Atari History

The name comes from the Japanese term Atari, used while playing the ancient Chinese board game Go. The word Ataru means “to hit a target” in Japanese and is associated with good fortune, while Atari means “about to win”.   

The Atari logo was designed by George Opperman, who was Atari’s first in-house graphic designer, and drawn by Evelyn Seto.  Opperman designed the logo intending for the silhouette to look like the letter A as in Atari, and for its three “prongs” to resemble players and the mid-line of the “court” in the company’s first hit game, Pong.


1971: Nolan Bushnell and Ted Dabney founded a small engineering company, Syzygy Engineering, that designed Computer Space, the world’s first commercially available arcade video game, for Nutting Associates.

1972: The two incorporated Atari, Inc. and soon hired Al Alcorn as their first design engineer. While Bushnell incorporated Atari in June 1972, Syzygy Company was never formally incorporated. Before Atari’s incorporation, Bushnell considered various terms from the game Go, eventually choosing Atari, referencing a position in the game when a group of stones is imminently in danger of being taken by one’s opponent. Atari was incorporated in the state of California on June 27, 1972. 

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, each getting an “exclusive” deal. Joe Keenan’s management of the subsidiary led to him being promoted president of Atari that same year.

1975: Atari’s Grass Valley, CA subsidiary Cyan Engineering, started the development of a flexible console that was capable of playing the four existing Atari games. The result was the Atari Video Computer System, or VCS (later renamed 2600 when the 5200 was released). The introductory price of $199 (equivalent to $894 in 2019) included a console, two joysticks, a pair of paddles, and the Combat game cartridge.  Bushnell knew he had another potential hit on his hands but bringing the machine to market would be extremely expensive. Looking for outside investors, Bushnell sold Atari to Warner Communications in 1976 for an estimated $28–32 million, using part of the money to buy the Folgers Mansion. Nolan continued to have disagreements with Warner Management over the direction of the company, the discontinuation of the pinball division, and most importantly, the notion of discontinuing the 2600.

1978: Kee Games was disbanded and in December of that year, Nolan Bushnell was fired following an argument with Manny Gerard. Eventually Warner claimed fired Bushnell however according to Bushnell, he quit.  The development of a successor to the 2600 started as soon as it shipped. The original team estimated the 2600 had a lifespan of about three years; it then set forth to build the most powerful machine possible within that time frame.

1980:  Atari 800 and its smaller sibling, the 400 had reasonable success and from this platform Atari released their next-generation game console.

1982: the Atari 5200 was released. It was unsuccessful due to incompatibility with the 2600 game library, a small quantity of dedicated games, and notoriously unreliable controllers. Porting arcade games to home systems with inferior hardware was difficult.  The ported version of Pac-Man for Atari 2600 omitted many of the visual features of the original to compensate for the lack of ROM space and the hardware struggled when multiple ghosts appeared on the screen creating a flickering effect.

Under Warner and Atari’s chairman and CEO, Raymond Kassar, the company 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 US history at the time. However, it ran into problems in the early 1980s as interference from the New York-based Warner management increasingly affected daily operations.

Its home computer, video game console, and arcade divisions operated independently 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.  These problems were followed by the video game crash of 1983, with 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.

1983: Ray Kassar had resigned and executives involved in the Famicom merger lost track of negotiations, eventually killing the deal. With Atari’s financial problems and the Famicom’s runaway success in Japan after its July 16, 1983, release, Nintendo decided to remain independent.

1984: Financial problems continued to mount and Kassar’s successor, James J. Morgan, had less than a year in which to tackle the company’s problems.  He began a massive restructuring of the company and worked with Warner Communications to create “NATCO” (an acronym for New Atari Company).  NATCO further streamlined the company’s facilities, personnel, and spending. Unknown to James Morgan and the senior management of Atari, Warner had been in talks with Tramel Technology to buy Atari’s consumer electronics and home computer divisions.

Negotiating until close to midnight on July 1, 1984, Jack Tramiel purchased the home computing and game console divisions of Atari for $50 cash and $240 million in promissory notes and stocks, giving Warner a 20% stake in Atari Corporation who then used it to create a new company under the name Atari Corporation.  

1985: Warner retained the arcade division, continuing it under the name Atari Games, but sold it to Namco in 1985. Warner also sold the Ataritel division to Mitsubishi.  Atari went on to create a new 16-bit line of computers and tried to retake the market with 2 failed game consoles.  Legal battles continued with companies like Nintendo as the company continued to struggle to keep afloat. 

1996: Atari merged with JTS Inc., a short-lived maker of hard disk drives, to form JTS Corp.  Atari’s role in the new company largely became that of holder for the Atari properties and minor support, and consequently the name largely disappeared from the market.