R.I.P. Ray Kassar, controversial Atari CEO

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    He died last month on December 10th. Opinions of his leadership ability at Atari are hotly debated to this day. [LINK]

    Raymond Edward Kassar, 89, passed away peacefully at home in Vero Beach, Florida on December 10th, 2017. The cause was Lewy Body Dementia.

    Born in Brooklyn in 1928, the son of immigrant parents Elizabeth Asfar and Edward Wahid Kassar, he was of Armenian, Assyrian and Syrian decent. Being the first member of his family to attend college, he went on to Brown University (’48) and the Harvard Business School (’52).

    Immediately following Brown, Mr. Kassar was hired at Burlington Industries, then the world’s largest textile company, where he spent more than twenty-five years. He was president of Burlington House, an Executive Vice President and a member of the Board of Directors of Burlington Industries when he left the company in 1975.

    In 1978, Warner Communications appointed Mr. Kassar as the president and CEO of Atari, a fledgling video game maker they had recently acquired. Ray is widely recognized to have been the driving force behind the rapid expansion of the video game industry and under his leadership Atari became the fastest growing company in the world at the time and the second most recognized brand after Coca-Cola.

    In 1982, Brown University dedicated The Edward W. Kassar House in memory of Ray’s father. The building currently serves as the University’s Mathematics Department. Since 2002, he was a Director of the Board of the American Hospital of Paris Foundation and has served in several capacities including treasurer. He was an avid art collector, and among other interests holds one of the premier collections of photo-secessionist photography in private hands. Quietly philanthropic, he has led a private life as investor and collector for the last thirty years.

    A mild summary of his Atari years comes courtesy of Wikipedia:

    In November 1978, when Atari Inc. co-founder Nolan Bushnell left the company after a dispute with Warner over the future of Atari Inc., Kassar became CEO. Under his leadership, sweeping changes were made at Atari and the laid-back atmosphere that had existed under Bushnell’s leadership all but disappeared. Kassar’s twenty-five years at Burlington Industries had given him a taste for order, organization, and efficiency and his efforts to revamp Atari along similar lines provoked substantial animosity. Kassar shifted the focus away from game development and more toward marketing and sales. Atari Inc. began to promote games all year around instead of just at the Christmas season. R&D also suffered deep cuts and the discipline and security at Atari Inc. became strict. Kassar became unaffectionately known to many at Atari Inc. as the “sock king” and the “towel czar” (due to his previous years in the textile industry) after he once referred to Atari programmers as “high-strung prima donnas” in an interview with the San Jose Mercury News in 1979.

    During the Kassar years, Atari Inc.’s sales grew from $75 million in 1977 to over $2.2 billion just three years later. Though Atari enjoyed some of its greatest success during this period, the stifling atmosphere and lack of royalties or recognition to the individual game designers angered employees, many of whom quit. During this period, nearly all members of the original Atari Inc. staff, including Al Alcorn, quit or were fired. Atari Inc.’s upper management also suffered severe turnover rates. Many blamed Ray Kassar’s autocratic management style, but Kassar was not held accountable.

    One of the most notable turnovers was when four programmers were unsatisfied with their paychecks. They felt they were making a very paltry salary for someone who actually designed the games that made the company millions of dollars. They wanted a small commission, but when they asked Kassar about that, David Crane recalls that Kassar responded, “You are no more important to that game than the guy on the assembly line who puts it together.” Crane and three others resigned from Atari and formed their own company: Activision, which became the first ever third party developer.

    In 1981, the highly popular and successful game Yars’ Revenge was released for the Atari 2600. Howard Scott Warshaw, the game’s designer, got the names “Yar” and “Razak” by jokingly spelling “Ray Kassar” backwards. Warshaw claimed that the game was “Ray’s revenge on Activision”.

    In July 1983, Kassar was forced to resign from Atari Inc. over mounting allegations of illegal insider trading activity. In December 1982, Kassar had sold 5,000 shares of stock in Warner Communications only 23 minutes before a much lower than expected fourth quarter earnings report would cause Warner stock to drop nearly 40% in value in the following days. The Securities and Exchange Commission accused Kassar and then Atari Inc. vice-president Dennis Groth of trading stock with illegal insider knowledge. Kassar settled, returning his profits without acknowledging guilt or innocence. The shares that Kassar sold actually constituted only a small amount of his total holdings in the company, and the SEC later cleared him of any wrongdoing.

    Love him or hate him for his management style and treatment of employees, a lot of people who love Atari came to love it on Kassar’s watch, whether they’re willing to admit that or not. I had always hoped Ray would write a memoir of his own covering his time at Atari, to shine some light on his decisions and some of the stories that have circulated about him to the point of being taken on board by many as gospel truth.

    Steve WSteve W
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    Well, he left behind a lot of stories from employees who worked with him. Like how they had Atari’s private jet fly out to Monterrey, California to get Mexican food from a prestigious restaurant in town, and all those executives sat around their boardroom table eating their expensive gourmet reheated food flown in by jet and Kassar griped non-stop about how the employees were a bunch of prima-donnas for wanting to earn slightly more than poverty-level wages.

    It makes my mind boggle when I think of how one person can totally screw up everything. The modern game industry would be completely different if he hadn’t driven all his employees away – there’d be no third-party games. It makes me think of how bad off America will be after our current president is through derailing all the progress we’ve made with the environment and civil rights, and how the repercussions will echo through the decades after he’s gone.

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