How Alienware's gaming PCs kept their cool
The company, known for its distinctive alien head logo and edgy designs, celebrates its 20th anniversary. Now owned by Dell, Alienware envisions even more of its PCs -- thanks to VR -- in our futures.
- Author of the award-winning, NY Times-reviewed nonfiction book The Tetris Effect; Longtime consumer technology expert for CBS Mornings
Imagine it's 1996, and you just finished watching FBI Special Agent Fox Mulder break out of a Russian gulag in his search for the truth about aliens, government conspiracies and the paranormal.
Nelson Gonzalez couldn't get enough of TV shows like "The X-Files," "Star Trek," "The Outer Limits" and "Lost in Space." It was a golden age of sci-fi, accented by movies like "Independence Day" and "Mars Attacks!"
All that sci-fi inspired Gonzalez, who, with his childhood friend Alex Aguila, decided to start a new kind of PC company. They named it Alienware.
Why did the world need a new kind of PC company? For Gonzalez and Aguila, the answer was summed up in one word: games. Both were into gaming, big time. But PCs at the time weren't able to deliver the horsepower needed for fast-moving, realistic games like the flight simulators Gonzalez played. So Gonzalez convinced Aguila to quit his job, pitch in $5,000 and co-found a company to build custom PCs for gamers like themselves. They maxed out their credit cards, racking up $13,000 in debt to get Alienware off the ground.
But a computer dedicated to gaming is by definition a niche gadget, and its creators knew it wasn't going to be an obvious or easy sell. They prayed they could sell at least 50 to 100 machines a month.
"A lot of people thought we were nuts," remembers Gonzalez, now 52. "The only people that understood us was us -- the gamers."
Fortunately, gamers got it. Now, 20 years later, Alienware is one of the most recognizable gaming PC makers in the world, thanks to innovations like computers cooled with water and laptops packed with enough tech to keep up with high-performance games. Dell bought the company in 2006, but Alienware has remained true to its roots, selling niche machines with unusual designs to a gaming PC market that represents just a fraction of the 276 million PCs shipped every year.
Alienware's effect on PCs and gaming isn't about numbers, though. It's about, as any gamer will tell you, the origin story.
When aliens meet hardware
Gonzalez and Aguila came up with the idea for a gaming computer after realizing how hard it was to replace parts in their PCs so they could play the newest, most exciting games. Back then, titles like Microsoft's Flight Simulator, ID Software's shooter game Doom or a murder mystery thriller based in a futuristic New York called The Ripper needed powerful computers, stuffed with extra video and graphics tech, to play at their best.
So Gonzalez became a "tech guy," building PCs for friends out of his garage. Then he realized other people might want to buy them too.
Alienware co-founders Nelson Gonzalez and Alex Aguila.
For the company name, they mixed the words "alien" and "hardware." Gonzalez wanted something that started with the letter A so it would be at the front of the Yellow Pages. "It almost became AAAlienware," joked Arthur Lewis, another childhood friend of Gonzalez and Aguila who later served as Alienware's president and CEO.
In 1997, the company created its first custom-built desktop computer, the Blade.
On a whim, Gonzalez began sending the machine to reviewers at popular magazines like PC Gamer. The response was better than he could hope for. He followed with the Area-51, named after the secret military base thought to be filled with alien technology collected by the US government. Boot magazine praised its speed and design, such as the extra fans that allowed owners to eke out even more performance. "The Area-51 computer is a remarkable device," the magazine wrote.
People began buying Alienware computers even though it took more than a month for them to be hand built and the average price was about $4,500. (A brand-name PC cost as little as $600 then.)
"A lot of the people that were into the same things we were into really accepted it because they understood it," Gonzalez said. "They got it."
By 2005, the company was selling 60,000 machines a year and taking in about $175 million in sales. But it had bigger dreams. It wanted to sell into more international markets and had set a goal to expand sales to $1 billion. So a year later, Alienware agreed to a buyout by Michael Dell's eponymous computer company, then the world's biggest PC maker.
Both companies were selling machines direct to consumers, but Dell had the advantage of massive scale, allowing it to buy a lot of parts at a low cost, Gonzalez said at the time. And so the deal with Dell was born.
Not everyone thought it was a good match.
Rahul Sood, founder of competing Voodoo PC, dubbed the matchup "Dellienware" and warned it could signal that Alienware was distancing itself from the ultra-high-end gaming market. (That ended up not being true, and Voodoo was bought by Hewlett-Packard six months later.) Dell, meanwhile, was missing sales targets and facing scrutiny for poor customer service, a trend that made "Dell hell" a popular search term.
That was enough to drive away Devin Dorshimer, whose parents bought him an Alienware PC as a birthday-plus-Christmas present just before the acquisition. He'd been enamored with the space-age looks and powerful chips after seeing the company's computers featured in a gaming magazine. "I could play everything I wanted," the now-26-year-old professional ballroom dancer said. And play he did, using his hulking green computer to tackle titles like the shooter Quake III and adventure game EverQuest.
The acquisition surprised him and his friends, whose initial response was that Dell "makes boring laptops." "Dell's not a gaming company," he thought. He was so put off by the marriage that he didn't buy another Alienware computer until earlier this year, a decade later.
Dell and Alienware pretty much brushed aside the criticism. Dell set up Alienware as a subsidiary, rather than part of the larger Dell engine, and let the team keep the alien-head logo hanging in front of its Miami offices and emblazoned on its computers.
Alienware has been based in the same Miami building since before Dell purchased the company in 2006.
That's how Alienware continues to operate today, pumping out high-end PCs crafted by the division's own designers and warrantied under rules that give gamers unusual freedom to upgrade parts and software without voiding their protection. Alienware still has the same call centers, and many of its early employees have stuck around.
"This is what makes markets. We've succeeded by not being afraid to take risks," Michael Dell said in an email interview this week. "The more skeptics, the greater the rewards for the risk takers."
And Alienware is still considered a cool-geek brand, regularly appearing on the current hit TV show about nerd culture, "The Big Bang Theory."
"They're one of the sports cars of the PC world," said Bob O'Donnell, president of Technalysis Research. "You can't survive just on that, but it helped reinforce that message that they're going to build kick-ass machines, make them look slick and make them edgy. And if you want the real deal, this is where you go."
Space-age looks
Alienware may have started building computers using off-the-shelf parts, but that didn't last long. With a design codenamed the Predator, the company wanted to make its computers like they'd come from the not-so-secret Nevada military outpost.
Alienware considered several designs for its chassis, including one shaped like a nuclear plant, in an attempt to demonstrate power and performance. "We really thought about an industrial design that was out there," Gonzalez recalled.
Eventually, they came up with a look they felt was somewhere between futuristic tech and sci-fi alien. It was tall and came in eight futuristic neon colors like "plasma purple" and "conspiracy blue." It was also molded to look almost like an alien's head, complete with black grills on the sides that resembled large eyes. Designers added lights around the edges to give the machine the kind of eerie look you'd expect in a spaceship with a gaming computer on board.
Released in 2003, the Predator was also designed to be easily opened and upgraded, a far cry from typical computers that required you to remove lots of screws and then fish around in the case for various plugs. Since Alienware's designers knew their machine would likely be opened by their customers at some point, they made sure manufacturing workers knew how to neatly tie together the wires inside the computer so they looked, well, sort of pretty.
The computers "stunned people when they went into retail stores," recalled Kelt Reeves, president of Falcon Northwest, which started making high-power PCs in 1992. "They were the best looking PC in the aisle of beige boxes by a mile."
Walk around stores or gaming conferences like the Electronic Entertainment Expo taking place in Los Angeles next week, and it's clear Alienware made its mark on the industry. Competing computers, headsets and other devices now make a point of embracing distinctive designs.
See also: Alienware changed the game of making PCs
Alienware's popularity also helped it usher in new technologies. The Area-51m, for example, was the first laptop powerful enough to play nearly any game when it was released in 2002. The Aurora-ALX pioneered new cooling techniques to allow the computer to run even faster than predecessors when it landed in 2010. And the 11-inch M11x laptop was one of the first truly portable gaming laptops at half the weight of its older siblings . In addition, Alienware was one of the first to make playing PC games in the living room practical with the Alpha, a computer designed to work with a television. Released in 2014, it was smaller than Microsoft's Xbox One video game console.
A future in VR
Alienware's machines today play in a world dominated by sleek and airy MacBooks and Surface tablets. In the niche market for powerful gaming machines, its rivals include Falcon Northwest, Origin PC and Razer. But some question whether big, boxy traditional desktop PCs and heavy powerful laptops with large displays can survive.
It turns out Alienware may have found an unlikely savior.
Early Alienware employee Frank Azor now leads both the Alienware and Dell XPS brands.
Four years ago, a startup called Oculus VR burst onto the gaming scene, delivering on virtual reality devices that had been dreamed of for decades. "Step into the game," the company wrote on its Kickstarter, which garnered nearly $2.5 million in preorders during a monthlong fundraising campaign. Oculus became so popular that Facebook bought it for $2 billion in 2014, just as other companies like HTC, Sony, Google and Microsoft began offering their own takes on VR.
The $599 Oculus Rift goggles, which went on sale in March, require a high-end PC to work -- exactly the type of hardware Alienware specializes in.
"We've been solving these problems for PC gamers for 20 years now," said Frank Azor, who heads Alienware today. "It's around making it easier for folks to get set up quickly. And if something goes wrong, for them to be supported properly."
The company has already partnered with Oculus and HTC to offer computers that effectively have a VR-ready stamp of approval. Alienware is designing all its future computers with VR in mind, Azor said.
A few years ago, conventional wisdom said PC gaming was dying due to the rise of tablets and smartphones and the popularity of consoles like Microsoft's Xbox One and Sony's PlayStation 4. Now, some are calling this the golden age of PC gaming, thanks to VR, lower-cost PCs and blockbuster games.
"You can find products that are gaming-capable in the industry, but very few are truly designed for a gamer from A to Z," Azor said. "That's the primary differentiator between Alienware and pretty much everybody else."
CNET's Connie Guglielmo contributed to this report.