Image of Atari games in the post the rise and fall of atari

A Historical Figure in Gaming

Atari, the once massive gaming conglomerate of the 70’s and 80’s, has now been reduced to a skeleton crew of just 18 employees working out of an office in New York. The focus is, unsurprisingly, on Flashback consoles. There is no self-respecting gamer out there who hasn’t played at least one of Atari’s games. It has been a rather ignominious fall from the Olympian heights it once enjoyed. Let’s dive in and attempt to fathom the story behind the rise and fall of Atari.
The Atari 400, an 8-bit home computer released in 1979.
Image of Atari console in the post the rise and fall of atari
The 3rd version of the Atari 2600, sold from 1979 to 1992

The Beginning

Atari Inc. was founded in the year 1972 by Nolan Bushnell and Ted Dabney in Sunnyvale, California. The company put its focus on arcade gaming, video game consoles, and home computers. Unknowingly at the time, Bushnell and Dabney would start one of the greatest and most influential gaming empires in history.

Atari’s Innovation

Over the years, Atari released several gaming consoles, but the main reason for the success of Atari was due to the company’s innovation in the gaming scene. 

Before Atari, a gaming console would come with built-in games, and the buyer of the console could only play the games that were pre-installed into the system. Considering the fact that gaming consoles were very expensive at the time, there was definitely an untapped need for more variety in gaming. 

That’s where Atari stepped in. Atari started introducing their famous gaming cartridges to the market. For the first time, a video game console owner would not have to be limited to the pre-installed games in their consoles. Now, Atari console owners had the freedom to choose what they wanted to play: they could purchase individual cartridges for different games, and not surprisingly, this new technology was received very well by the market.

The Rise To Fame

Due to Atari’s cartridge technology, the company could continue to earn by releasing new games for their gaming consoles. Knowing this, the company would see a massive increase in their earnings whenever new games such as Pac-Man or Space Invaders were made available to purchase via cartridges. 

The speed of the growth of Atari was overwhelming. In 1979, the company sold over 1 million units. The year after, the company doubled its sales and sold over 2 million units. Sales then continued to double for the next two years. 

So many people were turning to the Atari because the console was perceived as such a valuable gaming device. Customers wouldn’t have to spend so much money on buying another console if they wanted to play another game since with the Atari, all they had to purchase for a new experience was a much cheaper cartridge. 

Everything seemed to be going well for the company, but as they always say, everything that goes up must eventually come down.

Asteroids in the blog post the rise and fall of atari
Asteroids (1979) was a port from the arcade game
Image of missile command in the post the rise and fall of Atari
Missile Command (1981)

The Video Game Crash

You’ve probably heard of a couple of stock market crashes or the real estate bubble, but have you heard about the video game crash of 1983? 

Otherwise known as the Atari Shock, the gaming industry experienced a nasty recession, mainly due to the market being oversaturated with video game consoles. In a span of two years, revenues for the video game industry dropped by a whopping 97% in the United States. 

As a result, several companies that focused on the video gaming industry went bankrupt. Likewise, several analysts started questioning the longevity and sustainability of the video game industry. 

For Atari Inc., the effect of the video game crash was significant. The original company was split in two: the arcade division turned into Atari Games Inc., and the Atari Consumer Electronics division was sold and rebought by several different companies. Unfortunately, the end result for the consumer electronics division was bankruptcy by 2013.

The Fall Of Atari

The success of Atari was far from unnoticed by other tech companies. Over the years, more and more companies started adapting and improving the technologies used by Atari in their own gaming consoles. In addition to the video game crash, Atari started seeing their market share decline, as more aggressive competitors started stepping up their game. 

Atari attempted to regain its market share by purchasing the rights to sell games on other iconic figures such as E.T, but none of their new games lived up to the company’s expectations.

Shareholders were not too happy with the performance of the company either. It was estimated that the company would see around a 50% growth rate per year, but when the numbers were final, annual reports showed only a 10% growth rate. As expected, several shareholders withdrew their positions, and the stock price of Atari continued to fall.

Unfortunately, Atari never did recover, and after more than a decade of domination in the video game world, Atari discontinued their lines.

Atari’s Influence

Even though Atari discontinued their lines in 1992, their influence can still be felt in modern gaming. 

Can you imagine what it would be like if Atari never came up with their cartridge technology? Atari’s cartridge technology made the world realize that a consumer does not have to be limited to what games are pre-installed in a gaming console. 

Nowadays, purchasing a console wherein you can only play pre-installed games is unheard of. Every console takes advantage of the technology that Atari shared with the world.

An Icon Worth Paying Tribute To

Due to popular demand, several re-issues were released to the public. In honor of the video game consoles that changed the gaming scene, several newer gaming consoles were released in the 21st century. These new re-issues allow owners to play the original games released back in the ‘80s and ‘90s. Several prototypes of new Atari consoles were also leaked to the public, but so far, the consoles haven’t been released to the market yet.
Image of Atari flashback in the post the rise and fall of Atari
You can get the Atari Flashback for that ultimate nostalgic hit
Table Pong in the post the rise and fall of Atari
Table Pong for the die hard fan!

More Than Just A Console

Atari’s gaming consoles prove to be more than just gaming consoles; Atari laid down the foundation for a whole new phase of gaming. It’s hard to imagine where gaming would be today if it wasn’t for Atari and all the technologies they introduced to the world. The rise and fall of Atari is both epic and tragic. The company lives on to this day, but is only a shadow of where it once was.

What is your favourite Atari game? Let me know in the comments section below. 

For more cool things from the 80’s, read our full post, 17 Cool Things About The 80’s .

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Atari Gift Ideas

There is a lot of memorabilia out there, especially on Amazon, Etsy and Ebay. Amazon is usually cheaper with more selection and so I’ve chosen them. And if you’re not super satisfied with what you’ve bought, their returns policy is really good.

With so much to choose from, where do you start? My focus has been on cool, fun and quirky items, all garnering decent ratings from well-priced sellers.

Please note that I am an Amazon Affiliate and receive a small compensation if you use my links, but it will not increase your purchase price. If you use my links, I truly appreciate it 😉

Atari Flashback 9

Atari flashback console

This nostalgic phenomenon includes 8 games.

Check it out on Amazon.

Atari Flashback Portable

Atari flashback portable

Now you can take the Atari games on the road. 

Check it out on Amazon.

Atari Logo Tee

Atari shirt

Show your allegiance with this cool, Atari shirt. 

Check it out on Amazon.

6 thoughts on “The Rise And Fall Of Atari”

  1. I grew up with Atari and I feel that they just disappeared after PS and Xbox came into the market. I loved playing to Asteroids. Atari Flashback 9 Seems like a perfect gift for my husband, we are so gonna have fun enjoy playing all these old schools arcade games. Thanks for sharing about a little history if Atari. 

  2. What a great historical recap on Atari! This brings back my childhood memory. I started playing games around 1986, and back then I was queuing up at an electrical shop that sells Atari where the kids have to take turns to play. It didn’t last long, unfortunately, because the next thing I remember was Nintendo started to surface. I think I may have played Pong before but that was so long ago that I can vaguely remember. 

    1. Yeah, Nintendo really put Atari into the shadows! Wow, you played Pong? That was a bit before my time. I would like to play it though because it is such a touchstone to a different era.

  3. This article really brings back the memories of playing all the different consoles of Atari. The very basic games were so plain and simple to play, yet it seems that I would never get tired of playing them. The sounds of these games are ingrained in my brain that when I hear them, I see a little me playing them. While most of the games of Atari are my favorites, my most played game was Galaga and favorite of all time was with the Atari 7800. It’s just something about this game that made me played for hours.

    1. Yes I remember Galaga, used to play it on arcade though. Truth be told I never owned my own Atari – I only played it when visiting friends. To make up for it I’m thinking I deserve the Atari Flashback!

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