page_title: Atari
section_title: Atari Inc. (1972–1984)
hierarchical_section_title: Atari / History / Atari Inc. (1972–1984)
caption_attribution_description: The American Atari 7800 with joystick controller. A third-generation video game console released by Atari in the mid '80s.
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: In 1971, Nolan Bushnell and Ted Dabney founded a small engineering company, Syzygy Engineering, that designed and built Computer Space, the world's first commercially available arcade video game, for Nutting Associates. On June 27, 1972, the two incorporated Atari, Inc. and soon hired Al Alcorn as their first design engineer.  Bushnell asked Alcorn to produce an arcade version of the Magnavox Odyssey's Tennis game, which would be named Pong.  While Bushnell incorporated Atari in June 1972, Syzygy Company was never formally incorporated.  Before Atari's incorporation, Bushnell considered various terms from the game Go, eventually choosing atari, referencing a position in the game when a group of stones is imminently in danger of being taken by one's opponent.  Atari was incorporated in the state of California on June 27, 1972.
  In 1973, Atari secretly spawned a competitor called Kee Games, headed by Nolan's next door neighbor Joe Keenan, to circumvent pinball distributors' insistence on exclusive distribution deals; both Atari and Kee could market virtually the same game to different distributors, each getting an "exclusive" deal.  Joe Keenan's management of the subsidiary led to him being promoted president of Atari that same year.
  In 1976, Bushnell, through Grass Valley, CA firm Cyan Engineering, started the development of a flexible console that was capable of playing the four existing Atari games.  The result was the Atari Video Computer System, or VCS (later renamed 2600 when the 5200 was released).  The introductory price of $199 (equivalent to $894 in 2019) included a console, two joysticks, a pair of paddles, and the Combat game cartridge.  Bushnell knew he had another potential hit on his hands but bringing the machine to market would be extremely expensive.  Looking for outside investors, Bushnell sold Atari to Warner Communications in 1976 for an estimated $28–32 million, using part of the money to buy the Folgers Mansion.  Nolan continued to have disagreements with Warner Management over the direction of the company, the discontinuation of the pinball division, and most importantly, the notion of discontinuing the 2600.  In 1978, Kee Games was disbanded.  In December of that year, Nolan Bushnell was fired following an argument with Manny Gerard.  "[W]e started fighting like cats and dogs.  And then the wheels came off that fall.  Warner claimed they fired me," recalled Bushnell.  "I say I quit.  It was a mutual separation."
  The development of a successor to the 2600 started as soon as it shipped.  The original team estimated the 2600 had a lifespan of about three years; it then set forth to build the most powerful machine possible within that time frame.  Mid-way into their effort the home computer revolution took off, leading to the addition of a keyboard and features to produce the Atari 800 and its smaller sibling, the 400.  The new machines had some success when they finally became available in quantity in 1980.  From this platform Atari released their next-generation game console in 1982, the Atari 5200.  It was unsuccessful due to incompatibility with the 2600 game library, a small quantity of dedicated games, and notoriously unreliable controllers. Porting arcade games to home systems with inferior hardware was difficult. The ported version of Pac-man for Atari 2600 omitted many of the visual features of the original to compensate for the lack of ROM space and the hardware struggled when multiple ghosts appeared on the screen creating a flickering effect.
  Under Warner and Atari's chairman and CEO, Raymond Kassar, the company achieved its greatest success, selling millions of 2600s and computers.  At its peak, Atari accounted for a third of Warner's annual income and was the fastest-growing company in US history at the time.  However, it ran into problems in the early 1980s as interference from the New York-based Warner management increasingly affected daily operations. Its home computer, video game console, and arcade divisions operated independently and rarely cooperated.  Faced with fierce competition 
caption: Atari 7800
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