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Commodore Advert - February 1987

From 'Sunday Times'


"New Amiga 500 - Now other home computers are just toys"

The Amiga, code-named "Lorraine", was first demonstrated to a select few at June 1984's CES show in Chicago, by Amiga, a company founded by Jay Miner, one of the original designers of the famous Atari 2600 games console. Amiga, formerly known as Hi-Toro, was known to have been looking for capital in order to finish its prototype machine and start production, but still surprised everyone with the announcement in August of the same year that Commodore had bought the company. Commodore paid $25 million (about £48 million in 2019) in cash and stock for Amiga, in return for which it acquired 27 engineers as well as the rights to the Lorraine. Commodore's share price, which had recently fallen to below $20, recovered to $30 on news of the purchase[1], although it fell again when full details of the deal became public[2].

Meanwhile, Jack Tramiel, who had resigned from (or had been sacked by) Commodore on the 13th January 1984 following a bust-up with long-time financier and chairman Irving Gould over either Tramiel's plans to move his sons in to the company[3] or a fight about Gould's personal use of company property, purchased the struggling Atari consumer division in July [4] to run as Tramel Technology Limited - the missing "i" being a deliberate attempt to get the pronunciation right. Atari had been making huge losses for its parent Time Warner, and a sale had been on the cards for some time. In a late attempt to get into shape, Atari had already been attempting to trim overheads, following rumours that MV Phillips was in the market to acquire a stake, although the Dutch company was said to be insisting on a "substantial trimming of the Atari payroll". Perhaps with this in mind, Warner's president Steve Ross had already announced a stipping away of beaurocracy and a reduction in Atari middle management, with upwards of a 1,000 job losses[5] - a process which Tramiel was happy to continue, ending up with 9,000 staff removed from the head count[6]. As well as the rumours of a Phillips buy-out, it was even suggested in the press that Commodore itself had also been in the bidding for Atari "unaware that its former leading light was limbering up for combat"[7].

As part of the deal, previous owners Time-Warner transferred most of Atari's assets over to TTL in return for $240 million in notes at below market interest rates, all of which effectively meant that Tramiel had not paid any money but had just assumed Atari's debts. It was said that Warner "sold Atari to Jack and loaned him to money to buy it"[8].

When Tramiel left the company he had founded, he took with him his son Sam as well as several veteran Commodorians, including John Feagans, Tony Tokai, industrial designer Ira Velinsky and the man who had set up Commodore's buy-out of MOS Technology, Greg Pratt. Meanwhile, whilst former Commodore employees were defecting to Atari, news was the Commodore itself had hired none other than US General Alexander Haig, former Vietnam veteran, secretary of state for Ronald Reagan, and a man who had worked for Kissinger and Nixon. It was suggested by Commodore International's chairman Irving Gould that Haig's "experience and reputation will be helpful to us"[9].

Legal actions

Upon the news that Amiga had been purchased, Atari - which had previously invested $500,000 in Hi-Toro and had seen that investment apparently turn in to $25 million - filed a $100 million law suit against Amiga claiming that Atari had signed a contract the previous Autumn to get access to the custom chips [known as Agnus, Portia and Daphne] that made the Lorraine possible, a deal no longer possible as Commodore cancelled all outstanding contracts. The lawsuit was due to come to a head in November 1986, when it came to trial in the US. Despite Amiga/Hi-Toro having paid Atari's investment back, Tramiel was claiming that the contract had not been properly terminated, although Atari spokesman Claud Mahum was typically more reticent saying "We have a very good case, but our attorneys have advised us not to comment". Jay Miner, meanwhile, was more direct, suggesting that "It's just harassment by Atari. I'm sure Atari will lose, so I don't know if there will be an appeal or not, but Atari seems to think the chips belong to them somehow"[10]. The whole thing had followed not long after another lawsuit which had been aimed at the group of engineers who had left Commodore in order to join Atari, claiming that they carried some of Commodore's trade secrets with them, in particular those surrounding the new Z8000-based computer project[11][12]

Winter CES, Las Vegas, 1986 © Commodore Horizons
The original Amiga launched in 1985, but disappointed when it failed to make an appearance at June 85's Consumer Electronics Show, as Commodore was instead concentrating on the 8-bit C128 of which there were dozens on show, all the while fending of questions about "the computer they didn't want [people] to talk about". The summer CES appeared to be something of a downbeat affair, at least for microcomputer companies, as the industry was going through something of a "purple patch". Ending up as a smaller show than the UK's Personal Computer World event, only three hardware companies were exhibiting, the other two being Amstrad and Atari. Software companies were thin on the ground too, although Commodore User speculated that this was mostly because none of them had anything new to show, having reached the limits of hardware in the ageing range of 8-bit micros around at the time like Commodore's own C64. However, Electronic Arts' Trip Hawkins - once director of marketing for Apple's personal office systems division[13] - still seemed broadly positive about the future, describing the summer CES as "the lull before the storm"[14].

Amiga appears as Commodore falters

Marshall Smith, president of Commodore, © Popular Computing Weekly, 15th March 1984
The Amiga did make a showing at the January 1986 Winter CES in Las Vegas but at a time of increasing financial problems for Commodore. The company had racked up losses of $113 million (about £215 million in 2019) for the financial year ending 1985 on the back of tumbling sales as well as a $50 million stock writedown and the laying-off or 700 people - 15% of the workforce - at parent company Commodore International. Hopes were riding high on the Amiga to bail the company out, however somewhat worryingly early sales in the US were "at the low end" of the company's forecasts[15] with the cheaper Atari 520ST giving the machine "a run for its money". In October of 1985, Commodore hit the road in a 40-city tour of the US in an effort to drum up support for the Amiga amongst dealers - by August of that year only 260 dealers has so far signed up to sell the machine, although Commodore was saying that several deals with major chains "were imminent". Commodore seemed to be on the back foot about the "technically dazzling" Amiga, with David Ahl summing up "will the Amiga save Commodore? Not with marketing like this"[16]. Atari was also at CES and was comparing its ST to the Amiga by running versions of the Amiga's already-famous bouncing ball demo. However, it didn't reveal that whilst the demo on the Amiga was complete with sound and took minimal software scrolling to achieve, the equivalent demo on the ST was silent and required "huge amounts of processing power". When asked about the ST in an interview published in August 1985's Commodore User, president Marshall Smith said "There is just no comparison. Anybody can pick up a Motorola chip for $8 and build a computer around it, but it can't do half the things the Amiga can. [The ST] can't multi-task; the sound, colour and graphics on the Amiga are better in every respect". However, Smith was quick to point out "I never dismiss competitors - any time I've done that before I've lived to regret it"[17].

A big problem that Commodore had was that although it wanted to sell the Amiga through dealers, it had burnt its dealer bridges back in 1982 when it had launched the 64. Although initially sold through regular computer shops, as soon as the 64 became successful Commodore started selling it through discount stores at a massively-reduced price, leaving computer stores with machines they could only sell at a loss. As a result, independent computer dealers in the US hated Commodore. The big three chains in the US - Computer Land, Businessland and Entre - announced that they wouldn't be selling the Amiga, and Commodore's previously-favoured discount chains couldn't really sell it as nobody buys $1,295 machines in K-Mart or Poundland. That left a few smaller chains, but even here only The Computer Factory of New York and Computone of Atlanta had signed up by the Autumn of 1985. Even if dealers didn't hate them, there was still the problem of over-crowding in the market and the fight for shelf space with the IBMs and Ataris already out there. And if that wasn't bad enough, there was also the worry over Commodore's finances, the general slump in the industry and even a perception that - like Sinclair in the UK - the company's computers were perhaps aimed at the "toy" end of the market, which was a particularly problematic view as the Amiga was originally pitched as a business machine. Dan Gutman of Commodore User pointed out that the company was obviously worried enough about this to leave its name off the front of the machine[18].

Invisible Amiga

By the beginning of 1986 there was still no sign of the Amiga in the UK, other than a rumoured 80 or so machines that had been imported for use by software houses. That compared with 400 Amigas sent to US software houses with a further 700 receiving technical specs, whilst 70,000 machines had actually shipped by the end of 1985, although it was said that on account of the general lack of software that sales were mostly to hackers and software developers. Commodore's new president Thomas Rattigan was at least being straight up about the problems, telling InfoWorld that "[the Amiga's] not coming as rapidly as we would have liked to have seen it come", whilst VP of sales Frank Leonardi was toeing the more usual Commodore line of over-optimistic promises by stating that there would be 100 Amiga programs by March 1986[19].

Commodore further disappointed UK fans, who had been expecting the machine at the beginning of 1986, by announcing that the Amiga wouldn't be available in quantity until June, with some more limited quantities of NTSC-standard being made available in March. It was also still undecided where the UK PAL version of the Amiga would be assembled, with Commodore User speculating that "by the time it rolls off the assembly line the remarkable enthusiasm it continues to generate may be going stale"[20]. It was perhaps lucky that it was late, as otherwise it might have had a trademark struggle with the Amigo, a Z80A-based micro from Optim Computers which was released at the beginning of 1983[21]. Luckily for Commodore, this throwback machine had clearly dropped off the face of the earth by the time the Amiga made its delayed debut.

Metacomco gets the gig

The UK had a particular interest in the software of the Amiga, as when it became clear that Microsoft's port of its own Basic wouldn't be ready in time, Bristol-based Metacomco was approached to provide the AmigaDOS operating system and ABasic instead. The company, which had previously licenced its 8086 Basic interpreter for $800,000 (about £1,723,077 in 2019) to Digital Research, had also been quietly writing system software for the Moto 68000, but was not otherwise famous - Metacomco's Tim King said "We're trying very hard to get people to know who we are".

Metacomco seemed as surprised as anyone to get the gig, as even though it had a nominal office in Monterey, California, the company was tiny. Metacomco's marketing manager Peter Mackeonis recounted how "some Amiga people came to our stand at Las Vegas CES in 1984 and asked if we did anything on operating systems. Four months later they rang up and asked for a list of our ideas for a new machine". The company won the contract only six months before the Amiga's US launch, but had something of a headstart as it already had a suitable single-user multi-tasking operating system in the form of Tripos, which had been developed at Cambridge University in the late 1960s. It had also already ported two of its Tripos languages - an Assembler and BCPL (the forerunner of C) - to the Sinclair QL, a 68008-based micro. Nevertheless, producing an entire operating system for a new machine in only six months was certainly a tall order. Metacomco's King, who had overseen the entire Operation Amiga from the beginning, said of the effort that "It was really hard work [and] I know at least three members of the Amiga team with camp-beds in their office. They even work weekends"[22]. King himself spent a lot of the time in a three-week rotation between Bristol, Monterey, Commodore's HQ in Pennsylvania and Amiga on the West Coast of the US.

Pam Clare, Metacomco's technical manager added "While our AmigaDOS is certainly adapted from Tripos, we have had to do a lot of modifications to make it acceptable for a modern system. We've had to customise it to make the best use of the Amiga's graphics and sound capabilities - getting it to address the Amiga's custom chips has been the major modification". The company was not hanging around with other deals, as it was about to launch a version of C for the QL at the September Personal Computer World show, and as well as selling its existing versions of Assembler, BCPL, Lisp and Pascal for the QL it was also on the cusp of launching software for the Atari ST. However, it had ruled out the Apple Mac, launched the year before, as it considered its links with Digital Research to be more fruitfull. Mackeonis said "I would like to see Metacomco become a major force in the market place - the new Digital Research if you like, but home grown". Metacomco also saw its AmigaDOS as a "pre-Unix system" and intended to licence it to other micro manufacturers, with Mackeonis continuing "It's certainly a strong contender for the 'windows market'. As yet there is no standard operating system for the 68000 chip, so it would be good if we can get Tripos going now"[23].

Meanwhile, Bing Gordon of Electronic Arts, a software company that had spent $1 million on developing for the Amiga by April 1986[24] expressed some concern over the state of Commodore, pointing out that "Atari's Jack Tramiel has shown himself to be pretty canny, while Commodore has made lots of mistakes recently". Commodore Horizons' CES report went on the suggest that "the failure to show the Amiga properly at CES [the company held a press conference on the opening day and then disappeared for the rest of the show] and the continuing scepticism of software suppliers towards the market hopes of the expensive Amiga mean that Commodore's machine is in for a rough ride"[25]. The sentiment over in the UK was similar, with the excitement over the original specifications giving way to gloom, with software problems looming large. To be fair, these had been expected by Commodore which was why it shipped all its early software for the Amiga on disk instead of in ROM. What seemed more problematic was that the Amiga didn't seem to be making much of an impression of software houses. Dave Winer of software company Living Videotext said of his company's attempts to port ThinkTank to the Amiga that "they've given us a development machine which doesn't work and left us. When Apple first gave us a Macintosh, that didn't work either, but they also gave us five engineers. We're not getting that help with the Amiga problems". Apple, meanwhile, had just cut the price of its Macintosh, adding to the uncertainty for small software companies over which machine to support[26]. Even as late as August 1985, the Amiga still had only one official application package ready - a word processor known as TextCraft. There was no other application software yet available and the machine's Basic was not yet finished, although Metacomco's 68000 development tools - a linker, assembler and editor - were being shipped in ROM. Luckily for Commodore, arch-rival Atari was not doing much better with its software for the ST - it had a grand total of two packages available: GemWrite and GemPaint[27].

Rave reviews

In spite of all the software shortages, there were rave reviews in the press, inluding Guy Kewney writing in August 1985's Personal Computer World where he stated "come the revolution, there's going to be a definitive micro - low cost, multi-tasking and the last word in business computing. Commodore's Amiga may be it" and that "this really is the micro I've been waiting two years for the world to produce. This is the business machine which any games programmer would give his eye-teeth to get hold of. This is the games machine which business software writers will be able to really make hum. And this is the machine which users will really love"[28].

There was something of a comedown a few months later, following the three-day Amiga Developers' Conference in Eastbourne, where some realities of the Amiga were revealed, including the fact that its multi-tasking operating system wouldn't protect multiple programs from each other; the cutting-edge "bit blitter" - used for moving around huge amounts of data super-fast - would only work on video memory, and peripheral development looked to be moving too slowly. The current financial state of Commodore was also causing waves, with developers and suppliers nervous that the company might even go bankrupt, and there was even fear amongst the corridors of Commodore itself. One senior Commodorian was said to have said "Don't tell anyone I told you this, but if you know anybody with a few million to spend, try to persuade them what a good investment Amiga would be". The situation was bad enough that Commodore had already defaulted on some bank loans and was busy re-scheduling others, although it believed it would get back in the black over the Christmas period. Much of that hope rested on the venerable 64 and its sort-of upgrade the 128. Production of the Amiga, which might properly make a difference, was running at about a quarter the output of Atari's 520ST, where it really needed about ten times the output. Another senior executive said "We have to decide where our heart is. We have to decide whether we are pushing this machine out in to the market place, with all the resources it needs to be a success, or whether we are trying to be respectable. I think that at the moment, our bankers wouldn't dare to make us bankrupt and we should use our revenues to do what has to be done to the machine. We should not sacrifice the machine, we should not simply concentrate on paying off debts until they feel that they can bankrupt us safely". Guy Kewney concluded his revised analysis by saying "It remains the machine which I've been waiting for, even though I've had to trim my dreams a bit to suit"[29].

Antony Jacobson, editor of the normally partisan Commodore Computing International also weighed in in the magazine's June 1986 issue by saying "Commodore is surely staking its corporate future on this technically exciting but commercially risky computer. People are waiting for the Amiga to take off and, in effect, [are] waiting for a decision on Commodore's future. For [the Amiga] to succeed in the UK and around the globe will require a return of what used to be Commodore's great strength - marketing - giving the public something they want, something they feel they need at a price they are willing to pay and promoting, advertising and selling it in a fiercely competitive market. The Amiga alone is not enough, the question is whether Commodore still has the corporate will and can commit the resources"[30].

Minter's Metagalactic Llamas

Jeff Minter, © Your Computer December 1987
As well as the Atari ST and threats of "Amiga killers" like JVC's rumoured MSX2-based HC95 - cheaper than the Amiga at £1,000 but with the capability to also mix digitised video and computer graphics freely[31] - The IBM PC was also a potential problem, leading to Chris Kaday - Commodore's marketing director - to state "it is therefore all the more ironic that the current obsession with standards, coupled with widespread reticence to adopt new technology, seriously hampers the successful introduction of a new computer". As a sop towards the competition, the Amiga also offered an MS DOS emulator running on an add-in card known as Sidecar and which was first revealed in the UK at the PC User Show in Olympia in July 1986[32], although this didn't provide access to the Amiga's cooler features. The whole "trying to emulate the IBM PC" situation was one that Commodore User considered simply "dumb"[20]. Kaday went on to point out that ensuring there was enough software around early on was a priority but that "the Amiga has got off to an excellent start with a wide range of utilities, horizontal and vertical market applications already nearing completion"[34]. This software wasn't yet "out there" but it did look promising, prompting Jeff Minter, legendary software developer, owner of Llamasoft and writer of perhaps the best-named game ever - "Metagalactic Llamas Battle at the Edge of Time" - to comment "hopefully the current lack of Amiga stuff shouldn't last long, and some of the stuff in development looks like it's gonna blow minds. Pity the Amiga's just so damn expensive"[35]. Minter was a Commodore fan and had developed his first game in 1979 on a Commodore PET, whilst at 6th-form college. He swiftly moved on the the VIC-20 because "It was cheap and it had colour". Minter then fell ill with a virus infection and spent the next few months lying on his back in bed, a situation which he turned to his advantage to spend time learning to program. He never returned to his college course in maths and computing and decided to continue with his programming venture, which proved to be a good move as by the May of 1983 Minter's Llamasoft had gone from £15-£20 a week to £5,000 a week in sales, which - as Minter said - "for a one-man operation is really nuts"[36].

Once software did become available, it was clearly in demand if a lorry heist in France was anything to go by, when Software house Psygnosis confirmed that a "large consignment" of the Amiga version of the game "Blood Money" had been hijacked on its way to Paris. The lorry was also carrying clocks and lighters, but these were left behind, untouched[37].

Commodore survived its 1986 financial scare and went on to produce several subsequent Amiga models, including this - the Amiga 500 - a model which saw a return to Commodore's tradition of selling through mass-market retail outlets, a move which enabled the 500 to become the best-selling Amiga model[38]. In the US, the Amiga had finally started making some headway in the market and appeared to have contributed to Commodore International's financial turn-around, with the company going from a loss of $53.2 million in the second quarter if 1986 to a profit of $21.8 million in the same quarter in '87[39]. However in the UK, Commodore's Amiga marketing had not worked particularly well and sales were low - factors which perhaps explained the unexpected "resignation with immediate effect" of Commodore Europe big cheese and one-time General Manager of Commodore UK Nick Bessey, who left to go to an IBM dealership in New Zealand. Amigas had previously considered overpriced and definitely not mass-market, even though any mention of the machines were nearly always accompanied with words like "excellent" and "wonderful"[40].

At around this time, parent company Commodore International announced that it had signed a major deal with arcade-machine builder Bally, which would allow Bally to develop a whole new generation of coin-operated arcade games based on the Amiga. As part of the deal, Commodore would receive software rights to anything developed, in return for the Amiga's graphics capabilities - the key to the deal being the three co-processors that made the Amiga so good: Agnus, Denise and Portia, plus 1.5Mb of ROM for game code - and Commodore's technical know-how. Commodore's US general manager Nigel Shepherd suggested that "this association will particularly enhance the value of the soon-to-be introduced A500" whilst Bally's Roger Keesee said "The Amiga's ability to generate over 4,000 different colours, plus special effects capabilities can provide for substantially improved high-resolution graphics, not only in our games systems but in our other video products"[41]. A few weeks later, games company Mastertronic announced that its arcade cabinets also contained the same Amiga-based "B-52" boards. Recently launched in the US under the Arcadia Systems subsidiary, Mastertronic was a new entrant in the competitive arcade games market and was now a direct competitor with Bally. Mastertronic's Geoff Heath was somewhat pragmatic about this situation, suggesting that "[Bally is] a multi-million pound company, and we're still working on it"[42].

Finally, the affordable Amiga

Frank Herman of Mastertronic, © Popular Computing Weekly, December 1987
It really took the release of the A500, which was essentially an A1000 at less than half the price, to finally make the Amiga affordable enough to take on its closest competitor - the Atari ST - and finally kick off the company-saving sales Commodore had been staking its future on, a fact borne out by various comments from leading software houses of the day, including Mastertronic's chairman Frank Herman who said "I think the A500 is a very sensible move - it makes the Amiga more affordable. We're developing Amiga product, in fact we're already fully committed to it". Leigh Richards of Creative Sparks was a little more cautious, suggesting that "It's early days yet. It's a significant launch, certainly, and will encourage development of software. The Amiga is a super machine". Enthusiasm seemed to split along geographic lines, with companies in the UK, where the 16-bit market was still in its infancy, being more wary. Ian Stewart of Gremlin reckoned that "The ST has opened the market. The Amiga is a superb machine, but it is still too expensive as a games machine for Europe". Mirrorsoft marketing director Pat Bitton pointed out one of the issues for smaller UK software houses was that "Software for the 16-bit machines has to be done on an international scale, because of the high development costs"[43].

Popular Computing Weekly was another that, even after the price cut to £500, reckoned that the Amiga was still too expensive. In an article defending the magazine's seemingly pro-Atari ST stance, Peter Worlock suggested that "Yes, the Amiga is a great machine. Technically, it may even leave the ST for dead. But, assuming [we] speak for the silent millions, I would say: I'd love an Amiga but I can't afford it. Maybe you can do wonderful things with its graphics, but a Sun Apollo workstation does 'em better, and I can't afford that either". He continued by comparing the similarity of the price of an ST to that of the mass-market Commodore 64 a few years earlier, before suggesting that no computer at the Amiga's £500 price point had ever sold in large quantities in the UK and concluding "We're not being paid by Atari, we're paid by thousands of computer owners every week who expect hard facts and informed opinion. Our informed opinion is that, for the ordinary computer enthusiast, the ST currently represents a better buy"[44].

The A500 also seemed overpriced if the grey market was anything to go by, as by October 1987 Commodore was having to warn UK users against buying discount 500s which had been imported "without Commodore's knowledge" and which had been made available via "unauthorised dealers and distributors". The machines appeared to be European models rated at 220V, which although close enough to the UK's 240V supply[45], were not approved: if anything went wrong it was tough luck as Commodore would only warrant machines in their country of origin[46].

First signs of a grey market had appeared at least a month before this when it had been noted that poor sales in Germany and Europe might have been the source of the dubious import market, as dealers sought to dump their machines. The UK was in the midst of an Amiga turn-around following a voucher promotion, which offered £100 off an Amiga or £200 off a bundle including the 1081 monitor, the effect of which was to bring the Amiga 500's price down to £399 - the same as the 1981-vintage BBC Micro. Although Commodore UK's consumer sales manager Tom Hart suggested that the company had "no plans to do anything with the price of the A500" and that "[the offer] will end on the 12th September", Popular Computing Weekly was forecasting a price drop to £299 plus VAT before Christmas whilst Amiga distributor Zappo Computers' chairman Don Carter had been staggered by the effect of the promotion, saying "A500 sales are currently phenomenal. The Amiga has moved from being a product that was important to us, but frankly didn't sell very fast, to being a product that is currently our fastest-selling computer". Popular Computing Weekly observed that retailers in Germany - where the grey imports appeared to be originating from - might want to press Commodore for a similar promotion over there[47].

The grey imports issue rumbled on for a while, and mirrored a similar "crisis" 18 months before when there had been a threat of a wave of imports of Sinclair Spectrums from Brazil. As more stories of "dodgy computers" started to appear in the press, Commodore was poked in to action, although the company admitted that the machines, which had initially been described as outright "fake" and which Commodore's UK Consumer Division's Tom Hart had said were coming from "unscrupulous dealers who cannot get a Commodore dealership and are trying to make a fast buck"[48], were still perfectly legitimate machines having been produced at the company's Braunschweig factory in Germany[49]. On the downside, the grey machines were all European spec with round-pin Euro plugs and everything and even came complete with bogus UK warranty cards, printed with a non-Commodore luminous red ink. Commodore's new UK boss Steve Franklin - who started in July 1987[50] and who was the latest in a string of MDs, as Commodore seemed to be continuing the "revolving door" staffing policy popular during the Jack Tramiel years - was forced to admit that Commodore could take little action over the incident, whilst still suggesting that customers should be careful. Zappo Computers popped up again as its chairman Don Carter defended Commodore's position by suggesting that "Under the treaty of Rome we are in a free market, so there is no reason why products shouldn't be imported into this country from Europe. Commodore would stand in contravention of the treaty if it tried to stop those imports". However, he continued "Obviously Commodore [isn't] thrilled that someone in Europe is screwing up their market, but on the other hand have a duty to warn people that these products are not UK products. The technical subtlety is of significance - these products coming in from Europe have not been through UK quality control, so there is every possibility that they will be more prone to failure". The upside of the whole issue was that it did seem to have spurred Commodore into addressing its Amiga pricing, in order to compete with the "unofficial" grey Amigas. Carter pointed out that "in the early days, the Amiga didn't sell well Europe-wide. All the companies had targets to achieve, and some dealers and distributors tried to engineer prices which resulted in the machines coming in at silly prices. Commodore UK put a stop to it, and the only reason that the grey imports have ceased is that the promotion that Commodore UK is offering is better than the price of the grey import. Grey imports prosper when there is a market for them"[51].

As well as the headline-grabbing A500, Commodore also announced the A2000 at the same time as the A500 but actually managed to start shipping it several months before its cheaper sibling, and several weeks before it was actually due. Kaday, who was not surprisingly claiming that the move was as a result of the response to the launch by dealers and members of the public, said that "We are delighted to be shipping the new A2000 early following a positive press from this month's launch" and reckoned that Commodore was now "ready to fulfil [the public and press's] expectations"[52].

Chris Kaday, MD of Commodore UK, © Popular Computing Weekly, May 1986
In early April, Chris Kaday suddenly resigned, prompting speculation that his disappearance had been demanded by Commodore's European headquarters. Kristian Andersen, Commodore UK's marketing head, dismissed these rumours as "fairytales" (geddit?), saying, not entirely convincingly, that "It's not dramatic. It was just one of those things. Chris just thought he'd prefer to go for other opportunities". The rumours in the press however were that Kaday had been "asked to leave" following concerns from Commodore's president Tom Rattigan about Commodore UK's prospects, with Rattigan having stated that "the UK market's been a real problem for us over the past year". Those "problems" were primarily the lack of Amiga 500 and 2000s, which left Commodore UK without any new models to sell, unlike the rest of Europe. Beyond the mystery disappearance of Kaday, Andersen also took some time out to diss the company's own PC1 - a single-floppy-drive MS-DOS-based entry-level PC aimed at the home market. Andersen said of it that "The PC1 is a downgrade of our PC line. There seemed to be an interest in a product like that so we built one and showed it at Hannover". He continued "I'm not very convinced that people will buy it - for one thing MS-DOS will bore the home computer market stupid".

The sense of having to build crummy IBM clones to satisfy a perceived market need seemed to be quite common at the time - Commodore's founder and now CEO of Atari, Jack Tramiel, had been as dismissive of his new company's own PC entry as Andersen was of Commodore's attempt[53]. Kaday had also been skeptical about the PC1, suggesting that "If the PC1 can be released at the right price then we in the UK will participate. But, we feel we've just launched two very exciting products in the [A500 and A2000] Amigas and we don't want to distract too much attention from them". Maybe Kaday's sense of independence was getting too much for Commodore HQ, as he went on to suggest that "The whole question of price is academic. We will announce the UK price at the time of launch, but the machine is not yet in production. Commodore UK is focusing on product that is shippable"[54].

Commodore UK had appointed Steve Franklin, former Rank Xerox alumnus for 11 years and sales and marketing director of Granada Business Centres for the last three years, as its new General Manager, three months after the departure of Chris Kaday. UK operations, partly thanks to Kaday's slimming operations over the previous year which included the closing down of LCD watch and game manufacturer Commodore Electronics, had become something of a minor offshoot of CBM Europe in Frankfurt. Power was becomming increasingly centralised in West Germany, with local chief Ernest Tarien reporting directly to Commodore International's chief exec Gould, and Popular Computing Weekly was even questionning whether Franklin would simply become a puppet of the European operation - a sad end to the years when Commodore UK was the absolute jewel in the whole of Commodore's European crown. Franklin was due to start in his possibly-powerless poisoned-chalice role on the 1st July[55].

Within a few weeks, he was interviewed in Popular Computing Weekly and kicked off by suggesting that his plan was to "put Commodore back on the map", referring indirectly to the company's recent string of disastrous financial results and reduced sales. He also explained the continuing existance of the now-five-year-old C64, justifying its positioning as an entry-level machine "for some time" on the grounds that it was cheap and it had a massive software base. This was broadly true, except that the price of £388 for a 64 with disk drive didn't exactly compare well to the Atari 520 STFM's £299. It looked like a price cut had to be one the cards, with Franklin suggesting that "Come September, [you will see] some very attractive buys on the C64". He seemed less convinced about the company's C128 and C128D, hinting that "there is a question as to whether they're competitive", but he was also keen to rule out a return to the vicious price wars of 1983: "I will never get into a price war. It's bad for the industry, bad for dealers and ultimately it's bad for the end users, because if companies keep cutting their prices, then something will have to give, and that something will be quality". As well as Atari, Franklin also acknowledged the presence of Amstrad, pointing out that when a home user wanted a serious machine, the choice was "Amstrad, Amstrad or Amstrad". Here too was a willingness to avoid a price war on a second front, as Franklin stated that Commodore didn't want "to start a war with Amstrad, we simply want to provide an alternative". Popular Computing Weekly concluded that whilst wanting to avoid a war was understandable, "standing between Alan Sugar [of Amstrad] and Jack Tramiel [of Atari] is to place yourself squarely in the combat zone"[56].

On the 16th April, not long after Kaday's departure, Thomas Rattigan was sacked by Commodore, but this time it wasn't until October - a full seven months later - that chairman of Commodore International Limited, Irving Gould, had found a replacement in the absurdly-named Max E. Toy - apparently a well-known figure in the computer industry who had previously held jobs at IBM, ITT and Compaq. Rattigan, a former PepsiCo executive (echoing Apple's recruitment of John Sculley to replace Steve Jobs), had been hired to replace Marshall F Smith, who had held the post for only two years since Jack Tramiel's departure. He had re-established some trust with Commodore's bankers, who were said to have preferred his style and success in giving Commodore some product stability to Gould's hard-nosed approach. Gould, whose Canadian non-domiciled status meant that he could only work in the US for two days a week, felt threatened by Rattigan's increase in power and got the board to sack him[57], even though Rattigan's cost-cutting programme had been credited with turning around Commodore's fortunes following its significant losses in 1985 and '86, which had left it with debts of $100 million in May 1987.

In public however it was being said that the sacking of Rattigan, together with another five top executives, was down to the company's sales not growing fast enough, as well as delays in introducing and distributing new models of the Amiga. Gould, who had installed himself as interim Chief Executive (whilst still remaining chairman of the board), said of the sackings that "I am confident that these actions will improve operating efficiency and provide important momentum for our U.S. business to complement the continued strong performance of our European operations"[58], which was a nod to the comparative popularity of the Amiga in the UK and Germany. The management sackings were not the only blood-letting at Commdore, as they were also accompanied by the sacking of 50 staff at the company's head office in West Chester, Pennsylvania[59]. Rattigan, meanwhile, was suing Commodore for around $9 million with a claim that the company had "prevented him from doing his designated work"[60], including a reduction in responsibility and authority and Commodore hiring and firing senior management without his approval. The animosity ramped up in July when Commodore filed a $24 million counter-suit, claiming that Rattigan - who was widely credited with Commodore's recent financial recovery - had resigned of his own accord and would have been fired anyway[61].

Not long after this, Commodore was in the embarassing position of having to publicly admit that it was suffering from an early computer virus - the Amiga's first - having previously dismissing rumours of the SCA Virus as a hoax. However, it couldn't actually be arsed to do anything about the problem until it considered that the situation was out of control, with a spokesman suggesting that "it's not serious at the moment. As soon as someone thinks it's got out of hand, they'll take action. Commodore will do all it can to get rid of it - they've just got to obtain the anti-virus disc". Whilst the Guardian newspaper was warning users of other machines not to borrow discs, the readers of Popular Computing Weekly were already suggesting fixes, which seemed to involve nothing more than over-writing the boot sector on each floppy affected[62].

The Amiga's first virus, courtesy of the "Swiss Cracking Association", seemed to open the floodgates as countless others rapidly followed. Most at the time seemed to be similarly bootloader based and so spread quickly as the Amiga - or Amy as it was being called - had a particularly large Public Domain Software user base. This meant a lot of disk copying between users, and even between computer shops using public software, all of which presented an opportunity for up to 1024 bytes of dodgy boot code to spread rapidly. Although some of these viruses, with names like SCA and Byte Bandit, were intended merely as rogue advertising where destroying disk data was simply an unintended side-efect, the problem was clearly bad enough that by 1989 it had spawned the creation of an entirely new form of software: the anti-virus tool. In a neat sort-of circular reference, several of these were also available as Public Domain (i.e. free), and one of them - VirusX from Steve Tibbett - even provided its own source code, so the really paranoid could inspect it and even recompile it if they felt like it. This anti-virus tool also seemed to set the precedent for the way that most future virus checkers would work - it didn't just recognise changed boot sectors, but could recognise the various signatures of several known viruses of the day, even the ones that didn't have obvious ASCII messages like "Your Amiga is alive!" in them[63].

All Amigas up to the A500 had used Motorola's 68000 CPU, although there had been rumours of a 68020 CPU appearing in the A2500 "Ranger" Amiga, launched at November 1986's Comdex Fall show in Las Vegas. This didn't happen, but San Diego-based CSA did announce a 68020-based add on module which, with 512K of extra memory added, ran 280% faster than the standard Amiga it was attached to. It could generate a Mandelbrot image in three minutes, which compared against the 50 minutes for a standard Amiga or the 24 hours a standard IBM PC would take[64]. The Ranger had been subject to rumour for a while, however Clive Smith of Commodore US was trying to dampen interest by suggesting that "I'm not even sure Commodore will be at Comdex. We don't comment on un-announced machines. I have read the rumours about it as well but I cannot say anything. The Amiga was always intended to be a family machine, so there will be more appearing in the future". Commodore UK's Chris Kaday was a bit more hopeful that the parent company would throw him something, saying "In the UK, we'll take anything that they make in the States, but I don't know of anything at the moment. As far as we're concerned there will be no new Amigas this side of Christmas"[65].

Meanwhile, Commodore was expanding its sponsorship program. Having already picked up the sponsorship of Chelsea Football Club for £1.25 million, which complemented Commodore Germany's sponsorship of Bayern Munich and a similar deal with Dynamo Kiev[66], Commodore added Olympic gold medalist Tessa Sanderson to its roster in the December of 1987. Sanderson had found herself without sponsorship for the 1988 Seoul Olympics, a situation which Commodore's then-manager and sometime marathon runner Steve Franklin thought apalling. Commodore subsequently arranged a deal with Sanderson's manager - musician Adam Faith - to the tune of £50,000, with Faith keen to point out that "the deal was not only important for Sanderson but for all other athletes seeking sponsorship". As Popular Computing Weekly's editor John Brissenden pointed out, "For years the tobacco barons have seen sports sponsorship as a lucrative way of advertising their products. If it is good enough for them, surely it is time multi-national companies like Commodore and Atari got in on the action"[67]. At the press conference announcing the deal, Sanderson was joined by fellow Olympic athlete Sebastian Coe, as well as Faith and Commodore's Steve Franklin. The deal followed a few months after Commodore had been rumoured to be in the running for the gig to sponsor the entire Football League, which eventually went to Barclays (or Boerclays as it was sometimes referred to by the student anti-Apartheid movement at the time[68]), although the company was also planning to sponsor the break-away "Full Members' Cup" - a competition involving all the English clubs that had been banned from Europe following the Heysel stadium disaster[49].

By the late summer of 1987, Irving Gould's boardroom blood-letting earlier in the year seemed to pay off as Commodore announced improved figures for the last quarter of its 1987 financial year, as it turned a 1986 loss of $127.9 million into a net profit of $28.6 million (£47 million in 2019) - despite lower turnover which was down to $806 million from $889 million the previous year. Gould commented "We achieved this profitability through operating efficiencies implemented without sacrifice to agressive new product development and marketing"[70].

On its release, the Amiga 500 retailed for £500 - about £1,308 in 2019 terms, but was down to £400 (£1,047) by 1989.


In April 2014, a stash of previously-unknown Andy Warhol digital artwork was rescued from a set of old Amiga floppy disks. Warhol had been commissioned by Commodore in 1985 to produce some art to help promote the platform and had been given an Amiga 1000 together with a whole collection of peripherals. Of the images created, only one of Blondie's Debbie Harry was used in the promotion, and the rest were consigned to oblivion for nearly 30 years[71]. Warhol and Debbie Harry had both made an appearance at the Amiga's launch party in New York.

1: "The Home Computer Wars", Michael S. Tomczyk, 1st ed., ISBN 0-942386-78-8, p. 297
2: "CBM $25m payout", Commodore Horizons, February 1985, p. 9
3: "The Home Computer Wars", Michael S. Tomczyk, 1st ed., ISBN 0-942386-78-8, p. 284
5: "Commodore drinks some Haigspeak", Personal Computer News, 16th June 1984, p. 6
6: "Atari: Ours are the best", Home Computing Weekly, December 18, 1984, p. 5
7: "Return of Tramiel", Commodore User, September 1984, p. 4
8: "The Home Computer Wars", Michael S. Tomczyk, 1st ed., ISBN 0-942386-78-8, p. 29
9: "Commodore drinks some Haigspeak", Personal Computer News, June 16th 1984, p. 6
10: "Amiga chip suit comes to trial", Popular Computing Weekly, 18th September 1986, p. 5
11: "Return of Tramiel, footnote", Commodore User, September 1984, p. 4
12: "The Editor's Notes", Compute!'s Gazette, November 1984 - Issue 17, Vol 2, No. 11
13: "The Tarot of computers", Personal Computing Magazine, May 1982, p. 20
14: "Summer show blues", Commodore User, August 1985, p. 7
15: "Corby factory closes", Commodore Horizons, March 1986, p. 5
16: "Yankee doodles", Personal Computer World< November 1985, p. 126
17: "Going for the president", Commodore User, August 1985, p. 41
18: "Rocky road ahead of Amiga in the US", Commodore User, October 1985, p. 16
19: "Going soft on the Amiga", Commodore User, February 1986, p. 65
20: "Amiga delayed", Commodore User, February 1986, p. 7
21: "Friendly Optim", Practical Computing, February 1983, p. 24
22: "Amazing Amiga", Commodore User, October 1985, p. 66
23: "West-Country amigos", Popular Computing Weekly, 1st August 1985, p. 10
24: "Make or Break - The Amiga Assessed", Commodore User, May 1986, p. 74
25: "Las Vegas CES", Commodore Horizons, March 1986, p. 33
26: "A bitter blow", Personal Computer World, November 1985, p. 109
27: "Commodore's turbo Portia", Popular Computing Weekly, 1st August 1985, p. 15
28: "Commodore Amiga benchtest", Personal Computer World, August 1985, p. 136-137
29: "The dream to suit the reality", Personal Computer World, February 1986, p. 76-78
30: "Editorial", Commodore Computing International, June 1986, p. 8
31: "JVC aims £1,000 MSX 2 micro at Commodore Amiga market", Popular Computing Weekly, 29th May 1986, p. 5
32: "Sidecar to surface at PC User Show", Popular Computing Weekly, 17th July 1986, p. 5
33: "Amiga delayed", Commodore User, February 1986, p. 7
34: "Amiga intro", Commodore Horizons, March 1986, p. 28
35: "Minter Mania", Commodore Horizons, March 1986, p. 23
36: "Galloping Llamas!", Popular Computing Weekly, 19th May 1983, p. 13
37: "Gang bang", Your Commodore, October 1989, p. 82
39: "Recovery builds at Commodore", Your Computer, April 1987, p. 6
40: "Rainbird releases", Your Computer, April 1987, p. 7
41: "Major coin-op deal for Amiga", Popular Computing Weekly, 27th March 1987, p. 4
42: "Amiga B-52 boards - Mastertronic's secret weapon", Popular Computing Weekly, 3rd April 1987, p. 4
43: "Thumbs up for Amigas following A500 launch", Popular Computing Weekly, 20th March 1987, p. 5
44: "Why we said all those things", Peter Worlock, Popular Computing Weekly, 19th June 1987, p. 12
45: UK voltage was harmonised to the 230V of the rest of Europe in the 1990s
46: "Don't buy Amiga 500 warns Commodore", Your Computer, October 1987, p. 11
47: "Now Amiga 500 is set for price reduction", Popular Computing Weekly, 4th September 1987, p. 6
48: "Commodore warns of ounterfeit Amigas", Popular Computing Weekly, 21st August 1987, p. 6
49: "Grey imports leave A500 buyers in the cold", Popular Computing Weekly, 28th August 1987, p. 6
50: "Price cuts herald new Commodore MD's arrival", Popular Computing Weekly, 17th July 1987, p. 6
51: "Importing in shades of grey", Popular Computing Weekly, 4th September 1987, p. 13
52: "A2000 ships early", Popular Computing Weekly, 3rd April 1987, p. 6
53: "Andersen's tales - latest details on Kaday and PC1", Popular Computing Weekly, 17th April 1987, p. 4
54: "Kaday cagey on PC1", Popular Computing Weekly, 20th March 1987, p. 4
55: "Commodore finally picks new UK boss", Popular Computing Weekly, 12th June 1987, p. 7
56: "Putting Commodore back on the map", Popular Computing Weekly, 24th July 1987, p. 10-11
57: "A dynasty in the making?", Personal Computer World, July 1987, p. 85
59: "Results 2: good news from Gould", Popular Computing Weekly, 15th May 1987, p. 10
60: "New appointment", Popular Computing Weekly, 30th October 1987, p. 5
61: Commodore countersues former chief Rattigan", Popular Computing Weekly, 10th July 1987, p. 6
62: "Virus no hoax - official", Popular Computing Weekly, 26th November 1987, p. 1
63: "Amiga influenza", Personal Computer World, January 1989, p. 198
64: "Bits and pieces for the Amiga", Personal Computer World, January 1987, p. 114
65: "New Commodore micro previews at Comdex?", Popular Computing Weekly, 18th September 1986, p. 5
66: "CBM in soccer sponsor deal", Popular Computing Weekly, 11th September 1987, p. 7
67: "Editorial", Popular Computing Weekly, December 17th 1987, p. 3
69: "Grey imports leave A500 buyers in the cold", Popular Computing Weekly, 28th August 1987, p. 6
70: "Commodore gets a lift from 1987 figures", Popular Computing Weekly, 28th August 1987, p. 10

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