The House That Pac Built

Midway Manufacturing is king of the coin-op hill and loving it!

Sometimes Lady Fate smiles on you and sometimes she doesn’t. In the video games explosion of the ‘70s it sure helped to have her on your side. Trying to hit the right nerve in the new and constantly changing universe of electronic games was like walking into a pitch black room and fumbling to find the light switch. Who could see into the future?

It was a lot like that for Bally/Midway back then, particularly in the early part of the decade when your typical arcade featured a menu of pinball games, road-racing simulations and rifle-shoots. It was around this time—1972 to be exact—that a brash young engineer from California flew to Midway’s headquarters in Franklin Park, Ill. to demonstrate his latest invention—two electronic paddles wacking an electronic ball back and forth across a TV screen. The Midway brain-trust yawned. The engineer returned to California, started his own company and manufactured the game. The engineer was Nolan Bushnell. The game was Pong. The company became Atari.

A few years later, a young game designer named Larry Rosenthal approached Midway with another unique video proposition. He had created a version of the campus computer game Spacewar, using vector graphics for the first time in a coin-op machine. Once again, Midway balked. Rosenthal subsequently sold the game to Cinematronics. Dubbed Space Wars, it became the video hit of 1978.

But neither of these lapses could have ever matched the blunder of the century Bally nearly committed in 1979. Stan Jarocki, Midway’s vice-president of marketing, had returned from Japan positively electrified by Namco’s Puck-Man game. “I was really excited,” he smiles. “It was a very pleasant departure from the usual space, combat and shooting games. Plus it was totally simple to operate and easy to understand.” Jarocki urged Bally president Robert Mullane to buy the rights to market and manufacture Puck-Man in the States. “He turned it down, plain and simple,” Jarocki blushes.

This is when Lady Fate—in the form of Midway’s governing committee—stepped in. Midway proceeded to over-rule Mullane and make the deal with Namco. The game, of course, was retitled Pac-Man. It has made the company a fortune.

Midway execs can afford to laugh these days about their blunders and near-blunders of the past. They have had plenty of success to dull the pain. Back in 1974 when the company was floundering, at least one wise decision was made: Midway would begin importing games from Japan (a delicious little irony since Midway is the name of the pivotal naval battle in the Pacific in World War II). Five years later, a Japanese creation named Space Invaders hit America with the force of Godzilla. It was Midway who negotiated to bring it here.

Space Invaders sold a then record-setting 72,000 units and was followed by 45,000 Galaxians. But even those astronomical figures couldn’t prepare Midway—or the world for that matter—for Pac-Man. Since 1980, a total of 190,000 Pac-Man and Ms. Pac-Man machines have rolled off the company’s assembly lines. Says Jarocki: “No one could have ever guessed this would happen.”

With Midway expected to account for nearly half of Baily’s projected $1 billion in revenue for 1982—Bally also manufactures slot machines, owns casinos, hotels, and, among other things, the Alladin’s Castle arcade chain—it’s little wonder why one industry analyst crows: “There’s no telling how many games Midway can come up with. They’ve yet to scratch the surface.”

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There’s no mistaking Midway’s corporate headquarters in Franklin Park. You are first greeted by a welcome mat-like sign outside the main building on West Belmont that reads, “The Home of Pac-Man & Ms. Pac-Man.” Once inside, you are gobbled up by all types of Pac-paraphernalia, such as a handsome hook rug featuring Mr. and Ms. Pac’s persistent pursuers, Inky, Pinky, Blinky and Clyde.

Pac-hero Stan Jarocki never seems to be without reminders of the yellow fellow either. The well-groomed executive wears a custom designed, solid gold ring bearing the image of our most cherished cartoon character since Snoopy. One wall in his office displays a gold replica of Buckner & Garcia’s million-selling album, Pac-Man Fever, and he even drinks out of a Pac-Man glass.

Jarocki is explaining what prompted the company to go the Ms. Pac-Man route. “It was our way of saying thanks to the ladies who’ve helped the industry so much. Ms. Pac-Man was named for that one reason.” When asked if there’s a Pac-Man Junior in the works, he dodges the question like a boxer avoiding a jab. “There could always be another follow-up,” Jarocki says, playfully. “You can’t cut off success.”

Perish the thought. In 1982, Midway will ship more than 200,000 video games (94,000 Ms. Pac-Man units alone). At this very moment, Tron is congesting the conveyor belts. When Disney realized its film property was a perfect vehicle for an arcade game, Midway received a call. The company proceeded to design, manufacture and distribute the game in only three months (see sidebar). Shortly after the film was released Tron dislodged Zaxxon as the highest earning coin-op game in the country.

Down the hall, Midway’s co-founder and former president Hank Ross is sitting in an office he seldom uses anymore. Now semi-retired, he’s here visiting from his home in La Jolla, Calif. Technically, Ross is a consultant but more accurately, he’s a father figure and mentor for almost everyone at Midway. Throughout the day, company brass drop in and out of his office to ask for advice or pass along a tasty bit of gossip.

Ross is a walking history of the company. He tells how he and his partner Marcine “Iggy” Wolverton founded Midway in 1958, debuted with a quasi-legitimate bingo-pinball game called Red Ball, and followed with a parade of pinball and “pitch & bat” games housed in pinball cabinets. Winner (1964) might have been the most ingenious of the lot. By hitting one of the targets at the far end of the playfield—marked one, two, or four lengths—you set off an animated auto race inside the back glass. Another catchy number was Mystery Score (1964), with its timely monster motif. But by 1969, the company was in financial trouble and Ross and Wolverton decided to sell out to Bally.

Ross admits that Midway was “lowest on the totem pole” when the first video games hit the streets in 1972. “Everyone else was ahead of us in terms of electronics,” he explains. Three videos helped establish Midway in the mid-‘70s: Winner (a copy of Pong which, ironically, Midway licensed from Atari); Gunfight (the company’s first Japanese game, courtesy of Taito Corporation); and Sea Wolf (which was designed by Baily’s Nutting Associates). Each sold over 5,000 units at a time when, according to Jarocki, 3,000 units was big news.

Still, life at Midway remained a constant struggle. By 1978, Atari’s Football and Breakout games had given the California company a commanding lead in the coin-op race. Something had to be done and quick. The big break came when Taito tipped Midway to the new game that was causing all kinds of chaos on the islands. Kids were skipping school and suddenly the country was experiencing a yen shortage. What was going on? Space Invaders, of course.

Space Invaders’ popularity set off a rush to Japan that was not unlike America’s corporate shift to the Sunbelt in the ‘70s. The games were there and American companies wanted a piece of the action (and still do). Midway, however, had beaten them all to the punch.

But as profitable as this turned out to be, it created frustration for at least one key member of Midway’s brain-trust. Just as Pac-Man was about to arrive, a startling development occurred: Engineering v-p John Pasierb announced he was leaving Midway for a non-game related position at Electronic Cash Register. (In the video game business, the engineering vice-president supervises the company’s army of designers and programmers.)

“I quit because I wasn’t happy with the support I was getting,” Pasierb says, adding that Bally just wasn’t ready to commit “serious” money to research and development (R&D) at the time. Four months later, Midway’s new president Dave Marofske lured Pasierb back, promising that changes would be made.

Marofske wasn’t just handing Pasierb a line. He had decided to pour some of the company’s windfall profits back into R & D and to give his own designers a fair chance to prove themselves. This, Marofske hoped, would be a shot-in-the-arm to Nutting Associates and Baily’s other game design firm Arcade Engineering as well as Midway’s own in-house team, which would soon grow to a staff of more than 100 engineers and creative people.

Marofske’s plan worked. Nutting responded almost immediately with two hit games, Gorf and Wizard of Wor, and Arcade Engineering came through with Omega Race. Midway itself delivered what many feel is an absolute bomb—Kick-Man, the game in which a man on a unicycle catches balloons on his head. George Gomez, who supervised the project, concedes the game was a failure. “Thematically, it didn’t attract people. It didn’t really capture anyone’s imagination. Kick-Man’s just a reaction game. You can’t base a whole game on reaction anymore.” Not even Hank Ross’ eleventh hour addition of a balloon-gobbling Pac-Man could pull Kick-Man through.

Even so, Jarocki believes the game served a purpose. “With Kick-Man we introduced a new hardware system that gave us greater capabilities—more color, more movement and faster action.” To Pasierb, however, the secret of a great game is more than just advanced technology. “It has to feel right,” claims the engineer.

And what “feels right” for Midway these days? After listening to Kathy Novak rave about the company’s latest space game, the answer would have to be Solar Fox. “It has the same speed and feel as Omega Race,” says the woman who has test-marketed every Midway project since Pac-Man. “Usually I play the game for a few weeks, but I’ve been stuck on Solar Fox for over a month.”

On the TV-game front, Bally has arranged for Midway to provide CBS with software for that company’s recently formed games division (CBS Video Games). The approximately 10 million owners of Atari’s Video Computer System will soon have the opportunity to play Midway favorites like Gorf and Wizard of Wor (conversions of Kick-Man, Solar Fox and the Adventures of Robby Roto are scheduled to follow) in the comfort of their living rooms. In addition, Bally has licensed to Commodore, the home computer company, Omega Race and Gorf for play on the VIC-20. Commodore, though, will do all the software work itself.

John Pasierb sees Midway “coming out with very, very advanced state-of-the-art games” in the next five years. “The kind we can build now, but aren’t economically feasible yet,” he says.

And on the eve of Midway’s 25th anniversary, what does coin-op pioneer Hank Ross have to say?

“I make no predictions,” he states firmly. “I make no predictions.”