The original Atari, Inc. was founded in Sunnyvale, California in 1972 by Nolan Bushnell and Ted Dabney, was a pioneer in arcade games, home video game consoles, and home computers. The company's products, such as Pong and the Atari 2600, helped define the electronic entertainment industry from the 1970s to the mid-1980s.
"Pong" proved to be very popular; Atari released a large number of Pong-based arcade games over the next few years as the mainstay of the company. The Atari 2600 would go on to revolutionize the home gaming market, but Bushnell was forced out of Atari not long after its release. In 1974, Atari entered the consumer electronics market after engineers Harold Lee and Bob Brown approached Alcorn with an idea to develop a home version of Pong. Pong sales soared when the unit was released in 1975.
Using borrowed parts from Atari, having the main PCB printed up by Atari employee Howard Cantin, and receiving further assistance from Atari employee Ron Wayne, two non-employees, Steve Jobs and Steve Wozniak—both of whom had previously been involved in the development of the Atari arcade game Breakout—created and marketed their own home computer. They offered the design to Bushnell, but Atari had no desire to build computers at the time, instead focusing on the arcade and home console markets.
In 1976, Steve Jobs went to Nolan to get him to put in some money in exchange for a minor equity stake in Apple. Nolan remarked, "Steve asked me if I would put $50,000 in and he would give me a third of the company. I was so smart, I said no. It's kind of fun to think about that, when I'm not crying." Here is a clip with a brief history of Atari:
By 1976, Atari was in the midst of developing the Atari VCS (Video Computer System, later renamed the Atari 2600), but Bushnell realized that if the company was going to grow, it needed capital, and with the stock market in a bleak condition, going public would not be the solution. He made a list of companies to approach to buy Atari. Meanwhile, Steve Ross, CEO of Warner Communications, noticed that his children were hovering around video game cabinets at Walt Disney World. Warner Communications was contacted about Atari by one of its investors to discuss purchasing the company. For $28 million, Warner Communications (now WarnerMedia) bought Atari, bringing the capital they needed for the VCS launch, which took place in August 1977.
In November 1978, Bushnell was forced out of the company after a dispute with Warner over its future direction, notably on the lifespan of the Atari 2600 and their closed software strategy, which was later changed for the new home computer division.
By 1982, Atari had $1.3 billion in annual sales and was the fastest-growing company in the history of American business. By 1984, the company had crashed and was split into three pieces to be sold off. The coin-op division became Atari Games. The Consumer division was sold to Jack Tramiel, who folded it into his Tramel Technology, Ltd., which was then renamed Atari Corporation. The budding Ataritel division was sold to Mitsubishi Electric. Here is a clip of the story of the Pac Man game launch for the Atari 2600:
In 1984, as a result of the video game crash of 1983, the original Atari Inc. was split, and the arcade division was turned into Atari Games Inc. Atari Games received the rights to use the logo and brand name with appended text "Games" on arcade games, as well as rights to the original 1972–1984 arcade hardware properties. The Atari Consumer Electronics Division properties were in turn sold to Jack Tramiel's Tramel Technology Ltd., which then renamed itself to Atari Corporation. In 1996, Atari Corporation reverse-merged with disk-drive manufacturer JT Storage (JTS), becoming a division within the company. In 1998, Hasbro Interactive acquired all Atari Corporation related properties from JTS, creating a new subsidiary, Atari Interactive.
Infogrames Entertainment (IESA) bought Hasbro Interactive in 2001 and renamed it Infogrames Interactive, which intermittently published Atari branded titles. In 2003, it renamed the division Atari Interactive. Another IESA division, Infogrames Inc. (formerly GT Interactive), changed its name to Atari Inc. the same year, licensing the Atari name and logo from its fellow subsidiary.
Here is a clip of a brief history of video game consoles.
Under Warner and Atari's chairman and CEO, Raymond Kassar, the company 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 US history at the time. However, it ran into problems in the early 1980s as interference from the New York-based Warner management increasingly affected daily operations. Its home computer, video game console, and arcade divisions operated independently 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.
These problems were followed by the video game crash of 1983, with 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. In 1983, Ray Kassar had resigned and executives involved in the Famicom merger lost track of negotiations, eventually killing the deal. With Atari's financial problems and the Famicom's runaway success in Japan after its July 16, 1983, release, Nintendo decided to remain independent.
The Atari logo was designed by George Opperman, who was Atari's first in-house graphic designer, and drawn by Evelyn Seto. The design is known as "Fuji" for its resemblance to the Japanese mountain, although the design's origins are unrelated to it. Opperman designed the logo intending for the silhouette to look like the letter A as in Atari, and for its three "prongs" to resemble players and the midline of the "court" in company's first hit game, Pong.
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