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The term Atari is often applied to three separate companies which are Atari, Inc., Atari Games Corp, and Atari Corporation.
Atari. was originally formed by Nolan Bushnell in June 27th 1972. The company's first product was Pong, the world's first coin operated electronic video game. With less than $1000 Pong was developed and was first put into operation in a bar in Sunnyvale California. The game quickly reached its limit of quarters and a revolution in electronic based entertainment games ensued. In 1974 Atari released a home version of Pong. The system released was only able of playing a single game that being naturally Pong. Magnavox had released a similar rival system earlier but it did not fare as well in the market as the Atari machine. In 1976 a machine known as the Fairchild was released by a rival of Atari. This machine was cartridge based and allowed for addional cartridge games to play on this single console system. This was a revolutionary step forward from the early Pong game that could play Pong and only Pong. Fierce competition from this machine caused Atari's founder Nolan Busnell to see that his capital requirements to succeed exceeded what he had available. As a result, Atari was sold to Warner Brothers for $28 million. From then on Atari was known officially as Atari, Inc. for all practical purposes. Atari developed many products that did quite well including the Atari 2600. The company even developed products for sale on competing systems under the Atarisoft label. By 1984 the video game industry in the US was in major decline. Warner Brothers, the parent company of Atari decided that it was time to bail out of this market rather than continue to witness loss upon loss as predicted for the years to follow. Warner Brothers sold all Atari, Inc assets, rights to patent use, and game rights to Jack Tramiel in 1984. Warner Brothers did however keep the exclusive right to use the Atari name and fuji trademark symbol to market video arcade based machines. In addition patent rights from Atari, Inc. were jointly shared by Atari Corporation. and Warner brothers. That which Jack Tramiel acquired was reorganized and known as Atari Corporation.
Atari Corporation was formed under the laws of Nevada in May 1984. In July 1984 Atari Corporation formally acquired the rights to all of Atari, Inc's, assets, rights, trademarks, and proprietary technology to be used in all areas of business except that of coin operated amusement games. Warner Brother retained the exclusive right to use the Atari name, logo, and fuji symbol to market games for this market. As part of the agreement Warner Brothers retained an interest in the newly formed Atari Corporation of 14,200,000 shares or more than 25 percent (25 to 30 throughout the existance of Atari Corp)of the company. From 1984 to 1996 Atari Corporation's stock traded on the American Stock Exchange under the ticker symbol ATC. From its inception, Atari Corporation while publically traded was largely owned by a relatively small number of parties. Jack Tramiel served as the company's largest shareholder throughout its existance. He also served as the CEO for many years until his son Sam Tramiel became CEO. Atari's board of directors owned about 51 percent of the company when it was initially formed; while Warner Brothers had about a 25 to 30 percent interest in the company throughout its existance. In 1996 Sega owned apporixmately 7.1 percent of the company's stock. As a result of this concentration of ownership less than a fourth of the company's stock has been available for active trading on the Amex at any point. Atari Corporation's corporate headquarters was in Sunnyvale California, this is interesting since the bar that Nolan Busnell first displayed Pong in was also in the same city.
*Note Warner Brothers is now part of a much larger company known as Time Warner
Atari Games Corp was formed officially by Warner Brothers following the sell off of key Atari, Inc assets to Jack Tramiel who later formed Atari Corporation. Atari Games Corp had full rights to use the Atari name, logo, and fuji symbol in all areas of business except that of home based video game systems. As a result Atari Games Corp focused on the coin operated video arcade market. Originally Atari, Inc competed in this market before so basically this newly formed division of Warner Brothers did what their former Atari, Inc division did in this area. Atari Games Corp while owned by Warner Brothers (initially part owned by Namco, later Namco sold their equity stake back) has developed many key titles for this market including, Steel Talons, Race Driving, Pit Fighter, Vindicators, Rampart and many others. Atari Games Corp marketed many of their early titles for the Nintendo Entertainment Sytem under the Tengen brand. To develop games for console based systems at that time involved the paying of royalties for the rights to make licensed games using several patents Nintendo had on the technology behind their console system and compatible cartridges. Atari Games Corp through its tengen divison decided to make their own cartridges for play on the Nintendo Entertainment System (NES) as they felt their design did not conflict with any Nintendo Patents. Many titles were made for many years but ultimately Nintendo did fill a lawsuit against Atari Games Corp for alleged patent violations. As a result of the lawsuit Atari Games Corp was forbidden to market any games of any sort for any Nintendo based machines including the Super Nintendo Entertainment System in developement at the time. Titles based on Atari Games Corp design's continued to be marketed for the NES but this time they were marketed and sold by outside companies such as Mindscape. Tengen the brand Atari Games Corp marketed games under very quickly thereafter signed up as one of the early Sega Enterprises liscensses for the Sega Genesis System. Almost every title made under this brand for the Sega Genesis was of superior quality and playability.
On March 29, 1996, Midway Games acquired all the capital stock of Atari Games Corporation from Warner Communications Inc. ("Warner"), a subsidiary of Time Warner Inc. Atari Games Corp is now a part of Midway Games, Inc. Midway Games is a company formed in 1986 after WMS Industries (WIlliams Electronics of Defender arcade fame) spun off this division in an attempt to insultate this profitable segment of the company from the risks of the gambling machne operatons of the rest of WMS Industries.
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