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The Atari company started a global phenomenon. For millions of people worldwide, video games (see entry under 1970s—Sports and Games in volume 4)—played at home, in arcades, or using portable devices—are an entertaining part of everyday life. In the 1970s, Atari paved the way for the video-game giants of later years, like Nintendo and Sega.

Atari was founded in 1972 by Nolan Bushnell (1943–), an engineer who believed electronics could be adapted for entertainment. He invented the first video-game machine, Pong (see entry under 1970s—Sports and Games in volume 4). The electronic version of ping-pong became a huge hit in bars and arcades. Together with some friends, Bushnell created a company to market it. They called their company "Atari," after a word used in the popular Japanese card game "Go."

Pong was such a hit that Atari created an equally popular home version in 1974. Warner Communications bought Atari from Bushnell and his partners for $28 million the next year. Warner began developing an even more sophisticated home-arcade system that could play a wide variety of games. This system, the Atari Video Computer System, or VCS, was introduced just in time for the Christmas season in 1977. The arcade system and the nine games sold with it proved so popular that people actually lined up to purchase them. Over the next few years, Atari products became an international sensation. Popular software titles, some of which were based on Atari's own arcade games, included Space Invaders, Asteroids, and Pac-Man (see entry under 1980s—Sports and Games in volume 5). By 1982, Atari was a $2 billion company.

Eventually, Atari's competitors began to catch up. Atari was slow to upgrade its system, while others, like CBS' Colecovision, started to steal the Atari's market share. In addition, the home video-game market became flooded with too many games. By 1984, the industry was in a deep sales slump, from which Atari never fully recovered. When video-game sales picked up again a couple of years later, new companies like Nintendo and Sega were on hand to take Atari's place. Although still in business into the twenty-first century, Atari possessed little more than nostalgia value for a generation of adults who had grown up playing Pong, Space Invaders, and Asteroids.

—Robert E. Schnakenberg

For More Information

Atari. (accessed March 27, 2002).

Atari Historical Society. (accessed March 27, 2002).

Kent, Stephen L. The First Quarter: A 25-Year History of Video Games. New York: BWD Press, 2000.

Phillips, Gary, and Jerry White. The Atari User's Encyclopedia. Los Angeles: The Book Co., 1984.

Poole, Stephen. Trigger Happy: Video Games and the Entertainment Revolution. New York: Arcade Publishing, 2000.