Atari, Inc. was an American video game and home computer company founded in 1972 by Nolan Bushnell and Ted Dabney. Primarily responsible for the formation of the video arcade and modern video game industries, the company was closed and its assets split in 1984 as a direct result of the North American video game crash of 1983.
In 1966, Nolan Bushnell saw Spacewar! for the first time at the University of Utah. Deciding there was commercial potential in a coin-op version, several years later he and Ted Dabney worked on a hand-wired custom computer capable of playing it on a black and white television in a single-player mode where the player shot at two orbiting UFOs. The resulting game, Computer Space, was released by a coin-op game company, Nutting Associates.
Computer Space did not fare well commercially when it was placed in Nutting's customary market, bars. 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.Salon People | The adventures of King Pong
The original Atari upright cabinet Bushnell and Ted Dabney left Nutting to form their own engineering firm, Syzygy Engineering, and soon hired Al Alcorn as their first design engineer. Initially wanting to start Syzygy off with a driving game, Bushnell had concerns that it might be too complicated for the young Alcorn's first game. In May 1972, Bushnell had seen a demonstration of the Magnavox Odyssey, which included a tennis game. According to Alcorn, Bushnell decided to have him produce an arcade version of the Odyssey's Tennis game, which would go on to be named Pong. Atari later had to pay Magnavox a licensing fee after the latter sued Atari because of this.The Dot Eaters - Player1 Stage1 - Classic Video Game HistoryAtari Coin-Op/Arcade Systems.