As a follow-up to my feature on gaming’s ten biggest mistakes, here are the ten single most costly games in history. I’m doing this list a little different, since it’s impossible to quantify the potential damage a game by itself can cause. Thus, I’ll be listing these in the order they were released.
I should note that this isn’t a list of the most expensive games of all time. You can go to Wikipedia for that. These are ten games that came at a different kind of price. They might have bankrupted a studio, or tainted a developer’s image, or made the industry as a whole look bad. As always, I debated the picks with my friends and asked for their suggestions. I dropped one from the list (Daikatana, which will be covered in the next top 10) and added one that was suggested initially by my buddy Jesse. A couple of these were mentioned in the previous feature. I’m not double-dipping to be lazy. But in a list about games that came with a heavy cost, I can’t ignore them just because I already talked about them. However, I’ll try to include new material and anecdotes. I aim to please.
Gran Trak 10
Developed by Atari in 1974
The Game: First, there was Pong. Then, there was a lot more Pong. And then even more Pong. Everybody else was doing Pong too. When Atari tried something different (like a maze game where players groped a pair of pink rubber titties to control the action) it flopped and they went back to Pong. There was Doubles Pong, Pin-Pong, Quadrapong, Pong in a Barrel, Puppy Pong, Doctor Pong, and Do Wah Pongy Diddly Pong Diddly Pong. Okay, I made the last one up, but I bet if they would have done it if they thought of it. Obviously something had to give. So Atari owner Nolan Bushnell hired a consulting firm in Grass Valley, CA to come up with new ideas. After smoking a metric fuck ton of weed (they don’t call it Grass Valley for nothing) someone came up with the bright idea of making a driving game. And behold, there was Gran Trak 10. I’ve never played it, but I’m sure it was revolutionary for its time. It must have been popular. It was Atari’s best-selling game of the year.
It looks, um.. old.
What Happened: The Grass Valley team Nolan hired were very good at doing computer specs and programming. Industrial engineering, on the other hand, was not exactly their forte. The blueprints they sent for the cabinet were simply not commercially viable. The machine wouldn’t have been capable of withstanding the type of abuse arcade cabinets get. Thus, Atari’s lead engineer Al Alcorn had to redesign the entire thing with more expensive components, some of which had to be built from scratch, which well exceeded Atari’s modest operating budget. And Atari wasn’t exactly a well-oiled machine when it came to assembly. They would place an empty cabinet in the middle of the facility and, one by one, people would come in with their components and affix them to the machine. They were starting to get better by time they were working on Gran Trak 10, but the process was still slow. Atari’s assembly workers were poorly trained, usually hired from an unemployment office with little to no vetting, and often were junkies or bikers that did drugs at work and stole equipment they could fleece to support their habits. Thus, a lot of the completed machines didn’t pass inspection and poor Alcorn had to fix them himself before sending them out.
An over-budget game designed by an outside consultant (later purchased by Bushnell, but not by this point) which had to be redesigned, that was manufactured at a slow rate. What else could go wrong?
An accounting error led to Atari selling the game at a loss. It cost $1,095 per unit to make Gran Trak 10. Atari sold it to operators for $995. Yep, I bet that stung. And again, it was their best-selling game of the year. Needless to say, Atari had a lot of communication problems by this point. On the bright side, Gran Trak 10 was a much-needed wake-up call for the company. They paid closer attention to their books, reorganized their assembly process, and stuck to their budgets much better.
For what it’s worth, my father swears this was the coolest thing he had ever saw in his life up to that point. Mind you, at the time this came out, he had just arrived from Cuba, where the electricity would often go out for days at a time and where he lived in a building that had one toilet for all 100 people who lived in it. He wasn’t exactly hard to impress at this point. The first time he saw a hotdog stand, he fell to his knees and cried. I’m not even kidding.
The Cost: We’re going to enter the Marty McFly Zone a bit here. If Atari doesn’t sell Gran Trak 10 at a loss, it doesn’t sell as well as it did, but it probably still becomes their best seller of the year, and maybe their most profitable game ever. Atari accumulates a larger war chest with the profits. When they start the process of manufacturing Home Pong in 1975, they might not need to seek a venture capitalist to acquire the funding needed to build their inventory. Or, at the very least, they would have gotten much better terms that left them with more negotiable equity. Thus, when the time comes to do the more expensive Video Computer System (aka the Atari 2600), they would be able to do a round of venture capital instead of selling the company to Warner Bros. Nolan Bushnell would have never been fired from Atari and the video game world would be totally different today.
I guess an argument could be made that it wouldn’t necessarily be better today, at least for us. Bushnell never intended the Atari 2600 to last more than a couple of years. In fact, one of the disagreements that led to his dismissal from Atari was he thought they should discontinue the 2600 and begin working on a new console. This was almost immediately after it launched. And licensing Space Invaders from Taito, which is what ultimately blew up Atari, wasn’t his idea. It was Warner’s CEO Manny Gerard who thought it up after Nolan was gone. At the time Bushnell got beached, the 2600 was a flop and Warner had actually hired Ray Kassar (who became Atari’s CEO after Nolan was gone) as a consultant under the assumption that he would advise them to dump the company, not run it. I’m sure someone, somewhere would have eventually come up with the idea of licensing third-party arcade hits for home consoles, but still, it makes you wonder, doesn’t it?
Developed by Atari in 1982
Platform: Atari 2600
The Game: Only the most successful arcade game of all-time, at least until its sequel hit. And one that Atari had secured the rights to for pennies on the dollar. In 1978, Atari was having a tiff with Namco, who had manufactured Atari coin-ops for distribution in Japan without paying royalties. Namco’s position was essentially “the check is in the mail.” Atari sent a low-level executive named Joe Robbins to negotiate a settlement with them, with strict orders from Atari lead attorney Skip Paul to not sign anything. Not only did Robbins not listen, but he agreed to pay Namco a million dollars, renew their distributor agreement with Atari (Namco had no hits by this point and made most of their money from Atari-produced games), and wave a right-of-terminator clause, meaning Atari couldn’t opt out of his crummy deal. In exchange, Atari received a small royalty from Namco’s arcades (really small, as in less than a single percentage point) and the exclusive home rights to all of Namco’s arcade games for a ten-year period.
Robbins was almost immediately fired. But, in a story reminiscent of Jack and the Beanstalk, one of the magic beans Robbins brought back from Japan was the rights to Pac-Man, for a royalty so small it might as well have been non-existent.
What Happened: Unfortunately, Atari didn’t pass its incredible savings onto the development or manufacturing of Pac-Man for the Atari 2600. Because of the complexity of the game, engineers told Atari CEO Ray Kassar that the game couldn’t be done properly on a 4KB ROM cartridge. They said without 8KB, too many concessions would have to be made, rending it unrecognizable from its arcade heritage. By this point, Atari was the most profitable company in the entire world. Kassar was obsessed with setting records for net profits in a single year, and wanted to maximize Pac-Man’s potential, so they saved a few bucks per unit by going with 4KB instead of the 8KB everyone insisted it would take. People pointed out that Atari could afford to spend a little more, since they were paying Namco around one-tenth the royalty they paid Taito for Space Invaders. But Kassar had spoken, and after seeing the prototype programmer Tod Frye had come up with, he decided it was Pac-Manish enough and ordered it into manufacturing, with an initial order for an insane twelve-million units.
I love the cover art for this. It looks like Pac-Man is eating a communion wafer while being attacked by popsicles with eyeballs.
Unlike the other games I plan to feature in this article, I’m certain that Pac-Man for the 2600 turned a profit for Atari. Seven million units of Pac-Man 2600 were sold, a record at the time. I guarantee you it’s the most profitable licensed game ever made, even when stacked against the hottest movie or sports properties. I’m also sure Namco, who made almost nothing on the deal, spent at least one afternoon looking for a nice ledge to jump off of. The raw materials Atari used were relatively cheap, and even with five million units of dead inventory, Atari didn’t exactly take a bath in the crush they were left with.
The Cost: It was the game that cooled Atari’s jets and shook consumer confidence. It was the first time that consumers went back to stores demanding refunds because the game was so different from the arcade counterpart. Only ten million people actively used Atari 2600s at the time it was released, with the assumption being that people would buy the console just to play it, like they had for Space Invaders and Asteroids before it. I asked a friend of mine who is the main buyer for a big box chain in the San Francisco Bay Area if it was remotely reasonable to expect the type of penetration Kassar expected from Pac-Man 2600. He’s been in retail for thirty years, and he said, for a product that had already been on retail shelves for five years, it would be unfathomable. That no rational person would ever expect that, even if you had the single hottest product on the market and the single most desirable accessory for it. Kassar’s manufacturing of twelve-million units, and as reminder, he expected to call for an additional eight-million over the following twelve months, was basically him betting on a penetration rate that anyone else would deem to be impossible. His superiors at Warner should have fired him for the recklessness he showed. It’s only because of luck with timing (the cost of goods for manufacturing Atari carts had dropped significantly over the previous fiscal quarter) and licensing (thank you Mr. Robbins) that Atari’s dead inventory didn’t cripple them on the spot.
I can’t even watch a video of Pac-Man 2600 (or most Atari 2600 titles for that matter) because of my epilepsy. Oh, you mean I’ll never be able to play it myself? Oh um, what a shame or something.
A quirky side note which you can add to the cost of Pac-Man: in a roundabout sort of way, it’s the reason Atari chose not to license Donkey Kong from Nintendo. Atari paid Taito about $1.50 per unit for Space Invaders. This became the standard price Atari paid for other licensed properties, such as Berzerk or Defender. Because of the deal Joe Robbins got from Namco, the royalty for Pac-Man was a piddly 15 cents per unit. When Nintendo was shopping around Donkey Kong, the second most popular arcade game (behind Pac-Man) at the time, they wanted $2 per unit. Ray Kassar balked, saying they were paying a fraction of that for a more popular game. Coleco, needing a killer app, gladly took Nintendo’s offer (and also gave them an addition $1.50 per unit for a table-top version). When Warner Bros. CEO Manny Gerard found out they didn’t get Donkey Kong, he blew a gasket on Kassar. Without it, they would have used Mouse Trap as its pack-in title, and the Colecovision would never have caught on. Atari would have had a closer relationship with Nintendo and an even better shot at securing the worldwide rights to the Famicom, and history would have played out totally different.
E.T. the Extra-Terrestrial
Developed by Atari in 1982
Platform: Atari 2600
The Game: This is the last entry that was also talked about at length from the previous list, I swear. We all know the story. It’s one of the worst video games ever made.
What Happened: Like I wrote about last time, it was Warner’s top executives (Manny Gerard and CEO Steve Ross) who struck the deal that landed Atari the E.T. license. The deal was more about securing Spielberg to direct movies for Warner, with the E.T. game being little more than a dangled carrot. Which is not to say Spielberg was only looking for a paycheck. He enjoyed gaming (and would later help design Boom Blox, one of the Nintendo Wii’s unsung gems) and looked forward to working with Howard Scott Warshaw, the man who had made Raiders of the Lost Ark for the Atari 2600. Warshaw, who took the assignment on short notice, had only a few days to come up with a concept to pitch to Spielberg, and came up with a relatively ambitious adventure/collect-a-thon idea. When he showed it to Spielberg, the director didn’t like it. He thought it should be something similar to Pac-Man. Howard was like “meh, it’s been done.” Later, he admitted that in retrospect, it might not have been a bad idea. Anyway, I’ve never played it, but I hear it wasn’t the most well-received game.
It looks more like dinosaur with its head turned to the left.
The Cost: $25,000,000 up front to Steven Spielberg, plus a royalty for him and for Universal Studios (the guys who actually made the movie), all of which negated the game’s earnings from the 1,500,000 units it did sell. Contrary to popular belief, the 2.5 million units of dead inventory wasn’t that costly, since Atari carts were relatively cheap to manufacture, and the costs of making them had dropped in 1982. But you’ve all heard those numbers before. So I’ll give you another number to chew on: zero.
That’s the number of games for Atari platforms (besides pack-ins) released after E.T. that sold one million units. Not one. Nor did any sell 500,000 units, and no games for the 5200, 7800, Lynx, or Jaguar sold 250,000 units. Of course, the crash helped with that, and all of Atari’s horrible policies under Warner and later Jack Tramiel afterwards. So while E.T. (and Pac-Man 2600, for that matter) doesn’t shoulder all the blame, you have to admit, it’s kind of telling that the last game for an Atari platform that anyone could describe as a “best seller” was this, possibly the worst game ever made.
Tetris (Tengen Version)
Developed by Atari Games in 1989
Platform: Nintendo Entertainment System
The Game: It’s Tetris. I seriously doubt anyone here needs an explanation on it. However, I will note that most people consider Tengen’s version (developed by Ed Logg of Asteroids, Centipede, and Gauntlet fame) to be superior to Nintendo’s port for the NES.
What Happened: You practically need a flow chart to explain how Nintendo ended up with the exclusive rights to Tetris. It starts in 1986 when Robert Stein, president of a UK-based software company called Andromeda, contacted the Moscow Academy of Science, where Tetris was created by Alexey Pajitnov. Stein wanted to negotiate with the creator directly, thinking he had the rights to sell his software. However, in the USSR, you didn’t own anything you created, which meant that Pajitnov neither owned Tetris nor could negotiate the rights to it. Stein didn’t know that, secured the rights to Tetris (or claimed he did), and started licensing it before signing any official deal. Then, the people who he was merely licensing the game to started selling the Tetris license themselves. Spectrum Holobyte sold the rights to a man named Henk Rogers, who was a freelance game designer that sometimes acted as a liaison for Nintendo. Meanwhile, a company called Mirrorsoft, sold their rights to Atari Games, which was the former coin-op division of Atari before the company was divided in two and the home division was sold to the Tramiels. Are you confused yet? Just wait.
Henk Rogers, believing he only owned the console rights in Japan, realized nobody apparently had the rights for handheld devices, and Nintendo wanted Tetris to be the showcase game for their new Game Boy system. Rather than deal with any of the other people who claimed to own the rights to Tetris, Henk, with Nintendo’s authorization, was sent to Moscow to secure the handheld rights directly from the Soviets. When he got there, they surprised him by offering the worldwide video game rights to Tetris, which he had been under the impression had already been sold and were owned by Atari. Rogers, realizing he was in over his head, called Nintendo of America heads Minoru Arakawa and Howard Lincoln, who secured the international home video game rights to Tetris on March 22, 1988.
I’m pretty sure this was the only time the Russians caused an international incident.
Nine days later, Nintendo, aware that Atari Games (who published unlicensed games for the NES under the name Tengen) was making their own version of Tetris for the NES, sent them a notice that Nintendo had exclusive rights to Tetris. Atari Games rejected this, having already bought what they believed was the home rights to the game, and filed for a copyright on their product weeks later. Nintendo and Atari Games had been going at each-others throats over Atari Games releasing unlicensed games for the NES. The two companies ended up in court, where it was revealed that Atari Games was able to access the security code Nintendo used to lockout unauthorized third parties by forging documents and presenting them to the US patent office. Had Atari Games not done that, it’s likely they would have won their lawsuit and set a new precedent for third parties in gaming (which would later come to pass when a company named Accolade sued Sega and won on an appeal). While they were in the middle of this, the Tetris case came up. Nintendo, with direct authorization from the USSR, had such an airtight claim to the rights that Judge Fern Smith cancelled the trial and declared Nintendo the sole owner of the rights to Tetris.
The Cost: Over 250,000 units of Tengen Tetris were recalled and destroyed, making the surviving copies a treasured rarity for NES collectors. The Tetris fiasco also shook the confidence of stores, most of which dropped Tengen products from their shelves. Initially, they had the support of retailers during their ongoing trial with Nintendo. Instead, Tetris set off a domino effect, at a time when parent company Warner was being merged with Time Inc. Warner slashed Atari’s budget, it took several years for the lawsuit (which was won by Nintendo) to resolve, and in the meantime, Tengen was practically persona non grata in the industry. Eventually, the bottom fell out and they were sold to Midway for a piddly $10,000,000 (they were generating a multiple of that during their heyday as an NES publisher). Tetris isn’t single-handedly responsible for all of that, but it unquestionably got the ball rolling.
Developed by Digital Pictures in 1992
Platform: Sega CD
The Game: Do you want me to describe the actual game or the game the United States Congress seemed to think Night Trap was? In real life, it’s a horrible full-motion-video title where you have to activate boobytraps to capture novice vampires (wearing ski masks for some reason) to save girls at a slumber party, or something like that.
If you’re the United States Congress, it’s a game where you murder girls. SHUT UP IT TOTALLY IS! No, Mr. Zito, we don’t wish to hear from you. We saw the footage. We know what we’re talking about you shameless smut peddler, you.
Kill it! Kill it with Fire!
What Happened: Seriously, watch footage of someone playing Night Trap. This shit is positively tame. Your average Disney cartoon has more violence. Yet, Night Trap somehow became the prime exhibit in congressional hearings on video game violence in 1993. When you read the transcripts of the hearings, it’s pretty clear nobody (especially Joseph Lieberman, the pseudo liberal from Connecticut who initiated the whole thing) had ever played Night Trap, or seen footage of it outside of one very specific game-over clip where the vampires use a gizmo to suck the blood out of a girl wearing a (quite frankly, very modest) teddy. During the hearings, it was made out like you were the one controlling the vampires and the object was to murder the girls. Whenever anyone from Digital Pictures or Sega tried to explain that wasn’t what the game was about, they were told to sit down and shut up. Things went really downhill when a nutty feminist precursor to Anita Sarkeesian named Marilyn Droz took the stand. Someone was finally able to point out that the scene everyone kept referencing was actually game over scene. She responded that was actually worse, because if you lose and someone dies, it is bad for self-esteem. And now I have a concussion from banging my head on my desk, repeatedly.
The whole thing was basically a witch-hunt against Sega, who also had an uncensored version of Mortal Kombat (next on this list). Nintendo had made ties with a senator named Slade Gordon, who acted as a liaison for the company to purchase the Seattle Mariners to prevent them from relocating to Miami. When Lieberman discovered Mortal Kombat, Gordon told him that Nintendo were the good guys, the company the kept tight regulations on their games, and that it was Sega who was tarnishing the industry’s image. Mind you, Sega was the first company to actively put ratings on their titles. During the testimony, Nintendo had an air of innocence (and arrogance) about them, with Howard Lincoln in particular going off on Sega, claiming that they were lying about having an older audience than Nintendo. This whole clusterfuck eventually led to the creation of the ESRB.
What a douche.
The Cost: I’m not going to go off on the ESRB, even if they are shady as all fuck. No, I’m going to focus on real costs against Sega. The notoriety of Night Trap helped it sell significantly more copies than it likely would have if everyone just ignored it for being a piece of shit of a game. But, because Sega came across so bad during the congressional hearings, a lot of stores dropped the new and fledgling Sega CD, which Night Trap was exclusively on. Sega, who had been planning to slash the price of it, was now stuck with millions of units of inventory and a smaller network of retailers to distribute them to. Thus they had to delay their price drop, which they had planned to center around the release of the hotly anticipated Sonic CD. Ultimately, the add-on’s dead inventory was too much to overcome and it was phased out, having lost millions for the company.
And then the Japanese offices got pissed off over Sega of America causing them so much trouble with these wacky FMV games that they were never big fans of. Sega’s Japanese leaders demanded that their American branch significantly tone down their marketing and attempt to appeal to a younger audience, with less focus on violence. You can see the ramifications in the Sega Saturn, which lacked many of the more mature Genesis properties like Streets of Rage. Even the Sega Scream was ordered to be removed from advertising. This kinder, gentler Sega (which granted, still was about to base its next system’s launch around a fighting game) lost its older demographic to the PlayStation. They also had almost no chance to claim the younger demographic away from Nintendo. So, in a way, you can lay claim that Sega’s downward spiral actually began with these hearings. And, if Night Trap had never existed, there’s a good chance it never would have come to that.
To be Continued in Part 2.