Preliminary Report - Was The Devil's Dungeon the First Commercial CPRG and What Was the First Commercial Microcomputer Game?

While arcade games are the focus of my research, I occasionally delve into computer game history. While I certainly played my share of arcade games and spent a good deal of time with my Atari 2600 (though my first console was an Atari/Sears Super Pong IV), my favorite gaming platform by far was my Apple II and probably my favorite genre of games was the role playing game. I have also always had an intense interest in the origin of things (my favorite comic book issues, for instance, were inevitably those with origin stories). Unsurprisingly, then, one topic in which I am keenly interested in is that of the first commercial microcomputer/personal computer role playing game as well as the first commercial microcomputer game in general.

The "commercial" qualifier is a necessity since the finding the first microcomputer game period is probably a fool's errand. With computer games users could program their own games and many of them did. In the early years of personal computing, in fact, this may have been the only way to obtain software since there was as of yet no real commercial microcomputer software industry - at least not for games. But more on that later. Developing arcade and console games generally required expensive hardware and development systems that only a tiny, tiny handful of consumers were likely to have. Microcomputers were different. Almost all of them eventually had at least a BASIC compiler available and many of them shipped with one out of the box. In addition, there were numerous books and magazines offering "type-in" games in BASIC so even users completely lacking in programming skills could have a go at it. Since such games could be created by anyone and everyone who owned a computer, trying to document the first such game would probably be an exercise in futility.

Trying to find the first commercially sold personal computer game is a bit more manageable. But it still offers its own set of challenges. One is defining what counts as a personal computer. Contrary to what some thing, personal computers did not start with the Apple II, Commodore PET, and TRS-80 in 1977. There were at least two dozen personal computers, and possibly many more, produced in 1975, 1976, and the first half of 1977 (i.e. before the West Coast Computer Faire in June when the members of the "trinity" were either announced or introduced). And they didn't start with the Altair 8800 either. A handful of models appeared in the years before the Altair was introduced in the famous January 1975 Popular Electronics cover story, including the Kenbak-1, the Datapoint 2200, the National Radio Institute 832, a kit computer that could be built from 52 integrated circuits, the French MICRAL-N (1973, considered the first microprocessor-based nonkit microcomputer to be sold commercially), and the Scelbi 8H (1974, the first US microcomputer with a microprocessor). In the 1960s there were machines that some consider to be personal computers, MIT/DEC's LINC (1962), and Olivetti's Programma 101, introduced at the 1964 New York World's Fair. Some trace the beginnings of personal computing to 1966 when Stephen Gray formed the Amateur Computer Society as a way for hobbyists building their own computers to share information. Of course, in order for a society to be formed, there had to be an existing personal computer movement. Nonetheless, it was in the mid-1970s that the personal computer industry really began to take off. At the time, these machines were generally called "microcomputers" rather than "personal computers," which might be a better term to use.

All of that is a long way of saying that even the question of the first commercial microcomputer game is not an easy one to answer. This is especially true given how poorly this era is documented and how little attention it has been given by computer game historians. One thing I have discovered in researching early arcade games is that sources like Wikipedia and MobyGames are, more often than not, worthless. They are somewhat useful for finding information on arcade games published from the late '70s on but for earlier games, if you want to find reliable information, you have to dig it up yourself. The situation for early computer games is even worse. In my opinion, no one has really researched the pre-1978, or even the pre-1980 era in sufficient detail.

I would love to tell you that I am going to be the person who does but that is not the case. At one point, I was planning to write separate books covering the history of arcade, computer, and console games but just covering arcade games, and even then just up to 1985, and even covering primarily games made in America has taken up far too much of my time. On occasion, however, I do tackle more bite-sized questions about computer games.

Two that I hope to address one day are: 1) what was the first commercial CPRG (computer role-playing game), and 2) what was the first commercial microcomputer game. I will not be attempting to answer either of those questions here, since I haven't really researched them. I have, however, uncovered a few interesting items in my preliminary research and thought I'd share them.

The first question is the easier of the two because we are dealing with some constraints. The first edition of Dungeons and Dragons came out in 1974 making it very unlikely that there was a computer RPG before then. Perhaps the first computer RPGs of any kind were those created for the PLATO system. PLATO (Programmed Logic for Automated Teaching Operations) was a CAI (Computer Assisted Instruction) system created in 1960 at the University of Illinois, originally on the ILIAC I computer. Initially a single-user system, it soon evolved into a timeshare system that allowed multiple users to connect to a single mainframe. By the late 1970s the system included several thousand terminals around the world connected to almost a dozen mainframes. PLATO was a fascinating system which merits far more attention than it has been given so far and far more than I am going to give it here.

An entire blog could be dedicated just to PLATO (a book is forthcoming that looks very promising). It was among the first systems to offer such features as e-mail, chat rooms, and instant messaging. It was also home to a number of games, including some of the first CRPGs. The first may have been m199H, which was allegedly written in 1974. Unfortunately, nothing is known of the game save its name. A number of other RPGs appeared on the system in 1975, including dnd/The Game of Dungeons (which may have been started in 1974), pedit5/The Dungeon, and Moria. From the screenshots and videos, I've seen, these games appear to be more sophisticated than the microcomputer games we will discuss shortly. They arguably included features such as high score boards and bosses (one developer claims that one of these games included the first boss, but I find that claim questionable). I do not have time to go into these games here, but you can check out Charles Bolingbroke's (a pseudonym) excellent CPRG Addict blog for more info.


What about the first commercial microcomputer RPG? Here, three excellent sources come to mind: the CPRG Addict blog, the Museum of Computer Adventure Game History (www.mocagh.org), and Matt Barton's book Dungeons and Desktops. The leading contenders are Beneath Apple Manor (Don Worth, The Software Factory/Quality Software), Space (Steven Pederson and Sherwin Steffen, Edu-Ware), Dungeon Campaign (Robert Clardy, Synergistic), Dunjonquest: Temple of Apshai (Automated Simulations), Telengard (Avalon Hill), Wizard's Castle (Joseph R. Power), Eamon (Donald Brown), and Akalabeth (Richard Garriott).

Of these, Beneath Apple Manor, released in 1978, is the consensus pick for first CPRG. Wikipedia and CPRG Addict both list it as such, as does David Craddock's book Dungeon Hacks (a history of Roguelike RPGs) Craddock, however, takes the claim from CPRG Addict. Seeking "definitive proof" of the claim, Craddock contacted Chester Bolingbroke, who replied:

"In all my investigations, I've been unable to track down a commercial RPG released earlier than 1978. MobyGames, one of the most comprehensive sources on the Internet, gives 1978 as the first year of any commercial RPG, as does Wikipedia. In almost five years of blogging, no one has come forward with an earlier title."

That certainly doesn't sound like definitive proof to me and , as we will discuss, I am a bit skeptical of the claim.

Let's quickly review the major candidates.

* Akalabeth and Temple of Apshai were not published until 1979 (for a discussion of Akalabeth's chronology, see (www.filfre.net/2011/12/a-word-on-akalabeth-and-chronology/).

* Eamon was a text adventure system with some rudimentary role playing elements thrown in. The system eventually included over 200 games. While one person claims to have played it in 1978, a 1979 or 1980 initial release date seems more likely. Once again, Jimmy Maher has done some excellent legwork on this one (www.filfre.net/2012/04/my-eamon-problem)

* Telengard's release date is usually listed as 1982, but its history goes back much farther. The author, Daniel Lawrence, had written a BASIC game called DND (a different game than the PLATO dnd) in 1976 or 1977 and ported it to a Commodore PET in 1978. As Lawrence explained in an interview for the Armchair Arcade website (www.armchairarcade.com/neo/node/1366):
"DND was written in 1976. Telengard was written and played locally by myself and the local crowd in 1978 when the first Commodore PETs came out. I had ported it to the Atari 800, the Apple ][+ and the TRS-80 before it was noticed by Avalon Hill and licensed for marketing."
This seems to indicate that the game was merely played by Lawrence and his friends in 1978, not commercially released.

* In a comment on CPRG Addict Robert Clardy claimed that Dungeon Campaign was published in December 1978. However, the copyright record lists a date of creation of 1979 and a copyright date of March 20, 1979.

* Space was a text-based sci-fi game based on the Traveler tabletop rpg. While some list it as a 1978 game, Barton claims it was likely released in 1979.

* Wizard's Castle was another game mentioned by Barton. It was a BASIC game published in a
magazine for the Exidy Sorcerer. Barton does not say which magazine, but I suspect it was the Sorcerer fanzine whose name escapes me. Baron also fails to mention when the game was published. The Sorcerer debuted in April 1978 and I find it unlikely that the game was published prior to 1979 but need to do more digging.

Finally, there seems to be little question that Beneath Apple Manor was published in 1978, but when? Worth claims that he showed the game off in computer stores in the fall of 1978, but this is a bit problematic. Even if his memory is accurate, it is unclear if he sold the game in the fall, or just demonstrated it in computer stores.

As I said, I have not really investigated this issue myself so Beneath Apple Manor may well be the first CPRG. As I also said, however, I'm a bit skeptical. First off, I don't set much store by what MobyGames or Wikipedia has to say on the issue since pre-1978 microcomputer games are extraordinarily poorly documented (the ones in 1978 and 1979 are better but not much).
However, in the little research I have done, I've turned up one intriguing possibility. Back in the day, I had a collection of probably 1,500-2,000 Apple II games as well as a handful of magazines and catalogs listing games I didn't have, all of which I entered into an Excel spreadsheet several years back. Looking back over my spreadsheet, I found a handful of RPGs that may have been released in 1979 or sooner. One of them was a BASIC game called The Devil's Dungeon written by Dr. Charles William Engel.

A quick web search turned up this article: www.hardcoregaming101.net/history/history7.htm which gives a bit more info on the game. The copyright office lists a copyright date of January 10, 1978 and, intriguingly, a date of creation of 1977.

An ad for the game (from Engel's Tampa, Florida company, Engel Enterprises) appeared in the February 1978 issue of Byte and it was reviewed in the March 1978 issue of Interface Age, the April 1978 issue of Byte, and a 1978 issue of Personal Computing.

However, it appears that at this point it was only sold as a 15-page book containing a program listing in BASIC.  As the ad above indicates, Engel also published a book called Stimulating Simulations (copyright 1977), which was later republished in various editions for most of the early microcomputers. PDFs of both the original 1977 edition and the 1979 Atari edition are available on-line. The former does not include The Devil's Dungeon (which was being sold separately) but the latter does, along with a listing for the game and some sample runs.

Unfortunately, it gives little other info on the game's history. As for Engel, he was a professor of mathematics education at the University of South Florida with a B.S., M.S., and Ph.D. from Wayne State University. Around 1981, he helped establish the Florida Instruction Computing Resource Center, an organization dedicated to promoting the use of computers in education.

So could The Devil's Dungeon have been the first commercial CPRG? To answer that question, we must first decide if it was an RPG at all. The game was very, very simple (and that's putting it mildly), especially compared with games like Beneath Apple Manor. It was all text with no graphics of any kind. From this description, it may seem little different than games like Hunt the Wumpus and Colossal Cave, but unlike those games, it did include several role-playing-game elements, such as experience points, attributes (speed and strength), monsters, and treasure. (other features included poison gas and tremors). On the other hand, it seems to lack character development completely, which would disqualify it in some people's eyes. Personally, I lean toward saying that it qualifies as an RPG, but just barely though I may change my mind. Others, however, will likely disagree, especially given the lack of character development.

Even if it was an RPG, however, does a game that was only published in book form count as commercial? If so, what about all the other BASIC games that were published prior to 1978 in books like David Ahl's BASIC Computer Games the People's Computer Company's What to do After You Hit Return or in magazines like Byte and Creative Computing? I suppose it's a matter of opinion whether it counts as a commercial computer game, but in any event, it does seem to have been published prior to Beneath Apple Manor. As for other BASIC games, I am unaware of any previously published games that could be considered RPGs, but I need to review my library. Another question is whether or not it should be considered a personal computer/microcomputer game, since many of the BASIC games books were written before microcomputers appeared on the scene. My initial thought is that it should be. Yes, it was just one of many BASIC games and could have been implemented on a number of systems, but Engel appears to have aimed his book at microcomputer rather than mainframe users.

Also, it does appear that the game was later published on computer media of some sort. For instance, it was listed in Skarbek's Software Directory - a catalog of Apple software published in 1980 - as being sold by Rainbow Computing (a computer retailer in Northridge, CA that also published software). It was also included in A.P.P.L.E.'s Nightmare Game Pak, a collection of BASIC games for the Apple II. A.P.P.L.E. was the Apple Puget Sound Program Library Exchange, an early Apple user's group established in February 1978 that sold collections of games on tape and disk (in addition to other activities). I am not sure when Nightmare Game Pak was published, but this version is available as a disk image if you want to give The Devil's Dungeon a go on an emulator. Here are some screenshots from AppleWin:

As to when the game was published in book form, it appears to have been available by at least February 1978, and possibly (given the copyright information) in 1977. I was unable to find contact info for Charles Engel and am not sure he's still alive. He was born in 1935, so he would be 79 or 80 today. In any event, I think that at the least the game merits more research. And there's always the very real (in my mind) possibility that someone offered a CPRG for sale prior to 1978.

How about the second question: what was the first commercial microcomputer game? Here, information is much harder to come by and there does not really seem to be a consensus favorite. I've done even less research on this one than I have on the first, but once gain, I've unearthed some interesting candiates in the little resarch I have done.

On his personal website (www.benlo.com/microchess/), Peter Jennings (co-founder of Personal Software) claims that his program MicroChess was "the first game program sold for personal computers." Jennings originally wrote the game for the MOS Technology KIM-1 computer. It was first advertised in the November 1976 issue of KIM-1 User Notes and the first copy shipped on December 18.

Not to take anything away from Jennings and his achievement, but I am skeptical of his claim. A quick search turned up two earlier examples of computer games that were offered for sale.
In April 1976, and possibly earlier, Cromemco began running ads for its TV Dazzler, a color graphics card for the Altair 8800 and other s-100 bus microcomputers. The ad also offered three programs for the Dazzler for $15 each. One of them was John Conway's Game of Life.

Any guesses as to what format the games were sold on? If you guessed cassette tape, you are ------ wrong! Nope, these were sold on paper tape. Yes, despite what you may have heard, cassette tapes were not the first medium on which microcomputer games were sold.
OK, now some of you may question whether Life actually counts as a game. Personally, I am skeptical that it does. Stan Veit reports that Steve Wozniak also created a version of Life for the Apple I (that's I not II), though I don't know if it was offered for sale. In any event, by October 1976 (again, possibly earlier) Cromemco was selling Spacewar on paper tape for $15 for machines based on the 8080 microprocessor and that definitely counts as a game and was sold before MicroChess. Here is a the cover and first page of the game manual:

And here's the table of contents for TV Dazzler Games, a collection of games for the TV Dazzler published in 1977 on diskette. for $95.

So were these the first microcomputer games offered for sale? I seriously doubt it. I imagine there were a number of games available for personal computers prior to 1977 and surely a few of them must have been offered for sale (yes, I know that most software was swapped at users groups or typed in from magazines etc. but I can't believe no one was selling software). A few years back when the demoed an Apple I, they ran a Star Trek game on it and someone might well have made one for sale.

Another early game was Steve Dompier's Target. Most sources claim that Dompier created in 1977 for the Processor Techology Sol-20 (watch the video here: www.youtube.com/watch?v=y_E5UnCVll8) but Stan Veit claims that Dompier originally wrote it for Processor Tech's VDM-1, which was advertised in the first issue of Byte in September 1975. The ad, however, does not mention Target and Veit claims that the VDM-1 wasn't available until fall 1976 (despite the ad's claim that it would be available in three weeks, which only illustrates one of the pitfalls of relying on ads for game release dates).  There was also the Altair 8800 game "Kill the Bit" but I don't know if it was offered for sale (and it didn't use a monitor).

So what was the first commercial microcomputer game? Beats me. To answer that question would require, at a minimum, scouring all the back issues of computer magazines published prior to 1977 as well as ads in various users group magazines, fanzines etc.  So far, I don't know of anyone that had done that - and if they did, it still wouldn't give a definitive answer. One of these days, I may do it myself, but who knows when and if I'll have the time.

Finally, since I mentioned the TV Dazzler and Stan Veit, I thought I'd leave you with this story from his book Stan Veit's History of the Personal Computer - perhaps my all-time favorite book on personal computer history. Stan ran the Computer Mart in New York City, one of the very first computer retailers. One night he installed a TV Dazzler card, connected it to a color TV set, and ran the Kaleidoscope program that was sold for it (the program just displayed kaleidoscope patterns on the screen. At the time, the store was located inside another store called Polk's). I'll let Stan pick it up from there:

"One evening we put the TV set in the window. It was connected by a long piece of coaxial cable to the IMSAI computer in the back of the store, which had Kaleidoscope loaded into the TV Dazzler. We left the computer running when the store closed, and went home. Imagine that you are a motorist driving down 5th Avenue in New York City at night. All of the stores are closed. It's pitch black, except for the street lamps. As you approach 32nd St., you see dazzling kaleidoscope patterns in bright colors, playing across the face of a TV tube in a store window. Even a jaded New Yorker was sure to stop and see what was making this display. Naturally, when you stopped to see what was going on here, so did everyone else. It did not take long to attract a large crowd of rubberneckers, and this stopped traffic completely, creating a big traffic jam on one of New York's busiest avenues. Soon, the police came to unscramble the traffic jam and they quickly saw what was causing the  problem. Thinking that the pictures had to be coming from a TV broadcast (there were no VCR's in those days,) they called up all the local TV stations to find out who was broadcasting the images. The TV stations knew nothing about it. The police soon realized that the display had to be generated by something inside the store. First they called the owner, and then the manager, of the store. The manager had to come downtown all the way from the Bronx. We had to open the store, turn off the alarm, and then he disconnected the computer by pulling the power cord out of the wall. The next morning, when I came to work, he had a few choice words to say to me about the window display. If I ever pulled anything like that again, I was finished with Polk's store!"

What I love about that story is what it reveals about the early days of computers. It seems incredible now that a simple kaleidoscope program could stop traffic in one of the world's largest cities, but that's how unfamiliar people were with seeming computer-generated images on a television. Most people had never seen anything like it. That's why a game like Computer Space could leave people gaping in wonder.

The Ultimate (So-Far) History of Gremlin Industries Part 3

Before I jump into today's post, I wanted to mention a book I recently read that had some additional info on Nasir Gebelli, including why he left Sirius and why Gebelli Software failed. It is 1985's Software People by Broderbund co-founder Doug Carlston. If you have any interest in computer games of the 1970s and early 1980s, I highly recommend it.  have updated my earlier post on Nasir Gebelli with this new info.

Speaking of computer games, another source you need to check out if you haven't already is Jimmy Maher's outstanding blog "The Digital Antiquarian" (www.filfre.net). It is one of my two favorite blog's on video game history. It mostly concentrates on interactive fiction and other games with a story/interactive element, but it also dives into the general history of various publishers. It is generally well researched and very well written.

And while we're on the subject, my other favorite video game history blog is Alexander Smith's "They Create Worlds" (videogamehistorian.wordpress.com). This one takes a much broader approach, covering all three major segments of the video game industry (coin-op, home, and computer) as well as background information on the various threads that led to the industry's creation (i.e. the history of computers in general). Alex has recently started a podcast that is also well worth listening to.

On to today's post:

In the last two posts, I have reviewed the early history of Gremlin Games. When we left off, they were on the verge of being purchased by Sega. Before we look at the purchase, let’s backtrack a bit and look at some Sega history. In a series of earlier posts, I recounted the history of Sega’s predecessors (Service Games and Rosen Enterprises). After Sega was formed, the company had a long history in Japan but delving into that would take us too far off course. Instead, I will concentrate on Sega’s early attempts to enter the US market.

Cracking the US Market

In the late 1960s, Sega dominated the Japanese coin-op industry with relative ease, success in America came much more slowly. The biggest reason was probably the prevalence of piracy. Sega exported a number of games to America between 1966 and 1970 and most were initially successful. The success, however, never lasted. Time and again Sega would conduct months of research before introducing a game only to see their competitors build similarly-themed knock-offs (Midway’s S.A.M.I. for example, was basically the same game as Missile). In addition, the U.S. companies often undersold Sega (Rosen 1975). This was especially easy to do since domestic manufacturers could avoid the costs Sega incurred shipping their games from Japan to the U.S. (not to mention that they did not have to pay for R&D and that some of the copycat games were of less-than-stellar quality and thus cheaper to manufacture). After a disastrous experience of this kind with Jet Rocket, Sega pulled out of the U.S. market entirely. According to David Rosen, however, the "Jet Rocket fiasco" (as he called it) was not the primary reason. In Japan, the company’s arcade and amusement casino business was thriving and they did not have time to devote to the America market, which was an insignificant part of Sega’s total volume anyway (Rosen 1975). In any event, the company’s exit from the U.S. market was not to last long.

Going Public – Gulf + Western Buys Sega

After the success of Periscope, Rosen and his partners began to think about taking their company public, an unprecedented move for an American in Japan. It would have been the first time a coin-op company went public in Japan as well as the first time an American company of any kind did so after World War II. Rosen wanted to go public by acquiring another company and merging into his own. Sega's investment banker, Kidder-Peabody, suggested the opposite – find a company that might be interested in acquiring Sega. In 1969 and early 1970, Rosen and his partners sold 80% of the company to Gulf + Western Industries, though Rosen remained as CEO. Started in 1934 as Michigan Bumper Company, Gulf + Western went on to become the very definition of the word conglomerate (in Mel Brooks Silent Movie it was referred to as Engulf and Devour). Among the companies and brands it owned in the 1970s were Paramount Pictures, Simon & Schuster Publishing, Dutch Master Cigars, Paper Maid, Bohm Metals, Eagle Signals, and No-Nonsense pantyhose. Products made by these companies included food and agricultural products, tractors, air-conditioning equipment, books, movies, metal products, business machines, cables and connectors, musical instruments, public safety systems, wax museums, shoes, belts and the list goes on (and on, and on...). In its 1974 annual report, the list of subsidiaries takes up 9½ pages and includes almost 300 companies. Gulf + Western’s purchase of Sega would add yet another product line to its ever-growing list. One product that Gulf + Western did not make, however, (or want to) was gambling equipment. After acquiring Sega, they discontinued its slot machine line and, according to legend, Sega threw its slot machine molds into the Bay of Tokyo and began concentrating on arcade games.

Sega Enterprises, Inc.

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. (Annual Reports) While I am certainly no business expert, my guess (and that’s all it is – a guess) is that the reverse stock split was a way for Sega to increase its ownership of Polly Bergen by diluting that of any Polly Bergen Co itself or any other entities.

(Re)Entering the US Market: Sega of America 1975-77

In 1975, Sega decided to give the U.S. market another go. This time, hoping to avoid the problems that had led them to abandon the market earlier, they decided to build the games in America rather than shipping them from Japan. It seems that they initially tried to accomplish this through acquisition. Early in the year, Sega agreed in principle to acquire Seeburg’s Williams Electronics division but the deal was cancelled in the summer and in July, Sega opened its first U.S. manufacturing facility – a 50,000-square-foot plant in Los Angeles. At the 1975 MOA show, Sega debuted Bullet Mark, its first game manufactured in the US. A joint R&D effort between the US and Japan, Bullet Mark was a two-piece video gun game where one or two players used tommy guns to blast away at an oddly disparate assortment of targets (balloons, tanks, pirates, and jet fighters) (Rosen 1975). The guns featured a recoil effect for added realism and Sega later updated the game with new features like disappearing targets, machine gun sounds, and an IC containing new targets. The game arrived too late in the year, however, to have much of an impact on Sega’s bottom line (even if it had arrived earlier, it might not have had much of an effect as the game suffered from quality issues and its large size made it impractical for many locations).

In 1976 came more new video games. Tracer was a smaller, one-piece version of Bullet Mark, with different (and more sensible) targets (helicopters, submarines, bull’s-eyes, and jets). Road Race and Moto-Cross were driving games (automobile and motorcycle respectively) featuring a semi-first-person, behind-the-back perspective (itself somewhat unusual for the time). The latter featured motorcycle handlebar controls that vibrated after a collision as well as recorded sound effects on an 8-track tape. In the summer, Sega took advantage of Gulf + Western’s Paramount subsidiary and rebranded the game as Fonz, with cabinet graphics featuring the likeness of Henry Winkler of Happy Days (a Paramount property) fame. It was perhaps the first example of a celebrity-licensed video game. Sega even sponsored a "Ride with the Fonz" promo, cooked up by sales director Pat Karns (formerly of Atari). Participating arcades were given advertising posters and banners as well as Fonz T-shirts and free signed photos of Winkler to give as prizes and (hopefully) lure new players into the arcade (RePlay 12/76; 1/77). Tic Tac Quiz bore more than a passing resemblance to another TV property – Hollywood Squares (though the game show was produced by Filmways Television, not Paramount). Players agreed or disagreed with facts that appeared on the screen. If they were right, they got to choose where to put their X or O. The game shipped with 2,500 "questions" stored on a replaceable tape (Sega later offered a 1,500-question sports trivia tape).

Sega-Vision (and the Madman)

Sega also continued to branch out into other areas. In June, they acquired Muntz Manufacturing Inc. – a manufacturer of widescreen projection TVs. The company had had been founded by Earl "Madman" Muntz, a high school dropout who made a fortune selling cars, TVs, and stereos via his hyper-kinetic "Madman" persona. Muntz opened his first used car lot at age 20 and went on to become perhaps the most famous used car salesman in the country through a combination of publicity stunts (he once promised to smash a car to pieces on camera with a sledge hammer if he didn’t sell it by the end of the day) and a series of over-the-top TV and radio commercials. Bob Hope and Jack Benny incorporated him into their comedy routines and at one time his used car lots were the seventh most popular tourist attraction in Southern California. Underneath Muntz’s manic personality, however, was a shrewd businessman and a talented engineer. In a practice that came to be called "Muntzing," he would strip down complicated electronic devices to their bare essentials then sell them at a reduced price (he was the first to offer televisions that sold for under $100). Muntz also developed a 4-track car stereo called the Stereo-Pak that made him another fortune and led directly to the 8-track tape. After a fire damaged his offices, Muntz closed his Stereo-Pak business and turned his focus back to television. Taking a 15-inch Sony receiver, he added a mirror and a lens and projected the image onto a 50-inch screen, then housed the whole thing in a wooden console creating one of the earliest widescreen projection TVs. (New York Times 6/21/87; Erskine 2006; Rasmussen 2007)

One company that took notice was Sega, who was certain that the widescreen TV market was ready to explode. In addition to their use in homes, the sets could be installed in restaurants and hotels. Sega was also convinced that there was an untapped market for the devices in schools and corporations, where they could be used as a training aid. They later promoted their use in arcades for use in gaming tournaments. In June 1976, Sega purchased Muntz Manufacturing and began to develop its own widescreen TV, called Sega-Vision. In March 1977 they opened a Sega-Vision retail outlet in Los Angeles. Unfortunately, the world did not share Sega’s vision and did not buy its Sega-Vision. The anticipated market explosion did not happen (at least not in the late 1970s) and in mid-1978 Sega suspended production of the Sega-Vision. (Annual Reports; Play Meter 9/76)


Sega Centers


Sega’s U.S. arcade operations were much more successful. Not surprisingly, given its extensive experience operating arcades in Japan, expanding into arcade ownership was a major priority in Sega’s plan for competing in the U.S. market. The key was the family-oriented mall location. With the mall increasingly becoming the hang-out spot of choice for young people across America, mall owners were offering more activities outside of shopping (including movies, restaurants, arcades etc.) to take advantage of the new opportunity (what Sega called, in typically bloodless corporate-ese, "short-time-span entertainment").
Sega started in July 1975 by purchasing 50% of the Kingdom Of Oz Company, which operated about 70 arcades in shopping malls throughout California. They transformed six of them into Sega Centers – a chain of company-run arcades that Sega hoped would match its success in Japan. Rather than just opening a location and hoping kids would wander in, however, Sega aggressively promoted Sega Centers with tournaments, advertising, and other marketing tools. They also conducted extensive research into the playing habits and demographics of their clientele. In the summer of 1978, for instance, they ran a promotion offering free prizes to those who filled out a survey but the real purpose was to gather information on players’ likes and dislikes. Sega’s arcades were the only segment of their U.S. operations that turned a profit in 1978 and revenues for arcade operations rose 50% over the previous year. (Annual Reports)

Meanwhile, Back at Gremlin

And what about Gremlin? By the end of 1977, Gremlin had grown to almost 200 employees, but things were not all well. The wall game market was collapsing (again) and the computer division was doing poorly (it would be shut down in 1978). Gremlin’s video games were selling well, but none had matched the success of its initial effort, Blockade. Ultimately, however, sales may not have been the real problem.

[Gene Candelore] We were growing so rapidly we couldn’t sustain the cash flow… [We were growing at] something like 300% a year. Then there was a very bad winter. The transformers in our monitors were coming out of Chicago and Canada. With the bad winter that they had our supplies coming in were being held up and the games that we did produce…were caught in snow storms and they were sitting in Denver, and Kansas City, and St. Louis and not getting to our distributors. So on one hand we didn’t have any supply to build any more games and on the other hand we weren’t getting any income because our games weren’t getting into the hands of distributors. So that one winter really took us right down. We survived…but the next winter was the same thing. The second winter almost put us under, we almost went bankrupt. So we tightened up our belts and started working again so when Sega came to us and they were looking to acquire someone it was just a perfect fit at the time. (Candelore 1998-2002)

In September 1978, Gremlin got a new lease on life and a new corporate owner when they were purchased by the Japanese giant Sega, a company that was experiencing problems of its own.

[Gene Candelore] Sega had started a factory up north and over a period of two years they lost about $5 million. So, rather than trying to start a factory up and get into microprocessors, they decided, "Let’s buy the technology." (Candelore 1998-2002)


Sega Acquires Gremlin

So far, Sega’s plan for U.S. domination had not gone very well. In fiscal year 1977, Sega actually lost almost $800,000 overall and its American arm was responsible for almost all of it. Sega-Vision TVs were not selling and many operators were reluctant to take a chance on a new game in the midst of an industry downturn. As a result, Sega released just two new games in the American market in fiscal year 1978. If Sega was going to compete in the U.S. market they needed to do something – and fast. On September 29, 1978 they did just that when they acquired Gremlin Industries and began producing video games under the Gremlin/Sega name. (San Diego Union 8/9/78; Annual Reports; RePlay 10/78; Play Meter 9/1/78; 11/15/78).

The effects of the merger were not immediately reflected in Gremlin’s product line, however. At the 1978 AMOA show in November, they debuted three games and two of them were anything but revolutionary: Frogs, Fortress, and Gee Bee. Frogs cast the player in the role of the titular amphibian trying to spear insects (including an elusive dragonfly) with its tongue while avoiding falling off its lily pad. In Fortress, the player defended a castle against cannonballs fired from ships. While almost completely forgotten today, Fortress did have some innovative features - at least for Gremlin. Like most early video games, and all of Gremlin's previous games, Fortress was a timed game, but if the player got to the end of the time limit with part of his fortress remaining, they could earn extended playtime in which the enemy pirates were more aggressive. The feature, which had already been introduced in games like Midway's Sea Wolf, gave players at least the illusion that they could play forever. The game also incorporated a lesson Hauck had learned from Blockade. When playtesting the game, Hauck noted a mother and daughter who adopted an unusual play style.

[Lane Hauck] [They] would immediately head for each other on just the shortest path, and then they'd hit, hear the explosion sound, and laugh their heads off. Then they'd put in a quarter in do it again. (DeWyze 1982)

Hauck was about to approach the pair and tell them that they must not have read the instructions when he realized "Who am I to tell them not to put money in?" (DeWyze 1982). He decided that, in the future, he would try to play for unconventional play. He put this idea to use in Fortress. The game featured three cannons and Hauck figured that somebody would decide to get two additional players and put on each cannon.

[Lane Hauck] We want the player to feel that he'd figured something out and is really pulling something on us. Anything to get those next quarters. Discovering's an important thing in a game. For the macho arcade player you want to have some things that aren't laid right out. (DeWyze 1982)

On the other hand, despite the innovations, both Fortress and Frogs featured the same blocky, black-and-white graphics of earlier games. The one game that did look promising, Gee Bee (a video pinball game) was licensed from Namco. On the other hand, the ink was still barely dry on the Gremlin merger and its effects would not really be felt until 1979. When they did, things would change at Sega and in a big way. Meanwhile, in San Diego, Gremlin’s crosstown rival was introducing a major change of its own.
　Sources:
Aside from the sources mentioned above and in parts 1 and 2, additional sources include:

* Sega Inc Annual and 10-K reports
* Steven Kent's Ultimate History of Video Games
* An interview with David Rosen that appeared in the October 1975 issue of RePlay
* Chris Erskine. 2006. And the Pitch is…Wild. Los Angeles Times. June 21.
* Cecilia Rasmussen. 2007. An L.A. Legend You’ve Never Seen or Heard. Los Angeles Times. December 16.