Last week we looked at the Atari ST and the company it was built under, Atari Corporation.
But Atari Corporation wasn't the original Atari we knew and loved from the 70s.
It was a new company formed by Jack Tramiel after he bought the consumer division of Atari
from Warner Communications in 1984.
But if Jack only bought the consumer division, then what about the rest of the company?
What happened to that?
This video aims to clear this loose thread up by exploring the company known as Atari
Games.
First a little back story.
The sowing seed for Atari begins way back in 1966.
A young gentleman by the name Nolan Bushnell was attending the University of Utah and had
come into contact with a machine called Spacewar!
(complete with exclamation mark).
Spacewar!
was a combat video game developed in 1962 by Steve Russell on a DEC PDP-1 and housed
at the Massachusetts Institute of Technology.
As Nolan's university also had a PDP-1 it didn't take long for it to arrive on his soil.
This is when Nolan immediately realised the potential for a coin operated incarnation.
Several years would pass before he, and Ted Dabney began work on a hand-wired custom computer
capable of displaying on a standard black and white television.
Named Computer Space.
The game was demonstrated to the arcade game manufacturer Nutting Associates who hired
the duo in 1971 leading to the first machine being installed on Nolan's home territory
at the University of Utah.
Approximately 1,000 of the iconically 70s styled machines were sold, but the game did
not fare as well as hoped.
It was deemed possibly too complex for the casual bar dweller of the time, who was more
used the the dual button antics of a pinball machine.
Nolan suggested making an improved sequel but demanded a stake of Nutting Associates
in return.
Nutting refused, and so the pair left to setup Syzygy Engineering.
Al Alcorn was hired as their first designer and was put to work on producing a coin-op
version of tennis on the Magnavox Odyssey.
It's somewhat ironic given the number of "pong clones" which spawned that pong was itself
a clone in the first place.
With Pong nearing completion, the duo went to register their company but found that a
company called Syzygy already existed.
Frustrated they decided to have a calming game of Go, and Bushnell began writing down
various words from the board game "Go".
Atari, used to describe "capture threats" within the game stuck out and so it was settled.
Atari was incorporated on July 26th 1972.
The first Pong machine was completed by August and placed in a Sunnyvale tavern known as
Andy Capp's.
Alcorn was called in just a few days later as the machine had apparently broken down.
The problem actually turned out to be the collector was overflowing with quarters causing
the mechanism to fail.
With instant success under their belts Atari went on to release Gotcha, Gran Trak 10 & 20,
Pursuit, Rebound, Space Race, Super Pong, Tank, Touch Me and Quadrapong, all before
1975.
This was the year Bushnell attempted to produce a video game console that could play Atari's
arcade games in the home.
Initially it proved problematic, but the MOS Technology 6502 released in 1976 was the perfect
ingredient.
In 1977 the Atari 2600 was released marking Atari's move into the home consumer market,
with what would become one of the most successful consoles of all time.
The only problem was, marketing the machine would be hugely expensive and so in 1976,
Atari was sold to Warner Communications for $28 million.
Under Warner, the arcade division continued to do well with cabinets such as Asteroids,
Tempest, Centipede, Gravitar and Star Wars.
Whilst over on the home side a shift to compete with home computers began, with the Atari
400 & 800 released in 1979 followed by the XL series in 1982.
These never reached the same heights as the 2600 and came against fierce competition in
the form of an Texas Instruments and Commodore's machines.
Because of their separate markets, the home and arcade divisions operated independently
from each other and rarely co-operated, with the arcade division even seeing the consumer
market as a threat to the coin-operated industry.
But where-as the arcade division would continue to make profit, the Atari home computers quickly
ran into problems with their competition compounded by the bad reputation Atari had earned amongst
retailers through using threatening and bullying behaviour.
But ultimately it wouldn't matter anyway.
The video game crash of 1983 emerged - exacerbated, and in many parts caused by the saturation
of the American market, causing losses of more than $500 million.
Warner's stock price slid rapidly from $60 to $20, and they became increasingly keen
to cut Atari loose.
It's around this time, in mid-1984 that Jack Tramiel emerged, expressing interest in purchasing
the Atari brand.
Having recently left Commodore, he was well aware that the future of the home micro laid
in 16 bits and having a brand name like Atari would help sell his new computer vision with
much more consumer trust than under his own company name, Tramel Technology.
Jack wasn't interested in the arcade business which was still profitable, but was keen to
snap up the Atari Consumer division for just $50 cash and $240 million in promissory stocks.
This suited Warner as the home division was currently leeching $10k per day and it suited
Jack as he now had a viable brand, and the existing Atari stock to polish up and ship
out to keep things going whilst the ST was built.
Under this arrangement Tramel Technology was renamed to Atari Corporation and would hold
the rights for the consumer division and video game division, whilst Warner Communications
retained the arcade division, originally called Atari-Coin but renamed to Atari Games going
forward.
Under this arrangement the Atari Games logo was always required to have the word "GAMES"
under the Atari logo, and they were not permitted to use any Atari branding in the consumer
market.
Atari Games would essentially just continue the work of Atari Coin with little disruption,
whilst over in Jack's hands, Atari Corporation underwent a radical streamlining and optimisation
strategy.
So, we know what happened to Atari Corporation, but where did Atari Games Go Next?
Well, to begin with, nowhere.
Under Warner Communications, existing projects continued including Return of the Jedi, Roadrunner,
Paperboy, Peter Pack Rat, Marble Madness and Gauntlet, which sold 7,848 cabinets.
Some of these titles were later licenced by Jack's Atari Corporation under his consumer
brand, and no one was any the wiser that they were different companies.
As far as the arcade was concerned, these were still golden years, or silver at the
very least, and these games continued to be received well.
But apparently Warner Communications remained anxious about the whole world of gaming and
in 1985, a controlling share of Atari Games was sold to Namco for $10 million dollars.
Now this is an interesting twist, because Namco and Atari actually go way back.
All the way back to 1974 as it happens.
Back then Nolan had established Atari Japan to take care of the machine's arcade assets
over in the East, but this foreign arm of the company was struggling and Nolan was looking
to sell it on.
Sega, who were manufacturing pinball machines put up a bid of $50,000, but Nakamura Amusement
Machine Manufacturing outbid Sega by a whopping $750,000.
Yup, you heard that right.
To try and stave off competition, a mammoth amount of money was bid, which was finally
settled at $500,000.
Everyone thought the owner, Masaya Nakamura was mad, paying this much for a struggling
company, but it would turn out to be a good investment as it allowed Namco an exclusive
license to distribute Atari's games in Japan for ten years.
The previous general manager of Atari Japan, Hide Nakajima was placed as Vice President
of the new merged business.
Back in 1985, it therefore seemed a good idea for Namco to snap up the American business
as well, even against the advice of their accountants.
Games continued to be made by the now Namco subsidiary such as 720 and Gauntlet II, but
disagreements between Nakajima and Nakamura led to some disputes about the operation of
the new merger, with Nakamura seeing the new brand as potential competition to their Namco
line.
Nakajima came to an agreement with Nakamura to buy Atari Games out, with the assistance
of the current Atari Games employees and by 1986, Atari Games was once again a solo company.
The arcade cabinet bread and butter of the business continued to sell well, with some
excellent titles released during the latter part of the 80s, but the business wanted to
branch out, and the now revitalised home consumer markets were looking as appetising as ever.
Atari Games couldn't market themselves under the Atari brand in this domain, due to the
previous deal with Jack Tramel, however there was nothing stopping them creating a new brand
and shifting their talents over to the ever expanding sector.
in 1987, Tengen was the brand which emerged.
Following the original naming principle of Atari, Tengen was again borrowed from the
game "Go", referring to the central point on the board.
With their previous ties to Namco, Tengen made an agreement to port some of their Famicom
games over to the expanding Nintendo Entertainment System market in the States.
Namco didn't establish an American consumer branch until 1990, and so it made complete
sense.
A similar agreement was made with Sunsoft, another Japanese game developer which was
lacking Western distribution.
On top of this Tengen could develop and market all of the recent Atari Games arcade releases
and port them straight into the home, as business moves go, it was a no brainer.
With so many games at their disposal, Tengen needed a way to bypass Nintendo's restricted
licensing which allowed the release of only 5 games per year, and so began reverse engineering
the Entertainment System's lock out chip.
This led to immediate law suits by the regulation-profuse Nintendo which wouldn't be settled until 1994
when Atari Games payed cash damages to Nintendo and Tengen was bisbanded.
But throughout those years, Tengen released games for the NES, Mega Drive, Master System,
Atari Lynx and a host of other machines with stand out titles including Alien Syndrome,
After Burner and Tetris, which again led to a lawsuit with Nintendo leading to a recall
of unsold cartridges, with only 50,000 making it to sale.
In 1993, Warner Communications merged with Time Incorporated, leading to the formation
of Time Warner, and in 1993 bought back a controlling stake in Atari Games, after realising
the potential error of it's sale in the 80s.
Atari Games was made a subsidiary and retained it's identity, leading to continued production
of arcade machines throughout the 90s.
Tengen was replaced in favour of the Time Warner Interactive label.
In 1996 Nolan decided that he'd like his old company back, or at least part of it, and
tried to bid for it's purchase back from Time Warner, however was unsuccessful, with the
brand finally going to WMS Industries, owners of the Bally and Midway arcade brands.
WMS Industries then sold off it's remaining stock of Midway Games including the Atari
Games brand, leading to the Midway games establishing itself as a public company.
When Hasbro Games then bought the remains of Atari Corporation 1998 with the intention
of selling home software under the brand, Atari Games was renamed Midway Games West
to avoid confusion, with Midway leaving the arcade scene itself in 2001 to focus on Midway
Home Entertainment.
Midway Games West continued to develop games for home systems including Dr. Muto for the
PS2 and Gauntlet Dark Legacy for Xbox and Gamecube but product development was finally
closed on February 7th 2003.
Putting to an end, the era of Atari Games as a game development and innovation force.
Midway Games would still make use of the brand and games catalogue, pushing out classic compilations
such as Midway Arcade Treasures series, including games such as Gauntlet, Paperboy and Super
Sprint.
There would also be franchise follow ups such as Gauntlet: Seven Sorrows in 2005, but ultimately
Midway and it's intellectual property was purchased by Warner Bros. Entertainment in
2009 after filing for bankruptcy.
And this is where it remains, back at Warner, the company who bought Atari from Ted and
Nolan way back in 1976 and guided it through most of it's early, emerging years.
Somewhat rather fitting.
As for Atari's home division, Atari Corporation, they're owned by Atari, SA, formally Infogrames
Entertainment.
Serving up titles such as Rollercoaster Tycoon 3 and rather ironically Atari Vault, which
features a collection of Atari's arcade machines from the 70s and early 80s.
Oh, the world of copyright and licencing, it blows my tiny mind.
But what's clear, is that Atari lives on, in many guises, both classic and modern.
I'll leave you to judge which is
the best.