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What was Japan for Commodore?

An Online Interview with Michael Tomczyk

(former Assistant to the President of Commodore International)

Since 1980 Mr. Michael Tomczyk was an assistant to Jack Tramiel: the first President of Commodore. During his four years at Commodore, he played an important roll for mapping out plans of home computers such as the VIC-20, the Commodore 64, and for their international marketing. Nowadays he's active as the Managing Director at the Wharton School.

Although Commodore's computers were very popular in the world, only a handful of nuts appreciated them in Japan. However, Commodore was the most careful western company about the danger of rising Japanese computers in those days. In fact they developed the VIC and the C64 to keep back Japanese contenders. How did they see Japanese computers? What did they do against Japanese market? Mr.Tomczyk kindly told us various things related to Japan and many others. (Note: This interview consists of our email questionnaire and his reply.)

Please tell us about the VIC-20 (VIC-1001 [*1]). In the interview with The Desert Oasis, you said "We developed the VIC partly in Japan and partly in the U.S." Concretely speaking, which parts were developed by Japanese staff?

Actually, there was a blurring of responsibilities between the U.S. and Japanese contributions, and we functioned truly as a multinational team, with contributions from both sides adding to product design, ergonomics, software and other features. For example, the VIC chip which created revolutionary sound effects including voice synthesis and music, was developed at MOS Technologies in Valley Forge. Much of the design work drawn from a different computer, a color version of the PET/CBM [*2], was drawn from Santa Clara, CA. And a good deal of software design came from Yoshi [*3] and his small team in Japan. The ergonomic decisions were mostly mine although I made sure to involve Jack Tramiel in these decisions. Jack had final approval but left most of the key decisions to me - (name of the computer, type of keyboard, color of keys and case, decision to add function keys, built-in RS-232 and some other ergonomics).

In the interview with Rick Melic, "(The VIC was) called the VC-1001 in Japan, because the movie 2001: A Space Odyssey was popular and apparently 1001 is more 'friendly' in Japan than 20," you stated. However - please forgive me for asking such a rude question. '1001' is not recognized as a friendly number by most of Japanese people. I can't clearly understand why you thought so. Maybe you were aware of the NEC's PC-8001, the most successful Japanese computer in those days?

This decision was made by Tony Tokai [*4] in Japan and I had no involvement with the name of the Japanese product. So whether this name was friendly or not rests with Tony who is Japanese. I should mention that I did visit Japan and saw the NEC computer which I thought was a terrific computer and major threat. After seeing the beautiful function keys on the NEC computer, I insisted on function keys on the VIC-20 [*5]. I believe that if the NEC was launched in the U.S. with some major marketing push, that computer could have carved a niche in the market, but when we used my "bear in the woods" strategy - NEC never came in with their excellent product. The bear in the woods strategy goes like this: what do you do when you're being chased by a bear in the woods? Answer: you throw down your knapsack. The bear stops to examine it, and you run like crazy, or scurry up a tree. So what do you do when you're an American product manager and the Japanese are breathing down your neck? Throw them a low-cost, user-friendly computer (the VIC-20) - when they stop to examine it (which at that time took them 6 to 12 months!), you work like crazy to make an even better computer (the Commodore 64). Keeping the Japanese competition at bay was a major strategic goal of mine at Commodore, since I had lived in Asia for 2 years and knew the danger of a major Japanese push in home computing. Our tactical moves in price/performance kept them out of the market during the time that I was involved at Commodore. I should add that the Japanese were EXCELLENT technical allies as well as competitors and we greatly valued the contributions and candor with which companies like Sony et. al. shared their innovations, and previewed what was coming. I remember seeing an active matrix cell half a decade before it was used in laptops - but when I saw it, the cost was $125 per cell!

Can you tell something about HAL Laboratory from Japan? Apparently, many of early VIC-1001 cartridges were programmed by them. (At least the following titles have been confirmed: Jupiter Lander, Star Battle, Poker, Road Race and Money Wars. I guess Jelly Monsters, Alien, Mole Attack and Slot might be as well.) Although nowadays they're a popular video game company which is strongly connected to Nintendo, at that time HAL Laboratory was very young and small. The company had been established with a few associates just seven months before the VIC-1001 was announced. Why was HAL Laboratory given important posts from Commodore?

I believe Jelly Monsters (a replication of Pacman [*6]) was also programmed in Japan. As I recall, there were very few if any groups in the world capable of programming cartridge based video games [*7].

The Atari games were pitifully crude. The best games in the world were on video consoles found in arcades, bars, etc. Nintendo was a major player, along with Bally-Midway. At one point, I negotiated a contract with Ninendo for all of their games to be ported to Commodore computers, and got them pretty excited about the prospect of being on home-based machines. At the last minute - when the contract was ready to be SIGNED - Jack without warning told me he was cancelling the deal I negotiated. I was extremely humiliated by that, and lost face as a result. I believe that my efforts to evangelize home computing to Nintendo had a direct impact on their decision to go into the game console market [*8], because they weren't really thinking about that before I approached them with our licensing deal. I have always regretted Jack's decision because I desperately wanted Donkey Kong and other games on our machines. I believe that Jack decided to snub Nintendo because we had an agreement in place with Bally-Midway.

Please tell us the background history of the MAX Machine. What does "MAX" stand for?

I have a MAX machine at home. It was a small black machine that was going to revolutionize the home computing field. I had identified the four basic killer apps for home computing: wordprocessing, spreadsheets, database management, and graphics. All four apps were built into the HARDWARE of the MAX, along with a terrific 256 word speaking vocabulary (I researched and selected the words myself). We also planned to fix any bugs and provide software updates on a plug-in cartridge, a very elegant way to do upgrades that addressed the problem of having the software apps on chips in the motherboard.

Well, the MAX Machine you mentioned is quite different from the system that Commodore fans have already known...? The Max Machine I said means the cheaper model of the Commodore 64 which was actually released at almost the same time as the Commodore 64 in Japan. But your Max Machine sounds like another machine. It's interesting. Please tell us more details.

The MAX machine I describe was a prototype that was actually product engineered and built by Commodore as a next generation computer. We were growing very impatient with the poor and slow support from software vendors, so we decided to license some of the best software around the simply include it with the machine. The vendors were happy because they would be in every machine, and were prepared to license their software at an affordable rate, as a result. This allowed us to include a wordprocessor, spreadsheet, database and graphics package - the four primary "killer apps" that were driving home computer uses at the time.

The MAX was a small sleek black computer with grey keys and red highlights. It had a built in vocabulary of 256 words and could be programmed to speak. It was also compatible with the low-cost modems that we pioneered (actually the first $100 direct connect modem on a cartridge was my idea and I contracted with a small engineering firm to do the work since our engineers were overloaded at the time). Anyway, this was an innovation we perceived as a "next generation" home computer that would expose first time users to some of the real "power" of computing - and we figured they would find their own individual uses for the database and spreadsheet features. We were also going to provide software programs to go with the spreadsheet, database, etc. - templates - for such things as mortgage calculations, some rudimentary accounting and so on.

Unfortunately, Jack was voted off the board the season we were supposed to launch this product, and the leadership left in place - mostly men from outside the computer industry, mostly in their 50s and 60s - had a penchant for getting back into the business computer market, where they thought the price margins would be higher. That shift in strategy from home and personal computers to business computers - including the development of PC clones sold in Europe - was the beginning of the end for Commodore, and it began with the cancellation of the MAX. This machine - although taken to final design - and as I've indicated, I still have one at home - was killed by the incoming management team that took over when Jack Tramiel left the company.

That figures. The MAX machine you described seems the ancestor of the Commodore Plus/4 [*9] which was released just after the mass talent exodus from Commodore. At least it took over your MAX's "four killer apps" concept and the black body with grey keys. But the Plus/4 marrketing was too poor to be the next generation machine. What's the link between the MAX and the Plus/4?

The Plus/4 was salvaged from the MAX concept, but lacking the strong support of the product managers and technical staff who departed in 1984, it faltered in the marketplace.

As you can imagine, the six months following Jack Tramiel's departure were extremely frustrating for me and everyone else at the company, except the new "professional" management group who really messed up the company after we had become the world market leader in home and personal computing. I've never in my career seen such squandering of market power, or such disastrous strategic decision making. Frankly, I was always surprised that more people weren't sued by the shareholders.

Also, 6 months after Jack departed, about 35 of the top talent in the company all walked out in one fateful week, in May 1984 [*10]. Nearly all the top middle management and technical management team left the company in that single week (including me, the president of the U.S. company, many of the top engineers, etc.). The top management including Irving Gould the chairman, did nothing to stop anyone from leaving. They basically let all the "gurus and geniuses and wunderkind" of this remarkable company walk out the door. I think if they simply asked some people to stay, they would have, but basically they thought they could re-engineer the company into a "business" computer firm, which was a strategic disaster, as everyone knows from the crash in revenues, profits, and stock price.

I don't like to dwell on "soap opera" issues, but it's interesting to note that when so many people left, the company's management and legal staff harassed the departees and in several cases tried to prevent people from exercising legitimate stock options and even tried to prevent people from receiving their last pay check. At one point I had to write a personal note to Irving Gould in order to get my stock registered and last check paid (Irving took immediate action to help me, I should add). Anyway, this hostile attitude may explain why some hot new products like the real "MAX" were simply killed. Politically, the transition from Jack Tramiel and the team he built was extremely messy and inept, and what happened to the company subsequently reflects the result of all this turmoil.

What a mess that was. It left a bad taste all around. To sum up the "demise" of Commodore, after Jack Tramiel left, the creative core of the company was sucked out of the organization and only a shell remained. I was totally dismayed by the ineptitude displayed by the waves of management teams that came in, one after the other, to try to run the company, after Jack. Keep in mind, in 1984, we were the dominant home computer company in the entire world, and had vanquished such competitors as Texas Instruments, Atari and many others. All Commodore had to do was keep from committing suicide. Hmm. Well, there is always the potential for company's to go insane and melt down, I guess, and the Commodore saga certainly demonstrates this.

At the beginning the Japanese MAX Machine was announced as the Ultimax, in the same month the Commodore 64 was announced. Later it was renamed to the MAX Machine or the VC-10, and was announced in Canada, Germany and Japan. However, it seems to have been sold on a large scale only in Japan. Why Commodore focused this platform on Japanese market?

First of all, names changed a lot at Commodore. Sometimes we introduced a model at a computer convention just to see the reaction, and only pursued it if there was high demand. We had such a terrific engineering team, that we could slap together (over 6 to 9 months) a commercial quality prototype, float it at a convention, and then decide whether to production engineer it, or not. For example, my original name for the VIC-20 was "Commodore Spirit" which I thought had a nice cache - however, at the last minute, my Japanese colleagues informed me that the word "spirit" in Japan does not mean "wonderful energy" or "Casper the friendly ghost" - but rather would be associated with horrid, ghastly, ghoulish things. So I went to my second choice, which was VIC, and since VIC sounded to me like a truck driver, I arbitrarily added the number 20, because 20 is a friendly number.

To address your specific question, I can only say that most of our international general managers had a terrific amount of autonomy to customize computers for their markets - it was one of our truly ingenious secrets - giving country-managers the freedom to adapt the core technologies to their home markets which they understood best. Anyway, I would assume that Tony Tokai in Japan saw the possibilities of the Max and gave it a shot in his market, because the U.S. management team had an entirely different focus.

You wrote a book titled "Home Computer Wars" in 1984. Incidentally, Japanese version of "Home Computer Wars" was also started around the time when the Japanese MAX Machine was released. Tomy released the Pyuuta (cheaper TI-99/4A clone) and Sord released the M5 (very close to the MSX) at almost the same time as MAX Machine. Soon after them more competitors including more popular MSX computers also came. MAX Machine was the cheapest among those competitors. Video game cartridges for MAX Machine were also cheapest, but unfortunately, they were obviously lacked novelty for kids - eight of the first (and the last?) twelve titles were recycled versions of the VIC-1001 games made by HAL Laboratory. The only serviver of the wars in Japan was the MSX. However, MSX could never hold a candle to the C64 and even the Atari XL in the US market. What impression did you have about the MSX?

Actually, the Home Computer Wars was published in 1986. As I recall, a Japanese-American convinced a consortium of 12 Asian companies to adopt a common standard and produce a family of game machines and home computers all sharing the same standard and this would theoretically provide a huge amount of software, interchangeable on many machines. Developers could design one game that would fit 12 machines. The potential for 12 companies to come into the U.S. market, each with its own push and advertising budget, could have been a major competitive nightmare for Commodore, and I was very concerned about this when I first learned of the strategy. Then I looked more closely at what they were doing and realized these 12 companies had been tricked into adopting a two year old obsolete technology that produced blocky, slow, embarrassingly crude graphics that were really inferior. When I saw the first MSX machines at a trade show, I laughed all day long! I just walked around howling with laughter and whenever anyone mentioned MSX I exclaimed, "You mean MS-DEAD!" because I knew that awful technology would arrive still-born to the marketplace. I have no idea why the MSX consortium didn't conduct better due-diligence on this technology, except perhaps that the person who put together the strategy was a Japanese American and maybe they trusted him because of that. I can think of no other reason they would attempt to use that crude operating system. What a disaster [*11].

Commodore Japan seems to have lacked motivation to sell the Japanese Commodore 64 - at least they advertized the Japanese MAX Machine more. So the Commodore 64 couldn't be popular in Japan. I wonder why price-reduction effort and a wealth of software library in the US market weren't brought into the Japanese Commodore 64 business. Does it mean Commodore abandoned Japanese home computer wars in the early stages?

Well, I think the Japanese had other models of computers that were superior to the C-64, such as the NEC and others [*12]. The C64 was a bridge between "home" and "personal" computing. In the U.S. I think when Commodore abandoned the C64 in favor of Amiga, PC clones and other machines, American users upgraded to PCs and Macs and the C64 was a stepping stone. If the C64 had been evolved, we could have leveraged our brand loyalty to move into more powerful computers and traded up C64 and VIC users to Amigas and similar systems - but the Commodore management after Jack Tramiel did not seem to understand how to leverage a multi-million user base into a string of multi-year sales and trade-ups.

They simply cut the cord between the Commodore series and the Amiga series and effectively started over with Amiga - abandoning the brand equity that had been established with the VIC and C64 families. Well, I guess not everyone understands marketing in consumer electronics. It seemed so simple to me.

By the way, toward the end of Commodore's lifespan, I couldn't stand it any longer and went to New York to offer my services to Irving Gould and the CEO at the time (who looked amazingly, in physical appearance, like Jack Tramiel!!!) - but instead of asking how I might help rescue and restore the company to health, they still viewed me as a "product manager" and wanted me to try to help them launch a game machine. They kept me waiting for almost half a day which was incredibly insulting. At one point, I mentioned some Commodore "firsts" and no one in the room knew what I was talking about - which made me realize, to my horror, that by the mid-1990s, Commodore had completely lost its corporate memory and very little of the company's knowledge and talent base had been preserved. It was a sad ending and very poignant. I couldn't wait to leave New York after meeting with those people! Thomas Wolfe was right. You can't go home again!

As for me, I am exceptionally proud and gratified to have had the opportunity to play a small role - with many other pioneers - in the launch of home computing. It is even more gratifying to see computers in almost every home, and everyone "connected" via telecomputing, as we always envisioned this to be.

*1 - VIC-1001
VIC-1001 is the Japanese name of the VIC-20. It appeared ahead of the US release in October 1980. VIC was the first computer under 10,0000 yen (400 dollar) also in Japan, and made the scene, too. But soon Japanese computers based on the same concept such as the PC-6001 (NEC) and the Basic Master Jr. (Hitachi) pursued it. They brought a hard time for Commodore.

*2 - a color version of the PET/CBM
Around 1979 Commodore intended to release a color model of the PET/CBM as their next product. But it was abandoned when the VIC project was focused on. Their shift from business-oriented PET/CBM to completely hobby-oriented VIC was an important turning point in the history of Commodore.

*3 - Yoshi
Yoshi Terakura, maybe an engineer from Commodore Japan. He seems the first tech leader who looked with favor on the VIC project at the time it was being still questioned by many Commodore persons.

*4 - Tony Tokai
His real name is Taro Tokai. In those days he was the vice-president (virtual chairman) of Commodore Japan, and was one of the first VIC advocates as well as Yoshi and Michael. Incidentally, the real president of Japanese company was Sam Tramiel, known as the eldest son of Jack Tramiel.

*5 - function keys on the VIC-20
The VIC was the first western computer featuring function keys, except Hewlett-Packard's HP-9825 (1977) which was sold as a programable calculator but essentially is a computer. Incidentally NEC's (and all the Japanese computer's) function keys were layouted horizontally like the current standard PC keyboards, but the VIC's (and even next follower IBM-PC's) function keys were layouted vertically. Maybe the roots of their layouts were vertical Help/Start/Select/Option/Reset buttons of the Atari 400/800? Anyway western popular computers hadn't had horizontal function keys until the Amiga or so called Enhanced 101 of the IBM-PC/XT. Considering such a difference between western and Japanese might be interesting.

*6 - a replication of Pacman

In Japan Jelly Monster was officially released as the Pacman because Hal Laboratory owned legal right to port Namco's arcade games to computers. (they had already ported Namco hits such as the Galaxian and the Rally-X to the PET/CBM. Those game supported Hal's PCG-6500 Programmable Character Generator which enhances graphic and sound of the PET/CBM). On the other hand, Atari owned legal right for porting the Pacman in the USA. So Commodore changed the name to the Jelly Monster to avoid legal crash. However, Atari still didn't allow such Pacman clones, and tried to bring pressure on them to go away from the market. The Jelly Monster was the first target of this case. Anyway if you consider the limitation of the VIC, it was an excellent port and is obviously better than Atari's "official" version which appeared two years later. It proves HAL Laboratory was already a top grade software house. In the USA their Galaxian was also released as the Star Battle, and their Rally X was as the Radar Rat Race.

*7 - there were very few if any groups in the world capable of programming cartridge based video games.
Actually in those days, only the following companies had been supplying cartridge based videogames at work: Atari (Atari VCS, Atari 400/800), Magnavox (Odyssey2), APh Technology (Intellivision), Kagaku Giken (Supervision 8000), Texas Instruments (TI-99/4A) and their second parties such as Milton Bradley and Scott Foresman. Of course it shouldn't have been easy for Commodore to form an alliance with such rival companies. So HAL Laboratory must have been a valuable asset to Commodore even though they were small, because they had know-how for video game development about both hardware side and software side.

*8 - I believe that my efforts to evangelize home computing to Nintendo had a direct impact on their decision to go into the game console market
The Family Computer (NES in Japan) development was started on August 1981, so this episode really makes sense. (By the way, Barry-Midway's first VIC-20 port appeared in the beginning of 1982.) Then Coleco started contract negotiation with Nintendo, and acquired the right to port the Donkey Kong. Ironically enough it was what brought big success to the Colecovision.

*9 - the ancestor of the Commodore Plus/4
Speech function he mentioned implies it might be one of the rare Plus/4 prototypes called V364.

*10 - about 35 of the top talent in the company all walked out in one fateful week, in May 1984
Some of them moved to Atari. Taro Tokai of Commodore Japan also joined Atari as President of Atari Japan. And the next month, Jack Tramiel bought most of Atari except arcade division.

*11 - What a disaster.
Of course there're some misperceptions. (eg. Kazuhiko Nishi, the proponent of the MSX project, is actually a pure Japanese though he's very familiar with Bill Gates of Microsoft). But anyway it was true that two years had already past since the debut of the Colecovision when the MSX officially landed in the USA (May 1984). The Colecovision is known with almost same architecture as the MSX. The Commodore 64 had already enjoyed a high reputation as a cheap (around $200) but well fruitful computer with large software library. On the other hand the MSX was still much more expensive but lacked obvious advantage and strong support. As a result it couldn't be attractive competitor in the US market.

*12 - such as the NEC and others.
But in fact, there were no contenders at the same under 100,000 yen (400 dollar) price line yet. If any, Sharp's MZ-700 which followed straight after the Commodore 64 might be the first similar class machine though its expressiveness is much poorer. However, the Japanese Commodore 64 lagged a long way behind even this computer. Then almost a year later, NEC released the PC-6001mkII as the successor to the PC-6001. It seems to have been designed in deep consideration of the Commodore 64. At least on the catalog specification, its cost and basic potential are very close to the Commodore 64. But the PC-6001mkII has complete upward compatibility with the PC-6001, and also appealed by more functions such as voice synthesis and Japanese kanji character support. This fact ripped out strong sales points from the Japanese Commodore 64. Anyway, the PC-6001 series couldn't keep long hit since NEC abandoned the series rapidly (it became too powerful to coexist with NEC's main PC-8801 series). As a result slightly higher rank high resolution computers such as PC-8801 series, Fujitsu's FM-7 series and Sharp's X1 series etc. grew in popularity.

from Mr.Tomczyk

Looking ahead, I think the next big trend in technology will be wireless computing, which has only begun to realize its potential. I am still waiting to see: 1) full motion video in cellphones (like DoCoMo in Japan) which requires 4G or 5G telecom infrastructure and better handset designs; 2) wireless cable television available on desktop computers in the office (I have this at home but would like to watch the news while working at the office!); 3)convergence of the next generation of supercomputers with medical diagnostics and BioSciences; and 4) better self-correcting software that seamlessly updates systems and makes the transition to new software versions less of a hassle. I also think we have only begun to see microprocessors used in appliances and other devices including cars and trucks - this also depends on better wireless computing.

In my capacity at the Wharton School (I am the Managing Director of the Emerging Technologies Management Research Program, in the Mack Center for Technological Innovation), I do have some ability to influence and report on some of these developments and in the coming months I'll be doing a bit more writing about these issues, in various publications.

Best regards,

Michael Tomczyk

Interviewed by Hally (VORC) on September 9th 2003