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The Coleco Story
by Ralph H. Baer

* Some Background to start with.....

As I have reported elsewhere in the story of "How Video Games Invaded the Home TV Set", Magnavox' original Odyssey ITL100 home game was first announced to the public in May of 1972. Units finally were available for sale at Magnavox' aurhorized dealers in the Summer. By Christmas, nearly one-hundred-thousand game units had been purchased and were installed in people's homes, launching the home-TV game industry....the descriptor "video games" had not been coined yet.

For me that was the end of a long trail, beginning with my first> documented concept of video games in September of 1966, followed by two years of hardware and game development work and another two years of trying to find a home for our revolutionary game ideas.

All of the early work had been done in a small lab set aside for that purpose at Sanders Associates, a large defense electronics company in New Hampshire. I ran the Equipment Design Division there at the time. The division's work had nothing to do with video games. That activity was grudgingly allowed to go on by management, presumably on a non-interfering basis with the "real" work at Sanders (now a Lockheed company). The growling and negative comments ceased once the first royalty payments arrived at Sanders. Magnavox, being our prime licensee, did the administring/collecting of royalties. What they took in, they shared with Sanders on a 50/50 basis.

Having acquired a taste for electronic games during those years of running a sideshow at Sanders, I began to develop several handheld toys and games in my spare time. It soon became obvious that the hardest part of the job was finding licensees for my goodies. I made a decision to look for help in the toy-and-game-inventors community.

In 1973 I wrote a letter to Marvin Glass & Associates (MGA) in Chicago - then the pre-eminent independent toy & game designers in the US . I inquired whether they were interested in help with the design of electronic games in general, and in some of my own game developments in particular. Hand-helds were then in their infancy. Mattel had started the business with a small hand-held football game. Milton Bradley had small maze game....that was it.

The Marvin Glass partners promptly sent Jeffrey Breslow, one of their group of Associates to New Hampshire. He spent half-a-day giving my home-lab and me the once-over and then flew back to Chicago. He must have been favorably impressed because I promptly got an invitation to visit MGA. Their impressive studios were located in a bulding they occupied on North LaSalle Street. A week after Jeffrey's visit I got on a plane and presented myself to the Associates. Anson Isaacson was the senior partner at the time, Marvin Glass himself having died a year or two earlier. Two hours into the interview with Anson, Howard Morrison, Burt Meyer, Jeffrey Breslow and the rest of the partners, I had a handshake agreement; I became their "outside electronics capability".

That association lasted for better than a decade and resulted in such well-known products as Milton-Bradley's SIMON game, Ideal's MANIAC, Lakeside's COMPUTER-PEEFECTION and many other single-chip microprocessor-based hand held games. Sanders Associates, my "full-time" employer tolerated the arrangement because I managed to carry it on in a non-interfering manner....more or less ! Furthermore, there was a certain synergism between my work at Sanders in video games and that at MGA. Most importantly, licensing income to Sanders via Magnavox was beginning to make substantial contributions to Sanders bottom line. Nobody at Sanders wanted to disturb that process and I was the key to it. As money started arriving in ever larger amounts, I needed no other mantle of legitimacy.

For all practical purposes I now held down two jobs...and got two paychecks every month....not bad! Herb Campman, our Corporate Director of R&D was kind enough to protect my derriere by signing off on an official Sanders document sprinkling holy-water over the new arrangement. Every fiscal quarter Lou Etlinger, Sanders' Director of Patents (my partner in the video-game licensing business) and I would sit through Sanders' Management reports presented on the big screen in the auditorium at our headquartes in South Nashua. Regularly, our license income numbers beat those of the Electronic Countermeasure Division, the company's biggest division. Our names were up on the HQ tower in neon lights. We were golden!

During my years with the Glass organization, I made many a trip from Manchester, New Hampshire to Chicago and back. At times, I flew there once a week to handle ongoing problems. While there, I would frequently meet and often have lunch with major players in the T&G industry who had come for product demos. Among many others, I met Arnold Greenberg there, Coleco's president. That's how I got into the Coleco loop.

* A Telstar is born - but there's trouble in RFI land *

Now, fast-forward a couple of years: In March of '75 I got the word early about the development of a video game chip being developed by two engineers at General Instruments' labs in Scotland - an "unofficial" skunk works project there. Meanwhile, I had previously met Arnold Greenberg, Coleco's president, at the Marvin Glass studios.. At my urging, Arnold met me at GI's Hicksville, Long Island, NY plant where the AY3-8500 single-chip, multi-game device was demonstrated to us by Ed Sacks. He then ran the plant there and later moved GI's IC manufacturing to Phoenix, Arizona (it's now Microcircuits). Thus Coleco became GI's first and preferred customer for the AY3-8500, a chip around which millions of off-shore games were built in Hong-Kong, Taiwan and in Europe- on all of which Sanders and Magnavox collected royalties, thank you very much! Arnold Greenberg was impressed by what he saw at GI and thus was born "Telstar", Coleco's wildly successful video game.

However, this is not the end of my invovement in the Coleco story: One late Tuesday afternoon in 1976, I received a call in my lab at Sanders from Arnold Greenberg. At the same time, his brother and CEO Leonard was on the phone with Dan Chisholm, a Sanders' VP now nominally in charge of Video Games licensing activities. Why the double-barreled approach? There was a fire burning at Coleco! They needed the Sanders fire brigade, but fast!

Coleco personnel had been at the FCC's Radio-Frequency-Interference labs in Maryland for compliance testing of their "Telstar" prototypes the prior Monday......and they had flunked the RFI tests...too much radiation at harmonics (multiples) of the Channel 3 or 4 signals which video games use to get into a TV set via its antenna terminals. Their Telstar units failed to qualify under Rules 15 of the FCC. They were told to come back on Friday of that week; and they were also informed that if they could not get their problem fixed by then, they would have to "get to the back of the line" - while the FCC tested other companies' products that had been scheduled for this week and the following weeks! Since Coleco had some 30 million dollar's worth of Telstar inventory sitting in their Connecticut warehouse ready for distribution, there was panic in Hartford!

Fortunately for Coleco, Arnold Greenberg remembered me; and even more fortuitously, there was an RFI test lab at Sanders which I had set up years before in my Equipment Design Division. Coleco was informed that if they would sign Magnavox' Licensing Agreement (which they hadn't done at that point in time), we would be glad to help them. They showed up on Wednesday morning with an executed copy of the Agreement; our RFI-lab crew went to work on a Telstar console to get its spurious radiation within FCC spec limits. Tests took place on the partial fifth-floor roof of Sanders Canal Street building; that day, we tried various conventional methods to suppress the excess radiation, all to no avail.....we didn't do too well that day. I brooded about what to do next all evening and half the night.

Early Thursday morning I was in the lab on the floor adjacent to the roof test area. No one else had showed up yet to begin the RFI-reduction job. As I wandered through the large lab, I saw two pieces of electronic equipment sitting on a test bench that were connected together with some common coaxial cable. What attracted my attention was the presence of a couple of small ferrite toroids (powdered iron rings) through which the cable had been looped, one or two turns, I forgot just how many. On a hunch, I proceeded to ask around among the few engineers present at that early hour: Just what were those rings for? Lo and behold somebody actually knew the answer. It turned out that during operation of those two electronic boxes, the coax had picked up stray signals from some nearby radio transmitter which had screwed up the performance of the boxes. So someone had the bright idea of suppressing the surface wave created by that incident radiation with some "chokes"...and that's what those ferrite rings were!

At that moment, a lightbulb went on in my head: I ran around the lab opening storage cabinet doors and desk drawers, generally poking around until I found some ferrite toroids. When the RFI crew arrived on the roof for further Telstar tests, I slipped one of these toroids over the shielded coax cable of the Telstar unit being tested . I looped the cable twice through the ring - two turns- at the point where the coax was just "leaving" the plastic case . Then the crew resumed testing and ......BINGO! The unit passed the spurious radiation tests. We sent the Coleco folks back to Maryland. Telstar passed the FCC tests and everybody breathed a sigh of relief.

* Designing Coleco Video Game hardware

As a result of this episode, Coleco further relied on Sanders to help with the development of their next generation of video games. In the following year Arnold Greenberg called my down to Hartford to discuss helping Coleco with the design of their new line of video games. That was music to my ears - it gave us a chance at Sanders to put more license-income-producing hardware on the market. We just had to figure out how to handle such a support job within was all highly irregular. Nobody seemed to be able to tell us which overhead rates to use in calculating what the charges to Coleco should be. Overhead rates at Sanders were negotiated with the Government since virtually all the work there was done under contract to the Military. We figured it out somehow.

In order to accommodate Coleco, I asked Dunc Withun to assemble a small group of engineers and technicians and head it up. We created a separate little profit-center on paper for the purpose. Dunc had been Electronic Design Department manager to whom I had turned over my Equipment Design Division in 1970. We picked a small group of my old engineering buddies and some techs for the job. I kept a close eye on what the guys were coming up with. It was a fun job!

Under this contract, we helped Coleco to develop their triangular Telstar ARCADE game, the COMBAT game and a third game. We did the work, Coleco paid their bills and sold a lot of games. If anybody doubts that story, I still have reams of documents on the subject in my collection. Every time I look at them, I break out in a big smile. I always wanted get into the video game-hardware development business......there was no way Sanders would enter into we did it subliminally by doing Coleco's development work at Sanders.

So much for my initial contributions to Coleco's video-game business. There would be more several years later. Working after hours and weekends with my friends at MGA, we came up with AMAZATRON for Coleco in '78, among the first hand-held game to use T.I.'s TMS-1000 4-bit microprocessor chip.

Working in my lab at Sanders now exclusively on Video game and interactive video projects, I invented and later ('82) licensed to Coleco a pre-schooler video game attachment for the Atari 2600 which they named Kid-Vid. My demo unit was a modified audio-tape-player, a cute little white unit made by TIGER. This tape-player was tied into an Apple II computer for which I had written some code that simulated the 2600's functions. My program presented a "Dr.Seuss One-Fish-Two-Fish" story. I wrote and taped the "vocals" . All a pre-schooler would have to do is hit a key and the "2600" would turn on the tape-player (under computer control); simple but cute graphics showed several fish swming around on the screen while my voice droned on: "One fish, two fish, red fish, blue fish, swimming 'round this great big lake...don't they get tired, for goodness sake ?...etc.". The the voice-over would then call for some simple button pushing by the child; the tape player would be paused by the Apple acting as a 2600 until the little game was over; then tape-player resumed playing while the next segment of the story-line would come on-screen, complete with voice-over and some music.

I took my demo down to Harford along with two other items I was anxious to license to Coleco. Arnold Greenberg and several others watched my "Dr.Seuss" demo...they got the picture immediately. Within an hour we had a handshake agreement and Kid--Vid was launched. Unfortunately, instead of a cute little kiddie-tape-player, Coleco in their corporate wisdom chose to modify a standard black "shoe-box" tape-recorder for use with the system. While that did nothing for its appearance, Kid-Vid did become a nice product. Coleco had acquired several expensive licenses for the Berenstein Bears, the Smurfs as well as some Dr.Seuss titles and their programmers did a nice job of coming up with suitable graphics and voice-over. It should be remembered that sounds from video games at that point in time were very limited and here was this neat little machine playing real voices, singing and speaking in sync with the screen presentations.

Unfortunately for Kid-Vid, it was introduced at the same CES show as ADAM, Coleco's abortive venture into the home computer business. ADAM almost killed the company there was precious little promotion money available to push Kid-Vid sales. Coleco had bigger problems than that. So much for Kid Vid.

Another invention of mine which I had taken with me to demo at that same meeting in 1982 also resulted in an instant license agreement with Coleco. I had a demo promoting the idea of using a video-disc under control of a ColecoVision game (and presumably ADAM, later on) for interactive game use. To make this scheme economically feasible, I had discussions with Jon Clements - who headed the videodisc program at RCA - about building a 5 inch version of their Selectavison 12 inch video disk unit...shades of computer and game systems using shiny, round 5" CD-ROM disks for interactive games...only twenty years too early.

Coleco started to negotiate an agreement with RCA and all went well until the ADAM fiasco put a halt to this development effort. That was too bad...and nearly twenty years would go by until fully-digital versions of that system would reappear in the video game world. As for myself, I went on to develop interactive video-disk-based systems at Sanders which were used for military training-and-education purposes with considerable success.

Coleco recovered courtesy of the ugliest dolls in the world - the Cabbage Patch dolls - Although I tried a few times, I would never be able to place a product idea with Coleco again; electronics had become at no-no at Coleco. The company finally went out of business in the late eighties.

ColecoVision games continue to have a loyal following in the Classic Games community....I'm still waiting to see one of the retro-game designers interface it to a CD-ROM to extend the machine's capabilities. That would complete the circle I started in 1982 and never quite closed. Is anybody out there listening?

Copyright Ralph H. Baer 5/2000



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