Atari, Inc.

Origins

While studying at the University of Utah, electrical engineering student Nolan Bushnell had a part-time job at an amusement arcade, where he became familiar with arcade electro-mechanical games. Bushnell watched customers play and helped maintain the machinery, while learning how it worked and developing his understanding of how the game business operates.

In 1968, Bushnell graduated, became an employee of Ampex in San Francisco and worked alongside Ted Dabney. The two found they had shared interests and became friends. Bushnell shared with Dabney his gaming-pizza parlor idea, and had taken him to the computer lab at Stanford Artificial Intelligence Laboratory to see the games on those systems. They jointly developed the concept of using a standalone computer system with a monitor and attaching a coin slot to it to play games on.

To create the game, Bushnell and Dabney decided to start a partnership called Syzygy Engineering in 1971, each putting in US$250 of their own funds to support it. They had also asked fellow Ampex employee Larry Bryan to participate, and while he had been on board with their ideas, he backed out when asked to contribute financially to starting the company.

Bushnell and Dabney worked with Nutting Associates to manufacture their product. Dabney developed a method of using video circuitry components to mimic functions of a computer for a much cheaper cost and a smaller space. Bushnell and Dabney used this to develop a variation on Spacewar! called Computer Space, where the player shot at two UFOs. Nutting manufactured the game. While they were developing this, they joined Nutting as engineers, but they also made sure that Nutting placed a "Syzygy Engineered" label on the control panel of each Computer Space unit to reflect their work in the game. Computer Space did not fare well commercially when it was placed in bars, Nutting's customary market. Feeling that the game was simply too complex for the average customer unfamiliar and unsure with the new technology, Bushnell started looking for new ideas. About 1,500 Computer Space cabinets were made, but were a difficult product to sell. While Bushnell blamed Nutting for its poor marketing, he later recognized that Computer Space was too complex of a game, as players had to read the instructions on the cabinet before they could play. Bushnell said, "To be successful, I had to come up with a game people already knew how to play; something so simple that any drunk at any bar could play."

Founding and Pong (1972)