Atari, Inc.

File:Atari corporate logo.png
Company type	Public (Nasdaq: ATAR)
Industry	video game
Founded	1972 as Atari Inc. 1984 as Atari Corporation and Atari Games 1998 as Atari Interactive 2003 as Atari Inc. (formerly Infogrames Inc./GT Interactive)
Headquarters	New York, N.Y. , U.S.
Key people	David Pierce, CEO Patrick Leleu, Chairman and Chief Creative Officer Diane Price Baker, Executive Vice President and Chief Financial Officer
Products	Test Drive, Dragon Ball, Alone in the Dark, Godzilla, Neverwinter Nights, RollerCoaster Tycoon 3
Revenue	$218 million (2006)
Net income	$68 million (2006)
Number of employees	232 (2006)
Website	www.atari.com

Atari is a corporate and brand name owned by several entities since 1972. It is currently owned by Atari Interactive, who has licensed the brand name and assets to Atari, Inc. (Nasdaq: ATAR), a majority owned subsidiary of Infogrames Entertainment SA (IESA), encompassing its North American operations. Atari develops, publishes and distributes games for all major video game consoles, as well as for the personal computer, and is currently one of the largest third-party publishers of video games in the United States.

The company that currently bears the Atari name was founded in 1993 under the name GT Interactive. GT Interactive was acquired by IESA in 1999,^[1] and renamed Infogrames, Inc.^[2] Infogrames acquired the Atari brand name from its purchase of Hasbro Interactive,^[3] which in turn had acquired it from JTS Corporation,^[4] which the original Atari had merged with in 1996.^[5] Infogrames, Inc. intermittently used the Atari name as a brand name for selected titles before IESA officially changed the U.S. subsidiary's name to Atari, Inc. in 2003,^[1]

The original Atari was founded in 1972 by Nolan Bushnell and Ted Dabney. It 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 computer entertainment industry from the 1970s to the mid 1980s.

Atari Games was split off in 1984 with the rights to use the brand on arcade games, such as Klax, Gauntlet and Roadblasters as well as rights to the original 1972 - 1984 arcade properties.

History

Since the early days of coin operated machines, Atari has been responsible for home consoles such as the Atari 2600 (VCS); produced a series of eight-bit computers (Atari 400, 800, XL and XE series); taken part in the 16 bit computer revolution with the Atari ST; made the revolutionary (for its time) 64-bit Atari Jaguar; and released a hand held video game console, the Atari Lynx.

The 1970s: The rise of a video game empire

In 1966, Nolan Bushnell saw Spacewar! for the first time at the University of Utah. Deciding there was commercial potential in a coin-op version, several years later he and Ted Dabney worked on a hand-wired custom computer capable of playing it on a black and white television in a single-player mode where the player shot at two orbiting UFOs. The resulting game, Computer Space, was released by an existing coin-op game company, Nutting Associates.

Computer Space did not fare well commercially when it was placed in Nutting's customary market, bars. Feeling that the game was simply too complex for the average (potentially drunk) customer, Bushnell started looking for new ideas.^[6]

Bushnell and Ted Dabney left Nutting to form their own engineering firm, Syzygy, and soon hired Al Alcorn as their first design engineer. Initially wanting to start Syzygy off with a driving game, Bushnell had concerns that it might be too complicated for the young Alcorn's first game.^[6] In May 1972, Nolan had seen a demonstration of the Magnavox Odyssey, which included a tennis game. He decided to have Alcorn produce an arcade version of the Odyssey's Tennis game,^[7] which would go on to be named Pong.

When they went to incorporate their firm that June, they soon found that Syzygy (an astronomical term) already existed in California. Bushnell wrote down several words from the game Go, eventually choosing atari, a term that in the context of the game means a state where a stone or group of stones is imminently in danger of being taken by one's opponent. In Japanese, atari is the nominalized form of ataru, which literally means to "target" or "aim at" something. Loosely, it can be translated as "prepare to be attacked". Also, the name "Atari" is arguably more memorable than "Syzygy" in terms of spelling and pronunciation for most markets. Atari was incorporated in the state of California on June 27th, 1972.^[8]

By November 1972, the first Pong was completed. It consisted of a black and white television from Walgreens, the special game hardware, and a coin mechanism from a laundromat on the side which featured a milk carton inside to catch coins. Placed in a Sunnyvale pub by the name of Andy Capps' to test its viability, it took only one day to realize they had a hit:

"Seven quarters later they were having extended volleys, and the constant pong noise was attracting the curiosity of others at the bar. Before closing, everybody in the bar had played the game. The next day people were lined up outside Andy Capp's at 10 A.M. to play Pong. Around ten o'clock that night, the game suddenly died."^[9]

When they arrived the next morning to fix the machine, they were met by a lineup of people waiting for the bar to open so they could play the game. On examination, the problem turned out to be mundane; the coin collector was filled to overflowing with quarters, and when customers tried to jam them in anyway, the mechanism shorted out.

After talks to release Pong through Nutting and several other companies broke down, Bushnell and his partner Ted Dabney decided to release Pong on their own,^[10] and Atari Inc. was established as a coin-op design and production company.

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, with each getting an "exclusive" deal. Though Kee's relationship to Atari was discovered in 1974, Joe Keenan did such a good job managing the subsidiary that he was promoted to president of Atari that same year.

In 1975, Bushnell started an effort to produce a flexible video game console that was capable of playing all four of Atari's then-current games. Development took place at an offshoot engineering lab, which initially had serious difficulties trying to produce such a machine. However, in early 1976 the now-famous MOS Technology 6502 was released, and for the first time the team had a CPU with both the high-performance and low-cost needed to meet their needs. The result was the Atari 2600, one of the most successful consoles in history.

Bushnell knew he had another potential hit on his hands, but bringing the machine to market would be extremely expensive. Looking for outside investors, in 1976 Bushnell sold Atari to Warner Communications for an estimated $28 - $32 million, using part of the money to buy the Folgers Mansion. He departed from the division in 1979.

A project to design a successor to the 2600 started as soon as the system shipped. The original development team estimated the 2600 had a lifespan of about three years, and decided to build the most powerful machine they could given that time frame. By the middle of the effort's time-frame the home computer revolution was taking off, so the new machines were adapted with the addition of a keyboard and various inputs to produce the Atari 800, and its smaller cousin, the 400. Although a variety of issues made them less attractive than the Apple II for some users, the new machines had some level of success when they finally became available in quantity in 1980.

While part of Warner, Atari 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 the history of the United States at the time.

The 1980s: Hurdles ahead

Just before the 1980s, four programmers left the company to found Activision, these four programmers were responsible for about 60% of their game sales. This would be the turning point to Atari's success. Atari tried to sue them for stealing secrets to developing for their console, but it was ruled in 1982 that this was not the case, making the Atari open to third-party developers, which lowered games prices.

Although the 2600 had garnered the lion's share of the home video game market, it experienced its first stiff competition in 1980 from Mattel's Intellivision, which featured ads touting its superior graphics capabilities relative to the 2600. Still, the 2600 remained the industry standard-bearer, because of its market superiority, and because of Atari featuring (by far) the greatest variety of game titles available.

However, Atari ran into problems in the early 1980s. Its home computer, video game console, and arcade divisions operated independently of one another and rarely cooperated. Faced with fierce competition and price wars in the game console and home computer markets, Atari was never able to duplicate the success of the 2600.

• In 1982, Atari released disappointing versions of two highly publicized games, Pac-Man and E.T. the Extra-Terrestrial, causing a pileup of unsold inventory and depressing prices. (In 1983, in response to a massive number of returned orders from distributors, Atari buried millions of unsold game cartridges (the bulk of them consisting of those same two titles, Pac-Man and E.T.) in a New Mexico desert landfill.)
• In December of 1982, Atari executives Ray Kassar and Dennis Groth were investigated for allegations of insider trading (later found to be false).
• Larry Emmons, employee No.3, retired in 1982. He was head of research and development of the small group of talented engineers in Grass Valley, California, who had designed the 2600 and home computers.
• The Atari 5200 game console, released as a next-generation follow up to the 2600, was based on the Atari 800 computer (but was incompatible with Atari 800 game cartridges), and its sales never met the company's expectations.

These problems were followed by the infamous video game crash of 1983, which caused losses that totaled more than $500 million. Warner's stock price slid from $60 to $20, and the company began searching for a buyer for its troubled division.

Still, Atari held a formidable position in the world video game market, and was the number one console maker in every market except Japan. A Japanese video game company by the name of Nintendo was going to be releasing their first programmable video game console, the Famicom (later known to the rest of the world as the NES), in 1983. Looking to also sell the console in international markets, a partnership with Atari seemed a good match and Nintendo approached Atari to offer a licensing deal whereby Atari would build and sell the system, paying Nintendo a royalty. The deal was in the works throughout 1983,^[11] and the two companies tentatively decided to sign the agreement at the June, 1983 CES. Unfortunately, Coleco was showcasing their new Adam computer, and the display unit was running Nintendo's Donkey Kong. Atari CEO Ray Kassar was furious, as Atari owned the rights to publish Donkey Kong for computers, and he accused Nintendo of double dealing with the Donkey Kong license. Nintendo, in turn, tore into Coleco, who only owned the console rights to the game. [2] Coleco had legal grounds to challenge the claim though since Atari had only purchased the floppy disk rights to the game, while the Adam version was cartridge-based.^[12] In the coming month, Ray Kassar was forced to leave Atari, and executives involved in the Famicom deal were forced to start over again from scratch and the deal eventually languished. With Atari's further financial problems and the Famicom's runaway Japanese success after its July 16th, 1983 release date, Nintendo decided to go at it alone.

Financial problems continued to grow and Ray's replacement, James J. Morgan, had less than a year to try and tackle his predecessor's problems before he too was gone. In July 1984, Warner sold the home computing and game console divisions of Atari to Jack Tramiel, the recently ousted founder of Atari competitor Commodore International, under the name Atari Corporation for $240 million in stocks under the new company. Warner retained the arcade division, continuing it under the name Atari Games and eventually selling it to Namco in 1985. Warner also sold the fledgling Ataritel to Mitsubishi.

Under Tramiel's ownership, Atari Corp. used the remaining stock of game console inventory to keep the company afloat while they finished development of their 16-bit computer system, the Atari ST. In 1985, they released their update to the 8-bit computer line, the Atari XE series, as well as the 16-bit Atari ST line. Then, in 1986, Atari launched two consoles designed under the Warner Atari - Atari 2600jr and the Atari 7800 console (which saw limited release in 1984). Atari rebounded, producing a $25 million profit that year. The Atari ST line proved very successful (but mostly in Europe, not the U.S.), ultimately selling more than 4 million units. It was especially popular among musicians, as it had built in MIDI ports. Still, its closest competitor in the marketplace, the Commodore Amiga, outsold it 3 to 2. Atari eventually released a line of inexpensive IBM PC compatibles as well as an MS-DOS compatible palm computer called the Atari Portfolio.

In 1989, Atari also released the Atari Lynx, a handheld console with color graphics, to critical acclaim. However, a shortage of parts kept the system from being released nationwide for the 1989 Christmas season. As a result, the Lynx lost market share to Nintendo's Game Boy, which had only a black and white display but was widely available. Also in 1989, Atari Corp. sued Nintendo for $250 million, alleging it had an illegal monopoly. Atari lost.

The 1990s: Decline

As the fortunes of Atari's ST and PC compatible computers faded, consoles and software again became the company's main focus. In 1993, Atari released its last console, the Atari Jaguar. After a period of initial success, it, too, failed to meet expectations. It was not nearly as powerful as Sony Computer Entertainment's PlayStation or Sega's Saturn and lacked the extensive third party support its Japanese competitors had easily secured for their consoles.

During 1993, the Atari demo scene started to weaken, as as the popularity of the 16-bit microsystem was overtaken by the x86 based PC.

By 1996, a series of successful lawsuits followed by profitable investments had left Atari with millions of dollars in the bank, but the failure of the Lynx and Jaguar left Atari without any products to sell. In addition, Tramiel and his family wanted out. The result was a rapid succession of changes in ownership. In July 1996, Atari merged with JTS Inc.,a short-lived maker of hard disk drives, to form JTS Corp.^[5] Atari's role in the new company largely became a holder for the Atari properties and minor support, consequently the name largely disappeared from the market.

Although the original Atari ceased to exist, a large amount of underground support and development remains for Atari's game systems and computers of the 1970s and 1980s, and many of the retro-gaming conventions (such as World Of Atari, Philly Classic, and the Midwest Gaming Classic), focus largely on Atari. There are also websites dedicated to the release of new products for the original Atari consoles and computers, such as AtariAge. Another site that is a major resource for Atari history is [AtariMuseum.com] run by Atari consultant Curt Vendel.

In March 1998, JTS sold the Atari name and assets to Hasbro Interactive for $5 million—less than a fifth of what Warner Communications had paid 22 years earlier. This transaction primarily involved the brand and intellectual property, which now fell under the Atari Interactive division of Hasbro Interactive. The brand name changed hands again in December 2000, when French software publisher Infogrames took over Hasbro Interactive.

In the meantime, Atari Games was bought out by its employees in 1986, who also founded Tengen to bring their arcade games in to the home. The new Time-Warner eventually started gaining more and more shares in the company until they eventually owned the company completely again by 1994. At that point Atari Games became part of Time-Warner Interactive (TWI). By 1996, Time-Warner sold TWI to WMS Industries, Inc., owner of Midway at the time. WMS brought the properties under Midway (which it now renamed Midway Games Inc.). In 1998, Midway was sold to its shareholders and spun off as a separate company. Over 1999-2000, Midway held closed door proceedings with Hasbro which ultimately led to Atari Games being renamed Midway Games West. Midway left the arcade industry in 2001, and shut down Midway Games West in 2003 - closing the chapter on what was left of the original Atari arcade division.

The 2000s: Revival and re-release of Atari classics

In October 2001, Infogrames announced that it was "reinventing" the Atari brand with the launch of three new games. On May 7 2003, Infogrames officially reorganized its US subsidiary as a separate entity known as Atari, Inc., named its European operations to Atari Europe, and kept the main holdings company as Infogrames Entertainment. The original Atari holdings division purchased from Hasbro, Atari Interactive, was also spun off as a separate corporate entity.

In 2002, Jakks Pacific, a toy making company, released a plug-and-play video game console called the Atari 10-in-1 TV Game. It was battery-operated and shaped similarly to an Atari 2600 joystick, and included A/V ports. In 2004, the same company created a device called Atari Paddle Games, in the shape of one of the 2600s "paddle" controllers with appropriate titles included. However, as stated, neither of the games was directly released by Atari.

The same year that the Paddle Games were released, Atari released a TV game of their own which they called the Atari Flashback Console. The device was designed and produced by Atari consultant Curt Vendel through his engineering firm Legacy Engineering. With only a 10 week development window, what they produced looked like a minute version of the Atari 7800 console originally released in 1984, 20 years previously. The two controllers were small as well, having a joystick and two red buttons on each side. Twenty titles were built into the system. Unlike most plug-and-plays, the Flashback was not powered by batteries, but an (included) AC adaptor instead. The Flashback did fairly well in sales. Since the games were all recreated on hardware more closely resembling the Nintendo Entertainment System than the 7800, some of the aspects of certain games concerning the sound, graphics, or gameplay were either changed or omitted.

Because of popular demand, Atari hired Curt Vendel once again to produce a follow up product. With a longer development window, Vendel released a new version of the Flashback console, titled Atari Flashback 2, in August 2005. The Flashback 2 is based on an implementation of the original Atari 2600 on a single chip that Curt Vendel designed, allowing the original 2600 games to be run instead of ports as in the first Flashback. In addition, the included joysticks are fully compatible with the original 2600 joysticks and vice-versa. Furthermore, the circuitboard in the Flashback 2 actually has connectors for modders to solder on a cartridge slot, allowing the Flashback 2 to play the entire library of 2600 games.

Also, in late October 2005, Atari released one of two collections of its classic arcade games only for the Nokia N-Gage console, titled Atari Masterpieces. Atari Masterpieces Volume I includes classic arcade games: Asteroids, Battlezone, Black Widow, Millipede, Missile Command, Red Baron, Lunar Lander and Super Breakout, and features an exclusive interview with Nolan Bushnell. Atari Masterpieces Volume II was released in March 2006.

On May 5, 2006, Atari and Hasbro stopped Bioware and DLA from further development of premium modules and publishing near-completed premium modules for Neverwinter Nights. No reason was stated, but it was likely in anticipation of the upcoming sequel, Neverwinter Nights 2, which would lack features from these modules. They relented after community backlash.

On September 1, 2006, Atari announced that its stock faces delisting from NASDAQ since its price had fallen under $1.00. [3] On September 5, 2006, David Pierce was appointed as new CEO of Atari, replacing Bruno Bonnell. Pierce previously worked as an executive at Universal Pictures, Metro-Goldwyn-Mayer, Sony Pictures Entertainment, Sony Music Entertainment, and Sony Wonder. [4]

On October 2, 2006, Atari announced that it had sold off Shiny Entertainment to Foundation 9 Entertainment, which culminated in the completion of their strategic divesture.^[13]

On April 5, 2007, Bruno Bonnell resigned his position as chairman and chief financial officer. ^[14]

Atari's new titles and direction

Recently, Atari's top-selling titles have been the Dragon Ball Z games based on the popular anime license from Toei Animation in Japan. These include the Dragon Ball Z: Budokai series of games for next-generation console systems and the Dragon Ball Z: The Legacy of Goku series of games for the Game Boy Advance. These games have topped the best-seller charts for numerous console platforms since the release of Atari's first Dragon Ball Z game, The Legacy of Goku in 2002, which was the first Dragon Ball game to be made by an American company, Webfoot Technologies, and is one of the best-selling Game Boy Advance games of all time (#16). The best selling Budokai series is developed in Japan by Dimps and includes Dragon Ball Z: Budokai, Dragon Ball Z: Budokai 2 and Dragon Ball Z: Budokai 3). Atari is also releasing Dragon Ball Z: Budokai Tenkaichi and its sequel, Dragon Ball Z: Budokai Tenkaichi 2 which is a separate series from the Budokai series. Following the success of the Budokai and Legacy of Goku series, Atari has released numerous other Dragon Ball titles including Dragon Ball Z: Supersonic Warriors, Dragon Ball Z: Super Sonic Warriors 2, Dragon Ball Z: Sagas, Dragon Ball GT: Transformation, Dragon Ball: Advanced Adventure and Super Dragon Ball Z.

Atari also released a series of games based on the smash-hit The Matrix movie trilogy including Enter the Matrix and The Matrix: Path of Neo. These titles represent some of the most expensive video games ever developed. Enter the Matrix, which was developed by Shiny Entertainment, sold 1.38 million units for the PlayStation 2 and 1 million units for the Nintendo GameCube, making it one of the best-selling video games.^{[citation needed]}

Other currently popular titles for Atari include RollerCoaster Tycoon 3, Test Drive Unlimited, Neverwinter Nights, Godzilla games, the Alone in the Dark series and the Driver series (recently sold to Ubisoft for a reported $24 million^[15]).

Major products

Historical

• Pong (several versions)
• Atari 2600
• Atari Video Music
• Atari 5200
• Atari 7800
• Atari XEGS
• Atari Lynx
• Atari Jaguar
• Atari 8-bit family
• Atari ST, Atari STE
• Atari MEGA ST, Atari MEGA STE professional line
• Atari TT
• Atari Falcon
• Atari Transputer Workstation
• Atari Portfolio palmtop computer

Current

• Act of War: Direct Action
• Act of War: High Treason
• Alone in the Dark Series.
• ArmA: Armed Assault
• Boiling Point: Road to Hell
• Backyard Sports
• Dark Earth
• Dragon Ball: Advanced Adventure
• Dragon Ball Z: Budokai
• Dragon Ball Z: Budokai 2
• Dragon Ball Z: Budokai 3
• Dragon Ball Z: Budokai Tenkaichi
• Dragon Ball Z: Budokai Tenkaichi 2
• Dragon Ball Z: Budokai Tenkaichi 3
• Dragon Ball Z: Sagas
• Dragon Ball Z: Super Sonic Warriors
• Dragon Ball Z: Super Sonic Warriors 2
• Dragon Ball Z: The Legacy of Goku
• Dragon Ball GT: Transformation
• Yu Yu Hakusho: Spirit Detective
• Yu Yu Hakusho: Tournament Tactics
• Yu Yu Hakusho: Dark Tournament
• Driver (1999)
• Driver 2 (2000)
• DRIV3R (2004)
• Driver: Parallel Lines (2006)
• Enter the Matrix
• Ikaruga
• Chris Sawyer's Locomotion
• Neverwinter Nights (2002)
• Neverwinter Nights 2 (2006)
• Test Drive (1987)
• Test Drive Unlimited (2006 + 2007)
• The Matrix: Path of Neo
• Unreal Tournament 2003 (2002)
• Unreal Tournament 2004 (2004)
• Godzilla: Destroy All Monsters Melee
• Godzilla: Save the Earth
• Transformers
• Atari Flashback
• Atari Flashback 2
• Mission Impossible: Operation Surma
• Terminator 3: The Redemption
• Tycoon City: New York
• Dungeons & Dragons Online
• The Temple of Elemental Evil (computer game)
• Fahrenheit, also known as Indigo Prophecy in the U.S..
• Retro Atari Classics
• RollerCoaster Tycoon 3
• Marc Ecko's Getting Up: Contents Under Pressure

See also: Atari games

Trivia

• The founder of Atari, Nolan Bushnell, was also the founder of the well known restaurant franchise Chuck E. Cheese's.
• The Ataris, a band, is named after the company.
• The German punk band Atari Teenage Riot is also named after the company
• The Atari logo appeared in the futuristic 1982 movie Blade Runner.
• In the movie Terminator 2: Judgement Day, young John Connor uses an Atari Portfolio (predecessor of the palmtop computer) to steal money from an ATM.

See also

• Atari Games
• Atari 2600
• Atari 5200
• Atari 7800
• History of video game companies

References

External links

• Atari Official Global Site
• Atari US Official Site and Store
• Official Atari Forums
• The Atari History Museum - Atari historical archive site.
• Atari Times, supporting all Atari consoles.
• AtariAge.com
• Atari entry at MobyGames
• Atari Gaming Headquarters - Atari historical archive site.