Turning cheese into dough

(Fortune Magazine) -- NOLAN BUSHNELL, 63, founder and CEO of uWink

Nolan Bushnell made his first fortune in 1976 when he sold gamemaker Atari to Warner Communications for $28 million. Next he convinced parents that gobbling bad pizza, playing arcade games, and watching a robotic rat named Chuck E. Cheese was a good use of their kids' time. Now the entrepreneur is merging the concepts in uWink, a restaurant where customers play interactive games as they dine. Days after his first establishment opened near L.A., Bushnell spoke to FORTUNE's Ellen Florian Kratz.

Why is your business called uWink?

I wanted a name that was playful. Short names are better than long names.

So you think adults want to play videogames while they're eating?

Most videogame experiences that people have today are isolated, and I don't perceive that as being social. I want to create a situation where a group of four goes into a restaurant not knowing a person in there and leaves with six new friends.

You don't have any waiters and waitresses. Won't customers feel a little neglected?

It's almost the opposite. People say, 'Gee, it's so easy for us to [use the touchscreen] for another drink or appetizer.' They're saying it's a little bit like Las Vegas in that it's too easy to spend money.

What's an example of a game you have in the restaurant?

We've got a best-friend game for birthday parties in which the birthday person makes a list of things that she likes and then everybody else tries to guess what they are. Of course, the person who most matches the birthday person is clearly the best friend. Tween girls love that one.

Have you played Grand Theft Auto?

I don't want to be a prude, but I just don't believe that any industry should race to the bottom. I perceive those things to be not good for kids or adults.

You say you've done some clever financial engineering. Can you give an example?

If you're having a normal meal, you never ever pay for game play. It's free. But if you're just hanging out, there's a game surcharge. We're trying to make an economic model that is significantly more profitable than a regular restaurant.

So what was Steve Jobs like when he worked for you at Atari?

Steve was a little bit, let's say, meticulous. I loved him dearly and still do. He didn't abide fools gladly.

Is the food better than Chuck E. Cheese's?

Yeah. In fact everyone made me promise I'd forget everything I learned about pizza at Chuck E. Cheese. uWink's macaroni and cheese has garlic and extra flavors you don't expect because we're using high-quality cheeses [like smoked mozzarella].

Have you ever had your birthday party at Chuck E. Cheese's?

I have not. My kids have.