systems? There's just confusion right now. We think $149 is a very
affordable price.
They won't agonize...
UG: Is
it fair to say that the interactive-games market has matured to the point where
people
spending $6 billion a year are just not going to go away? They're going to buy
something.
ST: They haven't gone away since
the late '70s. More keep on coming.
UG: Is it fair to say that there's
going to be some kind of shake-out.
ST: The industry is going through
a real big shakedown. I don't want to mention names, but other
Japanese companies besides Sunsoft are having significantly hard times.
UG: Getting back to Atari, you'be
made some interesting, rather impressive new appointmets
within the company. I wonder if for the record you could just go over who some
of the new
personnel are, what their function will be, and how will they beef up Atari's
strngth when it comes
to the platform war this fall?
ST: The most important change that
we've made was hiring Ted Hoff. I've known him now for
six or eight years in the industry. He worked at Time/Warner, Atari Games Tengen
division.
He left and worked for Fox. And now he's running our North American operation.
UG: And there are some other
people who came from Sega?
ST: Yeah, John Currell. He's one
of the VPs of Software Development. We've hired a lot of other
Sega people, PA people, all different kinds of levels in the company. Our big
push is getting the
software for Jaguar moving. Before I came here, we were having a review. We have
reviews twice
a week on all our software. The software looks fantastic, our big emphasis, of
course, is software.
We are also working on the Jaguar 2. That's a 1996 and beyond product. The code
name is
Jaguar 2; we might call it something else when it hits the marketplace. But
we're getting ready
for the next generation of this stuff.
UG: I understand that it's
downwardly compatible. No matter how many people try to justify
the fact that 32X and Saturn are not compatible. I think it's a travesty; I
think the consumer feels
ripped-off. I'm a consumer too, not just a journalist.
ST: I'm a consumer also, and not
just the manufacturer of the hardware. And the way the
hardware works sometimes, you have no choice. There are such quantum leaps that
you can't use
the same basic structure for the next generation. In Jaguar 1 and 2, it doesn't
make sense to do it
this way. Maybe three to five years from now there might be some super-duper,
unbelievable stuff
out there to make a much better game. And it can't be compatible. Or keeping it
compatible adds
up to so much more cost that is just doesn't make sense anymore. We're trying to
follow the Intel
paradigm of being compatible for the future.
UG: Anything else you can tell me
about the Jaguar 2?
ST: We actually have the first
working silicon this week. It came in last week. The chips are called
Oberon and Puck. They're characters from A Midsummer Night's Dream.
And the design
team, our guys living here in Sunnyvale, are of British descent, and they call
it "Oberon and Puck,"
and the "Midsummer Project."
UG: How many bits is the Jaguar 2?
ST: It's a 64-bit system. Just
much faster, more use of the 64-bit architecture, runs on a higher
quad speed. Has much more impressive 3-D stuff going on. Beyond Playstation,
beyond Jaguar
today, beyond Saturn today. Just a better system. Using Point-five Micron
technology.
UG: Are you able to quote any
stats about it? Numbers of polygons per second?
ST: Not yet, but very soon we'll
be doing that. It's a "blow your socks off" machine.
UG: Is it a cartridge-based,
CD-based?
ST: I would say so, yes.
UG: Why has Atari not had the kind
of third-party support, even with the lowest licensee fee?
ST: I think that there's a number
of factores. Number one, the third-party people have to take
huge risks with inventory on expensive cartridge stocks. They're really nervous
about getting and
supporting another cart machine, where they have to invest a lot in cartridge
inventories. So we've
made it very simple for a lot of people. Instead of buying, license us, Atari.
We'll do the port and
we'll sell the software. And most people are happy with doing that. Acclaim is
an example of that.
So we're doing it that way. On the CD side, we're shipping our CD player into
the stores on
August 24. We'll see if more third parties come one, because of the risk is much
lower then.
UG: Only about 57cents to actually
press the CD. That's without packaging?
ST: Roughly speaking. You can have
a product finished and on the shelf for under $3. On CD.
For cartridge software, it's getting close to $20 apiece. That's a big software
investment for a lot
of companies.
UG: WIll you see more of these
companies taking a risk once the Jaguar CD comes out?
ST: We think so. We already sees a
few doing that now.
UG: With regard to CD-based games,
do you think it would benefit the industry if CD-based
games were less expensive? The strategy behind the Jaguar is "the least
expensive next-generation
system."
ST: Absolutely, the most
affordable."
UG: Software is still about the
same price. It's really impossible to change the price when it's
cartridges. If it's a CD-based system, would it be possible to price software
less?
ST: I'll be very frank and open
with you. The issue about CD software, the media part of it, the
hard cost is the three bucks. However, the development side of it, typically, is
more than a
cartridge. You've got a much greater amount of space to fill up and make use of.
So the
development costs are three times of those of a cartridge. It is a lower-cost
piece of hardware.
UG: I happen to believe that games
are far too expensive in general. Fifty bucks for a game means
that a lot of people read our magazine to see if it's really worth it, because
that's not an impulse
purchase. I think if games were inexpensive to the point that they become an
impulse purchase,
then the platform that chose to release games at lower prices would be the
dominant platform.
ST: We've found that people want
to buy quality software. If it costs 50 ,60 ,70 bucks, they'll
buy that software. If it's cheap and it's good, then you've got a runaway
winner. People over the
last 15 years have been willing to pay $50 for software. When you look at
inflation, software is
not going up in price. It's been staying no more than $69 at the highest. And
mostly in the 46 to
59 dollar range. They sell very well at that price. There's a limit to how high
you can go. We try
to get them in th e50-plus range, and it works.
UG: I happen to think a lot of the
reason that 16-bit sales have stalled is because you're seeing
bargin bins in front of all these stores, with games: $19.99 or less. No one's
going to spend $60
when they can buy three or more games for the same price.
ST: Well, people still are.
They're paying it for the A-games, you're right/ 16-bit hardware has
reached its saturation point in the marketplace. No one's buying it any more.
And the consumer
is waiting for the next generation to become available. That's what's happening.
UG: You
were quoted in "Next Generation" saying that you
weren't 100 percent happy with all
the games for the Jaguar. I'm wondering what's yet to come, in terms of killer
app that's going to
sell the system off the shelf to the average consumer? I think most people in
the industry agree that
software sells the system. It doesn't matter what the platform is, if there's a
game people want to
play, they'll buy the system to play it.
ST: As long as it's affordable. Rayman
from UBISoft is going into production next week, should
be on the market in September. That's a killer game. We hope we'll have some
jump on the CD
platform. But you can get Rayman for the Jaguar for $49. That should do very
well. Our Brett
Hull Hockey game is coming up this fall on cartridge and on CD.
That should be fantastic
software. We have 50 or more titles coming up around Christmas.
UG: Any you care to name between
now and Christmas?
ST: For the CD alone, we're
shipping out a game called Blue Lightning, which is a conversion of
the Lynx game of the same name, and that was a great title. We've made a version
of that for
Jaguar and CD. We have Vid Grid, which is a lot of fun, a puzzle/rock video
combo. We have
a sample of Myst on the Jaguar, in the package. Myst looks wonderful. The delays
aren't there,
like today. You push the button for the next scnece, and boom, it comes up right
away.
UG: As a side note, we just
receieved Blue Lightning for Jag CD for our magazine and Namco
just released Air Combat. It seems that the new technology is leading an awful
lot of companies
to release Flight Simulators for the next generation systems. Do you think this
move towards
more serious games is a good thing for the Jaguar and the games industry in
general?
ST: We were having a debate just
last week about the issue of flight sims for the Jag. Like
the flight sim from Microsoft and Sub Logic. And what kind of player plays what
kind of system,
and what kind of software? The consensus was not to do a serious flight sim on
Jaguar; people
want to have fun playing the Jag.
UG: For some reason, a lot of
people in the industry seem to feel that a mascot assoctiated with
the system is important. I don't think that you can actually design a mascot for
a system. I think
they happen by accident.
ST: I agree with you 100 percent.
People say, "what's your mascot?" And I say, "As soon as it
hits, I'll let you know." We're developing two potential mascot games. And
if they hit, great, we'll
be right there with it and suppoer it like no one's business. But which one it
will be, I don't know.
UG: I think that it's completely
by accident.
ST: One game w're excited about is
called Defender 2000. And that's looking really good.
UG: There seems to be this stragne
trend and fondness towards retro gaming. Of course Atari
has that history.
ST: We're very lucky with that. I
just got a letter agian from one of the users, a nice young man,
who said, "Please, I love Atari, I love my
Jag. You guys are it. You've got this tremendous library
of titles (he had over 30). Please come out with these games on the Jag."
The old and updated
versions. And we're doing that with a lot of games right now. We'll have one on
CD, the
compendium of about five or eight original 2600 titles in their origianl form,
for a very attractive
price. We'll release probably three compendiums that way.
UG: That has to do with Atari's
history as a company. When I talk to a lot of your product
people and producers, they're all passionate about game play. I think the big
trend in the industry
is graphics.
ST: I just think that maybe it's
in the blood or the genes here in the company, or maybe it's just
prevalent as general attitued, that seems to be in everyone I speak to, game
play is paramount.
UG: I think that a lot of
companies will do a lot of things that I consider to be crass, something
that's not good, just to make a buck. And then there are companies that, I
believe happen to
really care. And I get that from Atari, as one of the companies on that list.
ST: And luckily, the software is
coming up on a consistent basis, stuff they're shipping out
nicely now. White Men Can't Jump is a four-player game, a lot of fun. We shipped
that with Team
Tap, our four-player adapter, for free. Blue Lightning, Super Burn-Out, the
motorcycle game.
They'll keep on rolling out on a regular basis. Which is very important, of
course.
UG: Let's talk about your plans
for "Fourth Quarter." How do you intend to beat the competition?
ST: First, we've expanded our
distribution significantly. We'll be in almost 500 Walmart stores this
fall. A bunch of other stores in the East Coast and the Midwest. We've increased
our distribution
by the thousands. We're in 85 percent of the top-selling stores, which is 285
stores that they
have. Hopefully, we'll be in the rest son. That's how much we're in. We're also
going into the
Software Etc. Stores. Another important increase. Our whole structure is to
advertise on TV,
magazines, radio; "Here's Jaguar, $149, the next generation, with great
software, go check it out
in your store."
UG: What do you say to a retailer
who can't carry all these systems?
ST: (?) That $149 is a very
compelling retail price.
UG: I liken it to buying a TV set.
When you look at the TV sets, I'd like to get the $1200,
35-inch TV, with the flat screen that's black and perfect, you know what I mean?
This one's
a 25-inch, it's just as good.
ST: I just bought a VHS recorder,
and I had a choice of $250 or $600, so what am I getting?
Forget it, $250 is just fine. Brand name, good quality, it works beautifully.
UG: I happen to think also, that
when people get a look at Jaguar titles, like AVP, Tempest,
Doom in particular. Doom on Jaguar is the best of all the versions out there. I
don't care what
Sega says.
ST: There's no question, even the
makers of Doom say the same thing.
UG: Can you explain some of the
differences between the Ultra 64 and the Jaguar? What do
you feel the differences are between those two systems? They're both 64-bit. How
are they
different or similar?
ST: There's one gigantic
difference. Jaguar's here, Ultra 64 isn't here. That's a very important
difference.
UG: That's a brilliant quote.
ST: I'm not sure what else is
different about it. Nintendo's been talking about this thing for a long
time, we'll see if it comes out in the summer of '96.
UG: I'm told it's been pushed back
now to September of '96.
ST: I've heard all kinds of
stories about Ultra 64. I just won't know enough until I see a real
machine. There's too many rumors and lies. WHen I see it, I'll know it really
is. At $250, if that's
what they hold at, even at that price, where it's better than the Saturn or the
Playstation, it's still
too much moeny. We were at $250 with the Jag in 1993 and '94, we sold a good
number of
machines, but there's a limit to how much you can sell at that price. It's not a
mass-market price.
UG: Will you be doing any
different kind of bundling?
ST: We'll do all kinds of
different packaging. We're giving Ted really free reign in the U.S. He's
running the U.S. operation. I'm here to work on the hardware development,
getting more software
titles in and helping out any way I can. But Ted is the one who's doing it. And
he believes strongly
in the marketing side, in getting the platform known in the marketplace.
UG: People are spending a lot of
money, forth quarter, probably more than any other forth quarter
in the history of this industry, especially with Sony entering the marketplace.
About how much
would you be spending?
ST: I won't give you the exact
figure, but we are spending doube-digit millions of dollars on
marketing, and we'll be doing a guerrilla-marketing technique. Going back to our
Commodore 64
experience, we were up against TI and Atari with their computer line, and they
totally out-spent
us, but we advertised very effectively. We were in the stores they were in, and
we were much
lower priced. Consumers wnet for the Commodore 64 in droves. So we want to make
people
aware that we're there. We can't match Sony's spending. Let 'em spend a fortune
and God bless
them! Parents are going to see it and say, "What? $300? Forget it! I'll buy
you the $149 machine."
UG: This is what I think is going
to happen, I don't think it's going to matter spends how much.
A lot of new people are going to be buying new systems. I think you'll see a lot
of game systems
flying off shelves this Christmas. I don't know if it's going to be determined
by who spends the
most money.
ST: It won't be. We did a study
with Alexander & Associates in New York. It shows that less
than five percent of the gaming public will spend $400 for a game machine.
UG: There was another report that
confirmed it.
ST: Exactly, Data Quest. We were
happily suprised with their numbers. Maybe 500,000
units in that price range will sell this Christmas. And after that...it's too
much money.
UG: On a side question, regarding
your settlement with Sega, part of the deal involves some
exchange of software, is anything moving in that direction?
ST: The funny part is our library
was more worth-while to them, than their's was to us. Because
the software must be at least one-year-old before either side can get it, so the
Atari library of
year-old software is very valuable. It's all the great old Atari titles. So
they're going to make some
compendiums on Saturn, Genisis, and Game Gear of Atari titles. Next year it will
be better for us.
We can go after the Virtua Racer and Virtua Fighter and that kind of stuff.
Their new good
titles.
UG: So, we'll see Virtua Fighter
on the Jag one of these days then?
ST: Eventually, yeah.
UG: With no resistance from Sega?
ST: That's our agreement.