Atari (/əˈtɑːri/) is a brand name that has been owned by several entities since its inception in 1972. It is currently owned by French company Atari SA (formerly Infogrames) through a subsidiary named Atari Interactive.[1][2][3] The original Atari, Inc., founded in Sunnyvale, California, USA in 1972 by Nolan Bushnell and Ted Dabney, was a pioneer in arcade games, home video game consoles, and home computers. The company's products, such as Pong and the Atari 2600, helped define the electronic entertainment industry from the 1970s to the mid-1980s.
Infogrames Entertainment (IESA) bought Hasbro Interactive in 2001 and renamed it Infogrames Interactive, which intermittently published Atari-branded titles. In 2003, it renamed the division Atari Interactive. Another IESA division, Infogrames Inc.,[11] changed its name to Atari, Inc. the same year, licensing the Atari name and logo from its fellow subsidiary.[2][12][13] In 2008, IESA completed its acquisition of Atari, Inc.'s outstanding stock, making it a wholly owned subsidiary.[14] IESA renamed itself Atari SA in 2009. It sought bankruptcy protection under French law in January 2013.
The name comes from the Japanese term atari, used while playing the ancient board game Go. The word atari means "to hit a target" in Japanese and is associated with good fortune; in Go, it indicates a situation where a player will be able to capture one or more stones of the opponent in the next move.[16]
The Atari logo was designed by George Opperman, who was Atari's first in-house graphic designer, and drawn by Evelyn Seto.[17] The design is known as "Fuji" for its resemblance to the Japanese mountain, although the logo's origins are unrelated to it. Opperman designed the logo intending for the silhouette to look like the letter A as in Atari and for its three "prongs" to resemble players and the midline of the "court" in the company's first hit game, Pong.[18]
In 1971, Nolan Bushnell and Ted Dabney founded a small engineering company, Syzygy Engineering,[19] that designed Computer Space, the world's first commercially available arcade video game, for Nutting Associates. On June 27, 1972, the two incorporated Atari, Inc. and soon hired Al Alcorn as their first design engineer. Bushnell asked Alcorn to produce an arcade version of the Magnavox Odyssey's Tennis game,[20] which would be named Pong. While Bushnell incorporated Atari in June 1972, Syzygy Company was never formally incorporated. Before Atari's incorporation, Bushnell considered various terms from the game Go, eventually choosing atari, referencing a position in the game when a group of stones is imminently in danger of being taken by one's opponent. Atari was incorporated in the state of California on June 27, 1972.[21]
In 1973, Atari secretly spawned a competitor called Kee Games, headed by Nolan's next-door neighbor Joe Keenan, to circumvent pinball distributors' insistence on exclusive distribution deals; both Atari and Kee could market nearly the same game to different distributors, each getting an "exclusive" deal. Joe Keenan's management of the subsidiary led to his appointment as president of Atari when Kee was absorbed into the company in 1974.[22]
In 1975, Atari's Grass Valley, California subsidiary Cyan Engineering started the development of a flexible console that was capable of playing the four existing Atari games. The result was the Atari Video Computer System, or VCS (later renamed 2600 when the 5200 was released). The introductory price of $199 (equivalent to $1,066 in 2023) included a console, two joysticks, a pair of paddles, and the Combat game cartridge.[23] Bushnell knew he had another potential hit on his hands but bringing the machine to market would be extremely expensive. Looking for outside investors, Bushnell sold Atari to Warner Communications in 1976 for $28 million. Nolan continued to have disagreements with Warner Management over the direction of the company, the discontinuation of the pinball division, and most importantly, the notion of discontinuing the 2600. In 1978, Kee Games was disbanded.[24] In December of that year, Bushnell was fired as chairman and co-CEO following an argument with Manny Gerard. He decided to leave the company rather than take an advisory role.
The development of a successor to the 2600 started as soon as it shipped. The original team estimated the 2600 had a lifespan of about three years; it then set forth to build the most powerful machine possible within that time frame. Mid-way into their effort the home computer revolution took off, leading to the addition of a keyboard and features to produce the Atari 800 and its smaller sibling, the 400. The new machines had some success when they finally became available in quantity in 1980. From this platform Atari released their next-generation game console in 1982, the Atari 5200. It was unsuccessful due to incompatibility with the 2600 game library, a small quantity of dedicated games, and notoriously unreliable controllers. Porting arcade games to home systems with inferior hardware was difficult. The ported version of Pac-Man for Atari 2600 omitted many of the visual features of the original to compensate for the lack of ROM space and the hardware struggled when multiple ghosts appeared on the screen creating a flickering effect.[25]
Under Warner and Atari's chairman and CEO, Raymond Kassar, the company achieved its greatest success, selling millions of 2600s and computers. At its peak, Atari accounted for a third of Warner's annual income and was the fastest-growing company in US history at the time. It ran into problems in the early 1980s. Faced with fierce competition and price wars in the game console and home computer markets, Atari was never able to duplicate the success of the 2600.
These problems were followed by the video game crash of 1983, with losses that totaled more than $500 million. Warner's stock price slid from $60 to $20, and the company began searching for a buyer for its troubled division. In 1983, Ray Kassar resigned. Financial problems continued to mount and Kassar's successor, James J. Morgan, had less than a year in which to tackle the company's problems. He began a massive restructuring of the company and worked with Warner Communications in May 1984 to create "NATCO" (an acronym for New Atari Company). NATCO further streamlined the company's facilities, personnel, and spending. Unknown to James Morgan and the senior management of Atari, Warner had been in talks with Tramel Technology to buy Atari's consumer electronics and home computer divisions. Negotiating until close to midnight on July 1, 1984, Jack Tramiel purchased the home computing and game console divisions of Atari for $240 million in promissory notes and stocks. Warner gained a 20% stake in Tramel Technology, which was renamed Atari Corporation.[26] Warner retained the arcade division, continuing it under the name Atari Games, but sold it to Namco in 1985. Warner also sold the Ataritel division to Mitsubishi.
In 1987, Atari acquired the Federated Group for $67.3 million, securing shelf space in over 60 stores in California, Arizona, Texas and Kansas[27] at a time when major American electronics outlets were reluctant to carry Atari-branded computers, and two-thirds of Atari's PC production was sold in Europe.[28] The Federated Group (not related to Federated Department Stores) was sold to Silo in 1989.[29]
In 1988, the company unveiled the 1040STF and the Mega ST with a bit image manipulator chip, and launched its first parallel computer. The ATW-800 Transputer was based on the Inmos T800 CPU, which had a 32/64-bit architecture, ran at 15 million instructions per second (MIPS) and housed a Charity videochip that supported 16 million colors. The company continued to experiment with parallel computing aiming at B2B customers and graphic designers, but the transputer line failed to achieve commercial success.
In 1989, Atari released the Atari Lynx, the first ever handheld console with a color display and a backlit screen, to much fanfare. A shortage of parts kept the system from being released nationwide for the 1989 Christmas season, and the Lynx lost market share to Nintendo's Game Boy, which, despite only having a black and white display, was cheaper, had better battery life and had much higher availability. Tramiel emphasized computers over game consoles, but Atari's proprietary computer architecture and operating system fell victim to the success of the Wintel platform while the game market revived. In 1989, Atari Corp. sued Nintendo for $250 million, alleging it had an illegal monopoly.[30] Atari eventually lost the case when it was rejected by a US district court in 1992.[31]
In 1993, Atari positioned its Jaguar as the only 64-bit interactive media entertainment system available, but it sold poorly. It would be the last home console to be produced by Atari and the last to be produced by an American manufacturer until Microsoft's introduction of the Xbox in 2001.
By 1996, a series of successful lawsuits[33] had left Atari with millions of dollars in the bank, but the failure of the Lynx and Jaguar left Atari without a product to sell. Tramiel and his family also wanted out of the business. The result was a rapid succession of changes in ownership. In July 1996, Atari merged with JTS Inc., a short-lived maker of hard disk drives, to form JTS Corp.[34][35][36][37] Atari's role in the new company largely became that of holder for the Atari properties and minor support, and consequently the name largely disappeared from the market.
After the sale of the consumer electronics and computer divisions to Jack Tramiel, Atari was renamed Atari Games Corporation. Atari Games retained most of the same employees and managers from the coin-operated games division and continued many of the divisions projects from before the transition. In 1985, a controlling interest in the coin-operated games division was sold to Namco, which also took the Atari Games name. Warner renamed Atari Games to Atari Holdings, which continued as a nonoperating subsidiary until 1992. Meanwhile, Namco later lost interest in operating Atari Games. In 1987, Namco sold 33% of its shares to a group of employees led by then-president Hideyuki Nakajima.[38] He had been the president of Atari Games since 1985. Atari Ireland was a subsidiary of Atari Games that manufactured their games for the European market; while under Namco, Atari Ireland also manufactured Sega's Hang-On (1985) for the European market.[39]
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