Atari Inc.  — Video Game Consoles — Video Game Wiki

Atari Inc.
1972 – Present


Video Game Company

In Atari’s early days, one of the video game designers and his rather odd friend worked many late nights on a new arcade game called “Breakout”. While working on this new video game and playing other arcade games all through the night these two friends were busy on the side designing and building (from “borrowed” Atari parts) a personal computer system. They approached Nolan Bushnell with their new creation to see if it would be a product that Atari would sell and support.


Atari 2600 VCS

Above: Atari 2600 VCS


At the time Atari was concentrating on getting its new home version of Pong out the door and all resources were tied up, with no spare capital to devout to such a costly and risky product, Nolan Bushnell referred the two budding entrepreneurs to some venture capitalists to finance their new product. Who was this former Atari employee? None other then the current iCEO of Apple, Steve Jobs. Who was his rather odd friend? Steve “The Woz” Wozniak and their creation was the Apple Computer.


Sold to Time Warner

In 1978 the team that had finished the Atari VCS was at work on a new high-end video game console chipset. Atari was now owned by Warner Communications since its sale in 1976 by its original owner/creator Nolan Bushnell for $28 million. Atari was now run by Raymond Kassar who wanted Atari to compete in the home computer market against Apple and its Apple ][e computer. The new high-end chipset was “frozen” for use only in the newly created Atari Home Computer Division.


Atari Starts Computer Division

Atari’s new Home Computer Division was so hastily started that office trailers were brought in and set-up behind Atari’s offices while work progressed on the new computer designs. Working in these rather cramped quarters, Atari’s new HCD engineers & designers went to work on designing the worlds first personal computers to use custom IC’s to handle graphics, sound and communication.

Atari’s first two computers were called the Atari 400 and Atari 800 Personal Computer Systems. These computers had a large assortment of “Intelligent” peripherals which communicated through a custom bus called the “SIO” (Serial I/O) which compared to today standards is a rather simplistic version of the USB (Universal Serial Bus). In fact the USB and the Atari SIO have a lot more in common then many would think.


Atari 400

Above: Atari 400


One of Atari’s original computer engineers, Joe Decuir who created the Atari SIO bus is also one of the team of engineers at Microsoft to help design and holds patents on the USB.

The Atari 400 Personal Computer was Atari’s entry level computer. Designed for younger children with its clean simple design and more importantly its tactile membrane keyboard to prevent damage from food and small objects and the keys could not be removed and swallowed by small children. The Atari 400 during is design conception originally was to have only 4K of memory which is how its number designation was determined: 400.

The project was nicknamed Candy. When it began to ship it then came with 8K, finally Atari offered it with a base memory of 16K which allowed it to run almost all cartridge and cassette based software. Due to its low memory range, using a disk drive was not practical, so the Atari 400 was teamed up with its own peripheral, the Atari 410 cassette recorder.


Tramiel Leaves Commodore for Atari

Commodore’s board of directors were as impacted as anyone else by the price spiral and decided they wanted out. An internal power struggle resulted; in January 1984, Tramiel resigned. He founded a new company and hired away a number of Commodore engineers to begin work on a next-generation computer design.

The remaining Commodore management attempted to salvage the company’s fortunes and planned for the future. It started by buying a small company called Amiga Corporation. The company was better known for its forays into the video game market, designing controllers for game consoles as well as making games for the Atari 2600. Their video game business was successful, but the company had a strong interest in designing a groundbreaking new personal computer.

During development in 1983, Amiga had exhausted venture capital and was desperate for more financing. Jay Miner and company had approached former employer Atari, and the “Warner owned” Atari had paid Amiga to continue development work. In return Atari was to obtain one-year exclusive use of the design. Atari planned for a 68000-based machine, code-named “Mickey”, that would have used customized chips – but details were sparse.


Commodore Amiga 1000

Above: Commodore Amiga 1000


The following year, Tramiel discovered that Warner Communications wanted to sell Atari, which was rumored to be losing about $10,000 a day. Interested in Atari’s overseas manufacturing and world-wide distribution network for his new computer, he approached Atari and entered negotiations. After several on-again/off-again talks with Atari in May and June of 1984, Tramiel had secured his funding and bought Atari’s Consumer Division, which included the console and home computer departments, in July.

As more execs and researchers left Commodore to join up Tramiel’s new company, Commodore followed by filing lawsuits against four former engineers for theft of trade secrets in late July. This was intended, in effect, to bar Jack from releasing his new computer.


Tramiel Leaves Commodore for Atari

One of Jack’s first acts after forming Atari Corp. was to fire most of Atari’s remaining staff, and to cancel almost all ongoing projects, in order to review their continued viability. In late July/early August, Tramiel representatives discovered the original Amiga contract from the previous Fall. Seeing a chance to gain some leverage, Jack immediately used the contract to counter-sue Commodore through its new subsidiary, Amiga, on August 13.

The Amiga crew, still suffering serious financial problems, had sought more monetary support from investors that entire Spring. At around the same time that Jack was in negotiations with Atari, Amiga entered into discussions with Commodore. The discussions ultimately led to Commodore’s intentions to purchase Amiga outright, which would, from Commodore’s viewpoint, cancel any outstanding contracts – including Atari Inc.’s.

This “interpretation” is what Jack used to counter-sue, and sought damages and an injunction to bar Amiga (and effectively Commodore) from producing any resembling technology. This was an attempt to render Commodore’s new acquisition (and the source for its next generation of computers) useless. The resulting court case lasted for several years, with both companies releasing their respective products. By March of 1987 they had settled out of court, with all suits against Tramiel’s engineers dropped. His “Business is War” tactics had succeeded again.