Chuck E. Cheese's Video Game Origins

Ryan Fan

“It was my pet project. I started it inside Atari. My objective was to vertically integrate the market. We were selling coin-operated games at about $1,500 or $2,000 a pop.” — Nolan Bushnell, founder of Chuck E. Cheese.

When you think of Chuck E. Cheese, you think of birthday parties, arcades, playgrounds, and crappy pizza. To this day, I have never been to Chuck E. Cheese, perhaps partially because none of my friends had birthday parties there, and also partially maybe because I wasn’t invited. However, what few people think of when they think of Chuck E. Cheese is its history with video games.

Chuck E. Cheese’s Pizza Time Theater was actually originally founded by the creator of Atari: Nolan Bushnell, who wanted to extend video game arcades beyond adults to family-friendly venues. Bushnell had had previous experience in the video game industry, as well as an idolization of Disney.

“We’re in the fun business,” said Gene N. Landrum, President of Chuck E. Cheese.

With Chuck E. Cheese’s roots planted in Silicon Valley as well as its basis originally from a video game company, Bushnell eventually pivoted beyond video games to having a children’s friendly arcade spot as well as a pizza chain. Why pizza? Bushnell would respond to that question with the following answer:

“I chose pizza because of the wait time and the build schedule: very few components and not too many ways to screw it up. If the dough is good, the cheese is good, and the sauce is good, the pizza is good. I didn’t have any preconceived idea that I knew how to run a restaurant, but I knew simple was better.”

Instead of just having video games and a restaurant, he included substantial entertainment at his Chuck E. Cheese venues as well — and in his perspective, was for the parents, not the kids:

“The reason for doing the animals, believe it or not, was not for the kids. It was meant to be a head fake for the parents…The other thing was that we wanted the parents to have something to amuse themselves while the kids were in the game room.”

According to Alexis C. Madrigal at The Atlantic, the inspiration for the pizza would be a parlor called Pizza and Pipes, which was a venue with a theater organ and who sold out when an organist actually performed. Bushnell would then realize that there was a demand for entertainment to accompany pizza — and then when he went to Disneyland, he saw the demand for gaming and pizza simultaneously. He also realized there was a demand for characters that could appeal to a large audience. like they had at Disney.

Initially, he wanted to make Chuck E. Cheese a coyote and purchased many coyote costumes. However, there would be a misunderstanding, and Bushnell would be sent a rat costume — and so Chuck E. Cheese became a rat. The first choice for Chuck E. Cheese’s name was Rick Rat’s Pizza, and then, fortunately, his marketers convinced him otherwise in naming his place Rick Rat’s Pizza, since people associate rats with dirtiness.

They convinced him to name his establishment Chuck E. Cheese. Georgia Tech professor, Ian Bogost, would argue in 2007 that Bushnell’s background would make him a genius entrepreneur: not only had he seen demand for gaming, but he saw a demand for secondary pursuits like food along with gaming.

“Arcades had more in common with casinos than taverns, and Bushnell…would create an arcade space with the additional social and gastronomical goals of a tavern,” Bogost said.

Bushnell created the Pizza Time Theaters for kids to not only play games, but eat pizza. Chuck E. Cheese would end up being an arcade where kids could also go to a restaurant. Fortunately, Bushnell would have a lot of good help too — Mike Hatcher, a programmer, who wrote and designed the units of the characters at Chuck E. Cheese.

Hatcher would work extremely hard — according to Mary Gottschalk at the San Jose Mercury News, it would take Hatcher three hours of programming for every one minute of animation, since there were usually 200 movements going on at once. Not only that, but Hatcher worked a lot of nights.

In 1978, Bushnell sold Atari to Warner Communications, who refused to take on Chuck E. Cheese. He bought out Chuck E. Cheese for $500,000 to run on his own. Landrum would resign from Atari and join Bushnell as President of the company.

All would go well for a long time, but in 1983, there was a recession in the video game industry that led to Bushnell losing $15 million that year. The next year, he filed bankruptcy under Chapter 11 and sold the company to Showbiz.

Bushnell would then be clear of the company, making $35 million from his initial side hustle. The chain is only a domineering presence in the hearts of many American children today because of Bushnell’s vision and experience in video games, and the story is a tidbit of video game history mostly unknown to the general public.

Bushnell would be called by Newsweek one of the “50 Men That Changed America,” as well as the Father of the Video Game Industry. Both well-deserved honors.

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