Atari, Inc
Encyclopedia
Atari, Inc. was an American video game
Video game developer
A video game developer is a software developer that creates video games. A developer may specialize in a certain video game console, such as Nintendo's Wii, Microsoft's Xbox 360, Sony's PlayStation 3, or may develop for a variety of systems, including personal computers.Most developers also...

 and home computer
Home computer
Home computers were a class of microcomputers entering the market in 1977, and becoming increasingly common during the 1980s. They were marketed to consumers as affordable and accessible computers that, for the first time, were intended for the use of a single nontechnical user...

 company founded in 1972 by Nolan Bushnell
Nolan Bushnell
Nolan K. Bushnell is an American engineer and entrepreneur who founded both Atari, Inc and the Chuck E. Cheese's Pizza-Time Theaters chain...

 and Ted Dabney. Primarily responsible for the formation of the video arcade
Video arcade
An amusement arcade or video arcade is a venue where people play arcade games such as video games, pinball machines, electro-mechanical games, redemption games, merchandisers , or coin-operated billiards or air hockey tables...

 and modern video game industries, the company was closed and its assets split in 1984 as a direct result of the North American video game crash of 1983.

Origins

In 1966, Nolan Bushnell saw Spacewar! for the first time at the University of Utah
University of Utah
The University of Utah, also known as the U or the U of U, is a public, coeducational research university in Salt Lake City, Utah, United States. The university was established in 1850 as the University of Deseret by the General Assembly of the provisional State of Deseret, making it Utah's oldest...

. Deciding there was commercial potential in a coin-op version, several years later he and Ted Dabney
Ted Dabney
Ted Dabney is the often uncredited co-founder of Syzygy and Atari. While working at Ampex Ted met Nolan Bushnell and the two jointly created Syzygy with their first product being Computer Space which was manufactured and sold by Nutting Associates...

 worked on a hand-wired custom computer capable of playing it on a black and white television
Television
Television is a telecommunication medium for transmitting and receiving moving images that can be monochrome or colored, with accompanying sound...

 in a single-player mode where the player shot at two orbiting UFOs. The resulting game, Computer Space
Computer Space
Computer Space is a video arcade game released in November 1971 by Nutting Associates. Created by Nolan Bushnell and Ted Dabney, who would both later found Atari, Inc., it is generally accepted that it was the world's first commercially sold coin-operated video game — and indeed, the first...

, was released by a coin-op game company, Nutting Associates
Nutting Associates
Nutting Associates was an early arcade game manufacturer from Mountain View, California, formed in 1968 by Bill Nutting. They introduced a number of mechanical coin-operated games, starting with a quiz game known as Computer Quiz, and moving on to more common fare like shooting games.In August...

.

Computer Space did not fare well commercially when it was placed in Nutting's customary market, bars. Feeling that the game was simply too complex for the average customer unfamiliar and unsure with the new technology, Bushnell started looking for new ideas.

Bushnell and Ted Dabney left Nutting to form their own engineering firm, Syzygy Engineering, and soon hired Al Alcorn
Al Alcorn
Allan Alcorn is an American pioneering engineer and computer scientist. He grew up in San Francisco, California, and attended the University of California, Berkeley, graduating with a Bachelor of Science degree in Electrical Engineering and Computer Sciences in 1971.- Atari and Pong :He worked for...

 as their first design engineer. Initially wanting to start Syzygy off with a driving game, Bushnell had concerns that it might be too complicated for the young Alcorn's first game. In May 1972, Bushnell had seen a demonstration of the Magnavox Odyssey
Magnavox Odyssey
The Magnavox Odyssey is the world's first home video game console. It was first demonstrated on May 24, 1972 and released in August of that year, predating the Atari Pong home consoles by three years....

, which included a tennis game. According to Alcorn, Bushnell decided to have him produce an arcade version of the Odyssey's Tennis game, which would go on to be named Pong
Pong
Pong is one of the earliest arcade video games, and is a tennis sports game featuring simple two-dimensional graphics. While other arcade video games such as Computer Space came before it, Pong was one of the first video games to reach mainstream popularity...

. Atari later had to pay Magnavox a licensing fee after the latter sued Atari because of this.

When they went to incorporate their firm that June, they soon found that Syzygy
Syzygy (astronomy)
In astronomy, a syzygy is a straight line configuration of three celestial bodies in a gravitational system. The word is usually used in reference to the Sun, the Earth and either the Moon or a planet, where the latter is in conjunction or opposition. Solar and lunar eclipses occur at times of...

 (an astronomical term) already existed in California. Bushnell wrote down several words from the game Go
Go (board game)
Go , is an ancient board game for two players that originated in China more than 2,000 years ago...

, eventually choosing atari, a term that in the context of the game means a state where a stone or group of stones is imminently in danger of being taken by one's opponent. Atari was incorporated in the state of California on June 27, 1972.

By November 1972, the first Pong was completed. It consisted of a black and white television from Walgreens
Walgreens
Walgreen Co. , doing business as Walgreens , is the largest drugstore chain in the United States of America. As of August 31st, the company operates 8,210 locations across all 50 states, the District of Columbia and Puerto Rico. Founded in Chicago, Illinois in 1901, and has since expanded...

, the special game hardware, and a coin mechanism from a laundromat on the side which featured a milk carton inside to catch coins. Placed in a Sunnyvale
Sunnyvale, California
Sunnyvale is a city in Santa Clara County, California, United States. It is one of the major cities that make up the Silicon Valley located in the San Francisco Bay Area...

 tavern by the name of Andy Capp's to test its viability, it took only a few days to realize they had a hit

When they arrived the next morning to fix the machine, they were met by a lineup of people waiting for the bar to open so they could play the game. On examination, the problem turned out to be mundane; the coin collector was filled to overflowing with quarters, and when customers tried to jam them in anyway, the mechanism shorted out.

After talks to release Pong through Nutting and several other companies broke down, Bushnell and his partner Ted Dabney decided to release Pong on their own, and Atari, Inc. was established as a coin-op design and production company.
In 1973, Atari secretly spawned a "competitor" called Kee Games
Kee Games
Kee Games was an arcade game manufacturer that released games from 1973 to 1978. Kee was headed by Joe Keenan, a long-time friend of Atari co-founder Nolan Bushnell. Keenan managed to hire several defectors from Atari, and began advertising itself as a competitor...

, headed by Bushnell's next door neighbor Joe Keenan, to circumvent pinball
Pinball
Pinball is a type of arcade game, usually coin-operated, where a player attempts to score points by manipulating one or more metal balls on a playfield inside a glass-covered case called a pinball machine. The primary objective of the game is to score as many points as possible...

 distributors' insistence on exclusive distribution deals; both Atari and Kee could market (virtually) the same game to different distributors, with each getting an "exclusive" deal. Though Kee's relationship to Atari was discovered in 1974, Joe Keenan did such a good job managing the subsidiary that he was promoted to president of Atari that same year.

In 1975, Bushnell started an effort to produce a flexible video game console that was capable of playing all four of Atari's then-current games. Development took place at an offshoot engineering lab, which initially had serious difficulties trying to produce such a machine. However, in early 1976 the now-famous MOS Technology 6502
MOS Technology 6502
The MOS Technology 6502 is an 8-bit microprocessor that was designed by Chuck Peddle and Bill Mensch for MOS Technology in 1975. When it was introduced, it was the least expensive full-featured microprocessor on the market by a considerable margin, costing less than one-sixth the price of...

 was released, and for the first time the team had a CPU with both the high-performance and low-cost needed to meet their needs. The result was the Atari 2600
Atari 2600
The Atari 2600 is a video game console released in October 1977 by Atari, Inc. It is credited with popularizing the use of microprocessor-based hardware and cartridges containing game code, instead of having non-microprocessor dedicated hardware with all games built in...

, one of the most successful consoles in history.

As a subsidiary of Warner Communications

Bushnell knew he had another potential hit on his hands, but bringing the machine to market would be extremely expensive. In 1976 Bushnell sold Atari to Warner Communications for an estimated $28 – $32 million, using part of the money to buy the Folgers Mansion. He departed from the division in 1979.

A project to design a successor to the 2600 started as soon as the system shipped. The original development team estimated the 2600 had a lifespan of about three years, and decided to build the most powerful machine they could given that time frame. By the middle of the effort's time-frame the home computer
Home computer
Home computers were a class of microcomputers entering the market in 1977, and becoming increasingly common during the 1980s. They were marketed to consumers as affordable and accessible computers that, for the first time, were intended for the use of a single nontechnical user...

 revolution was taking off, so the new machines were adapted with the addition of a keyboard and various inputs to produce the Atari 800
Atari 8-bit family
The Atari 8-bit family is a series of 8-bit home computers manufactured from 1979 to 1992. All are based on the MOS Technology 6502 CPU and were the first home computers designed with custom coprocessor chips...

, and its smaller cousin, the 400. Although a variety of issues made them less attractive than the Apple II
Apple II
The Apple II is an 8-bit home computer, one of the first highly successful mass-produced microcomputer products, designed primarily by Steve Wozniak, manufactured by Apple Computer and introduced in 1977...

 for some users, the new machines had some level of success when they finally became available in quantity in 1980.

While part of Warner, Atari achieved its greatest success, selling millions of 2600s and computers. At its peak, Atari accounted for a third of Warner's annual income and was the fastest-growing company in the history of the United States at the time.

Although the 2600 had garnered the lion's share of the home video game market, it experienced its first stiff competition in 1980 from Mattel's
Mattel
Mattel, Inc. is the world's largest toy company based on revenue. The products it produces include Fisher Price, Barbie dolls, Hot Wheels and Matchbox toys, Masters of the Universe, American Girl dolls, board games, and, in the early 1980s, video game consoles. The company's name is derived from...

 Intellivision
Intellivision
The Intellivision is a video game console released by Mattel in 1979. Development of the console began in 1978, less than a year after the introduction of its main competitor, the Atari 2600. The word intellivision is a portmanteau of "intelligent television"...

, which featured ads touting its superior graphics capabilities relative to the 2600. Still, the 2600 remained the industry standard-bearer, because of its market superiority, and because of Atari featuring (by far) the greatest variety of game titles available.

However, Atari ran into problems in the early 1980s. Its home computer
Home computer
Home computers were a class of microcomputers entering the market in 1977, and becoming increasingly common during the 1980s. They were marketed to consumers as affordable and accessible computers that, for the first time, were intended for the use of a single nontechnical user...

, video game console
Video game console
A video game console is an interactive entertainment computer or customized computer system that produces a video display signal which can be used with a display device to display a video game...

, and arcade
Video arcade
An amusement arcade or video arcade is a venue where people play arcade games such as video games, pinball machines, electro-mechanical games, redemption games, merchandisers , or coin-operated billiards or air hockey tables...

 divisions operated independently of one another and rarely cooperated. Faced with fierce competition and price wars in the game console and home computer markets, Atari was never able to duplicate the success of the 2600.
  • In 1982, Atari released disappointing versions of two highly publicized games, Pac-Man
    Pac-Man (Atari 2600)
    In 1982, Atari Inc. released a port of Namco's hit arcade game Pac-Man for its Atari 2600 video game console. Like the original arcade version, the player controls the titular character with a joystick...

    and E.T. the Extra-Terrestrial
    E.T. the Extra-Terrestrial (Atari 2600)
    E.T. the Extra-Terrestrial is a 1982 adventure video game developed and published by Atari, Inc. for the Atari 2600 video game console. It is based on the film of the same name, and was designed by Howard Scott Warshaw...

    , causing a pileup of unsold inventory and depressing prices. (In 1983, in response to a massive number of returned orders from distributors, Atari buried millions of unsold game cartridges
    Atari video game burial
    The Atari video game burial was a mass burial of unsold video game cartridges, consoles, and computers in a New Mexico landfill site, undertaken by American video game and home computer company Atari, Inc. in 1983. The goods disposed of through the burial are generally believed to have been...

     (the bulk of them consisting of those same two titles, Pac-Man and E.T.) in a New Mexico desert landfill
    Landfill
    A landfill site , is a site for the disposal of waste materials by burial and is the oldest form of waste treatment...

    .)
  • In December 1982, Atari executives Ray Kassar
    Ray Kassar
    Raymond E. Kassar was president, and later CEO, of Atari Inc. from 1978 to 1983. He had previously been vice-president of Burlington Industries, a textile company....

     and Dennis Groth were investigated for allegations of insider trading
    Insider trading
    Insider trading is the trading of a corporation's stock or other securities by individuals with potential access to non-public information about the company...

     (later found to be false).
  • Larry Emmons, employee No.3, retired in 1982. He was head of research and development of the small group of talented engineers in Grass Valley, California, who had designed the 2600 and home computers.
  • The Atari 5200
    Atari 5200
    The Atari 5200 SuperSystem, commonly known as the Atari 5200, is a video game console that was introduced in 1982 by Atari Inc. as a higher end complementary console for the popular Atari 2600...

     game console, released as a next-generation follow up to the 2600, was based on the Atari 800 computer (but was incompatible with Atari 800 game cartridges), and its sales never met the company's expectations.


These problems were followed by the infamous video game crash of 1983
Video game crash of 1983
The North American video game crash was a serious event that brought an abrupt end to what is considered the second generation of console video gaming in North America. Beginning in 1983, the crash almost destroyed the then-fledgling industry and led to the bankruptcy of several companies producing...

, which caused losses that totaled more than $500 million. Warner's stock price slid from $60 to $20, and the company began searching for a buyer for its troubled division.

Still, Atari held a formidable position in the world video game market, and was the number one console maker in every market except Japan
Japan
Japan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...

. A Japanese video game company by the name of Nintendo
Nintendo
is a multinational corporation located in Kyoto, Japan. Founded on September 23, 1889 by Fusajiro Yamauchi, it produced handmade hanafuda cards. By 1963, the company had tried several small niche businesses, such as a cab company and a love hotel....

 was going to be releasing their first programmable video game console, the Famicom
Nintendo Entertainment System
The Nintendo Entertainment System is an 8-bit video game console that was released by Nintendo in North America during 1985, in Europe during 1986 and Australia in 1987...

 (later known to the rest of the world as the NES
Nintendo Entertainment System
The Nintendo Entertainment System is an 8-bit video game console that was released by Nintendo in North America during 1985, in Europe during 1986 and Australia in 1987...

), in 1983. Looking to also sell the console in international markets, a partnership with Atari seemed a good match and Nintendo approached Atari to offer a licensing deal whereby Atari would build and sell the system, paying Nintendo a royalty. The deal was in the works throughout 1983, and the two companies tentatively decided to sign the agreement at the June, 1983 CES
Consumer Electronics Show
The International Consumer Electronics Show is a major technology-related trade show held each January in the Las Vegas Convention Center, Las Vegas, Nevada, United States. Not open to the public, the Consumer Electronics Association-sponsored show typically hosts previews of products and new...

. Unfortunately, Coleco
Coleco
Coleco is an American company founded in 1932 by Maurice Greenberg as "Connecticut Leather Company". It became a highly successful toy company in the 1980s, known for its mass-produced version of Cabbage Patch Kids dolls and its video game consoles, the Coleco Telstar and...

 was showcasing their new Adam computer
Coleco Adam
The Coleco Adam is a home computer, an attempt in the early 1980s by American toy manufacturer Coleco to follow on the success of its ColecoVision game console...

, and the display unit was running Nintendo's Donkey Kong
Donkey Kong (video game)
is an arcade game released by Nintendo in 1981. It is an early example of the platform game genre, as the gameplay focuses on maneuvering the main character across a series of platforms while dodging and jumping over obstacles. In the game, Jumpman must rescue a damsel in distress, Lady, from a...

. Atari CEO Ray Kassar
Ray Kassar
Raymond E. Kassar was president, and later CEO, of Atari Inc. from 1978 to 1983. He had previously been vice-president of Burlington Industries, a textile company....

 was furious, as Atari owned the rights to publish Donkey Kong for computers, and he accused Nintendo of double dealing with the Donkey Kong license. Nintendo, in turn, tore into Coleco, who only owned the console rights to the game. Coleco had legal grounds to challenge the claim though since Atari had only purchased the floppy disk rights to the game, while the Adam version was cartridge-based. In the coming month, Ray Kassar was forced to leave Atari, and executives involved in the Famicom deal were forced to start over again from scratch and the deal eventually languished. With Atari's further financial problems and the Famicom's runaway Japanese success after its July 16, 1983 release date, Nintendo decided to go at it alone.

Splitting of properties

Financial problems continued to grow and Kassar's replacement, James J. Morgan
James J. Morgan
James J. Morgan is a former American executive who served as CEO of Atari from 1983 to 1984 and CEO of Philip Morris USA from 1994 to 1997.James Morgan first joined Philip Morris in 1963...

, had less than a year to try and tackle his predecessor's problems before he too was gone. In July 1984, Warner sold the home computing and game console divisions of Atari to Jack Tramiel
Jack Tramiel
Jack Tramiel is an American businessman, best known for founding Commodore International - manufacturer of the Commodore PET, Commodore 64, Commodore 128, Commodore Amiga, and other Commodore models of home computers.-Biography:...

, the recently ousted founder of Atari competitor Commodore International
Commodore International
Commodore is the commonly used name for Commodore Business Machines , the U.S.-based home computer manufacturer and electronics manufacturer headquartered in West Chester, Pennsylvania, which also housed Commodore's corporate parent company, Commodore International Limited...

, under the name Atari Corporation for $240 million in stocks under the new company. Warner retained the arcade division, continuing it under the name Atari Games
Atari Games
Atari Games Corporation was an American producer of arcade games, and originally part of Atari, Inc..-History:When, in 1984, Warner Communications sold the Atari Consumer division of Atari Inc...

 and eventually selling it to Namco
Namco
is a Japanese corporation best known as a former video game developer and publisher. Following a merger with Bandai in September 2005, the two companies' game production assets were spun off into Namco Bandai Games on March 31, 2006. Namco Ltd. was re-established to continue domestic operation of...

 in 1985. Warner also sold the fledgling Ataritel to Mitsubishi
Mitsubishi
The Mitsubishi Group , Mitsubishi Group of Companies, or Mitsubishi Companies is a Japanese multinational conglomerate company that consists of a range of autonomous businesses which share the Mitsubishi brand, trademark and legacy...

.

Major products

  • Pong
    Pong
    Pong is one of the earliest arcade video games, and is a tennis sports game featuring simple two-dimensional graphics. While other arcade video games such as Computer Space came before it, Pong was one of the first video games to reach mainstream popularity...

    (several versions)
  • Atari 2600
    Atari 2600
    The Atari 2600 is a video game console released in October 1977 by Atari, Inc. It is credited with popularizing the use of microprocessor-based hardware and cartridges containing game code, instead of having non-microprocessor dedicated hardware with all games built in...

  • Atari Video Music
    Atari Video Music
    The Atari Video Music was introduced by Atari Inc. in 1976, and designed by the initiator of the home version of Pong, Robert Brown. The idea was to create a visual exploration that could be implemented into a Hi-Fi stereo system...

  • Atari 5200
    Atari 5200
    The Atari 5200 SuperSystem, commonly known as the Atari 5200, is a video game console that was introduced in 1982 by Atari Inc. as a higher end complementary console for the popular Atari 2600...

  • Atari 8-bit family
    Atari 8-bit family
    The Atari 8-bit family is a series of 8-bit home computers manufactured from 1979 to 1992. All are based on the MOS Technology 6502 CPU and were the first home computers designed with custom coprocessor chips...


See also

  • History of video game companies


External links

The source of this article is wikipedia, the free encyclopedia.  The text of this article is licensed under the GFDL.
 
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