 The Atari logo, also known as the "Fuji" | |
| Industry | Video games |
|---|---|
| Founded | June 27, 1972 |
| Founders | |
| Defunct | June 26, 1992 |
| Fate | All operating divisions sold off in 1984–85. Merged into parent company in 1992. |
| Successors | |
| Headquarters |
|
| Products | |
| Parent | Warner Communications (1976–1990) Time Warner (1990–1992) |
| Subsidiaries | Chuck E. Cheese (1977–1978) Kee Games (1973–1978) |
Atari, Inc. was an American video game developer and home computer company founded in 1972 by Nolan Bushnell and Ted Dabney. Atari was a key player in the formation of the video arcade and video game industry.
The company was founded in Sunnyvale, California, in the center of Silicon Valley, to develop arcade games, starting with Pong in 1972. As computer technology matured with low-cost integrated circuits, Atari ventured into the consumer market, first with dedicated home versions of Pong and other arcade successes around 1975, and into programmable consoles using game cartridges with the Atari Video Computer System (Atari VCS or later branded as the Atari 2600) in 1977. To bring the Atari VCS to market, Bushnell sold Atari to Warner Communications in 1976. In 1978, Warner brought in Ray Kassar to help run the company, but over the next few years, gave Kassar more of a leadership role in the company. Bushnell was fired in 1978, with Kassar named CEO in 1979.
From 1978 through 1982, Atari continued to expand at a great pace and was the leading company in the growing video game industry. Its arcade games such as Asteroids helped to usher in a golden age of arcade games from 1979 to 1983, while the arcade conversion of Taito's Space Invaders for the VCS became the console's system seller and killer application. Atari's success drew new console manufacturers to the market, including Mattel Electronics and Coleco, and fostered third-party developers such as Activision and Imagic.
Looking to stave off new competition in 1982, Atari leaders made decisions that resulted in overproduction of units and games that did not meet sales expectations. Atari had also ventured into the home computer market with their first 8-bit computers, but their products did not fare as well as their competitors'. Atari lost more than US$530 million in 1983, leading to Kassar's resignation and the appointment of James J. Morgan as CEO. Morgan attempted to turn Atari around with layoffs and other cost-cutting efforts, but the company's financial hardships had already reverberated through the industry, leading to the 1983 crash that devastated the U.S. video game market.
Warner Communications sold the home console and computer division of Atari to Jack Tramiel in July 1984, who then renamed his company Atari Corporation. Atari, Inc. was renamed Atari Games, Inc. after the sale. In 1985, Warner formed a new corporation jointly with Namco, AT Games, Inc., which acquired the coin-operated assets of Atari Games, Inc. AT Games was subsequently renamed Atari Games Corporation. Atari Games, Inc. was then renamed Atari Holdings, Inc. and remained a non-operating subsidiary of Warner Communications and its successor, Time Warner, before being merged back into the parent company in 1992.