Video games have a very interesting history behind them, including scary coincidences, market crashes, and sales that are mind-blowing in size. This running series attempts to document most of these in an interesting way. This post focuses on the rather short history of one of the greatest names in gaming history, Atari.
After being taught by Steve Russell, Nolan Bushnell, together with friend Ted Dabney, designed an arcade game: Computer Space. However, Computer Space was very different and not normal for the average human back in the 1970s. The game was a little too daring, with four buttons. Keep in mind that the general public was used to just two, the two found on pinball machines. Computer Space was not a success, but Bushnell’s second game, with the help of Al Alcorn, created one of the most successful and well-known games in the history of gaming: Pong. Pong became a huge hit, which no-one was expecting. Unfortunately, rival company Magnavox had just released their console, the Odyssey, just two months beforehand, with one of the games being an almost-perfect copy of Pong. Magnavox took Atari to court for copyright infringement, and ended up winning the case, possibly because Bushnell had signed the guest book after playing Magnavox’s version of the game. Atari had to pay Magnavox $700,000 (around $2,900,000 US today), and soon after Magnavox started charging other companies royalties, as many, many clones of Pong were created.
Atari’s early games had been arcade-exclusive, but after a while they investigated other markets, and perhaps inspired by their rival Magnavox, decided to release a home console. This console was called the Video Computer System, but it is more famous by its other name, the Atari 2600. Warner Communications bought Atari in 1976 to help give life to the console, and by 1980, the sales of the system had reached and impressive $415 million, or approximately $1.175 billion US today. Unfortunately, this couldn’t save Warner Communications, who had losses totaling $533 million (approximately $1.25 billion US today). Atari was sold to former Commodore CEO Jack Tamriel. Under his guidance, the team released the Atari ST Home computer, which had $25 million in sales in 1986, approximately $50 million today.
Game Footage of Pong
Atari was not all fun-and-video-games though, and it placed very strict restrictions on its programmers, which has led to some miraculous discoveries recently, such as hidden credit sections in the layout of a level. These restrictions would cause some programmers to leave what they considered too harsh a company, and three in particular – David Crane, Alan Miller, and Bob Whitehead – would go on to form the gaming company Activision, who are still around today, and published the titles Call of Duty and more recently, Destiny.
Atari would go on to invent several more home computers, the Atari 800 and the Atari 400, the technology of which would be used in their next console, the 5200. The 5200, like most consoles nowadays, was an attempt to continue the Atari home console brand, because the 2600 had proven to be incredibly successful: by the end of the 2600’s run, there were over 400 games for the system, and it was inducted into the Toy Hall of Fame in 2007. The games for the 5200 were mostly just ports from the 2600, and couple that with how much larger and more expensive the 5200 was compared to the 2600, (not to mention that only 69 games were released for the console) it was considered to be a failure. The 5200 did, however, have some interesting innovations in the controller, including a numeric keypad, a reset button, and a button that was widely used till its retirement in this generation, the pause button.
The Atari 5200, with its interesting controller
Then Atari decided to make the game for ET: The Extra Terrestrial, and subsequently caused the market crash. Nintendo saved the games industry with the Nintendo Entertainment System (NES), but Nintendo forced developers to have console exclusivity to the NES, which made Atari’s next console, the 7800, somewhat unpopular. The 7800 was released in January 1986, was backwards-compatible with the 2600, was relatively cheap, and had several planned peripherals, but few of these ever came to life. Even though the 7800 struggled to obtain a decent library, Atari managed to port some fantastic arcade games, and the 7800 was eventually profitable for the company. Atari would soon release another console, the XEGS, but this was a failure – commercially and critically, even though it was compatible with all of Atari’s previous software and could double as a home computer (with a special keyboard).
After Atari’s home consoles, the company figured that they should break into the portable market. The Atari Lynx was first released in 1989, and it was the first handheld with a color LCD screen. It was designed ambidextrously, had good graphics, (being 16 bit as well) and even had multiplayer support through the use of a “Comlynx” cable, which allowed up to 17 people to play simultaneously, although most games only supported 8. The Lynx was also giant, had poor battery life, and a large lack of third party games. This last point was thanks in part to Nintendo’s Gameboy being more popular and Sega’s Game Gear also being fairly popular. When the Lynx II was released in 1991 with stereo headphones, battery saving options, and a price tag of just $99 (about $170 today), sales picked up slightly, but Atari could just not compete with the popularity of Nintendo and Sega.
The Gargantuan Atari Lynx compared to Sony’s PSP and PSP Go
In 1992, Atari lost an antitrust lawsuit against Nintendo. Atari was originally meant to publish the NES in America, but they refused when they saw that their exclusive license had been violated at a conference. This was the start of the end for Atari.
Atari was working on a 32 bit console, the Panther, at the time, as well as a much more powerful 64 bit console, the Jaguar. Development on the Jaguar progressed much faster than expected, so the Panther console was scrapped and all focus was on the Jaguar. In 1994, to compete with the Super Nintendo Entertainment System (SNES), the Sega Mega Drive/Genesis, and the Panasonic 3DO, Atari released the Jaguar, with the advertising campaign “Do the Math”, highlighting the 64 bit to 16 bit difference between the consoles. Developers found it hard to program for the system, possibly due to issues such as the controller having a phone-style keypad at the bottom, but there were some amazing games, including Rayman and Doom. The Jaguar only sold 125, 000 consoles, with another 100, 000 consoles remaining unsold. The Jaguar was the last American console until 2001, when the Xbox was released.
The Atari Jaguar, with its bizarre controller
In 1994, Sega invested $40 million (about $62 million US today) in exchange for all of Atari’s patent rights. The Atari Interactive Division failed to revive the company in 1996, so they were sold to JTS, a maker of computer disc drives. In 1998, JTS sold all of Atari’s assets as intellectual property scraps, and all patents, copyrights, and trademarks were bought by Hasbro Interactive for $5 million (about $7 million US today).
While Atari was focusing on the arcades, there was actually an entire generation of gaming consoles that were released before they even thought about moving to the home console market. That generation is the focus of the next post.
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