MR. WILLIAMS: Q. Mr. Bushnell, as I understand it, Documents 40-2, 40-3, 40-6, 40-7, 40-10, 40-11, 40-15 and 40-17 all relate to circuitry which you intended to use with the monitor in association with your system for playing games













A. Okay.

MR. WELSH: Now, this is of the monitor system?

A. Incidentally, this is generalized terminology for data bus architecture. I am indicating there are several lines. The exact number of lines depends on the resolution that you wish. This is approximately with some simplifications.

(Drawing made by the witness was marked Atari Exhibit No. 41 for Identification.)

A. The oscillator runs a sync chain which essentially counts down the oscillator frequency into a horizontal and vertical component. There’s a number associated with each picture element in both the horizontal and a number coincident with each line in the vertical direction. These numbers are fed into a compare circuit which is compared to a number which is the shift register. If you can visualize a television screen, zero zero being in the upper left-hand corner and 256 by 256, the number 256 by 256 is the number of the lower right-hand corner. Then you can see that there is a series of ordered pairs which describe every point on the TV screen. Everyone follow that?

A. The sync chain willcount every one of those numbers in one frame. So that first the vertical counter is at zero and the horizontal counter then counts up to 256 at which time it gives the TV screen a sync pulse and the scan is reset and now the vertical scan counts to 1 and again to 256, and then the vertical goes to 2, 3 until it's scanned the whole time.




















Q. Over on the lower right-hand corner?






And the guy says, “Is it right?”

Q. But the basic purpose of the IO block is to get information from the monitor to the computer, as I understand it.

Q. You described the way in which one rocket ship is show during one scan of the cathode-ray tube.

Q. In the system you were building in playing Spacewar I assume that you wanted to show at least two rocket ships.

Q. What does the circuitry shown in Exhibit 41 provide? What is necessary to display two rocket ships?

Well, this is again the problem that I ran into. If you do it this way the computer has to be very smart and it has to be fast because it has to have that information ready for the second rocket ship very, very quickly because the minute the one rocket ship is done, if the other rocket ship is very close to it it has to have that information in a big hurry or you’re going to lose it, the rocket ship will disappear if it gets close. So what you can do is you can say, “Okay, I’m going to make the monitor smarter and I’ll just dump the information out at one time,” say during frame scan or frame reset in which there’s a lot of time, and that way the computer doesn’t have to be as smart. This design was an afterthought of this kind of architecture.

A. Yes. I want to keep this simple so that you can understand it. You see, the more and more smarter I made the monitor, the less power I had to have in the computer itself until finally I said, “The hell with it, “ you know, “let’s just build the hardware unit.”

A. That is ultimately. I think this was a general-purpose design. I’m not sure which one this was, how late it was. But I originally designed the general purposely so that it could adapt to essentially any 16-bit machine.

A. Yes. As small as possible.

A. I felt that in my original thinking I could get by with four K.

A. Yes. And memory was never the problem in the design. It was always update speeds.

A. Yes. It says, “System Input, one coin box to initialize particular CRT and program.” I think at that time we were talking about having it to be a situation where you could not only choose whether you wanted to place Spacewar, but whether you wanted to play any other game that we had in the program. That was kind of a question of memory. We thought that it would be interesting to have the switch selectable so that you could play a multitude of games. So that was No. 1 as far as system input.

No. 3 says, “Clockwise rotator SPP2.”

No. 5 is, “Fire control causes missile to shoot at fixed speed relative to rocket in direction rocket is pointing. Output to CRT done by sorting position, line and data. Words into output area. An interrupt will be generated at end of each field to indicate.”

That’s it.

A. No, I didn’t.

A. No, I don’t. I have been asking myself that. It could have been a guy named Larry Bryan who was going to do the software at that time.

A. Well, yes, I think it’s essentially all the things that we wanted to put into the system, you know, to make sure that we had enough input ports to play the game.

A. If he, in fact, was the one that generated it, and I think he was, yes.

A. It was probably during the summer.

A. Yes.

A. Ted Dabney.

A. He was a good circuits guy. He ultimately designed most of the sound circuitry and the video amplifier.

I was the hardware man and Ted was the analog man.

Q. Can you identify Exhibit 40-16?

Q. Can you identify Document 40-8?

Q. Did you write the document?




A. I think so. I don’t really know what the difference between the two documents is. One might have been for the Nova 850 which was a faster machine. When we started getting into problems I thought it might have to go to a faster machine.

A. It’s a Xerox of a Signetics integrated circuit, and why I’ve got it there I have no idea.

Q. Can you identify Document 40-5?

Q. Was that for the Nova 1200?

A. I believe it was.

Q. Can you identify Document 40-4?

Q. One in which plant?

Q. What do you mean by the term “pin-outs”?

A. Well, the bus is essentially the input ports and it tells what part of the computer is connected to what pin. You know, like is It an input port, an address port of interrupt port.

See, you put input and output in terms of a word. You see these data A8, All, each one of these represents a bit in the data word.

A. Yes. It’s a page describing how the data channel transfers work with this particular computer. It’s necessary in designing the thing to really have that stuff well scoped out.

A. Yes.

A. This is an OEM discount schedule which tells you what your price would be depending on how many units you buy. I was trying to find some way to get them to believe me that I was going to take 200 units the first year so I could get a 40 percent discount, but I didn’t quite have that much guts. But I was projecting that if the item did very well there would be considerable savings in the computer.

A. Correct.

A. I put my time into designing a very inexpensive and complex exerciser, if you would, that would essentially do the calculations and hardware. At that time I had had a very complex exerciser already going, but it took me quite a bit to get it up to the point where it controlled two objects. It was only good for one object at that point.

A. Correct.

A. Well, I guess you can say that—What’s to say when something is complete? It was complete when it went into production at Nutting Associates. I mean, that was the first commercial result of that. But I could move objects around the screen before that time.

A. We sold our first units in December of January of the following year. I guess that would be December ’71 of January ’72.

Q. Did it go into production approximately the same time it was first sold?

Q. How long before it was first commercially sold would it have gone into production?

Q. At what show did you show it?

Q. Where was the show held?

Q. When you say you showed it at the show, was there an operative game there at the show?

Q. When did you commence your employment with Nutting Associates?

[NOTE – According to Goldberg and Vendel, Nolan started working at Nutting in March of 1970, not 1971. To me, the 1971 date seems more plausible given the information in this deposition (i.e the fact that they were still writing letters to Data General in January and February of 1971) and assuming its accurate. It also seems a bit implausible to me that the worked on the game for Nutting for almost two years before releasing it, but it was sort of a side project and Nutting was inexperienced, so maybe. The claims in the deposition seem to fit better with Nolan visiting his dentist in February 1971 rather than February 1970 as reported in Business Is Fun. OTOH, Marty and Curt generally have solid documentation to support their dates, and it may be that they have such information in this case and maybe Nolan is a year off in his dates.]

A. That ones that were built for Computer Space.

A. You say the Computer Space game. There was a lot of variations and modifications to it.

A. Oh, it was probably April or May of ’71.

A. Well, I had in mind, you know, various sports games, various arcade games that I had seen in school, you know, when I was at the amusement park. I was thinking particularly of baseball. I was also thinking of hockey.

A. Yes, I do. Now, these are some of the files, some of which are missing, and I don’t know why I’d have these and why I don’t have the others or why I have any at all. I think most of the others are at Nutting. I also have my book in which I have just essentially some of my cost estimates on the Nova and the PDP-8. This is the company that I rented some time on a 16K Nova.

Q. Was that the same agreement as the agreement relating to Computer Space?

Q. Was there a separate agreement from the employment agreement which dealt with your retaining rights to video technology?

Q. That is, the employment agreement?

Q. Were there any agreements on any other game than Computer Space?

Q. Were there any other agreements relating to games with Nutting?

Q. Can you describe for us the game Two Player Computer Space?

Q. Did Nutting ever commercially manufacture the Two Player Computer Space game?

Q. Do you know when the commenced this manufacture?

Q. For how long did they manufacture that game?

Q. Did they manufacture it for a period or months of a period of years or—

Q. Do you know how much they sold that game for?

Q. Nutting, I assume, did commercially manufacture the Computer Space game?

Q. Do you know how much they sold that for?

[NOTE – This is one of the few semi-contemporary references I’ve seen to Computer Space’s sales price. I’ve seen some accounts that indicate a price of around $3,000 or more, which seemed way too high to me. Benj Edwards (normally very accurate and one of the best writers on early video game history out there) at one point seems to use a price in this range when trying to estimate Nolan and Ted’s Computer Space royalties.

Q. I think you testified earlier that they started their commercial production in either December of ’71 or January of ’72?

Q. Do you know how long that game was in commercial production at nutting?

Q. Do you know you many units of Computer Space they sold?

[NOTE – the actual transcript says “13 to 15 units.” There is a handwritten word about the “13 to 15.” It is illegible, but looks like it says “hundred.”

Q. Do you know how many units of Two Player Computer Space they sold?

(22 lines missing?)

A. A game called Asteroid.

A. That’s what we called it around the company.

[NOTE – This is quite interesting to me. As most of you probably know, Midway’s Asteroid was basically the same game as Space Race.


Q. Is that name also known as VP-2?

A. Yes, it is.

A. It would have to be the game which is now called Pong. Maybe for classification here there were three of us that were technical.

A. Well, three of the employees of the then Syzygy Company were technical and we each had our projects. Mr. Dabney had the pinball projects which was part of the contract engineering for Bally Corporation.

Mr. Alcorn, when he came aboard, his first project was to build a simulated tennis game. I only did about two days’ work on Space Race because I got bogged down in administrative details and running the company other than design and was able to finish up the Two Player Computer Space for Nutting, but Mr. Alcorn ultimately finished the Space Race design.

Q. When did Mr. Alcorn come on board?

MR. ETLINGER: What year would that be, ’72?

MR. WILLIAMS: Q. Shortly after you both left Nutting?

(half a page missing?)


















We looked at the first thing that we had up on a screen which was essentially a rectangular blob which would later be cut by a diode matrix into the little man and the ball. But you could also--you know, it's very easy to make it so that when the ball and the paddle intersect instead of waiting for the computer to detect the hitting motion, that it just automatically bounce off.



Oh. I'm leaving out one thing. In this kind of a hitting motion we wanted the racket to do—


(indicating.)






I said. “Okay, put in the raspberry sound when it misses.” It was my idea that I wanted to cheer on the winner rather than badmouth the loser. But he prevailed on me. So the honk sound was put into the game on a miss. Digital scoring was put in. The game played pretty well. So we said, thinking in the back of our mind, "Hey, we’ve got this. We did it in a hurry. Let's give this to Bally satisfying their contract, their contract engineering. Then we can get off and get doing some of our own stuff.”








We did it and we were successful in being able to sell the machines, and with that money we made a re-lease for I think 300 at that time which was out of sight because we were in, you know, 1500 square feet of building. We ended up doing an awful

Today, we continue with Nolan Bushnell's depositions from January 13 and 14, 1976.
 



















[Note the two other Nutting employees who attended were Rod Geiman and Charles Fibian.]



A. Yes. He was the sales manager for Nutting.









Q. Do you recall what you saw at the demonstration?









































A. No, I did not.










































































That's the end of the testimony I have from January, 1976. I also have depositions from 1974 and March 1976. I will probably start with those next time.
 
In the meantime, here are a few photos.
 
First, here's Bill Nutting from 1944:
 
 
 
 
Here are some marquees from some unreleased Bally/Midway games that I found on the web (I think the first two are from Arcade Heroes).
 
 

Speaking Willie Lump Lump, here's a picture of a promotional keychain for the game that sound designer Bob Libbe sent me.

 



Here is some concept art for Mothership and Earth Friend from Bill Kurtz's Encyclopedia of Arcade Video Games. At least Kurtz calls it concept art. The first one looks more like a marquee to me.

 
 
 
 
 Here is some concept art for another unreleased game called TankMaze that artist Steve Ulstad sent me.

 

 
 Finally, here is a cabinet for another unreleased Bally/Midway game called Aerocross. At least one is from Craig's List.


 

Today, I cover another possible seminal moment in the history of esports that I have never seen mentioned. Actually, I did not discover this one on my own. Marty Goldberg brought it to my attention when he sent me a short UPI article on the incident, prompting me to investigate further. So what is the incident? It was possibly the first serious attempt – or maybe the first attempt period – at a video game world record.

Roger and his cousin (though it may have been a friend) Valerie Mayers after their ecology walk - from the San Diego Union, October 29, 1970.

 In 1974, Roger was running a store in Pacific Beach called American Graffiti that sold nostalgic memorabilia. According to English, the incident that led to his year a serial record breaker came when a friend who owned a nightclub called and told him that the club was going bankrupt and asking for help. After racking his brain for weeks English came up with the idea of setting a world record for dancing the twist in the nightclub. Just as he was about to start, however, the police told him that there was a state law prohibiting anyone from doing anything for more than eight consecutive hours in a 24-hour period. Relieved, English called the attempt off, but when the story made headlines and people began organizing protests at the county courthouse, English decided to defy the police warning and go ahead with the attempt. From July 11 to 16 1973, he spent 102 hours, 28 minutes, and 37 seconds twisting the night (and the day, and the night and the day…) away and the resulting publicity made him a local celebrity. The attempt was later the subject of a question in Trivial Pursuit, Baby Boomer Edition.

From the 1977 edition of Guinness

Before long, others began calling English asking him to do similar publicity stunts to promote their businesses. For his second stunt, he decided to break the record for voluntarily going without sleep, which was then 11 days, 18 hours, and 55 minutes by Bertha Van der Merwe of South Africa. This time, the goal was to promote a local store called the Love Shop Waterbed showroom. English broke the record by staying awake for 12 days on a waterbed in the window of waterbed store from 10:30 a.m. on March 20 to 10:30 a.m. April 1, 1974.




After that, he set his sights on the record for treading water to promote the heart association. After just five minutes, he was exhausted and thought about giving up. If he did, however, he would lose the momentum he had built up. So he pressed on and treaded water for 18½ hours. If it was a record, it did not last long. In August 1975, Pete Bahn Jr. shattered the record by treading water for 41 hours and 11 minutes.
            In late April 1974, English participated in the Oddball Olympics in LA where he tried to set a record by singing for 75 hours – though it appears that he was not successful. Another unsuccessful attempt involved kite flying. If treading water had been difficult, another record was anything but when English kissed 3,000 girls in 8 hours[1]. For his next feat, starting in August 1974, English swam the length of the Mississippi River from Minneapolis to New Orleans - though it is not clear if he finished. On December 27, 1974, Bank of America paid English $500 an hour to tell jokes for five hours and 15 minutes at the Winner’s Circle Lodge north of Del Mar. He claims he did not get a single laugh.

From the 1977 edition of Guinness

English in 1974, from the San Diego Union

            For his video game attempt, English set up shop in a mobile radio station at a shopping center, where he spent seven days and five minutes (though English says it was five days) taking on all comers before calling it quits on May 10. During his marathon session, English squared off against over 30,000 spectators, an anteater from the San Diego Zoo, and employees of KFMB radio station. English claims that he got so good at the game that he was able to beat two opponents at once while playing only with his toes.
   The big question for me is what game English played. Was it an arcade game or a home game? The above article refers to th game as “Pong” but it is unclear if they meant Atari Pong or Home Pong or some other Pong clone (the term "Pong" was sometimes used for ball-and-paddle games in general).. English claims that the attempt was intended to promote the introduction of the game. This makes it unlikely that it was Atari Pong and the date also seems a bit late for Home Pong. It could have been that he was doing a promotion for a department store etc. that was introducing a new console. If it was an arcade game, the May date and the fact that it was in San Diego make me wonder if it could have been Cinematronics' first game Cinematronics was founded in April, 1975 and could well have released their first game around this time.
    Perhaps even more interesting is the UPI article's claim that KFMB was the “sponsor of a countrywide ‘Pong-a-Thon’ tournament to determine who will represent the city in national competition.” Could this have been the first nationwide arcade video tournament in the US? (there was one in Japan in 1974). I've always suspected that there must have been at least a few Pong tournaments somewhere. Unfortunately, I have found no other reference to this one and am suspicious that it ever existed. The name 'Pong-a-Thon' sounds to me like a description of English's record attempt itself. On the other hand, the article specifically mentions a "national competition."
   As for the record, while English indicates that it made it in into Guinness I could not confirm that it did. Unfortunately, while my local library has almost every pass edition of Guinness, including the 1975 and 1977 editions, it does not have the 1976 edition (I have ordered a copy and it should arrive shortly). I could only find three records for English in the 1977 edition (staying awake, twist dancing, and kissing) and found no mention of a video game record of any kind – though I could have been looking in the wrong spot. Whether it made the official record books or not, however, it may well have been the first attempt at a world record involving video games.

Note – for more information on Roger, you can watch 2006 documentary “The Spectacle Artist”: https://www.youtube.com/watch?v=g5l1LzoYSD0. He discusses the video game record at the beginning of part two.

Aside from the article above and Guinness, primary sources include several issues of the San Diego Union. Oddly (given that the attempt was made in San Diego), while I found a number of articles on English’s earlier attempts in the Union, I didn’t find one on his video game attempt, or any articles on him at all in 1975 or 1976. Perhaps it is an issue with Genealogybank’s indexing of those issues. 

---

[1] English claims that the kissing record was his eighth record (which automatically gave him his ninth record for most world records) and that it occurred after his video game and swimming records but the record was reported in an April 29, 1974 newspaper story. The Guinness Book of World Records included the record, but did not indicate when it occurred. The UPI story claims that English kissed 2,892 women in 24 hours but that Guinness rejected the attempt – though this seems to be false given that the record was in Guinness.

Baer’s original 1966 description of the game referred to it as “TV Gaming Display,” while later documents (which were reproduced in Baer’s Videogames: In the Beginning) from the 1967-1972 period call it a “TV Game.” None of the various patents that Sanders filed between prior to 1974 used the term “video game.” Instead, they usually called it a “Television Gaming Apparatus.” Ads for the system referred to it as and “electronic game,” as did most early articles.








Edwards:Do you know how the term "video game" came about?
Bushnell:I think it was started at the first trade show that Computer Spacewas at. And I think it was coined by a reporter, and that was in the fall of 1971, when we showed it in Chicago. The reporter, writing for one of the trade magazines, coined the term "video game."
Edwards:So it was around 1971, you think?
Bushnell: Yeah. To be exact, it was November 1971.
Edwards:Do you have any idea what reporter it was that might have coined the term?
Bushnell: No, but I know the magazine. I think it was the magazine called Vending Times

Is his claim true? It appears not.




Here is a quick summary of all the flyers for video games produced prior to 1974, with approximate release dates, along with the term (if any) they used to describe the game (you can see most of the flyers at the Arcade Flyers Archive or Flyer Fever websites) A question mark indicates that either I didn’t find a flyer or the flyer was in Japanese. Note that flyers generally appeared in trade magazines about a month before the game was released – though it is possible that some of these flyers were alternate versions produced after the game was released. This is unlikely, and I suspect that the flyers here were all produced around the time of the game’s release.

·         Computer Space  (Nutting Associates, 11/71) – “game”
·         Star Trek (For-Play, 9/72?) – “game”
·         Pong (Atari, 11/72) – “video skill game”
·         Computer Space Ball (Nutting, ca 1/73-6/73) – none
·         Paddle Battle (Allied Leisure, 3/73) - none
·         Rally (For-Play, 3/73) – “fast action space age game”
·         Volly (Ramtek, 3/73) - ?
·         Winner (Midway, 4/73) – “television skill game”
·         TV Ping Pong (Chicago Coin, 4/73) – “electronic ping pong game”, refers to Chicago Coin as “the newest leader in electronic games”
·         TV Ping Pong (Amutronics 4/73) – “game”
·         Paddle Ball (Williams, 5/73) – “game”
·         Space Race (Atari, 7/73) – refers to Atari as “the originators of video game technology” and “the reliable leader in video games”
·         TV TableTennis (PMC Electronics, ca 7/73) - none
·         Tennis Tourney (Allied Leisure, 7/73) - none
·         Elepong (Taito, 7/73) – “video skill game”, “electronically simulated ping pong game”
·         TV Tennis (Chicago Coin, 8/73) – “electronic game”
·         Ric-O-Chet (Allied Leisure, 9/73) - none
·         Pong Doubles (Atari, 9/73) – “video game”
·         Winner IV (Midway, ca 9/73) – “tv game”
·         Pong Tron (Sega, 9/73) - ?
·         Elimination (Kee/Atari, 10/73) – “video game”
·         Gotcha (Atari, 10/73) – “video skill game”, also refers to Atari as “the originators of video game technology” and “the reliable leader in video skill games”
·         TV Table Tennis (United Billiards, ca 10/73??) - ?
·         Olympic TV Football (Chicago Coin, 11/73) - none
·         Olympic TV Hockey (Chicago Coin, 11/73) - none
·         Super Soccer (Allied Leisure, 11/73) – none
·         Deluxe Soccer Allied Leisure, 11/73) – none
·         Wham Bam (PMC, ca 11/73) – none
·         Hockey TV (Sega, 11/73) - ?
·         Pong Tron II (Sega, 11/73) - ?
·         Pro Hockey (Taito, 11/73) - ?
·         Soccer (Taito, 11/73) – “video reaction game”
·         TV Tennis (US Billiards, ca 11/73?) - none
·         Pro Tennis (Wiliams, ca 11/73) – “t.v. tennis game”
·         Hockey (Ramtek, ca 11/73?) – “video game”
·         Scoring (Volly, ca 11/73?) – “hockey game”
·         Tele-Soccer (BAC Electronics, ca 11/73?)
·         Champion Ping Pong (Arizona Automation, ca 11/73?) - none
·         TV Hockey (Amutronics, ca 12/73) - none
·         Pro Hockey (Williams, ca 12/73) – “game”
·         Asteroid (Midway, ca 12/73) – “TV thriller”
·         Leader (Midway, ca 12/73) – “game” or “TV knock-out”
·         Olympic Tennis (See-Fun, ca 12/73) – “game”, “electronic match-point tennis game”
·         Sports Center (For-Play, ca 12/73) – “t.v. game”
·         Elimination (Volly, ca 12/73?) - ?
·         Sportarama (United Billiards, ca 12/73??) – “video game”
·         Astro Race (Taito, 1973?) – “video game”
·         Davis Cup (Taito, 1973?) - none
·         Soccer (Ramtek, 1973?) – “video game”
·         Hockey (Volly, 1973) / Tennis (Volly, 1973) – “video game”, “video audio game”
·         Missile Radar (Nutting, 1973??) - none
·         Crazy Foot (Bally, 1973?) - none

·         Space Race (Atari, 7/73)
·         Pong Doubles (Atari, 9/73)
·         Elimination (Kee/Atari, 10/73)
·         Gotcha (Atari, 10/73)
·         Hockey (Ramtek, ca 11/73?)
·         Sportarama (United Billiards, ca 12/73??)
·         Astro Race (Taito, 1973?)
·         Soccer (Ramtek, 1973?)
·         Hockey (Volly, 1973) / Tennis (Volly, 1973)

Finally, let’s look at magazines – trade and non-trade.

























So far, this is technically the very first usage of the term I’ve found, but since it was in a private letter, it is debatable whether or not it should count as a first usage or not.


As an aside, the first patent I found using the term “video game” was patent 4.006,47, filed 18 Mar 1976, for a Video Game Rebound Apparatus by Jeffrey Reed Lukkarila of Magnavox.

First, for those who read my last post on the etymology of "video game," I was able to get some more issues of Cash Box and find a little more information - including a usage of the term in the March 10, 1973 issue. I updated my previous post to include the new information.  On to today's topic.


Here is another of the Nolan Bushnell depositions I have from the Magnavox case. This one was taken July 3, 1974. This represents about half of the deposition. I will post the rest later.
No annotations this time.

In the Unites States District Court
For the Northern District of Illinois
Eastern Division

The Magnavox Company, a corporation
And Sanders Associates, Inc., a corporation
Plaintiffs

Vs

Bally Manufacturing Corporation, a corporation,
Chicago Dynamic Industries, Inc., a corporation.
Et al.,

Defendants

Deposition of Nolan K. Bushnell

July 3 1974

Be it remembered that pursuant to Notice of Taking Deposition, and on Wednesday, the 3rd day of July 1974, commencing at the hour of 10:00 o'clock a.m. thereof, at the law offices of Messrs. Flehr, Hohbach, Test, Albritton & Hubert, 160 Sansome Street, San Francisco, California, before me, Ruth E. Benton, a Notary Public in and for the City and County of San Francisco, State of California, personally appeared

Nolan K. Bushnell

called as a witness on behalf of the plaintiffs, who, being by me duly sworn to testify the truth, the whole truth, and nothing but the truth herein, was thereupon examined and testified as hereinafter set forth.

Messrs. Thomas A. Briody and Neuman, Williams, Anderson & Olson, by Theodore W. Anderson, Esq., 77 West Washington Street, Chicago, Illinois 60602, appeared as counsel on behalf of plaintiffs.

Messrs. Flehr, Hobach, Test, Albritton & Herbert, by Thomas O. Herbert, Esq., and Baylor G. Riddell, Esq., appeared as counsel on behalf of the defendant Atari, Inc.

Messrs. Fitch, Even, Tabin & Luedeka, by Donald L. Wels, Esq., 135 South LaSalle Street, Chicago, Illinois 60603 appeared as counsel on behalf of the defendants Bally Manufacturing Corporation, Midway Manufacturing & Empire Distributing.

Observers present: Edward S. Wright and James Sholer.

MR. ANDERSON: I understand, Mr. Welsh, you had a statement for the record?

MR. WELSH: Yes. The depositions of Bally, Midway, and Empire taken last week in Chicago, there was a claim of confidentiality made with respect to certain documents produced by Bally and testimony with respect to those documents on behalf of Bally. I will now withdraw that claim of confidentiality both with respect to the documents and the testimony.

MR. ANDERSON: I think that is quite satisfactory to us of course and I think it expedites things a good deal.

MR. WELSH: I presume you will get that to the reporter?

MR. ANDERSON: Yes I will get that to Mr. Shapiro, and does that vitiate our signed stipulation?

MR. WELSH: No I would like to keep that in effect because there may be other documents such as those that we have agreed to produce from--

MR. ANDERSON: Then the stipulation remains in effect but there is nothing under it at the moment at all to the best of my knowledge.

MR. WELSH: Right.

MR. ANDERSON: That is fine.

MR. HERBERT: The removal of the confidentiality is certainly in accordance with the wishes of Atari.

MR. ANDERSON: I think maybe just for the record show the presence of these two gentlemen.

MR. HERBERT: WE have two observers here, Edward Wright and James Sholer.

---

Whereupon,

Nolan K. Bushnell

Called as a witness on behalf of the plaintiffs, having been duly sworn by the Notary Public to testify the truth, the whole truth, and nothing but the truth herein, was examined and testified as follows:


Examination by Mr. Anderson.
Q. Mr. Bushnell would you please state your full name?

A. Nolan K. Bushnell.

Q. Where do you reside?

A. I reside at 6101 Almirida, Campbell, California.

Q. Is Campbell in the San Jose vicinity?

A. Yes it is.

Q. By whom are you employed?

A. Atari Incorporated.

Q. That's A-t-a-r-I, I-n-c period?

A. That's Correct.

Q. Where is Atari located?

A. 14600 Winchester Boulevard, Los Gatos, California.

Q. Is Los Gatos in the San Jose vicinity?

A. Yes it is.

Q. What is your position with Atari, Inc.?

A. I am president.

Q. Do you hold any other titles or positions?

A. I am chairman of the board.

Q. Do you hold any other titles or positions?

A. No I do not.

Q. Do you hold any other titles or positions in any other corporations?

A. Yes I do.

Q. What other corporations?

A. I hold the position of president of Syzygy Company, S-y-z-y-g-y.

Q. And that is Syzygy Company?

A. Yes.

Q. Is that a California Corporation, do you know?

A. It's currently a California proprietorship. It's going through incorporation currently.

Q. Has it ever been a corporation?

A. Yes it has incorporated under the name Syzygy Game Company. Well, actually the assets of that corporation were purchased so essentially, you know, the business was not purchased but simply the assets of the corporation were purchased.

Q. The assets of Syzygy Game Company were purchased by the proprietorship of Syzygy Company?

A. Right.

Q. Which is now being formed into a corporation?

A. Right. We assumed the assets without the liabilities.

Q. When you say "we" who do you mean?

A. Ted Olson.

Q. Ted Olson?

A. Yes.

Q. O-l-s-o-n?

A. Yes.

Q. Who else?

A. There are a couple of other people. It's a small little game company which, you know, I really think is not material to this case.

Q. Is it in the video game business?

A. It's in the game operating business, yes.

Q. In the video game operating business?

A. Yes.

Q. Do you hold a controlling interest in Syzygy Company at the present time?

A. Yes.

Q. Where does Syzygy Company operate?

A. I don't have the address with me right now. It's on Walsh Avenue.

Q. Walsh Avenue in Los Gatos?

A. In Santa Clara.

Q. Does the Syzygy Game Company place video games on the street?

A. Yes.

Q. Where has it placed video games on the street?

A. Various places in the Santa Clara Valley.

Q. Anywhere outside the Santa Clara Valley?

A. No.

Q. Do you hold a position in any other companies other than Syzygy Company and Atari, Inc.?

A. There are positions--I hold a position in Atari Pacific but there are Atari subsidiaries. Do they need to be enunciated?

Q. At least we should identify them of I would like to. Atari Pacific?

A. Yes.

Q. Incorporated, is it?

A. Yes.

Q. I-n-c period and where is that located? AT the same address as Atari, Inc.?

A. No. It's in Honolulu and I do not have the address.

Q. What is your position with Atari Pacific, Inc.?

A. I am a member of the board.

Q. What is the nature of the business of Atari Pacific, Inc.?

A. It places and operated video amusement machines.

Q. Where does it place and operate video games or amusement machines?

A. in the Pacific Basin.

Q. Is that primarily in the Hawaiian Islands?

A. Yes, it is including Guam.

Q. For how long has Atari Pacific been in existence approximately?

A. Six months.

Q. Has it ever placed games outside of the Hawaiian-Guam complex?

A. No it hasn't.

Q. Do you hold a position in any other companies?

A. No I do not.

Q. Does Atari Inc. have any other subsidiaries partially or wholly owned?

A. We have a current investment in Japan but at this point Atari does not own that investment.

Q. Does Atari, Inc. have an investment interest in the Japanese operation?

A. Yes.

Q. Well, roughly what percentage interest?

A. Right now it's an accounts receivable interest and a cash interest and a formalization of that corporation is not complete.

Q. Does Atari, Inc. presently have any equity interest in the Japanese company?

A. No.

Q. Is it contemplated that Atari, Inc. will have an equity interest in the Japanese company once the mechanics are completed?

A. It has not been determined as yet.

Q. What is the name of the Japanese entity at the present time?

A. Atari Japan.

Q. What is the nature of the business of Atari Japan?

A. To assemble and operate video amusement machines.

Q. Is it presently assembling video amusement machines?

A. Yes.

Q. Is it presently operating video amusement machines?

A. Yes.

Q. In what geographical area is it operating these machines?

A. Tokyo.

Q. From whence does it obtain the parts and raw materials to assemble the video machines that they assemble.

A. Atari in the U.S.

Q. Does Atari assemble all of the component parts or does Atari, Inc. provide all the component parts for Atari Japan?

A. No.

Q. What parts does Atari, Inc. provide to Atari Japan?

A. Computers.

Q. In addition to a computer what are the basic building blocks of an Atari video amusement machine?

A. A cabinet, CRT monitor, coin mechanism.

Q. Has Atari Japan assembled any video amusement machines for export?

A. I don't know.

Q. Do you know whether it is contemplated that Atari Japan will assemble any video amusement machines for export?

A. They may if they so desire.

Q. Does Atari Inc. control whether or not Atari Japan exports to the United States?

A. No.

Q. Is it contemplated in the formative stage of Atari Japan that Atari Inc. will control the export of video amusement machines from Atari Japan to the United States?

A. It has not been determined as yet.

Q. Does Atari, Inc. have any other wholly or partially owned subsidiaries?

A. No.

Q. Does it control any other companies?

A. Excuse me, I would like to retract that last statement. We control Kee Games, Inc.

Q. That is K-e-e?

A. Yes.

Q. What is Kee Games, Inc.?

A. A manufacturer of video amusement machines.

(short recess)

MR. ANDERSON: Q. Mr. Bushnell, I think just before the break you started that Kee Games, Inc. was a manufacturer of video amusement games. Where is Kee Games, Inc. located?

A. They are located in Santa Clara.

Q. Do you hold any position with Kee Games, Inc.?

A. No.

Q. What is the relationship between Kee Games, Inc. and Atari, Inc.?

A Atari has an equity interest.

Q. Is it a controlling interest?

A. Yes it is.

Q. Does Kee Games, Inc. manufacture a different produce line than Atari, Inc.--

A. Yes.

Q. --or the same? A different?

A. Yes

(Off the record discussion.)

Q. Who are the principal officers of Kee Games, Inc.?

A. Joseph Keenan.

Q. K-e-e-n-a-n?

A. Yes.

Q. Is he president?

A. Yes.

Q. Who else?

A. Bill White.

Q. W-h-i-t-e?

A. Yes.

Q. What is his position?

A. I think he is secretary. Steven Bristow.

Q. B-r-i-s-t--

A. T-o-w and Gil Williams.

Q. What is Bristow's position?

A. He is treasurer.

Q. And Williams?

A. Director.

Q. Are any of these gentlemen officers or directors of Atari, Inc.?

A. No.

Q. Are any of them employed by Atari, Inc.?

A. No.

Q. What product line does Kee Games, Inc. manufacture in the video amusement game field or amusement device field?

A. The Kee product line under the name Kee Games.

Q. Do they specify product names within the line?

A. Elimination, Formula K, Spike.

Q. Any others?

A. That is it.

Q. Are any of these three games played in the same general manner as Pong?

A. Not in the same general manner.

Q. Is there a movable playing element that moves back and forth across the screen?

A. Yes.

Q. In which ones is that true?

A. There is motion involved with all the games.

Q. Are there players, two or more players in all these games?

A. No.

Q. In any of them?

A. Yes.

Q. In which game?

A. Elimination.

Q. How many players does Elimination have?

A. One to four.

Q. Is there a movable playing piece of some sort in Elimination?

A. There is motion involved. I don't understand the question.

Q. A display which is moving in the course of playing the game?

A. Yes.

Q. What do you call the thing which moves?

MR. HERBERT: I have to object. You are going substantially on the background but it seems to me we are getting a little more deeply into the construction, not only with our games but even Kee games, and my understanding of this deposition is that it is to be limited only to the question of venue so far as Atari is concerned.

MR. ANDERSON: I think one question in venue is what products are made and where they are made and where they are sold.

MR. HERBERT: As far as our motion for dismissal for lack of venue, the product line hasn't even been mentioned. The motion is based upon no business at all and no place of business at all in the northern district of Illinois.

MR. ANDERSON: I understand, you know, your affidavit I think and your contentions.

Q. What do you call the moving display in Elimination

A .The moving display, there is a--we call it variously the paddle.

Q. Now the paddle is manipulated by one of the players, is that right in Elimination?

A. Yes.

Q. And this is manipulated in order to hit some other display?

A. Yes.

Q. What do you call the display which the paddle is intended to hit? I'm just trying to get some nomenclature. We seem to be having trouble.

A. Ball.

Q. And Elimination has a ball?

A. It has a square.

Q. Would you call that square a ball?

A. Yes.

Q. Is it the object of the game that a player manipulates the paddle so that it will engage the ball and cause it to go toward the other player's end of the playing display?

A. Yes.

Q. And if the paddle impacts the ball, does it change the direction of the ball?

A. Yes.

Q. And does that score a point?

A. No, it doesn't.

Q. What is the manifestation then of the ball going off the field?

A. It beeps.

Q. Is there any scoring involved in Elimination?

A. There is a tally which is eliminated.

Q. Are there upper and lower walls across the top and bottom of the display in Elimination?

A. No.

Q. Are there any fixed barriers that cause the ball to change its direction in Elimination?

A. Yes.

Q. Where are they located?

A. In the corners.

Q. If the ball impacts on one of the barriers, does it change its direction?

A. Yes.

Q. Does the description that you have just given generally describe the way in which Pong is also played?

A. No.

Q. How does it differ?

A. I don't really understand the question. The essential differences of the game?

Q. Yes.

A. One is a contest between two people only.

Q. That is Pong?

A. Yes, and there are no provisions for four players.

Q. Any others?

A. Let's say the paddles are arranged on four sides.

Q. In Elimination?

A. Yes.

Q. Any others?

A. No.

Q. Where does Kee Games Incorporated sell its products?

A. Throughout the United States and some into Europe.

Q. When was Kee Games, Inc. started?

A. October of 1973.

Q. Does Kee Game, Inc. place machines on the street?

A. No.

Q. Does it only sell products?

A. Yes.

Q. Does it have any other products other than the three games that you mentioned: Elimination, Formula K, and Spike?

A. There are small modifications but nothing we consider to be new products.

Q. Does Kee Games, Inc. have a distributor organization of some sort?

A. Yes.

Q. What is the name of that organization?

A. I don't know.

Q. Does it have any employees outside of the San Jose area?

A. No.

Q. Does Kee Games, Inc. have a distributor in the Chicago area that you know of?

A. Yes.

Q. Who is that?

A. Worldwide.

Q. Do you know the full name of the company?

A. No, I don't. I think it's Worldwide Distributors.

Q. Do you know where the y are located?

A. No, I don't.

Q. When did Kee Games, Inc. first deal with Worldwide Distributors approximately?

A. I don't know.

Q. Was it before the first of the year?

A. Yes.

Q. Has Kee Games, Inc. sold the game Elimination to Worldwide Distributors?

A. Yes.

Q. Has Kee Games, Inc. sold the game Formula K to Worldwide Distributors?

A. Yes.

Q. Has Kee Games, Inc. sold the game Spike to Worldwide Distributors?

A. Yes.

Q. How long has Elimination been in the Kee Games product line approximately?

A. December I believe was their shipment.

Q. Of Elimination?

A. Of any game.

Q. Was Elimination the first game that Kee Games, Inc. made and sold?

A. Yes.

Q. When was the first Formula K game sold approximately to Worldwide Distributors?

A. It probably would be April. I am not sure.

Q. Of 1974?

A. Yes.

Q. Does Formula K involve paddles?

A. No.

Q. Or a ball?

A. No.

Q. Does it involve motion of some sort of a playing device or display?

A. Yes.

Q. Do you by any chance have literature with you on all three of these games?

A. No.

MR. ANDERSON: May we have some literature on these three games, Mr. Herbert?

MR. HERBERT: We have no--at least I have no control over Kee Games. They are not party to this lawsuit. Do you have literature at Atari?

THE WITNESS: No.

MR. HERBERT: Atari does not.

MR. ANDERSON: It's a controlled corporation.

MR. HERBERT: It's also a separate corporation. The witness has already indicated he doesn't know what the distributorship arrangements are.

MR. ANDERSON: Well, he knows who the distributor is, when the product was shipped. You are going to stand on the corporate isolation that you are alleging?

MR. HERBERT: Oh, yes.

MR. ANDERSON: And will not provide us with printed distributed, publicly available literature on that basis?

MR. HERBERT: IF they have them at Atari I certainly will. If not I'm not going to Kee to get them, no.

MR. ANDERSON: Q. Describe the manner in which Formula K is played?

MR. HERBERT: I am going to object to this line of questioning again, that it has nothing really to do with respect to the venue questions before the court and I will instruct the witness not to answer. All it is doing is extending the length of this deposition.

MR. ANDERSON: Again I will say the witness has testified it's a wholly owned--

MR. HERBERT: No.

MR. ANDERSON: It is a controlled subsidiary and I think we are entitled to interrogate the witness to the extent he has this knowledge about a controlled subsidiary. I think I have made a long trip to get a reasonable amount of very basic information.

MR. HERBERT: If and when you pass the venue hurdle, I think that is probably true but until you pass that hurdle I don't think that you are entitled to go into the workings of fhe games of Kee or even of Atari.

MR. ANDERSON: I'm not asking about the workings of the game. I'm asking what an operator sees and does and experiences in playing the game, just the outward manifestation of a game which is made by a controlled subsidiary of Atari, Inc., a named defendant in this lawsuit.

MR. HERBERT: It has nothing to do with the venue question. The venue question at this point as far as I can see down the line has nothing to do with what is manufactured by Kee. It really has nothing to do with what is manufactured by Atari. We haven't even gotten into that. If and when we do we will get into whether or not Atari's machines or Kee's machines infringe any of the patents involved in the litigation.

MR. ANDERSON: And you are instructing the witness not to answer?

MR. HERBERT: I instruct the witness not to answer.

MR. ANDERSON: Well, we will certainly take appropriate steps, I hope not but perhaps to make another trip out here for that purpose at hopefully Atari's and Kee Games' expense because I think this is so clearly a thin corporate relationship that we are entitles to pierce or at least try to pierce that. We will certainly take the position you are violating the intent and the language of the Federal rules of civil procedure.

MR. HERBERT: You can try to pierce the corporate relationship to see whether Kee has a place of business in the northern district of Illinois, that is fine. You can attempt to do that. That is not what you are attempting to do with this line of questioning.

MR. ANDERSON: We have established that Kee Games are in the northern district of Illinois, they are sold there, delivered there I presume. We will get into that further, that they have a distributor there and I think we are entitled to explore just how these games are used, what is done with them when they get there to the extent this witness knows and if we can't get it from the witness we will make another trip out here to get the information we are entitled to.

MR. HERBERT: You are entitled to pierce the corporate veil if you can. You have not even attempted to do that at this point. Until that veil is pierced the activities of Kee Games, not being a party to that suit have nothing to do with it.

MR. ANDERSON: Q. Mr. Bushnell, does Formula K involve moving a paddle?

MR. HERBERT: I instruct the witness not to answer.

MR. ANDERSON: Q. Will you answer the question?

A. No, I will not.

Q. Does the game Spike involve moving a paddle?

MR. HERBERT: I instruct the witness not to answer on the same grounds.

MR. ANDERSON: Q. Does the game Spike involve a ball?

MR. HERBERT: I instruct the witness not to answer on the same grounds.

MR. ANDERSON: Q. What is the percentage control which Atari, Inc. has in Kee Games Incorporated?

Off the record.

(Unreported discussion)

THE WITNESS: Atari has in excess of 90 percent..

MR. ANDERSON: Q. That is 90 percent of the stock of Kee Games, Inc., is that correct?

A. That's correct.

Q. Who holds the remaining 10 percent?

A. Joseph Keenan.

Q. Was he ever employed by Atari, Inc.?

A. No, he was not.

Q. Was he ever employed by any other entity which Atari, Inc. owns or controls?

A. No.

Q. Are there any other companies which Atari, Inc. controls?

A. Previously stated.

Q. Other than the ones we covered already?

A. No.

Q. When was Atari, Inc. formed?

A. Its incorporation date was June of 1972.

Q. Did it continue the business activities of some other entity?

A. Yes, it did.

Q. What was that entity?

A. Syzygy Company.

Q. Was it then Syzygy Game Company?

A. No.

Q. It was then Syzygy Company?

A. Yes.

Q. A proprietorship?

A. A partnership.

Q. Who were the partners in Syzygy Company?

A. Myself and Mr. Ted Dabney.

Q. Did one of you control the company?

A. Yes.

Q. Did you?

A. Yes.

Q. At the time of the formation of Atari, Inc. did Syzygy have a product line?

A. Yes.

Q. What was that product line?

A. Pong. Excuse me. At the time that is not true. Pong wasn't really introduced until later on. I guess I should say publication here.

Off the record

(Unreported discussion)

MR. HERBERT: Back on the record.

THE WITNESS: What did you mean by do you have a product line?

MR. ANDERSON: Q. Did syzygy have any product that it was making and selling as of June 1972?

A. No.

Q. Did Syzygy Company at any time in its history sell a product?

A. What do you mean by product? We were operating amusement machines which we had purchased.

Q. As of June 1972 was Syzygy operating amusement machines which it had purchased?

A. Yes.

Q. Was Syzygy Company in June of 1972 operating any video amusement machines?

A. Yes.

Q. Was that portion of the business of operating video amusement machines transferred in some way to Atari, Inc. in June of 1972?

A. Yes, it was.

Q. Was the entire active business of Syzygy, Inc. transferred to ATarin, Inc. at that time?

A. Yes, Syzygy Co.

Q. Excuse me, Syzygy Co. I am sorry. Did Syzygy Co. at that time continue to have an operating business.

A. No, it didn't I turned into a DBA.

Q. And DBA is for--

A. Doing business as.

Q. I'm not sure I understand that. Who was doing business as what?

A. Atari was doing business as Syzygy.

Q. Syzygy became more or less just a name that Atari used, is that correct?

A. That's correct.

Q. In June of 1972, whose video amusement machines was Syzygy operating?

A. A game called Computer Space built by Nutting Associates.

Q. Did Atari, Inc. continue to operate video amusement machines after June of 1972?

A. Yes.

Q. Is Atari, Inc. operating video machines today?

A. Yes.

Q. At some point in time did Atari, Inc. operate any other games other than Computer Space?

A. Yes.

Q. What other games has Atari, Inc. operated?

A. Pong, Space Race, Gotcha, Grantrak, Rebound, Quadrapong.

Q. Any others?

A. World Cup, Super Pong, Pong Doubles, Color Gotcha.

Q. Is that the list as far as you know at the present time?

A. Yes.

Q. Of those which if any is Atari, Inc. not at the present time operating?

A. Color Gotcha--not, that is not true, I will take that back. All of them.

Q. By operating, do you mean street operation?

A. That's correct.

Q. Is there any separate entity of Atari, Inc. or a division which handles the street operation?

A. No.

MR. HERBERT: Before we go on I think the answer might be misleading. The question was which of these is Atari not operating and you answer was all of them.

MR. ANDERSON: Q. None of them? That is correct?

A. None of them.

Q. That is the way I understood your answer. Has Atari, Inc. operated any video games outside of the State of California?

A. Yes.

Q. Where outside of the State of California?

A. Salt Lake City, Hawaii, Tokyo, Guam. That is it.

Q. Within the State of California does Atari, Inc. operate games throughout the state or only in a limited geographical area?

A. A limited geographical area.

Q. Just generally what is the limited area?

A. Santa Clara Valley.

Q. At any time in the history of Atari, Inc. has it operated video games in areas other than those you have listed: Salt Lake City, Hawaii, Tokyo, Guam, and the Santa Clara Valley?

A. Clarify what you mean by "operate"?

Q. Street operation of any kind.

A. Define that.

Q. Well, it's a term that I found somewhere in your material, I think. Does street operation have a meaning to you?

A. Well, yes, it means placing on location and collecting the revenues therefor. That is what I mean by street operation.

Q. I then would ask you the question using that definition of street operation.

A. Could you repeat the question?

Q. Yes. Has Atari, Inc. at any time in its history operated in a street operation outside of the areas that you have listed, namely, Salt Lake City, Hawaii, Tokyo, Guam and the Santa Clara Valley?

A. No, we haven't. Excuse me. I will take that back. We have operated machines in Los Angeles which we sold.

Q. You have since sold?

A. Yes.

Q. Has Atari, Inc. at any time operated machines outside of the geographical areas you have just listed on a more limited basis than the operation which you described, total control, maintenance and so forth? In other words, have you placed any anywhere else in the United States where Atari, Inc. maintained ownership of it for some more or greater or lesser amount of time and perhaps received any coins that were place in it?

A. No.

Q. With respect to the operation of Syzygy prior to June of 1972, did it operate in all of the areas that you have listed in street operations?'

A. No.

Q. What area did it operate in?

A. Just the Santa Clara Valley.

Q. Did Syzygy, Inc. operate any games other than the one that you have mentioned made by Nutting Associated named Computer Space--I said Syzygy, Inc., I mean Syzygy Co.--prior to June of 1972?

A. We operated various other amusement machines purchased by various Chicago and Florida manufacturer that were nonvideo.

Q. Syzygy Co. purchased other amusement machines, nonvideo games, from other sources. Did this include Allied Leisure?

A. Yes.

Q. And what Chicago company? Midway?

A. There were all purchased in San Francisco.

Q. Whose Chicago machines did you purchase in San Francisco?

A. Oh, Midway, Gottlieb, Chicago Coin, Williams. We were in the operating business.

Q. Is the game Computer Space or is the video amusement machine Computer Space a paddle game?

A. No.

Q. Does it have a playing piece?

A. Yes.

Q. Is it a ball?

A. No.

Q. Can you just generally describe the game, Computer Space?

A. It's a rocket ship-flying saucer flight. The computer controlled flying saucer battles with a player controlled rocket ship.

MR. ANDERSON: I will have the reporter mark as Bushnell deposition Exhibit 1 a Notice of Taking Deposition.

(Notice of Taking Deposition marked Bushnell deposition Exhibit No. 1 for identification)

MR. ANDERSON: Q. And I hand you Exhibit 1, Mr. Bushnell and ask if you have seen that before or a copy of it?

A. Yes, I have.

MR. HERBERT: What is it? Can you identify it?

MR. ANDERSON: The Notice. Bushnell deposition Exhibit 1 is directed to defendant Atari, Inc. and has listed certain categories in which the defendant has been requested to produce documents.

Q. Have you caused a search to be made for documents responding to those categories?

A. Yes, I have.

Q. Have you produced any documents here today in response to that Notice?

MR. HERBERT: I might interject here with respect to Paragraph No. 1, the only documents located are documents which have already been produced in Chicago, the contracts. I have other copies but I am not going to add anything to it. The are the same at Britz deposition Exhibit 3, Britz deposition Exhibit No. 2 and Ross deposition Exhibition No. 2.

MR. ANDERSON: May I see them?

MR. HERBERT: I didn't even bring them in here. I have the--yes, I will get them.

(short recess)

MR. HERBERT: I was mistaken, I do not have the letter on Syzygy letterhead which is Britz deposition Exhibit No. 2 and in addition to that the contracts between Bally and Mr. Bushnell are not fully executed as were the agreements actually presented in Chicago.

MR. ANDERSON: Does Mr. Bushnell or Atari have fully executed documents?

MR. HERBERT: No, that we can locate.

MR. ANDERSON: Then what you have handed me are the best documents in the records of Atari, Inc. at the present time?

MR. HERBERT: That is all we can locate.

MR. ANDERSON: I will have the reporter mark as Bushnell deposition Exhibit 2 a stapled collection of documents which Mr. Herbert has handed me. the top page is marked "Royalty Agreement", it is two pages of Xeroxed material. It bears a date of 26 day of June 1972, followed by an Affidavit form bearing the date of 1st of June 1971, a second Affidavit form bearing the date of June 1972 and a second two page Royalty Agreement or document so labeled between Bally Manufacturing Corporation and Syzygy Co., the first one I notice between Bally Manufacturing Corporation and Nolan Bushnell.

(Group of documents being Royalty Agreements and Affidavits marked Bushnell deposition Exhibit No. 2 for identification.)

MR. ANDERSON: Q. Mr. Bushnell, I hand you Bushnell deposition Exhibit 2 and ask.--
Would you like to see it?

MR. WELSH: Yes, please.

MR. ANDERSON: Q. Mr. Bushnell, I hand you Bushnell deposition 2 which you heard me briefly describe on the record and ask you whether you are familiar with those documents?

A. Yes, I am.

Q. Did they come from any files whch you maintain?

A. Yes, they did.

Q. What file did they come from?

A. It came from what I call essentially the Bally file.

Q. Is that a file that is maintained at the offices of Atari, Inc.?

A. Yes, it is.

Q. Did you find in your search any other copies of the documents which are stapled together as Bushnell deposition Exhibit 2?

A. Yes, we have a copy of this document.

Q. You have another copy of the document?

A. Yes.

Q. Do you have originals or non-Xeroxed copies of the documents that you know of?

A. No, I don't believe I do.

Q. Do you have any copies of any of the documents which form a part of Bushnell deposition Exhibit 2 which bear actual signatures?

A. Not to my knowledge. This is the most complete form.

Q. Do you know who prepared the first document, the first two pages of Bushnell deposition Exhibit 2?

A No.

Q. Was it prepared in California or Chicago?

A. Chicago.

Q. How did it come into your possession?

A. It was given to me by Mr. Britz.

Q. Was that while you and he were together?

A. Yes.

Q. Where were you at that time?

A. I don't remember.

Q. Were you in Chicago at the time?

A. I am not sure whether I received it in the mail or whether it was handed to me in Chicago.

Q. Did you ever have any correspondence with anyone at Bally or Midway with respect to this subject matter?

A. I don't remember.

Q. Have you made a search for such correspondence?

A. Yes, I have.

Q. Have you been able to find any?

A. Only those things which are presented here.

Q. Are there any other documents, Mr. Herbert, that you are producing in response to our request?

MR. HERBERT: No. We had no other documents we consider to be in response to the request in the Notice but in view of the long discussion of our invoices in Chicago, we did bring invoices. I don't think they respond to any paragraph here but we do have invoices to Empire Distributing.

Q. All right. Perhaps we will just take those and mark them at this time or look at them and come back to them later.

MR. HERBERT: Insofar as marking and making of record, there are a fair number of them and they are invoices giving pricing information as well as the volume of business between Atari and Empire which may or may not be relevant here. I am perfectly glad to let you take a look at them. If you think any pertinent ones of them need to be marked as exhibits perhaps we can delete some portions that are not necessary for your purposes.

MR. ANDERSON: All right.

MR. HERBERT: But I prefer not to have them marked as exhibits at this time and let you take a look at them at your leisure, perhaps in a short recess.

MR. ANDERSON: All right. Why don't you lay them aside? We will look at them in a short recess and pursue the Royalty Agreement which is the first two pages of Bushnell deposition Exhibit 2.

Q. Mr. Bushnell, do you recall whether you signed the original of the Royalty Agreement which forms the first two pages of Exhibit 2?

A. Yes, I believe I did.

Q. I will show you the Ross deposition Exhibit 3 and ask you if you recognize that?

A. Yes, I do.

Q. And is that another copy of the Royalty Agreement which is the first two pages of Bushnell Exhibit 2?

A. It appears to be so.

Q. And does it bear your signature?

A. Yes, it does.

Q. Did you sign it on or about the 26th of June 1972?

A. I don't know. I believe that I did.

Q. The third page of Bushnell deposition Exhibit 2 is a form , unsigned, entitled "Affidavit" and it states in part "I, Nolan Bushnell, of ( ) hereby state and affirm that as of the 1st of June 1971 I no longer had any obligatory duties to Nulting [sic] and Associates" and it goes on. Do you recall having seen that affidavit before?

A. Yes, I have.

Q. Do you know who prepared it?

A. Bally Corporation.

Q. Did you provide them wit the information for its preparation?

A. No, I didn't.

Q. Do you know, did they ever give you any reason why they prepared it?

A. They felt that there might be some kind of conflict because I was previously in the employ of Nutting, and there was a document signed with Nutting with regard to certain things, certain tasks, that I would perform there, and they were concerned since they were in competitive areas that there may be some cause for legal action.

Q. Do you know if you signed the form Affidavit which comprises the third page of Bushnell deposition Exhibit 2?

A. Yes.

MR. HERBERT: I would like to point out to the witness the third page of Exhibit 2 looks very similar to the fourth page of Britz deposition Exhibit No. 3 and request that the witness look at it more closely rather than upside down as he is doing now.

MR. ANDERSON: That is an excellent suggestion. I might say I'm not trying to create an erroneous record, I only want to get the facts.

THE WITNESS: Yes.

MR. ANDERSON: Q. You will note the third page bears a date of June 1971 I believer, and the fourth page---

MR. WELSH: 1st of June.

THE WITNESS: Okay.

MR. ANDERSON: --is dated June of '72.

THE WITNESS: This is the one I signed.

MR. HERBERT: The witness is referring to the one marked Britz deposition Exhibit No. 3.

MR. ANDERSON: Q. And that is the fourth page of the set of documents I have had the reporter mark as Bushnell deposition Exhibit 2, is that correct?

A. Yes.

Q. Did Bally also prepare the Affidavit which you actually signed, do you know?

A. I don't remember. I believe they did.

Q. Do you now recall the reason that new affidavits were prepared?

A. I think there were several typographical errors in the first one and they were incomplete in some areas.

Q. Was the first merely a draft of the second as they appear in deposition Exhibit 2?

A. I'm not sure. I don't remember the events that clearly.

MR. ANDERSON: Mr. Herbert, are there any other documents that are being produced in response to this Notice?

MR. HERBERT: No. There is nothing else.

MR. ANDERSON: Q. Mr. Bushnell, how old are you?

A. I am 31.

Q. Would you briefly state your educational background after high school?

A. I went to Utah State University and later on continued at the University of Utah where I received a bachelor's degree in electrical engineering with an emphasis on computer design.

Q. In what year did you receive your degree?

A. 1968.

Q. Did you continue your education beyond that degree in 1968 or did you enter business?

A. I entered business.

Q. For whom did you go to work at that time?

A. Ampex Corporation.

Q. Located where?

A. In Sunnyvale, California.

Q. Just in general what were your duties?

A. I was in computer design, digital recording involved in an information, storage, and retrieval system.

Q. How long did you stay with Ampex?

A. Two years.

Q. So you left them about 1970?

A. That's correct.

Q. For whom did you become employed in 1970?

A. Nutting Associates.

Q. Where was Nutting located?

A. Mountain View, California.

Q. What was the nature of Nutting's business in 1970?

A. They were an amusement game manufacturer.

Q. At that time did they have a video amusement game that they were making and selling?

A. No.

Q. Just generally what was the nature of their amusement games at that time?

A. It was a question and answer game using film storage techniques.

Q. What were your duties when you joined Nutting?

A. As chief engineer.

Q. Approximately how many employees did Nutting have at the time?

A. 20.

Q. For how long did you stay at Nutting?

A. One year.

Q. So that you left in about 1971?

A. Yes.

Q. At the time that you left Nutting, did Nutting have a video amusement device that they were making and selling?

A. Yes.

Q. When in 1971 did you leave?

A. It was actually in June--it was February I believe of '72 actually.

Q. Did Nutting have more than one video game on the market that they were making and selling at that time in February of 1972?

A. No, they did not.

Q. What was the game?

A. Computer Space.

Q. On approximately what date was Computer Space first made and sold by Nutting as far as you can recall?

A. I believe that the firs unit was sold in late December or early January of 1972.

Q. Were you involved in the design of the game Computer Space or the machine Computer Space?

A. Yes, I was?

Q. What was your involvement?

A. The machine was designed by me independently and offered to Nutting Associates on a royalty basis.

Q. Was it designed by you independently while you were an employee of Nutting?

A. No.

Q. Was it designed prior to your employment at Nutting?

A. Yes, it was.

Q. Is there some other agreement between you and Nutting with respect to a royalty basis for amusement games at this time?

A. Yes, there is.

MR. ANDERSON: I will have the reporter mark as Bushnell deposition Exhibit 3 a copy of United States patent 3,793,483.

(Copy of United States patent 3,793,483 marked Bushnell deposition Exhibit No. 3 for identification)

MR. ANDERSON: Q. Mr. Bushnell, I hand you Bushnell deposition Exhibit 3 and ask if you are the Nolan K. Bushnell named I that patent?

A. I am.

Q. Is that a patent which you own?

A. It's currently assigned to Atari, Inc.

Q. Based on the disclosure of that patent, does that relate to the subject matter of the work that you did while you were at Nutting?

A. No. Well, it represents the subject matter which I did prior to working for Nutting.

Q. You testified that you had independently developed the game Computer Space before you joined Nutting I believe?

A. That's correct.

Q. And is that the subject matter to the best of your knowledge of your Patent 3,793,483?

A. I don't quite understand.

MR. HERBERT: I am going to object to this. We are getting again quite far afield from the venue question and I don't see the connection to the venue question. Perhaps there is one in your mind but unless there is I am going to instruct the witness--I do instruct the witness not to answer.

MR. ANDERSON: Q. Patent 3,793,483 relates to video amusement machines, does it not?

A. Yes it does.

Q. Does Atari, Inc. have any licensees under Patent 3,793,483?

A. Yes.

Q. Is Nutting Associates a licensee?

A. Only the that they have a right to manufacture or had a right I should say under the terms of a contract to build that particular machine which has now expired.

Q. When you say that particular machine, you mean the machine Computer Space which you developed?

A. Yes.

Q. Is Nutting no longer making the game or machine Computer Space to the best of you knowledge?

A. I don't know. I don't believe they are.

Q. Are there any other licensees under you Patent 3,793,483, Bushnell deposition Exhibit 3?

MR. HERBERT: I object to the question and instruct the witness not to answer on the ground that it has nothing to do with the venue question.

MR. ANDERSON: Well, I disagree that it has nothing to do with the venue question. I think that we perhaps can get back to it at a later point. We may find it more acceptable, I don't know.

MR. RIDDELL: Would it be improper to ask you to connect that up right now, as to where that is going?

MR. ANDERSON: All right, I will certainly at least do that in part for you, Mr. Riddell.

MR. RIDDELL: With regard to the venue question.

MR. ANDERSON: Q. Mr. Bushnell, what if anything did you do in response to or subsequent to the royalty agreement of June 26, 1972, Bushnell deposition Exhibit 2?

A. I produced a video amusement machine and a four player flipper type pinball machine.

Q. Did they have names?

A. The video amusement game had no name at that time nor did the pinball.

Q. Were they subsequently named, do you know?

A. The machine--when you say subsequent to, it should be clarified. I had in my possession at the time of the execution of this contract the architecture of several games including a flipper type pinball machine, including several video amusement games. The Royalty Agreement here referred not to any particular video amusement machine nor to any particular pinball machine.

MR. ANDERSON: Q. You stated that you did develop or had developed two amusement machines under--

A. Several.

Q. Well, you mentioned two, a video amusement machine I think and a four player flipper game, at least that is what my notes say and I think where we were I asked whether those had names, you said they didn't at the time that you delivered them to Bally. I asked if they were named subsequently and what is the answer to the question if you know?

A. There was a machine named, that was subsequently named Pong represented to Bally.

Q. And was that the video amusement machine that you referred to as one of the machines delivered to Bally under the provisions of P.X. 2?

A. Yes.

Q. Did you develop any other video amusement machines which you delivered to Bally or Midway?

A. Yes I did.

Q. How many?

A. There were two.

Q. Two additional ones beyond Pong?

A. No, one.

Q. One additional one. Was it delivered to Bally or to Midway?

A. To Midway.

Q. Was it done pursuant to the Royalty Agreement, the first two pages of Bushnell deposition Exhibit 2?

A. Yes, it was.

Q. Why did you deliver that game to Midway when you were under agreement with Bally?

A. I was instructed to do so.

Q. By whom?

A. By Bally.

Q. Who at Bally instructed you, do you know?

A. Mr. Britz.

Q. On what occasion did he instruct you to do that?

A. Upon the occasion when I presented the second game to them.

Q. Did you present that to them in person?

A. Yes I did.

Q. In the Chicago area?

A. Yes I did.

Q. Where did you do that?

A. At their corporate offices.

Q. At Bally's corporate offices?

A. At Midway's corporate offices.

Q. Is that in Schiller Park, Illinois, do you know?

A. Yes it is.

Q. What was the name of that game if it had a name at that time?

A. It was called VP-2 or Asteroid as it was later.

Q. Did VP-2 or Asteroid precede Pong in your development or was it subsequent.

A. When you say--would you elaborate on development?

Q. Well, perhaps we should establish which one you delivered to Midway or Bally first.

A. Pong.

Q. Approximately when did you deliver Pong to Bally or Midway, if you know?

A. It was in middle summer of '72.

Q. When did you deliver Asteroid of VP-2 to Bally or Midway?

A. It was sometime later than that. I think it was in early 1973.

Q. Did you deliver Pong to Bally or to Midway?

A. To Bally.

Q. But you delivered Asteroid to Midway?

A. Yes.

Q. I will show you a document that has previously been marked as Britz deposition Exhibit 2 and ask if you recognize that?

A. What was the question again?

Q. Whether you recognize the letter?

A. Yes, I do.

Q. Does it bear your signature.

A. Yes it does.

Q. Did you write it on or about the date that it bears?

A. I must have, yes.

Q. Does that refresh your recollection at all with respect to when you delivered the first Pong game to Bally?

A. Yes it was--I think it was prior to the date called for here but I think it was in the early fall.

Q. So that was subsequent to July 10 1972, the date of Britz deposition Exhibit 2?

A. Yes it was.

Q. But prior to November 15 you believe?

A. Yes.

Q. Did you attend the MOA show in Chicago in 1972?

A. Yes I did.

Q. Did you or any company that you controlled have a display at that show?

A. No we did not.

Q. Did you show a machine of any kind during that show while in conjunction with that show?

A. No I did not.

Q. Upon your being in Chicago for the show, is that the occasion on which you delivered the Pong game to Bally, do you know?

A. I believe that the delivery of the Pong game to Bally--not, I would say no, that was not the occasion.

Q. So in the fall of '72 then you made at least two trips to Chicago?

A. Yes, I did.

Q. How many trips did you make to Chicago during 1972 to the best of your recollection?

A. During the whole year of 1972 I would say four.

Q. When was the first trip to Chicago in 1972?

A. It was in early spring.

Q. What was the occasion for that trip?

A. As an employee of Nutting Associates.

Q. And who did you visit if anyone in the Chicago area at that time?

A. Empire Distributing.

Q. Was Empire Distributing a distributor for Nutting at that time?

A. Yes they were.

Q. What was the purpose of your calling on Empire at that time?

A. To teach a field service school.

Q. Prior to that visit to Empire in 1972 in the spring, had you made any prior trips to Chicago on behalf of Nutting?

A. Yes I did/ It was to the MOA Show.

Q. In 1971?

A. Yes.

Q. did Nutting have a booth at the 1971 MOA Show?

A. Yes.

Q. Had you made any other trips to Chicago on behalf of Nutting prior to your trip in the spring of 1972?

A. No.

Q. Did Nutting have the machine computer Space on display at the 1971 MOA Show as a part of their booth?

A. Yes they did.

Q. Who else from Nutting was at the MOA Show in 1971?

A. Bill Nutting, David Ralston, Rod Guyman [sic].

Q. After your trip to Empire in the spring of '72 what was the next occasion of your traveling to Illinois?

A. It was to obtain a consulting arrangement with Bally Manufacturing.

Q. To the beat of your recollection on what date did you make that trip?

A. I think it was somewhere around March or April of that year.

Q. At that time were you no longer in the employ of Nutting?

A. Yes I was no longer.

Q. Did Syzygy Company then exist?

A. Yes it did.

Q. You mentioned earlier that you think there was an earlier corporation called syzygy Games?

A. No, that was later.

Q. That came later?

A. The chronology, just to set the record straight, is Syzygy was rolled into Atari, Syzygy later became the operating arm of Atari, Ted Dabney who was my partner purchased the assets of Syzygy and operated it independently and at a later time I reacquired the assets of syzygy personally so that is the whole--during the time that Dabney ran it independently it was called Syzygy Game Company.

Q. I see. That would have been after June of '72?

A. That's Correct.

Q. As of March of 1972 you and Mr. Dabney were partners in Syzygy Company?

A. That's Correct.

Q. And as I understand it there were no other partners at that time?

A. That's correct.

Q. Did Syzygy have any other employees?

A. No they did not.

Q. Did it have a manufacturing facility?

A. No it did not.

Q. Did it have a laboratory or development facility?

A. Yes it did.

Q. Upon your visit to Chicago in March or April of '72 who did you call on at Bally?

A. John Britz.

Q. Did you meet with anyone else at Bally at that time?

A. I don't recollect.

Q. Did you meet with any other companies or individuals with respect to Syzygy business at that time?

A. I also met with Empire.

Q. With whom did you meet at Empire?

A. Mr. Kitt.

Q. What was the purpose of your meeting in Chicago with Mr. Kitt in March or April of '72?

A. We were friends.

Q. Was there any business purpose?

A. Only the introduction to Bally.

Q. Did you have a video game with you during your trip in March or April of 1972?

A. Explain yourself more?

Q. Did you have a physical device which operated as a video machine?

A. No I did not.

Q. Had you developed a video game other than the Computer Space as of March or April 1972?

A. Yes I had.

Q. Was that the game that became Pong?

A. Yes it was.

Q. Did you provide Empire or Bally with any written material with respect to the video game that became Pong during that visit?

A. Not to my recollection.

Q. Did you enter into any sort of a business relationship with Bally or Midway or Empire at or during that trip?

A. Which trip is that?

Q. March or April 1972.

A. Yes.

Q. What was that business relationship?

A. It was covered--it's in the essence of this contract which is labeled plaintiff's Exhibit 2. I mean that was the outcome document of those discussions.

Q. Then that would be actually Bushnell deposition Exhibit 2, the one with the yellow label?

A. Yes.

Q. How do you relate that with the July 10 1972 letter on the Syzygy letterhead which is Britz deposition Exhibit 2?

A. Now this was in response to receiving the contract.

Q. Then you received Bushnell deposition Exhibit 2, the proposed Royalty Agreement prior to your letter of July 10 1972?

A. To the best of my knowledge, yes.

MR. WELSH: I think your records are a little bit confused in that Bushnell Exhibit 2 contains more documents that just that particular agreement.

MR. ANDERSON: Your point is probably well taken. I was referring to the first two pages.

THE WITNESS: Yes, so was I.

MR. ANDERSON: Q. Then perhaps we can clarify that by just merely referring to Ross deposition Exhibit 3 which is the same Royalty Agreement but the one you said bears your signature?

A. Yes.

Q. If I understand it then at the termination of your meeting with Mr. Britz in March or April of '72 did you believe you had an understanding with Bally?

A. Yes I did.

Q. And it was just a matter of reducing it to writing later, is that correct?

A. Right.

Q. And as far as you understand it, Ross deposition Exhibit 3 was that reduction to writing?

A. That's correct.

Q. And the letter of July 10 that you wrote, Britz deposition Exhibit2, was merely a followup on Ross deposition Exhibit 3?

A. Yes.

Q. For what purpose?

A. Oh I needed several parts that we had agreed on that I had not received. It was a situation that I had been purposely vague in describing the product that I was going to produce for them, and upon receiving the documents and the money I was able to tell them a little bit more about the game which I was going to produce for them.

Q. What was the occasion of your next visit to Chicago after the March or April visit in 1972?

A. To show them a video game.

Q. When was that? Was that the one that you have referred to?

A. Yes that was the, you know, late summer, midsummer.

Q. At that time you had a game that was ultimately called Pong with you?

A. Yes I did.

Q. At the time of that trip I gather Atari, Incorporated had been formed?

A. Yes that is true.

Q. During that trip were you functioning on behalf of Atari, Incorporated?

A. Yes I was.

Q. Was the agreement between Nolan Bushnell and Bally Manufacturing Corporation, Ross deposition Exhibit 3, transferred over to Atari, Inc.?

A. In effect it was. I don't remember if there is any supporting documentation to that effect. No, there was.

Q. There was supporting documentation?

A. Yes.

MR. ANDERSON: Mr. Herbert--

MR. HERBERT: I don't know what it is. I have not seen it that I can recall.

THE WITNESS: I can remember signing something for the auditors.

MR. ANDERSON: Would you be good enough, Mr. Herbert, to find this supporting documentation?

<<To be continued>>

I suspect that most readers of this blog have played an arcade light gun game – those rifle games that used a beam of light instead of bullets or wiper blades and contacts to determine when a target was hit. But do you know when the first light gun game was created? Some of you might guess the 1980s, when Nintendo produced the NES Zapper for the home and games like Duck Hunt and Hogan’s Alley for its arcade Vs. system. Others might opt for the 1970s, when arcade games like Nintendo’s Wild Gunman and Atari’s Qwak! Still others might say the 1960s when Ralph Baer, Bill Rusch, and Bill Harrison created a light gun game for their Brown Box and Nintendo produced its Beam Gun series.



All of those guesses are wrong. The first light gun game was not created in the 1960s, or the 1950s, or the 1940s. No, to find the first known light gun game, you have to go all the way back to the early 1930s, and perhaps earlier.


Interestingly, the first known electric gun game was patented by J.L. McCullough in 1896. The game used a wiper blade that brushed across a series of contacts when the gun was turned, creating a closed circuit when the bullet was pressed if the gun was aligned with the target. This style of game later became known as the “Dale Gun” after Eldon Dale of Dale Engineering, who created a popular variant called that he sold to the Exhibit Supply Company. Exhibit Supply released the first model in 1947 under the name “Deal Gun” and some mistakenly credit Dale with inventing the method, but it actually predated his creation by over half a century.










From  videos of the unit on YouTube, however, it does not appear to have been a light gun game. Instead, it projected an image onto a screen or wall and they used another method  to detect hits (and given the video's claim that it was entirely mechanical other than the projector, it does not appear to have been a Dale Gun mechanism). Still, however, Costa may be correct about the Patterson patent but without more information, the jury is still out and even if it was a light gun game, it may never have been produced. So for now, it looks like the Rayolite may indeed have been the first light gun game - until someone finds an unambiguous reference to an earlier one.  
What about light gun video games? Here too, I do not know for sure which was first. Some sources claim it was Atari’s Qwak! Released in November 1974. Qwak! had some similarities to Nintendo’s Duck Hunt, including the duck hunting theme and a hunting dog that retrieved downed birds. Ironically, in 1986 Nintendo itself cited Qwak! in an attempt to invalidate one of Magnavox's video game patents by claiming that Ralph Baer (who had seen the game at the 1974 MOA show) had merely copied it to create the Odyssey rifle games – though the claim was clearly false since their rifle game was conceived in the late 1960s. Another candidate for first light gun video game is Sega's Balloon Gun, which used pistols rather than rifles. According to some sources, the game was released in August 1974 while others list it as a 1975 game. I don’t have any hard information on a release date. I’m not even sure if it used a light gun. The only information I have is a flyer, and from that, the graphics appear too advanced to me for a 1974 or 1976 game - though it could have used computer imagery superimposed on a filmed or physical background.

In this article, I will try to give a more accurate account of Service Games and its early history. I don’t pretend that this will be a comprehensive history and given the conflicting information that’s out there, I have no doubt that I will get some things wrong myself. One problem with researching Sega’s early history is the dearth of information in existing sources. Another (that seems endemic to video game histories) is that even those works that do have seemingly accurate information do not identify their sources. Nonetheless, I did find some sources that provide what seems to be some solid facts about Service Games and its founders. Two of them are legal documents (always a great source for hard dates and other info).




NOTE – information below was taken from various sources available on Ancestry, including the 1920, 1930, and 1940 federal census, 1925 New York state census, Social Security Death Index, California Death Index, World War I Draft Registrations, New York Marriage Index, city directories from Los Angeles and Honolulu, and various ship passenger lists. This was made a bit difficult by the fact that there were two Irving Brombergs living in LA at the time, both with sons named Martin.

Irving Bromberg and Dave Robbins in 1937

 
The son of Russian Jewish immigrants, Irving Bromberg was born on June 10, 1899 in New York. On June 15, 1918 Irving, who had just turned 19, married Jeannette Blumenthal. In September 1918, Irving registered for the World War I draft in Brooklyn, listing his occupation as a salesman of glassware. On August 6, 1919 Irving and Jeannette’s son Martin Jerome Bromberg was born. On the 1920 census, Irving was still selling glassware. From 1923 to 1930, he served as president of the Greenpoint Motor Car Corp of Brooklyn and from 1930 to 1933 he operated a vending and coin-operated amusement machine distribution company called Irving Bromberg Co. in Brooklyn, Boston, and Washington DC (Fraud and corruption… 1971). On the 1930 census, Irving listed his occupation as a salesman of “chewing gum” (by then, they had a second child: daughter Ehthelda, who had been born in 1924). In 1933, he sold the New York office to Leon Taksen, who had managed the office (Billboard 7/29/33).  Though the July 1933 issue of Coin Machine Journal included an ad saying that the Supreme Vending Company of Brooklyn (Wm Blatt pres) had purchased the Irving Bromberg Company of Brooklyn. That same year Irving moved to Los Angeles and opened up either another company called Irving Bromberg Co. or another branch of his existing company

A very bad photo of Marty Bromley in 1941

And a better one from 1989 (Marty's the one on the left)

The 1964 case claims that Standard Games of Hawaii "...continued until 1945, at which time it was sold."

NOTE - I have removed this part of the article after doing more research and will move it to part two, with the addition of further details

And to clean up some loose genealogical ends:

Martin Jerome Bromley died on September 7, 2008 in London.

Bonus Pictures

Here's a rare photo of an upright Exidy 0077 cabinet from an industry show. They later added some more levels and renamed it Top Secret

NOTE - since my first post, I have finished reading the two source documents (or at least the parts referencing Service Games and Sega) and have new information, so I thought I would reorganize the posts and create one that just concentrates on Sega’s founding date (I changed my previous post to just talk about the pre-history of Service Games).
So when was Sega founded? Sega's website says it was 1951.
Of course it depends on what you mean by Sega and what you mean by founded. Others say it was 1952, 1965, or some other date.

Since Sega was preceded by Service Games, you might trace Sega’s founding to the founding of Service Games. So when was Service Games founded, and when did it become Sega? It depends on which “Service Games” you mean. Various entities existed under that name in the 1950s and ‘60s.

Here is a list of some of them. Note that most of these were subsidiaries rather than separate corporations:

Service Games, Inc. - Service Games, Hawaii, Inc. - Service Games, Japan, Inc.
Service Games, Korea, Inc. (located in Okinawa, later became Garlan) - Service Games, Philippines, Inc. - Service Games, Panama, Inc. - Service Games, Nevada, Inc.

There were also several other entities with different names allege to have been affiliated with Service Games, many of which had the same partners/executives.

This is the only ad I could find mentioning Service Games - from the April 2, 1949 issue of Billboard

To help answer the question at hand, here is a brief timeline:

• 1945 - Standard Gaems of Hawaii is sold. Irving Bromberg, Martin Bromberg, and James Humpert form a new company called Service Games, Hawaii to distribute slot machines and other coin-operated devices to US military facilities on the islands. Service Games is formed as a partnership with each partner contributing $50,000 in capital.
Humpert served as the company’s PR man, finding locations for machines and “keeping location owners happy.”
Martin Bromberg changed his name to Martin Bromley.

• February 15, 1952 - Service Games, Hawaii and salesman Richard Stewart enter into agreement by which Stewart will move to Japan and open a distribution office, while Service Games will supply him with machines and pay him a 10% commission on gross sales.

• February 1952 - Marty Bromley sends Stewart and mechanic Raymond Lemaire to Japan to promote and expand sales of Service Games on US military bases in the Far East. In Tokyo, they form a partnership called Lemaire & Stewart, which also does business as Japan Service Games, and Service Games, Japan.
Stewart and Lemaire leave the employment of Service Games, in which they have no financial interest at the time.
The partnership later becomes successful enough to warrant the establishment of factories and a sales organization.

• 1953 - Service Games, Japan, Inc. is organized??
In the senate report, Delmar Fox, Assistant Chief of the Fraud Investigations Division, Office of Special Investigations, US Air Force testified “I was able to trace the evolution of the Bromley enterprises in Japan to Service Games, Japan, Inc., which was organized in 1953.”
I am unsure of this. I don't know if Service Games, Japan was ever an actual corporation or if it was just a dba name for Lemaire & Stewart. It was referred to numerous times in the testimony, but I didn’t find any place that said it was actually incorporated as a separate company

• September 10, 1953 - Service Games, Inc., Panama files for incorporation and becomes the controlling corporation for all of the other Service Games entities. Irving Bromberg, Marty Bromley, Raymond Stewart, Raymond Lemaire, and James Humpert each have a 20% stake (200 shares of stock).

• September 22, 1953 - Service Games, Panama's second board meeting provides for Lemaire & Stewart to represent Service Games in Japan

• April 24, 1954 – first use in commerce, and first use anywhere of the Sega trademark for coin-op amusement machines, as per the 4/2/1962 trademark application

• April 30, 1955 - Martin Bromley and Irving Bromberg buy Humpert's interest in Service Games, including Service Games, Panama, for $50,000 each.

• January 2, 1956 - Raymond Lemaire buys 50 shares in Service Games, Panama from Irving Brombeg for $30,000. Richard Stewart buys 50 shares from Marvin Bromley for the same amount. All four now own 250 shares (25% of the company)

• 1957 - Service Games, Nevada is incorporated. Korwin Hailey is president, Martin Bromley is VP, Irving Bromberg is secretary-treasurer, R.N. Nickels is director. Hailey subsequently names Stewart and Lemaire as members of the firm as well. Service Games, Nevada and Service Games, Japan have same cablecram code.

• May 31, 1960 - Service Games (Japan), Inc. is dissolved. Two new companies are organized: Nihon Goraku Busan Kabushiki Kaisha (Japanese Automatic Manufacturers Company, Inc - sometimes called Nippon Goraku Bussan) and Nippon Kikai Seizo KK (Japanese Machine Manufacturers Co. Inc.)
Nihon Goraku Bussan was a distributor of coin-op amusement devices while Nippon Kikai Seizo manufactured slot machines and also did business as Sega, Inc.

• June 1960? – According to Moody’s international manual, Sega was “established” in June 1960 as “Nihon Goraku Bussan Co. Ltd.”
Not sure about this one either. Is NGB “Co Ltd” a different company than NGB “KK”? I’m guessing that they are referring to the May 31 event.

• September 5, 1960 - Billboard reports that the assets of Service Games (Japan), Inc. have been purchased by Sega, Inc. and Ultimatic Inc. (managing director: Richard Stewart) - Service Games itself has been liquidated
I think Sega, Inc. is Nippon Kikai ‘Seizo and Ultimatic is Nihon Goraku Bussan

• March 31, 1961 - Irving Bromberg and Marty Bromley sell Service Games, Hawaii, Inc. to a group headed by Harold Okomoto for $1.4 million - they reserve the use of the name "Service Games" for their foreign operations

• April 2, 1962 – Nippon Kikai Seizo files two trademarks on name “Sega”, one fior use on jukeboxes the other for use on other coin-op amusement devices

• April 12, 1962 - Service Games, Panama, Inc. changes its name to Club Overseas Inc., Panama

• June 1964 – Nihon Goraku Bussan acquires Nippon Kikai Seizo

• July 1, 1965 - Rosen Enterprises and Nihon Goraku Bussan merge to form Sega Enterprises, Ltd.
NOTE that according to David Rosen's testimony in 1971, what technically happened was that Rosen Enterprises was acquired by Nihon Goraku Bussan

• Mid June 1969 - Gulf + Western buy out Marty Bromley, Richard Stewart, and  Scott Dotterer's interest in Sega Enterprises, Ltd. Bromley is paid , 1,673,429 and 114,065 shares of Gulf + Western stock, Richard Stewart gets $836,710 and 57,032 shares, Scott Dotterer gets $371, 901 and  23,350 shares.

• January 5, 1970 - Gulf + Western completes its buyout of Sega. David Rosen gets $513,173 and 32,850 shares and his wife Masako gets $185,894 and 11,881 shares. Based on the price of the stock at the time, the total sales price for the 1969 and 1970 transactions is to $9,977,043.
Gulf + Western now owns 80% of Sega Enterprises. Ltd. The other 20% is owned by Raymond Lemaire.

A few observations. As others have pointed out, the “Service Games” that became Sega was not the same Service Games that was founded in 1945, nor was it the same as Service Games, Japan. OTOH, I don’t know if you can really say it was a “completely different company” either. On paper, that may be true, since Service Games Japan was dissolved when Nihon Goraku Bussan was created. In reality, however, was Nihon Goraku Bussan just Service Games Japan under a new name? They seem to have had the same executives, but I cannot really say if they were different or not, since I am not sure what led them to dissolve the former and create the latter.

I mentioned earlier Steven Kent’s claim that “Service Games began in May 1952,” which I said was “wrong.” In reviewing the information, perhaps “wrong” was a bit strong. He seems to be referring to the Stewart & Lemaire partnership, which did business as Service Games Japan (SGJ). If so, I can see why he would pick that date rather than the founding of Service Games, Hawaii (SGH). He may have been thinking that SGJ is the one that became Sega (though this is not entirely accurate) while SGH did not. I am not sure what the significance of May 1952 was but if SGJ was incorporated on that date then I can see why he makes his claim.

As I said, however, I am not entirely sure that SGJ ever was officially incorporated.
What about the 1951 date? I’m sure where they got that one.

Next time, I’ll talk more about the problems Service Games had with the US government – and boy, did they have them.

Bonus Content

Since someone else made reference to the Polly Bergen Company last time, I thought I'd include this little blurb from my book about the formation of Sega Enterprises, Inc. (the American arm)

"Meanwhile, in 1974, a new corporate entity called Sega Enterprises, Inc. appeared on the scene, though it happened in a roundabout manner that only an accountant could understand. At the time, Gulf + Western, in partnership with David Rosen, was trying to establish a conglomerate in the Far East similar to Gulf + Western, with Sega as a subsidiary. When that effort failed, they decided to spin off Sega into a separate US company headed by Rosen (Kent 2001). One of Gulf + Western’s many holdings was a cosmetics company called the Polly Bergen Company, which they owned a 53.5% interest in via another subsidiary (naturally) called Consolidated Brands. By 1973, Polly Bergen was losing money and in March 1973 Gulf + Western sold its cosmetics business to Faberge, leaving Polly Bergen with no product line whatsoever. In March 1974, Gulf + Western transferred its Sega Enterprises, Ltd. subsidiary to the Polly Bergen Company. Then, on March 25, it effected a one-for-ten reverse stock split and acquired Polly Bergen for 1.7 million shares of stock, increasing its ownership of the company to 95%. The same day, they changed its name from The Polly Bergen Company to Sega Enterprises, Inc. with Sega Enterprises, Ltd. (Sega’s Japanese operations) as a subsidiary (makes perfect sense to me)."

This came from Sega's annual reports. Despite my comment at the end, I actually suspect that it made perfect sense to somebody. My initial suspicion was that it was done specifically to take control of Polly Bergen by diluting its stock. Since I am not well versed in such matters, however, that was a guess. Wikipedia claims that reverse stock splits are often done to  satisfy the stock exchange's reduce the number of shareholders so that the company is placed in a different regulatory category.

Last time we talked about the founding of Service Games and a few of the many entities that were related to it. Today, we discuss their many run-ins with the government.

Service Games was initially founded in Honolulu to distribute slot machines and other coin-operated amusement devices to US military bases in Hawaii. As I mentioned last time, there were probably few, if any, distributors serving the Hawaiian market at the time, so Service Games likely had the market to themselves. The good times came to an end, however, in 1951 when Congress passed the Gambling Devices Transportation Act of 1951 (a.k.a. the Johnson Act), which made it a crime to transport gambling devices across state lines except to states where the devices were legal. This meant that slot machines were now illegal on military bases in the continental US and (likely) in the territories of Alaska and Hawaii, leaving Service Games with an abundance of them (Steven Kent reports that the government actually confiscated their machines and that the Brombergs bought them back, but I didn’t see any mention of that in the senate report, which merely reports that they had an abundance of machines).

In any event, the Johnson Act did not apply to US military bases in foreign counties, providing Service Games with an opportunity. In February 1952, Marty Bromley sent Richard Stewart and Raymond Lemaire to Japan to distribute Service Games machines to US military bases in the Far East. Initially they appear to have merely distributed slot machines made by Mills (and maybe Jennings) to PXs and servicemen’s clubs. In the 1960s, however, they began to manufacture Sega-branded slots. In They also distributed other kinds of coin-op amusement machines and sold things like pizza ovens, snacks, rotisseries and other goods.

As you might guess, not everyone liked the idea of the military having slot machines on its bases. During a 1971 senate investigation of fraud and corruption in military clubs in Vietnam, Senator Abraham Ribicoff said, "the sooner the military kicks out all the slots the better." In January 1951, Army brass directed that slot machines be removed from Army installations in the continental US, Alaksa, Hawaii, and the Panama Canal Zone. In February 1952, however, the Army Chief of Staff ruled that in US bases in foreign countries, it was up to each base commander to determine whether or not to allow the games. The Navy banned slot machines from all of its installations in 1951 but changed its mind in early 1959, after the Commander of the US Naval Forces, Japan recommended that slots be allowed in messes and PXs in his command. In July the Chief of Naval Personnel ruled that they could be. During the 1971 senate investigation, Marty Bromley claimed that there were 10,000 slot machines being operated by the combined armed forces. While it might seem odd that the military would allow slot machines at all, they felt that doing so would keep soldiers and sailors on base and out of local bars (and trouble). They also felt that the games would raise morale and that the money taken in by the machines, since at least part of it would go back to the facility owners, would directly benefit military personnel by keeping down the cost of food and other items. The machines were governed by strict rules, however. They had to be purchased from American manufacturers, they had to be owned and maintained by the PX or mess (renting was not allowed), and they had to pay back at least 93-94% of money to the players.
While the military, for the most part, did not have a problem with the slot machines themselves, they did have a problem with Service Games and the illegal activities that it was allegedly engaged in. In 1954, an informant sent a letter to the Office of Naval Intelligence saying that the company was illegally importing slots into Guam using phony release forms. In 1958, the IRS began investigating Bromley at the instigation of an employee of Service Games Hawaii. The investigation soon became a matter of public controversy and political interest and the IRS expanded its investigation into every aspect of every business in which Bromley was engaged. In the 1971 senate investigation, the military claimed they had reports of over 100 instances of violations of law by Service Games, including bribery, illegal use of military and sea transport, illegal imports, customs violations, fraud and forged documents, kickbacks, collusion in bidding, circumvention of the "Buy American" program  illegal gratuities, coercion, and intimidation. Alleged offenses by individuals associated with Service Games included theft, assault, intimidation, coercion, bribery, rape, assault with a deadly weapon, and others. In the fall of 1959, the eighth army blacklisted Service Games. In December 1959, the Navy banned Service Games and all of its officers, employees, and affiliates from its installations in Japan. When Service Games later began to offer machines on behalf of Utamatic and Nihon Goraku Bussan, the Navy banned those companies as well. In 1960, the Navy permanently banned Service Games from its installations in the Philippines. In 1961, the US Civil Administration of Okinawa fined Service Games $300,000 for smuggling, fraud, bribery, and tax evasion. The day before Christmas 1963, the Air Force debarred Service Games from its installations (the ban lasted until April 1967).
What, in particular, were some of the crimes Service Games was accused of? One was avoiding payment of required duties. Because Service Games' machines were imported for use on military bases, they were exempt from the normal import duties or commodities taxes. The company was accused of importing the games duty free, sometimes with counterfeit importation or customs clearance documents,  then diverting them to storage facilities and selling them on the Japanese market (slot machines were illegal in Japan). Service Games was also accused of manufacturing their machines outside of the US, sending them to Nevada for final assembly, then falsely claiming they had been made in the US as required by military regulations. Even when Service Games did place the machines in PXs, there were problems. While regulations required that clubs own any machines they operated, Service Games was accused of applying the club's take to the purchase price so that all they got was the machine itself with no benefit to the personnel. They were also accused of skimming profits from the machines  Marty Bromley was accused of using phony names to open Service Games accounts in Japan-based branches of US banks. The accusations continued after Service games “merged” with Sega Enterprises. In April 1969, a source who was allegedly “closely connected with the Service Games complex” began corresponding with federal authorities, claiming that Sega was shredding tons of documents relating to military coin machines. The source also claimed that Sega Enterprises, through David Rosen, had attempted to write off as tax deductible, bribes of 30 members of the US military. When Japanese tax authorities refused to allow it, Sega wrote them off as “business expenses.” In October 1969, the government claimed, Marty Bromley met with General Earl F. Cole at the Frankfurt airport and offered him a $50,000 bribe to take the fifth and not appear before the senate subcommittee investigating Service Games and Sega. Cole denied that he had met with Bromley and Bromley claimed he was in Madrid at the time.
For all the accusations, the government did not seem to have had much luck making any charges stick. In fall 1960, Service Games was tried by the Japanese Criminal Affairs Division in Yokohama but ended up only paying a small fine. In 1964, the IRS charged Marty Bromley and his wife with failure to pay $4.7 million in taxes between 1962 and 1964. They were only able to collect $47,145.26 and about $10,000 in interest, $15,000 of which was returned to the Bromleys. In December 1964, the US Tax Court found that there had been no fraud of any kind on the part of Bromley or anyone associated with Service Games.
So where does that leave us? Was Service Games guilty of the crimes it was accused of or was it the victim of an overzealous government investigation? From the information in the report, it’s hard to say. During the Vietnam conflict, there was so much graft and corruption in the military club system that it is difficult to determine to what degree Sega was involved, if at all. While Sega and Service Games were certainly discussed during the 1971 senate investigation, during which all of their principal officers were called to testify, it was only as part of a much larger investigation of the club system in general. The clubs were run by NCOs (non-commissioned officers), who often operated with little or no supervision. It is perhaps unsurprising, then, that some turned to graft and corruption. In 1965, a group of seven sergeants, led by William Wooldridge, who was appointed Sergeant Major of the Army in 1966, began to exploit the system for their own personal gain, something for which it seems Sega cannot be blamed. On the other hand, the sheer number of subsidiaries, the number and timing of corporate name changes, the admitted use of aliases, and the fact that Service Games had set up its controlling corporation in Panama, a well-known tax haven , do arouse one’s suspicions – or at least mine. On the other hand, it is not uncommon for companies to set up multiple subsidiaries in the countries in which they operate (though perhaps not as many and not with so many different names), not is it unheard of for a company to establish its headquarters in a tax haven. Still, while i' do not think they were guilty of some of the more egregious crimes they were accused of, I am nonetheless suspicious. Of course, that’s entirely subjective and it is entirely possible the Service Games was innocent of any wrongdoing. 

For the last few posts, we've been looking at the history of one of Sega Enterprises' predecessors, Service Games. Today, we take a look at the other one - Rosen Enterprises. Before we do, however, a quick correction. Early, I think I said that Service Games did not start making slot machines until the 1960s. Actually, I believe the first machine they manufactured was the 777 - a.k.a. the "Sega Bell," which they began making in 1957. Allegedly, the first one was built when they found an old Mills machine in the rubble of a bar and recreated it. I am still investigating the issue, however, and may come back to it in my last Sega post, which will discuss what the first Sega game was.

One other thing I mentioned earlier was that Steven Kent's Ultimate History (henceforth "Kent 2001") was practically the only extensive source of information I had found on Rosen Enterprises. That actually wasn't true either. Another excellent source was an article that appeared in the July 1982 issue of RePlay. Anyway, on to Rosen enterprises.

David Rosen and his wife Masayo in 1982

David Rosen had served in the US Air Force in Japan during the Korean War from 1949 to 1952. At the time, the Japanese economy was in the doldrums, but Rosen was impressed by the industriousness of the Japanese people and loved the country. After the war, Rosen returned home and set up a new business. He would send photographs from America to Japan where local artists would turn them into portraits. The venture failed and in 1954, Rosen decided to return to Tokyo to set up an import/export firm called Rosen Enterprises. In addition to importing products, and exporting products like paintings, sculptures, and woodcrafts, the company also manufactured small souvenir items, like cigarette lighters and money clips, engraved with advertisements from American companies (RePlay 7/82). Seeing that the Japanese had income to spend and a pressing need for identification pictures for employment, rationing, travel, and other activities, Rosen started a two-minute photo booth company that quickly became a nationwide chain. Prior to Rosen’s company, IDs were costly and took a minimum of 2-3 days to produce. In America, Photomat booths had sprung up offering photo processing in minutes instead of days. The only problem was that the photos they produced lasted only one or two years before fading and the Japanese needed photos that lasted at least four or five. After investigating the issue, Rosen found the problem. The Photomat booths produced photos without using negatives and lacked the temperature control required to produce durable results. Having found the source of the problem, Rosen decided to import some Photomat equipment to Japan and set up facilities where employees could develop the photos while monitoring the temperature to produce long-lasting pictures. The business was called Ninfun Shashin and the brand name was Photorama. The idea was an instant success and before long Rosen had over 100 locations throughout Japan (RePlay 7/82; Kent 2001). Being a foreigner provided Rosen with some advantages. At the time (and for years after) the Yakuza was heavily involved in the Japanese coin-op industry. When Rosen opened a Photorama booth in Tokyo's entertainment district, he failed to pay his respects to the local boss. Because he was a foreigner, however, he was let off with an apology and had little trouble with the Yakuza after that. Business competitors were a different story. Rosen's Photoramas were so successful that local photographers complained to the U.S. Consulate in an effort to put him out of business. As a compromise, Rosen offered to license Photorama franchises (possibly the first franchising business in Japan). The deal allowed Rosen to open up another 100 locations but it also allowed copycats to move in and by the early 1960s, Rosen was forced to shut Photorama down. (Kent 2001)

By then, however, he had already found another potential source of income. The booming Japanese economy and reduced work hours left people with more money to spend and more leisure time in which to spend it. Rosen decided to try and fill both needs. Many of Rosen’s photo booths were located in theatres and department stores and Rosen decided to replace them with American coin-operated amusement games, which had thus far been found almost exclusively in US military bases.
[David Rosen] To fully understand this decision, you have to realize there weren't any coin amusement games in Japan then, period. The games were abundant in the States but not a single one was on location in Japan, except on military posts. The machines were almost exclusively made in Chicago, and were usually target galleries or sports type themes like baseballs or hockey games. It took me about a year to convince the Japanese authorities to let me import these games. Until that time, they concentrated on essential goods only. Games were luxury imports. (RePlay 7/82)
[NOTE - Rosen here is not talking about pachinko machines, which were considered more akin to slot machines. Pachinko actually exploded in popularity in Japan after World War II - though it had also been popular before the war. According to some sources, pachinko was especially popular after the war for two reasons: 1)  people could exchange pachinko balls for scarce necessities like food (many Japanese were too proud to accept aid or handouts) 2) some pachinko parlors awarded tobacco as prizes, allowing people to get around wartime restrictions. I don't know if these stories are accurate or not and there's more to the pachinko story. I may do a separate post on the history of pachinko, but I don't want to do too many non-video game posts.]

In 1956, Rosen convinced the Ministry of International Trade and Industry to allow him to import $100,000 worth of machines. To stretch that allowance as far as he could, Rosen initially imported older, cheaper games. Two of the companies early hits were Seeburg’s Shoot the Bear and Coon Hunt rifle games.


[David Rosen] We set them up in stores, which became known as ‘gun corners." At that time in Japan, it was absolutely illegal for anyone other than the authorities to own or use firearms, so it gave the people the chance to take target practice, even though it was only a simulation. The went for it in a big way, especially after we set the games up in jungle or forest backgrounds by taking the cabinets off and letting the targets run around free. It was a free form shooting gallery. (RePlay 7/82)

Within a year, Rosen got authorization to purchase another $200,000 worth of games and continued to buy more games in the future. Rosen estimates that the number of used games he was buying exceeded the number of new games being produced in Chicago (RePlay 7/82). Eventually, over 1,000 gun corners were in operation throughout the country (RePlay 7/82).

[David Rosen] The Japanese, certainly at that time, were very possessive about their real estate…even when it came down to taking a few square feet of space in a store. But we were lucky at the start to make an arrangement with Toho Films to put games in their theater lobbies, which proved to be very successful (RePlay 7/82)

While Rosen had the market to himself for a year and a half, his success eventually drew in competitors. While the competition mostly concentrated on street locations, however, Rosen focused on arcades (RePlay 7/82) Within a few years Rosen Enterprises Ltd. owned a chain of 200 arcades throughout Japan (Kent 2001).

Meanwhile, flushed with successs, Rosen had begun to expan. He tried his hand at a chain of indoor golf centers, but the idea failed to catch on with the Japanese public, who considered golf an outdoor game. His next venture, a line of businesses built around slot cars, sparked a brief fad, but also eventually failed. With two strikes against him, Rosen set out again, and this time he met with unqualified success. Around 1963, AMF (American Machine and Foundry) and Brunswick had come to Japan to try and establish bowling as an entertainment option in the country. At the time, bowling alleys in Japan were found almost exclusively on US military bases. There was one alley in Tokyo, but it was mostly frequented by American GIs. Noting the new lanes being built by AMF and Brunswick, Rosen decided to give it a try.

[David Rosen] They got one or two centers opened, so we decided to take a try at it. But, to really do it right, we wanted a 'showcase' center, so we went to Tokyo's busiest entertainment area, which is called Shinjuku. This area had bar after movie house after restaurant. It was an 'adult Disneyland.’ Now, land was not only extremely expensive, it was virtually unattainable. So, we went to one of our movie friends and asked if we could build a bowling center on top of one of their theaters…To make a long story short, we installed 14 lanes on what amounted to the seventh story of this theater, with this huge six-story-tall movie house below it. The management was terrified about the possible noise and vibrations ... and, of course, we were all worried about the stress on the building. I was pretty nervous until we rolled that first ball. Guess what? Not a sound could be heard underneath. (RePlay 7/82)

Rosen also added an American style steakhouse overlooking the lanes. Before long, customers were waiting four or five hours to bowl and the center was staying open 22 hours a day, from seven a.m. to five a.m. (RePlay 7/82) While Rosen never opened another lane, Brunswick and other companies began opening them all over Japan, often with Sega or Taito arcade games in the lobby (RePlay 7/82; Kent 2001).

This is my final post on the early history of Sega. In this post, we take up the question of what was Sega’s first arcade game. Of course, the answer to this question depends on which Sega you’re talking about. A number of sources claim that Periscope, released in 1966, was Sega’s first game. If you are talking about the first game made after Sega Enterprises was formed in 1965, that may be true but it may not. As we shall see, I am unsure about the 1966 date and even if it’s accurate, I don’t know if it was Sega’s first game. If we are talking the first game to bear the "Sega" brand name, then it almost surely was not the first. A quick note. I am actually probably not the best person to answer this question. My research focuses on arcade video games so I don’t have access to many of the sources that would be helpful in addressing this question – like issues of Cash Box and Vending Times from the 1960s. Nonetheless, here is what little information I’ve found on this issue

Note here that by game, I am not including slot machines. As I mentioned last time, I believe that the first Sega-made slot machine was the "Sega Bell" or "777" of 1957.

With that in mind, here are the candidates I’ve found so far for the title of "first Sega arcade game."

Punching Bag(1962?) – This one was just what the name implies – a strength tester in which you punched a bag with all your might. It is VERY similar to American Mutoscope & Biograph’s Deliver the Punch/Punch a Bag (which Pinrepair dates to 1910) and Mills Novelty’s Bag Puncher (a.k.a. Reward Paying Punching Bag) of 1903 and 1926-30. Mills Bag Puncher was designed by Herbert S. Mills, who filed a patent on July 31, 1903. The game was released in 1926 with a cheaper, simpler cabinet. I don’t know if it was the first punching machine with a boxing-style punching bag or not. There were earlier punching bag machines, but they used a leather pad rather than a bag. There is also a current machine that appears to be an update of this game.


As for the Sega version, arcade-history.com, Segaretro.org, and Pinrepair.com all list it as a 1962 game, though they don’t list their source and they may all be using the same one. I have not found any contemporary evidence confirming the 1962 date. A flyer for the game can be found at TAFA and other sights, but it is from Sega Enterprises Ltd and thus must date from 1965 or later. I did find an article mentioning the game in the October 19, 1968 issue of Billboard, confirming that it was produced by Sega Enterprises. I do not know when they started producing it or for how long it was out of production before they started producing it again. If the 1962 date is correct, then the game must have been produced by Service Games prior to the merger, so some may not count it as "Sega’s" first arcade game, even if it was the first to bear the Sega brand name.






Space Ace (1962???) – Even less is known about this one. About the only information I found is from the brief write-ups on Pinrepair and segaretro (including photos), which only show that it was a space themed gun game. The date on this one is really uncertain. Pinrepair lists it as "early 1960s (exact date unknown)" while arcade-history says 1962. According to a form post at sonicretro, both Space Ace and Punching Bag used the "1962 Sega logo" but I don't know how long this logo was used (perhaps this is the source of the 1962 date?).



Skill Diga (1965??) - This was a crane game. Sega also produced a game called Super Skill Diga. Ashcraft and Snow's book Arcade Mania claims that Skill Diga was released in 1965. arcade-history lists both Skill Diga and Super Skill Diga as 1968. I don't think segaretro lists Skill Diga(I can't tell because the site is down right now)but I think it lists Super Skill Diga as 1968 - though a commentator on the site wrote " Sega Skill Diga is 1965; Super Skill Diga is 1968. These two need to be separated." I originally thought that they might be the same game but Super Skill Diga actually has a second button that allowed players to mix the prizes once per game.



 Basketball (1966?) - In this game, you tried to pop a ping pong ball into a tiny basket. This may have been the first Sega game to be imported to the U.S. (though not by Sega). According to the below article from the May 27, 1967 issue of Billboard, Sega planned to begin producing inexpensive games for export to the US. The article notes that Basketball was "one of the first models". Rosen was careful to note, however, that he was not trying to compete with US manufacturers. The games would be manufactured in Japan and exported to the US. David Rosen was careful to note, however, that Sega did not plan to compete directly with US manufacturers but rather "to compliment the role of the US manufacturer." They also announced that they planned on seeking licensing arrangements with US manufacturers. That was the case with Basketball. While this article reports that the game "has been seen on test in the U.S.", another article from July 27, 1967 reveals that the game was licensed to Midway for US distribution (Midway also manufactured it). The arcade flyers website lists the Midway version as a 1964 game, but this appears to be incorrect.








Rifleman (1967?) - Another gun game. The player used a rifle to take ten shots at a paper target showing five bottles bearing bull’s-eyes. Swinging saloon doors would occasionally obscure the target and at the end of the game, the machine printed out a "score card" showing where the player’s shots landed. You can see a video about the game here. Pinrepair lists this game as 1967. The November 11, 1967 issue of Billboard reports that Sega showed both Rifleman and Periscope at the 1967 MOA show. That does not mean, however, that they released it that year. Note that the person in the video above claims that his machine was manufactured in 1968. He was also puzzled as to why it had English on the cabinet but used a 220-volt (or was it 240?) power supply. This would make sense if it was designed for US military bases overseas (though I thought that Japan used 100-volt power).



Periscope (1966 or March 1968?) - This was Sega's real breakout game and one of the most significant arcade games of the 1960s. Not only was it hugely popular in both Japan and the US, but (according to RePlay) it shattered "the American game operator’s reluctance to buy foreign-made equipment". IT was also allegedly the first arcade game to cost a quarter (at the time, pinball games cost a dime or three games for a quarter). Note, however, that Nutting's Computer Quiz, which was released in the US before Periscope, has also been described as the first game to cost a quarter. RePlay's Ed Adlum once called it first coin-op amusement machine to feature straight quarter play for a single game. RePlay, however also claimed that Periscope was the first arcade game to cost a quarter. Why the discrepancy? It could be that they were thinking of the 1966 release date for Periscope, but that seems unlikely. My guess is that Adlum did not consider Computer Quiz an "arcade" game since it was mostly sold to bars.
So when was Periscope released? Kent's Ultimate History says it was released in Japan in 1966 and that date has been repeated in a number of other sources. Cash Box magazine's equipment catalog listed it as a March 1968 game - a date also listed at Pinrepair.com. The March 1968 date, however, likely refers to its US release date. Unfortunately, I do not have a good source for Japanese release dates and Kent doesn't identify his source. It seems strange to me that Sega would have released the game in Japan in 1966 and waited until 1968 to release it in the US but maybe they (it WAS a very large game). In any event, I do not think Periscope was released in the US in 1966.






So what was the first Sega arcade game?

If we are talking about games bearing the Sega brand name, the leading candidate is Punching Bag (it almost surely wasn't Periscope). If we are talking about he first Sega-designed game released in the US, I'd guess it was Basketball, but that game was licensed to Midway, so it probably shouldn't count. If we are talking about the first game released by Sega Enterprises, it might be Periscope, but the evidence is unclear and I am not at all convinced that that is the case. If it WAS released in Japan in 1966 (and I am far from convinced that it was), it may have been beaten to the punch by Skill Diga and/or Basketball. In the US, it does not appear to have been released until 1968 and may have been preceded by Rifleman.

Here is the last half Nolan Bushnell's July 3, 1974. Deposition. Kind of dry I know but think some of the others will be more interesting.

MR. HERBERT: As I understand it it's a paper you signed for the auditors?

THE WITNESS: Yes, it was just an internal memorandum that the auditors like so as to have the ends tied up.

MR. ANDERSON: Q. Ross deposition Exhibit 3 calls for monthly payments of four thousand dollars for a period of six months in paragraph 2 under consideration -- excuse me, paragraph 1 under consideration. Were those sums paid, do you know?

A. Yes they were.

Q. To whom were they paid?

A. To Nolan Bushnell.

Q. And did Nolan Bushnell transfer them to Atari, Inc.?

A. Yes I did.

Q. Was that true of all the six payments, do you know?

A. Yes.

Q. Did Bally ever accept a game that you submitted to them pursuant to the Royalty Agreement, Ross deposition Exhibit 3?

A. Yes they did.

Q. What game di they accept or games?

A. It was the Asteroid game.

Q. Did they make and sell the Asteroid game, do you know?

A. Yes they did.

MR. WELSH: You may want to clarify here whether he means Bally or some subsidiary of Bally.

THE WITNESS: Midway did.

MR. WALSH: You asked the question Bally and he answered yes.

MR. ANDERSON: Q. Do you know whether it was in fact Bally that made Asteroid or--

A. Bally did not make Asteroid.

Q. I gather from what you said Midway did make Asteroid?

A. Yes.

Q. So that when you answered my question with respect to Bally you were either thinking of or referring to Midway?

A. That's correct.

Q. When Bally accepted and made Asteroid and sold it, or Midway, did Midway at any time report to you with respect to the manufacture of Asteroid?

A. No.

Q. Did Bally or Midway at any time report to you any sales of games which they accepted from you pursuant to Paragraph 2 at the bottom of the first page of Ross deposition 3?

A. No.

Q. Did you or Atari call upon Bally or Midway to report with respect to games which they accepted and sold pursuant to this Royalty Agreement, Ross deposition Exhibit 3?

A. No.

Q. You have testified that they did accept a game that you made and sell it. Was there some reason that Atari did not call upon Midway or Bally to report pursuant to Paragraph 2 at the bottom of the first page of Ross deposition Exhibit 3?

MR. WELSH: So the record is clearer who do you mean by "they" in the beginning of your question?

MR. ANDERSON: By "they" I mean Midway or Bally.

THE WITNESS: Yes.

MR. ANDERSON: Now my question is--I guess you better read the who question and just think Midway or Bally when I said "they".

(Pending question read by reporter.)

THE WITNESS: The answer is yes and it was Midway.

MR. ANDERSON: Q. Is there a reason that you did not call upon Midway to report the production of a game which they accepted and made and sold?

A. Yes.

Q. What is the reason?

A. I didn't feel that the numbers made represented sums in excess of the advance and therefore I felt that it was unnecessary.

Q. And you never asked for an accounting to establish whether that was true or false?

A. No I did not.

Q. Did you ever discuss with Midway or Bally any patent rights which you might have had on video machines?

A. Yes.

Q. Did you ever discuss granting them any rights under patents which you might have had on video machines?

A. Not as part of any current existing contract or obligation.

Q. In any other context did you discuss your patent rights on video machines with Bally or Midway?

A. Yes.

Q. In what context did you discuss there?

A. I discussed with them that we did have several patents pending, that we would cover that under separate arrangements if and when those patents were finalized.

Q. When did that discussion occur?

A. At the time the other discussions were in progress.

Q. In early '72, March or April of '72?

A. Yes.

Q. Did you ever have these subsequent discussions that you referred to that you would have after the patents issued?

A. Yes.

Q. When did you have that subsequent discussion?

A. It was probably March of this year.

Q. Were you personally involved in that discussion?

A. Yes I was.

Q. Was anyone else from Atari involved?

A. No.

Q. With whom did you have that discussion?

A. With the counsel of Bally.

Q. Who was that, do you know?

A. I can't remember.

Q. Mr. Tomlinson?

A. Mr. Tomlinson.

Q. Anyone else at Midway or Bally that was involved in those discussions?

A. Yes, Mr. Ross at Midway.

Q. Anyone else?

A. No.

Q. Did this discussion occur in Chicago--

A. Yes it did.

Q. --or the Chicago area? Did that discussion involve your patent 3,793,483?

MR. HERBERT: I will have to object here again. We are going well beyond the area of venue. Licensing or negotiations for licensing of Atari patents doesn't have anything to do with venue in a patent infringement suit based upon Magnavox patent, and in view of that fact it is so far beyond the area of venue I instruct witness not to answer.

MR. ANDERSON: Well, as you well know, Mr. Herbert, one act of infringement is an inducement for someone else to infringe and we certainly think this goes to the question of whether Atari induced others to infringe on the Magnavox patents and therefore it's certainly relevant and it likely to lead to admissible evidence on those issues.

Q. Mr. Bushnell, was the patent, of plaintiff's Bushnell deposition Exhibit 3, one of the patents you did discuss with Midway or Bally?

MR. HERBERT: Go ahead and answer the question.

THE WITNESS: Would you rephrase the question?

MR. ANDERSON: Read it first.

(Pending question read by reporter.)

THE WITNESS: Yes.

MR. ANDERSON: Q. That was during the March 1974 meetings or meeting in Chicago?

A. Yes.

Q. Did you discuss with Mr. Tomlinson or Mr. Ross whether or not there was any relationship between the Royalty Agreement, Ross deposition Exhibit 3, and rights under your patent, Bushnell deposition Exhibit 3?

A. Yes.

Q. Please relate to me that discussion?

A. I felt that the patent was a separate situation to the Royalty Agreement.

Q. Has the Royalty Agreement, Ross deposition Exhibit 3, ever been canceled?

A. No it has not.

Q. Has it ever been modified either in writing or orally?

A. No.

Q. During your meeting in March of '74 or at any time prior to that, did you discuss with anyone at Midway or Bally modifying the Royalty Agreement, Ross deposition Exhibit 3?

Q. No.

Q. You indicated that there were I think four meetings or occasions when you were in Chicago in 1972 and you have described two of them. What was the next occasion where you were in Chicago in 1972?

A. I have described I was there for the MOA Show, I was there to teach a service school, I was there later to discuss this.

Q. And on the occasion when you had Pong with you?

A. That was a later occasion.

Q. That would be a third trip?

A. And I also went to the MOA Show.

Q. That would be three as I understand it?

A. No.

Q. To teach the course?

A. Teach is one.

Q. Attend the MOA Show?

A. No. The MOA was the last.

Q. And then to teach the Empire course was in March or April of '72.

A. Negotiate the contract.

Q. Negotiate the contract and when was that approximately?

A. It was in March or April.

Q. Was that a separate trip from teaching course, teaching trip?

A. Yes.

Q. At the end of 1972 approximately how many employees did Atari have?

A. Probably in the neighborhood of 30.

Q. Did any of those 30, approximately 30 employees make any trips to Chicago in 1972?

A. No.

Q. Approximately how many trips did you make to Chicago in 1973?

A. Maybe four.

Q. What was the first trip to Chicago that you recall making during 1973?

A. Boy, I really can't recollect. I believe it was in early summer, late spring.

Q. What was the purpose of the first trip that you can remember making to Chciago in 1973 or the Chicago area generally?

A. I don't recollect.

Q. What trip to you recall making to Chicago in 1973 specifically?

A. MOA Show.

Q. Did Atari have a booth at the MOA Show in 1973?

A. Yes we did.

Q. As of the date of the MOA show in 1973, approximately how many employees did Atari have?

A. 250.

Q. Did other Atari employees attend the MOA show beyond you?

A. Yes.

Q. Who in addition to you?

A. They were Mr. Wakefield, Mr. Mobilio.

Q. M-o-b-i-l-i-o?

A. Yes. Mr. Karns, K-a-r-n-s. Mr. Emmons.

Q. E-m-m-o-n-s?

A. Yes. Mayer.

Q. M-a-y-e-r?

A. Right. Alcorn.

Q. A-l-c-o-r-n?

A. Yes. Andres.

Q. A-n-d-r-e-s?

A. Yes. Faraco.

Q. Will you spell that one?

A. F-a-r-a-c-o. I think that is it.

Q. What was Mr. Wakefield's position at that time?

A. President.

Q. And is he a psychiatrist?

A. Yes.

Q. Mr. Mobilio, what was his position?

A. VP marketing.

Q. Mr. Karns?

A. National sales manager.

Q. Did he report to Mr. Mobilio?

A. Yes he did.

Q. Mr. Emmons?

A. Engineer.

Q. To whom did he report?

A. To Mr. Alcorn.

Q. Mr. Mayer?

A. Engineer.

Q. Did he report to Mr. Alcorn?

A. Yes.

Q. Mr. Alcorn?

A. Vice president of engineering.

Q. Mr. Andres?

A. That is Miss Andres. She is my secretary.

Q. Mr. Faraco?

A. Engineer.

Q. Did Atari have just one booth space at the MOA or more than one?

A. We had three contiguous booths?

Q. What did Atari have on display at the MOA in 1973 in the way of equipment?

A. It had Pong, Space Race, Pong Doubles, Gotcha.

Q. Was there more than one of any of these games in the three booths, three contiguous booths of Atari?

A. Yes.

Q. How many Pongs?

A. I don't remember.

Q. How many in all, approximately how many games in all?

A. I think there were approximately 10.

Q. Where they operative games?

A. Yes.

Q. All of them?

A. Yes.

Q. Were they operated at the show?

A. Yes.

Q. Who got to keep the quarters?

A. Free play.

Q. Did you use a token or just bypass the coin slot or how was it?

A. Bypass the coin slot.

Q. During 1973 did Atari have any machines in the Chicago area at any location other than in the booths at the MOA--

A. No.

Q. --at any time?

A. Would you clarify that question?

Q. Well you said that Atari had 10 machines approximately at the MOA.

A. Yes.

Q. And now were they all in the booth space of Atari at MOA?

A. We had two other machines in a hotel suite.

Q. In the Conrad Hilton, was that?

A. Yes.

Q. What machines were they?

A. World Cup.

Q. Is that an automotive racing game?

A. No.

Q. What is World Cup just generally?

A. It's a ball paddle game.

Q. What was the other game?

A. Grantrak.

Q. Were they operative games?

A. Yes.

Q. Were they actually operated during MOA?

A. Yes.

Q. Has Atari at any other time in 1972 had a machine at any location other than the two you have mentioned?

A. No.

Q. At any time in the history of Atari has it had any machines in the Chicago are other than at the MOA in our booth space and in the Conrad Hilton in a suite that you have referred to?

A. Not machines which Atari has owned.

Q. How many World Cup games did you have in the suite?

A. One.

Q. How many Grantrak ten games?

A. One.

Q. So you had approximately 12 games in Chicago during the MOA in 1973?

A. Yes.

Q. Where did those games come from?

A. Los Gatos.

Q. Were they invoiced to anyone or just kept in the property of Atari?

A. Just kept on the property of Atari.

Q. What was done with the machines after the show?

A. Most of them--some of them were shipped to Los Gatos.

Q. How many were shipped to Los Gatos?

A. I don't remember.

Q. What became of the rest of them?

A. They were shipped to Atlanta.

Q. For what purpose?

A. There was another show down there.

Q. Did you at one time work for a Salt Lake City amusement machine company?

A. No.

Q. Were you in some way involved with a Salt Lake City amusement machine company?

A. Well, there was a Salt Lake City amusement park.

Q. Is that the name of the entity?

A. No. It was Lagoon Corporation.

Q. What was your involvement with Lagoon Corporation?

A. I was manager of the games department.

Q. Was that while you were in college?

A. Yes it was.

Q. Did you have any relationship with Lagoon Corporation following your college career?

A. No, other than, you know, just being good friends with lots of people.

Q. Did Atari, Incorporated have any business relationship with Lagoon Corporation?

A. Yes.

Q. What is that relationship?

A. We sold an operation to Lagoon Corporation. We had machines in operation which I previously stated and sold that to Lagoon.

Q. Were those machines owned and operated by Atari, Incorporated or by some entity which Atari--

A. Some entity.

Q. What entity was that?

A. Called Martin Enterprises.

Q. When was Martin Enterprises created?

A. The summer of 1973.

Q. Does it still exist?

A. No it does not.

Q. When did it cease to exist?

A. Spring of 1974.

Q. Did it operate video machines?

A. Yes.

Q. What became of the video machines? Were they sold to Lagoon?

A. Yes.

Q. Are you familiar with an entity known as West World Amusements?

A. No I am not.

Q. Does Atari, Inc. have any interest in Lagoon Corporation?

A. No it does not.

Q. Other than the trip to the MOA Show about which you have testified, what other specific trips do you recall making to the Chicago area during 1973?

A. I remember the trip in which we talked about royalty arrangements under the patent.

Q. Now, was that in 1973?

A. Oh excuse me, that was in 1973. I'm sorry. I don't really recollect--maybe I didn't go there four times. I can remember the MOA. Things were so hectic I don't recollect. Maybe I only went there once in '73. That seems unlikely but--

Q. Do you keep records of your travel?

A. It should be in my calendar.

Q. Would you check and let us know how many trips you made to the Chicago area during 1973?

A. Sure.

Q. Did any other employees of Atari, Inc. make trips to the Chicago area during 1973 including the people that you have mentioned that were at the show but of course excluding the show which you have already testified about?

A. I think Mr. Karns probably made a trip there.

Q. More than one trip?

A. I would say maximum of two.

Q. And Mr. Karns in national sales manager, is that his title?

A. That's correct.

Q. How does Atari, Inc. distribute its products in Chicago area?

A. It sells them to Empire Distributing.

Q. Does it sell them to Empire Distributing exclusively in the Chicago area?

A. That is the only people, yes.

Q. Is there an agreement between Empire Distributing and Atari--

A. No.

Q. --either written or oral?

A. There is an oral agreement.

Q. Approximately when was that oral agreement reached?

A. Spring of '73.

Q. Where you personally involved in the reaching of that oral agreement?

A. Yes I was.

Q. Was that during one of your visits to Chicago?

A. No.

Q. How was it done?

A. On the telephone.

Q. With whom at Empire did you reach that oral agreement?

A. Gil Kitt.

Q. What is the oral agreement as best you understand it?

A. We would sell to Empire and no others in that area as long as, you know, they represented us fairly.

Q. Any other aspect of the agreement that you can recall that you discussed at that time?

A. Payment terms would be two percent, ten, net 30, and that they would pay shipment. The machines would be sold F.O.B. deck.

Q. Any other terms or conditions that you can recall?

A. No.

Q. Did you ever discuss with Mr. Kitt or anyone at Empire Empire's handling of competitive lines?

A. Yes.

Q. What was that discussion?

A. Oh just something to the effect that I was hopeful that some more Atari games were being sold that anyone else's.

Q. When did that occur?

A. Over the phone at various times.

Q. Any other discussions with respect to competitive lines?

A. Not to my recollection.

Q. Has there ever been a training course for Empire personnel with respect to Atari games of the type you described you conducted with respect to Nutting?

A. Yes.

Q. When have they occurred?

Q. I think there has been one that was conducted by Mr. Arkus. [sic - he is referring to Bill Arkush] Excuse me, that is not true. It was one of the employee technicans of Atari. I don't remember who.

Q. When was that course held?

A. Probably in early fall of '73. Joe Alig.

Q. What is his title with Atari?

A. He is no longer with Atari.

Q. What was his title when he was there?

A. Customer service.

Q. Customer service manager?

A. No, just customer service.

Q. Customer service man. For how long was the training course at Empire?

A. Probably one day.

Q. Did Mr. Alig make a tour at that time of several distributors?

A. Yes.

Q. Was the training course that you referred to in Chicago at Empire?

A. Yes.

Q. Did he teach at any other Midwest locations?

A. I'm sure he did.

Q. Do you know any of them?

A. Probably it would be Omaha, presumably Minneapolis. I think the closest Midwest would be--I guess we jumped from there over to New York.

Q. Did he go to any other Empire installation other than the one at Chicago, do you know?

A. No he did not.

Q. I understand they have places of business in other cities.

A. Yes. Can I get a glass of water?

Q. Certainly. Why don't we take a break and I will look through those invoices at this time.

(Short recess.)

MR. ANDERSON: Q. Earlier Mr. Bushnell, when I asked you for the basic blocks of a video amusement machine you mentioned a TV monitor. Has Atari used commercial TV receivers in contrast to monitors at any time in its manufacture of games or amusement machines?

A. No it has never used a TV receiver. It has used what was once a TV receiver.

Q. Was it purchased by Atari as a TV receiver and modified in some way?

A. Yes.

Q. We have gone through the invoices. At the moment I see no need to require copies or ask you to delete portions. We might at some future date want one or two of the earliest or latest but I think for the moment the easiest procedure is just to ask you one or two questions about the. I notice several of them relating specifically to the shipment of computers. Are they sold as such or are they only sold as replacement items, do you know? I have one here two Pong computers shipped at apparently no charge, N/C.

A. We have a warranty policy that they are shipped as a computer.

Q. Are they a replaceable item in the field, the computer?

A. Yes they are.

Q. This particular one is Invoice No. 3866 to Empire. Does Atari from time to ttime ship computers to Empire in Chicago for replacement purposes?

A. Occasionally.

Q. I noticed several relating to harnesses. What is a harness?

A. It's the wiring, the internal wiring of the machine.

Q. Why does Atari ship harnesses to Empire as indicated by some of the invoices?

A. Occasionally a connector becomes defective and it's cheaper to replace it than repair it.

Q. What promotional activities in general does Atari conduct with respect to the sale of its video amusement machines?

A. We occasionally advertise.

Q. Where does Atari advertise, in what outlets or--

A. Primarily Cash Box which is a trade rag.

Q. What other promotional activities does Atari--Cash Box is a nationally distributed magazine, I take it?

A. Yes.

Q. What other means of promotion does Atari employ?

A. The MOA Show.

Q. Any others?

A. No.

Q. Has Atari ever shipped a machine to a distributor for a field test or market test?

A. Well, I mean many of the machines are for market test but we sell them.

Q. Has Atari ever sold a machine for a test where the terms were in any way different from the ordinary terms that you testified about earlier?

A. No. Occasionally if we feel that a machine is what we consider to be not a production run we will have a reduced price on it.

Q. Do you ever permit deferred payments for a market test machine?

A. No, not really.

Q. What are your terms for return of a machine that a customer doesn't want to keep?

A. Generally there are no provisions for a return.

Q. And specifically other than the generalization if Empire took a new machine and decided they didn't think it fitted their market needs, could they return it to you?

A. They could at our discretion.

Q. Has this ever occurred that you know of?

A. We reshipped on occasion.

Q. You have reshipped. What do you mean by that?

A. Well, let's see, it would be a situation where if Empire didn't want the machine they would call us and sometime we would actually take it back.

Q. And it has occurred with respect to Empire?

A. On two occasions, yes.

Q. What tow occasions do you recall specifically?

A. There was a situation of a Quadrapong machine which they couldn't get to function properly so rather than, you know, repair it they decided to return it and we agreed.

Q. Were both of the two occasions you referred to Quadrapong?

A. Yes they were. Oh excuse me. There was one other in which it was a Grantrak that was a real lemon.

Q. But again it was a defective machine?

A. Yes it was.

Q. Has Atari ever accepted a returned machine for grounds other than malfunction?

A. No. It's not our policy.

Q. Approximately what percentage of the industry sales of video amusement machines does Atari have in your professional opinion?

A. I just don't know. I would like to know.

Q. Is there any trade source that from time to time issues such information?

A. Not to my knowledge. If you find it would you let me know?

Q. From your knowledge of the industry, what is the sales trend in the video amusement machine business?

MR. HERBERT: I object to that question. That has nothing to do with anything in the lawsuit. I instruct the witness not to answer.

MR. ANDERSON: Q. Other than the specific instances that you have already testified about where Atari has place machines for street operations, has Atari ever sent out a machine or sold a machine based upon a return that is a function of the revenue produced?

A. Not to my recollection other than those previously mentioned occasions.

MR. HERBERT: Perhaps I misunderstood the question. By return other than you mean being paid as a percentage of the take of the machine?

MR. ANDERSON: Yes or anything other than a fixed price sale.

Q. Is there any instance where Atari has sold a machine on anything except a set price sale or the instances of street operations that you have already testified about?

A. No.

Q. During your meeting in the spring of 1974, with Mr. Tomlinson and perhaps Mr. Ross, did you discuss the Magnavox patent position?

A. Yes we did.

Q. What was the discussion?

MR. HERBERT: Objection on this. Again we are getting beyond the area of venue.

MR. ANDERSON: I don’t know that that is true and I don't see how you do unless you know what this discussion was, Mr. Herbert. We have certainly established a relationship between Midway, Bally, Empire and Atari and I think we are entitle to explore it fully.

MR. HERBERT: All right.

MR. ANDERSON: Q. Will you answer the question please?

A. We discussed prior art that I have--which I had, not I have.

Q. Prior art with respect to the patent that Magnavox is asserting?

A. Yes.

Q. How did that subject of prior art first come up during the meeting?

A. Yes.

Q. How did that subject of prior art first come up during the meeting?

A. There was a, you know, a question was asked, what do you think about the Magnavox situation.

Q. Someone asked that of you?

A. Yes.

Q. Was that Mr. Tomlinson, do you recall?

A. No. I think It was Mr. Ross.

Q. What was your response?

MR. HERBERT: Objection. Now I do instruct the witness not to answer. This has nothing to do with venue, it only has to do with validity and possible scope of the patent.

MR. ANDERSON: Q. What prior art did you refer to in that conversation?

MR. HERBERT: Objection, same reason, instruct the witness not to answer for the same reasons.

MR. ANDERSON: Q. What other aspects of the Magnavox situation were discussed during that meeting other than your discussion with them of prior art that you had?

A. The question was raised if anyone felt that Magnavox was going to sue.

Q. At the time of your meeting was there not a lawsuit pending?

A. No there was not.

Q. Was there any discussion of any of the Bally companies indemnifying or holding Atari harmless in any way in the event of a lawsuit?

A. No.

Q. Was there any discussion of the possibility of Atari holding any of the Bally companies harmless or indemnifying them in the event of a lawsuit?

A. I would like to confer for a second.

(Short recess.)

THE WITNESS: Would you restate the question?

MR. ANDERSON: Would you read the question please?

(Pending question read by reporter.)

THE WITNESS: There was a discussion of a future further agreement in which one of the provision that we were discussing was a provision of indemnification.

MR. ANDERSON: Q. Was this a further agreement between Atari and one of the Bally companies?

A. There were no further agreements.

Q. I mean was there discussion with respect to a possible further agreement?

A. Yes.

Q. That is what you are referring to in your last answer?

A. Yes.

Q. With which Bally company was that being discussed or with respect to which?

A. It was with Mr. Tomlinson.

Q. And was he speaking then for Midway or Bally or Empire or do you know?

A. I don't know.

Q. Did he distinguish between those various companies during your discussion?

A. I don't recollect.

Q. Do you know who he was representing during the discussion? Was it Midway or somebody else?

Q. I don't know.

Q. What was the discussion with respect to indemnification in the event of a future agreement?

MR. HERBERT: I am going to object to this. Again this witness has already testified that there has been no agreement for indemnification and as far as the discussion as to what the future might be, I think that is pretty far afield again from the area with which we are concerned here so I instruct the witness not to answer.

MR. ANDERSON: I think the record in this deposition and prior ones shows a rather close relationship between these companies and I think we are entitled to explore it.

MR. HERBERT: Between what companies?

MR. ANDERSON: Between Midway, Bally, Atari, and Empire.

MR. HERBERT: Maybe I misunderstood your question but I think Mr. Bushnell already indicated he didn't know which of those companies the other party was representing and I may have misunderstood your question.

MR. ANDERSON: Your summary is exactly in accord with mine and my question is what was discussed between Mr. Tomlinson and Mr. Ross and Mr. Bushnell at the meeting in the spring of 1974 with respect to possible indemnification regarding the Magnavox patent claims and I would like to to answer that as best you can, Mr. Bushnell.

THE WITNESS: Well, it was primarily geared around, you know, the discussion of some of the prior art which I had and that I felt Atari would, you know, as part of a Royalty Agreement take on that burden.

MR. ANDERSON: Q. Now what burden is that?

A. In the event of a possible Magnavox patent infringement suit.

Q. And the burden would be what, that Atari would defend the suit?

A. Yes.

Q. Have there been any further discussions since the meeting between Mr. Tomlinson, Ross and you regarding this subject matters?

A. No.

Q. Either telephone or personal?

A. No.

Q. Have you discussed this subject matter with anyone, any of the Bally companies since that meeting in Chicago?

A. No I haven't.

Q. Did you ever discuss that subject matter with anyone in or any of the Bally companies prior to the meeting in Chicago with Mr. Tomlinson and Ross in March or April of this year?

A. I had mentioned on the telephone that I had a situation which I felt would be of interest to them and it included the indemnification provision.

Q. When was that conversation?

A. It was probably a week prior to my visit.

Q. And the proposal that you thought might be of interest to them included Atari's assumption of responsibility for defending claims by Magnavox, is that correct?

A. Yes.

Q. Did it also involve a license under Atari patent rights?

A. Yes

Q. Did it involve any exchange of know-how?

A. No it didn't.

Q. Or any engineering help of any kind?

A. Strictly a license under our patent.

Q. Prior to that telephone conversation had you ever discussed with anyone associated with any of the Bally companies the Magnavox patent rights and claims?

A. I was aware of it. We had discussed the existence of the Magnavox patents. That was about the extent of it.

Q. Have you had any discussions with any other manufacturers of video amusement machines with respect to the Magnavox patent position?

A. Yes I have.

Q. With whom?

A. Oh I think a fellow, Gary Stern from Seeburg.

Q. G-a-r-y?

A. Yes.

Q. S-t-e-r-n?

A. Yes.

Q. Who else?

A. Gene Lipkin from Allied Leisure.

Q. Who else?

A. That is about it.

Q. On how many occasions have you discussed the Magnavox patent position with Gary Stern?

A. I think I can only think of one phone call.

Q. When was that approximately?

A. I really don't know. It was prior to being served.

Q. Was it this year?

A. I don't believe so.

Q. Who initiated the phone call?

A. He did.

Q. Was it to inquire specifically about the Magnavox patent position?

A. Yes I believe it was.

　

Q. Approximately how long did this phone call last?

A. Five, ten minutes.

Q. Relate as best you can what he said to you and what you said to him.

MR. HERBERT: Objection again. It's still way beyond venue. It has nothing to do with this whole lawsuit. You are going far beyond. I instruct the witness not to answer.

MR. ANDERSON: Q. Will you answer?

A. No I will not.

Q. On how many occasions did you discuss the Magnavox patent position with Gene Lipkin?

A. One.

MR. HERBERT: Objection.

MR. ANDERSON: Q. On one occasion, is that right?

A. I will not answer.

Q. Mr. Herbert has not instructed you not to answer, he has merely recorded an objection.

MR. HERBERT: The answer is already in the record so I will let it stand.

MR. ANDERSON: Q. Approximately when was that one discussion with Mr. Lipkin?

MR. HERBERT: Objection again and instruct the witness not to answer.

MR. ANDERSON: I think these questions have relevance on the Atari involvement in Chicago.

MR. HERBERT: Not as you have made the questions insofar as what you discuss about the Magnavox patent position, it's too broad.

MR. ANDERSON: IT's the only way you can get the specific questions to establish a foundation, it's fundamental. IF I did it any other way you would have a valid objection.

Q. Approximately when was that one discussion with Mr. Lipkin?

MR. HERBERT: Answer that one.

THE WITNESS: I think that was probably in the summer of '73.

MR. ANDERSON: Q. What that a telephone conversation?

A. Yes it was.

Q. Who initiated the call?

A. I don't remember.

Q. Approximately how long did it last?

A. 10, 15 minutes.

Q. Was it initiated specifically with respect to the Magnavox patent position?

A. No, it wasn't

Q. Have you ever had any business relationship with any other manufacturers of video amusement machines other than the ones you have already testified about?

A. In terms of sales or--

Q. Sales, engineering help, agreements of any kind with Allied Leisure?

A. No.

Q. With Chicago Dynamic?

A. No.

Q. With Seeburg?

A. No.

Q. With Ramtek?

A. No.

Q. Are you familiar with Universal Research Laboratories?

A. Yes.

Q. Have you ever had any business dealings of any kind with Universal Research Laboratories?

A. No.

Q. Do you know whether Universal Research Laboratories is in the video amusement machine business in any way?

A. I don't know of their dealings. All I know is what I have heard.

Q. Has Atari at any time granted any rights to anyone other than one of the Bally companies under the agreements you have already discussed to make or sell video amusement machines?

A. Not as far as our computers. We are the sole manufacturer of our computers.

Q. Do you sell your computers to others for incorporation into video amusement machines?

A. Yes.

Q. To whom?

A. Various companies.

Q. Approximately how many companies have you sold your computers to for incorporation into their own video amusement machines?

A. Probably four.

Q. What are the names of those companies?

A. Atari U.K. No relation as a company, they just use our name. Socodimxsa.

Q. Is that a South American company or Mexican?

A. No, French.

Q. To whom else have you sold?

A. Segasa.

Q. Where is Segasa located?

A. Spain.

Q. Is Segasa related in any way to Seeburg, do you know?

A. I believe that it is.

Q. Do you know how?

A. I think Seeburg owns a percentage of them although I am not sure of what that is.

Q. And to whom else has Atari sold its computer for incorporation into their machines?

A. Hunter Electronics, PTC, LTD, Australia.

Q. Do you restrict in any way the places in which these four companies can resell their complete machines?

A. No.

Q. Do you know whether any of them do resell them in the United States or for shipment to the United States?

A. None to my knowledge.

Q. You gave me a list of machines at the beginning of this deposition and I will lay before you my list. Is that a complete list of the games which Atari, Inc. now has in their line?

A. There is one more and I don't know what it is. No. Yes that is a complete list.

Q. Do you know Joseph Robbins?

A. Yes I do.

Q. Have you met with him personally?

A. Yes I have.

Q. In Chicago?

A. Yes.

Q. Anywhere else?

A. He visited my factory at one time.

Q. Have you met with him on each occasion of your travelling to Chicago do you know?

A. No I haven't.

Q. Approximately on how many occasions have you met with him in Chicago?

A. Oh probably three or four.

Q. Do you know Mr. Wolverton?

A. Yes I do.

Q. Have you met with him personally?

A. Yes.

Q. On what occasions?

A. On visits to Midway.

Q. He is the president of Midway, is that correct?

A. Yes.

Q. Where these occasions other than the ones that you have already testified about or--

A. No. They were in conjunction with those previous meetings.

Q. Have you met Mr. David Braun?

A. Yes I have.

Q. On what occasions , if you recall?

A. At the MOA Show.

Q. And he is an officer of Allied Leisure, am I correct?

A. That's correct.

Q. At what other shows have you shown video amusement machines? other than MOA and I think you said one in Atlanta?

A. IAAP.

Q. What does that stand for?

A. International Association of Amusement Parks.

Q. Is that the show that is in Atlanta?

A. Yes.

Q. Have you ever shown at any others?

A. Oh there have been some small regional shows. Whether you can really call them shows or not is hard to say.

Q. Any in the Midwest?

A. I think there was one in Omaha.

Q. Any others that you can recall?

A. No.

Q. Was that in 1973 in Omaha?

A. Yes.

Q. Have you shown in the Atlanta IAAP on more than one occasion?

A. No.

Q. That was in 1973 also?

A. That's correct.

Q. When did you first learn of the video game that ultimately became known as Odyssey of Magnavox?

MR. HERBERT: Objection. That has nothing to do with the venue question either. I instruct the witness not to answer.

MR. ANDERSON: Q. What initiated the original discussion between you and Bally with respect to video games? Did you initiate it or did someone in the bally companies?

A. I initiated it.

Q. Did you approach other people at the time that you approached the Bally companies or were they the only company that you approached in the manner indicated by the exhibits that already are of record?

A. Nutting Associates--I don't know whether I approached them but upon leaving Nutting Associates I agreed to complete a prototype game for them.

Q. Is anyone else other than you involved in the design or engineering of the computers for Atari?

A. Yes.

Q. Anyone outside of Atari? In other words, not an employee of Atari.

A. No.

Q. Has Atari ever made an attachment for a TV receiver in the nature of Odyssey?

A. What do you mean?

Q. In other words, something that could be attached to a home TV receiver.

A. As a product?

Q. As a product or proposed product?

A. No it hasn't.

Q. Has it done any work on that product line or potential product line?

MR. WELSH: I'm wondering how that is relevant as to potential product line. I will object to that. I would like to request you to speed it up if you could. I am right at the door and no go.

THE WITNESS: Atari has the capability of doing that if it wishes to.

MR. ANDERSON: I will try to cut it short.

Q. Has it done it? You say it has the capability. Has Atari done any work?

A. On the consumer product?

Q. Yes.

A. Yes it has.

Q. Has it ever sold a product for the consumer market?

A. Well, we have had people who are nonprofessionals buy our coin operated pieces but that is the extent of it.

Q. Has Atari ever sold the computer part apart from a TV receiver or monitor other than to the four customers you named for incorporation by the customer with a TV receiver?

A. Not to my knowledge. I think there were some small companies in South America.

(Short recess.)

MR. ANDERSON: I have just one or two further questions.

Q. Is Mr. Wakefield still with Atari?

A. No he is not.

Q. When did he terminate?

A. Three weeks ago. We had a significant reduction in personnel.

MR. ANDERSON: I will have the reporter mark as Bushnell deposition Exhibit 4 a copy of the affidavit of John C. Wakefield.

(Copy of affidavit of John C. Wakefield marked Bushnell deposition Exhibit No. 4 for identification)

MR. ANDERSON: Q. Mr. Bushnell, are you familiar with Bushnell deposition Exhibit 4?

A. Yes I am.

Q. Has Atari, Inc. at any time during its existence had a telephone in the northern district of Illinois?

A. No it hasn't.

Q. Or a representative located there?

A. No.

Q. Has it ever had a business location there of any kind?

A. None whatsoever.

Q. Has Atari, Inc. ever accepted trade-ins of machines that it previously sold?

A. Never.

Q. Has it ever purchased back a machine that it sold other than the one that I think you mentioned earlier that was defective?

A. No it has not.

Q. Does Atari have any licensees other than the relationship to Nutting that you mentioned under Bushnell deposition Exhibit 3?

A. There is no agreement between Nutting and Bushnell on this agreement.

Q. I think you said there was some relationship that was terminated.

A. We had an agreement but it had nothing to do with our patent.

Q. Does Atari have any licensees under Bushnell Exhibit 3?

A. No.

Q. When did Atari first become aware of the patents under which Magnavox makes its claims?

A. Vaguely or detailed?

Q. Well, vaguely.

A,. It was probably middle--I would say 1972, middle of '72.

Q. How did Atari gain that awareness?

A. There was some mention of the existence of such patents from Bally Corporation.

Q. Was that during a meeting?

A. Yes.

Q. In Chicago?

A. Yes.

Q. Was that the meeting when you entered into this agreement?

A. When we negotiated it.

Q. When you negotiated it. Has Atari, Inc. ever indemnified any customer against infringement of the patents under which Magnavox makes its claims?

A. No it has not.

Q. When did Atari gain more specific knowledge of the Magnavox patents, more specific knowledge than your vague information in the summer of '72?

A. It was probably--I went home and I think I applied for a copy of those patents and I think it was two or three months thereafter.

Q. Did Bally give you the patent numbers during the meeting?

A. I don't recollect.

Q. How di you apply for copies of them or request them?

A. I must have had patent numbers. My secretary--I just said that I understand there is a Magnavox patent and she as good little secretaries do came up with the goods.

MR. ANDERSON: We have no further questions.

MR. WELSH: I have no cross-examination.

MR. ANDERSON: I would suggest that we agree that Mr. Bushnell can sign the deposition before any notary public.

MR. HERBERT: So stipulated.

(Whereupon, the taking of the deposition was concluded)

Bonus - Someone mentioned earlier that they wanted to see pictures of Dave Nutting. I don't have any from when he was active in the coin-op industry but here are two from his earlier days:

1949 - Culver Military Academy

1953