Atari is a corporate and brand name owned by several entities since its inception in 1972, currently by Atari Interactive, a subsidiary of the French publisher Atari, SA (ASA). The original Atari, Inc. founded in 1972 by Nolan Bushnell and Ted Dabney 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 electronic entertainment industry from the 1970s to the mid-1980s.
In 1984, the original Atari Inc. was split due to its role in the video game crash of 1983, and the arcade division was turned into Atari Games Inc. Atari Games received the rights to use the logo and brand name with appended text "Games" on arcade games, as well as rights to the original 1972–1984 arcade hardware properties. The Atari Consumer Electronics Division properties were in turn sold to Jack Tramiel's Tramel Technology Ltd., which then renamed itself to Atari Corporation. In 1996, Atari Corporation reverse-merged with disk-drive manufacturer JT Storage (JTS), becoming a division within the company.
In 1998, 6 November Hasbro Interactive acquired all Atari Corporation related properties from JTS, creating a new subsidiary, Atari Interactive. Infogrames Entertainment (IESA) bought Hasbro Interactive in 2001 and renamed it to Infogrames Interactive, later Atari Interactive in 2003, when Infogrames Inc. licensed the Atari name and logo from the latter and changed its name to Atari Inc., a name used for a company founded in 1993 as GT Interactive, which IESA also renamed to Infogrames, Inc. and acquired a 62% controlling interest in by 1999. After IESA's acquisition of Hasbro Interactive, Infogrames, Inc. intermittently published Atari branded titles for Infogrames Interactive. On October 11, 2008, Infogrames completed its acquisition of Atari, Inc., making it a wholly owned subsidiary.
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In 1971, Nolan Bushnell and Ted Dabney founded an engineering firm, Syzygy Engineering, that designed and built Computer Space, the world's first arcade video game, for Nutting Associates. On June 27, 1972 Atari, Inc. was incorporated and soon hired Al Alcorn as their first design engineer. Bushnell asked Alcorn produce an arcade version of the Magnavox Odyssey's Tennis game, which would be named Pong. 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.
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, each getting an "exclusive" deal. Joe Keenan's management of the subsidiary led to him being promoted president of Atari that same year.
In 1976, Bushnell, through Grass Valley, CA firm Cyan Engineering, started 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 $838 in 2016) 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 important, the notion of discontinuing the 2600. In 1978, Kee Games was disbanded. In December of that year, Nolan Bushnell was fired following an argument with Manny Gerard. "[W]e started fighting like cats and dogs. And then the wheels came off that fall. Warner claimed they fired me," recalled Bushnell. "I say I quit. It was a mutual separation."
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. Mid-way into their effort the home computer revolution took off, leading to the addition of a keyboard and features to produce the Atari 800 and its smaller sibling, the 400. The new machines had some success when they finally became available in quantity in 1980. From this platform Atari released their next-generation game console in 1982, the Atari 5200. It was unsuccessful due to incompatibility with the 2600 game library, a small quantity of dedicated games, and notoriously unreliable controllers.
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. In 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.
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 in May 1984 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 Tramiel Technology to buy Atari's consumer electronics and home computer divisions. Negotiating until close to midnight on July 1, 1984, Jack Tramiel purchased Atari. Warner sold the home computing and game console divisions of Atari to Tramiel 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. Warner retained the arcade division, continuing it under the name Atari Games, but sold it to Namco in 1985. Warner also sold the fledgling Ataritel to Mitsubishi.
The Atari logo was designed by George Opperman who was Atari's first in-house graphic designer. The design is known as "Fuji" for its resemblance to the Japanese mountain, although the design's origins are unrelated to it. 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 midline of the "court" in company's first hit game, Pong.
Under Tramiel's ownership, Atari Corp. used the remaining stock of game console inventory to keep the company afloat while they finished development on a 16/32-bit computer system, the Atari ST. ("ST" stands for "sixteen/thirty-two", referring to the machines' 16-bit bus and 32-bit processor core.) In April 1985, they released the first update to the 8-bit computer line — the Atari 65XE, the Atari XE series. June 1985 saw the release of the Atari 130XE, Atari User Groups received early sneak-preview samples of the new Atari 520ST's, and major retailer shipments hit store shelves in September 1985 of Atari's new 32-bit Atari ST computers. In 1986, Atari launched two consoles designed under Warner — the Atari 2600jr and the Atari 7800 console (which saw limited release in 1984). Atari rebounded, earning a $25 million profit that year.
In 1987, Atari acquired Federated Group for $67.3 million, securing shelf space in over 60 stores in California, Arizona, Texas and Kansas at a time when major American electronics outlets were reluctant to carry Atari-branded computers, and two-thirds of Atari's PC production was sold in Europe. The Federated Group (not related to Federated Department Stores) was sold to Silo in 1989.
In 1989, Atari released the Atari Lynx, a handheld console with color graphics, to much fanfare. A shortage of parts kept the system from being released nationwide for the 1989 Christmas season, and the Lynx lost market share to Nintendo's Game Boy which, despite only having a black and white display, was cheaper, had better battery life and had much higher availability. Tramiel emphasized computers over game consoles but Atari's proprietary computer architecture and operating system fell victim to the success of the Wintel platform while the game market revived. In 1989, Atari Corp. sued Nintendo for $250 million, alleging it had an illegal monopoly. Atari eventually lost the case when it was rejected by a US district court in 1992.
In 1993, Atari positioned its Jaguar as the only 64-bit interactive media entertainment system available, but it sold poorly. It would be the last home console to be produced by Atari and the last to be produced by an American manufacturer until Microsoft's introduction of the Xbox in 2001.
By 1996, a series of successful lawsuits had left Atari with millions of dollars in the bank, but the failure of the Lynx and Jaguar left Atari without a product to sell. Tramiel and his family also wanted out of the business. 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. 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.
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 October 2001, Infogrames (now Atari SA) announced that it was "reinventing" the Atari brand with the launch of three new games featuring a prominent Atari branding on their boxarts: Splashdown, MX Rider and TransWorld Surf. Infogrames used Atari as a brand name for games aimed at 18-34 year olds. Other Infogrames games under the Atari name included V-Rally 3, Neverwinter Nights, Stuntman and Enter the Matrix.
On May 7, 2003, Infogrames had its majority-owned, but discrete US subsidiary Infogrames NA officially renamed Atari, Inc., renamed its European operations to Atari Europe but kept the original name of the main company Infogrames Entertainment. The original Atari holdings division purchased from Hasbro, Hasbro Interactive, was also made a separate corporate entity renamed as Atari Interactive.
On March 6, 2008, Infogrames made an offer to Atari Inc. to buy out all remaining public shares for a value of $1.68 per share, or $11 million total. The offer would make Infogrames sole owner of Atari Inc., thus making it a privately held company. On April 30, 2008, Atari Inc. announced its intentions to accept Infogrames' buyout offer and to merge with Infogrames. On October 8, 2008, Infogrames completed its acquisition of Atari Inc., making it a wholly owned subsidiary.
Namco Bandai has purchased a 34% stake in Atari Europe on May 14, 2009, paving the way for its acquisition from Infogrames. Atari had had significant financial issues for several years prior, with losses in the tens of millions since 2005.
In May 2009, Infogrames Entertainment SA, the parent company of Atari, and Atari Interactive, announced it would change its name to Atari SA.
As of March 31, 2011, the board of directors consisted of Frank Dangeard, Jim Wilson, Tom Virden, Gene Davis and Alexandra Fichelson.
On January 21, 2013, Atari, Atari Interactive, Humongous, and California US Holdings (collectively, the "Companies") filed petitions for relief under Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy Court for the Southern District of New York. All three Ataris emerged from bankruptcy one year later and the entering of the social casino gaming industry with Atari Casino. Frederic Chesnais, who now heads all three companies, stated that their entire operations consist of a staff of 10 people.
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