Atari Inc

### Fate

Sold to Jack Tramiel.Arcade business retained by Warner, renamed to Atari Games.

### Subsidiaries

Chuck E. Cheese (77-78)Kee Games (73-78)

**Atari, Inc.** was an American video game developer and home computer company founded in 1972 by Nolan Bushnell and Ted Dabney. Atari was responsible for the formation of the video arcade and modern video game industry.

Based primarily around the Sunnyvale, California, area in the center of Silicon Valley, the company was initially formed to build arcade games, launching with *Pong* in 1972. As computer technology matured with low-cost microprocessors, Atari ventured into the consumer market, first with dedicated home versions of *Pong* and other arcade successes around 1975, and into programmable consoles using game cartridges with the Atari Video Computer System (Atari VCS or later branded as the Atari 2600) in 1977. To bring the Atari VCS to market, Bushnell had sold Atari to Warner Communications in 1976 as to get investment into the VCS's development. Warner had brought in Ray Kassar to help run the company, but over the next few years, gave Kassar more of a leadership role in the company. Bushnell left the company in 1978, with Kassar named as CEO in 1979.

From 1978 through 1982, Atari continued to expand at a great pace and was the leading company in the growing video game industry. Its arcade games such as *Asteroids* helped to usher in a golden age of arcade games from 1979 to 1983, while the arcade conversion of Taito's *Space Invaders* for the VCS became the console's system seller and killer application. Atari's success brought new console manufacturers to the market including Mattel Electronics and Coleco, as well as the creation of third-party developers such as Activision and Imagic.

Facing new competition heading into 1982, Atari made a number of poor decisions to try to maintain their leadership position. These decisions resulted in overproduction of units and games that did not meet sales expectations and eroded consumer confidence in Atari. Atari had also ventured into the home computer market with their first 8-bit computers, but their products did not fare as well as their competitors. The once-profitable Atari began a string of quarters of losses throughout 1983, with the company losing more than $530 Million USD over 1983. Kassar resigned as CEO in mid-1983 amid mounting losses and was replaced by James J. Morgan who instituted a number of cost-cutting procedures to turn Atari around, including a large number of layoffs. However, Atari's financial hardships had already reverberated through the industry, leading to the 1983 video game crash that devastated the video game market in the United States.

Warner Communications broke up Atari in July 1984, selling the consumer games (including the home console and computer division) to Jack Tramiel, who then renamed his company Atari Corporation. Atari, Inc. was renamed Atari Games, Inc. after the sale. In 1985, the company was renamed again to Atari Holdings after its coin-operated games division was sold to Namco and its arcade operations division was shut down. It remained a non-operating subsidiary of Warner Communications and its successor company, Time Warner, until it was merged into the parent company in 1992.