A History of Games – Atari and the Industry

Last Episode I told you that the creator of early videogame Spacewar! eventually went on to teeach Nolan Bushnell? But just who was Nolan Bushnell? Nolan Bushnell was the founder of well-know company Atari, which is one of the most faous companies associated with gaming; indeed, it was Bushnell himself who started the whole industry.

Bushnell, along with Ted Dabney, created the first arcade game, Computer Space, which was based on Steve Russell ‘s Spacewar!.  A year later, Bushnell, with help from Al Acorn, would create one of the most successful videogames ever. that game was PongPong became a big hit, and like may mobile games, many clones were created. Unfortuantely, rival company Magnavox (famous for their console the Odyssey) had released an earlier version of the game just two months before Atari, and ended up paying $700’000 (around $2’900’000 US today), and Magnavox started charging other companies royalties. a lot of the early Atari games were in the arcade, but they soon started to realise another market, possibly inspired by their opressors, Magnavox: the home console.

Screen from Atari’s Pong. Source

Atari’s first console was the Video Computer System, which would become better-known as the Atari 2600. In 1976, Atari was sold to Warner Communications to help bring the console to life. By 1980, sales of tari video systems had reached $415 million (aproximately US $1,173,266,444.17 today), but Warner soon had loses totalling $533 milion (approximately US $1,246,647,399.60 today). Because of this, Warner sold tari to Jack Tamriel, former CEO of commodore. he released the Atari ST Home Computer, and sales topped $25 million (approximately US $53,138,001.82) in 1986.

While Atari was very successful in the games industry, it placed very strict conditions on its programmers and refused to give them credit for any games they made, which has actually led to som amazing hidden names discovered in the gamesonly recently. This led three developers (David Crane, Alan Miller, and Bob Whitehead) to leave Atari completely and create their own comapny, which is actually still creating games today – Activision. Activision is the publisher of the yearly titles Call of Duty and Skylanders. They went on to create Pitfall, and recently crereated it as a rather good endless runner for mobile devices. By the end of the 2600’s run, there were over 400 games for the system, and the 2600 was inducted into the Toy Hall of Fame in 2007. Atari released the Atari 800 and the Atari 400 home computers, and a lot of the hardware in these computers would go on to be used in Atari’s next consle, the 5200, which was released in 1982, and featured sme crazy innovations in the controller, including a numeric keypad, reset, and a pause key, only the latter of which remains in controllers todaay.  Most of the games on the 5200 were just ports of old Atari games, but there wasn’t a big difference between this console and the 2600, and because the 5200 was a lot larger and more expensive than the 2600, it is generaly considered a failure; as such, only 69 games were released for the console.

The Atari 5200 console Source

Then the great videogame crash happened (I’ll be addressing this at a later date). Nintendo managed to instil faith in the consumers with the Nintendo Entertainment System (or NES for short), but the NES would have quite an impact on atari’s next console, the 7800. TheAtari 7800 was released in January 1986. Not only wasit backwards-compatible with the 2600, it was reltively cheap as well. A keyboard, disc drive, and connectivity to a laser disc player were all planned peripherals for the 7800, but few were ever created. The NES had a part to play, as companies were not allowed to release their works on other consoles for two years, making it very difficult for the 7800 to obtain a decent library. Despite this, Atari managed to port somegreat Arcade games to the system, and it ended up being profitable for Atari in the end. atari also released another conssole soon after, titled the XEGS. t was a commercial and critical failure. It was comptble with all then) current Atari software and could be used as either a videogame console or home computer (with a special keyboard), athough most of the Atari games were simply repackaged instead of updated.

Atari then got into the portable market with the Atari Lynx., first released in 1989, and it was the first portable handheld gaming device with a colour LCD screen. It was 16 bit, had good graphics, and designed with an ambidextrous feel as well (left-handed people could use it). It also had “Comlynx”, a multiplayer cabe system similar to the Link Cable of the Gameboys, but Comlynx allowed 17 people to play simultaneously (although most games typically had 8 as the maximum). Unfortunately, the Gameboy was more popular (even though it was the weaker system). he Lynx II was released in 1991 with battery saving optons, stereo headphones, and a price tag of just US $99 (approximately US $169.33 today) While sales picked up for a while, Atari just couldn’t compete with the popularity of the Gameboy and the much larger volume of games for Sega’s ame gear.While the Atari Lynx was very far ahead of its time, it was a lack of portability, battery life, and lack of third party games was its downfall. 

The Atari Lynx compared to the Sony PSPGo and PSP 2000. Source

In 1992 Atari lost an anti-trust lawsuit against Nntendo. This may have had soething to do with he fact that Atari was meant to publish the Nintendo Entertainmeant System in America, but refused to when they saw that their exclusive lisnce with intendo had been violated at a conference. This was the start of Atari’s downfall. Atari relaed the Jaguar in North America in 1994, ad was made to compete with (and surpass) the Super Nintendo Etertainment System, the Sega Mega Drive/Genesis (Amerian name) andth ansonic 3DO (I’ll get into all these consoles at a later date). Atari as going to release the 32-bit “Panther firsst, but development on the 64-bit Jaguar progressed much further and fasterso te”Panther” was cancelled. Atari’s whole campaign with the Jaguar was “Do the Math”, promoting the fact that the Jaguar was 64-bit and the other consoles were only 16-bit. Unfortunately, 3rd-party developers had a lot of trouble programming the games. This led to a rather small library of third-party games for the system, even though there were a few gems, such as Rayman and Doom. The controller was criticised for having a phone-style keypad at the bottom that was awkward to hold, and while a CD peripheral was released, it was difficult to operate. The Jaguar only ever sold 125’000 consoles (and had another 100’000 consoles they never sold). It also the last American console until 2001, whenthe  Xbox was released.

Atari Jaguar Console. The controller’s in the bottom left, but upside down, the console is on the right. Source

Atari went downhill frm hee. n 1994, Sega invested$40 million (approximately US $62,876,383.27 today) in exchange for all of their patent rights. In 1996, the new Atari nteractive division failed to revive the compay, so it was taken over by JTS, a maker of computer disc drives, in the same year. Two years later, in 1998, JTS sold Atari assets as intellectual property scraps. All patents, copyrights, and trademarks were sold to Hasbro Interactive for $5 milion (approximately US $7,145,920.25 today).

Next episode (“airing” on the 9/02/13) I’ll be taking a look at the first generation of videogame consoles, so “tune in” then to read all about them!


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Have an time period in gaming you want looked at? A specific series, or a specific console? Have I maid a mistake in the article? Leave me a comment and I’ll reply as soon as  have the chance!


2 thoughts on “A History of Games – Atari and the Industry

    • Yeah, that was after several years of selling. The PS4’s already made over a billion dollars (4’200’000 sold at approximately $400 for each console, more in some countries) and the Xbox One isn’t far behind. When you look at it that way, it’s not that much (assuming I’ve done the maths right).


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