In the age of gaming corporate tomfoolery, the story of a venerable brand like Atari filing for bankruptcy is making a decent splash all over the media. Many of these stories are angling the story as an “end of an era” piece, the final “full stop” on a company that defined video games for a significant part of the ’70s and ’80s. While that’s partly true, the convoluted history of the Atari brand shows just how little the current “Atari” has to do with the company aging gamers remember, and how enduring the brand continues to be.
The truth is, the company that bears the name “Atari” today bears surprisingly little relationship to the Atari that made a name for itself with arcade games like Pong and the Video Computer System (i.e. the Atari 2600) back in the ’70s. That company, Atari Inc., was founded in 1974 by Nolan Bushnell and featured employees like future Apple Computer luminaries Steve Wozniak and Steve Jobs.
Atari was purchased by Warner Communications way back in 1976, and the video game giant grew to become a huge part of the massive Warner corporation over the coming years—until the video game crash of the early ’80s. This marks the first time that Atari “died,” as Warner split the company up and sold it off for parts in 1984.
The portion of the original Atari responsible for arcade games was split off into a new company, Atari Games Inc., which went on to make well-remembered “Silver Age” arcade classics like Gauntlet, Marble Madness, Paperboy, and San Francisco Rush. Atari Games was repurchased by Time Warner Interactive in 1993 and was then transferred to WMS Industries in 1996, which renamed the company Midway Games West.
The arcade industry continued to decline in the US, though, and Midway Games West was finally disbanded in 2003, the third or fourth time Atari “died” (No, I didn’t skip the second time… keep reading). The rights to Atari’s arcade output from 1984 through 2003 were transferred to Warner Bros. Entertainment in 2009; you should bug them if you want a new version of Klax or something.
Today’s bankruptcy has to do (loosely) with the other branch of the original Atari, responsible for home hardware and software (and control of the rights to the company’s pre-1984 arcade classics, like Pong, Centipede, Breakout, Asteroids, and Missile Command). This bit of the original Atari was sold to Commodore founder Jack Tramiel in 1984, meaning that, in a way, the maker of the relatively niche (for gaming purposes) Commodore 64 actually triumphed over the market-dominating Atari 2600 in the end.
Starting in 1984, Tramiel tried to revive the Atari brand with hardware like the Atari ST computer, the Atari Lynx portable game player, and the Atari Jaguar home console. When all of these efforts failed (somewhat disastrously, in the case of the Jaguar), Atari died its second “death,” with the pieces getting sold off to little-known Hasbro Interactive in 1998. This incarnation of Atari was responsible for the surprisingly decent revamp Pong: The Next Level on the original PlayStation and other platforms.
Meanwhile, a company named GT Interactive, founded in 1993, was busy publishing games ranging from Doom II, Unreal, and Duke Nukem 3D expansion packs to PlayStation franchises like Driver and Oddworld. Following a brief downturn for GT Interactive, French conglomerate Infogrames Entertainment, SA, bought the company in 1999. Infogrames then bought a controlling interest in Hasbro Interactive (including the remnants of the failed Atari Inc.) in 2001, arguably marking a third “death” for Atari as it existed under the Hasbro banner.
Stay with me now. At this point, GT Interactive began publishing games under the “Atari” label, though the developer was officially known as Infogrames Interactive. It wasn’t until 2003 that the French parent company realized that no one knew or cared what “Infogrames” was. So Infogrames renamed the whole company to “Atari Inc.,” and renamed Infogrames Interactive (née GT Interactive) to Atari Interactive in 2003.
The death of today’s “Atari”
The new Atari Inc., as it existed in the 2000s, was a multiheaded beast that at points encompassed a huge variety of unrelated companies and franchises. It controlled the Civilization series until 2004, when it sold it off to Take-Two Interactive for $22.3 million. Earthworm Jim and MDK maker Shiny Entertainment became part of Atari Inc. through a buyout in 2002, before it was sold off again in 2006. Atari bought City of Heroes maker Cryptic studios in 2008, before selling it off in 2011.
Things got so convoluted that, at one point, the 2001 PS2 remake of Spy Hunter was developed by Atari Inc. subsidiary Paradigm Entertainment and published by Midway Games, which controlled the dying remnants of the original Atari’s arcade division. Never mind that the original Spy Hunter had nothing whatsoever to do with Atari.
It’s a bit hard to follow, but all of this is just a long-winded way of showing how little the current “Atari” has to do with the original company that made the name famous. The French company that currently sports the name didn’t even exist when Atari was founded and only got the name through a complicated series of acquisitions of the less successful home-console half of the original company. None of the people involved with the original Atari are part of this new company’s DNA in any way, shape, or form. Interestingly though, original Atari founder Nolan Bushnell joined the new Atari’s board of directors in 2010, through investor Blubay holdings.
Today’s bankruptcy filing reflects the weakness of this new, largely unrelated company more than the weakness of the legendary Atari brand. All those acquisitions and sales mentioned above are just the tip of the iceberg as far as the French company’s flailing lack of focus in the last decade or so—and a large part of why it hasn’t shown a profit since 1999. In fact, the US branch of Atari is filing for bankruptcy today largely to escape the debt-ridden French parent company that is holding it back, according to a press release.
Though this is the fourth or fifth death for “Atari” since 1974, depending on how you count, the name will doubtlessly live on. The Atari brand and logo still hold real nostalgic power, and they are recognized by 90 percent of Americans, according to a recent survey. In fact, 17 percent of Atari’s US revenues reportedly come from licensed products sporting the Atari logo or name, according to an LA Times report. The company has been milking the nostalgia extra hard recently, with mobile hits like Atari’s Greatest Hits, Breakout: Boost, and Asteroids: Gunner.
Sure, Atari hasn’t had a new, homegrown hit franchise since Roller Coaster Tycoon (developed and scooped into the Atari umbrella during the Hasbro Interactive days), but the company’s name recognition and stable of legendary brands pretty much ensures it will exist in some form for years to come. But let’s be clear: “Atari” as it currently exists is just a holding entity for a brand devoted almost entirely to nostalgia, with no core business legacy or history tracing it to the people behind the original company. This makes it decidedly different from classic gaming names like Nintendo or Sega, which have gone through changes but maintained their core structure and corporate memory over the decades.
In other words, don’t mourn for Atari today… it’s already dead. And yet, at the same time, it will live on, probably forever.
Atari Files For Bankruptcy
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