Despite a growing list of competitors and mounting internal problems, Atari remained one of the strongest companies in the industry. By this time, so many new companies were manufacturing arcade equipment that no one company could hope to control more than half the market as Atari had in the past. In 1981, Taito America had its first American-made hit—Qix, a highly innovative game that one reviewer described as a cross between an Etch-a Sketch and Star Wars; Sega distributed Frogger, a game in which players helped a frog cross a busy highway and an alligator-filled stream;
Stern attracted crowds with Berzerk; and Midway imported several strong titles from Namco and released domestic hits created by Dave Nutting and other American designers. Smaller companies like Nichibutsu, maker of Crazy Climber, and Konami also made their mark. Toward the end of the year, Atari released a new game by Dave Theurer, designer of Missile Command. The game was called Tempest. Tempest did not start out as an original idea.
Shortly after finishing Missile Command, Theurer went hunting for his next game in the book of game themes that had been compiled at company brainstorming sessions. The idea that caught his eye was called “First-Person Space Invaders.” Since his game would be played from the first-person perspective, Theurer needed the efficiency of a vector-graphic generator. As it turned out, a new X-Y generator that created color lines was under development. Tempest, Star Wars, The Empire Strikes Back, Gravitar, Black Widow, Space Duel, Quantum, and Major Havoc were the only games Atari ever released that used the color X-Y generator.
It took Theurer six weeks to create a preliminary version of First Person Space Invaders. The project was almost derailed when he demonstrated it at a coin-op meeting. I got First-Person Space Invaders up pretty quickly. Gene Lipkin, the head of coin-op, and Frank Ballouz played it at a meeting and said, “This game is not that fun. It’s basically Space Invaders from a different perspective.” They said I should kill the game if I couldn’t do something special with it.
I told them about this nightmare I had about monsters coming out of a hole in the ground and you had to kill them before they got out of the hole or they would kill you. “I can take First-Person Space Invaders, put it on a surface, wrap that surface around a circle to make a cylinder, and rotate the cylinder to make a different game out of it.” They said go ahead and try it, so that’s what I did.