Free The Ultimate History of Video Games: From Pong to Pokémon and Beyond—The Story Behind the Craze That Touched Our Lives and Changed the World by Steven Kent Page B

little. He got away with a very, very, very small licensing fee up front.
    Atari became a licensee under a prepaid arrangement. It paid some fixed sum, some ridiculous number like a few hundred grand. I don’t remember the details. But he [Nolan] had an extremely advantageous, nonburdensome license from us. And as far as we were concerned, that was the end of our problems with Atari.
    If anybody had had any inkling of what was going to happen to this business at Atari, they would never have gotten those terms.
    —Ralph Baer
     
    Bushnell played the legal action like a chess game. In exchange for settling, Atari became Magnavox’s sole licensee. By this time other companies had begun making similar games. While Atari had already paid its licensing fees, future competitors would have to pay stiff royalties to Magnavox. In several later litigations, Magnavox zealously prosecuted all violators.
    Magnavox said, “For $700,000 we’ll give you a paid-up license.” And Nolan said, wisely, “You got it.” So we had a paid license and everybody else had to pay royalties.
    That was negotiated in June of 1976, a very key date. It was a week before the consumer electronics show opened, and one of the caveats of that agreement was that Magnavox got the rights to any product we came up with in the next 365 days. Anything we released.
    So we said at one point, we’re not going to release any consumer products for a year; we’ll release them at the next CES [Consumer Electronics Show]. That was the only time we ever kept our mouths shut about a product, and itwas funny because when the Magnavox attorneys came by to analyze our stuff, we had Steve Bristow show them around. Bristow knew nothing about the consumer stuff—the stuff that Magnavox wanted.
    —Al Alcorn
    I helped negotiate that deal. We paid so little money, and yet we agreed that they would go after, as part of the settlement, all our other competitors. Well, we were the dominant people, and all of a sudden Magnavox said, “We’ll help, we’ll give you a sweetheart deal, and we’ll beat up on everybody else.”
    —Nolan Bushnell
     
    With the settlement signed, the case never went to court. Bushnell and Baer met in Chicago, on the steps of a courthouse, the day that settlement was sealed. Baer remembered being introduced to Bushnell and shaking hands. They exchanged pleasantries, then went in different directions.
    Over the years, Bushnell became a national celebrity as the “father of video games.” In the late 1970s, as he prepared to retire, Ralph Baer finally told his story to the press.
    I finally got tired of being a shrinking lily and I started tooting my horn a little bit. But it didn’t have any financial effect because it was all over by then.
    I also didn’t open up my mouth, didn’t make any loud press for myself, because guys like Nolan were clients. He was a licensee. He put the business on the map. In fact, without him there would never have been any money in the till. If Nolan wants to say he was the great inventor, hooray Nolan. You’re a nice guy, you made a lot of money for us, say anything you want to.
    —Ralph Baer
     
    Years later, Baer ran into Nolan Bushnell and Gene Lipkin, Atari director of marketing, on the floor of the Consumer Electronics Show. According to Baer, Bushnell introduced him as “the father of video games.” Baer smiled and said, “I wish you would have said that to the press.”
    * In later litigation, it was revealed that Bushnell not only attended the Burlingame show but also played the tennis game on Odyssey.

The King and Court
     
    We had vendor credit from Cramer Electronics. Banks wouldn’t talk to us because we were obviously in the Mafia if we were in coin-op.
    —Al Alcorn
     
     

Guilt by Association
     
    More than thirty years had passed since Fiorello LaGuardia’s crusade successfully shut down pinball in New York City, but the stigma of organized crime still plagued the coin-operated amusement