page_title: Atari
section_title: Atari Corporation (1984–1996)
hierarchical_section_title: Atari / History / Atari Corporation (1984–1996)
context_page_description: Atari is a brand name owned by several entities since its inception in 1972, currently by Atari Interactive, a subsidiary of the French publisher Atari, SA. The original Atari, Inc., founded in Sunnyvale, California in 1972 by Nolan Bushnell and Ted Dabney, was a pioneer in arcade games, home video game consoles, and home computers. The company's products, such as Pong and the Atari 2600, helped define the electronic entertainment industry from the 1970s to the mid-1980s.
  In 1984, as a result of the video game crash of 1983, the original Atari Inc. was split, and the arcade division was turned into Atari Games Inc. Atari Games received the rights to use the logo and brand name with appended text "Games" on arcade games, as well as rights to the original 1972–1984 arcade hardware properties. The Atari Consumer Electronics Division properties were in turn sold to Jack Tramiel's Tramel Technology Ltd., which then renamed itself to Atari Corporation. In 1996, Atari Corporation reverse-merged with disk-drive manufacturer JT Storage, becoming a division within the company.
context_section_description: Under Tramiel's ownership, Atari Corp. used the remaining stock of game console inventory to keep the company afloat while they finished development on a 16/32-bit computer system, the Atari ST. ("ST" stands for "sixteen/thirty-two", referring to the machines' 16-bit bus and 32-bit processor core.) In April 1985, they released the first update to the 8-bit computer line — the Atari 65XE, the Atari XE series. June 1985 saw the release of the Atari 130XE; Atari User Groups received early sneak-preview samples of the new Atari 520ST's, and major retailer shipments hit store shelves in September 1985 of Atari's new 32-bit Atari ST computers. In 1986, Atari launched two consoles designed under Warner — the Atari 2600jr and the Atari 7800 console (which saw limited release in 1984). Atari rebounded, earning a $25 million profit that year.
  In 1987, Atari acquired Federated Group for $67.3 million, securing shelf space in over 60 stores in California, Arizona, Texas and Kansas at a time when major American electronics outlets were reluctant to carry Atari-branded computers, and two-thirds of Atari's PC production was sold in Europe. The Federated Group (not related to Federated Department Stores) was sold to Silo in 1989.
  In 1989, Atari released the Atari Lynx, a handheld console with color graphics, to much fanfare.  A shortage of parts kept the system from being released nationwide for the 1989 Christmas season, and the Lynx lost market share to Nintendo's Game Boy which, despite only having a black and white display, was cheaper, had better battery life and had much higher availability.  Tramiel emphasized computers over game consoles but Atari's proprietary computer architecture and operating system fell victim to the success of the Wintel platform while the game market revived.  In 1989, Atari Corp. sued Nintendo for $250 million, alleging it had an illegal monopoly.  Atari eventually lost the case when it was rejected by a US district court in 1992.
  In 1993, Atari positioned its Jaguar as the only 64-bit interactive media entertainment system available, but it sold poorly.  It would be the last home console to be produced by Atari and the last to be produced by an American manufacturer until Microsoft's introduction of the Xbox in 2001.
  By 1996, a series of successful lawsuits had left Atari with millions of dollars in the bank, but the failure of the Lynx and Jaguar left Atari without a product to sell. Tramiel and his family also wanted out of the business. The result was a rapid succession of changes in ownership.  In July 1996, Atari merged with JTS Inc., a short-lived maker of hard disk drives, to form JTS Corp. Atari's role in the new company largely became that of holder for the Atari properties and minor support, and consequently the name largely disappeared from the market.
caption: Atari ST
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