Atari, a gaming giant, once revered by many because of its revolutionary games, was first introduced to the world in 1972. Founded by Nolan Bushnell, Atari was the first to mass-produce arcade games and made household gaming systems possible. The company pioneered console gaming and created quite a few innovative systems. Best known for early arcade hits such as Asteroids, Pong, and Centipede, Atari played a vital role in shaping the home console market during the ’70s and ’80s. But let’s start from the very beginning.
How it Started Out?
In 1971, Bushnell invented his first video game, Computer Space. And if you have never heard of this game, you are not alone. Computer Space was a dud, it was complicated, and the fact that it was the first arcade video game only made things worse. However, Bushnell was determined to right his wrongs. So, he partnered up with his friend, Ted Dabney, and made history.
Atari hired engineer Al Alcorn to build a simple Ping-Pong-style video game. And to Bushnell’s surprise, Ping-Pong was a lot more fun to play than he had expected. The game was named ”Pong” and was tested commercially at Andy Capp’s Tavern in Sunnyvale, California. A few weeks later, the owner of Andy Capp’s called to complain that the game had already broken. Alcorn returned to the machine to look for the problem, and as soon as he opened it, he realized what had happened. The game was stuffed with quarters, overflowing the coin tray and jamming it. This was the first indication that Pong was going to be a hit, and so was Atari.
On the Way to Success
Pong was a moneymaker for Atari from the moment it was introduced in 1972. More than 8,000 units of Pong arcade machines were sold, and that’s an outstanding figure when compared to one of the most popular arcade games at that time, the Pinball machine, which didn’t sell as many. So Atari was off to a great start indeed. And a few years later, in 1977, it entered the home video game console market with the Atari 2600. Bushnell made an exclusive deal with Sears and sold about 150,000 games that first season alone; he was now ready to make more home versions of classic arcade games. But to do so, Atari required a lot of funding, and the only way Bushnell could raise the money was by selling the company to Warner Communications for 28 million dollars. The deal was signed in 1976, and Bushnell stayed on as Atari’s chairman.
The Atari 2600 was all the hype back then, and it made a significant impact on home computing as well, with its 8-bit range and the Atari ST. The company made headlines when it decided to license Space Invaders, which became the most popular arcade game in America at that time. Subsequently, Atari followed up with other megahit cartridges like Missile Command, Defender, and Asteroids. By 1980, Atari led a 75% share of the home video game market, and its annual sales grew from $75 million to more than $2 billion in just three years, making it one of the fastest-growing companies in history. However, things wouldn’t stay that way for long, and was about to take a hard left turn.
Atari enjoyed several years as the market leader before things started to unravel. In November 1978, differences between the top executives at Warner and Nolan Bushnell resulted in Nolan being forced out of the company. And after that, Warner struggled with managing Atari’s employees and alienated nearly all of its best programmers. This led to some of Atari’s top-performing workers leaving the company. And they didn’t just leave; they started their own company, called Activision. Now the greatest, most popular games were being made by Activision, and the company kept cranking out hit after hit. By 1982 Activision was selling 150 million dollars worth of games a year and had replaced Atari as the fastest growing video game company in the United States.
In 1982, Atari released the home version of Pac-Man, which was highly anticipated by gamers worldwide. But Atari’s Pac-Man didn’t live up to its hype. Instead, it was a complete mess and was not worth the wait. As a result, only 7 million cartridges were sold out of the 12 million manufactured, and many of these were returned by outraged customers.
That same year, Atari made a bigger flop with E.T. The Extra-Terrestrial, a game that was rushed out in just 6 weeks, where it should have taken about 6 months to develop. Atari was adamant about releasing the movie-based game right in time for Christmas, and the company wasn’t even sure if consumers would be interested in the game. This resulted in a buggy, unplayable game. According to Ray Kassar, the CEO of Atari at that time, about 3.5 million of the 4 million produced were sent back to the company as unsold inventory and customer returns. Atari ended up dumping nearly 800,000 game cartridges in a New Mexico landfill.
And then later came the infamous Video Game Crash of 1983, a large-scale recession in the video game industry that lasted till 1985. This was attributed to several factors, such as market saturation in the number of game consoles and available games, as well as a shift away from console games in favor of personal computers. The recession was brutal on everyone in the video game industry and dealt Atari a heavy blow.
The Atari 2600 may have been the console that started the video gaming boom in the ’80s, but the company failed to capitalize on its success. And in November 1982, the crumbling electronic game company came up with the Atari 5200, which proved to be a spectacular flop. It was heavily criticized for its poorly-designed controllers and hefty price. And the rise of Nintendo in the video gaming market was another nail in its coffin. After that, Atari did manage to release some profitable products, namely the Atari 7800. But most of what Atari was coming up with were commercial failures destined only for the pages of gaming’s forgotten history.
Attempting a Comeback
On June 15, 2021, Atari released the micro-console Atari VCS, designed to pay homage to the Atari 2600. It comes with a decent selection of arcade classics for people who loved the era when Atari used to be a formidable name in the video game industry. The company is also moving away from its free-to-play and mobile strategy games. And now, it is planning on releasing a premium PC and console game in 2022. Moreover, the fallen giant of console gaming has plans to build a crypto casino that will feature an entirely skill-based game, which will most likely involve some sort of crypto reward.
It is hard to get excited for the Atari VCS, as we already have three highly established consoles currently in the market. And the idea of a crypto casino seems like a shot in the dark. The amount of work Atari would have to do to get on the same train as Sony, Microsoft, and Nintendo is incredibly monumental.
Atari experienced significant early success in both the home console market, the arcade market, and their own games company. From their point of view, they were getting everything right, every decision they made was a successful one, they didn’t know what failure was, and at that time, they were the best at what they did. However, when you get that big and popular, you will be less likely to see any pitfalls ahead of you because everything you do will seem like the right thing. And this led to Atari suffering greatly from poor management and a lack of innovative ideas.
From its beginnings with Nolan Bushnell and capital of five hundred dollars, through its phenomenal growth in the 1970s to its numerous problems, Atari has carved its name in gaming history. Although many believe that Atari died with the demise of the beloved 2600, it would be a tragedy for video gaming if the brand was to disappear completely, as it was the first company that brought us some of the most important arcade titles of all time and shaped the home console market as we know it.