NPR Atari & Chuck E. Cheese’s: Nolan Bushnell
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Strawberries 50c a basket in market. That’s what the market is. Picked and sold at a
discount.
Carnie. Good at bringing people to him. Arcade games started at carnival. Not video
games.
Steve Russell. Space War. If game in arcade, that would make money. Maybe someday,
cost would come down and be practical.
Find the market.
Ideas may be good but costs may be too high at the time. If you wait long enough,
your idea may become more feasible. (Space Wars in an arcade but computer cost too
high).
Funded company (venture capital was just being started at this point) $250 per person.
$500 to start company.
Ping pong game was first game after space wars knock off. Became Pong. Thought it was
going to be a throwaway. Was insanely fun and wanted to sell to coin company, but was
2 player and they didn’t want it.
Game became so popular in a bar, it filled the coin box.
o Earned almost $300 a week.
o Cost was $300.
o Made and licensed machines themselves.
Revolutionary for the early 70s
Machines sold for cash.
o 30/60 day terms
Copied a lot. Patents back then didn’t hold as strong.
Cash was limitation, but investors thought video games were “flaky”
New tech, a chip, was created, and they realized that pong could be put on a single chip.
o Chip cost $5
Left NY toy show feeling like a failure
o Cost too much. Toys $35, Console $79
Sears Sporting Goods became their distribution channel.
Sometimes, things that may not seem like a hit can become a massive hit. It’s the
market you’re selling to, not yourself. Utility of the consumer, not the creator.
1. In this podcast, one of the first things mentioned is a key point to me. If you create
something of value, you need to gauge the market.
 The strawberry story illustrates this.
 Nolan Bushnell went out, found out that strawberries were going for 50c a
basket and he went out, picked his own strawberries, and sold them at a
discount.
 If you find a market, but have the means to produce that product at a discount,
you can add value to your product by establishing a new, lower cost market to
the consumer. Consumers will gravitate to your product over others if it is at a
similar quality to its competitors, but at a lower price.
2. Ideas may be good ones, but at the time of your idea, the cost of technology may be too
high to bring to fruition. However, over time, these costs may decrease and these ideas
can become more feasible. With this, these ideas can become more valuable because of
this ability to create a new and innovative products and services at a level of value that
your target consumer can afford.
 Space Wars was extremely fun, but difficult to make consumer friendly.
 Bushnell thought that bringing it to arcades everywhere but the cost of
equipment was too high.
 After a while, the cost of this equipment became more affordable, and coin slot
video games became a reality.
3. Sometimes, ideas that may seem irrelevant or unnecessary can be a hit, not because it
serves the needs of the creator, but because it creates value to the consumer. Bushnell
gave his engineer, Allan Alcorn, a training exercise. That training exercise became the
revolutionary arcade and console game named Pong.
 It was originally thought of by Bushnell as a complete flop.
 The novelty and simplicity of the game was a hit.
 Once they played it, the game was actually extremely entertaining so they
shopped it around, got no offers, but decided to make and license the game
themselves.