Atari is a brand name that has been owned by several different companies since it was established in 1972. The original company was founded by Ted Dabney and Nolan Bushnell. Their video game consoles and arcade games helped pioneer the computer entertainment industry from the 1970s to the mid-1980s.
The company was originally called Syzygy Engineering, but when Dabney and Bushnell tried to register that name in California, they discovered that it was already being used. When trying to come up with a new company name, Bushnell looked to his game Go. He finally settled on the gaming term atari, which meant one’s stones were about to be taken by an opponent. In the Japanese language, this is a form of the verb ataru, which means “to hit the target” and is sometimes used in Japan when a person accurately predicts an event.
In 1973, Bushnell and his friend, Joe Keenen, created Kee Games because Atari game distributors were all insisting on exclusive distribution contracts. The two companies marketed games to several distributors, each company getting an “exclusive” deal. Keenan’s marketing efforts introduced Atari to the American public in 1974, and he was named the company president.
The next year, Nolan Bushnell decided to create a new home gaming system that could play all of the games available at the time. His creation, the Atari 2600, was among the most popular video game consoles in the history of gaming. Because of the cost of manufacturing and marketing the system, Bushnell decided to sell it to Warner Communications in 1976 and use some of the profits to produce the new game console.
Atari designers immediately began working on the 2600's successor, but halfway through development, home computers started gaining in popularity. In response, the new consoles were revamped to include a keyboard and various gaming inputs. Available in 1980, the Atari 800 and the 400 enjoyed some popularity, but had nowhere near the success of the original console. Part of the problem was that the video game console, the home computer, and the arcade divisions worked independently and didn’t cooperate with one another. Another reason for the lack of success was the fact that competitors came out with their own models and there were fierce price wars in the video game segment of the market.
In 1983, and right on the heels of those problems, came the video game industry crash. Warner Communication’s stock prices slid and they lost over $500 million US Dollars (USD). They began looking for another buyer to take over the troubled Atari division. In 1984, Warner Communications sold the game console and home computing divisions to Jack Tramiel, who created the Atari Corporation.
In 1985, the Atari Corporation launched the XE series and the ST line. It also released the 2600 jr and the 7800 console in 1986. The company rebounded, making a $25 million (USD) profit for the year. In 1989, Atari launched the Lynx, the first handheld console that featured color graphics. Although this innovative system was received with a lot of fanfare, a lack of parts stopped the distribution of the system nationwide. The Lynx lost the market share of the 1989 Christmas season to Nintendo’s Game Boy, a handheld console that lacked a color display but was readily available.
By 1996, Tramiel wanted to leave the video gaming business, so Atari merged with JTS Inc., a company that made hard disk drives. In 1998, Hasbro Interactive bought the company for a mere $5 million (USD). Atari was sold again in 2000 when Infogrames, a popular French software publisher, bought Hasbro Interactive. The corporate name is currently owned by Atari Interactive, which is a subsidiary of Infogrames Entertainment SA (IESA). Many of the original games, including Pong, Frogger, and Space Invaders, are considered classics and are still played by die-hard fans.