Hot-Tub Time Machine

In Silicon Valley in the late 1970s and early ’80s, the closest thing to being a rock star was working for Atari. The company that introduced the video game to the masses kept its engineers’ creativity flowing with free meals, Friday beer bashes and weekend “gamestorming” retreats on the California coast that featured naked hot-tub parties, fat doobies, food fights, broken coffee tables and locked doors ripped out of their frames. “We partied like hell,” says Rob Zdybel, a former Atari console programmer who at 55 still wears his hair shaggy and his vintage T-shirts Grateful Dead.

Thirty years later, the band is getting back together. Zdybel and nine other programmers and designers from the company’s wild early days–the makers of Asteroids, Centipede, Missile Command and the like–have come out of retirement or semiretirement to try to revive some of the magic of gaming’s so-called golden age. In 1982 playing a video game meant a trip to the arcade with a fistful of quarters. In 2012 playing a video game increasingly means turning on an iPad. The 99 download has become the new quarter drop, and the old Atari guys see the new medium as an opportunity to rethink classic game play.

Their target audience isn’t the hardcore gamers who immerse themselves in virtual worlds for hours upon hours but rather what the industry has started calling “casual gamers,” people who play a bit of FarmVille at work or Angry Birds on their phones. The games that appeal to this demographic have a low barrier to entry. They’re cheap and convenient, like a quick game of Pac-Man at the pizza parlor. “We’ve come full circle,” says one of the reconstituted Ataristas, Owen Rubin, 57, who in 1983 unleashed Major Havoc. “The iPad and the iPhone–they’re the new arcade.”

The group’s new company takes its name from an expired Atari slogan: Innovative Leisure. Its founding partners believe the industry has been coasting on fancy graphics for too long and that old skills and retro sensibilities are valuable again. “We were inventing genres back then,” says Rubin, and he lists them: driving games, shooters, side-scrolling platform games and maze and puzzle games. The 10 coders–seven from Atari’s arcade-game division, two who specialized in making game cartridges for its home consoles and a designer for an Atari archrival, Cinematronics–are all bald or graying and refer to themselves as “grizzled old farts.”

They also think most of the new games on the market stink. “World of Warcraft?” says the oldest of the bunch, Bruce Merritt, 63, dismissing the popular massively multiplayer role-playing game. “The whole premise is one we wore out 30 years ago playing Dungeons & Dragons.” Merritt and his colleagues, not lacking in ambition, say now that they are back in the game, they don’t just want to have a WoW-size hit. They aspire to invent new mechanisms of game play, maybe even new genres.

Space Cowboys

In 1983 Atari imploded in what is known as the great video-game crash. Activision and other third-party cartridgemakers cracked the console code and flooded the market with lousy games. Atari, under pressure to produce a blockbuster, started rushing out its own games, most notably E.T.: The Extra-Terrestrial, which has come to be known as one of the worst video games ever made. Five million unsold copies were buried in the New Mexico desert. Within 18 months of its release, the debt-laden company was essentially given away.

Mario, Nintendo’s mustachioed mascot, revived the North American market beginning in 1985 with quality games and a more sophisticated console. Graphics engines have improved so dramatically since then that virtual worlds are now scarcely distinguishable from the real thing.

Games have followed this steroidal curve as well. Ed Logg, 63, creator of the Atari megahit Asteroids, once described Rip-Off–a classic shoot-’em-up arcade game created by Tim Skelly, his great rival at Cinematronics and now co-worker–as “a poem.” Contrast that simple elegance with a celebrated modern shooter: Gears of War, for example. The latest edition of Gears retails for $40, and even an experienced gamer would need 60-plus hours to play it to completion. Yet for all their differences, Gears and Rip-Off fall in the same broad category. The rendering has gotten far better, but the games themselves–the strategies, the action, the backstories–aren’t much different from the ones invented decades ago.

The most outspoken critic of the industry’s creative stagnation is Innovative Leisure’s president, Seamus Blackley, who grew up playing Atari games and, at 44, is young enough to be the son of some of the men his company is reuniting. “Did you ever see the movie Space Cowboys?” asks Blackley, who as an bergeek and former Hollywood agent is big on sci-fi movie references. “NASA had to call up the old astronauts out of retirement and send them back into orbit, because they were the only ones that understood the space station well enough to fix it and save the planet.”

In the game world, Blackley is known as the guy who invented the Xbox at Microsoft and later ran the game-talent division at Creative Artists Agency in Los Angeles. After seven years as an agent, Blackley left CAA, reached out to his childhood heroes with an offer of equity and held the company’s first meeting–in secret–last July at a hotel in Pebble Beach, Calif., the last town to host Atari’s golden era off-site gatherings. Blackley asked each of the coders to show up with an idea for a new game. “We are the Jedi Council of video-game design,” he told them.

Atari founder Nolan Bushnell, the man who directed the company’s early success from his perch as CEO, is busy with his own start-up but agrees with Blackley’s essential premise. “Mobile platforms have reinvigorated Atari-like game play,” he says. For evidence, look at Angry Birds. Since Rovio released this addictive puzzle game in 2009, it has been downloaded half a billion times. Zynga, the company behind FarmVille and the other ‘Villes, surprised no one when it raised nearly $1 billion in its December IPO.

Innovative Leisure will formally announce its existence on Feb. 9 at the annual DICE summit (Design, Innovate, Communicate, Entertain–the Davos of the gaming world) in Las Vegas. Tickets are $2,200 a pop, and pretty much every CEO in the industry will be there. The Academy of Interactive Arts and Sciences (AIAS), which puts on the super-high-end conference, asked Seamus & Co. to be this year’s keynote speakers. “These Atari guys are heroes. They’re the all-stars,” says the academy’s president, Martin Rae. “I think they have a great shot at making something really fun and compelling.”

Ka-boom!

The company has hired ten interns straight out of USC’s computer-science department to help the Atari old-timers use new tools to crank out prototypes for games in less time than it used to take to code an impressive ka-boom! “Back in the day,” says Merritt, who designed Atari’s multidirectional shooter Black Widow in 1982, “we all would spend weeks working on a game effect, maybe only a few seconds long, that would amaze and overwhelm the others and would make them say, ‘I didn’t realize you could do this with that hardware.'” Effort that all came to naught, he hastens to add, if the rest of the team judged the effect to be unfun.

All told, there is a staff of 30 working to release seven original games in 2012, which is the size and pace of Atari circa 1978. Game publisher THQ has green-lighted every idea the company has pitched so far. Of the various titles under development, the one most likely to, in Blackley’s estimation, “save the planet” or at least break new ground is a game code-named WW1 Dogfight. It is a fighting-game app that, as one might expect, pits two biplanes against each other over the skies of Europe. But what’s novel about the setup in this turn-based game is that you and your opponent don’t have to be playing at the same time. You can make a move by picking from a menu of choices (fly left, right, straight ahead) while waiting in line at the grocery store. And your opponent might react–perhaps by choosing a more complicated maneuver, like a wingover or an Immelman–only after she has put the kids to bed. The computer calculates and animates the result. If either player manages to get the other in their sight, the game automatically shoots and adds up the damage before asking both players for their next move. The end result is an epic battle that plays out in spurts, kind of like an action-adventure edition of Words with Friends. And after the Red Baron has been shot out of the sky, you can sit back and watch an instant replay of the whole action sequence.

Turn-based tactical games are not a new concept; chess nerds were snail-mailing one another their moves long before everyone had e-mail. But Blackley believes that adding the element of asynchronicity to the video-game version and putting it on an easy-to-use mobile platform represents a new paradigm in the industry. At the original meeting of the minds at Pebble Beach last summer, no fewer than three of the principals came to the gamestorming session with variations on this idea, which could be applied to other kinds of fighting games or sports games or even games with in-depth story lines. It seems tailor-made for casual gamers with short attention spans.

So, Innovative Leisure: old farts or Jedi Council? “It’s not a nostalgia play,” says Rae, who as head of the AIAS has a bird’s-eye view of the industry. “If anyone can make it, these guys can.” However, Rae cautions, as with any creative business, “no one knows anything until the games ship.” The games, the first of which are expected to be released this fall, could flop. Or they could go viral.

“I hope Seamus makes me rich,” says Dennis Koble, 63, reflecting on the fact that when he designed Sprint 2 for Atari, his only reward was a small bonus on top of his small salary. Some of his former colleagues ended up wealthy after moving on to other tech ventures; others stayed in the game industry and never left the middle class. Yet everybody says getting back together isn’t about the money. The real pleasure, they say, is in spending their golden years furiously building a time machine that is taking them back to their halcyon days.

“It’s this unimaginable last chance to pretend that we know the great truths,” says Merritt, his voice cracking with emotion. “The Return of the Son of Atari,” he says, riffing on the game world’s penchant for making endless sequels. And in private, a good portion of the Innovative Leisure crew confided in this reporter as Lyle Rains, 60, did: “Don’t tell Seamus,” the Tank creator whispered, “but I would have done this for free.”