ATARI

Founded in the United States in 1972 by Nolan Bushnell, Atari could be credited with starting the video arcade industry with the seminal Pong. The home version of Pong, which connected to a television set, was also the first of the video game consoles.

Bushnell sold Atari to Warner Communications in 1976 for $28 million. Bushnell departed from the division in 1978. While part of Warner, Atari achieved its greatest success, selling millions of Atari 2600 consoles, and at its peak, it accounted for one third of Warner's annual income and became the fastest-growing company in history in the United States (at the time).

However, Atari ran into problems in the early 1980s. Its home computer, video game console, and arcade 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 follow on the success of the 2600. In 1982, Atari released disappointing versions of two highly publicized games, Pac-Man and E.T., causing a pileup of unsold inventory and depressing prices. Also in 1982, Atari settled a court case with Activision, officially opening the 2600 to third-party development. The market quickly became saturated, depressing prices further. In addition, in December 1982, Atari executives Ray Kassar and Dennis Groth were investigated for insider trading. The Atari 5200 game console, released as a next-generation followup to the 2600, was based on the Atari 800 computer (but was compatible with Atari 800 game cartridges), and its sales never met the company's expectations. Some time during the 1980s, Atari buried millions of unsold E.T. game cartridges in a New Mexico desert landfill.

Still, Atari held a formidable position in the world video game market. They were the number one console maker in every market except Japan. That market belonged to Nintendo, who had released their first game console, the Famicom (known to the rest of the world as the NES) in 1983. The system took Japan by storm, and Nintendo began to look to other markets. They approached Atari and offered a licensing deal - Atari would build and sell the system, paying Nintendo a royalty. The deal was all but done, and the two companies decided to formally sign the agreement at the 1983 Summer CES. Unfortunately, at that same show Coleco was showing their new Adam computer, and the display unit was running Donkey Kong. But Atari owned the rights to publish Donkey Kong for computers. Atari CEO Ray Kassar had a fit, accusing Nintendo of double dealing with the Donkey Kong license. Nintendo in turn tore into Coleco. 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.

These problems were followed by the infamous video game crash of 1983, 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. As for Nintendo, Atari could no longer afford the Famicom deal, and eventually Nintendo would be forced to go it alone.

In July 1984, Warner sold the home computing and game console divisions of Atari to Jack Tramiel, the recently ousted founder of Atari competitor Commodore International, under the name Atari Corp. for $240 million. Warner retained the arcade division, continuing it under the name Atari Games.

Under Tramiel's ownership, Atari Corp. abandoned the game console market to concentrate on aggressively priced home computers, releasing the 8-bit Atari XE series and the 16-bit Atari ST line in 1985. Then, in 1986, Atari re-released the Atari 2600 and released its previously cancelled Atari 7800 console. Atari rebounded, producing a $25 million profit in 1986. The Atari ST line proved moderately successful, ultimately selling more than 4 million units, but its closest competitor in the marketplace, the Amiga, outsold it 1.5 to 1. Atari eventually released a line of inexpensive IBM PC compatibles as well.

Atari also released Atari Lynx, a handheld console with color graphics, in 1989 to critical acclaim. However, a shortage of parts kept the system from being released nationwide for the 1989 Christmas season and as a result, the Lynx lost marketshare to Nintendo's GameBoy, which had only a black and white display but was widely available. Also in 1989, Atari Corp. sued Nintendo for $250 million, alleging it had an illegal monopoly. Atari lost.

As the fortunes of Atari's ST and PC compatible computers faded, consoles and software again became the company's main focus. In 1993, Atari released its last console, the Jaguar. After a period of initial success, it, too, failed to meet expectations. Although it was more powerful than competing consoles from the likes of Sony and Sega in some ways, it was also more expensive and more difficult to program. Atari's competitors offered larger software libraries and advertised much more heavily.

By 1996, a series of successful lawsuits followed by profitable investments had left Atari with millions of dollars in the bank, but the failure of the Lynx and Jaguar left Atari without any products to sell. In addition, Tramiel and his family wanted out. The result was a rapid succession of changes in ownership. In July 1996, Atari merged with JTS Corporation, a short-lived maker of hard disk drives, and the Atari name largely disappeared from the market. In March 1998, JTS sold the Atari name and assets to Hasbro Interactive for $5 million, less than a fifth of what Warner Communications had paid 22 years earlier. The brand name changed hands again in December 2000 when French software publisher Infogrames took over Hasbro Interactive.

• Atari 2600
• Atari 5200
• Atari 7800
• Atari XEGS
• Atari Lynx
• Atari Jaguar

Atari 8-bit (6502) microcomputers

• Atari 400
• Atari 800
• Atari 1200
• Atari 800XL
• Atari 600XL
• Atari 130XE
• Atari 65XE
• Atari XEGS

Atari 16-bit (Motorola 68000) microcomputers

• Atari 520ST
• Atari 1040ST
• Atari Mega ST
• Atari STacy

Atari 32-bit (Motorola 68030) microcomputers

• Atari TT
• Atari Falcon

Other Atari machines

• Atari Transputer Workstation
• Atari Portfolio palmtop computer

Selected Arcade Games

• Area 51
• Asteroids
• Battle Zone
• Breakout
• Centipede
• Firefox
• Gauntlet
• I, Robot
• Lunar Lander
• Marble Madness
• Missile Command
• Pong
• Pole Position
• Star Wars
• 'Tempest''

External Links