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 matter of weeks or months after their founders ran out of cash before sustaining income was received. Others learned, sometimes belatedly, that the demand for the General Instrument chip far exceeded the supply and other integrated-circuit suppliers weren't ready to fill the void. Lloyd's Electronics says it received only 20% of the chips it had ordered from General Instrument for games planned for the Christmas 1976 season.

The supply of games ran short during the Christmas 1976 season in some parts of the United States.

Lloyd's feels it lost about $15 million in sales when Systek Corp., its Japanese assembler, ceased production because of financial problems and didn't resume operations until the Christmas season had passed.

Coleco was the first major customer for General Instrument's industry-revolutionizing game chip and as a result received early delivery of the part. Approval for its game also came early from the Federal Communications Commission, and by May, 1976, many stores had sufficient stock to meet Father's Day demands. Reorders poured in, encouraging Coleco to build up heavy production capability.

Coleco president Arnold Greenberg estimates that his company's 1976 games sales exceeded $110 million.

Even before the Christmas 1976 season, the momentum was clearly evident. By the middle of 1976, approximately 70 companies were in the home video game business.

Atari, recognizing that the battle ahead would be awesome, began looking for a way to raise more capital. It received the financial backing it needed to broaden its activities in the fall of 1976 when Warner Communications paid $28 million to take ownership. Bushnell continued in his post of Atari board chairman.

Sales for the TV games during the Christmas 1976 holiday season lifted the industry into the big business category.

A survey of game manufacturers, conducted by hfd-Retailing Home Furnishings and published in its January 13, 1977 issue, indicated that TV game sales in 1976 were approximately $187,000,000. Estimated unit sales were 3.39 million.

Projections by manufacturers for 1977 see units shipped rising to 8.14 million with sales ranging from $270,000,000 to $500,000,000.

Also providing evidence that the industry had stabilized and could offset bad publicity was reaction to the ion burn scare.