Introduction
From 1975 through 1977, there was a short-lived fad toward dedicated home video game consoles. Frequently little more than what we would consider today to be Pong clones, these flooded the market, selling millions of units during the holiday seasons of 1976 and 1977.1 While this was an unsustainable business, companies looked to what was next: microprocessor-driven home video game machines, where new games could be programmed and sold separately from the system itself. Fairchild Semiconductor was the first company to get a console to market: initially called the Video Entertainment System, but better known under its much more common name, the Channel F. Of course, this was a radically different product than the dedicated consoles elsewhere in stores, and so it required a new approach to explain to consumers how this system worked, how to operate it—and for retailers, how to sell it.
This was John Donatoni’s job, as the consumer-products sales manager at Fairchild. Born in Southern California, Donatoni went to California State University-Long Beach, where he earned his MBA. From there he worked at Union Carbide as a sales representative for its consumer-products division; at Polaroid as a national accounts manager and sales representative; and then at semiconductor company Rockwell International, where he dealt in consumer products, primarily calculators. From there, Fairchild’s vice president of consumer products Greg Reyes headhunted him and several others to help sell digital watches—a major consumer product for the company during the digital-watch fad of the mid-1970s—and video games.2 In August 1976 he was promoted from national accounts manager to national sales manager. In October 1977, Donatoni was named the marketing director for the video games division, a position he held until November 1978, when he left the company and became a commercial realtor.
During his time with Fairchild, Donatoni was responsible for convincing retailers to stock the Channel F and assisting them with selling it to consumers who would be completely unfamiliar with the concept of interchangeable video game cartridges (and probably the idea of a home video game console in general). His unique vantage point allowed him to work with the game-development team, distribution networks, manufacturing, and advertising. He was able to see the problems facing the Channel F in the months after its November 1976 launch, but Fairchild’s own major financial struggles with the imploding digital-watch market, the technical compromises necessary for the Channel F to receive FCC approval, and the company’s manufacturing ethos ultimately did not allow it to dominate the section of the market it created despite consumer interest and an ample head start over the eventual industry leader Atari.
The interview was conducted by phone on January 11, 2022. It has been lightly edited for clarity.
Interview
Kevin Bunch [KB]: How did you come to work in marketing at Fairchild?
John Donatoni [JD]: Well, prior to Fairchild, a number of us were with Polaroid. Polaroid at that time when they introduced the SX-70, which was a revolutionary camera at that time. That was a small compact where you take the picture and it comes out and it develops in front of your eyes. The actual picture itself was self-contained and you could put it in water and you couldn’t damage it. At any rate, it was consumer products.
A group of us actually got recruited. Executive headhunters all over the country were looking—the first company actually was Rockwell International. Rockwell at that time decided to compete against Texas Instruments because they were the two biggest chipmakers, and Intel obviously was there at that time. But Texas Instruments decided to go into consumer products, and they came out with a calculator line. Rockwell decided to compete against Texas Instruments and come out with a calculator line.
So a number of the Polaroid group from across the country went with Rockwell to start that consumer-product division and sell calculators. Well, that lasted about a year—I’m trying to remember—I’m going to say maybe a year and a half. Rockwell basically, they were semiconductors. They didn’t have the mentality of consumer products and they could never grasp—it actually carried over into Fairchild, which we were a little surprised by that situation because Rockwell’s mentality was always to take an order and build it. You know, chips or whatever.
So consumer products was something where you have to have inventory and carry inventory, so when a department store or mass-merchandiser drugstore calls, you need to ship them [what they need]. [Rockwell] had a very difficult time grasping that and they missed—like Christmas season, we just couldn’t get inventory and then they’d make it and [by then] it’s too late, so they decided to get out of the business. At that same time, a guy named Greg Reyes, who was a vice president with Fairchild, was assigned the task of—I think the [CEO] was Wilf Corrigan.
He basically had Greg assigned to start a consumer-product division with the Channel F as well as a watch line with the modulars and doing the watch. They basically recruited a number of us from the Rockwell group, which were ex-Polaroid, and of course, there are other companies represented too. There were Procter & Gamble guys, Schick razor-blade people. Across the country, they were just all going after consumer-product experience. That’s how it started.
Greg was hired as the corporate vice president, and he hired Chuck McDonald. Chuck was the regional manager with Polaroid, and he’s the one that recruited me to go over with him to Rockwell and a number of others. Then Chuck decided to make that switch to get into Fairchild, and so a number of us went there in different positions and started the consumer-product division from zero. That’s a little of the history, and I believe that was in, I want to say, ʼ76, ʼ77, in that range. Maybe even ʼ75 because I left in mid ʼ78.3
I would say it was ʼ77, ʼ76 when they launched the Channel F video game. Of course, at that time, my recollection is that Atari—we were the first cartridge. We were the first game to come out with the cartridge and tied into the TV, a pretty simple situation with a joy deck. We introduced I believe three cartridges at first and then we added onto a number of them. I wish I could remember the names of those, but I don’t know if you’ve got access to that, or ever come across the product itself. (See fig. 1)
KB: Yes, I actually have a Channel F in the room here.
Figure 1
JD: Okay. All right. Our [sales] strategy [for the Channel F] was, because of the complexity of the unit, and it was a takeoff from Pong of course from Atari, so the first few games were Pong games and then they continue to increase them with the cartridge. The key was the cartridge—sell the product, like the razor blade. Sell the hardware, and then we’re going to make the profit on the cartridge sales.
In our first marketing [presentations], we decided to go into the department-store arena because they had the personnel to be able to sit with a customer face-to-face and show them the unit and sell it. I was the director of marketing and sales, so I basically handled all the sales. We had three regional managers and then district managers and salespeople. Our first presentation I recall was with Macy’s in New York, corporate Macy’s, and Bloomingdale’s. Those were our first entry into the market.
I recall in New York we were at—I can’t remember what hotel—and we had Macy’s come. These are all corporate people. They weren’t stores. These were the corporate Macy’s. We had our engineer there and we had the screen set up and we had on the screen written “Welcome Macy’s. Welcome, Joe Schmo from Bloomingdale’s.” When they walked in, we handed them the joystick and said, “Either write your name on this. We just wrote your name on it.” That was a real wow factor to get their attention. Ultimately, we sold a lot of units to them and launched it nationwide with Macy’s and Bloomingdale’s.4 Then we did dealers in the South and, geez, the Chicago area—I’m trying to remember the big department store chains there. There was a big department store back then that owned the market if you will. That was our launching and our success in getting into a market and making sales. We had substantial sales. I don’t remember the numbers, but after about six to, oh, I don’t know, maybe even four months, I’m just recollecting this, four months or so, we started getting a lot of returns on the joysticks, that they just weren’t holding up.
The games themselves, the cartridges were good. We had the engineers, the designers, creative guys that were making these games. I do recall having a number of meetings with them. These guys were characters. They were the ones that come in at midnight and work all night and creating, playing with their programs, and so on. They had a little revolt, where they wanted to get recognition as the designer of the games and wanted to have the rights to name the games.
Of course, we were in sales and marketing and we were sensitive to, how do we sell this? Well, we want to make sure it’s consumer friendly, and we want to be able to market it and make sales off of that name. If it was called baseball, we want to call it “Baseball.” Interesting, just a side note, is that that was a little chaotic internally there. We actually decided to compromise, you know, “everybody, we’re on the same team” type thing. We gave [the designers] recognition, where [the designers] were able to, on the packaging, would put their name on as a designer and they were happy and they continued to move on.5
Fast-forwarding through that whole process of selling, getting them out, selling the cartridges, introducing new cartridges, new games, it was going well until we hit the quality-control issue. In my recollection, that was the death of the product. Atari was out. Atari had cartridges out. They were competing head-to-head. You’d go to Macy’s they’d have Atari, they’d have Channel F, and the salesperson would give a presentation on both.
For department stores particularly, returns are death to them when they make a sale. Particularly in the electronic industry at that time, it was serious enough to start losing orders. Fairchild didn’t do a very good job on the quality control, and they didn’t do a good job on setting up a repair center and a service center to be able to turn those things around and fix them or redesign them and it ended up a slow death, is what I recall.
KB: What kind of marketing support were you folks offering to the stores and the distributors?
JD: Well, we had a group of almost 100 percent—I think it was 100 percent—of women that we used as demonstrators. We would provide those people and we would fund those people into the stores and set up certain presentations, that they’ll be there on Friday night from five to ten. We had that basically nationally. We had, I don’t remember the number, but I know in the Bay Area we had, geez, I don’t know, twenty, thirty, forty of what we called demonstrators. They were mostly, like I said, women that were looking for extra cash and housewives.
It wasn’t a career-type job. It was extra hours, extra cash. Most were in their, I would say, thirties to fifties range, that just wanted to be in the professional market and do something. That’s how we actually supported the retailers, to be able to offer them that type of support. Of course, the sales organization itself was set up nationally with, like I said, regional managers. The regional managers then had district managers. The district managers were responsible for smaller markets in the market and for obtaining these demonstrators. They would be, each salesperson or district manager may have twenty, thirty of the demonstrators and they would use those periodically as needed to create sales and support the product.
KB: This was a new approach to the home games with the cartridges and everything. Was that a challenge for you folks?
JD: Yes. That’s why we really went to the department stores because they had the personnel to spend the time, because it was not something where if you advertised it and you walked in the store—it really took education to understand what the game did. Everybody would think it was a Pong game, “Oh, it’s a Pong game.” Well, no. One of the cartridges is a Pong or a more sophisticated [version] than just the regular Atari bar Pong. That’s why we used the department stores because they had the personnel, and you’re able to educate them.
Then we would use our demonstrators throughout the country to be able to support them and go in and be there at certain times that their electronics department wanted to promote it, or just have a special four-hour presentation from a Fairchild representative just to demonstrate Channel F. They’d run an ad and do in their ads either pamphlets or newspaper ads that our demonstrators would be there and our salesperson also would be there and spend the time directly face-to-face with the customer and certainly make sales.
KB: The electronics departments, were those sort of where you saw the Channel F and the games fitting in at the retail?
JD: Yes. They were all electronic. Macy’s and Bloomingdale’s, all the department stores, pretty much it was in their electronics departments, which at that time was stepping out a little bit there of, what I’d say, their normal business, because back then there were TVs and there wasn’t a lot going on. Electronics departments really a lot of them, believe it or not, they were electronics and jewelry, which for some reason that was odd but that’s who the merchandise manager would be responsible for. Yes, that was pretty much I would say the electronic departments were our main focus and point of sale at the department stores.
KB: You mentioned that you were going for this razor and razor-blade approach. Was that intentional from the get-go?
JD: Oh, that was the plan from day one to produce. That was why we went into cartridge. We weren’t going to just build up a hardware [platform] and come out with a game and then it’s over. It was the whole marketing concept, and the development concept was to do something that hadn’t been done and had been talked about a lot.
Another player, I believe there was Commodore. They were always in there, in electronic stuff with calculators, they were big in the calculators, and they always, for some reason in my mind, they ended up doing something by Atari. They ended up buying Atari’s game division or something. That could be wrong, but for some reason, there’s something at the back of my mind that I remember.
KB: I think the founder of Commodore [Jack Tramiel] ended up buying the Atari game division.
JD: Right, that’s what it was. Yes. Geez, that just came out of nowhere, to remember that, but yes, absolutely the concept was to get a hardware [platform] out and continue to develop and sell cartridges and that’s where the profit was going to be, and that’s where the business model—that’s basically what it was.
KB: I know that prior to that point, home games were a seasonal thing. How did the idea to start selling them year-round come about? Were they always seen that way or planned that way?
JD: Yes, we planned it as a 365. Our sales pitch to the departments stores and the retailers was, this was a product that obviously is seasonal. For Christmas, it’s going to be big sales, people buying these as gifts, so they’ll buy—but it’s a year-round. Yes, you put it right into the electronics department, you’re selling it with calculators, you’re selling it with TV. It’s year-round. That was always the concept. We never looked at it as a seasonal product.
KB: What was the structure around your position and the working environment at Fairchild for you?
JD: Well, let’s see. I reported to Chuck McDonald, who basically I think his title was vice president in marketing, and then he reported to Greg Reyes, who was a corporate vice president, but of the division. He ran that division—that was his. I reported to Chuck, then I had the—there’s another gentleman, Phil Conklin (who I initially reported to). I basically was national accounts. We started out as being the national accounts. Director of marketing sales for national accounts and Phil was for retail sales, but we worked hand in hand because national accounts of course is anything that’s national, and we were basically all national.6
We were dealing with national, our regional accounts in the department-store industry, and so Phil’s sales, really salespeople, direct salespeople. We used the salespeople together, because if I went to make the presentation at Macy’s or Bloomingdale’s, or Dillard’s or wherever, Phil and/or one of his regional managers—and he had, I want to say three in Atlanta, and then he had a regional manager in Chicago, and I don’t think he had one in Dallas, and then he had one in the corporate office, in Palo Alto. Then they funneled down. Then I had four national account managers that just worked strictly the big national accounts and we worked together with the sales force, which was Phil’s group.
KB: What were your impressions of your coworkers there?
JD: Well, the sales and marketing, a lot of us, we would work together with Polaroid. We were at Rockwell, not all of us, but a lot of us. We all knew each other. Basically, the merchandising demonstrators, which we’d call the merchandising force, which, like I said, was predominantly all women—when I say women, I mean they were professional because they had to be our face in front of our people. That concept came from Polaroid actually. Polaroid used to do a lot of what they called demonstrators and merchandisers.
We just carried the concept in and used the same business model. We had a great marketing and sales [team]. Our longevity from start to finish—our retention was excellent. I mean, I don’t even recall anybody ever leaving until we crashed and burned basically. We stayed through that period and into the watch period and so everybody just pretty much stayed in place. The difficult part was, again, coming from Rockwell and going into Fairchild, we were promised from Wilf Corrigan and Greg that, “No, we understand consumer products. We understand inventory. We understand quality control. We understand service and we’re going to set the organization up and do it well.”
It was good to say that, but in reality, it was always crunch time that, again, going back to the semiconductor mentality of, “Get the order and we got to build it and you got to book it. We got to have bookings, because we got to show what our bookings are to the shareholders. We’ve got to have the numbers.” There was a lot of pressure from corporate to use the same business model that they did in semiconductors in consumer products, and it doesn’t really work that way in consumer products. You don’t go in at the end of a quarter, and let’s say it’s in June, and you go into Kmart and say, “Hey, we need to order—I got to get some product. I need to book it but we won’t ship it until August or September,” then they go, “We don’t do that.”
They don’t do that because they have so much funds to use when they buy. These are national buyers and they only have so much funds to spend and they’re not going to spend the funds in June, get billed, pay, and then they don’t get the product for three months. That just wasn’t the process that they worked under, so we had a lot of difficulty with the internal part of what I call the semiconductor mentality of getting an order and building it after the fact versus carrying inventory.
KB: It sounds like you folks may have had some stocking issues as well. Would that be fair to say?
JD: Yes. The inventory was a big issue because if you didn’t have the inventory, you couldn’t sell it. It would be like corporate would say, “Okay, we’re going to come out with this new game. How many do we think we’re going to do?” We’d do our analysis, come back, and if we needed more, then we had to go get an order before they would go build more. There was always a lag and that hurt us. It hurt the market in sales.
Let’s say the regional buyer at Macy’s in San Francisco calls and says, “Hey, guys. I’m out of cartridge five. I need twelve of those and I need—” you know, whatever, and you go, “We don’t have it, but we’ll take the order and we’ll get it to you.” He goes, “No, I only have so much money and I’m hoping to buy, because I’ve got to spend this money because I lose it if I don’t buy product and my job is basically buying product and selling it. That’s how I get paid, by what I sell.” That was an issue. That was internal, always going on, of getting product in inventory and it carried over into the watch. You understand we went from the Channel F into the watches, right?
KB: Yes, I was reading some old reports about how the company took a bath on the watch market.7 I was curious as to how that may have impacted you folks with the Channel F.
JD: Well, it was actually the same sales force. It didn’t change. It was the same people. Everything was the same.
KB: You were trying to sell watches—?
JD: We’re selling watches and games, yes. That’s what I was racking my brain trying to get this sequence of how many months did we start with Channel F, and then we rolled into the watches. The watches were huge. Huge sales. When we started, all I remember is sitting in a board meeting with Wilf and Greg, Chuck and Phil, and myself. We had gone from zero to I want to say close to a hundred million dollars in a twelve-month period in sales.
It was a huge infusion into the bottom line for Fairchild. Our watches were nationwide, we were selling like popcorn. It was the LED, Timeband was the brand. I was going to Kmart. I’d sell Kmart fifty thousand watches and they would distribute them out to every one of their stores, ten here, fifteen here. Those were the LEDs where you push the button, the light comes on. They were in the modulars that we start out with a higher brand, and then went down into the mass merchandising brand with the cheaper—getting down into the $19.99, $29.99 price range. It was just selling them like crazy.
KB: What happened with the watch market that it sort of fell out on you?
JD: It’s interesting because it basically followed the Channel F market, it was quality control. We started getting back modules that—modules were the little round like, say, a quarter, but thicker than that. That’s what fit into the watch. The watch was just a casing. You flop off the back, stick the module in, put the back on, and it runs on the battery, and that was it. We ran into design issues and quality-control issues with the modules, and they started coming back. They were coming back at huge, huge rates.
Again, they didn’t have the infrastructure to service those and get them back out to customers. When customers start complaining to the retailers, then the retailers quit buying your product. Basically, the watch business just disappeared. At that time there, we were one of the originals coming out with the LED and LCD. That’s the liquid crystal, that was the ongoing where it’s always on where if you looked at it, you didn’t have to push the button to get the little readout on the LEDs ... But then a ton of competitors come on the market. Casio [and] all the watch companies started coming out with the digitals, and so competition became very fierce. When you have a product that was starting to fail, that was the demise of the watch industry and the watch project there.
KB: Do you remember what sort of a marketing campaign you were using with the Channel F in that first year or so?
JD: Yes, we had what we’d use—we were doing merchandise dollars where we would do matching advertising where Macy’s was going to run. We’d say, “Well, okay, we’ll fund twenty-five thousand dollars toward the campaign.” We did co-opping,8 if you call it, basically co-opping with the retailer to advertise. We had a small advertising firm, Ogilvy and Mather was the firm that I recall. I know they did the watches. We worked with them because they came up with the word chart on getting a name and they ended up coming up with the Timeband name when we’re getting started.
Where we were was, mostly, we’d run newspaper—we would do ads in markets, and we would have the Channel F and so then we would have an eight hundred number where you could find it, because what we found out is if you ran an ad, not all retailers had it. They couldn’t go down to Walmart, for example, and get it, or Jack Eckerd Drugs or whatever. We basically used our dollars to go into the markets that had the product.
We would go into New York, we’d go into LA, we’d go into the Bay Area because those were the stores that had the multiple stores and you could run an ad in the San Francisco Chronicle and you’d get the whole Bay Area and you’d cover Macy’s eleven stores in the Bay Area. Then they would run an ad and so you would tie in. We had an eight hundred number and we had a 24/7 line that people would call and we’d say, “Yes, they’re available at Macy’s store in Union Square in San Francisco,” or “They’re available at Macy’s store in Walnut Creek in the Walnut Creek market,” or New York, they’re in whatever store they were.
That was pretty much our national marketing campaign. Through the ad agency, we did a lot of the brochures, particularly in the market electronics, CES [Consumer Electronics Show], we always had a booth, a huge booth at the CES, showed very well; our product line got a lot of exposure. Then we’d run in the trade magazines, the trades. Then from retail, mostly our dollars went to co-opping and national print, if you would, media print magazines, and newspaper ads.
We didn’t really do any national TV, anything from TV side point. Did a lot of promotions with sports teams or stuff like that. We would have somebody at the store, the Macy’s store if there was a San Francisco Giant [player], something they’d tie in, come and see them, and then they would run a half-page ad in a paper, a full-page ad and we would co-op with them on paying it. (See fig. 2)
Figure 2
The first page of a small pamphlet Fairchild directed toward retailers around December 1976, when the Channel F first started reaching retail shelves. This particular version was attached to the January 1977 issue of retail trade magazine Merchandising .
KB: What support were you getting from upper management? What was the relationship with them too more broadly?
JD: We had good support. Our upper management really from my standpoint, it was Greg Reyes and Chuck but it was always a group thing. Greg was really representing Fairchild. He was the senior vice president, sat on the board there of that division. He had a lot of responsibility and there was a lot of pressure on him toward the end to perform and get stuff done. He would have meetings with the production people, the quality-control people, what’s going on, it just was constant, like in any business that’s producing something, but for some reason, we could never get the quality-control issue resolved enough to solve [it for] the consumers.
The user, when they send a watch back once with a module broken, they want to get it back like tomorrow or the next day. They don’t want to sit two, three weeks getting it, or they don’t want to send it back at all. It starts getting back to the buyers, retailers, and they’re saying, “Hey, we’re getting too many complaints from our clients. We’re sending them back. They’re not coming back.”
The support inside it was a little chaotic in that it was a reaction to what was happening versus having a full plan set up to address the volume. Obviously, the inner workings were set up to provide for returns and how to get them back, but not to the degree of the volume that happened on the returns on the Channel Fs, particularly the joysticks. The units themselves, I think held up pretty good, but it was the joysticks [that] were breaking just constantly. They went to a second generation with thicker plastic and better contacts but still, they just couldn’t get it in time while they’ve got the market and when it’s hot to continue on with a product that would last.
Of course, you don’t really know how long it’s going to last anyway, because you don’t know who’s next. If Atari’s going to come out and just blow you out of the water with a whole new system. Your longevity and at that time, I think looking back, you can’t say that that was probably a product that … would last for twenty years, thirty years, it just wasn’t. It had an evolution and boom, boom, and you move on to the next evolution.
KB: Did you have any interactions at all with Corrigan?
JD: Yes. I was in meetings with him. I wouldn’t say a lot, but definitely through Greg and he would come to a meeting there, or we would go to the boardroom meeting and have [a presentation] when divisions would be presenting and he was very supportive. He’s one of the guys that I talked to when I looked to come [to Fairchild] because I wanted the assurance that this was going to be different from the Rockwell experience that they had a commitment and he was very well-spoken, very committed, engaged. I think very highly of him.
KB: Do you remember what working relationship he had with Greg based on your experience?
JD: I really don’t. That I ever heard Greg ever say a bad word about him or vice versa or that he didn’t do …? I really didn’t know, that was above my pay grade. I just never saw that in the workings of what was going on there.
KB: Do you remember what sort of a relationship there was between the marketing staff and the game-development staff?
JD: Yes, it was a little touchy. Like I said, they indicated that we’re the creative guys and we want some recognition. That’s really what came down after they started doing it. I think the sales and marketing accommodated it. We didn’t battle, we didn’t hate each other for any reason. They just wanted more input on “if I developed this game and I want to call it Jump Over the Moon, then I’m the designer and we do it,” and we may say, “that’s not really a good name. Let’s let our advertising take a little [look]” And so we’d work it out.
The biggest solution of that whole thing was to get their names on the cartridges that they were the designer. It was rightly so, I had no problem with it whatsoever. Because the way the model was at the beginning, they were, let’s say, I don’t want to say in the back room, but like I said, they were guys that were different from a marketing group. They had come in at five, six at night and worked all night, and they were just doing their engineering stuff. We really didn’t even see them until they would present us a game, say, “Hey, here’s our new thing.” … Great, and we’d say “Let’s do it,” and then everything got put in place and we’d get the game in production, get the labeling done, and we would premarket it, that kind of stuff. The only rub there was for a period of time, I think a short period of time, very short. I remember that they just didn’t feel like they were getting the recognition. We solved that and we all moved down the road. I don’t remember any division as that went on after that was resolved.
KB: Did they always just hand you games that they had come up with or did you ever suggest anything to them from marketing?
JD: Mostly they came up with the games. The marketing sales really, we weren’t involved in development. I would say we would get ideas from our salespeople of course, who were out in the front lines and talking. The demonstrators or merchandisers would come back and we would always pass that on onto them. Or that a competitor [like Atari] had something on the board, we would always pass it on to them, but they were pretty much independent and doing their own thing and coming up [with games]. That was what their job was in my understanding.
KB: I understand that [Fairchild’s video game engineering director] Jerry Lawson headed up the software [game-development] group. Did you have any working relationship with him?
JD: No, I don’t even remember that name, doesn’t even ring a bell. I knew they’re his software guys and that’s who I used to always talk to. I used to—the ones that would come in and show us what they were doing or we’d go in there and say, “Hey, this is it.” But Jerry Lawson, no. (See fig. 3)
Figure 3
A promotional photo of the Channel F was included in the Fairchild Annual Report to Employees 1976 (Courtesy of the Computer History Museum, Mountain View, CA)
KB: My understanding is that the system was delayed getting approved by the FCC [Federal Communications Commission], so it came out later than expected. What do you remember of that from your perspective?
JD: There was a delay. I don’t recall that being a big issue. It was so hot and in demand after we made our presentations [at the summer CES in June 1976] that when we went to Bloomingdale’s or Macy’s or whoever, and said, “Hey, we just haven’t got them,” it was not an issue with our retailers. It didn’t affect sales in my recollection at all.9
KB: I read an interview with Corrigan from ʼ77 [in Business Week] where he mentioned that they were pulling back on production, getting a little more conservative.10 Was that in response to the order process that you folks had or was that a financial issue?
JD: Yes. I would say all the above. I think it was financial because the problems we had in building them and keeping them out in the consumer’s hands without having them send them back. I’m not even going to give a number because I don’t remember, but there was a percentage of sales that came back, and it was significant. That was way, way above any norm for a product. I think, at that time, ʼ77, when [Corrigan] was doing it, we could almost see that writing on the wall. I can’t say it was a sales problem because we never had problems getting sales. It was getting the product made, getting the cartridges out, [the new] cartridges to fill the pipeline, and then solving the defects in the unit that were coming back to be repaired.
KB: This might have predated you, but I wanted to ask. I remember reading about a deal that Fairchild made with an arcade company to make a Pong machine for the home and that’s separate from the Channel F. I was curious if that was anything you had any involvement on?11
JD: Never heard. I would have said, “Well, that’s probably what was the trigger for them just to even look into getting into Channel F.” That would be my first guess, but no, I never heard of any other product at all. Never. It probably was before my time.
KB: You mentioned that you left in ʼ78. Could you talk about why and what you went on to do after that?
JD: Our sales just on the watch [market collapsed]. The Channel F, we just pulled out and just shut off [the product line], pretty much just kept servicing product that came back in, but my recollection is they shut the design group down, they shut production. It was basically we’re getting out of business. Then with the watches, we were continuing on, and then that same cycle happened there, and in ʼ78 Texas Instruments came out, I remember, with the $9.99 LED strap watch, and we couldn’t match that. They basically came in and just took our lower-end market.
Then based on not having inventory, the servicing factor with quality control, all led to just with all signs that hey, you can’t make sales when you don’t have the product. That was when the major part of that in there, in ʼ78 was, you couldn’t get anything. Fairchild … was not putting the money in to get the production [it needed] to put in to make any inventory. They just wanted to sell what [Fairchild] had made.
I think a guy named Dick Bohnet, if I remember, Dick was international, and he came back and took over.12 He was international and came up with—that he had the responsibility of liquidating, getting everything off of every inventory that he could when they liquidated it. That happened, I think, in late ʼ78, maybe early ʼ79. I don’t know how much longer that went on, because I left in ʼ78. We just cut the salesforce down. My national sales manager Phil had left prior to that way before. I was basically responsible for all sales, national accounts as well as sales.
I basically said, “There’s no need for me to be here, my position.” A guy named Dick Skallon [sp?], who was the national sales guy, he was the head of all the salesmen, and the salesmen were down to, I don’t know, a number, but significantly lower, because we had to lay guys off because we didn’t have a product to make the sales. Then that just started winding down. I actually left and decided to take a year off. My wife and I traveled around the world. I left [on the] first of November, and decided just to get out of the business for a while and take sick time off. I did that and came back and started a career in commercial real estate. That’s what I’ve done since 1980.
KB: It seems like it’s working out for you.
JD: Yes, it worked out good. It was one of those things when I was in the corporate arena with Polaroid, I was a national account sales manager, I was up there at the Rockwell group and then Fairchild. I said, “You know what? I’m going to do something that I’m going to have control of and work for myself.” Commercial real estate was just perfect. And I couldn’t have been happier doing what I did to be able to be my own boss and spend the time with my kids and I coached every team that they played in—softball and track and basketball, soccer, all through their younger years. It ended up being just very fortunate and blessed to have a nice career.
Conclusion
After Donatoni left the company, Fairchild continued supporting the Channel F with revised hardware and a new ad campaign in the fall of 1978 featuring comedian Milton Berle as a spokesperson, but production numbers remained low due to the company’s financial troubles.13 In February 1979, Fairchild announced it was shuttering its time products line, and in April it declared it was leaving the video game market as well.14 The company sold its video game line to Zircon, and the rest of Fairchild was acquired by Schlumberger that summer.15 Zircon continued to support the Channel F by selling old stock and producing six new cartridges in 1980 and 1981.16 The company halted its Channel F business following the Christmas season in 1982.17
Footnotes
1. ^ Ethan Johnson, “Video Game Sales: 1972–1999,” Gaming Alexandria, last modified June 7, 2021, https://www.gamingalexandria.com/wp/2021/06/video-game-sales-1972-1999/.
2. ^ John Donatoni, correspondence with the author, October 12, 2023.
3. ^ According to the electronics industry trade Weekly Television Digest, McDonald was already at Fairchild by February 2, 1976, as the vice president and marketing director of the consumer products division. Weekly Television Digest with Consumer Electronics, February 2, 1976.
4. ^ Former Fairchild engineer Nicholas Talesfore said in an interview with game historian Kate Willaert he believes the Channel F namesake derived from a meeting with major retailer Sears, but Donatoni remembers meeting with its staff only in the context of Fairchild’s digital-watch line. Kate Willaert, correspondence with Nicholas Talesfore, November 22, 2020.
5. ^ The only Channel F games with designer credits in the packaging were the last few releases published by Zircon. It’s likely that this agreement did not go into effect before Fairchild sold its video game rights. Nevertheless, Donatoni remembers that the agreement was for the cartridge labels and the packaging itself.
6. ^ Donatoni was promoted from national accounts manager to national sales manager in late August, 1976, according to the August 30, 1976, Weekly Television Digest with Computer Electronics, succeeding Conklin in that role. At that time Conklin had been moved over to be the time products marketing manager.
7. ^ Fairchild did extremely well in the digital-watch market in 1976, but the bottom fell out in 1977, and the company lost a reported $24.5 million in 1977, almost entirely because of it, according to Fairchild’s 1977 annual report. Fairchild Camera and Instrument Corporation 1977 Annual Report (1978).
8. ^ Cooperative, or co-op, advertising is when two entities, in this case Fairchild as the manufacturer and local retailers, share the costs of advertising and marketing a product. This is typically done for localized advertising campaigns, allowing a manufacturer to expand its efforts across multiple storefronts at a reduced cost to each of the individual retailers.
9. ^ The Channel F was submitted to the Federal Communications Commission in July for testing with a September target for distribution (Weekly Television Digest with Consumer Electronics, July 12, 1976). The system failed and did not receive approval until October 21, which reduced the number of shipped consoles from an anticipated 200,000 units to around 50–60,000, according to reporting from Electronic News and Weekly Television Digest, as well as an interview between the author and former Fairchild engineer Richard Olney (“Fairchild Says F.C.C. Approves Its TV Game,” New York Times, October 21, 1976; Home Electronic Games and Computers, February 1979; and Richard Olney, correspondence with the author, March 22, 2020).
10. ^ “Fairchild’s Problems: More Than Watches,” Business Week, August 15, 1977, 116.
11. ^ In January 1976 Fairchild announced an agreement with coin-op company Mirco to develop dedicated home games based off of Mirco’s ball-and-paddle titles. No such products were ever released. Weekly Television Digest with Consumer Electronics, January 26, 1976.
12. ^ Bohnet was the international marketing director at Fairchild and was promoted to vice president-general manager of Fairchild video products division in June 1978, according to Weekly Television Digest, replacing Greg Reyes, who had resigned from the company. See Weekly Television Digest with Consumer Electronics, June 12, 1978.
13. ^ “Fairchild Redesigns Channel F, Cuts Price,” Merchandising, July 1978; and Alpex Computer Corporation v. Parker Brothers, affidavit of Gerald Lawson with attached exhibits, March 30, 1988, box 1, folder 17, Jerry Lawson Papers, Brian Sutton-Smith Library and Archives of Play, Strong Museum of Play, Rochester, NY.
14. ^ Weekly Television Digest with Consumer Electronics, February 5, 1979; and Weekly Television Digest with Consumer Electronics, April 2, 1979.
15. ^ “Fairchild Channel F: Timeline,” Fndcollectables, accessed through Wayback Machine October 21, 2023, https://web.archive.org/web/20180430010915/http://www.fndcollectables.com/CHANNEL_F_INFO/U_S_/Time_Line/time_line.html.
16. ^ “Fairchild Channel F: Ads and offers,” Fndcollectables, accessed through Wayback Machine, October 21, 2023, https://web.archive.org/web/20160711121846/http://www.fndcollectables.com:80/CHANNEL_F_INFO/U_S_/Adds___Offers/adds___offers.html.
17. ^ Roger Dionne, “Channel F: The System Nobody Knows,” Video Games, March 1983.
John Donatoni, circa 2023. The former Fairchild marketing director has worked in commercial real estate since leaving that company in 1978. (Courtesy of John Donatoni)