If you grew up playing Missile Command, Asteroids, Centipede, and Battlezone, take heart: The men who created those games are now building iPad and iPhone games.

Seamus Blackley, co-creator of the Xbox and president of Innovative Leisure, has assembled a “dream team” of old Atari game designers and set them to work building iPad, iPhone, and iPod touch games. He’s assigned these “geriatric” experts to work with young programmers to develop new arcade-like games for Apple devices. He is betting that gameplay, not distribution power or brands, will triumph in the mobile gaming business.

He and his partner chief executive Van Burnham have recruited a team of veterans from the “golden age “of Atari in the 1970s and 1980s to create games for the “new arcade” on iOS devices. They include Ed Rotberg, creator of the classic Atari game Battlezone; Owen Rubin, creator of Major Havoc and Space Duel; Rich Adam, creator of Gravitar and co-developer of Missile Command; Ed Logg, co-creator of Asteroids and Centipede; Dennis Koble, creator of Touch Me and Shooting Gallery; Tim Skelly, the only non-Atari veteran arcade game designer who worked for Cinematronics and created games such as Rip-Off; and Bruce Merrit, creator of Black Widow.

We caught up with Blackley in a fireside chat at our GamesBeat 2012 conference, where he made fun of my fish tie. Here’s an edited transcript of our interview.

GamesBeat: So what’s the business idea behind Innovative Leisure?

Seamus Blackley: It’s to go and find those designers who initiated the whole thing in the first cycle of casual games in the industry, which was the explosion of the arcade business. We got together all of these people from Atari to make new games. Every classic arcade game you can think of, every style of gameplay that you can think of, were more or less all of them, at one point, at Atari.

GamesBeat: It seemed like a great idea for you, to take advantage of the sort of retro urge among a lot of older gamers…

Blackley: Well, there’s the retro urge, but I don’t think that’s the important factor. The important factor is that you have this whole audience of people who are lapsed gamers, who stopped playing games when they turned into movies. They want to have a game experience on whatever device is in front of them. In fact, when you look at what’s going on with Blackberry today, Blackberry failed to have games. And devices that fail to have games fail in the marketplace.

It’s a very interesting thing. People expect to be entertained, and they expect to be entertained in a way that’s very seamless with life. It’s very low friction. It’s a moment that’s identical to what happened when video games first showed up in arcades. It’s a moment that’s also identical to when home consoles started to take off. The people who wanted to play games, they wanted to play them in a way that integrated into their lives. I think that the main emphasis for this company, these are the guys who first came to that idea…. To a modern audience it’s very new. Games that fulfill that same need to play a game right now for a little bit before I go back to work, before I go on with whatever I’m going to do.

GamesBeat: There is also a down side of these cycles, where people fear that the games that they love are going to go out of style and the whole business is going to die off. There’s some fear that the $60 console game is going to die off and we’re going to be left with stuff that isn’t as good.

Blackley: A lot of the fears about the rise and fall of games from a business standpoint are kind of funny in the context of these cycles of waxing and waning in the industry. If you look at it as a pure business proposition, you say, well, social is hot here, games that are social are going to win. It’s not true. Games that are good are going to win. You can actually almost accurately track the growth and contraction in the games business according to whether or not the games we were producing were satisfying. What’s happened with the explosion of mobile and social games is we’ve discovered that an audience has a huge pent-up demand for a kind of game we’re not giving them. It doesn’t mean there’s not still demand for console games, it doesn’t mean that there’s not still demand for all good games. The explosion in growth fueled by the discovery of this new audience tends to sort of drumbeat out the rest of the business. People who look at it strictly in terms of growth in numbers on spreadsheets tend to predict the demise of sectors, much as they predicted the demise of the PC industry a couple of console cycles ago, much as they predict the demise of the Xbox thank to social games now… Yet we have a very strong PC business that’s grown, and it’s growing even faster now that we’ve tapped other pent-up demand in the form of things like Kickstarter. You see people willing to give millions of dollars for PC games. It doesn’t indicate that the audience is looking to be entertained in new ways. It indicates that the audience is looking to be entertained in the ways that they love, and it doesn’t necessarily follow the business cycle a lot of people are predicting.

GamesBeat: So you’re investing in game designers and game design. What is the reaction people have had to this plan, that you’re investing in talent?

Blackley: The reaction is great. It’s the same reason that Tim Schafer has been successful on Kickstarter, and other people. People love to play games that they love. And when you say that you’re going to get the band back together, people who invented a lot of fundamentals of gameplay and made these great games. People realize that their connection to the games on mobile devices is very much like the connection that they had to games in arcades. The idea of…

GamesBeat: Nobody ever really tried to get the Atari guys back together, right?

Blackley: Well, no. The human brain is magnificent and tragic at the same time. The tragedy is that when things sort of leave your view, you forget about them. I think one tends to assume that those things are old and those designers are gone and there are new designers now. It turns out, and Van and I were lucky enough to meet these guys at their annual golf tournament, that they are still epically smart and incredibly interested in game design, and they’re great friends.

They have this incredible rapport, which is a fancy way of saying that they give each other a titanic amount of crap, constantly. It comes from the feedback process when they were in the Atari lab. These guys came to Atari in an era when Atari has a huge amount of success with Pong, huge amount of success with Pong knockoffs, but Nolan and the other guys at Atari had no idea where to go next. It was a company based on copying a couple of games and engineering a solution that would allow them to be cheap enough that you could play it on a television. It took off. Where do you go now?

We need guys who can come up with ideas for new games. What the heck is that? Nobody knew what a game designer was. They made a couple of lucky hires and hired some guys who started to figure out what it was to come up with new ways to make games. Those guys that went on to invent things like driving games, shooting games. The concept of three lives. Crazy, fundamental things that you don’t think needed to be invented, but they had to be invented, and these guys did it by working together. Exploiting the sort of computer counterculture stuff that was going on in the ’70s to figure out what it meant to be making these games. They went on to have what still is the longest consecutive string of hits in the history of game design, and it was because they wanted to work together and were constantly thinking of new ideas and giving each other feedback about those ideas. So we met them and saw they still had that. It was obvious that somebody needed to give them a shot at getting back together.GamesBeat: Zynga’s hiring. They’re up to about 3,000 people now, but more specifically, they’re hiring more people for game design. They have 150 people with the title of game designer.

Blackley: Again, there’s a chasing-the-tail aspect to the games industry and the general reaction to business trends. Everybody now understands, for instance, in the motion picture industry, that story is the most important thing. People understand that it’s fundamentally a creative industry, that the power of creativity in film has a lot to do. Not everything, but a lot to do with whether you’re going to succeed or fail. Games haven’t really done that. People evaluate the success of games like Zynga’s games based on the explosion of social. I think if you asked the audience, they’d say they play FarmVille because it’s awesome and they love playing it. They like the way that it was designed. And so I think that it’s inevitable that after that initial success… Just like with Atari. Atari had some success with Pong, not really thinking about game design, they thought about making this thing that was entertaining and releasing it. It was massively successful, and then you had this problem. We need to make more. How do we make more? I think it’s an inevitable consequence of success.

GamesBeat: You’re focusing on iOS. How did you choose that platform? Is it a coincidence that it might take about as many people to make an iOS game as it once did to make an arcade game?

Blackley: Well, if you believe in deeper karmic resonance and stuff. There are so many similarities between what’s happening on mobile platforms now, specifically the sort of pad platforms, and what happened in the arcade business that it’s kind of creepy. We could go into that in great detail. We concentrate on the Apple platform for the same reason a lot of people have, which is that it’s a well-defined business, right? It’s a well-defined, relatively predictable business structure that you can launch a new game into. You can control the number of unknowns you have. We may end up releasing products for a whole bunch of different categories, but for now, we’re going to try Apple and see if the ghost of Steve Jobs is our friend. Who, incidentally, started off in his first job as an Atari game designer with some of these guys. Again, the karmic resonance, you can’t get away from it.

GamesBeat: So what do you actually think of the console business now? Sales year to date are down 25 percent in the U.S. I don’t know if that just means we’re getting close to the end of the console cycle, or something else is at work…

Blackley: Yep. It’s the end of the console cycle. It happens at the end of every console cycle. Per my earlier comment about…

GamesBeat: Should we not be alarmed?

Blackley: I don’t think we should be alarmed. The consoles are old. There’s not really a lot of interesting new content coming out en masse. I mean, there’s obviously some very interesting new games coming out for consoles, but it’s the end of the cycle, people are looking for something new. Witness the unbelievable phenomenon today on Kickstarter, Ouya [editor’s note: now past $4 million], that represents a huge amount of pent-up demand from console customers, people who want a new console. That’s them voting with their money.

That, I don’t think, comes from a desire to have a new console. That comes from a desire amongst fans and game developers alike to have a viable platform on which to play high-def games on their television. People want that kind of content. They demand that kind of content. They haven’t tired of those experiences. But they’ve tired of what we’re giving them and the product that we have for sale. So the market declines a bit, and then we give them something new. It’s an entertainment business, and again, we keep coming back to those entertainment cycles. It’s an entertainment business, if you’re not delighting and surprising the audience, you’re not going to do well.

GamesBeat: It almost seems like a push for platform owners to wake up and embrace some of these trends…

Blackley: I’m massively happy that it is no longer my problem, because if I was sitting at Sony or Microsoft and I saw what’s going on with Ouya. You really have to think about what that means. You have to think about what you can do to access that sort of pent-up demand and enthusiasm amongst the audience. Ouya, iPad, all of these things. The audience loves games. I like to say this a lot, but I think it’s very true. If you release a device that’s capable of playing games, or a device that’s going to become part of people’s lives today, and you don’t enable it to entertain, not necessarily with games but with entertainment in general, then it’s going to do well. It’s going to fail. That is an aspect of the consumers that we have today. They’re smart, they understand what they want. If you give them something that entertains them and you’re honest with them about it, you’re not trying to exploit them, you’re not trying to sell them some piece of crap game that you’re cynically trying to market to them. They’re becoming increasingly aware of those times when you do try to cynically exploit them. They’re increasingly aware and increasingly connected about what’s new and what’s not, what’s good and what’s not, and you’re going to start to see that reflected in the numbers.

GamesBeat: Is there something scary about this plan for making games as well? You don’t have to spend $100 million making an iPhone game, but I imagine there’s other things you have to worry about.

Blackley: It’s the most wonderful time, I think, since the early ’80s for game design. When you think about it, there are three things going on. First of all, we’ve discovered this incredibly great thing, which is that everybody wants to play games now. People have been quoting numbers all day here about the size of the audience and it’s great when you look at them all. But the overarching message, the macroscopic picture, is that almost everyone is a game customer. That’s the greatest news ever for our industry. Another wonderful thing going on is that people want to play games that can be made more quickly, that can be made for a more casual experience. What that means for game designers is, it’s the end of the tyranny of having to work on big multi-year console projects. There are people who still have to do that, but when you’re on a big multi-year console project, you’re not playing games every day.

You can’t change your game to reflect what’s going on in gamer culture and in world culture. You have to take a gamble on something that’s going to happen a couple of years from now. It’s very difficult, and it tends to disconnect us from audiences. We’re seeing a time now where not only does the audience want the kinds of games that are really fun to make, but they’re enabling us to become part of the audience again. I can remember in my class of game designers, who are now old men… In the ’90s there were news stories about the fact that we were aging, and now instead of making games for ourselves, we’ve become slightly more abstract, we were having to guess at the tastes of people younger than us and people who weren’t necessarily our demographic. The thing that’s happening now that’s so beautiful is that we’ve all become part of the demographic again. As a game designer, you are making games for yourself again. You’re making games for a lifestyle that you have and that you share in, on devices and on social media. That’s super exciting. If you’re invested in trying to maintain the old order and keep the business models the same as they’ve always been, it must be extremely terrifying. If you’re interested in making new games, experimenting with new types of gameplay, and experimenting with new ways of making people happy, it’s probably the best time it’s ever been.

GamesBeat: You’re mashing up your older game designers with younger college folks from USC and other places. Why did you do that, and what are you finding as a result of that direction?

Blackley: Well, the geriatric crowd that I work with, this is their own name for themselves… They actually have even less attractive names for themselves, but I’ve been advised by our PR professionals not to ever use those. But when you meet them, a couple of things impress you. The first thing is that they’re incredibly animated, young-seeming people. They’re constantly playing games, thinking about games, thinking about game design. When the Time photographers came, their comment after the photo shoot was, “Man, that’s the weirdest group of older guys I’ve ever met.”

Because they’re all huddled around televisions analyzing game design and talking about programming. You have Ed Logg, who made Asteroids, looking at a PSN game and saying, “Look, he’s not pre-computing the jump…” They’re all commenting on it. But at the same time, these guys come from a different era. They have a lot of strengths that they bring to the design of these games, and one of them is, they remember what it’s like and live what it’s like to create something from nothing. Dennis Koble made the first driving game. The first video driving. And so he knows what it’s like to have an idea that is totally new. Not a mash-up of other stuff, but totally new. But these guys don’t come from the culture of people who’ve always come up with these devices. So how do you deal with that? Well, we got the idea to bring in these smart young programmers and see if everyone could work together. It turned out to be a really interesting sociological exercise for a couple of reasons.

First, the programming tools now are obviously light-years ahead of where they were ten years ago, and from an entirely different universe compared to what existed when these guys started programming. Some of these guys started programming on punch cards. But at the same time, programming becomes much more of a system. I need to add physics on this, so I’ll attach the physics structures to this thing and see how it behaves. If something is too slow or something doesn’t work right, or if you want something that’s going to be truly custom, it’s a little bit of an awkward sort of event. So you have these kids, with this awesome systems engineering background, and then you have guys like Ed Logg or Bob Smith, who are really, truly frightening coders. They will go and rewrite the entire event-handling system of some big software engine package overnight. The kids will come in the next day and be absolutely ashen-faced, not even understanding how somebody could conceive of doing that. But for the old guys it’s no big deal. Between the two of them, we’ve been able to create a couple of really special things that each group couldn’t have done on their own.

GamesBeat: So what’s next for you?

Blackley: Well, I hope we make people really happy with the games we’re making. I hope we find a couple of these designs that really come out. That’s exciting. We have something like 30 games right now that we’re working on. We’ll release a bunch in the next few months. They’re all very different, a lot of them have very novel gameplay, things that people haven’t seen before. I think it’s going to be fun to see what works. It’s going to be fun to see what doesn’t work, it’s going to be fun to figure out everything from how to structure the business around these games to how to handle people’s feedback, figuring out how to incorporate customer feedback into the next game. That’s exciting, it’s a wonderful and exciting thing about being a game designer right now.

GamesBeat: Game startups started getting funding from VCs and so forth a few years ago. You’re a little late in that particular cycle of this happening. What is it like starting a company now? I don’t know if you feel like you’re later as a game startup…

Blackley: In your world, you think about all that crap. I don’t think about it. We had an awesome idea for a company, we got a bunch of guys together, and it was super fun to work with them. We found a deal and financed the company, and all sorts of people started coming to us with different business offers. I didn’t really think about it too much. I suppose, on some planet, you want to represent yourself as being a cunning businessman who’s finding the most cutting-edge deal at exactly the right time, but it never really works out that way.

Having done, I guess, at Creative Artists Agency, probably hundreds of millions of dollars in deals, I thought it was always dependent on whatever you could do that was right for the game at the right time. And so for me, I’m just happy that we’ve been able to find business situations that are right for the way we want to run this company. That’s the most important thing. Not necessarily going to a cocktail party in Silicon Valley and talking about how much more awesome my board structure is than some other guy’s.

GamesBeat: How do you feel about starting this up versus starting up the original Xbox?

Blackley: Well, it’s the same thing, really. I got 150 million texts today about this Ouya platform and what I thought about starting a new console. For me, it’s an easy answer. The idea for the Xbox was bred out of making an enabling tool for developers. I love game developers and I love what happens when you give game developers the opportunity to make awesome stuff. That’s what makes the business work. And so all of the stuff that’s been going on with game consoles, and what went on with Xbox, and what’s going on with Innovative Leisure, is designed around giving great game designers the opportunity to make cool stuff. So it seems the same to me. It is, however, unbelievably nice to not have to do it within a giant monolithic corporate structure.Question from audience: Do you think that Google missed the boat by not making a Google TV that was more like Ouya’s, focused around games? They’ve been struggling with Google TV, they must look at Ouya and think, why didn’t I just do that?

Blackley: Well, I think a lot of companies… The thing that’s great about Kickstarter, aside from the fact that it’s given a lot of cool people a lot of money, is that it’s such a demonstration of the almost frustrated, pent-up consumer demand for this content. I always used to say, when I was doing press stuff for Xbox, that games would have made it if games were covered in entertainment, as opposed to being covered in tech, in places like the New York Times. And then they went and did it. It destroyed my whole awesome line. But that overarching point there is that a lot of companies like the New York Times, media outlets, or Google or Apple, have had a really hard time getting their head around, for some reason, games being legitimate. A lot of people have missed tremendous business opportunities in giving people the ability to play games on platforms that are in front of them all the time. You watch, now… In various places where you can play games on Google, it spikes and takes off. The demand was always there and many boats were missed. It’s not just Google, it’s a lot of them. Heck, it’s Microsoft. Sony missed the boat a couple of times before they started the PlayStation. Everybody looks back now at Sony being prescient, they weren’t, they missed it a couple of times. It’s hard, I think, for people who come from the generation before the video game generation to imagine just how powerful and important this is in people’s lives. Now it’s a little more evident.

Question: You’ve obviously spent your career on the sort of fault line between the Hollywood entertainment world and the gaming world. Where are areas where you see those worlds kind of converging, and where is there still a divide?

Blackley: Traditionally, the place where the two businesses converge has probably been the display device, the living room. Almost nowhere else in between. We’ve never really seen a cultural match between the old-school entertainment business and what’s going on in games. It’s very similar to the cultural mismatch we’ve seen between Hollywood and the technology business. Even now, with the way that the music business works, there’s still an uneasiness between the northern California culture and the southern California culture of music. It’s a completely different approach. One approach comes from an audience that is natively digital, that is hugely respectful of a certain way of doing business and a certain amount of openness and a certain amount of sharing. And another business that is completely built around technology that offered a different kind of control. I still don’t see any of that coming together. Really. I don’t. At some point, though, just like with everything else related to games, the population ages enough that everybody who is in a management position at any company of note will have grown up as a gamer. When that happens there’s going to be a necessary and obvious convergence. It’s happening now at the studios, you’re seeing executives who grew up as gamers, who are starting to take games really seriously. Not in an exploitative way, like “Let’s make an Asteroids movie!”, but in a way that’s much more serious and probably more respectful to the game audience. Ultimately, they’ll be more successful.