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February 2004
The rise, fall and rise again of Atari
Atari logo
Clarkestar reports on the history of oneof the founder members of the video game culture.

There's more to Atari than PAC MAN and squares. Clarkestar charts the Hollywood story that is the father of video game.

Beat the kid - can you topple the bigheaded gamester?
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Atari created titles such as PAC MAN, Space Invaders and Asteroids and was the leader of video gaming in the 1980's

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They say you can't keep a good thing down. And 'they' would be right. For the games industry pioneers of the early 80s, Atari, have once again risen from the ashes of economic meltdown, and have justifiably reaffirmed their iconic position as an industry superpower.

In 2003, Atari released the much-anticipated Enter The Matrix across all platforms, which went on to sell (despite a poor reception by many critics) a staggering three million units worldwide in less than four months. Nevertheless, these figures have punctuated the sheer muscle of the Atari brand.

So what exactly is Atari's story?

For many of you, Atari is just another mediocre publisher, churning out good to average games. In fact, Atari is probably not a name you would ever use in the same sentence as say Nintendo or Sega, especially within today's global context. But you would be wrong.

Atari is without doubt the most significant company in the short history of video games to date. It is argued that Atari single handedly started the video game revolution, creating both the home entertainment and arcade industry.

If Atari never existed during the late 70s and early 80s, then there would probably be no Nintendo and no Sega (OK, you can stop crying now). In fact, the landscape of interactive entertainment would look very different indeed. But how and why is that?

quoteIn 1972, Atari created the first coin-operated arcade video game with the introduction of Pong. And hey presto, the video game industry was born, shaping pop culture ever since.. quote

Atari, founded by University of Utah graduate Nolan Bushnell in 1972 for $500, was once the fastest growing company in the United States.

By the late 70s Atari was a centre for exciting developments in software and chip design for the home entertainment market, and was estimated to have attained sales exceeding $500 million.

But before Atari's global home invasion took place, there was yet another backyard revolution taking place. For the visionaries at Atari were busy creating revolutionary hardware and software for what we now refer to as the arcade market.

In 1972, Atari created the first coin-operated arcade video game with the introduction of Pong. And hey presto, the video game industry was born, shaping pop culture ever since.

Pong was an international success and, within months, units of the game started popping up all over the shop - in diners, coffee bars, pubs, even car garages across the world.

The Atari brand soon became practically synonymous with video game excellence. And by the end of 1982, not only had Atari been sold and then bought by Warner Communications for a sum containing many zeros, they had also released Asteroids for the arcades.

It also released the definitive versions of Space Invaders and Asteroids for their home entertainment units, and had licensed PAC MAN, which later became Atari's mascot and central sales image.

With the home entertainment industry pretty much wrapped up with their home video game systems, the future was certainly looking bright and prosperous for Atari.

  • In October 1977 Atari released the Video Computer System (later dubbed 2600) along with the first incarnation of the joystick and nine game cartridges. The 2600 also had switches for selecting games, displaying games in colour or black and white, and setting difficulty levels.

    No other competitor could offer these enhancements. Today the 2600 is looked upon with a sense of nostalgic fondness, and is considered (especially by all of us here at Secret Level) as the first true home console.

  • Towards the end of 1982, as a reflex to flagging 2600 sales, Atari released the Atari 5200, a new and improved games console. Shaped like a breeze block, the 5200 had the same processor as the Atari 400, had a small but sophisticated array of 'special effects', and had the ability to handle several moving objects simultaneously.

    Newsweek called the 5200 "a quantum improvement over the standard 2600". But despite its strengths the 5200 failed to sell, due largely to its high cost, and the fact it had an unforgiving library of games, not to mention the worst controllers in the history of the business, and an unfocused Atari programming team - that spent a considerable amount of time devoted to developing games for the huge 2600 user base.

But Atari fell on hard times. Not long after its banner year in 1980, Atari registered $536 million in losses for 1983. Hence their slippery decline into economic instability - a fact not helped by the growing popularity of Nintendo's Famicom (Nes) and the mounting unpopularity of arcade culture.

quote The Atari brand soon became practically synonymous with video game excellence. And by the end of 1982, not only had Atari been sold and then bought by Warner Communications for a sum containing many zeros, they had also released Asteroids for the arcades. quote

Despite attaining a healthy interest from the general public, both the 2600 and the 5200 failed to make a substantial profit margin.

It seemed people were reluctant to invest in Atari's hardware despite its decision to cut costs on retail to an unprofitable half. Nevertheless, Atari executives planned to recoup their losses on software. It cost less than $10 to manufacture the game cartridges, which sold for $30.

Unsurprisingly, after months of economic pressure, Warner Communications sold Atari. Atari Games then creates the Tengen label for the purpose of marketing games for home game systems, releasing games across all platforms, including the NES and Master System. This would see the end of Atari's hardware reign.

In 1998, due to a further decline in sales, Atari was forced to officially drop all remaining support for their eight-bit consoles, ultimately resulting in a takeover by Hasbro Interactive, for a relatively pathetic $5 million in cash.

Hasbro, famous for their games on PCs, and MS-Windows, would go on to produce remakes of classic Atari titles, marketed under the Atari Interactive name and logo.

Games produced by Atari under Hasbro ownership include: Atari Arcade Hits 1 and 2, Breakout, Centipede, Missile Command, Pong, and Q*Bert.

And this brings us almost up to date. In 2001 Infogrames Entertainment announced completion of its acquisition of Hasbro Interactive from Hasbro, renaming them as Infogrames Interactive.

And in 2003, Infogrames Interactive adopts the ATARI brand, effectively changing the name of the entire company to Atari.

Today, Atari develops interactive entertainment for all platforms, and is the second largest third-party publisher of video games in the world.

At present, the word Atari may mean very little to the newer generations of gamers that missed their ride on the Atari roller coaster of the late 70s - that kick started the video game revolution.

But nonetheless, Atari is still undeniably a company that places emphasis on creating top-rate interactive entertainment for the masses, and what's more… it's poles apart from the Atari that crashed and burned in the 80s.

The Atari brand is arguably as strong as ever. And with that, the legacy continues.


P.S. Due to Atari's extremely eventful history the previous should be seen as a snapshot of the company's ups and downs. Unfortunately there was no room to mention (amongst other things) their two most recent consoles - The Jaguar and the Lynx handheld.

In fact Atari has such a wide and varied history that we would struggle to fit it all in a book! Now I think of it that's a good idea, coming soon 'The History of Atari' by Secret Level press - possibly.

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