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I give full credit to Ultimate Gamer for this information. Since they are no longer publishing magazines, I don't think they would mind me posting this page. THANKS Ultimate Gamer! for this interview! --This page brought to you by -StrayCat


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.

Do you think that sometimes people forget that $400 is what someone in, say, the Midwest
takes home in a week?

In Silicon Valley, it's the same thing also.

Will Atari be doing any price promotions besides just the regular "low price" of the system?
Any trade-in type things?

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."

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.

Could there be another crash?
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.

They haven't gone away since the late '70s. More keep on coming.

Is it fair to say that there's going to be some kind of shake-out.
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.

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?

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.

And there are some other people who came from Sega?
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.

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.

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.

Anything else you can tell me about the Jaguar 2?
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."

How many bits is the Jaguar 2?
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.

Are you able to quote any stats about it? Numbers of polygons per second?
Not yet, but very soon we'll be doing that. It's a "blow your socks off" machine.

Is it a cartridge-based, CD-based?
I would say so, yes.

Why has Atari not had the kind of third-party support, even with the lowest licensee fee?
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.

Only about 57cents to actually press the CD. That's without packaging?
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

WIll you see more of these companies taking a risk once the Jaguar CD comes out?
We think so. We already sees a few doing that now.

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

Absolutely, the most affordable."

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?

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.

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.

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.

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.

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.

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.

Any you care to name between now and Christmas?
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.

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?

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.

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.

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.

I think that it's completely by accident.
One game w're excited about is called Defender 2000. And that's looking really good.

There seems to be this stragne trend and fondness towards retro gaming. Of course Atari
has that history.

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.

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.

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.

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.

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.

Let's talk about your plans for "Fourth Quarter." How do you intend to beat the competition?
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."

What do you say to a retailer who can't carry all these systems?
(?) That $149 is a very compelling retail price.

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.

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.

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.

There's no question, even the makers of Doom say the same thing.

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?

There's one gigantic difference. Jaguar's here, Ultra 64 isn't here. That's a very important

That's a brilliant quote.
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.

I'm told it's been pushed back now to September of '96.
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.

Will you be doing any different kind of bundling?
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.

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?

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."

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.

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.

There was another report that confirmed it.
Exactly, Data Quest. We were happily suprised with their numbers. Maybe 500,000
units in that price range will sell this Christmas. And after's too much money.

On a side question, regarding your settlement with Sega, part of the deal involves some
exchange of software, is anything moving in that direction?

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

So, we'll see Virtua Fighter on the Jag one of these days then?
Eventually, yeah.

With no resistance from Sega?
That's our agreement.