Atari Corporation
Overview
Atari was founded by
Nolan Bushnell and
Ted Dabney in 1972. Initially, they were a company that developed arcade games, such as
Pong.
Nolan Bushnell then wanted to make a console that could play all of their games, however at first this was too impractical because of the high costs associated with developing it. This changed when MOS technology engineer
Chuck Peddle developed a high quality and low cost processing chip (the MOS 6502 chip to be precise), this low cost processor was all the difference that Bushnell needed. In the end of it all, the Atari 2600 was born.
When the Atari 2600 was developed, Nolan Bushnell knew it was going to be a hit with the low price associated to consumers, but he needed financing and better distribution methods. He then sold his share of the company to Warner Communications for 30 million US dollars. The Atari 2600 was a hit and Atari became Warner's most successful division. However during the middle of this, tensions arose in the boardroom, and Nolan Bushnell was forced out of the company in 1979.
Ray Kassar became the president of Atari at this time.
Not too long after this, employees at Atari started to demand more recognition for the games that they were developing, as the employees were seeing their games make millions in sales and getting no on-screen credit or more money for their success. This led to four programmers to co-found
Activision. These four programmers were then taken to court for stealing secrets for developing for the Atari console, because Atari was the only company that developed for the Atari 2600 at the time. This lawsuit went on for two years until the court ruled that Activision did not steal technological secrets. Other programmers followed suit and started their own companies, others followed these programmers to Activision. This brought on a lot of trouble for Atari because it meant that third-party companies could develop for their console.
Once third party development and publishing was allowed for consoles, many companies wanted to jump into developing video games because it was a profitable venture at the time. However, many of these companies had no programming experience, and it led to many poor quality games being distributed to the market. Atari could not control these companies from distributing their games because these third party companies manufactured their own game cartridges, so Atari could not control the shelf space at their retailers, or which games went onto the market.
On top of it, Atari produced
E.T. The Extra-Terrestrial which sold well, but Atari manufactured 6 million cartidges and only sold about one million, this caused Atari to have a very big financial loss. Warner saw its stock price plummet as a result. Warner was interested in selling off Atari.
It is noted that these poor quality games, along with the many different consoles out on the market, the increased quality of arcade games (which is classified as the golden age for Arcade games) and the price wars that were going on in the computer market (started by Commodore International to eliminate their competition) are the main reasons for the Video game crash of 1983.
Atari's assets were sold to
Jack Tramiel, the founder and recently ousted CEO of Commodore International in 1984. During this time, Jack Tramiel stopped all of their game and console development and focused only on developing computers. Jack Tramiel hired many of the engineers from Commodore to join him, however these engineers were sued by Commodore for stealing computer designs that were used in Commodore computers, and Commodore won. Atari also sued Commodore and Amiga Corp. for breach of contract, which Atari won.
Atari came up with the Atari ST computer, which stopped the net losses at Atari, the ST sold 4 million units, mostly in Europe, it did not fare as well in the USA.
This success gave Atati more financial leverage, so Atari got into marketing the handheld console, the Atari Lynx (which was developed by
Epyx). The Lynx had very good technical abilities, however it drained the batteries required for it very quickly, and they had a shortage of parts when a person needed it repaired. It was also more expensive than the
Nintendo Game Boy and had less aggressive marketing strategies that the Game Boy had and did not have the third party development that the Game Boy and the
SEGA Game Gear had.
Atari then proceeded to develop a 64-bit CD Based console, the Atari Jaguar, which was expensive on the market. It did not fare well in the beginning of it's introduction, and after the SEGA Saturn,
Sony PlayStation and Nintendo 64 came out, the Jaguar was a complete failure because of its inability to compete with these systems. The Tramiel family eventually pulled out of the business and sold their stock to JTS Inc., but Atari does not exist anymore.
The name Atari is now used as a game publisher and subsidiary for
Infogrames, which later re-branded its entire business to Atari. There are no plans on getting back into developing consoles.
Trivia
Atari Corporation was founded on a $250 investment by
Nolan Bushnell. The name Atari comes from a move from the ancient Japanese board game called "Go", which happens to be a favorite of
Nolan Bushnell. The Atari logo itself symbolizes two pong players separated by a play field line in the middle.
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