Atari was founded in 1972 by Nolan Bushnell and Ted Dabney in Sunnyvale, California. The company’s first major product was Pong, released in 1972, the first successful coin-operated video game. While Atari continued to develop new arcade games in following years, Pong gave rise to a number of competitors to the growing arcade game market. The competition along with other missteps by Atari led to financial problems in 1974, though recovering by the end of the year. By 1975, Atari had released a Pong home console, competing against Magnavox, the only other major producer of home consoles at the time.
The Atari VCS (later renamed the Atari 2600) launched in 1977 with nine simple, low-resolution games in 2 KB cartridges. The system’s first killer app was the home conversion of Taito’s arcade game Space Invaders in 1980. The VCS became widely successful, leading to the founding of Activision and other third-party game developers and to competition from console manufacturers Mattel and Coleco. By the end of its primary lifecycle in 1983–84, games for the 2600 were using more than four times the storage size of the launch games with significantly more advanced visuals and gameplay than the system was designed for, such as Activision’s Pitfall!
The success of the VCS led to Atari’s rapid growth in the early 1980s. However, the company’s management was ill-prepared for such growth, and it made a number of costly mistakes. In 1982, Atari released the Atari 5200, an updated version of the VCS that was incompatible with most existing games. The 5200 was a commercial failure, and it further damaged Atari’s reputation.
In 1983, the video game industry experienced a crash, and Atari was one of the hardest hit companies. The company’s over-reliance on the VCS, its poor management, and its high prices all contributed to its decline. In 1984, Atari was sold to Warner Communications for $500 million.
Under Warner’s ownership, Atari continued to struggle. The company released a number of new consoles and home computers, but none of them were successful. In 1985, Atari fired over 1,000 employees, and it closed its arcade division. In 1987, Atari released the Lynx, a handheld game console that was a commercial success. However, the company’s success was short-lived, and the Lynx was discontinued in 1991.
In 1993, Atari was sold to Jack Tramiel, the founder of Commodore International. Tramiel attempted to revive Atari, but he was unsuccessful. In 1996, Atari filed for bankruptcy.
Atari was purchased by Infogrames in 1998. Infogrames renamed the company Atari Interactive, and it began to focus on developing and publishing video games. In recent years, Atari has released a number of successful games, including the RollerCoaster Tycoon series and the Backyard Sports series.
Atari is currently owned by French company Atari SA. The company continues to develop and publish video games, and it also owns a number of classic arcade games that are available for download on modern consoles and computers. Check out their latest releases here.
