But for two years the VCS struggles to find a niche in the marketplace, and Atari loses millions, substantially dragging down Warner's stock price. Under pressure from above, Bushnell leaves Atari in 1978, and the work atmosphere changes perceptively as Warner cracks down on the relaxed attitude towards dress and work hours that the 'hippies' at Atari had previously enjoyed. That year, utilizing the influx of Warner cash, the company produces 800,000 VCS units, a highly optimistic production run. Most of the inventory languishes in Atari warehouses. In 1980 Atari becomes the first videogame company to license an arcade game.
People rush out and buy the system just to play the game.
There are 112 different variations on gameplay available, including invisible aliens, moving bunkers and simultaneous two-player action. Over the next two years, the Atari VCS completely dominates the home videogame market, its only rival of any significance being Mattel's Intellivision unit. Over the course of its production run, over 200 games are produced for the system by 40 manufacturers. Approximately 120 million cartridges are sold, and there are 55 different compatible videogame systems eventually released world-wide. The company that had shrunk Warner Communication's market share during the early days of the VCS was now responsible for half of the mother corporation's profits.