Ray Kassar
The CEO who lost Atari
The former textile executive who led Atari through its peak years but whose decisions contributed to the 1983 crash and the company's collapse.
Overview
Ray Kassar was the CEO of Atari from 1978 to 1983, presiding over both its greatest success and its catastrophic collapse. A textile industry executive with no gaming background, Kassar transformed Atari from a scrappy startup into a $2 billion company, then watched it implode under the weight of overproduction, quality failures, and mismanagement.
Fast Facts
- Born: 1928
- Died: 2017
- Role: CEO of Atari (1978-1983)
- Background: Burlington Industries (textiles)
- Peak: Atari reaches $2 billion revenue
- Fall: Fired July 1983
The Burlington Man
Kassar came from textiles, not technology:
- Executive at Burlington Industries
- Brought corporate structure to Atari
- Viewed games as consumer products
- Famously called programmers “high-strung prima donnas”
- Clashed with engineering culture
Achievements
What Kassar got right:
| Achievement | Impact |
|---|---|
| Scaled operations | Met massive demand |
| Licensing deals | Space Invaders, Pac-Man, E.T. |
| Distribution | Got products into stores |
| 2600 dominance | Market leader |
Critical Mistakes
What went wrong:
| Mistake | Consequence |
|---|---|
| Activision lawsuit | Lost, legitimised third parties |
| No quality control | Market flooded with shovelware |
| E.T. timeline | 5 weeks for flagship game |
| Pac-Man overproduction | Made more carts than consoles sold |
| Ignoring warnings | Believed growth was permanent |
| Developer treatment | Talent left for Activision |
The Activision Problem
Kassar’s response to Activision:
- Programmers demanded credit and royalties
- Kassar refused
- Programmers left to form Activision
- Atari sued - and lost
- Third-party floodgates opened
- No quality control possible
The Fall
1983 timeline:
- Q1: Holiday sales disappointing
- Q2: $536 million quarterly loss
- July: Kassar fired
- 1984: Atari split and sold
Insider Trading
Kassar also faced legal issues:
- Sold stock before announcing losses
- SEC investigated
- Settled without admitting wrongdoing
- Reputation further damaged
Legacy
Kassar represents:
- Corporate management vs creative culture
- Short-term profit over long-term sustainability
- The danger of treating games like commodities
- Why platform holders need quality control