In October 1977, the Atari Video Computer System hit the shelves of U.S. retailers, and our concept of video games would be changed forever.
The Atari CX2600 was a cartridge-based system that could be connected to any regular television set. Unlike the Magnavox Odyssey, Atari Video Pong and other stand-alone consoles, users of the Atari 2600 weren't locked in to a pre-set selection of games married to the machine. They could play the newest games on the market without purchasing a whole new system.
With its headquarters based in Sunnyvale, California, Atari designers Steve Meyer, Joe Decuir and Harold Lee began a project named Stella in 1976. Owner Nolan Bushnell realized that he did not have enough funds to finish Stella, so in October 1976, he sold the company to Warner Communications for $28 million.
At the core of the Stella system was a 1.19 Mhz, 8-bit microprocessor, and the machine was given a mere 128 bytes of RAM in order to keep costs down. Included with the original Atari 2600 were two CX40 joysticks, one set of CX30 paddle controllers, an AC adapter, a TV/game switch and a Combat game cartridge. The other eight games available at the time of the system's release were Air-Sea Battle, Basic Math, Blackjack, Indy 500, Star Ship, Street Racer, Surround and Video Olympics.
Over the years, Atari released a variety of peripherals to extend the system's capabilities -- keyboard controllers for a few games such as A Game of Concentration and Basic Programming, a touch pad for Star Raiders, driving controllers for Indy 500, a trackball for games like Centipede and Crystal Castles, and a kid's controller for its Sesame Street series of games. A computer module add-on was announced but never released.
The initial price tag of the Atari 2600 was $199.95, quite expensive for its time, and Warner did not make much of a profit on the system. But they knew that the real money was in the selling of new game cartridges.
In 1979, the arcades were set on fire by a phenomenal new game called Space Invaders. Atari quickly acquired the licensing rights from the Taito Corporation, and in January 1980, the Atari 2600 version of Space Invaders debuted in the U.S. Atari's system became an overnight sensation.Atari's gross revenue for 1979 was $200 million, and in 1980, after Space Invaders, they grossed $415 million, accounting for a third of Warner's total annual revenue.
This success was followed with more translations of arcade games including Asteroids, Missile Command, Berzerk and a tremendously popular but much-maligned version of Pac-Man. Atari also hoped to cash in on the popularity of hit movies by releasing Raiders of the Lost Ark and E.T. The Extra-Terrestrial, both of which did not meet sales expectations.
Competition inevitably entered the scene, vying for a piece of the highly lucrative video game market opened up by Atari. Disgruntled by the rigid working conditions imposed by Warner, programmers David Crane, Larry Kaplan, Alan Miller and Bob Whitehead left Atari and formed a new company called Activision. Beginning in 1981, they unveiled a number of superb games, such as Pitfall!, Freeway and Kaboom!. Activision's success as the first third-party manufacturer of home video games set off an avalanche of new software titles rolling in from other developers like Imagic, Parker Brothers, Coleco and M Network.
By 1983, the large number of sub-par games being released, as well as competition from the ColecoVision and Intellivison began to take its toll on the Atari 2600. Soon, the entire industry collapsed, and the Atari 2600 made way for the success of Nintendo's NES in 1985.
In the late '80s, Atari made an unsuccessful attempt to relaunch the Atari 2600. Along with new games like Solaris and Midnight Magic, the decade-old system was repackaged into a sleeker, more compact shell and marketed with the tag-line "The Fun is Back." Although it was priced at a mere $49, the Atari 2600 was no match for the enormous popularity of the NES or even the Sega Master System, and once again Atari's workhorse faded into video game history. ~ Dave Beuscher, All Game Guide