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History of Atari - Atari's 50th Anniversary

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My passion for technology stems from a lifelong love of gaming. I received my first video game console when I was just 3 years old—a 16-bit Sega Genesis handed down to me by my father. And so this year is especially notable in my book, as it marks the 50th anniversary of Atari. Without the seminal video game company, I wouldn’t be able to enjoy my favorite pastime today. Atari almost single-handedly created the video game landscape with just a few dozen pixels: pong, its table tennis-inspired video game from 1972. But while Atari was able to bring interactive entertainment to arcades and eventually living rooms, staying relevant was a whole other ballgame. The brand is now looking to regain its footing half a century later, with a new console launch just last year.

Atari was founded by Nolan Bushnell and Ted Dabney. The electrical engineers saw potential in the budding medium of interactive video games after seeing Spacewar! in Stanford University’s computer labs. While the video game was popular among programmers, it wasn’t accessible to the general public since computers were primarily used in business and government settings. Bushnell and Dabney aimed to change the underground nature of video games and, on June 27, 1972, formed Atari to bring coin-operated machines to the masses. Atari released pong that November.

pong game

Pong | Alamy

Even if you’ve never played pong, you’ve likely seen its classic black-and-white screen. The game placed two players head-to-head, with each controlling a two-dimensional digital paddle via a dial to volley a ball back and forth. pong‘s gameplay mechanics may seem basic now, but this was the first interactive video game introduced to the public. Plus, it was simple and fun. These aspects helped it become the first commercially successful arcade cabinet.

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Now that the company was financially viable enough to research and develop new concepts, Atari shifted its focus to an at-home game console, called Home Pong, that could connect to a television. As fate would have it, the previously pricey circuitry required to make a home console had fallen in price to make it affordable for more people. Atari released Home Pong during the holidays of 1975. Like the arcade cabinet, this system was extremely popular. This massive revenue and a variety of games springing up from competitors prompted further innovation from Atari, which culminated in 1977’s Atari 2600 (originally called the Atari VCS, for Video Computer System).

The 2600 was game-changing, quite literally. People could swap cartridges in and out to play multiple arcade games at home. The console was built on, by today’s standards, a paltry 128 bytes of RAM, a 1.19-megahertz processor, and a custom graphics and sound chip. However, this system was ahead of its time and highlights Atari 2600’s greatest contribution: It paved the way for consumer microprocessor-based equipment. Its maximum resolution was just 160 x 192 pixels with support for up to 128 colors through a Television Interface Adapter to send both visuals and audio, laying the groundwork for plug-and-play television electronics.

While the 2600 was the dominant home gaming system in America at its release, five years is a long time in any industry. After the 2600 launched, Bushnell left Atari in the corporate hands of Warner Communications, which led to a series of poor management decisions. One of those was releasing the system’s follow-up, the Atari 5200 in 1982, with a limited game library consisting of rehashed 2600 games with slightly updated graphics. At the time, this system was perceived as stagnant, since other consoles offered a similar graphics experience while undercutting it on price.

Meanwhile, Atari had spent millions of dollars on licensing popular media properties but routinely released poor, lower-quality games based on them. One of the most infamous examples is when the company spent over $20 million to acquire the rights to make ET The Game. Executives pressured a single developer to push out a fully finished product in just five weeks. Unsurprisingly, the game reviewed poorly for being a boring and broken mess due to poor level design and graphics. Outside of the company’s own mishaps, third-party game developers were flooding the market with low-quality games. After poor sales and a loss in customer faith, manufacturers and investors across the board pulled out of the video game space, causing the industry to come to a crash in 1983.

Nintendo was able to help the market recover with the release of its popular Nintendo Entertainment System in 1985. It wasn’t long until the Japanese manufacturer dominated the market that Atari had created. Atari responded in 1986 with its new Atari 7800 system with an architecture that more closely resembled that of then-modern arcade machines and their improved graphics. But the NES and Sega Master systems it competed with offered still better graphics, had larger game libraries, and their controllers came with directional pads rather than a dated joystick. Even though the 7800 was a step in the right direction, it was too late to the party. Still, it sold well enough to maintain a sliver of the market.

Then came the Atari Jaguar in 1993. The console was expensive and lacking in several ways while trying to compete with the already well-established Sega Genesis and Super NES. Atari made poor hardware decisions (like a clunky controller with nearly a dozen buttons laid out like a phone keypad). Meanwhile, complex internals, rampant bugs, and a lack of developer tools made it hard for developers to build games for the Jaguar. Just a year after its launch, 32-bit systems like the Sony PlayStation and Sega Saturn were released, rendering the Jaguar obsolete through their use of 3D graphics. With grim sales figures, Atari left the console market entirely when it sold off its name and company divisions in 1995. Eventually all divisions of Atari Inc. were acquired by European company Infogames in 2008, which renamed itself Atari SA.

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Atari 2600 | Getty Images

atari jungle

Jaguar | Getty Images

In celebration of the company’s 50th anniversary, Atari SA released the Atari VCS micro-console, which places a mini-computer inside the body of an Atari 2600—iconic walnut woodgrain panel and all. This system plays 4K video, streams games over the cloud, and runs less demanding titles from Steam and the Epic Games Store. The Atari VCS channels the gaming and home computer fundamentals Atari weaved into its DNA throughout its lifetime. While the VCS is a practical collector’s item at the end of the day, it brings a lot of functionality to your living room that a streaming stick can’t match. There’s a certain charm to playing older game systems through emulators and watching Netflix from the first ever home video game console.