The Dot Eaters - Home Video Game History

Player 3 Stage 4: On the Brink

Atari and Mattel are about to get nuked by a former PONG-clone maker promising to usher in the third-wave of videogame technology. Too bad the whole industry is approaching meltdown.

ColecoVision - Coleco 1982

The Next Wave

Connecticut Leather Company, aka Coleco Industries, is founded in West Hartford, Connecticut in 1932 selling supplies to shoe repair shops by Russian immigrant Maurice Greenberg. Moving into plastic moulding in the 50's, Coleco eventually sells off the leather business. By the end of the 60's, they are the largest manufacturer of above-ground swimming pools, and aquire Eagle Toys in 1968, a Canadian maker of popular rod hockey tables. After the company goes public in 1971, Coleco flirts with bankruptcy due to some shaky forays into snowmobile and dirt bike production. With the release of its million-seller Telstar home PONG clone in 1976, Coleco tastes the profits of electronic videogames and thirsts for more. It produces nine more varieties of the Telstar unit, nearly bankrupting itself again in 1978 as the home videogame market moves over to programmable, cartridge based game units. With Pong-type game manufacturers slashing the price of their dedicated consoles up to 75%, Coleco is forced to dump over a million obsolete Telstar machines at a cost of 22.3 million dollars.

Coming with Kong

With Maurice's two sons Leornard and Arnold Greenberg at the helm, Coleco's line of electronic handheld games such as Electronic Quarterback and the Head-to-Head series meet with success. This leads the brothers to ignore the near disaster experienced with the Telestar PONG clones and the company funds a new videogame division to the tune of $1.5 million. The team is directed to begin work on a new third-generation home videogame system, one that would set the standard in graphics quality and expandability. The key to the success of this new machine is to be its pack-in cartridge, the smash arcade hit Donkey Kong. Coleco sends an executive over to Japan to negotiate the rights with Nintendo, who immediately present him with an ultimatum. Either sign a contract on the spot paying $250,000 or risk losing the license to either Atari or Mattel, both of whom are scratching at the door looking to buy. Unable to call back to Connecticut to review the deal with Coleco lawyers, he is forced to sign. Upon his return, the executive gets a tongue-lashing from his bosses, who think they've been screwed on the deal. The game, of course, becomes one of the greatest system-sellers ever. Later on in 1982, lawsuits are filed against both Nintendo and Coleco by Universal Studios, claiming infringement of their King Kong copyright. With the large sum of money already invested in the licence looming in their minds, Coleco cuts a deal with Universal, giving them 3 percent of Donkey Kong - Coleco 1982 Donkey Kong sales. Nintendo, however, fights the lawsuit, offering numerous in-court demonstrations of gameplay vs. movie plot. They also discover the factthat MCA Universal has let their copyright to King Kong lapse anyway. After appeals all the way to the U.S. Supreme Court, Universal looses the case and Nintendo is awarded $1.8 million in damages. This prompts Coleco to then file suit and receive a portion of their lost Donkey Kong royalties.

The new system is based around an 8-bit 3.58 MHz Z-80A CPU, 8K system RAM and 16K of video RAM allowing a screen resolution of 256x192. It has the amazing capability to display 32 sprites on-screen at the same time, along with a 16 colour on-screen palette out of a total of 32. Three channel sound is also thrown into the mix for good measure. The ColecoVision is released in the summer of 1982, at a retail cost of $199. It's a sturdy looking device, a large black box with two controllers that follow the Intellivision's lead by allowing overlays to be inserted over a 12 button membrane keypad. But the ColecoVision splits the difference between the joysticks of the VCS and the control disk of the Intellivision by having a short, thumb-busting mushroom-shaped stick for the player to control their characters.

Arcade Quality

The most promising part of the machine however is probably the large port in the front of the box, covered by a sliding panel. It is here that purchasers will plug in the many add-on devices Coleco plans to release for the system. Twelve additional cartridges are announced along with the machine. While Atari had pioneered the licensing of arcade games for home play with Space Invaders, Coleco makes this a key part of their strategy, aggressively seeking licenses for coin-op games instead of concentrating on creating original titles.

The first batch of cartridges include such arcade translations as Lady Bug, Space Panic, Mouse Trap, Venture, Space Fury and Zaxxon. The game development department at Coleco is staffed by around 30 artists, designers and programmers at the start. Once the rights to an arcade game is secured for the ColecoVision, the design team receives an arcade unit that joins its brethren in the "game room". Lacking any technical source material, the game designers at Coleco must videotape gameplay from the coin-op version for reference while translating the game. While the conversions are not flawless interpretations, they are one giant step towards capturing the graphics and game mechanics of the original coin-op for play at home. The usual timeframe for development of a game is 3 - 4 months.

Hitting the market in the midst of the public relations war Atari and Mattel are waging against each other, the ColecoVision sells for around 100 dollars more than the 2600 but also 35 dollars less than Mattel's machine. The unit is an instant success, with the first run of 550,000 machines selling out. By Christmas 1982 one million of the devices have been sold, along with eight million cartridges. Sales for the the company triple from $178 million in 1981 to $510 million by 1983. Coleco stock enjoys an amazing run, increasing from 6 7/8 to 36 3/4 in a one year period.

"I must have this machine!"

In 1982 my Atari VCS is three years old, and while I'm enjoying the new games being produced for the system by Activision, the horrible Pac-Man translation from Atari really starts me thinking it might be time to put the old beast to pasture and move on to a better system. I look at the Intellivision as a possible upgrade, but the games really don't appeal to me, along with that crazy control disc. That year my family and I take our annual trip to the Canadian National Exhibition in Toronto, and coming through the Dufferin street gates I notice a large crowd gathered around a big geoscopic dome, one I think they had installed fitness stuff in during previous Ex's so I had never really paid much attention to it. But this time the sound of electronic boops and beeps drifts out of the entry way and plays its siren song in my young ears, and as I enter a girl hands me a button that says "Try ColecoVision". "What the heck is a ColecoVision?" I wonder, and the answer is like a slap in the face when I look around inside. Amid smaller displays with Intellivision's and VCSs crying to be heard looms a huge set-up with ten people standing in front of 10 monitors playing what looks from a distance like the arcade version of Donkey Kong. As I approach, I'm amazed to see that this game is being played on a home system! The ColecoVision! I stand in the large queue and wait my turn, inching up the line, anxiously shifting from foot to foot like I have a full bladder, eternities ticking away as I watch those other lucky bastards play the game. Finally I'm up against the rope separating me from the play area, and miracle! Someone who must have be 2600 Donkey Kong - Coleco 1982 ColecoVision Donkey Kong - Coleco 1982 en playing for at least three hours is led away by an attendant and I fly to the monitor, a large popping sound echoing through the place as the air rushes in to fill the vacuum where I had been standing microseconds before. I look at the machine secured to its pedestal, large and black and imposing. I pick up the controller, surprised by the size and heft, and press the start key. There's Mario! He looks like Mario! There's the gorilla Kong! He looks like Kong! I don't even notice deficiencies like the reverse positioning of Kong or the lack of detail on the barrels or the missing 'mudpie' level. For once, the pitch phrase "The Arcade in Your Home!" doesn't come off like so much hyperbole. As my thumb strains against the stiff mushroom controller, guiding Mario over barrels and gaps and rivets, an epiphany washes over me like rain: I MUST HAVE THIS MACHINE! Then suddenly, Oh No! The screen goes blank! A hand on my shoulder! Reality snaps back as I find myself back in Toronto, Ontario, being led out of the play area to the popping sound of another vacuum being filled behind me. The 5 minute play interval, now seeming like 3 seconds instead of 3 hours, is over. I get in line three more times, and each session at the ColecoVision is as wondrous as the last. I then wander around the rest of the displays, play Mattel's Downhill Skiing...but even the graphics of the Intellivision seem like images chiseled onto a stone tablet compared to the Coleco. And the VCS? Pfffft. What had been cutting edge a couple years ago was now hopelessly antiquated. That Christmas, I got my ColecoVision.

Filling the Hole

Expandability is what Coleco promised, and they keep to their word with the release of two hardware add-ons in 1982. Expansion Module #1 is the Atari 2600 Converter, selling for $60, allowing users to plug in the cartridges for that system and play the games on the ColecoVision. 150,000 converters are sold within the first three months. This hardware, along with their stand-alone VCS clone Gemini, results in a flurry of litigation, starting with a $350 million lawsuit from Atari charging infringement of patents filed during and after the development of the VCS/2600. The company also includes various accusations of deception in Coleco's marketing of the expansion module. Coleco counter-sues for $550 million, claiming that Atari is infringing on American anti-trust laws by using various strong-arm tactics to maintain a monopoly in the videogame market. The two companies eventually settle, resulting in Coleco paying royalties to Atari on every Converter and Gemini sold. There is also an adapter planned to allow the ColecoVision to play Intellivision cartridges, but this apparently never makes it off the drawing board. The second module is the Driving Controller, consisting of a steering wheel and foot pedal, packed with the arcade driving game Turbo. The $55 hardware is also compatible with TV tie-in game Dukes of Hazard and coin-op conversion Bump 'N Jump. The device plugs into joystick port #1, and a controller in the other port is used as a gear shift.

In 1983 the ColecoVision takes its place at the top of the videogame heap. It sells 1.5 million units over the year, beating the mighty 2600, the Intellivision, and Atari's new 5200 Supersystem. There are 29 game publishers producing cartridges for the system, and with the Atari converter it has the largest game library of any console on the market. Although Coleco forcefully pursues licenses for arcade games for their system, they are outmaneuvered on occasion. After they forge an agreement with coin-op game maker Centauri for several of their arcade hits including Vanguard and Phoenix, Atari swoops in and snaps up the rights with a higher bid. Parker Brothers takes a similar action by outbidding Coleco for the Popeye home licence.

Adam Falls From Grace

The success of their console is firmly established, so of course Coleco takes the next seemingly obligatory step and risks it all with a precarious reach for the Holy Grail of videogame manufacturers...the home computer conversion! First comes the next expansion hardware announcement: the Super Game Module, featuring expanded memory for souped-up versions of games that will be flawless interpretations of the originals including intermissions, along with a high-speed 'wafer' ADAM Computer - Coleco 1983 tape drive that holds 30 times the information of an Atari 2600 cartridge. But Coleco decides to drop this in favour of sinking 34 million dollars into development of their ADAM home computer system, one version a stand-alone and the other a series of add-ons called Expansion Pack #3 for the existing ColecoVision unit. Introduced at the 1983 Summer CES in Chicago, the hardware is a Zilog Z80 CPU with 64K of RAM and 32K of ROM (expandable to 144K), with a built-in word processor. There are three internal slots, along with an expansion bus for the peripherals and the stand-alone system features an external cartridge slot into which ColecoVision cartridges can be inserted and played, as well as two game controllers. Both systems include a full-size keyboard, one digital tape drive accepting high-speed data packs with space available for an optional second drive, and a humongous daisy-wheel printer that also serves as the unit's power supply. In the ADAM add-on system, the box containing the CPU and expansion slots was somewhat lower profile than the stand-alone system, since the components in the original ColecoVision game unit did not have to be included. The add-on has its own port for video output to a monitor, as well as two external joystick ports, but TV output to channels 3 or 4 is handled by the original game console, which the CPU box fit onto through the expansion slot at the front of the console. BASIC and Super Buck Rogers Planet of Zoom are the two pack-in tapes. There is a 5 1/4 inch floppy drive and a 300 baud modem made available soon after release. By late 1983 Coleco has received a delayed approval from the FCC on the ADAM design and the company Electronic Typewriter - Coleco 1983 frantically begins mass production to meet the 500,000 units promised to retailers before the much-valued Christmas season. Units are air-shipped out to stores near the end of Oct. 1983, with a retail price of $650 for the stand-alone and $400 for the ColecoVision add-on package. Although accompanied by a $15 million television ad campaign, public reaction to the Adam system is mass indifference, with sales vastly below company forecasts. Out of the pre-orders, only 100,000 eventually sell. The ADAM is buggy to say the least, with one of the most dramatic problems being the enormous magnetic pulse the machine emits when powering up, erasing any tapes accidentally left in the data drive. 60 percent of all ADAMs sold are eventually returned to stores as defective. Coleco reports over $65 million in inventories of finished goods, evidence that ColecoVision sales are grinding to a halt. In 1984, with the home videogame market hemorrhaging badly, the consumer electronics division of Coleco loses over 258 million dollars. The retail price of the ADAM is steadily slashed down to $475 in an attempt to bolster sagging sales, but not even a billion dollars in Cabbage Patch Kid sales for the company can save the machines. The ADAM and ColecoVision line of electronic devices are abandoned by Coleco in early 1985, with Coleco stock tanking at $13 dollars a share. Most of Coleco's assets wind up purchased by Hasbro in 1989, but at the time of the bankruptcy Telegames almost immediately buys up the rights to the ColecoVision and remaining stock and starts selling the machines through mail-order, as well as working to finish games that were left hanging when Coleco went under. In 1985 they begin selling the $40 Personal Arcade aka Dina through mail-order, a redesigned system using the ColecoVision hardware. The machine is small, featuring low-rent versions of Nintendo's NES controllers. The original's membrane keypads have been reduced in number to one, mounted on the cabinet and incompatible with game overlays. Space shooter Meteoric Shower is included as a built-in game for the system. Another interesting aspect of the machine is a second cartridge port, right behind the ColecoVision slot. This extra slot accepts Sega SG-1000 cartridges, a Japanese precursor to the Sega Master System. The Ultimate Critic eventually weighs in with His review of the Dina, when a tornado wipes out all remaining Personal Arcade stock in 1994.

Last Life

In 1988, having not learned a thing from their past mistakes, Coleco's over-leveraging of the fading Cabbage Patch Kid craze buries the company for good, using up the last of their nine lives. All licenses and rights pass to toy giant Hasbro in 1989. With over six million units sold in the space of just two years and approximately 190 cartridges released in total, it makes you wonder whether Coleco could have established itself as an enduring force in the videogame market if the big crash, coming just one year after the ColecoVision's introduction, hadn't cut the legs out from under their system. The Coleco brand resurfaces again in 2005 through a Chicago based company, releasing new lines of handheld games and virtual TV plug-and-play devices.