Editing Atari (section)

===Atari Inc. (1972–1984)===
{{Main|Atari, Inc.}}
{{more citations needed section|date=August 2016}}
[[File:TeleGames-Atari-Pong.jpg|thumb|Atari-Telegames Home Pong (1975)]]
In 1971, [[Nolan Bushnell]] and [[Ted Dabney]] founded a small engineering company, Syzygy Engineering,<ref>{{Cite web|url=http://www.atarimuseum.com/videogames/arcade/arcade70.html |archive-url=https://web.archive.org/web/20030703021923/http://www.atarimuseum.com/videogames/arcade/arcade70.html |url-status=dead |archive-date=July 3, 2003 |title=Atari Coin-Op/Arcade Systems |website=www.atarimuseum.com |access-date=July 8, 2016 }}</ref> that designed ''[[Computer Space]]'', the world's first commercially available arcade video game, for Nutting Associates. On June 27, 1972, the two incorporated Atari, Inc. and soon hired [[Al Alcorn]] as their first design engineer. Bushnell asked Alcorn to produce an arcade version of the [[Magnavox Odyssey]]'s Tennis game,<ref name="nolanmagnavox">{{cite web|author=Ador Yano |url=http://www.ralphbaer.com/video_game_history.htm |title=Video game history |publisher=Ralphbaer.com |access-date=December 27, 2011 |url-status=live |archive-url=https://web.archive.org/web/20111223011401/http://www.ralphbaer.com/video_game_history.htm |archive-date=December 23, 2011 }}</ref> which would be named ''[[Pong]]''. Before Atari's incorporation, Bushnell considered various terms from the game ''[[Go (game)|Go]]'', eventually choosing ''[[Atari (go)|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.<ref name="inc1972">{{cite web|url=http://kepler.ss.ca.gov/corpdata/ShowAllList?QueryCorpNumber=C0654542|archive-url=https://web.archive.org/web/20071016062150/http://kepler.ss.ca.gov/corpdata/ShowAllList?QueryCorpNumber=C0654542|url-status=dead|archive-date=October 16, 2007|title=California Secretary of State – California Business Search – Corporation Search Results|date=October 16, 2007|access-date=December 30, 2016}}</ref>

[[File:Atari-2600-Wood-4Sw-Set.jpg|thumb|The third version of the [[Atari 2600]], which was sold from 1979 to 1986]]
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 nearly the same game to different distributors, each getting an "exclusive" deal. Joe Keenan's management of the subsidiary led to his appointment as president of Atari when Kee was absorbed into the company in 1974.<ref>{{cite book |last1=Monfort |first1=Nick |last2=Bogost |first2=Ian |title=Racing the Beam |publisher=MIT Press |date=March 31, 2009 |orig-year=1st. Pub. 2009 |pages=[https://archive.org/details/guidetolcshinfor00doej/page/20 20] |chapter=Chapter 2: Combat |chapter-url=https://books.google.com/books?id=DqePfdz_x6gC&q=kee+games+competitor&pg=PA20 |isbn=9780262012577 |name-list-style=amp |url-access=registration |url=https://archive.org/details/guidetolcshinfor00doej/page/20 }}</ref>

[[File:Atari-5200-4-Port-wController-L.jpg|thumb|[[Atari 5200]] (1982)]]
In 1975, Atari's [[Grass Valley, California]] 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 2600|Atari Video Computer System]], or VCS (later renamed 2600 when the 5200 was released). The introductory price of $199 ({{Inflation|US|199|1976|fmt=eq}}) included a console, two joysticks, a pair of paddles, and the ''Combat'' game cartridge.<ref>{{Cite web|url=https://toytales.ca/atari-2600/ |title=Atari 2600 {{!}} Toys with a History {{!}} Toy Tales – Todd Coopee |date=December 28, 2015 |language=en-US |access-date=July 8, 2016 |url-status=live |archive-url=https://web.archive.org/web/20170619185554/https://toytales.ca/atari-2600/ |archive-date=June 19, 2017 }}</ref> 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 [[Time-Warner|Warner Communications]] in 1976 for $28 million. 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. In December 1978, Bushnell was fired as chairman and co-CEO following an argument with Manny Gerard. He decided to leave the company rather than take an advisory role.

[[File:Atari-7800-Console-Set.jpg|right|thumb|[[Atari 7800]] (1986)]]
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. Mid-way into their effort the [[home computer]] revolution took off, leading to the addition of a keyboard and features to produce the [[Atari 8-bit computers|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. Porting arcade games to home systems with inferior hardware was difficult. The [[port (video gaming)|ported]] version of ''[[Pac-Man (Atari 2600)|Pac-Man]]'' for Atari 2600 omitted many of the visual features of the original to compensate for the lack of [[read-only memory|ROM]] space and the hardware struggled when multiple ghosts appeared on the screen creating a flickering effect.<ref>{{cite journal |last1=Nicoll |first1=Benjamin |title=Bridging the Gap: The Neo Geo, the Media Imaginary, and the Domestication of Arcade Games |journal=Games and Culture |date=2015 |doi=10.1177/1555412015590048|s2cid=147981978 }}</ref>

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. It ran into problems in the early 1980s. 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 resigned. 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 Tramel Technology to buy assets pertaining to Atari's consumer electronics and home computer businesses. Negotiating until close to midnight on July 1, 1984, [[Jack Tramiel]] completed the asset purchase for $240 million in promissory notes and stocks. Warner gained a 20% stake in Tramel Technology, which was renamed Atari Corporation.<ref name="sale">{{Cite news
 |last=Sange 
 |first=David E. 
 |title=Warner Sells Atari To Tramiel 
 |newspaper=[[The New York Times]] 
 |pages=Late City Final Edition, Section D, Page 1, Column 6, 1115 words 
 |date=July 3, 1984 |url=https://www.nytimes.com/1984/07/03/business/warner-sells-atari-to-tramiel.html 
 |url-status=live 
 |archive-url=https://web.archive.org/web/20161118132248/http://www.nytimes.com/1984/07/03/business/warner-sells-atari-to-tramiel.html 
 |archive-date=November 18, 2016 }}</ref> Warner also sold the Ataritel division to [[Mitsubishi Electric|Mitsubishi]].