The Commodore 64 was rushed together by exhausted MOS Technology engineers over the Thanksgiving and Christmas holidays of 1981, crammed into an old VIC-20 case, and shown at CES in January 1982 with a $595 price tag that left Atari executives stunned. This episode explains how CEO Jack Tramiel's demand for 64 kilobytes of RAM, at a time when the memory alone cost over $100 retail, was made possible by vertical integration: Commodore owned its own chip fab, so a machine that sold for $595 cost an estimated $135 to build.

From there we follow the price war that drove the C64 down to $199 by 1983, bled Texas Instruments out of the home computer market, sparked a hilarious $100 rebate loophole involving $10 Timex Sinclair machines, and helped trigger the North American video game crash. We break down the VIC-II graphics chip and Bob Yannes's S ...