For video game lovers, Atari is the stuff of legend. The iconic company founded in 1972 turned pioneering engineers loose to create the building blocks of the entire industry. Their slick, addictive arcade cabinets and cartridge-based home consoles made them the fastest growing company in U.S. history by the early 80s. Though a devastating crash eventually brought the high-flying Atari back down to earth, their breakthrough products and culture of innovation left an indelible imprint on both game developers and fans alike.
This comprehensive guide covers Atari‘s formation, stunning rise and sudden collapse along with lasting repercussions. For devotees of gaming history, strap in to learn the complete story of the beloved brand that kicked off the video game revolution.
Origins of Atari‘s Founding Fathers
Atari‘s genesis stems from an early meeting of eventual co-founder Nolan Bushnell‘s inquisitive mind and an emerging computer space game. While studying electrical engineering at the University of Utah in the 1960s, Bushnell first witnessed Spacewar – an early computer game created by MIT students in 1962 featuring spaceships battling among the stars.
Bushnell became enthralled with the nascent concept of computer video games. He envisioned bringing these previously lab-only experiments into public arcades. But he needed collaborators to make it happen.
Enter Ted Dabney – an experienced engineer friend of Bushnell‘s who shared his fascination with the intersecting worlds of computer technology and entertainment. Together, they convinced their employer Ampex to allow them to work on arcade game projects on the side.
Bolstered by seeing the first coin-operated arcade game Galaxy Game and the Magnavox Odyssey home system, Bushnell and Dabney decided to go into business. They launched Syzygy Game Company in 1971 to bring space combat games to bars and student unions.
With this founding DNA as computer engineer nerds enticed by the storytelling possibilities of the brave new digital world, Atari was born…
Atari co-founders Ted Dabney (left) and Nolan Bushnell posing in 1972
Launching Atari & Becoming King of the Arcades
Bushnell and Dabney‘s first release would be Computer Space – the world‘s first mass-produced coin-operated arcade game. The nitrous-fueled space battle action failed to capture widespread interest. But the two co-founders saw even more potential in the arcade video game concept.
They incorporated the company under a new name – Atari – in June 1972. Atari is a term in the Japanese board game Go meaning you are about to win. As chief engineer Allan Alcorn quipped, they selected it hoping that "we will win eventually!"
For its next project, Atari tasked Alcorn with creating a simple tennis game to get him acclimated to video game programming. Alcorn‘s Pong prototype turned out so fun and addictive that Atari released it as a commercial arcade game later that year.
Pong took the world by storm in late 1972, rocketing Atari to prominence. Its Ping-Pong style paddle action resonated widely from bars to pizza parlors, racking up profits. Despite copycat products emerging due to having no patents initially, Atari sold over 8000 Pong arcade units globally.
Flush with cash from dominating the arcade scene, Atari rapidly churned out more innovative sports and action games throughout the 1970s like Tank, Space Race, Gotcha and Breakout, which featured conspiracy theory dynamo Steve Jobs early in his career.
Atari‘s Space Race (1973) challenged players to pass asteroids and spacecraft
| Year | Key Arcade Games Released | Units Sold | Revenue |
|---|---|---|---|
| 1972 | Pong, Space Race | 8,000 Pong machines | $3.2 million |
| 1974 | Tank, Gotcha, Pursuit | 12,000 Tank machines | $56 million |
| 1977 | Breakout | 3,000 cabinets | $62 million |
| 1978 | Football, Sky Raider | 15,000 Football machines | $183 million |
| 1979 | Lunar Lander, Asteroids | 79,000 Asteroids cabinets | $238 million |
With a breakneck pace fueled by the creativity of early luminaries like star programmer Larry DeMar and slick salesman Nolan Bushnell, Atari utterly dominated the arcade scene from 1972-1979. Hit games like Asteroids truly transformed video gaming from curious novelty to mainstream entertainment passion.
Bringing Arcade Thrills Home with Atari 2600
While Atari conquered public gaming spaces in the 70s, they also plotted an invasion of living rooms around the world. Home Pong clones prompted the idea of a TV-connected console you could play different interchangeable games on.
Atari began work on their Video Computer System (VCS) in 1976 under Joe Decuir. Released in September 1977 with some apparent inspiration from Magnavox‘s Odyssey system, the VCS – later renamed the Atari 2600 – marked one of the most influential products in gaming history.
The 2600‘s cartridge-based games system using Joystick controllers made home video gaming popular worldwide. While reception was slow initially, hit arcade ports like Space Invaders eventually drove record sales:
| Year | Atari 2600 Consoles Sold | Revenue | Top Selling Games |
|---|---|---|---|
| 1977 | 330,000 | $183 million | Combat (pack-in), Air Sea Battle, Star Ship |
| 1978 | 800,000 | $215 million | Combat |
| 1981 | 4 million | $436 million | Space Invaders, Asteroids, Missile Command |
| 1982 | 5 million | $623 million | Pac-Man, E.T., Pitfall! |
From 1977 to 1983‘s infamous crash, Atari moved over 30 million 2600 units to households globally thanks to the fun, simple games it enabled. A generation raised on Space Invaders and Combat became lifelong gamers.
The Iconic Games That Came to Define Atari
While Atari delivered hit hardware, they also unleashed creative developers who produced countless groundbreaking arcade machines and cartridges. The iconic games coming from Atari in its heyday include:
Arcade Classics:
- Pong (1972) – Originator of paddles and pixelated balls.
- Space Invaders (1978) – Shooting aliens pre-dating almost all others.
- Asteroids (1979) – Space rocks destruction at its finest.
- Centipede (1980) – Addictive shoot-em-up meets garden pest massacre.
- Tempest (1981) – Psychedelic 3D vector graphics tube shooter.
2600 Favorites
- Combat (1977) – Launch pack-in showcased tanks warfare at its finest.
- Adventure (1979) – Open world fantasy icon of exploration.
- Space Invaders (1980) – Arcade port that made the 2600 a must-have.
- Pitfall! (1982) – Running/jumping 2D action that cracked open platforming potential.
These games exemplified the creative risk-taking and compelling concepts that became Atari‘s calling card to the joy of arcaders and console gamers alike in the late 70s/early 80s golden age.
The Crash Heard ‘Round the Gaming World
In 1983, the seemingly unstoppable video game freight train that was Atari slammed into a wall – hard. The infamous video game crash of 1983 severely disrupted a meteoric rise that saw arcade and 2600 revenues approach $2 billion at their peak.
A melting pot of factors boiled over to decimate Atari and nearly destroy the entire gaming industry at the time. Console market saturation, a flood of rushed low-quality 3rd party games, and some high-profile duds like the E.T. licensed title triggered devastating losses over a matter of months.
Atari went from over $2 billion in sales to around $100 million between 1982 and 1984. They plunged from a staff count of over 10,000 to less than 1000 employees in a couple years. Its fall was as sudden and shocking as its ascent and popularity had been. The crash rippled out far beyond just Atari – as once high-flying competitors like Mattel and Coleco also abandoned console gaming amidst extreme market losses. The fruitful garden of gaming over the past decade turned into a wasteland almost overnight.
Aftermath – Splintered Assets & Lingering Influence
Atari would never fully recover to its zenith after the cataclysmic 1983 crash. Owners Warner Communications offloaded their decimated home computing/gaming division to the Tramiel family in 1984. They revived product lines briefly including the Atari ST Computer and Lynx portable under the Atari Corporation banner.
Meanwhile, Warner sold off Atari‘s still profitable arcade game assets to Namco in 1985 – renamed Atari Games Inc. Though changing names over time, Atari Games carried the arcade legacy forward – developing further classics like Paperboy and Hard Drivin‘ using innovative new hardware.
None of Atari‘s subsequent scattered corporate fragments managed to recreate the magic after the crash fallout. The iconic brand drifted among owners like Hasbro throughout the 90s/00s – occasionally loaning its name to retro nostalgia products before recently reemerging to announce new connected hardware initiatives.
But even as Atari itself faded from view over time and a new generation of gaming giants like Nintendo, Sega and Sony took the mantle – the company‘s indelible influence persists. The designers, programmers and concepts seeded during Atari‘s frenetic heydays still echo through many blockbusters and indie passion projects today. Atari alumni and classics like Asteroids or Adventure remain integral to gaming‘s DNA – their iconic early contributions forever etched into the pixels of history.
The Bittersweet Legacy of an Industry Trailblazer
For longtime gamers and historians, Atari‘s legacy is familiar yet nuanced. They undoubtedly sparked the wider gaming revolution that now counts over 3 billion players globally. Their talented stable of engineers and programmers also influenced countless developers who shape immersive digital worlds enjoyed by millions today.
Yet there is also a tinge of melancholy when reminiscing on Atari‘s incomplete ascent. Their incredible run defined a gaming era but crashed hard before realizing the full long-term potential. Putting aside nostalgia, Atari‘s products and culture drove the rapid growth which contained the seeds of its swift demise.
Like legendary music artists who burn bright but brief, Atari‘s bittersweet history is layered. Their iconic games and daring innovation irreversibly expanded entertainment horizons, though fate denied them a chance to follow through into enduring empire status like Capcom, Nintendo or others.
Regardless of its abrupt end, Atari‘s defining legacy persists anywhere pixels bring joy on screens large and small. Their firing of gaming industry Big Bang made the sprawling universe of immersive worlds enjoyed today possible – leaving behind star-bright memories and influence lasting generations.
