Conference hydra::amiga_v1

365.0. "RJ Speaks" by TLE::RMEYERS (Randy Meyers) Wed Mar 04 1987 15:17

The R. J. Michal talk Monday night in Boston was fantastic.  RJ
talked steadily from 7:45pm to 11:15pm (three and a half hours).
Most of the talk was devoted to the history of the Amiga from the
very start until the present day, but the last part of the talk 
was devoted answering questions from the audience.  A lot of the
questions concerned Amiga futures, and had some surprising answers.

Amiga Inc. was started by a group of doctors in Florida that had an
investment consortium.  They had between them six million dollars to
invest.  They had considered various traditional investments:  hamburger
franchises, department stores, etc.  But, somehow (this is during the
big video game craze) they decided that they would get the largest
return on investment by developing a new home video game system.

The doctors asked around, and found that everyone told them the best
guy in the business designing video game hardware was a guy named
Jay Miner at Atari.  They approached Miner and convinced him to start
his own company.  Jay, having no head for finances, agreed: he thought
that six million dollars was plenty.  (RJ said said to duplicate the
Amiga development effort would cost about fifty million dollars today.)
So Miner, and another fellow who became the company president, set
about the task of staffing up their company.

RJ was the third software developer hired.   When he was interviewed,
the president of the company explained that they were working on a
top of the line home game system, and that the technical people
would fill RJ in on the details.  RJ talked to the technical people
who followed the party line about the box being a new game machine,
but they also mentioned that you would be able to plug in a keyboard.
And, the box would support multiple disk drives.  And, it would have
this great multitasking operating system.

RJ marches back to the president's office.  "So, this a game machine?"
says RJ.  Answers the president, "Sure it is.  Talk to the techs.
They know all the details."  Wink, wink!  [The doctors felt pretty
strongly that the company should be making a game machine.]

----------

RJ was unusually candid about the Atari deal.  About Amiga Inc.'s second
year of operation, they were out of money.  Counting the initial six million
investment, Amiga had attracted (and spent!) thirteen million dollars. The
company was broke.  With great reluctance, and with creditors pounding
on the door, they decided that they had to look for a buyer for the company.
Things were in very bad shape.  The company had only met the last payroll
because the company president had taken a second mortgage on his home
and dumped the money into the company.

Atari walks in and says that they are interested in buying the Amiga and
making it the flagship of the company.  Their initial offer was that they
would put up one-half million dollars earnest money.  This would start
a clock running for one month.  During this month, Atari and Amiga would
try and work out a deal.  If no deal could be reached, Amiga would return
the money and the companies would go their separate ways.  Just in case
there was some kind of disaster, Amiga Inc. would place copies of all their
code and designs for the machine including masks for the custom chips
with an escrow company.  If something should happen the Amiga Inc. or
if a deal could not be reached and Amiga defaulted on repaying the earnest
money, the escrow company would turn over the designs to Atari.

Amiga took the money, and spent it in one day paying past due bills.  They
then sat down at the conference table with Atari, and was offered $1 per
share for Amiga stock.  Amiga stated that the company was worth far more
than that.

Atari responded by saying that they knew that Amiga was in dire financial
shape, and they had already spent the earnest money.  Given that, why should
we make you a better offer.  In fact, why should we make you an offer that
good?  We now offer $0.95 per share.

As the month progressed, Atari kept lowering their offer.  Although RJ didn't
say so, the people in Amiga must have thought that Atari had no intention
of paying anything for Amiga stock. Amiga had no way of repaying the earnest
money, and would have to default.  RJ did say that quite a few Amiga
employees had come to the conclusion that they had been tricked by Atari.
Fantasies of breaking in the the escrow company and destroying the records
and burning down the Amiga headquarters started to be dreamt.  Anything to
keep the machine out of the hands of such people.

Three days before the deadline, Commodore approached Amiga with a buyout
bid.  The president of Amiga flew to the Commodore headquarters and started
hammering out a deal.  Commodore had heard of the Atari takeover bid, and
wanted to keep the Amiga out of the hand of Atari.  The initial Commodore
bid was about $3.50 a share; the bargaining goes on, and on the last day
of the deadline with Atari, Commodore raised their bid to $4.00 per share.
(By this time, the Amiga people were not use to people raising their bids!)

The situation is pretty tense.  Everyone knows that this is it.  Commodore
realizing that Amiga will have to move quickly to get out of the Atari
deal, has a company jet standing by to whisk the Amiga president to
the Atari headquarters.  The Amiga president tells Commodore that he
needs to phone the guys back at Amiga headquarters to see how they feel
about the deal.  All the people on the phone say go through with the deal.
The Amiga president goes back into the meeting room and says, sorry, but
my people just won't go for it.  As the Amiga president gathers his papers
to leave, Commodore offers $4.25 a share, and the deal is struck.

The Commodore jet races to the Atari headquarters, where much to Atari's
dismay, Amiga presents them with a check for a half-million dollars.

------------------------------

I'll type in more of the talk as a reply to this note later.

[My comments are in square brackets.]

Some of the other comments made by RJ:

Commodore is indeed closing the California office that was the birthplace
of the Amiga.  People were offered jobs in Pennsylvania (where Commodore
has its big support office), but not everyone was interested.

The version of Kickstart that will be burned into ROMs in the new machines
will have a edit to allow them to boot from a hard disk.  It is not
clear if this version of Kickstart will be called 1.3 or 1.2a or something
else.

There is some discussion of another major enhancement to Kickstart and
Workbench, but it is not definite if it will be done anytime soon (in
the next year).

The fat angus isn't done.  It is in the design phase.  There is a faction
that is lobbying for the chip to address 4meg instead of 2meg.  (This
implies that the reports that the fat angus is used the the Amiga 500 are
wrong.)

Commodore expects to sell a half million Amigas next year.  [This is an
incredible number:  Apple has sold less than a million Macs.  Maybe
Commodore hopes that Compute! will pick up this number a spread it around
like they did the "over a million STs sold" rumor.  But then, an Amiga
500 for $600 would be a pretty big draw.]

Commodore is not currently making any more Amiga 1000s.  However, they
have not ruled out the idea of reviving the 1000 in order to have three
Amigas in the family.  If they cost reduce the 1000 by a slight amount,
Commodore thinks it may make a good intermediate size Amiga.

The German branch of Commodore became the darlings of the company when
the designed the sidecar in six months.  Originally, the Amiga 2000 was
being designed in California, but that version of the machine was canceled
and the German group was chartered with designing it.

It seems that the German group changed the form size of Zorro boards
somewhat capriciously.

In Europe, Commodore is viewed as a respected business machine manufacturer
of IBM clones.  It is not considered a toy company as in the States.  A
large part of the IBM compatibility emphasis in the 2000 is due to a desire
to fit in with the existing product line.

All the rumors about RJ's game are wrong.  It has been a background task
for a while now, but he recently raised its priority when he heard
Commodore's projected sales for next year.  "My little game seems a lot
more important now."

People have been playing around with ideas for the next generation of
Amiga hardware: 1024 by 1024 pixels, more colors, etc.  But, it would
be at least three years before any Amiga like that would be released.

There are several things about the Amiga 1000 that RJ likes better
than the 2000.  The 1000 is smaller and quieter.  RJ dislikes ROMing
code:  Kickstart and the write protected Kickstart memory provide
a great deal of flexibility without any real inconvenience.  [I have
read that replacing the write controlled memory with ROMs allow Commodore
to decrease the cost of machines by $200 retail.]

RJ really hates the lack of a garage for the keyboard in the 2000.  He
lacks getting desk space back by pushing the keyboard under the system
unit.  He philosophized, "Well, this means there is now an opportunity
for a third party manufacturer to make little legs for the Amiga 2000."

He likes the keyboard on the 1000 much better.  [The new keyboard has
DEC LK201 brain-damage combined with IBM key legends.  Delete, escape
and the function keys are now no longer touch typeable.]

    You tell a good story, Randy!  One question though... where did
    Jack Tramiel fit into the intriguing climax of the Amiga deal? 
    Was he already out of Commodore when CBM whisked the Amiga president
    to Atari to pay off the loan?  Was JT negotiating to buy Atari at
    the same time? 
    
    On a related topic, did RJ discuss the status of the ongoing lawsuit
    between Jack and Commodore?  I have seen nothing in the press recently.
    
    
    
    
    

Re .2:

Tramiel had just acquired Atari.  It was his negotiating style that Atari
was using.  RJ called Tramiel "an interesting product of the Capitalist
system."  This phrase got a big laugh from the audience.

RJ didn't discuss the actual Atari lawsuit.

I had always thought that the stories about Tramiel were due to an over
active imagination on the part of rabid Amiga supporters.  Then, I read
an interview with Tramiel in a friendly press (not a 60 minutes style
interview).  Tramiel volunteered all the incriminating statements during the
interview, and was proud of his sleazy tactics.  Evidently, Tramiel believes
business is war and doesn't see anything wrong with war crimes.

Thanks for complementing my story telling, but I deserve no credit.  The
birth of the Amiga was a dramatic story, and RJ did a great job of telling
it (when describing the bad times, when the company was about to go under
and take all their work with them, RJ's voice was choked with emotion).
As I listened to him speak, I kept thinking that he should get a ghost
writer and get the story of the Amiga published.  It was far more dramatic
than "Soul of a New Machine" or "Hackers."