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Atari: the story on HearLore | HearLore
— Ch. 1 · The Hit That Started It All —
Atari.
~5 min read · Ch. 1 of 6
On the 27th of June 1972, two men named Nolan Bushnell and Ted Dabney incorporated a company in Sunnyvale, California. They chose the name Atari from the Japanese Go board game term meaning to hit a target or put an opponent's stones in danger. The first product they built was Pong, an arcade version of tennis that became an instant sensation. Bushnell hired Al Alcorn as their first design engineer just weeks after incorporation. Before this moment, Bushnell had considered various terms from Go before settling on atari for its strategic connotation.
The company grew rapidly by selling arcade cabinets to bars and restaurants across America. By 1975, Atari had established a subsidiary called Cyan Engineering in Grass Valley, California to develop a home console. This machine would become known as the Video Computer System, later renamed the 2600. The introductory price of $199 included two joysticks, paddles, and the Combat cartridge. Bushnell knew he had another potential hit but bringing it to market required significant investment.
Warner Deal And The Crash
In 1976, Bushnell sold Atari to Warner Communications for $28 million. He continued to have disagreements with Warner Management over the direction of the company and the discontinuation of the pinball division. In December 1978, Bushnell was fired as chairman following an argument with Manny Gerard. He decided to leave rather than take an advisory role. Under new leadership including 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 that time. These problems were followed by the video game crash of 1983, with losses totaling more than $500 million. Warner's stock price slid from $60 to $20. Ray Kassar resigned in 1983 while his successor James J. Morgan had less than a year to tackle the company's problems. Financial problems continued to mount until the 1st of July 1984 when Jack Tramiel completed an asset purchase for $240 million in promissory notes and stocks.
Who founded Atari and when was the company incorporated?
Nolan Bushnell and Ted Dabney incorporated Atari on the 27th of June 1972 in Sunnyvale, California. They selected the name from a Japanese Go board game term meaning to hit a target or put an opponent's stones in danger.
What happened to Atari after Nolan Bushnell sold it to Warner Communications in 1976?
Bushnell was fired as chairman in December 1983 following disagreements with Warner Management over the direction of the company. Under new leadership including Raymond Kassar, the company achieved its greatest success before facing losses totaling more than $500 million during the video game crash of 1983.
When did Jack Tramiel acquire Atari assets and what companies were formed from the split?
Jack Tramiel completed an asset purchase for $240 million on the 1st of July 1984. The assets of the home console and computer divisions became Atari Corporation while the remaining part became Atari Games Inc which later merged with Namco to form Atari Games Corporation.
Why did Atari exit the video game business in 1996 and who acquired the brand?
Atari merged with JTS Inc in July 1996 due to financial failures of the Lynx and Jaguar consoles leaving them without products to sell. JTS sold the Atari name and assets to Hasbro Interactive for $5 million on the 13th of March 1998.
What is the history of Atari's ownership changes between 2000 and 2017?
French software publisher Infogrames took over Hasbro Interactive in December 2000 and renamed its US subsidiary Atari Inc on the 8th of May 2003. Four related companies filed for Chapter 11 bankruptcy on the 21st of January 2013 before emerging one year later to enter social casino gaming.
When was the Ataribox released and what are its specifications?
Atari shipped first units of the Ataribox exclusive to backers of systems crowdfunding campaign on the 16th of December 2020. The hardware features a ribbed top surface, HDMI connectivity, USB ports, SD card slots, and two versions including traditional wood veneer front or glass front.
In 1984, the assets of the home console and computer divisions were sold off to Jack Tramiel's Tramel Technology Ltd., which renamed itself Atari Corporation. The remaining part of Atari Inc. became Atari Games Inc. In early 1985, Warner established a new corporation jointly with Namco named Atari Games Corporation. This entity took control of Atari's coin-operated games division. The rights to Atari Inc.'s game properties were shared between the two companies: Atari Corporation receiving trademarks and home rights while Atari Games received arcade product rights.
By 1996, a series of successful lawsuits left Atari with millions but the failure of the Lynx and Jaguar consoles left them without products to sell. Tramiel and his family wanted out of the business entirely. In July 1996, Atari merged with JTS Inc., a maker of hard disk drives, forming JTS Corp. Video game magazines reported it as Atari exiting the video game business. Meanwhile, Atari Games was acquired by Midway Games in 1996 and effectively retired the Atari name on arcades by 2000 to avoid public confusion with Hasbro's home releases.
Hardware Battles And Commercial Losses
Under Tramiel's ownership, Atari used remaining stock to keep the company afloat while developing the 16/32-bit computer system called the Atari ST. June 1985 saw major retailer shipments hit store shelves of these new 32-bit computers. In 1987, Atari acquired the Federated Group for $67.3 million securing shelf space in over 60 stores across California, Arizona, Texas and Kansas. Two-thirds of Atari's PC production was sold in Europe during this period.
In 1989, Atari released the Lynx handheld console featuring color display and backlit screen. A shortage of parts kept the system from being released nationwide for the Christmas season. The Lynx lost market share to Nintendo's Game Boy which had better battery life and much higher availability despite its black and white display. By 1993, Atari positioned its Jaguar as the only 64-bit interactive media entertainment system available but it sold poorly. It would be the last home console produced by an American manufacturer until Microsoft introduced the Xbox in 2001.
The Brand Returns From Ashes
On the 13th of March 1998, JTS sold the Atari name and assets to Hasbro Interactive for $5 million. This transaction primarily involved brand and intellectual property falling under the Atari Interactive division. Two years after Atari's death, the brand made a comeback with Hasbro immediately stating development of new remakes starting with Centipede released on Windows PCs later that year. In December 2000, French software publisher Infogrames took over Hasbro Interactive.
In October 2001, Infogrames Entertainment SA announced reinvention of the Atari brand with three new games featuring prominent Atari branding: Splashdown, MX Rider and TransWorld Surf. On the 8th of May 2003, IESA had its US subsidiary officially renamed Atari Inc while keeping original company name Infogrames Entertainment. The original holdings division purchased from Hasbro was renamed Atari Interactive. On the 30th of April 2008, Atari Inc announced intentions to accept Infogrames' buyout offer and merge with them. By the 8th of October 2008, IESA completed acquisition making it a wholly owned subsidiary.
Modern Strategies And New Directions
On the 21st of January 2013, four related companies filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for Southern District of New York. All three Ataris emerged from bankruptcy one year later entering social casino gaming industry with Atari Casino. Frederic Chesnais who now heads all three companies stated their entire operations consist of staff of just 10 people. On the 22nd of June 2014, Atari announced new corporate strategy focusing on LGBT audiences, social casinos, real-money gambling and YouTube content.
In mid July 2017 an Atari press release confirmed existence of new hardware called Ataribox designed with ribbed top surface and rise at back console. Two versions were announced: one with traditional wood veneer front and other with glass front. Connectivity options included HDMI, USB ports and SD card slots supporting both classic and current games. The product was initially launched via crowdfunding campaign to minimize financial risk. On the 16th of December 2020, Atari shipped first units exclusive to backers of systems crowdfunding campaign. In March 2024, Atari announced work with coin-op manufacturer Alan-1 to bring Atari Recharged titles to arcades marking return after 25 years.