How Atari Changed our Lives for the Better

            They’ve flashed across our TV screens and into our hearts. They’ve probably added more than a few pounds to our waistlines and more than a few dollars to our optometrists’ bills. They’ve made such phrases as “Game Over” and “Power Up” part of American lexicon. And they’ve shown us that Italian men can make darn good plumbers. Yes, home video games are as big a part of American culture as television and radio. And while Nintendo and Sony are now the big players in the game, one cannot overlook the importance of Atari in the home video game market.

In 1972, Nolan Bushnell, the future founder of Atari, plays a ping-pong game on the Odyssey home video game system. The Odyssey system was introduced that year by Magnavox, but ultimately was a failure in the market place. Bushnell had actually developed the world’s first arcade video game, Computer Space, the year before, but it didn’t sell well. Bushnell becomes convinced that the reason it didn’t sell well was that it was too complicated, and he needs a simpler game, like ping-pong, in order to make it big. Later that year, Bushnell and partner Ted Dabney form their own company, Atari, after attempts to coerce their previous employer to let them develop another arcade game did not go over well. Bushnell decides that Atari’s first game should be a simplistic tennis game. Bushnell hires an engineer to help him create the game, and Pong is born.

Bushnell hires some employees and begins construction on Pong arcade machines. The machines become a huge hit, selling 8,500 units in the span of one year. Atari sells the machines, which cost $500 to build, for $1,200 each, and consequently the company collects a tidy profit. In 1974, the company works with Sears to manufacture a home version of Pong, and the game becomes a huge hit. In 1976, Bushnell sells Atari to Warner Communications for $28 million, retaining the title of CEO. But the best, and worst, days of Atari lie ahead.

 The Atari VCS (Video Computer System) is released to stores just in time for the 1977 Christmas season. Included with the game system, which markets for $249.95, is the war game Combat. However, for two years, the VCS struggles in the marketplace, and Atari loses millions. Warner Communications becomes unhappy with the managing techniques of Bushnell, and he resigns from Atari in 1978. Though the outlook for Atari at this point was justifiably bleak, brighter days were around the corner.

In 1980, Atari licenses Space Invaders for the VCS. Space Invaders  was a game originally made in Japan and then licensed for video arcades by Midway. The game becomes a monster hit, and people start buying the VCS just so that they can play Space Invaders. Atari winds up making $100 million on the game.

Over the next two years, the VCS dominates the video game market. But along the way, Atari ruffles the feathers of its employees, inadvertently triggering the development of companies that will ultimately contribute to Atari’s demise. The first, and most important, of these companies is Activision, which is launched in 1979 by four ex-Atari employees and a music executive. The company focuses on making video games for the VCS as well as other competing home video game systems, and thus becomes the world’s first third-party manufacturer of video game software. The company makes $150 million in profits in 1983, and its success prompts a lawsuit from Atari, stemming from the fact that the founders of the company were previous employers of Atari and violated non-disclosure agreements they signed. Atari loses the lawsuit, and that opens the floodgates for many more third party game developers.

Still, as big a hit as the VCS was, the fact was that as the 1980s rolled on, technology would be developed that would render the system obsolete. In fact, in the early 1980s, the sales figures for the VCS are already beginning to slip. But Atari ignores the obvious and decides that, instead of developing a video game system of higher technology, it could just change the appearance of the VCS, and everything would be fine. In 1982, Atari remodeled the VCS, renamed it the Atari 2600, and included the new arcade hit Pac-Man as the game included with the system. The “new” 2600 sells over 10 million units, but is a creative disaster.

Meanwhile, a company called Coleco is slowly entering the video game market. Based in West Hartford, CT, Coleco launches a Pong clone for the arcades in the late 1970s before eventually launching ColecoVision in the summer of 1982. ColecoVision sports a marked upgrade in graphics and sound over the VCS. By Christmas 1982, one million units are sold. The success of ColecoVision prompts Atari to finally upgrade their home video game technology, and in 1982, the Atari 5200 Supersystem is released.

Sporting better graphics and sound than both Atari 2600 and ColecoVision, the 5200 Supersystem seems destined for greatness. This is not to be, however. The emerging home computer market, combined with overzealous Atari executives who order construction of more 5200 machines than can be sold, help to sink the project, and production of it ends abruptly in 1983. And it gets even worse for the once-great Atari company.

Following the great home video game crash of late 1983 (spurred in large part by the blossoming home computer industry), Warner Communications sells Atari to Jack Tramiel, the former head of Commodore, in 1984. Tramiel wants to focus more on home computers, and the development of the Atari 7800 ProSystem, which had begun in late 1983, is stalled.

Though the company is no doubt fading in the market place, Atari still holds some clout at this time. In 1985, some executives from a small Japanese company named Nintendo approach Atari executives with the idea of marketing Famicom in America. Famicom was a home video game system that had sold well in Japan. In a move that has since gone down in history as one of the most boneheaded corporate strategies of all time, Atari declines the offer, choosing instead to focus on home computers and the 7800 ProSystem. Finally, they release the 7800 ProSystem. Nintendo, meanwhile, decides to release Famicom under the Nintendo name in America, and the system becomes a colossal hit, and helps ensure Nintendo’s dominance in the marketplace for the next 15 years. The 7800 ProSystem, which has been collecting dust in Atari’s warehouses, is finally released in 1986. By this time, the clearly superior systems offered by Nintendo and Sega have already established themselves, and the 7800 ProSystem quietly fades away.

After remaining quiet in the home video game market for several years (with the exception of the release of a portable video game console called Lynx in 1989), Atari makes one last gasp in late 1993, with the release of the Jaguar. The 64-bit gaming system initially sold quite well, but, unfortunately, it turned out that developers weren’t yet familiar with the new technology, and few games are released for the system in 1994. With no games to promote, sales of the Jaguar slow, and developers of games jump ship to better-selling systems from Sega and Sony. As the years go by, Atari slashes the price of the Jaguar and introduces new technology for it, but, by 1996, the system is dead and, by 1998, so is Atari.

Though Atari has quietly faded away, one cannot overlook its importance. Without it, we might very well not have Nintendo, or Sony, or Sega. We all might be thinner, but would we really be happier?