The Rise And Fall Of Atari
A Historical Figure in Gaming
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.
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.
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.
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
More Than Just A Console
Atari Gift Ideas
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