ARCADE OF HISTORY
GAME on! As the pandemic raged in 2020, a revolution played out in the entertainment world. In that year, video game revenue grew 20% to a whopping $179.7 billion — pulling in more money than global movies and North American sports industries combined.
Sure, it was helped by the fact that we were collectively confined to our homes, theaters were shuttered and sports teams were grounded.
But it was also a testament to the wild growth, innovation and popularity of the video game industry, whose humble roots can be mostly traced back to a California company trying to make coin-operated games lucrative.
That small startup called Atari — which launched on June 27, 1972 — ended up changing the world: first with a rudimentary table tennis game called Pong and later a culture-shifting home console. It would also briefly employ Apple founders Steve Wozniak and Steve Jobs and was an early darling of the then-burgeoning Silicon Valley tech universe.
“Part of their cultural legacy is they were able to get video games from a public space to a private space,” Matthew Thomas Payne, associate professor of film, television and theater at the University of Notre Dame in Indiana and author of various gaming books, including “Playing War: Military Video Games After 9/11,” told The Post. “They domesticated this technology . . . But they never could have imagined [its current iteration].
“How do you draw the line from Pong to, say, Fortnite? It’s a complex story,” said Payne.
Pong and beyond
This week marks a half century since the eccentric Nolan Bushnell — who also founded Chuck E. Cheese — and Ted Dabney started the pioneering company in Sunnyvale, Calif.
Before they launched Atari, they created
the first arcade video game, called Computer Space, in 1971. It was based on the game Spacewar!, made in 1962 by Massachusetts Institute of Technology grad students whom Payne noted would be considered hackers today.
About a year later, the pair formed Atari with the simple tennis game Pong.
“They figured out how to commodify game play,” said Payne, going on to recount a tale that “always gets told in their origin story,” even if its veracity has been challenged.
As the story goes, in September 1972, they installed Pong in Andy Capp’s Tavern, a Sunnyvale watering hole that also had a pinball machine. The next day, the bartender called to say the machine was broken.
“Al Alcorn, who was one of the programmers, goes to check it out and, lo and behold, it was overstuffed with quarters. And they know, from this prototype, they have a winner on their hands,” said Payne.
They made home console versions
of Pong and followed with other arcade games. In 1976, the company was bought by Warner Communications for a reported $28 million.
In September 1977, it released its best-selling Atari 2600 for $199 — ultimately selling more than 30 million units. The console featured joysticks and the ability to swap out various cartridges for popular games such as Combat and, later, Frogger, Pac-Man
and Space Invaders.
“One of the first successful attempts at getting video games in the home was Atari 2600, which would have been the first computer in the house,” said Payne. “It was really the beginning of home computation.”
Payne noted Atari wasn’t the first to make a home game console, and its success ignited legal battles within the fledgling industry. Magnavox, which had created a home system called Odyssey that featured a table tennis game, went after Atari and other companies making Pong knockoffs. In 1974, they filed a patent infringement suit against
Atari, which eventually settled for $1.5 million.
Crash of ’83
But Atari had other issues. The company would take a huge hit in the now-infamous video game crash of 1983, which tanked the market. Payne attributed the industry recession to a lack of oversight.
“Atari was unable to lock down third-party publishers and they produced complete trash games and oversaturated the market. The bottom fell out,” he said.
The year after the crash, Atari sold off its home console and computer divisions.
Bushnell, who left Atari in 1978, blamed its woes on the sale to Warner.
“Atari had an extraordinary corporate culture that was destroyed within two years of the sale,” Bushnell said in 2014 on Reddit of his company’s notoriously debauched office, which even featured a hot tub. “I think that Atari would still be important today if that sale hadn’t occurred.”
In 1985, Nintendo released its Nintendo Entertainment System for $149.99 — providing a muchneeded jolt to the industry.
“It’s Nintendo that comes back and saves the day for home games after Atari’s rise and fall,” said Payne. “Other companies like Sega and Nintendo saw those lessons and recalibrated accordingly and were able to survive much longer than Atari.”
A lasting legacy
Of course, with the advent of streaming, gaming is now a growing billion-dollar business. Esports is so popular, many professional sports franchises own esports teams, which are filling arenas.
But there still exists a nostalgia for Atari, and there are even throwback consoles that mimic
the 2600 as part of the Atari Flashback series.
The company, which filed for bankruptcy in 2013, has changed hands several times over the years. Now it’s back, creating games. In 2017, it announced a new gaming console and, a year later, the creation of a game show off its original hit, “Million Dollar Pong.” In 2020, Atari said it would be launching a chain of video game-themed hotels.
“Even though we still recognize Atari, it’s not nearly the force it once was in video games,” said Payne. “But it still holds. It still speaks to the very early years of the industry.”