Atari, Inc. created the home video game industry. Founded in 1972 by Nolan Bushnell and Ted Dabney, it produced Pong — the first commercially viable video game — and then the Atari 2600 console, which by 1982 was a $2 billion-a-year business. Revenue grew from $75 million in 1977 to over $2 billion in 1982, with Atari accounting for about a third of parent Warner Communications’ income.
The collapse was as fast as the rise. Atari flooded the market with low-quality licensed games — the Pac-Man port and the E.T. cartridge became symbols of the problem — while third-party developers glutted shelves with shovelware. Consumer confidence cracked, and the 1983 video game crash followed. By mid-1983 Atari had lost hundreds of millions and cut much of its staff. In July 1984 Warner sold the home and computer divisions to former Commodore chief Jack Tramiel, and the original Atari, Inc. ceased to exist.
Worth remembering
- Pong, released in 1972, was the first commercially successful video game; the prototype installed in a Sunnyvale bar reportedly jammed because it was stuffed full of quarters.
- The Atari 2600, launched in 1977, sold over 10 million units and held a dominant share of the home console market by 1982.
Sources
- Atari, Inc. was split apart in July 1984 by Warner Communications after heavy losses; the home and computer divisions were sold to Jack Tramiel. Wikipedia
- The video game crash began in late 1982 with Atari's poor results; by mid-1983 the company had lost hundreds of millions and cut much of its workforce. Wikipedia
- At its peak Atari accounted for about a third of Warner's income, with sales surging from $75 million in 1977 to over $2 billion in 1982. Encyclopaedia Britannica
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