A history of the Amiga, part 6: stopping the bleeding

By Jeremy Reimer


Chopping heads

When a corporation is bleeding money, often the only way to save it is to drastically lower fixed expenses by firing staff. Commodore had lost over $300 million between September 1985 and March 1986, and over $21 million in March alone. Commodore's new CEO, Thomas Rattigan, was determined to stop the bleeding.

Rattigan began three separate rounds of layoffs. The first to go were the layabouts, people who hadn't proven their worth to the company and were never likely to. The second round coincided with the cancellation of many internal projects. The last round was necessary for the company to regain profitability, but affected many good people and ultimately may have hurt the company in the long run. Engineer Dave Haynie recalled that the first round was actually a good thing, the second was of debatable value, and the last was "hitting bone."

Under Jack Tramiel, Commodore had embarked on a whole host of projects: some practical, some far-sighted and visionary, and others just plain crazy. To try and figure out which was which, Rattigan looked for an experienced opinion. He found one in Charles Winterble, a former Commodore engineer turned consultant who at the time was still under the lawsuit Commodore had going against Atari!

First to the chopping block were Commodore's aging line of PET computers, which had been the first fully-assembled computers to hit the market (they predated both the Apple ][ and TRS-80). The VIC-20, once promoted by William Shatner, was also axed. Next up were the innovative but ultimately pointless collection of small 8-bit computers that were incompatible with the blockbuster C-64: the Plus/4 and Commodore 16, and various other machines that had never left the prototype stage. The Commodore 900, an innovative Unix workstation with a 1024 by 800 bitmapped display, was also canceled.

Computers weren't the only thing that Tramiel had a hand in. At the time, the company still owned an office supply manufacturing firm in Canada. I personally ran into Commodore-branded filing cabinets far more often than I ever ran into Amigas. Rattigan got rid of these and other distractions.

Rattigan also cleaned up the sloppy accounting processes that had been allowed to fester under his predecessor, Marshall Smith. Three redundant manufacturing plants were closed, and new financial controls were put into place to keep a tight check on spending.

In all, the cuts did their job. Commodore paid off their debts and even posted a modest $22 million profit in the last quarter of 1986.

In the meantime, the Amiga still needed applications if it was to become anything more than a curiosity. One of the first companies to publicly pledge support for the platform was none other than Electronic Arts.
Electronic Arts and Deluxe Paint

Those who have firsthand experience with the modern Electronic Arts typically know it as a faceless corporate behemoth, infamous for absorbing, then strangling independent development teams, eliminating competition by paying for exclusive rights to major sports leagues, and working its employees beyond the breaking point. They may be surprised to find out that EA originally had quite a different mission and philosophy.

EA's founder, Trip Hawkins, was actually fighting against the poor treatment of programmers that he witnessed elsewhere in the industry. When he launched Electronic Arts in 1982, he envisioned an environment where developers and game designers would be treated like rock stars: promoted in major media, given generous royalties, and allowed to explore wherever their imagination and talent led them.

Hawkins saw the Amiga as a groundbreaking platform, a brand new canvas that would let his developers create great new works of art. In November 1985, he took out a two-page ad in Compute! magazine that extolled the Amiga's virtues and promised that Electronic Arts would be supporting the platform for a whole new generation of games. "I believe this machine, marketed and supported properly, should have a very significant impact on the personal computer industry," Hawkins said prophetically in an earlier interview in the same magazine.

EA's first Amiga product, however, wasn't a game at all, but a game development tool. Programmer Dan Silva had been working on an internal graphics editor that was code-named Prism. When the Amiga was released, he quickly reworked the program to take advantage of the new computer's stunning graphics capabilities. Even before it shipped, Silva was already working on the next version, which would contain many more advanced features.

This program was Deluxe Paint, and it launched the careers of thousands of computer graphic artists. With a simple interface featuring a toolbar on the right-hand side of the screen, Deluxe Paint was a powerful tool that could create not only static graphics, but also animation. This made it perfect for creating images for computer and video games, and for a long time Deluxe Paint was the industry standard for creating art for this medium, much like tools such as 3D Studio Max are today.

Even years later, as the PC gaming market began to eclipse the Amiga in terms of sheer size and number of titles, many game development studios still made their art using Deluxe Paint. Its native format, IFF, and animation format, IFF ANIM, are still supported by many graphics packages today. IFF ANIM files were compressed using delta encoding, resulting in smaller files. This was nearly 10 years before animation compression standards such as MPEG were released.

But back in 1986, the combination of an Amiga and Deluxe Paint was unbeatable. While Adobe's Photoshop on the Macintosh platform would eventually become the standard tool for creating two-dimensional graphic images, the Mac was still a monochrome-only computer at this point, and the PC could barely manage four colors even with a CGA graphics card. Again, the Amiga was ahead of its time.

The cover art for the Deluxe Paint II box featured an image of Tutankhamen that had been created inside the program itself. This image quickly became an iconic picture in the computer graphics industry. Even Commodore recognized the power of Deluxe Paint, using the Tutankhamen image on a new full-page ad that—finally!—stated the Amiga's advantages outright.



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Magazines

Around this time, the first print magazines covering the Amiga platform were starting to appear. The first such magazine was called Amiga World, started by publisher IDG. The premiere issue of the bimonthly magazine reached store shelves in late 1985, and featured the new Amiga 1000 on the cover.

For the second issue, Amiga World tracked down Andy Warhol, who had been one of the stars of the Amiga unveiling. Warhol was an enigmatic personality who ran a magazine called Interview, yet refused to give interviews himself. After brusquely turning down the Amiga World reporter's request for an interview, Warhol retreated to his office upstairs. The undaunted reporter followed Warhol into his office, and while the iconic artist began painting pictures on his Amiga 1000, the journalist started asking him questions anyway.

"Do you like the Amiga? What do you like about it?" the reporter asked.

"I love it. I like it because it looks like my work."

"Do you think it will push the artists?

"That's the best part about it. I guess you can... An artist can really do the whole thing. Actually, he can make a film with everything on it, music and sound and art... everything."

"Why haven't you used computers before?"

"Oh, I don't know, MIT called me for about ten years or so, but I just never went up... maybe it was Yale."

"You just never thought it was interesting enough?"

"Oh no, I did, uh, it's just that, well, this one was so much more advanced than the others."

Warhol was a genius at self-promotion, but his "interview" showed genuine enthusiasm for the Amiga computer. He expressed frustration at not having a color printer yet and talked about how cool it would be to have a graphics tablet and stylus to replace the mouse. These products were all in development, but Warhol wanted them now.

Celebrity endorsements were hardly new in the computer field, but here was something different: a celebrity artist who was a genuine user and enthusiast for the platform. Here was a market—albeit a small one—that could potentially be nurtured.
Repositioning the Amiga

Commodore marketing had positioned the Amiga 1000 as a business machine to compete directly with the IBM PC and its countless clones. This was probably not the best idea.

The average businessman is—let's face it—slow, stodgy, and a bit boring. They are often the last to adopt any new technology unless it can make a clear case for increasing the bottom line. A computer that could print dynamic 3D charts and graphs in color was not going to be useful to a businessman unless there was a whole supporting infrastructure around it: color printers, color overhead display panels, business presentation software, and so forth. This was not the case in 1986.

Thomas Rattigan didn't believe that the business market was the best place to try and sell the Amiga. "I think the price confused a lot of people," he said in a 1987 interview. "People seem to think that home systems are under $1,000 and business systems are over $1,000. I don't think the higher-end Amiga is going to go into accounting departments, but I do think it is going to go into areas where there is a degree of creativity, if you will." In this prediction Rattigan was bang-on.

Rattigan believed that the best strategy was to split the Amiga 1000 into two products: a low-end model to take on the huge home market that had been dominated by the Commodore 64, and a high-end computer that would appeal to graphic artists—like Andy Warhol—who were interested in expanding their system.




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The low-end: The Amiga 500

The Commodore CEO wasn't the first one to make the case for a cheaper Amiga. Hardware engineer George Robbins felt that a lower-end Amiga was a better idea right from the start, and Bob Russell said he had been fighting for such a product before the Amiga 1000 was even released. Still, it took someone higher up in the management chain to make the new machine—dubbed the Amiga 500—a reality. Rattigan had to choose between the remnants of the original Los Gatos crew who had designed the Amiga 1000 and Commodore's core group of engineers in West Chester, Pennsylvania. He chose the latter group because he felt they would be "more bloodthirsty" and thus likely to deliver the machine faster.

He assigned Jeff Porter, the engineer who had developed the innovative (but canceled by Rattigan's predecessor) LCD computer, to be the director of new product development. The lead engineers for the 500 were George Robbins and Bob Welland, who had previously worked on the also-canceled Commodore 900 Unix workstation. They were an odd bunch to be tasked with coming up with the computer that had to save the company, but in many respects they echoed the rogue team of misfits that had come up with the Amiga in the first place. George Robbins, a gentle and kind man with long hair and a walrus mustache, practically lived at work and often forgot to do his laundry. His coworkers, who loved Robbins, but worried about his personal hygiene, would constantly buy him new shirts to wear and quietly dispose of the old ones.

Robbins needed to avoid the distraction of laundry duties, as he was intensely focused on cutting costs on the Amiga. Welland was the ideas man, while Robbins was the practical engineer who could take great ideas and turn them into working electronics. One of the ideas Welland had was to increase the RAM on the "Agnes" custom chip to 1MB so that the Amiga could support higher graphics resolutions. The original Los Gatos team was a bit miffed at the proposed changes to their design, which they felt were not revolutionary enough, and made it known that they didn't think the changes would work. This motivated the Amiga 500 team even harder.

"Fat Agnes" did end up working, and the original Amiga engineers admitted that the design was probably a good idea. The modest change increased the Amiga's capabilities while also keeping a high level of backwards compatibility with existing software. "It was a step in the right direction, but it violated the [original] idea of the bus architecture and actually slowed the machine down," RJ Mical said later.

Meanwhile, the pragmatic Robbins was finding ways to redesign the Amiga's motherboard to reduce costs. He took out the ability to connect directly to a television set and replaced it with a separate adapter, the A520. This turned out to be a good idea because most users weren't using a TV set anyway—the fuzzy image quality of TV sets caused text to "bleed" and made it hard to read. He took the power supply out of the main machine and integrated the keyboard into the case, which was inspired by the design of the Commodore 128. The 3.5 inch floppy drive was fitted in on the right-hand side of the machine. An thin expansion slot was placed on the other side. Devices could be plugged into this slot directly without removing the Amiga's case.
The high-end: The Amiga 2000

While the 500 project continued, Commodore needed people to work on the high-end Amiga 2000 design. Unfortunately, Rattigan's massive personnel cuts had left few engineers available for the project. The task was farmed off to Commodore's German subsidiary, but the engineers there simply took the original Amiga 1000 design, added a hardware interface for adding expansion cards, and put the whole thing in a standard PC desktop case. This wasn't quite what Rattigan was looking for.

The task of redesigning the Amiga 2000 fell on one Dave Haynie, whose broad shoulders and ever-broadening ego were large enough to carry this burden. "I was the design team for the A2000," Haynie said. "That's kind of the way things were there because we had a lot of layoffs. I was working day and night and there still wasn't enough time to do everything." Haynie would work through the week, then let off steam on Friday by retiring to Margaritas, a local dive where the beer was cheap and plentiful.

Haynie was inspired by the designs made by the Los Gatos team and determined to improve on their elegant architecture. He designed a new custom chip, called Buster, to handle the expansion bus. The bus design, which was called "Zorro" in reference to one of the original Amiga prototypes, was also ahead of its time. Unlike the ISA slots in the IBM PC, the Zorro slots had "autoconfig" built-in and would allow expansion cards to be work instantly without any manual configuration of jumpers or resolving device conflicts.


Haynie wanted to design a machine that would be easy—for both end users and Commodore itself—to upgrade to more powerful processors that were coming out of Motorola's design labs. He put the CPU on a separate board that could be swapped out later. From the German designers he got the idea of a genlock—a way to directly output computer images on top of video with no loss of image stability. He turned this idea into a separate dedicated video slot, which could be fitted with a genlock card or other types of video processing cards. This idea would later turn the Amiga—already a multimedia powerhouse—into the standard computer for the video industry.

The Amiga 2000 would have unprecedented expandability, with five open Amiga Zorro expansion slots, four IBM PC ISA slots, and the aforementioned CPU and video slots. This was to be a serious machine, for serious users. The case was recycled from the canceled Commodore 900 workstation project.

Not everybody liked the idea of the 2000. Amiga creator Jay Miner, when asked about the machine at an Amiga user group meeting, recommended that Amiga 1000 owners hang on to their existing computer instead of upgrading. Jay's feelings weren't all about sour grapes. He felt that the computer had not been improved enough, given the advances in technology that had occurred since he first started designing the original Amiga back in 1982.



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Rattigan's fall

Jay Miner had a point. Time had been passing swiftly since the Amiga launch in 1985, and he wasn't the only one getting frustrated. Irving Gould, the enigmatic financier who controlled Commodore at a distance, started voicing concerns that the Amiga 500 and 2000 were taking too long to arrive.

Gould, like many bosses before and after, was asking for the impossible. Making Commodore profitable was the first priority, and Rattigan had done that by slashing the payroll. Creating a more popular successor to the Amiga 1000 was the next priority, and the few remaining engineers were doing what they could with very limited resources.

The Amiga 500 and 2000 delays weren't the only fault that Gould could find with Rattigan. He accused his CEO of behaving "in a high-profile manner" in an interview with the Philadelphia Inquirer, a spurious charge if there ever was one. Rattigan's "high profile" consisted of doing a couple of magazine interviews. In one of these, the reporter asked him how he felt about being so little-known compared to other computer industry CEOs like John Sculley at Apple. He replied that he didn't think it was important to be well-known when your company was losing money.

Rattigan knew that he could not win in a battle with Gould, who owned six million of Commodore's 30 million shares. For his part, Gould was a slippery opponent. He rarely came into the Commodore offices, preferring to spend his time phoning various employees, trying to dig up dirt on his own CEO.

In April 1987, Gould hired the management consulting firm Dillon-Read to prepare a report on Commodore. Consulting firms have a long and inglorious history of charging outrageous fees just to have their junior-level employees issue urgent recommendations for more consulting, all billed by the hour. This particular firm was no different, but the Dillon-Read consultant who prepared the report had an even less altruistic purpose in mind.

His name was Mehdi Ali, and legions of Commodore employees and Amiga owners would one day learn to rue his name.

The report suggested that Rattigan be immediately replaced, something Gould was more than happy to carry out. He called a board meeting, specifically excluding his CEO from attending. Rattigan knew that the game was up, but decided to stick it out to the end, and showed up for work the next morning.

The guards had been ordered not to let him on the premises, but pretended that they hadn't heard these instructions. "What the hell am I going to do?" one of them said. "The guy is running the company and turned it around, and I'm going to stop him from entering? Are you crazy?"

The locks on his office door had been changed. Rattigan was met in the hallway by an army of lawyers, who informed him that he was no longer employed at Commodore. He asked what the basis was for his termination, but the lawyers could give him nothing but meaningless gibberish. Resigned to his fate, Rattigan allowed himself to be escorted out of the office. Standing in the parking lot, he took a look back at the company that he had saved, and wondered where it had all gone wrong.

Gould had won, but it was a pyrrhic victory at best. He had lost the best CEO he ever had, and worse still, had broken a legally binding contract to do so. Rattigan sued for breach of contract and $9 million of unpaid wages. Commodore immediately countersued for $24 million. The case wasn't settled until 1991, which was ironically the expiry date of Rattigan's original five-year contract. Rattigan won, and Commodore's countersuit was dismissed.
The Amiga strikes back

So what had Rattigan accomplished? He had stopped the bleeding, made Commodore profitable, and made possible the projects that would bring the Amiga into its golden age: the A500 and A2000. Both models were released within a couple of months of Rattigan's termination.

What the Amiga could have done had Rattigan been allowed to stay is another of the many "what if" stories that pepper the Amiga tale, but it is what he did while he was there that mattered. By saving Commodore, he allowed the Amiga to survive, and in its new high-end and low-end forms it would find sales successes that the Amiga 1000 could only dream of.

And because of these new models, the story of the Amiga split also. No longer was it just about the original creators, or the struggles of a company trying to introduce a revolutionary new technology. From now on, the Amiga tale would be about its users: a diverse group of people who found the platform in different ways and took it in different directions.

Amiga was now about the gamers, about the bulletin board users, about the demo coders, about the hackers, and about the graphic artists, the animators, and the movie and television creators. It was now about the Amigans.

Tune in for the next installment, where we'll take a look at the glory days of the Amiga 500 and the games that made it famous.





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