Bushnell founded the company in Sunnyvale, California, in 1972. After he discovered that his first choice, “Syzygy,” was taken, he chose “Atari,” a word from the Japanese game “go” that means roughly the same as the chess term “check.” Bushnell fashioned the distinctive, sloped Atari logo as a representation of Japan’s Mt. Fuji.
The company’s first game, “Pong,” is now regarded as the granddaddy of arcade games. Late in 1972, engineer Al Alcorn took a prototype unit — developed for less than US$ 1000 — to a local bar and left it there for a few days. When the bartender called, angry that the machine had stopped working, Alcorn showed up and discovered that the makeshift coin box had overflowed with quarters, which shut the unit down.
Armed with their first hit, Atari began to mass-produce Pong machines inside a converted skating rink, eventually assembling 38,000 of them. The company later created Pong units with different cabinets—including one shaped like a doghouse that was sold to doctors for use in their waiting rooms—and a four-player variation.
In 1975, the company produced a home version of Pong that sold huge numbers, thus solidifying its position as a well-known brand in both the arcade and the home. Inspired by that success, Atari released the Atari VCS (later renamed the Atari 2600) in October 1977. Unlike Pong, which featured just one game that was built into the unit, the Atari VCS played games from cartridges that you plugged into a slot on the machine (more than 500 titles were produced over the life of the system).
Atari’s dual-pronged attack on the games industry served it well during the next several years as it produced the popular arcade games Gauntlet, Asteroids, and Centipede, and released such Atari 2600 classics as Space Invaders (some bought the system just to play the game), Warlords, and Joust. The company fended off fierce competition from Mattel’s Intellivision and Coleco’s Colecovision in the home market, but it made poor decisions in 1982 when it published the disappointing Atari 2600 titles Pac-Man and E.T. the Extra-Terrestrial. That year they also released a new home console, the Atari 5200, which was plagued by easily-broken controllers and a too-high price tag.
The following year, Atari posted a US$ 536 million loss, and the entire home videogame industry began to decline, with many dismissing videogames as a fad that had ended. In 1984, Warner Communications, which had purchased the company from Nolan Bushnell for US$ 28 million in 1976, sold the computer and home console divisions to Commodore International founder Jack Tramiel (who had left Commodore in an acrimonious split) and retained the arcade division.
Tramiel decided that the home console business was on the way out and killed plans to release the Atari 7800. He wanted to focus on the Atari ST computer line, which was built on the success of 1979’s Atari 400 and Atari 800 home computers. Competition with Apple’s Macintosh, Commodore’s Amiga, and IBM’s PC proved to be too much, however, and Tramiel went back to home consoles when Nintendo’s Nintendo Entertainment System (NES) became a hit in 1986.
As a result, Atari finally released the Atari 7800 and even repackaged the original Atari 2600 as the Atari Jr., but sales lagged far behind those of the NES, which was as popular with a new generation of kids as the 2600 had been almost a decade earlier. The company also released a console/computer hybrid called the Atari XE Game System, but that failed too.
Atari’s last two forays into the gaming industry were the Lynx handheld and the Jaguar console, neither of which sold well in a market segment dominated by Nintendo’s GameBoy and NES. Tramiel finally called it quits in 1996, selling Atari to hard disk manufacturer JTS, who in turn sold Atari’s intellectual properties to Hasbro Interactive for US$ 5 million in 1998.
While Tramiel suffered, however, Warner Communications (which later became part of the Time-Warner conglomerate) prospered with Atari’s arcade game business. After a successful run that included such popular games as Primal Rage, Hard Drivin’ and KLAX, Time-Warner sold the unit to WMS Industries, who placed it in their Midway Games division. Midway ended Atari’s dominance in the arcades in March 2000 when it announced that San Francisco Rush 2049 would be the final game to bear the well-known name and distinctive logo.
But was it really game over for Atari? Not when the brand was fondly remembered by an entire generation that was graduating from college and entering the workforce during the 1990s. Fans around the world revived interest in the old games by creating emulators that allowed anyone to play the classics on a personal computer; a folder with the Atari 2600 emulator (known as “Stella,” after the original code-name for the console) and over 500 games occupies just a few megabytes of hard disk space. They also set up websites that extolled the virtues of Atari in many languages.
Hasbro Interactive noticed this activity and wasn’t about to let the intellectual properties it had purchased lie fallow. In 1997 the company released an updated version of the classic game Frogger for the Sony PlayStation and Windows PC and sold 2.5 million copies. Encouraged by that success, Hasbro produced new versions of Asteroids, Centipede, Pac-Man, and several other old favorites.
Atari’s travels through the international business world weren’t over yet, though. In January 2001, French publisher Infogrames purchased Hasbro Interactive for US$ 100 million, and the company reintroduced Atari as a brand in November 2001. Infogrames set up a website (www.atari.com) and announced a slate of new Atari titles, beginning with the motocross racing game MXrider.
“The Atari name is synonymous with only the best in video games,” Bruno Bonnell, Chairman and CEO of Infogrames, said in a press release issued to announce the event.
To a whole generation that had grown up with the brand, Bonnell was simply stating the obvious.