Atari

Founded in 1972

Nolan Kay Bushnell (1943 - Living)

Personal Life

Nolan Kay Bushnell was born on February 5, 1943 in Clearfield, Utah, USA.  In high school and college, he worked at Lagoon Amusement Park.  He was particularly interested in the arcade games.  After transferring from Utah State University, he graduated from The University of Utah with a degree in electrical engineering in 1968.  Bushnell married Paula Rochelle Nielson, with whom he had three children.  His second marriage was to a woman named Nancy, with whom Bushnell had five children.

The Company

Syzygy (1969 - 1972)

In 1969 Bushnell and his friend Ted Dabney formed the company Syzygy in order to create a Spacewar! clone called Computer Space.  The two began servicing broken pinball machines to keep the company running.  Dabney built the prototype for the game, while Bushnell looked for manufacturers.  Eventually they came across Nutting Associates, who agreed to make a fiberglass cabinet with a coin slot.  Although it earned $3 million, Computer Space was considered a failure.  Therefore, Bushnell decided to find another manufacturer.

Atari, Inc. (1972 - 1984)

In 1972, Bushnell and Dabney discovered that the name Syzygy was used by a roofing company and a candle company.  The name Atari, a reference to Bushnell’s favorite board game Go, was chosen.  Then they rented an office in Sunnyvale, California, created a driving game with Bally Manufacturing, and hired Allan Alcorn as an employee.  Later Dabney was forced out of the company.

After he attended a Magnavox Odyssey demonstration in Burlingame, California, Bushnell had Alcorn make a coin-operated version of the Odyssey’s Tennis game.  Alcorn added sound effects and scoring, and thus created the game Pong.  Atari would later be sued by Magnavox due to the similarities.  In 1974, engineers Harold Lee and Bob Brown asked Alcorn to make a home version of Pong.  This home console received about $40,000 by 1975.

Bushnell wanted to make a version of Pong in which a player would control a single paddle to destroy a wall of bricks.  Al Alcorn was assigned as the manager of the project, and Bushnell partnered with Apple founders Steve Jobs and Steve Wozniak to design it.  As predicted, it was extremely popular, but Jobs was paid about $5,000 and paid Wozniak only $350, taking sole credit for the game.

Using parts borrowed from Atari, Jobs and Wozniak released Apple’s first home computer, the Apple I.  Jobs offered Bushnell the design, but he declined, saying that Atari was more focused on arcade games rather than home computers.  Later Jobs offered a third of his company in exchange for $50,000 but Bushnell declined this as well.

In 1976, Atari was developing the Atari 2600, but needed capital.  They decided to look for companies to buy Atari.  Eventually Steve Ross, CEO of Warner Communications, found his children playing arcade games at Walt Disney World.  He learned about Atari’s problem and bought Atari fro $28 million.

In 1984 the company crashed and split into three parts.  The coin-op division became Atari Games.  Jack Tramiel bought the consumer division, which he renamed Atari Corporation.  The recently founded Ataritel division was sold to Mitsubishi Electric.

Atari Games (1984 - 2003)

Atari Games was originally a part of Atari, Inc. until the company crashed in 1984.  It was founded by Warner Communications.  Atari Games kept most of its employees and managers, and continued working on games started before the crash.  In 1985 the company was sold to Namco, who later stopped operating an American subsidiary.

In 1986 Atari Games was sold again to a group of employees.  Starting in 1987 it also began developing games for the Nintendo Entertainment System, including Tetris, under the name Tengen.  Many lawsuits were made over Tengen’s circumvention of Nintendo’s “lockout chip”.  This was supposed to prevent third parties from making unauthorized games.  It was finally settled in 1994 with Atari Games paying Nintendo for damages.

In 1989 Time Warner was formed from a union of Time, Inc. and Warner Communications.  In 1983 Atari Games was made a subsidiary of Time Warner Interactive.  Its consumer division, Tengen, was removed to be replaced by the Time Warner Interactive label.  In 1994, Tengen, Time Warner Interactive, and Atari merged as Time Warner Interactive.

In 1996 Atari Games was sold yet again to WMS Industries, who renamed it Midway Games West to avoid confusion with the Atari Corporation.  Midway made the arcade market start working on home consoles.  Midway Games West was disbanded in 2003 after sales fell.

Atari Corporation (1984 - 1996)

The Atari Corporation was another part of Atari, Inc. before the crash in 1984.  It was sold to Jack Tramiel, the founder of Commodore International soon after he resigned.  Before buying the company, it was named Tramel Technology, Ltd., or TTL.  When Tramiel bought Atari’s consumer division, he renamed TTL the Atari Corporation.

In 1985 the company released the 8-bit Atari XE and the 16-bit Atari ST computer systems.  The next year Atari Corp. launched the Atari 2600 Jr and the Atari 7800.  That year the company produced $25 million in profit.  The Atari ST line became very successful, selling over 5 million units, but mostly in Europe.  The Commodore Amiga, however, outsold it 3 to two.  Eventually Atari also released a palm computer called the Atari Portfolio.

Despite the popularity of the computers Atari Corp. made, the company itself had a bad reputation.  A columnist for the magazine A.N.A.L.O.G. stated that Atari Corp. had poor customer service and product release dates that were “perhaps not the entire truth.”

In 1987 the company discovered that their recently acquired Federated Group had much worse financial problems than they had assumed.  The FBI also investigated Atari Corp. for reselling Japanese DRAM chips.  Two years later Federated was sold to Silo.

The same year the Atari Lynx was released, but it lost market share to the Nintendo Game Boy due to its better battery life and availability.  Atari also lost $250 million in a lawsuit saying that Nintendo had an illegal monopoly.  In 1993 Atari Corp. released its last console, the Atari Jaguar, which failed to sell well competing with the Sega Saturn and the Sony PlayStation.

In 1996 Atari Corp. merged with JTS, Inc., a producer of hard disk drives.  The name disappeared from the market.

Ataritel (1981)

Unfinished

Ataritel was a telephone company founded in 1981.  After Atari split up in 1984, it was sold to Mitsubishi Electric.  Mitsubishi continued a project, previously started in 1983, called the Lumaphone.  Although it was promoted as a videophone on its release in 1985, it would merely send a still photograph every 3 to 5 seconds.  The phone also included a sliding door on the camera lens for privacy.

Later Mitsubishi released the Visitel LU-500 in 1988.  It was less advanced than the Lumaphone, but had a larger black-and-white display.  Sony released a similar PCT-15, while Panasonic had two models, the WG-R2 and the KX-TV10.