Atari Corporation

Atari Corporation was an American manufacturer of computers and video game consoles from 1984 to 1996. Atari was founded in July 1984 when Warner Communications sold the home computing and game console divisions of Atari, Inc. to Jack Tramiel. Its chief products were the Atari ST, Atari XE, Atari 7800, Atari Lynx and Atari Jaguar.

Atari Corporation
Formerly
Tramel Technology Ltd.
Private
Industry
FateMerged into JT Storage; assets later acquired by Hasbro Interactive
PredecessorAtari, Inc.
SuccessorAtari Interactive (division of Hasbro Interactive)
FoundedMay 17, 1984; 36 years ago (1984-05-17) in Sunnyvale, California, U.S.
FounderJack Tramiel
DefunctJuly 30, 1996; 23 years ago (1996-07-30)
Headquarters,
Key people
Products
ParentWarner Communications Inc. Edit this on Wikidata

The company reverse-merged with JTS Inc. in 1996, becoming a small division, which itself closed after JTS sold its intellectual property to Hasbro Interactive in 1998.[1]

HistoryEdit

The company was founded by Commodore International's founder Jack Tramiel soon after his resignation from Commodore in January 1984. Initially named Tramel Technology, Ltd. (TTL), the company's goal was to design and sell a next-generation home computer. On July 1, 1984, TTL bought the Consumer Division assets of Atari, Inc. from its owner Warner Communications, and TTL was renamed Atari Corporation. Warner sold the division for $240 million in stocks under the new company.

In order to halt the massive losses Atari, Inc. had been yielding under Warner's ownership, Tramiel shut down nearly all of their 80 domestic branches, laying off the staff and liquidating the inventory.[2] Under Tramiel's ownership, Atari used the remaining stock of game console inventory to keep the company afloat while they finished development of their 16-bit computer system, the Atari ST. In 1985, they released their update to the 8-bit computer line—the Atari XE series—as well as the 16-bit Atari ST line. Then in 1986, Atari Corp. launched two consoles designed when Atari was under Warner's control: Atari 2600 Jr and Atari 7800 (which had a limited release in 1984). Atari Corp. rebounded, producing a $25 million profit for 1986.[3] The Atari ST line proved very successful (mostly in Europe, not the U.S.[2]), ultimately selling more than 5 million units. Its built-in MIDI ports made it especially popular among musicians. Still, its closest competitor in the marketplace, the Commodore Amiga, outsold it 3 to 2.[citation needed] Atari eventually released a line of inexpensive IBM PC compatibles as well as an MS-DOS compatible palm computer called the Atari Portfolio.

Atari under Tramiel had a poor reputation in the marketplace. In 1986 a columnist for Atari magazine ANALOG Computing warned that company executives seemed to emulate Tramiel's "'penny-pinching' [and] hard-nosed bargaining, sometimes at the risk of everything else", resulting in poor customer service and documentation, and product release dates that were "perhaps not the entire truth ... Pretty soon, you don't believe anything they say". He concluded, "I think Atari Corp. had better start considering how they're perceived by the non-Atari-using public".[4] The company, however, was much more open to the press than its predecessor Atari Inc., which had refused to let Antic preview forthcoming announcements and even opposed the magazine printing the word "Atari" on its issues.[5]

On August 23, 1987, Atari agreed to purchase the Federated Group for $67.3 million. October 4, 1987, Atari completed the acquisition and gained full control of its own retail stores. In the final quarter of 1987, Federated lost $6.4 million in day-to-day operations. A post-acquisition audit ended on February 15, 1988, and identified $43 million in adjustments to Federated's balance sheet, far more than Atari anticipated. The net worth of its acquisition was reduced by $33 million. Atari's CFO later claimed that they would never have done the deal had they known at the time.[6][7][8] Federated's operational losses increased, reaching $67 million for its first full year under Atari in 1988.[9] The FBI began an investigation of Atari in May of that same year for an ongoing scheme involving the profitable import and resale of Japanese DRAM chips in the US, "in violation of U.S. import laws and contrary to import agreements".[10] In March 1989, Atari announced that it would treat Federated as a discontinued operation and took an additional one-time charge of $57 million.[11] Federated was eventually sold to Silo in 1989.[12]

In 1988, Stewart Alsop II said that Atari was among several companies that "have already been knocked out" of the GUI market by Apple, IBM/Microsoft, and others,[13] but Atari's sales hit their peak that year, at $452 million.[14][3]

In 1989, Atari released the Lynx, a handheld console with color graphics, to critical acclaim. However, a shortage of parts kept the system from being released nationwide for the 1989 Christmas season; the Lynx lost market share to Nintendo's Game Boy, which had only a monochrome display, but a much better battery life, and was widely available.

As the fortunes of Atari's computers faded, video games again became the company's main focus. In 1993, Atari released its last console, the Jaguar. The Jaguar was one of the first fifth generation gaming consoles, but due primarily to a games library which was low in both quantity and quality, it was unable to compete effectively against the incumbent fourth generation consoles as well as the Sega Saturn and Sony PlayStation later in its lifespan.[15][16]

Atari sustained a net loss of $49.6 million for 1995, with $27.7 million in losses during the last quarter of the year alone.[17] Attempting to hedge their bets, in January 1996, Atari announced the formation of a new subsidiary, Atari Interactive, which would be devoted to publishing games for PC.[18] However, Atari would relinquish its interest in both the Jaguar and PC software within a few months.

Demise and AftermathEdit

By January 1996, a series of successful lawsuits followed by profitable investments had left Atari with millions of dollars in the bank, but without any products to sell because of the Jaguar's commercial failure. In addition, the Tramiel family wanted themselves out of business. The result was a rapid succession of changes in ownership. On July 30, 1996, Atari reverse-merged with JTS Inc., a short-lived maker of hard disk drives, to form JTS Corporation.[19] Atari's role in the new company largely became a holder for the Atari properties; most Atari staff either were dismissed or resigned, and the remainder were relocated to JTS's headquarters.[2] Consequently, the Atari name all but largely disappeared from the consumer market as a result.

On March 13, 1998, JTS Corporation sold the Atari name and all of its properties to Hasbro Interactive for $5 million,[1] less than a fifth of what Warner Communications had paid 22 years earlier. The transaction primarily involved the brand and intellectual property rights which would then fall under Hasbro Interactive; the rights to the Jaguar, however, were released into the public domain on May 14, 1999.[20] On January 29, 2001, Hasbro Interactive, along with all the Atari properties, was purchased by Infogrames,[21][22] becoming Infogrames Interactive and then took on its current name in 2003; Atari Interactive, through its parent company, Atari SA, continues to hold, and license, the Atari trademarks today.

List of productsEdit

 
Atari ST
 
Atari 7800
 
Atari Portfolio
 
Atari Jaguar

ReferencesEdit

  1. ^ a b Johnston, Chris (April 8, 2000). "Atari Goes to Hasbro". GameSpot.
  2. ^ a b c Thomas, Don (December 1996). "Atari's Historic Road to Nowhere". Next Generation. No. 24. Imagine Media. pp. 97–104.
  3. ^ a b "The Life and Death of Atari". GamePro. No. 92. IDG. May 1996. p. 20.
  4. ^ Leyenberger, Arthur (February 1986). "The End User". ANALOG Computing. pp. 109–110. Retrieved 24 June 2014.
  5. ^ Friedland, Nat (March 1987). "Today's Atari Corp. | A close-up look inside". Antic. pp. 30–33. Retrieved 4 July 2014.
  6. ^ YOSHIHARA, NANCY (24 August 1987). "Atari to Acquire Federated Group for $67.3 Million: Deal Would Give Video Pioneer Access to a Retail Network" – via LA Times.
  7. ^ "970 F.2d 641". law.resource.org.
  8. ^ "Annual report" (PDF). www.atariarchives.org.
  9. ^ "Annual report" (PDF). www.atariarchives.org.
  10. ^ "AtariLeaks". 2013-05-01. Retrieved 2018-09-30.
  11. ^ LAZZARESCHI, CARLA (10 March 1989). "Ailing Unit Blamed for $85-Million Loss: Atari Puts Federated on the Block" – via LA Times.
  12. ^ AP. "COMPANY NEWS; Atari Is Selling 26 Federated Stores".
  13. ^ Alsop, Stewart II (1988-01-18). "WUI: The War Over User Interface" (PDF). P.C. Letter. 4 (2): 1–4.
  14. ^ "Annual report" (PDF). www.atariarchives.org.
  15. ^ "Which Game System is the Best!?". Next Generation. Imagine Media (12): 36–85. December 1995.
  16. ^ Langshaw, Mark (January 27, 2013). "Atari Retrospective: The Rise and Fall of a Gaming Giant". Digital Spy. Retrieved 13 April 2017.
  17. ^ "New Systems, New Price Cuts". GamePro. No. 93. IDG. June 1996. p. 16.
  18. ^ "Atari Broadens its Platform Base". Compkarori.com. Business Wire. January 2, 1996. Archived from the original on March 3, 2016. Retrieved 2009-08-15.
  19. ^ "Agreement and Plan of Reorganization - Atari Corp. and JT Storage Inc. - Sample Contracts and Business Forms". contracts.onecle.com.
  20. ^ "Hasbro Releases Jaguar Publishing Rights". Hasbro Interactive. Retrieved May 14, 2008. Beverly, MA (May 14, 1999) – Leading entertainment software publisher, Hasbro Interactive announced today it has released all rights that it may have to the vintage Atari hardware platform, the Jaguar.
  21. ^ "Infogrames to Acquire Hasbro Interactive". IGN. December 6, 2000. Archived from the original on November 19, 2001. Retrieved September 30, 2019.
  22. ^ "Infogrames completes Hasbro Interactive acquisition". GameSpot. January 29, 2001.

External linksEdit