Programs for small computers of the time were generally stored on cassette tapes, floppy disks, or paper tape. By the early 1970s, Hewlett-Packard manufactured desktop computers costing thousands of dollars, such as the HP 9830, which packaged Read Only Memory (ROM) into removable cartridges to add special programming features, and these were being considered for use in games. At first, the design was not going to be cartridge-based, but after seeing a “fake” cartridge system on another machine, they realized they could place the games on cartridges essentially for the price of the connector and packaging.Ted Dabney and Nolan Bushnell developed the Atari gaming system in the 1970s. Originally operating under the name “Syzygy”, Bushnell and Dabney changed the name of their company to “Atari” in 1972. In 1973, Atari Inc. had purchased an engineering think tank called Cyan Engineering to research next-generation video game systems, and had been working on a prototype known as “Stella” (named after one of the engineers’ bicycles) for some time. Unlike prior generations of machines that use custom logic to play a small number of games, its core is a complete CPU, the famous MOS Technology 6502 in a cost-reduced version known as the 6507. It was combined with a RAM-and-I/O chip, the MOS Technology 6532, and a display and sound chip known as the Television Interface Adaptor (TIA). The first two versions of the machine contained a fourth chip in the video circuitry, a standard CMOS 4050 buffer IC. Some later versions of the console eliminated the buffer chip.
In 1976, Fairchild Semiconductor released their own CPU-based system, the Video Entertainment System. Stella was still not ready for production, but it was clear that it needed to be before there were a number of “me too” products filling up the market, which had happened after they released Pong. Atari Inc. didn’t have the cash flow to complete the system quickly, given that sales of their Pong systems were cooling. Nolan Bushnell eventually turned to Warner Communications, and sold the company to them in 1976 for US$28 million on the promise that Stella would be produced as soon as possible.
Key to the eventual success of the machine was the hiring of Jay Miner, a chip designer who managed to squeeze an entire wire wrap of equipment making up the TIA into a single chip. Once that was completed and debugged, the system was ready for shipping.
Launch and success
The second 2600 model is the “Light Sixer”, which has lighter plastic molding and shielding, and a more angular shape, than the 1977 launch model, the “Heavy Sixer”. Later 2600 models only used four front switches. The unit was originally priced at US$199 ($786 adjusted for inflation), and shipped with two joysticks and a Combat cartridge (eight additional games were available at launch and sold separately). In a move to compete directly with the Channel F, Atari Inc. named the machine the Video Computer System (or VCS for short), as the Channel F was at that point known as the VES, for Video Entertainment System.
For the first year of production, the Video Computer System was manufactured in Sunnyvale, California. The consoles manufactured there had thick plastic molding around the sides and bottom. These added weight to the console, and because all six switches were on the front, these consoles were nicknamed “Heavy Sixers”. After this first year, production moved to Hong Kong, and the consoles manufactured there had thinner plastic molding. In 1978, only 550,000 units from a production run of 800,000 were sold, requiring further financial support from Warner to cover losses. This led directly to the disagreements that caused Atari Inc. founder Nolan Bushnell to leave the company in 1978. Despite Bushnell’s retirement in 1978, Warren Robinett’s invention of the first graphical adventure game, Adventure, was developed the same year and changed the fundamentals of gaming as it unlocked a game with a “virtual space bigger than the screen”. Once the public realized it was possible to play video games other than Pong, and programmers learned how to push its hardware’s capabilities, the VCS gained popularity. By this point, Fairchild had given up, thinking video games were a passing fad, thereby handing the entire quickly growing market to Atari Inc. By 1979, the VCS was the best-selling Christmas gift (and console), due to its exclusive content, and 1 million units were sold that year.[13
Sears Video Arcade and sold through Sears, Roebuck and Company stores. Another breakthrough for gaming systems was Atari’s invention of a computer-controlled opponent, rather than the usual two-player or asymmetric challenges of the past. When Fairchild learned of Atari Inc.’s naming, they quickly changed the name of their system to become the Channel F. However, both systems were now in the midst of a vicious round of price-cutting: Pong clones that had been made obsolete by these newer and more powerful machines were sold off to discounters for ever-lower prices. Soon many of the clone companies were out of business, and both Fairchild and Atari Inc. were selling to a public that was completely burnt out on Pong. In 1977, Atari Inc. sold 250,000 Video Computer Systems.
Atari Inc. then licensed the smash arcade hit Space Invaders by Taito, which greatly increased the unit’s popularity when it was released in January 1980, doubling sales to over 2 million units. The VCS and its cartridges were the main factor behind Atari Inc. grossing more than $2 billion in 1980. Sales then doubled again for the next two years; by 1982, the console had sold 10 million units, while its best-selling game Pac-Man sold 7 million copies. The console also sold 450,000 units in West Germany by 1984.[15 By 1982 the 2600 console cost Atari about $40 to make and was sold for an average of $125. The company spent $4.50 to $6 to manufacture each cartridge and $1 to $2 for advertising, and sold it for $18.95 wholesale.
The all-black “Darth Vader” 4-switch model from 1982
game console became widely popular for the time. Later however, they designed the Atari 2700, a wireless version of the console that was never released because of a design flaw. The company also built a sleeker version of the machine dubbed the Atari 2800 to sell directly to the Japanese market in early 1983, but it suffered from competition with the newly released Nintendo Famicom.
In 1980, the VCS was given a minor revision in which the left and right difficulty switches were moved to the back of the console, leaving four switches on the front. Other than this, these four-switch consoles looked nearly identical to the earlier six-switch models. In 1982, and there version of the four-switch console was released without woodgrain. They were nicknamed “Darth Vader” consoles due to their all-black appearance. These were also the first consoles to be officially called “Atari 2600”, as the Atari 5200 was released the same year. During this period, Atari Inc. expanded the 2600 family with two other compatible consoles. Despite the faux-wood panels and what would now appear to be primitive graphics, the
In a survey mentioned by Jeff Rovin it is reported that more stores reported breakdowns of the Atari 2600 system than any other, and that Atari repair centers seemed to have the most trouble with consoles manufactured in 1980. In one case it is stated that a system was repaired five times before static electricity from a carpet was discovered as having caused the problem. The controllers were also a source of breakage because of the way they could be gripped by a player holding it with their fist, allowing players to get carried away and over control, which was less likely with other systems released at the time, such as the Magnavox Odyssey², which has controllers that are nearly half its size.
Sears Tele-Games 2600s
Sears got a rebranded “Video Arcade” 2600 for its Tele-Games line.
Atari Inc. also continued their OEM relationship with Sears under the latter’s Tele-Games brand label, which started in 1975 with the original Pong. Sears released several versions of the 2600 as the Sears Video Arcade series from 1977 to 1983. These include the Rev. A “Heavy Sixer” model in 1977, the “Light Sixer” model in 1978, the Rev. B “4 switch” model in 1980, and the US version of the Atari 2800 branded as the Sears Video Arcade II in 1983.
Sears also released their own versions of Atari Inc.’s games under the Tele-Games brand — often with different titles[21 — which included the Tele-Games branded variations of text and picture labels. Three games were also produced by Atari Inc. for Sears as exclusive releases under the Tele-Games brand: Steeplechase, Stellar Track, and Submarine Commander. Sears’s Tele-Games brand was unrelated to the company Telegames, which also produced cartridges for the Atari 2600 — mostly re-issues of M Network games.
Decline and remodel
During the 1970s, Atari Inc. continued to grow until it had one of the largest R&D divisions in Silicon Valley. However, it spent much of its R&D budget on projects that seemed out of place at a video game (or even home computer) company; many of these projects never saw the light of day. Meanwhile, several attempts to bring out newer consoles failed for one reason or another, although Atari Inc.’s home computer system (the Atari 8-bit family) sold reasonably well, Warner was pleased as it seemed to have no end to the sales of the 2600, and Atari Inc. was responsible for over half of the company’s income.
The programmers of many of Atari Inc.’s biggest hits grew disgruntled with the company for not crediting game developers and many left the company and formed their own independent software companies. The most prominent and longest-lasting of these third-party developers was Activision, founded in 1980, whose titles quickly became more popular than those of Atari Inc. itself. Atari Inc. attempted to block third-party development for the 2600 in court but failed, and soon other publishers, such as Imagic and Coleco, entered the market. Atari Inc. suffered from an image problem when a company named Mystique produced a number of pornographic games for the 2600. The most notorious of these, Custer’s Revenge, was protested by women’s and Native American groups because it depicted General George Armstrong Custer raping a bound Native American woman. Atari Inc. sued Mystique in court over the release of the game.
Atari Inc. continued to acquire licenses for the 2600, the most prominent of which included Pac-Man and E.T. Public disappointment with these two titles and the market saturation of poor third-party titles are cited as major contributors to the video game crash of 1983. Suddenly, Atari Inc.’s growth meant it was losing massive amounts of money during the crash, at one point about $10,000 a day. This in part led to the Atari video game burial of 1000s of unsold Atari 2600 games in the desert in New Mexico. Warner quickly grew tired of supporting Atari Inc., and started looking for buyers in 1984.
By mid-1984 most software development for the 2600 had stopped except by Atari and Activision, with third-party developers emphasizing ColecoVision games. Although not formally discontinued, the 2600 was de-emphasized for two years after Warner’s 1984 sale of Atari Inc.’s Consumer Division to Commodore Business Machines founder Jack Tramiel, who wanted to concentrate on home computers. He ended all development of console games, including a 2600 Garfield game and an Atari 5200 port of Super Pac-Man. Due to a large library and a low price point, the 2600 and the 2600 Jr. continued to sell into the late 1980s and were not discontinued until 1992. The 2600 ended up outdoing all other hardware that Atari released, in attempt to replicate its success.