Atari: missed opportunities and tales of woe

The once and mighty Atari has, once again, fallen on desperate times.  Atari, originally founded in 1972 by Nolan Bushnell and Ted Dabney, is the company that just won’t stay dead.  The company started off life in 1972 as an arcade game manufacturer.  Pong, its first hit product, was the first successful arcade video game.  Bushnell and company repackaged the game for home use and made a small mint.  Unfortunately, between 1974 and 1977, so did everyone else.  By 1975, General Instruments had developed a ‘pong on a chip’ that enabled cheap pong clones to flood the market.

Not to be outdone, Atari was already hard at work developing the next big thing:  the programmable video game computer.  Atari, however, was not bringing in enough cash to make and manufacture the new product.  So, Bushnell sells majority control of the company to Warner Brothers.  Atari now has the capitol to fund the new product. Atari 2600

While initially, sales were slow, Atari scored a coup when they got the home rights to Space Invaders.  Sales picked up and by 1980, the VCS was king.  1980 to 1982 were banner years for Atari.  And they were decent years for Mattel with Intellivision.  But, as with seven years earlier, everyone was in on the game and putting out some really bad products.  Emerson, for example, released the Arcadia.  Arcadia was an odd console and seated between Intellivision and VCS.  They, like others, had few, if any, real licenses for arcade games and, at the time, the arcade was THE place the hot, new games.  Arcadia debuted as a bargain bin console and games were hard to find.  By mid-1983, the bottom was starting to fall.  January of 1984 brought hard times for all.  Mattel shut down its games division.  Atari was bleeding red ink.  Colecovision was about to fall hard thanks to Adam.

Atari was working on a new console, the 7800, that was going to save the company.  Warner, however, decided to sell Atari to Commodore founder, Jack Tramiel.  Tramiel was not interested in home video games and shelved the ready to release 7800.  Atari had warehouses full of games and consoles that were supposed to be in the pipeline, but were not. 

Nintendo, however, believed that the American market was ready for its console and they released the Nintendo Entertainment System and by 1986, they had the market to themselves.  Atari, realizing that they should have products out the door, finally released the 7800.  It was just short of a dismal failure.  Desperate, once again, they re-introduced the VCS, now called the Atari 2600 JR.  Sales were brisk for awhile, but did not last.  Atari introduced a bevy of repackaged consoles made from various Atari computers minus the keyboards, but none caught on.

1993 saw the introduction of the Jaguar, Atari’s last original console.  The machine failed to catch on.  Nintendo and Sega were firmly entrenched in the market and 1995 saw Sony enter the market with the Playstation juggernaut.  Atari could do little right.  Even the computer market was gone.  The Tramiels wanted out.  In a really bizarre turn, small disk drive maker, JTS, acquire the larger Atari company.  It then promptly disappeared.

Hasbro Interactive purchased the assets and Atari name from JTS for five million dollars, quite a bargain. Hasbro then began to release some of Atari’s more well known games in new formats and the public became reacquainted with the brand.  In 2000, Infogrames took over Hasbro and, in the process, they got Atari.  In October of 2001, Infogrames announced that they were changing the name of the company to Atari, Inc.  

Once again, the mighty name was shining bright along with its ‘fuji’ logo.  2005 and 2006 saw the releases of ‘plug and play’ versions of classic Atari games in cases that resembled the 7800 and the 2600.  The Atari Flashback 2, the 2600 version, was an actual 2600 and could be hacked to play real cartridges.  Unfortunately, Atari fell on hard times again.  A third planned device has yet to hit the market.

In March of 2009, Atari’s European parent company, Infogrames/Atari, announced that it was selling its 66% stake in its distribution and marketing company to Namco Bandai.  Atari Europe will shut down in a matter of weeks and its employees will go to Namco Bandai.  And so ends Atari’s European presence.

Atari US is still in business, for now.  They have announced that they will not attend the E3 conference this year.  Missing E3, perhaps the biggest marketing opportunity outside of the holiday season, is not a good thing.  They have cancelled a number of projects and appear to be reaching for the oxygen tank.

If there ever were a company to look at and ask ‘What the hell happened?’ this would be the one.  From Bushnell’s cavalier days in the company, to Warner not really understanding what it had, to the mismanagement and missed opportunities of the Tramiel era to the downright weird JTS thing, Atari has always managed to survive.  I have to wonder what could have been had Atari said ‘yes’ to Nintendo when that company offered up the NES to Atari.  What would have been had Atari proceeded with the 7800 in 1984 and really pushed it.  If they had not focused on computers as much.  For now, though, the invaders have not won…yet.

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