History of the Atari Video System

In 1971, Nolan Bushnell together with Ted Dabney created the first arcade game. It was called Computer Space, based on Steve Russell's earlier game of Spacewar!. The arcade game Pong was created by Nolan Bushnell (with help from Al Alcorn) a year later in 1972. Nolan Bushnell and Ted Dabney started Atari (a term from the Japanese game Go) that same year.

Atari Sold to Warner Communications

In 1975, Atari re-released Pong as a home video game and 150,000 units were sold. In 1976, Nolan Bushnell sold Atari to Warner Communications for $28 million. The sale was no doubt aided by the success of Pong. By 1980, sales of Atari home video systems had reached $415 million. That same year, the first Atari personal computer was introduced. Nolan Bushnell was still employed as president of the company.

Sold Again

Despite the introduction of the new Atari computer, Warner had a reversal of fortune with Atari with losses totaling $533 million in 1983. In 1984, Warner Communications unloaded Atari to Jack Tramiel, ex-CEO of Commodore. Jack Tramiel released the somewhat successful Atari ST home computer and sales topped $25 million in 1986.

Nintendo Lawsuit

In 1992, Atari lost an anti-trust lawsuit against Nintendo. That same year, Atari released the Jaguar video game system as competition to Nintendo. Jaguar was an impressive game system, however, it was twice as expensive as Nintendo.

The Fall of Atari

Atari was reaching the end of its legacy as a company. In 1994, Sega game systems invested $40 million in Atari in exchange for all patent rights. In 1996, the new Atari Interactive division failed to revive the company which was taken over by JTS, a maker of computer disk drives that same year. Two years later in 1998, JTS sold Atari assets as intellectual property scraps. All copyrights, trademarks, and patents were sold to Hasbro Interactive for $5 million.