The following history of the Amiga documents the development and commercial history of the Amiga, a home computer product line manufactured from the middle 1980s up to today.

The Amiga's Original Chip Set was designed by a small company called Amiga Corporation during the end of the first home video game boom. Wary of industrial espionage, the developers codenamed the chipset “Lorraine” during development. Development of the Lorraine project was done using a Sage IV (m68k/8 MHz/1MB) machine, nicknamed “Agony”. Amiga Corp. funded the development of the Lorraine by manufacturing game controllers, and later an initial bridge loan from Atari Inc. while seeking further investors. The chipset was to be used in a video game machine, but following the video game crash of 1983, the Lorraine was repurposed to be a multi-tasking multi-media personal computer.

The company demonstrated a prototype at the January 1984 Consumer Electronics Show in Chicago with an attempt to get investors on board. Reporters saw it perform the Boing Ball demo with stereo sound. The Sage acted as the CPU, and BYTE described “big steel boxes” substituting for the chipset that did not yet exist. The magazine reported in April 1984 that Amiga Corporation “is developing a 68000-based home computer with a custom graphics processor. With 128K bytes of RAM and a floppy-disk drive, the computer will reportedly sell for less than $1000 late this year.”

Follow up presentations were made, at the following CES in June 1984, to Sony, Hewlett-Packard, Philips, Apple, Silicon Graphics and others. Steve Jobs, CEO of Apple, who had just introduced the Macintosh in January, was shown the original prototype for the first Amiga and stated that there was too much hardware -even though the newly redesigned board consisted of just three silicon chips which had yet to be shrunk down. Investors became increasingly wary of new computer companies in an industry that the IBM PC dominated, and employees mortgaged their homes to keep the company running.

In July 1984, Atari Inc. was bought by the recently fired CEO and founder of Commodore, Jack Tramiel, who was taking a substantial number of Commodore's employees with him. His son Leonard later discovered that Atari Inc. loaned $500,000 which must be paid back in one month and Atari Corp. use this to counter sue Commodore. And then in a “surprising” development, in August 1984, the Amiga group found an interested Commodore. Amiga was purchased by Commodore for $27 million -including paying off the Atari loan.

When the first Amiga computer was released in July 1985 by Commodore, it was simply called the Amiga 1000, devoid of references to Commodore. Commodore marketed it both as their intended successor to the Commodore 64 and as their competitor against the Apple Macintosh and the Atari ST. It was later renamed the Commodore Amiga 1000. The Amiga 1000's graphics abilities were revolutionary for its time.

At a relatively affordable base price of US$1,295 (equivalent to $2,884 in 2016) the Amiga could display up to 4096 colors, produce 8-bit stereo audio and run several applications concurrently. These qualities were unprecedented in a consumer-oriented computer and gave the Amiga 1000 a significant technical lead on its three main competitors (the Atari ST, the Macintosh and the IBM PC) that was not matched until after the Amiga faded from the mainstream market.

The public saw both Commodore and Atari as selling, as John C. Dvorak wrote, “cheap disposable” game machines, and observers believed that either the ST or Amiga would survive, not both. The ST had more software in the beginning, but larger companies like Electronic Arts and Activision promised Amiga software. Neither had distribution from major chains like ComputerLand or BusinessLand, or support from large business-software companies like Microsoft, Ashton-Tate, or Lotus. The New York Times noted that “it is not clear that the business computer user really cares about colorful graphics”; the computers' sophisticated graphics strengthened their perception as “game machines”.

Poorly marketed, the Amiga 1000 was not an instant success. An August 1986 Compute editorial expressed amazement that Commodore, insisting that the Amiga was a business computer, did not show it at the summer Consumer Electronics Show. The magazine estimated that in their first year of availability the Atari ST, with Tramiel's “superior marketing attack”, had outsold the “withered” Amiga. Stating that the “industry needs the vision and direction that a Commodore can help provide”, it urged the company to pursue the consumer market that it had been very successful in with the 64. Jerry Pournelle in BYTE in September praised the Amiga Sidecar as “really impressive”, and approved of the “great deal of Amiga software” at Spring COMDEX, but wondered “whether Commdore has—and keep—enough high-tech people to support the Amiga properly” after large layoffs, while “Atari ST software pours forth like a flood”. Bruce Webster reported in the magazine in January 1987 that Commodore had sold about 150,000 Amigas as of October 1986, but “imagine how many (the company) might have sold if they had done things right”. He criticized many aspects of Commodore's handling of the computer, including selling “not-quite-finished” hardware and software, not supporting third-party developers, poor advertising, and internal uncertainty of the Amiga's target market. Aware of its reputation Commodore asked the press to call the computer “The Amiga, from Commodore” and designed new logos to replace its own iconic “C=” design. Commodore compounded the problem by marketing the new 8-bit Commodore 128 alongside the Amiga, confusing the general public about Commodore's direction and the Amiga's advantages.

By 1987 rumors spread that the size of the Amiga market disappointed software vendors, which were uncertain of Commodore's intention for the computer. Bing Gordon of Electronic Arts, which had prominently supported the Amiga, stated that year “The Amiga has never done as well as we had hoped when we started out”, and that Electronic Arts had expected Commodore to sell it as a $600 high-end home computer instead of a $1800 business computer. The best-selling Amiga games sold about 25,000 copies in 1986, said Gordon, compared to 125,000 to 150,000 copies on the Commodore 64. In 1994 BYTE wrote “The Amiga was so far ahead of its time that almost nobody — including Commodore's marketing department — could fully articulate what it was all about. Today, it's obvious the Amiga was the first multimedia computer, but in those days it was derided as a game machine because few people grasped the importance of advanced graphics, sound, and video.” This marketing confusion would plague the Amiga throughout its lifetime, even as it changed hands between Escom, Gateway and other owners.

In 1987, faced with strong competition from Atari ST in the lower end of the segment, Commodore released the cost reduced Amiga 500 and the high end Amiga 2000 for the respective prices of US $699 and $2395 (this price included 1 MB RAM and a monitor).

By 1988 software sales for the Amiga remained disappointing compared to those for the IBM PC, Commodore 64, and Apple II. With its lowered price, the Amiga 500 went on to become a successful home computer and eventually outsold its main rival, the Atari ST. The Amiga 2000, thanks to its Genlock and internal expansion slots, managed to carve out a market niche within desktop video. This market was not as large as the office and publishing markets dominated by the IBM PC and Apple Macintosh and as a result the Amiga 2000 lagged these systems in sales. Also, Commodore had initially announced a price of $1495 for the 2000, resulting in widespread grumbling among their customer base when the higher price was made public. To a lesser degree this was the case for A500 which Commodore announced its price $595.95 but later released it at $699. The Amiga did see widespread use in the television and video production industry during the late 1980s and early 1990s, including on popular shows like Clarissa Explains It All and Unsolved Mysteries.

… to be continued …

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