To full appreciate the history of the Amiga, you have to know a bit on the history of Commodore Computers first. Lets face it, Commodore was a fish out of water in the computer game and did not know how to be a computer company (not that many knew how to back then). Commodore had a huge success with the C64 because of price and sat back and let the money come in, they did not know how to market computers and had huge rivals at the top of the Company. The 2 owners Jack Tramiel and Irving Gould. Jack was eventually let go from the company he started and went over to head Atari Computers.

Meanwhile, back in 1980, Jay Miner was working for Atari on the 8 bit systems (Atari 400,800, 2600) and is board with 8 bit systems and begins to plan work on a system based on the 6800 processor. Atari passes on on the idea. In 1982 Jay and Larry Kaplin from Activision start a small company called Hi-Toro, assembling a rag-tag group of people to work on his 68000 design, People think it is a lawn mower company, so they change the name to Amiga incorporated. During this time Dave Morse is recruited as Chief Executive Officer, who leaves his role as vice-president of marketing at Tonka Toys to take the job. Amiga Inc. secretly design a computer called Lorraine (after Dave Morse Wife) . The aim of the Lorraine protoype was to create a monster Gaming machine with a 3.5 inch floppy drive and a keyboard.

In an attempt to finance the project, the Lorraine was shown to several interested investors at the Consumer Electronics Show in Chicago on January 4th, 1984. However, the custom chips weren't finished and the entire project was still held together by four breadboards. During the show RJ Mical and Dale Luck wrote a bouncing ball animation - a demo that showed a red & white sphere bouncing around the screen. The 'Boing Ball' soon became a symbol of the Amigas technical prowess and was later adopted as a symbol of rebellion against the Commodore management. Although there was considerable interest in the hardware, the show did not produce any conclusive results.

By this time debts were piling up and the Amiga team were forced to place all they owned on the line, Dave Morse took out a second mortgage on his house. In an attempt to gain outside funding Amiga Inc. made an appeal to Sony, Apple, Silicon Graphics, Atari, and many others. Although these companies expressed an interest in the Amiga, they did not provide a suitable offer. Steve Jobs of Apple made the excuse that there was too much hardware, even though the newly redesigned board consisted of just three chips. Only Atari Inc. (managed by Warner at the time) made a serious offer for the Amiga custom chips, loaning $500,000 to keep the company alive while a license agreement was constructed. In a 1992 interview, Miner indicated the deal was a last ditch attempt:

"Atari gave us $500,000 with the stipulation that we had one month to come to a deal with them about the future of the Amiga chipset or pay them back, or they got the rights. This was a dumb thing to agree to but there was no choice."

The tentative plans between Amiga and Atari incorporated terms that Atari would purchase one million preferred shares of Amiga at $3 each by September 1st. However, Atari knew that Amiga, Inc. could not pay back the money and started to play dirty, reducing the amount offered to just 98 cents per share for the company. To make matters worse, Atari only wanted the Amiga technology in an attempt to get into the 16 bit market before Commodore (who were working on a Unix box) and had no interest in the team that created it. Amiga grudgingly accepted the offer. However, the Atari deal soon turned sour. On Tuesday July 3rd, Atari employees were informed all 8-bit projects have been canceled and the Amiga project was on hold. Facing cancellation the Amiga team began to look around for other options in an attempt to find a buyer.

While these events are being played out, Jack Tramiel leaves Commodore with half of the engineering staff and is sued by the company for breach of Commodore's propietary secrets. Just a few days later Tramiel purchases Warner's Atari Consumer company to take advantage of its existing manufacture and distribution channels and renames Tramiel Technologies to Atari Corp. He subsequently discovers the original Atari/Amiga agreement and files a $100 million suit in the Santa Clara County Superior Court on Monday, August 13th against Commodore & Jay Miner individually, charging a breach of contract. Atari suggest that Amiga fraudulently dealt with other potential buyers after agreeing to negotiate licensing specific microprocessors to Atari Inc. in return for the $500,000 advance payment. In an attempt to gain revenge on his old company for suing him, Tramiel sought damages and an injunction to prevent Amiga from delivering or selling chips to any other company.

Fortunately help is at hand and Commodore decide that the Amiga is worth the potential cost. Two days later, on August 15th, Commodore International Ltd. announced they would purchase the cash strapped Amiga Inc. In a moment of rebellion, the Amiga team persuaded Commodore to raise its bid to $4.25 a share and give them $1,000,00 to pay their Atari debts. A few weeks the Amiga hardware and its creators moved to the newly created subsidiary, 'Commodore-Amiga Inc.' and continued to develop the newly renamed Amiga computer with 27 million dollars of extra development money.

While Commodore were focussing their resources into the Amiga, the Tramiel-owned Atari had not abandoned their goal of 16-bit domination. Through the use of off-the-shelf hardware and software the company constructed their own 16-bit platform - the Atari ST - in record time. This used a 68k port of the CP/M operating system, which was integrated with the GEM user interface. The result was a single tasking OS that required a love of the colour green to be used over a long period. However, its quick design made it significantly cheaper and easier to manufacture, appearing several months before the Commodore AMIGA. In spite of their initial defeat, Jack Tramiel demonstrated a willingness to dominate his former company in the market place.

Just 11 months after Commodore had bought the ailing Amiga Inc, they unveiled the product of that union. The Commodore Amiga (the initial name of the Amiga 1000) was unveiled at the Lincoln Centre in New York on July 23rd in a media frenzy. For the launch Commodore had hired Andy Warhol & Debbie Harry (lead singer of Blondie) to demonstrate the Amiga's graphics capabilities using Island Graphics Graphicraft. This was accompanied by a full score synthesized by Roger Powell and Mike Boom, author of Musicraft.

The Commodore Amiga was officially launched in September 1985 for $2,500. The world's first Amiga magazine - Amiga World - was launched soon after. At the time this price was a major detractor that placed it in the high-end region occupied by the Apple Macintosh. In comparison, the Atari ST was selling for less than half the price. It was later recognized that this was Commodores' first mistake. Rather than promoting the Amiga as a professional machine, they sought to replicate the success of the Atari ST. However, the Atari ST had built a steady market since its launch that made it a difficult adversary, with the Amiga playing second fiddle to the ST regarding game releases. It is difficult to indicate just how advanced the Amiga was compared to other systems. Apple had a graphical interface but was largely restricted to the black and white monitor display, whilst PCs were still horrible text based systems. The Amiga also had an ace up its sleeve by the fact that it was TV compatible and could be used for editing footage. A task that even now the Mac and PC cannot do as standard. The Juggler demo, consisting of a character juggling reflective balls in a 3D environment, attracted customers to the graphical capabilities. This spurred Electronic Arts to rewrite their IBM PC package, Prism (which was an enhanced port of Doodle for Xerox machines) and release it for the Amiga during September. The rewrite was christened Deluxe Paint and the rest is history.

(some of this information is from www.amigahistory.co.uk)

 

But wait! The above information is what is floating around the net, but on June 17,2010, I recieved an e-mail from Marty Goldberg who was actually involved in the Atari/ Amiga negotiations and he wanted to make some "Corrections". I have left both versions intact, because both are facinating tales.

 

 

Date: Thu Jun 17 15:20:57 2010

From: Martin Goldberg Subject: Amiga history corrections....

Hi Glen, ran across your Amiga history page and wanted to share a few corrections on some of it to help you out. Noticed you took some of it from Brian's book and other sources - I'm actually credited in Brian's book (I provided a lot of the material regarding the Atari/Amiga deal interactions).

 

"Only Atari Inc. (managed by Warner at the time) made a serious offer for the Amiga custom chips, loaning $500,000 to keep the company alive while a license agreement was constructed. In a 1992 interview, Miner indicated the deal was a last ditch attempt:

'Atari gave us $500,000 with the stipulation that we had one month to come to a deal with them about the future of the Amiga chipset or pay them back, or they got the rights. This was a dumb thing to agree to but there was no choice.'"

That's partially right. They already had 4 investors in the company before they approached Atari Inc. (which was in the Fall of '83). These investors already had an ownership stake in Amiga's technology. And that quote by Jay is wrong (seems like he was influenced by RJ's missinformation, though he wasn't directly involved in the actual negotiations, David Morse was). How the contract negotiations and contracts themselves actually went:

It was started in the Fall of '83 with Warner and Atari Inc., further negotiated with Amiga during the January '84 CES, and signed in early March of '84. The deal was for Warner and Atari to join the already several investors Amiga had, by providing a $500,000 payment. The payment and contract were for several things: 1) a "guarantee" that in return they'd do a full licensing contract together in late June when the chipset was to be delivered. As part of the guarantee, all technical documents were kept in escrow until the signing of the contract. If Amiga were to fold (as it was already in financial distress, and in danger of being chopped up and sold off by the other investors should this happen), Atari Inc. would gain access to the documents in escrow and no longer need to negotiate a license as a recoup of it's investment. They would not "own" Amiga or the chipset, they simply would not need to license the technology anymore. 2) To gain access to Amiga's engineers and the still in development chipset. The initial contract was for Atari to develop a game console based on the Amiga chipset, to be released that Fall. Codenamed Mickey, it was to be expandable in to a full computer - though that would not be allowed by Amiga until Spring '85. A full Atari computer was also planned around the chipset, and would not be allowed by Amiga until '86. Likewise, Atari was to use the chipset in coin-op boards as well. 3) Upon delivery of the three chips in late June and signing of the licensing agreement, Atari would pay $500,000 per chip. They also agreed to buy 1,000,000 preferred shares at $3 a share, and pay a license fee of $2 per unit royalties on consumer and computer products, plus a guaranteed minimum of $100,000 per year from coin-op sales at $15 per unit sold. "However, Atari knew that Amiga, Inc. could not pay back the money and started to play dirty, reducing the amount offered to just 98 cents per share for the company. " Never happened. That's more of RJ's missinformation.

The agreement was always as mentioned above. In fact Morse and his counterpart at Atari had even met at the June '84 CES and both were excited about the pending licensing signing at the end of the month. In the interim, Morse got cold feet and had worries that the Atari deal may somehow screw with his ultimate goal of selling Amiga outright. So they returned the $500,000 on June 30th with the claim that the chips didn't work right, much to the surprise of the people over at Atari. *Before* Warner's deal with Jack was announced. "To make matters worse, Atari only wanted the Amiga technology in an attempt to get into the 16 bit market before Commodore (who were working on a Unix box) and had no interest in the team that created it." Never happened.

Atari Inc. already had several 68000 projects going since '83, some at full completion. The Amiga project was simply going to be another project in the mix. That reads like a mishmash of statements regarding RJ's missinformation regarding Tramiel's Atari Corp. and the myth that the ST was going to be based around the Amiga chipset. "While these events are being played out, Jack Tramiel leaves Commodore with half of the engineering staff and is sued by the company for breach of Commodore's propietary secrets. Just a few days later Tramiel purchases Warner's Atari Consumer company to take advantage of its existing manufacture and distribution channels and renames Tramiel Technologies to Atari Corp. " Jack left in January of '84, his purchase of the Atari Consumer division didn't happen until July. Likewise, Commodore didn't sue Jack, and it wasn't half the engineering department. They sued Shiraz Shivji and two other engineers, and put an injunction on their doing any computer work for Jack. "Atari suggest that Amiga fraudulently dealt with other potential buyers after agreeing to negotiate licensing specific microprocessors to Atari Inc. in return for the $500,000 advance payment. In an attempt to gain revenge on his old company for suing him, Tramiel sought damages and an injunction to prevent Amiga from delivering or selling chips to any other company." That was Jack's Atari Corp, and it had nothing to do with other potentional buyers. Atari Inc. was never a "buyer" they were to be a licensee. They always knew Dave already had other investors and licensees, and ultimately wanted to sell the company. The issue was the money was returned to Atari Inc. with the excuse that they couldn't get the chips to work right, and then they're selling themselves to Commodore on the basis of the chips (which was announced first in July and completed in August). Jack did his countersuit on the basis of that. "Fortunately help is at hand and Commodore decide that the Amiga is worth the potential cost.

Two days later, on August 15th, Commodore International Ltd. announced they would purchase the cash strapped Amiga Inc. In a moment of rebellion, the Amiga team persuaded Commodore to raise its bid to $4.25 a share and give them $1,000,00 to pay their Atari debts." Wrong timeline.

That all occured in late June and early July - in fact it was Commodore who had provided the money that Dave used to pay back Atari Inc. the $500,000 plus interest. What happened in August was the purchase was finalized. Again, the whole reason for the suit by Jack was because Commodore had *already* announced it's intent to buy Amiga that June. "While Commodore were focussing their resources into the Amiga, the Tramiel-owned Atari had not abandoned their goal of 16-bit domination. Through the use of off-the-shelf hardware and software the company constructed their own 16-bit platform - the Atari ST - in record time. This used a 68k port of the CP/M operating system, which was integrated with the GEM user interface. The result was a single tasking OS that required a love of the colour green to be used over a long period. However, its quick design made it significantly cheaper and easier to manufacture, appearing several months before the Commodore AMIGA." That gives the wrong idea that the ST was somehow going to be based off the Amiga chipset and deal. It was not. The deal was with Atari Inc. as mentioned, Jack had no idea about the deal when he purchased the Consumer Division. In actuality, Jack's ST was already planned out by the time of the purchase that July. That's why they started breaboarding at the beginning of August and had it ready to work on software design by September.

Respectfully, Marty Goldberg

Thus, the Amiga was born. Later, Commodore would change the name to the Amiga 1000.