World of Commodore Amiga Show Report Part 2, Commodore's Press Conference, Address, and Booth by Dan Zerkle This is part 2 of my report from the World of Commodore Amiga show held in Pasadena, California, on September 10th, 11th, and 12th. This section details what I learned about Commodore from their press conference, keynote address seminar, and booth. I will continue to post sections each night until I finish. There should be at least four more sections. First, a couple of corrections from last night's report: The gentleman I met at the press conference was Robert Du Gaue, contributing writer/editor for California Computer News. The name of the mysterious business executive who pretended to be Irving Gould is spelled "John DiLullo," not the way I had it spelled. He's head of public relations. Gould's correct title is in fact "Chairman of the Board of Commodore International." It was in fact Jim Dionne who made the smart-alec comment at the press conference about paying for sandwiches. The friendly guy from Sweden is named Pjotr Sjostrom. Not only did he write the "mama" robot on IRC, he also runs the Aminet site, ftp.luth.se. Many thanks to Harv Laser for filling in the gaps here. I could have sworn that it said "Delulu" on that guy's badge, though. PRESS CONFERENCE The press conference was held at 11:00 on Friday the 10th. The crowd seemed remarkably subdued, probably because many of them were still a little worn out from the travel. Video and film cameras, laptops, tape recorders, and even ink pens were visible in the group of about 30 reporters. The reporters managed to be remarkably polite except for one from a competing electronic publication. Jim Dionne, president of Commodore's US operations, gave most of the address. He had a tremendous amount of trouble getting a microphone clip on his tie. He then started in with a status report of the main Commodore products. The CD32 (note: the "32" should be superscripted, but that won't work properly on Usenet) was introduced in the United Kingdom in July, and has been shipping for a few weeks. It is being introduced in the US now, and will shipping by the Christmas season in limited areas. The main launch will be at the January Consumer Electronics Show in January, after which it will be available in all areas of the United States. Dionne referred to the A4000 as a "remarkable success." Apparently, the main problem is one of manufacturing enough of them. Apparently, there have been complaints from dealers who would like to have them in stock. He said that the A1200 has "done well" in the United States, then moved on. Dionne stated that he hopes the CD32 will become the next Commodore 64. Considering that the C64 has sold more units than any other computer in history, I consider that unlikely, but Dionne clearly considers the CD32 to be the best hope for Commodore's future. "We really do feel we've hit a home run here," he stated. After Dionne was done, Lew Eggebrecht, Vice President of Engineering, took the stage to discuss the more technical details of the CD32. He took even longer to get the microphone clip properly attached. He then started into the technical specifications of the CD32, calling it a "32-bit game console / interactive multimedia player." He emphasised that it solves many of the problems apparent after developing CDTV. It has basically the same chip set as the Amiga 1200, with the same sound and AGA graphics. The 14mHz 68EC020 it uses is a 32- bit processor with a small cache that gives a performance of about four million instructions per second. It comes with two megabytes of RAM, all accessible by the graphics and sound systems. It also has one megabyte of ROM (opposed to half that in an A1200). This contains a special version of AmigaDOS (equivalent to version 3.1). It also contains support for the CD file system and the game controller. One kilobyte of non-volatile RAM (EEPROM, I believe) is used to store high scores and saved games. The CD-ROM drive is something very special. It is a custom double-speed, multi-session device. Commodore used a Sony mechanism and added their own magic, including custom microcode. Apparently, this allowed the machine to be manufactured for a low price. I never did get a good explanation of what "multi- session" means, other than that you need to in order to support Kodak's Photo CD standard. The sound output is either standard Amiga 8-bit, four-voice, or the CD's 16-bit sound. There is a mini-headphone jack with adjustable volume control. The video output is available as standard RF, composite, and S-Video mini-DIN. Apparently, the S-Video gives a noticably better picture. The game controllers are hard-wired, instead of the infrared controller of CDTV. They hook up to jacks that look like the standard Commodore 9-pin controller jacks. However, the controllers are something new. They are 11-button controllers with a circular game pad. Each controller port can daisy-chain up to four controllers, for a total of eight on one CD32! CD32 ships with just one controller. There is an auxiliary port which is a combination keyboard and serial connection. It is shaped just like the keyboard port on an A4000, so you can hook up a keyboard there for typing. It also can handle a serial connection, if it is set up right. A hidden port is the expansion bus. It provides all of the singnal lines from the CPU, the video, and the audio. You could basically hook up whatever you wanted here. A wide variety of formats is supported. Audio CDs work, of course. The Karaoke format is supported, but those in the US prefer to call it VideoCD. If you are still into CD+G, you can view it on CD32. Commodore went to great pains to make sure that the top 30 CDTV titles worked, although packages that only work under version 1.3 of the OS or that don't follow programming standards are likely to break. Of course, there is also a new CD32 format. Eggebrecht then described the strengths of CD32. First and formost, he emphasised the mature development environment available to developers. All the tools available to develop games and other applications for Amigas will work to develop for CD32. A lot of people have had a lot of practice programming for the Amiga. He then mentioned the enthusiastic developer support. Thirty different developers are actively producing software for CD32. These are not just companies that have registered as developers, but people actually writing things. Commodore expects 75 titles to be ready before Christmas. He did not make it clear if this included the old CDTV titles or not. Actually manufacturing software for CD32 is much less expensive than for the cartridge-based systems. It costs about one dollar to produce a CD in quantity, while a cartridge costs from ten to twenty dollars. Cartridges require a long order time (four to six weeks or more) as they are produced by some overseas company that also sells the console. Compact discs can be pressed by the thousands in a single day by a local company, thus making inventory much easier to manage. Each cartridge manufactured requires a large licensing fee. Commodore's licensing fee is small ($3 per disc) and need be paid only when the software is actually sold. Because of this, Eggebrecht stated that he expected CD32 software to sell for 40% to 50% of the price of cartridge-based software. After finishing with CD32, Eggebrecht detailed some other news from Commodore. Some of this was covered in more detail at the keynote address later in the day. CD peripherals will be released for the A1200 and A4000. These will allow the computers to function as a CD32. AmigaDOS 3.1 will be available soon. This will have CD support. RTG (Commodore's re-targetable graphics standard) is coming along more slowly than expected. Its release will be tied to the next- generation chip set. Commodore's networking will be available through third-party licensing. Engineering has conducted a six-month study on RISC (reduced instruction set computer) processors. They have not decided how to use them, but intend to eventually use RISC technology to provide higher performance. They will stick with Motorola's 68000-series chip series until Motorola stops improving it. The A4000T will be in production withing two months. Finally, Eggebrecht dropped a few jaws by stating that Commodore's new factory in the Phillipines is manufacturing 20,000 CD32's per week! Eggebrecht finished up and introduced John Campbell to give a demo of CD32. The demo was a fancy multi-media show put together to impress developers into producing software for the game console. It had dinosaurs, Porches, and jets zipping all over the place doing their thing. The jet launched a missile which a voice-over said was "blowing away" the competition. It was clearly poking fun at the other machines. The speed was quite good. This complicated demo loaded in a few seconds and continued with no glitches. Campbell also had a CDXL preview of a Jurassic Park video game. The film clips were pretty good, but the game demo looked terrible, as though it was ripped off from a Nintendo console. It probably was. I noticed that one part of the game looked a lot like Wolfenstein 3D. At this point, Campbell mentioned that CD32 was good for more than video games. The audio-visual capabilities, massive CD-ROM storage, and low price point makes it ideal for kiosk applications. Then, Campbell demonstrated the prototype MPEG module by playing a Bon Jovi video from CD. I was, quite frankly, startled. The picture quality was excellent--almost indistinguishable from cable broadcast. It was clearly better than VHS video. The sound was also excellent. It was very close to audio CD, and (again) spectacularly better than VHS audio. A single CD can hold up to 74 minutes of MPEG video, meaning that two of them can hold a movie, for much less space and price than a VHS tape. The CD32 can overlay graphics on top of the MPEG picture, so MPEG video could be used in many applications other than simple playback. As it was, the unit simply put a small logo in the corner of the screen. At this point, Eggebrecht and Dionne opened things up for questions. Here are some of the interesting answers: The CD32 hardware is perfectly capable of supporting Kodak's Photo-CD. However, Phillips and Kodak are partners in a competing product. Commodore has not been able to get a license for the technology. Commodore expects to reach an agreement soon. The MPEG add-on module uses chips from C-cubed. The price is not decided yet, but will be less than the Phillips module, which is expected to be about $250. The sound from the MPEG disks is standard compressed MPEG sound. It is like the mini-CD standard. The software bundle included with CD32 will depend on the country. It is expected to change with different promotions and seasons. All of the software needed to run MPEG disks is included on the MPEG hardware module. Nothing additional is required to play MPEG disks. The US packaging for CD32 will be in English, French, and Spanish. Apparently, this has nothing at all to do with the proposed North American Free Trade Agreement. The motherboard is ready for the A4000T. It should be available sometime near the end of the year. The MPEG module, on the other hand, will be available in late November. Advertising will be in the form of cable television spots and the usual magazine ads, including video game magazines. Commodore is thinking of running infomercials! The regions in which the CD32 will receive its limited launch in the US this year have not been decided. The expansion connecter will be able to accept expanded RAM, all of which will be FAST RAM. KEYNOTE ADDRESS James Dionne and Lew Eggebrecht held the keynote address Friday afternoon. The crowd held mostly users, so it was much larger then the press conference, and also noticably hostile! Dionne again had trouble attaching his microphone. He commented, "These things are as difficult to use as a DOS machine!" After that, he was considerably less upbeat than he appeared at the press conference. His presentation was quite serious. First, Dionne presented a twelve-month review of business activity since September of last year. It was not good. He proceeded to list all the problems that Commodore has had, partially blaming them on the general shakedown the the personal computer industry. He did say, though, that "a lot of this is history." Here is a list of the problems: * The economic slowdown in Europe. Commodore does 80% of its business in Europe, so that hurt sales. * The strengthening of the US dollar. Commodore's sales are reported in US dollars, so even if profits go up in a foreign currency, they may go down once converted to dollars. * Erosion of PC margins in Europe. A considerable amount of Commodore's business used to be in selling IBM PC compatible computers in Europe. The clone price wars reached Europe, and the prices and profitablity of the PC's dropped. * Write-downs in inventory of A2000's and A3000's. Once the A4000 and A1200's came out, the A500's, A2000's and A3000's were worth considerably less. Writing off this value resulted in a considerable loss. The results can be seen in the very low prices available now for new A3000's. That said, Dionne said that Commodore has "taken all the bad medicine," and outlined plans for the future. The strategy involves the following: * Major restructuring and inventory changes. This is a nice way of saying that they fired a whole lot of people. * Commodore intends to make a profit in the US this quarter. * More emphasis on the Amiga. This means that they will drop the low-margin European sales of PC clones and concentrate on the proprietary Amiga hardware. * All subsidiaries have reduced overhead to free up revenue for marketing. Again, they fired a lot of people. * New products. This is mainly the CD32, but more will be coming out in the next year. * New plant in the Philippines. Apparently, there were a lot of difficulties getting things started up, resulting in a shortage of A4000 machines. Now, the glitches have been cleared up, and it is producing large quantities of CD32's and A4000's. * A new emphasis on profitability. * All US sales are through five distributors. There are no direct dealers any more. This lets Commodore worry less about distribution work and results in less overhead in supporting the direct dealers. * After-sale service has been out-sourced to another company. * Warehousing and shipping has also been out-sourced, resulting in lower cost. * Commodore, a smaller company now, can now concentrate on its core business. That is, making and selling fancy multimedia computer like the A4000. * They intend to stress the markets of video, graphics, and kiosks. * They are now prepared to work harder on the low-end market. Dionne then gave some more information about the A4000T. It has two video slots instead of just one. It also has both IDE and SCSI-2 interfaces built onto the motherboard. Otherwise, it is mainly a bigger A4000. He then discussed the CD32. This was mostly a repeat of the press conference. Lew Eggebrecht gave a status report of ongoing engineering work. Work on the AAA chip set is proceeding well. Commodore has actually produced a silicon prototype and displayed 24-bit graphics. It has bugs, of course, but no fatal ones. Engineering intends to produce an updated prototype each month until it is done. They expect to sell hardware using the chip set by the middle of next year. The AAA chip set will feature much higher performance than the AGA set. See last year's report for a description of planned specs for the set. The 4091 SCSI-2 controller will be shipping within 6-8 weeks. There does not seem to be much interest in this product. The SCSI-2 controller will be included in the A4000T, and in later versions of the A4000. The DSP project has been suspended. This project could give a considerable amount of signal processing power to the Amiga, resulting (mainly) in vastly improved sound. It was suspended because the engineering department was smaller and most people were concentrating on CD32. Eggebrecht then explained that a smaller company can not handle all the engineering projects. Commodore intends to give away their developed technology for FREE to third-party developers on a non-exclusive license! That means that Commodore has already invented several products. If you have a company, you can sell those products under your own name. All you have to do is figure out how to manufacture, package, market, and ship them. You don't have to develop them. He then gave a list of projects that Commodore wishes to give to third-party developers: * scan converter board * networking software * DSP * 4091 * multi-port board * ethernet adapter He then moved on to a couple more projects. CD peripherals, which will allow an A1200 or A4000 to run CD32 games, will be available near the end of the year. RTG development has been slowed down, due to lack of staff. It will be released at the same time as the AAA chip set, although it will work on other chip sets. Networking is mostly done. Commodore is looking for a third party to take over. AmigaDOS 3.1 was completed last week. It includes a SCSI file system (I think he meant "CD file system"), support for CD32, a better PostScript driver, and many bug fixes. As time was running over, the question/answer period was very short. The only interesting point was that Commodore has no plans to produce a portable, and that they do not intend to license their chip set to anyone who might do it for them. COMMODORE'S BOOTH Commodore had a booth way in the back. It was very lively, full of CD32's, A4000's, and a few A1200's. They also were demoing the OpalVision and the Toaster 4000. The CD32's were mostly set up to play games. They also had one set up to play music videos from an MPEG disc. I particularly liked one video by Enya. The games looked pretty sharp. One machine was also showing Grolier's electronic encyclopedia. You could pull up some nice digitized pictures of various animals. Very impressive. I got a chance to grab a CD32 controller. It had a very nice, solid feel to it. The buttons were different colors and sizes, with start and pause buttons. Then some kid grabbed it back to play a game. They were having a good time. The adults seem to like the football and pinball games. A prototype of an A4000T was on display. The front panel looked very nice and professional. There was no side panel, so I stuck my head inside. It had room for up to five half-height 5-1/4 inch external devices so you can have two floppy drives, a CD-ROM reader, a tape drive, and a Syquest, if you like. There was also lots of space inside, but I didn't see any obvious place to mount internal devices. I found five Zorro 3 slots. Two of these lined up with video slots. The rest lined up with PC-AT style ISA slots. There was also an extra ISA slot on the side that didn't line up with anything else. ANALYSIS All of this gave me a few opinions about Commodore. The spectacular losses in revenue and share price have alerted management that something needs to be done. I heard executives say more than once that if they kept going as they had been, they would go out of business in the next six months, which wouldn't help anyone. Instead of letting that happen, they fired a lot of people to make sure that they had a smaller, less expensive company to run. Now, all they have to do is to sell a lot of machines. Commodore marketing still needs some work. They do not intend to run _any_ broadcast television ads. They are not clear where they are going to sell CD32. They have not ramped up for full distribution before the all-important Christmas sales season. Still, the infomercial idea is a good one. What's more, if they can get enough large stores to pick up the product at CES, it will do well. We'll have to see how they handle it. Commodore has bet the farm on CD32. They fired many engineers and put most of the rest on getting CD32 out the door. There are no other real new products coming any time soon. Commodore has put all its eggs in one basket now, so CD32 better sell or the cows are coming home to roost. Or something like that. It might work. CD32 is a really good product. The suggested price of $399 is much, much better than the original price of CDTV. Commodore is aggressively pursuing game developers, and it looks like there will quickly be more games for CD32 than for any other CD-ROM game console. Manufacturing is not a problem, and the things are selling like crazy in Europe. I noticed that the company really is smaller. Many of the people at other booths used to work for Commodore. Some of the folks at the Commodore booth itself were former Commodore employees hired just for the duration of this show. Still, they seemed dedicated and attentive. When I explained my problem with Sue West getting fired, Dionne directed me to someone who might be able to get me electronic versions of press releases. MPEG on CD has tremendous potential. The picture and sound is the best you could expect from most television sets. I did manage to find a couple glitches, but only because I was looking for them. A couple CD's would be much less expensive to produce than a standard video laser disc (typically $100). Since it is digital, it won't wear out like VHS tapes often do. The total $650 price tag is a bit steep for movie watching, though it might be worth it if you consider the games as well. Being able to select music videos from CD, or to skip around a movie without that bothersome rewinding has a lot of appeal as well. I know, given the choice, I would rather rent a movie on CD than on VHS. If you are the daring type, now would be a really good time to buy stock in Commodore. It is now around 3 1/2 dollars per share, where it used to be $12. If CD32 works out, the price will double in the next year. If it doesn't, Commodore will probably go bankrupt and the stock will be nearly worthless. It will certainly make life exciting.... Tomorrow: Chapter 3, Seminars by Axiom and Opalvision, with the first few booth interviews. Addresses: CCN (California Computer News) 9719 Lincoln Village Drive, Ste. 500 Sacramento, California, 95827 Commodore Business Machines 1200 Wilson Drive West Chester, PA 19380 (215) 431-9100