Play Meter

Lyle Rains (left) , uice president/ engineering/or Atari's Coin-Op Games Diuision,
discusses an attract mode sequence with one of Atari's game programmers.
(photo courtesy Atari, Inc.)
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PLAY METER, August 15,1 981
In the world of semiconductors
which revolutionized the game indus-
try in the early 1970's, Japanese
.companies have become the clear
leaders in the field. According to
some estimates , Japan accounted for
almost 69 percent of the $13 billion
world market , while Americans took
23 percent of it , and the Europeans
picked up the remaining 8 percent .
Looking at this success , American
businessmen respond with almost a
litany of reasons to explain it: Japan 's
government supports businesses with
tax benefits or sometimes capital
grants . It also encourages research
and development, and an organiza-
tion like the Mitsui Intercompany
Research Institute gets major
companies together to produce ideas
for new business opportunities .
Worker productivity in Japan is
higher . Tight money and high
interest rates stifle investment in
research and development in the
U.S .
The reality of these conditions are
not lost on the coin-operated amuse-
ment industry where many com-
panies have turned to licensing
games from Japan rather than
deve loping their own.
"I guess the real fever for licensing
started about five years ago with
Space Invaders ," says Tom Stroud ,
executive vice president of Cinema-
.tronics, a games manufacturing
company based in El Cajon, Califor-
nia . "I think everyone realized you
could go out and license a game and
that it could be a winner. "
But while on the surface it appears
that a large number of game
companies are opting for licensing,
good old American know-how is
hardly dead . A number of manufac-
turers are adopting the strategy of
using outside licenses as well as
inside development to come up with
products .
In looking at how game com-
panies are able to continue their own
research and development (R&D) at
a time when many American
businesses are bowing out of it( Play
Meter talked with tnree Cali ornia
games manufacturers .
Each of these companies, Atari
and Exidy , based in Sunnyvale , and
Cinematronics in El Cajon , have
common reasons as well as indivi-
dual considerations for doing their
own development . Tom Stroud of
Cinematronics estimates that com-
panies doing in-house R&D devote
between 8 and 12 percent of their
budget to it . Michael Fournel! ,
director of corporate public .relations
at Atari , says his company puts 8 or 9
percent of its company-wide gross
sales back into development .
Obviously these manufacturers
think it's worth it.
"From an ·economic standpoint,
there are so many plusses that
outweigh the minuses that we can't
afford not to do our own in -house
development ," says Leslie Hauser ,
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