Atari

• 1. Introduction

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  Atari began not as a company but as a word from an ancient board game. On the 27th of June 1972, Nolan Bushnell and Ted Dabney incorporated Atari, Inc. in Sunnyvale, California, choosing a name borrowed from the Japanese game of Go, where atari signals that a group of stones is in danger of being captured. That choice of name was not accidental. Bushnell had spent months weighing terms from Go before landing on the one that described a moment of vulnerability and threat. Within weeks of incorporating, Atari hired Al Alcorn as its first design engineer and set him to work on a tennis game. Within a decade, the company would account for a third of Warner Communications' entire annual income. Then it would nearly vanish entirely. What happened between those two points is one of the more turbulent stories in the history of American technology.

• 2. The Name and the Logo

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  George Opperman, Atari's first in-house graphic designer, created the company's iconic logo, and Evelyn Seto drew it. Opperman intended the silhouette to read as the letter A, with three prongs representing players and the midline of the court in Pong. The design became known informally as "Fuji" for its resemblance to the Japanese mountain, though Opperman's reference was entirely to the game rather than to any geography. The word atari itself means "to hit a target" in Japanese; in Go, it names a specific tactical situation. Bushnell had considered other Go terms before settling on this one, which referenced the precarious position a player creates just before capturing an opponent's stones. That duality, a word meaning both aim and peril, would prove oddly fitting for what followed.

• 3. Pong, the 2600, and Warner

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  Bushnell asked Alcorn to build an arcade version of the Tennis game found on the Magnavox Odyssey, and the result became Pong. To sidestep pinball distributors who insisted on exclusive deals, Atari quietly created a competitor company in 1973 called Kee Games, headed by Bushnell's next-door neighbor Joe Keenan. Both firms could offer distributors what each believed was an exclusive product. Keenan ran the subsidiary so effectively that he became president of Atari when Kee was absorbed in 1974. Development of the flexible cartridge-based console, begun by the Cyan Engineering subsidiary in Grass Valley, California in 1975, produced the Atari Video Computer System at an introductory price of $199, which included two joysticks, a pair of paddles, and the Combat cartridge. Bushnell recognized he needed outside capital to bring it to market and sold Atari to Warner Communications in 1976 for $28 million. Under Warner's chairman and CEO Raymond Kassar, Atari sold millions of 2600 units and computers, reaching its peak when it represented a third of Warner's annual income and was described as the fastest-growing company in American history at the time. Disagreements between Bushnell and Warner management over the 2600's future led to his firing as chairman and co-CEO in December 1978, following an argument with Manny Gerard.

• 4. The Crash and the Sale

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  The video game crash of 1983 cost Atari more than $500 million in losses. Warner's stock price fell from $60 to $20. Ray Kassar resigned in 1983, and his successor, James J. Morgan, had less than a year to address the damage. Morgan began restructuring and worked with Warner in May 1984 to create a reorganized entity called NATCO, shorthand for New Atari Company. Unknown to Morgan and his senior leadership, Warner had separately been negotiating with Jack Tramiel's Tramel Technology. Those talks continued until close to midnight on the 1st of July 1984, when Tramiel completed an asset purchase for $240 million in promissory notes and stock. Warner retained a 20% stake in the renamed Atari Corporation and also sold the Ataritel division to Mitsubishi. The remaining piece of the original company, the coin-operated games division, stayed with Warner under the name Atari Games Inc., and Warner established a joint venture with Namco in early 1985 called Atari Games Corporation, which took over that arcade business. The two halves of Atari now had separate owners, and the trademark rights were divided: Atari Corporation received the trademarks and home rights, while Atari Games received the right to use the logo and brand name with the word "Games" appended on arcade products.

• 5. Tramiel's Atari

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  Tramiel used remaining console inventory to keep Atari Corporation solvent while engineers finished a 16/32-bit computer, the Atari ST, whose name stood for "sixteen/thirty-two," reflecting its 16-bit bus and 32-bit processor core. April 1985 brought the Atari 65XE, the first in the XE line, followed in June by the 130XE; major retailer shipments of the 520ST reached store shelves in September 1985. In 1986, Atari launched the 2600jr and the 7800, and earned a $25 million profit that year. The following year, facing retail reluctance to stock Atari computers in the United States, the company acquired the Federated Group for $67.3 million, securing shelf space in more than 60 stores across California, Arizona, Texas, and Kansas. Two-thirds of Atari's PC production was nonetheless sold in Europe. The Federated Group was sold to Silo in 1989. That same year, Atari released the Lynx, the first handheld console with a color backlit display. A parts shortage prevented nationwide availability in time for the Christmas season, and the Lynx lost ground to Nintendo's Game Boy, which was cheaper, had better battery life, and was far more available despite its black-and-white screen. Atari Corp. also sued Nintendo in 1989 for $250 million, alleging an illegal monopoly; a US district court rejected the case in 1992. The Jaguar, positioned in 1993 as the only 64-bit interactive media entertainment system on the market, sold poorly. It was the last home console Atari produced and the last built by an American manufacturer until Microsoft released the Xbox in 2001.

• 6. Atari Games and the Arcade Years

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  While Tramiel ran Atari Corporation, the arcade half of the business followed its own path. By 1987, Namco had sold 33% of its shares in Atari Games Corporation to a group of employees led by then-president Hideyuki Nakajima, who had held that role since 1985. Starting in 1988, Atari Games also sold cartridges for the Nintendo Entertainment System under the Tengen brand, including a version of Tetris. Lawsuits over Tetris rights and Tengen's circumvention of Nintendo's lockout chip occupied the two companies through the late 1980s, finally reaching a settlement in 1994 in which Atari Games paid Nintendo cash damages and granted several patent licenses. In April 1996, after an unsuccessful bid by co-founder Nolan Bushnell to acquire the company, Atari Games was sold to WMS Industries, which owned the Williams, Bally, and Midway arcade brands. On the 19th of November 1999, Atari Games Corporation was renamed Midway Games West Inc. San Francisco Rush 2049 was the final Atari-branded arcade release before the name disappeared from that market.

• 7. Hasbro, Infogrames, and Bankruptcy

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  On the 13th of March 1998, JTS sold the Atari name and assets to Hasbro Interactive for $5 million, a figure that reflected how far the brand had fallen. Hasbro immediately announced development of new remakes of Atari classics, beginning with Centipede released on Windows PCs that same year. The name changed hands again in December 2000 when French publisher Infogrames took over Hasbro Interactive. By October 2001, Infogrames Entertainment SA announced it was relaunching Atari-branded games aimed at 18-to-34-year-olds, with titles including Neverwinter Nights and Enter the Matrix. On the 8th of May 2003, its US subsidiary Infogrames Inc. was officially renamed Atari, Inc. On the 6th of March 2008, IESA offered to buy out all remaining public shares of Atari, Inc. at $1.68 per share, or $11 million total. The acquisition completed on the 8th of October 2008. Infogrames Entertainment SA then renamed itself Atari SA in 2009. Financial losses running into the tens of millions since 2005 accumulated until, on the 21st of January 2013, four related entities filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the Southern District of New York. All three Atari companies emerged from bankruptcy a year later. Frederic Chesnais, who then led all three, noted that total staff had been reduced to 10 people.

• 8. New Hardware and What Came Next

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  In June 2017, Atari released a teaser video for a new product, and the following week Chesnais confirmed a new console was in development. A July 2017 press release named it the Ataribox: it drew its industrial design from the original 2600, with a ribbed top surface and a rise at the rear, and was offered in two versions, one with a wood veneer front and one with glass. By September 2017 the product had been renamed the Atari VCS, and its specifications included a Linux operating system with a custom TV interface, HDMI, four USB ports, and an SD card slot. In January 2020, Atari announced a deal with GSD Group to build Atari Hotels, with the first planned to break ground in Phoenix in mid-2020; additional locations were listed across Las Vegas, Denver, Chicago, Austin, Seattle, San Francisco, San Jose, Dubai, Gibraltar, and Spain. The first Atari VCS units shipped on the 16th of December 2020, exclusively to crowdfunding backers and only to North America, Australia, and New Zealand. In late 2021, Wade Rosen became CEO and redirected the company back toward retro gaming and classic franchises, effectively reversing the diversification strategy of his predecessor. On the 18th of April 2022, Atari terminated all license agreements with the ICICB Group, ending both the hotel and casino ventures that had been part of the Chesnais era. In March 2024, Atari announced a partnership with coin-op manufacturer Alan-1 to bring Atari Recharged titles to arcades, marking the brand's return to the arcade space after 25 years.