In January 1981, a handful of semiconductor engineers at MOS Technology in West Chester, Pa., a subsidiary of Commodore International Ltd., began designing a graphics chip and a sound chip to sell to whoever wanted to make “the world’s best video game.” In January 1982, a home computer incorporating those chips was introduced at the Winter Consumer Electronics Show in Las Vegas, Nev. By using in-house integrated-circuit-fabrication facilities for prototyping, the engineers had cut the design time for each chip to less than nine months, and they had designed and built five prototype computers for the show in less than five weeks. What surprised the rest of the home-computer industry most, however, was the introductory price of the Commodore 64: $595 for a unit incorporating a keyboard, a central processor, the graphics and sound chips, and 64 kilobytes of memory instead of the 16 or 32 that were then considered the norm.
I still remember getting my C64 back in the 1980's. It was my stepping stone between the ZX81 and the Commodore Amiga. After the ZX81 (and those very early PC's that started to appear), the C64 was actually a big step forward with its graphics (sprites) and synthesizer sound. I always thought it was the Amiga that brought the big step forward, but had forgotten about the C64.
See Creating the Commodore 64: The Engineers’ Story
The daring and design that went into the best-selling computer of all time