End of an Era: Atari Files for Bankruptcy

February 1, 2013   Editorials, Site News   1 Comment
atari

Those of us old enough to remember shooting at an abstract-looking arthropod in Centipede, or being able to play arcade-favorite Pac-Man at home in the early 1980s are mourning the loss of a cultural icon. Atari Inc., the U.S. branch of the company best known for games like Asteroids and Super Breakout, has filed for Chapter 11 protection in U.S. Bankruptcy Court for the Southern District of New York. The company said in a statement that the move is a strategic maneuver to sever ties with Atari SA, the French branch of the company.

Meanwhile, Atari SA filed for Book 6 bankruptcy protection in Paris, further exposing the messy and volatile corporate relationship between the two entities. Atari Inc. said it will sell most of its assets, including the logo “90 percent of Americans recognize,” and continue iOS and Android-compatible re-makes of their signature titles.

Controversy Started Early

Atari was first established in 1972 by Nolan Bushnell and Ted Dabney. The company first gained notoriety with the very simple electronic table tennis game called Pong. The game was so successful in arcades that the company released a home version in 1975. The first bit of trouble for Atari began a year earlier. Magnavox, the makers of the home-gaming console Odyssey, filed a copyright infringement lawsuit against Atari for stealing their concepts they said led to Pong’s creation. Atari settled the case out of court for $700,000 in 1976, with the condition that Magnavox would obtain rights to all Atari product for the next year.

Video Game Crash Of 1983

The early 1980s was a time some consider the golden age of home gaming consoles. Not only were the Atari 2600 and Atari 5200 madly successful, but ColecoVision, Intellivision and Odyssey also had their market shares. Total sales of consoles and cartridges reached $3.2 billion in 1983, according to Nintendoland.com. However by 1985, the gaming industry grossed only $100 million. Atari, which was now owned by Warner Communications, lost $500 million alone. President and CEO Ray Kassar was forced to resign and James Morgan took his place. Morgan was given the unenviable task of pulling off a Brian Ferninand of Liquid Holdings, or a Steve Jobs of Apple, and bring Atari back to national prominence. But the emergence of Nintendo and Sega, along with personal computers becoming more widely available, forced Atari through several mergers and sales over the next 25 years.

The Legacy

Atari was a trend setter in many ways, but mostly with portable gaming. The Atari Lynx, their hand-held gaming console, was released in 1989. The Lynx had a colour screen, unlike its main rival, the Nintendo Gameboy. The Lynx was given a five-star review by Dragon magazine in 1990, despite complaints about the units not being ergonomically friendly. Atari was also recognized as a hand-held gaming pioneer at the 59th Annual Technology and Engineering Emmy Awards in 2008.

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  • http://www.facebook.com/marty.goldberg Marty Goldberg

    No, the Atari Inc. today has zero to do with the Atari Inc. of PONG and Asteroids. There is no continuous lines of sales of that company, just of the brand name and IP. The current Atari Inc. simply arrived at that name via a name change from GT Interactive -> Infogrames NA, Inc. -> Atari Inc.

    Likewise, that Atari during the time of the NES was also a different Atari. That Atari was Jack Tramiel’s Atari Corp., which was a renaming of his company TTL after he bought the Consumer Division of Atari Inc. and put it under TTL.