Companies & Studios

Atari

The company that started it all

Atari created the video game industry with Pong, dominated it with the 2600, and nearly destroyed it through hubris and shovelware.

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Overview

Atari didn’t just make video games—Atari invented the video game industry. Founded by Nolan Bushnell in 1972, the company went from arcade coin-ops to the best-selling console of the early 80s to a cautionary tale about quality control. The name has changed hands many times, but “Atari” remains synonymous with gaming’s origins.

Fast facts

  • Founded: 1972 by Nolan Bushnell and Ted Dabney in Sunnyvale, California.
  • Pong (1972): the arcade game that proved video games could be a business.
  • Atari 2600 (1977): the VCS console that brought gaming into living rooms worldwide.
  • Warner acquisition (1976): sold to Warner Communications for $28 million.
  • The crash (1983): overproduction and quality failures contributed to the North American video game market collapse.
  • Split (1984): Warner sold consumer division to Jack Tramiel (ex-Commodore); arcade division became Atari Games.

The Jay Miner connection

Before the Amiga, Jay Miner designed the heart of the Atari 2600:

  • TIA chip: the Television Interface Adaptor handled both graphics and sound in a single chip—remarkable engineering for 1977.
  • Departure: frustrated by Atari’s refusal to let him build a more powerful machine, Miner left to found what became Amiga Corporation.
  • Bitter irony: Atari nearly acquired Amiga before Commodore swooped in.

The golden age

From 1977 to 1982, Atari dominated:

  • 2600 library: Space Invaders, Asteroids, Missile Command—arcade hits came home.
  • Licensing deals: third-party developers like Activision (founded by ex-Atari programmers) expanded the library.
  • Cultural phenomenon: “playing Atari” became synonymous with playing video games.

The crash

By 1982, warning signs were everywhere:

  • Rushed releases: E.T. the Extra-Terrestrial was developed in five weeks to meet Christmas—it became a symbol of quality failure.
  • Pac-Man disappointment: the 2600 port looked nothing like the arcade, selling millions but destroying trust.
  • Overproduction: retailers returned unsold cartridges by the truckload.
  • Market collapse: the 1983 crash wiped out North American console gaming until Nintendo’s revival.

The Tramiel era

When Jack Tramiel bought Atari’s consumer division in 1984:

  • New direction: focused on computers (Atari ST) rather than consoles.
  • Atari ST (1985): 16-bit computer that competed with the Amiga, popular in Europe for MIDI music.
  • Jaguar (1993): failed attempt at 64-bit gaming.
  • Decline: sold to JTS in 1996; the brand has changed hands multiple times since.

Legacy

Atari proved video games could be an industry, then proved that industries can collapse when quality fails. The lesson—consumers will tolerate only so much cynical product—influenced Nintendo’s strict quality control and resonates today.

See also